AMERICAN CHAMBER OF COMMERCE - MACEDONIA Financial Statements for the year ended 31 December 2016 and Independent Auditors Report

Transcription

1 AMERICAN CHAMBER OF COMMERCE - MACEDONIA Financial Statements for the year ended 31 December 2016 and Independent Auditors Report

2 Contents INDEPENDENT AUDITOR S REPORT... 1 STATEMENT OF FINANCIAL POSITION... 3 INCOME AND EXPENSE STATEMENT General information about the Chamber Summary of significant accounting policies Income Current tax Property and equipment Cash and cash equivalents Accounts receivables Accounts payables Contingencies and commitments Events after the reporting period... 11

3 GENERAL INFORMATION Director Michelle Osmanli - Executive Director from August 2012 Board of Directors Slavko Projkoski President of the Board (as of October 2013) Selim Simbil 1 st Vice President (as of October 2013) Ljupco Georgiev 2 nd Vice President (as of October 2016) Stefan Peter Board Member (as of October 2015) Georgi Markov Secretary Treasurer (as of February 2016) Mihael Solter Board Member (as of February 2016) Jovan Radosavljevic Board Member (as of May 2016) Registered office Vasil Gjorgov 20A, 3rd floor 1000 Skopje, Macedonia Bankers Komercijalna Bank A.D. - Skopje Auditors Ernst & Young Certified Auditors Ltd. 8mi Septemvri Skopje Republic of Macedonia

4 INDEPENDENT AUDITOR S REPORT To the Management of the American Chamber of Commerce in Macedonia We have audited the accompanying balance sheet of the American Chamber of Commerce in Macedonia (hereafter the Chamber ), as of 31 December 2016 and the related income statement for the year then ended and a summary of significant accounting policies and other explanatory information. The financial statement has been prepared by management using the cash receipts and disbursements basis of accounting described in Note 2. Management s responsibility for the financial statements Management is responsible for the preparation of these financial statements in accordance with Macedonian accounting regulation, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing accepted and published in the Official Gazette no. 79 dated 11 June 2010 of Republic of Macedonia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of financial statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying financial statements are prepared in all material respects, in accordance with the Law on Accounting for Non-Profit Organisations of the Republic of Macedonia. Basis of accounting

5 Without qualifying our opinion, we draw attention to Note 2 to the financial statement, which describes the basis of accounting. The financial statement is prepared to provide information to American Chamber of Commerce in Macedonia. As a result, the statement may not be suitable for another purpose. Ernst & Young Certified Auditors Ltd. Skopje Vladimir Sokolovski Administrator Vladimir Sokolovski Certified Auditor Skopje, June 21 st, 2017

6 STATEMENT OF FINANCIAL POSITION as at 31 December Note ASSETS in MKD in MKD Current Assets Cash and cash equivalents Other receivables Total current assets Non-current assets Property and equipment Total non-current assets Total assets LIABILITIES AND EQUITY FUNDS Accumulated excess of income Business fund Total Equity LIABILITIES Current Liabilities Other payables Total current liabilities Total liabilities and equity Approved by: Michelle Osmanli Executive Director Skopje, June 21 st,

7 INCOME AND EXPENSE STATEMENT for the year ended 31 December in MKD in MKD Note Membership fees Event ticket sales Interest income Other Total income generated in the year Transferred prior year excess of income Total income Personnel expenses ( ) ( ) Professional services ( ) ( ) Travel expenses ( ) ( ) Publication and promotional materials ( ) ( ) Services ( ) ( ) Office supplies ( ) ( ) Rent and utilities ( ) ( ) Communications ( ) ( ) Event expenses ( ) ( ) Donations transferred (9.000) (21.791) Expenses related to grant - ( ) Other (46.150) (34.776) Total expenses ( ) ( ) Surplus income over expenses Income tax 4 (7.763) (5.788) Surplus income after tax

