SOUTH AFICAN ACADEMY OF FAMILY PHYSICIANS NPC ANNUAL FINANCIAL STATEMENTS FO THE YEA ENDED 31 MACH 2013
Index The reports and statements set out below comprise the annual financial statements presented to the shareholders: Index Page General Information 2 Directors' esponsibilities and Approval 3 Independent Auditors' eport 4 Directors' eport 5 Statement of Financial Position 6 Statement of Comprehensive Income 7 Statement of Changes in Equity 8 Statement of Cash Flows 9 Accounting Policies 10-11 Notes to the Annual Financial Statements 12-15 The following supplementary information does not form part of the annual financial statements and is unaudited: Detailed Income Statement 16 1
General Information Country of incorporation and domicile Nature of business and principal activities Directors egistered office Business address South Africa Empowerment of doctors through education Dr. S. Mazaza Prof.. Mash Prof. P. De Villiers Dr. N. Naidoo Dr. H. Brits Prof. G. Ogunbanjo 15 Oxford Street Durbanville 5550 15 Oxford Street Durbanville 5550 Postal address Postnet Suite 110 Private Bag X19 Durbanville 7551 Bankers Auditors Standard Bank of South Africa Limited West-Evans Incorporated Chartered Accountants (S.A.) egistered Auditors 14 Bedfordview Office Park 3 iley oad Bedfordview 2007 Tel.: (011) 450-1520 Company registration number 1980/007011/08 Level of assurance Preparer These annual financial statements have been audited in compliance with the applicable requirements of the Companies Act 71 of 2008. The annual financial statements were independently compiled by:. West-Evans Chartered Accountant (S.A.) Published 05 November 2014 2
Directors' esponsibilities and Approval The directors are required by the Companies Act 71 of 2008, to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the company as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with the International Financial eporting Standard for Small and Medium-sized Entities. The external auditors are engaged to express an independent opinion on the annual financial statements. The annual financial statements are prepared in accordance with the International Financial eporting Standard for Small and Medium-sized Entities and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates. The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The directors have reviewed the company s cash flow forecast for the year to 31 March 2014 and, in the light of this review and the current financial position, they are satisfied that the company has or has access to adequate resources to continue in operational existence for the foreseeable future. The external auditors are responsible for independently auditing and reporting on the company's annual financial statements. The annual financial statements have been examined by the company's external auditors and their report is presented on page 4. The annual financial statements set out on pages 5 to 16, which have been prepared on the going concern basis, were approved by the board on 05 November 2014 and were signed on its behalf by: Prof. G. Ogunbanjo 3
Independent Auditors' eport To the shareholders of We were engaged to audit the annual financial statements of as set out on pages 5 to 15, which comprise the statement of financial position as at 31 March 2013, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, the notes, comprising a summary of significant accounting policies and other explanatory information. Directors' esponsibility for the Annual Financial Statements The company s directors are responsible for the preparation and fair presentation of these annual financial statements in accordance with the International Financial eporting Standard for Small and Medium-sized Entities and requirements of the Companies Act 71 of 2008, and for such internal control as the directors determine is necessary to enable the preparation of annual financial statements that are free from material misstatements, whether due to fraud or error. Auditors' esponsibility Our responsibility is to express an opinion on these annual financial statements based on conducting our audit in accordance with International Standards on Auditing. Because of the matter described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Basis for Disclaimer of Opinion We were unable to obtain the written representations from the directors that they have fulfilled their responsibility for the preparation and fair presentation in accordance with the International Financial eporting Standard for Small and Mediumsized Entities and the requirement of the Companies Act 71 of 2008. We were also unable to obtain written representation from the directors that they have provided us with all relevant information and access as agreed in terms of the audit engagement and that all transactions had been recorded and are reflected in the annual financial statements. The directors were not prepared to provide us with these representations to substantiate certain laon accounts, suspense accounts, bank accounts and expense transactions. We could not determine the effect of the lack of such representations on the financial position of the company at 31 March 2013, or the financial performance and cash flows for the year then ended. Disclaimer of Opinion Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the annual financial statements. Other reports required by the Companies Act As part of our audit of the annual financial statements for the year ended 31 March 2013, we have read the directors' report for the purpose of identifying whether there are material inconsistencies between that report and the audited annual financial statements. The directors' report is the responsibility of the directors. Based on reading that report we have not identified material inconsistencies between it and the audited annual financial statements. However, we have not audited the directors' report and accordingly do not express an opinion thereon. West-Evans Incorporated Chartered Accountants (S.A.) egistered Auditors 05 November 2014 Berdfordview Per: P.H. Briel Chartered Accountant (S.A.) egistered Auditor 4