8 NOTES TO THE FINANCIAL STATEMENTS at 31 December General information about the Chamber American Chamber of Commerce - Skopje ( the Chamber ) was established in 2000 as a business interest association in the Republic of Macedonia. The purpose of the creation of the Chamber is to increase and develop the business activities of the members in the field of their operations and to increase and improve their results. The activities of the Chamber are: to further develop mutual cooperation of the business between the Republic of Macedonia and the United States of America; to encourage trade, investment and economic cooperation and development between the two countries; to open maintain lines of communication between economy and government as related to U.S/Macedonia trade and economic relations; to encourage legislation to simplify and enhance U.S-associated economy development in Macedonia and to promote good business practices and ethics; and to be a forum for the exchange of ideas among economies operating in Macedonia and the United States; to promote liberal market development in Macedonia and further Macedonia's integration into the global trading system. AmCham aims to support and advance the interest of U.S., international and leading local businesses in Macedonia, and to promote the competitiveness of the country. Members of the Chamber are in the same time founders of the Chamber. The members are deciding for the issues in accordance with the Agreement of the Association of American Chamber of Commerce. 2. Summary of significant accounting policies a. Basis of preparation These financial statements of the Chamber have been prepared in accordance with the legal regulations accepted in R. Macedonia in relation to the work of the non-profit organizations, the Law on Accounting for Non-profit Organizations of the Republic of Macedonia (Official Gazette of Republic of Macedonia 24/03 with amendments up to 17/11 and 154/15) and the Rulebook for the Accounting of Non-profit Organizations (Official Gazette of Republic of Macedonia 42/03 with amendments up to 175/11). The financial statements have been prepared for the year ended 31 December The Chamber s financial statements are presented in Macedonian Denars ( MKD ). Accounting policy of the Chamber is to present financial statements on a cash receipts and disbursement basis of accounting. On this basis, revenue is recognized when received rather than when earned, and expenses are recognized when paid rather than when incurred. The payments executed in the year N will be considered as well as the payments executed beginning of the year N+1 and related to services rendered and goods delivered in the year N. 5

9 NOTES TO THE FINANCIAL STATEMENTS at 31 December Summary of significant accounting policies (continued) b. Revenue Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Chamber and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognized: Membership fees Revenue is recognized when the membership fee is paid from the member. Rendering of services Fees from services provided are recognized over the period in which the services are paid by the buyer. Interest income Interest income is recognized over the period in which the interest is transferred and paid to the Chamber. c. Fixed assets Fixed assets are recorded at cost upon their acquisition. Fixed assets are fully expensed at their invoiced amount upon their acquisition and are directly credited to the fixed assets fund in the balance sheet. Later, when the depreciation is calculated, the charge is also debited to the fixed assets fund. Fixed assets are stated at cost, excluding the cost of day-to-day servicing, less accumulated depreciation and accumulated impairment in value. Such cost includes the cost of replacing part of such equipment when that cost is incurred of the recognition criteria are met. Cost comprised purchase price, including import duties and non-refundable taxes as well as any directly attributable cost of bringing asset to its working condition and location for its intended use. The carrying values of equipment are reviewed for impairment when events change or changes in circumstances indicate that the carrying value may not be recoverable. An item of equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognizing of the asset (calculated as a difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognized. Depreciation is charged on a straight-line basis at prescribed by law rates to allocate the cost of plant and equipment over their estimated useful lives. The annual depreciation rates applied are the following: Computer equipment 25% Furniture and fixtures 20% 6