Directors' eport The directors have pleasure in submitting their report on the annual financial statements of South African Academy of Family Physicians NPC for the year ended 31 March 2013. 1. Nature of business To promote and encourage in the field of family practice/ primary care the highest standard of care by providing facilities for teaching, training and research and matters incidental thereto. The company principally operates in South Africa. There have been no material changes to the nature of the company's business from the prior year. 2. eview of financial results and activities The annual financial statements have been prepared in accordance with International Financial eporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act 71 of 2008. The accounting policies have been applied consistently compared to the prior year. Full details of the financial position, results of operations and cash flows of the company are set out in these annual financial statements. 3. Directors The directors in office at the date of this report are as follows: Directors Dr. S. Mazaza Prof.. Mash Prof. P. De Villiers Dr. N. Naidoo Dr. H. Brits Prof. G. Ogunbanjo There have been no changes to the directorate for the period under review. 4. Property, plant and equipment There was no change in the nature of the property, plant and equipment of the company or in the policy regarding their use. 5. Events after the reporting period The directors are not aware of any material event which occurred after the reporting date and up to the date of this report. 6. Going concern The directors believe that the company has adequate financial resources to continue in operation for the foreseeable future and accordingly the annual financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the company. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the company. 7. Auditors West-Evans Incorporated continued in office as auditors for the company for 2013. 5
Statement of Financial Position as at 31 March 2013 Note(s) Assets Non-Current Assets Property, plant and equipment 2 1 1 Other financial assets 3 907,337 907,337 907,338 907,338 Current Assets Trade and other receivables 4 2,325,885 2,278,539 Cash and cash equivalents 5 1,020,220 491,920 3,346,105 2,770,459 Total Assets 4,253,443 3,677,797 Equity and Liabilities Equity etained income 3,820,380 3,188,351 Liabilities Current Liabilities Current tax payable - 52,085 Trade and other payables 6 433,063 437,361 433,063 489,446 Total Equity and Liabilities 4,253,443 3,677,797 6
Statement of Comprehensive Income Note(s) evenue 7 1,243,777 1,462,822 Operating expenses (644,674) (537,515) Operating profit 8 599,103 925,307 Investment revenue 9 527 57,830 Finance costs 10 (19,686) (1,453) Profit before taxation 579,944 981,684 Taxation 11 52,085 (52,085) Profit for the year 632,029 929,599 Other comprehensive income - - Total comprehensive income for the year 632,029 929,599 7
Statement of Changes in Equity etained income Total equity Balance at 01 April 2011 2,258,752 2,258,752 Profit for the year 929,599 929,599 Other comprehensive income - - Total comprehensive income for the year 929,599 929,599 Balance at 01 April 2012 3,188,351 3,188,351 Profit for the year 632,029 632,029 Other comprehensive income - - Total comprehensive income for the year 632,029 632,029 Balance at 31 March 2013 3,820,380 3,820,380 8
Statement of Cash Flows Note(s) Cash flows from operating activities Cash receipts from customers 1,339,585 912,355 Cash paid to suppliers and employees (792,126) (683,630) Cash generated from operations 13 547,459 228,725 Interest income 527 57,830 Finance costs (19,686) (1,453) Net cash from operating activities 528,300 285,102 Cash flows from investing activities Sale of financial assets - 76,105 Net cash from investing activities - 76,105 Total cash movement for the year 528,300 361,207 Cash at the beginning of the year 491,920 130,713 Total cash at end of the year 5 1,020,220 491,920 9
Accounting Policies 1. Presentation of Annual Financial Statements The annual financial statements have been prepared in accordance with the International Financial eporting Standard for Small and Medium-sized Entities, and the Companies Act 71 of 2008. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African ands. These accounting policies are consistent with the previous period. 1.1 Property, plant and equipment Property, plant and equipment are tangible items that: are held for use in the production or supply of goods or services, for rental to others or for administrative purposes; and are expected to be used during more than one period. Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses. Cost includes all costs incurred to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation is provided using the straight-line method to write down the cost, less estimated residual value over the useful life of the property, plant and equipment, which is as follows: Item Office equipment IT equipment Average useful life 5 years 3 years Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss in the period. 1.2 Financial instruments 1.3 Tax Initial measurement Financial instruments are initially measured at the transaction price. This includes transaction costs, except for financial instruments which are measured at fair value through profit or loss. Financial instruments at amortised cost Debt instruments, as defined in the standard, are subsequently measured at amortised cost using the effective interest method. Debt instruments which are classified as current assets or current liabilities are measured at the undiscounted amount of the cash expected to be received or paid, unless the arrangement effectively constitutes a financing transaction. At the end of each reporting date, the carrying amounts of assets held in this category are reviewed to determine whether there is any objective evidence of impairment. If so, an impairment loss is recognised Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Deferred tax assets and liabilities A deferred tax asset is recognised for all deductible temporary differences and for the carry forward of unused tax losses and unused tax credits. 10
Accounting Policies 1.3 Tax (continued) Tax expenses Tax expense is recognised in the same component of total comprehensive income (i.e. continuing operations, discontinued operations, or other comprehensive income) or equity as the transaction or other event that resulted in the tax expense. 1.4 evenue When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the company; the stage of completion of the transaction at the end of the reporting period can be measured reliably; and the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable. evenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. Interest is recognised, in profit or loss, using the effective interest rate method. 1.5 Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred. 11
Notes to the Annual Financial Statements 2. Property, plant and equipment Cost / Valuation Accumulated depreciation and impairments Carrying value Cost / Valuation Accumulated depreciation and impairments Carrying value Office equipment 38,586 (38,585) 1 38,586 (38,585) 1 IT equipment 58,239 (58,239) - 58,239 (58,239) - Total 96,825 (96,824) 1 96,825 (96,824) 1 econciliation of property, plant and equipment - 2013 Opening Total balance Office equipment 1 1 econciliation of property, plant and equipment - 2012 Opening balance Depreciation Total Office equipment 6,306 (6,305) 1 3. Other financial assets At fair value Unit trusts 39,982 39,982 At amortised cost SAAFP Trust loan account The loan is unsecured, interest free and is not repayable within 12 months. 867,355 867,355 Total other financial assets 907,337 907,337 Non-current assets At fair value 39,982 39,982 At amortised cost 867,355 867,355 4. Trade and other receivables 907,337 907,337 Bluebean Credit Card: Account number 401128663 179,003 179,003 C. Simpson: unauthorised expenses 240,080 94,930 L.D. Pick: unauthorised expenses 987,221 987,221 Suspense account 464,819 466,918 Trade receivables 454,762 550,467 2,325,885 2,278,539 12
Notes to the Annual Financial Statements 5. Cash and cash equivalents Cash on hand - 4,380 Bank balances 1,020,220 487,540 6. Trade and other payables 1,020,220 491,920 Trade payables 282,652 205,442 VAT 128,311 126,707 Audit fee accrual 22,100 72,884 Unknown bank transfers - 32,328 7. evenue 433,063 437,361 endering of services 1,243,777 1,443,225 oyalty income - 19,597 8. Operating profit Operating profit for the year is stated after accounting for the following: 1,243,777 1,462,822 Operating lease charges Premises Contractual amounts 44,046 81,495 Equipment Contractual amounts 7,245 9,557 51,291 91,052 Depreciation on property, plant and equipment - 6,305 Employee costs 93,800 279,549 9. Investment revenue Interest revenue Bank 527 57,830 10. Finance costs Penalties and Interest 19,686 1,453 13
Notes to the Annual Financial Statements 11. Taxation Major components of the tax (income) expense Current Local income tax - current period - 52,085 Local income tax - recognised in current tax for prior periods (52,085) - No provision has been made for 2013 tax as the company has no taxable income. The company has been registered as a non- profit organisation and is exempt from income tax in terms of section 10(1)(e) of the Income Tax Act.. 12. Auditors' remuneration (52,085) 52,085 Fees 22,100 20,000 Adjustment for previous year (25,644) - 13. Cash generated from operations (3,544) 20,000 Profit before taxation 579,944 981,684 Adjustments for: Depreciation and amortisation - 6,305 Interest received - investment (527) (57,830) Finance costs 19,686 1,453 Changes in working capital: Trade and other receivables (47,346) (849,066) Trade and other payables (4,298) 146,179 14. elated parties 547,459 228,725 ` elationships Associates Members of key management SAAFP Trust Dr. S. Mazaza Dr. N. Naidoo Dr. H. Brits Prof. Mash Prof. P. de Villiers Prof. G. Ogunbanjo elated party balances and transactions with other related parties elated party balances Loan accounts - Owing (to) by related parties SAAFP Trust 867,355 867,355 14
Notes to the Annual Financial Statements 15. Directors' remuneration No emoluments were paid to the directors or any individuals holding a prescribed office during the year. 16. Going concern The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. 15
Detailed Income Statement Note(s) evenue endering of services 1,243,777 1,443,225 oyalty income - 19,597 7 1,243,777 1,462,822 Other income Interest received 9 527 57,830 Operating expenses Accounting fees 42,322 4,919 Administration and management fees 149,215 5,229 Advertising 16,228 - Auditors remuneration 12 (3,544) 20,000 Bank charges 13,479 18,236 Computer expenses 32,659 - Conference expenses 3,468 34,607 Depreciation, amortisation and impairments - 6,305 Employee costs 93,800 279,549 Entertainment - 1,768 Insurance 675 8,132 Lease rentals on operating lease 51,291 91,052 Legal expenses 13,000 - Office expenses 1,026 - Postage 9,522 2,423 Printing and stationery 13,632 6,022 Staff welfare 12,152 - Subscriptions - 2,305 Telephone and fax 23,821 33,781 Travel - local 92,853 21,487 Venue hire 79,075 1,700 644,674 537,515 Operating profit 8 599,630 983,137 Finance costs 10 (19,686) (1,453) Profit before taxation 579,944 981,684 Taxation 11 52,085 (52,085) Profit for the year 632,029 929,599 16 The supplementary information presented does not form part of the annual financial statements and is unaudited