10 NOTES TO THE FINANCIAL STATEMENTS at 31 December Summary of significant accounting policies (continued) d. Fixed asset fund The fixed asset fund of the Association is set up in accordance with the Law on Accounting for Non-profit Organizations of the Republic of Macedonia and corresponds to the net carrying amount of the fixed assets. Increases to the fund are generated upon acquisition of fixed assets. Decreases to the funds are recorded annually and entirely comprise of the depreciation charge and any disposals. e. Accounts receivables Accounts receivables are recognized and carried at original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. f. Cash and cash equivalent Cash and cash equivalents comprise from cash at bank and cash in hand. g. Fund Funds are initially created by founders contributions made in monetary and/or in kind assets carried at their fair values. Subsequently, funds are increased/ decreased through additional founders contributions, than results (surplus/shortages) from operations during the periods, as well as changes in the net carrying amounts of the equipment and intangibles as explained in Note 2.d. h. Taxes Current tax With the latest changes in the Macedonian tax legislation published in Official Gazette no.112 from 25 July, 2014, effective from 1 January 2014, the current income tax in Republic of Macedonia is calculated as 10% tax rate on the income before tax representing the tax base. This tax base is further increased by the non-deductible (unrecognized) expenses incurred in that fiscal year, decreased by the amount of tax credits and other tax reliefs. The current income tax is recognized in the statement of profit or loss for the year. During the year, the Chamber pays monthly advances which are calculated based on the tax balance for unrecognized expenses from previous year. At the end of the reporting period, a final tax calculation is prepared for the current year based on the current year income tax expenses and any difference to the monthly advances paid is recorded as either tax asset or tax liability. 7

11 NOTES TO THE FINANCIAL STATEMENTS at 31 December Summary of significant accounting policies (continued) h. Taxes (continued) VAT The Chamber is not registered taxpayer for the purposes of VAT, so the expenses and assets are recognized with the amount for VAT. Net amount for VAT that is paid to tax authorities is part of obligation in balance sheet. i. Foreign exchange transactions Foreign exchange transactions are recorded at the rate ruling at the day of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Resulting exchange differences are taken to the income statement. The following currency exchange rates are used to translate the following currencies in Macedonian denars, on the reporting date: 31 December December 2015 MKD MKD EUR 61, ,5947 USD 58, ,3744 j. Events after the reporting date Events after the reporting date that reflect the balances which exist on the reporting date, are treated as corrective events in these financial statements. Those who reflect the balances after the reporting date are treated as non-corrective events. 8

12 NOTES TO THE FINANCIAL STATEMENTS at 31 December Income a. Membership fees Type of membership 4. Current tax Patron Corporate Business Entrepreneur NGO s For 2016, as explained in the Note 2h, a reconciliation of income tax expense is as follows: Non-deductible expenses arising from: Representation Sponsorships Donations Insurance of employees Other Total Non-deductible expenses Tax on non-deducible items at statutory income tax rate of 10% The Company s tax liabilities are based on the tax returns filed with the tax authorities and are finalized when audited by the Central Tax Authorities, or a ten-year period has elapsed from the year they are filed. The Chamber s books and records have not been audited by the tax authorities regarding the income tax for 2016 and 2015, and consequently, the Chamber s income tax may not be considered finalized. Any additional taxes and penalties that may arise in the case of tax control cannot be determined with reasonable accuracy in this stage. 9

13 NOTES TO THE FINANCIAL STATEMENTS at 31 December Property and equipment in MKD Computers Furniture and Total fixtures Cost Balance at 1 January Additions At 31 December Additions At 31 December Depreciation At 1 January Depreciation charge for the year At 31 December Charge for the year At 31 December Net book value At 31 December At 31 December Cash and cash equivalents Cash at banks MKD Cash in hand

14 NOTES TO THE FINANCIAL STATEMENTS at 31 December Accounts receivables Tax receivable Advances The MKD represent the difference between the paid advances for income tax during 2015 increased for the tax receivables transferred from 2014 and the income tax for the year. 8. Accounts payables Tax obligations Contingencies and commitments Litigations At 31 December 2016, there are no legal proceedings raised against the AmCham. Capital commitments There is no significant capital expenditure contracted at the balance sheet date that is not recognized in the financial statements. 10. Events after the reporting period No material events subsequent to balance sheet date have occurred which require disclosure in the financial statements. 11