Financial statements for the year ended 31 March 2016
General Information Country of incorporation and domicile Nature of business and principal activities Board members Registered office Business address South Africa Counselling services, personal growth and life skills training Sonya Rayne (Chairperson) Andre Vest (Treasurer) Sharon Pearlman Jenny Tweehuijsen (Secretary) Tom Sebastian Sheila Houghton (Vice Chairperson) Dawn Mosdell Teresa da Silva (Ex-officio Director) 71 Watermeyer Street Val de Grace Pretoria 0184 71 Watermeyer Street Val de Grace Pretoria 0184 Postal address PO Box 12407 Queenswood Pretoria 0121 Bankers Auditors Level of assurance Preparer Nedbank Limited HP AUDIT Registered Auditors These financial statements have been audited in compliance with the applicable requirements of the Non-Profit Organisation Act No. 71 of 1997. The financial statements were independently compiled by: PR Potgieter Chartered Accountant (S.A.) Published 04 July 2016 1
Index The reports and statements set out below comprise the financial statements presented to the board members: Index Page Board members' Responsibilities and Approval 3 Independent Auditors' Report 4 Board members' Report 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 Financial Statements 12-14 The following supplementary information does not form part of the financial statements and is unaudited: Detailed Income Statement 15-16 2
Board members' Responsibilities and Approval The constitution of LIFELINE PRETORIA stipulates that the control and the management of the properties and affairs of the organisation shall vest in the board members. The board members are required by the Non-Profit Organisation Act No. 71 of 1997, to maintain adequate accounting records and are responsible for the content and integrity of the financial statements and related financial information included in this report. It is their responsibility to ensure that the financial statements fairly present the state of affairs of the organisation 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 Reporting Standard for Small and Medium-sized Entities. The external auditors are engaged to express an independent opinion on the financial statements. The financial statements are prepared in accordance with the International Financial Reporting 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 board members acknowledge that they are ultimately responsible for the system of internal financial control established by the organisation and place considerable importance on maintaining a strong control environment. To enable the board members 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 organisation and all employees are required to maintain the highest ethical standards in ensuring the organisation s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the organisation is on identifying, assessing, managing and monitoring all known forms of risk across the organisation. While operating risk cannot be fully eliminated, the organisation endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The board members 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 financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The board members have reviewed the organisation s cash flow forecast for the year to 31 March 2017 and, in the light of this review and the current financial position, they are satisfied that the organisation 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 organisation's financial statements. The financial statements have been examined by them and their report is presented on page 4. The financial statements set out on pages 3-17, which have been prepared on the going concern basis, were approved by the Board on 04 July 2016 and were signed on its behalf by: Sonya Rayne (Chairperson) 3
Independent Auditors' Report To the members of LIFELINE PRETORIA We have audited the financial statements of LIFELINE PRETORIA, as set out on pages 6 to 14, which comprise the statement of financial position as at 31 March 2016, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information. Board members' Responsibility for the Financial Statements The organisation s board members are responsible for the preparation and fair presentation of these financial statements in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and requirements of the Non-Profit Organisation Act No. 71 of 1997, and for such internal control as the board members determine is necessary to enable the preparation of financial statements that are free from material misstatements, 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. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from 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 auditor considers internal control relevant to the entity s preparation and fair presentation 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 management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for Qualified Opinion In common with similar organisations, it is not feasible for the organisation to institute accounting controls over the income from cash receipts, donations, courses, bequests and fundraising activities prior to the initial entry of collections in the accounting records. Accordingly, it is impractical to extend an examination beyond the receipt actually recorded. Qualified Opinion In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of LIFELINE PRETORIA as at 31 March 2016, and its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and the requirements of the Non-Profit Organisation Act No. 71 of 1997. HP AUDIT Registered Auditor Per: PR Potgieter Partner 76 Lynburn Road Lynnwood Manor Pretoria 0081 4
Board members' Report The board members have pleasure in submitting their report on the financial statements of LIFELINE PRETORIA for the year ended 31 March 2016. 1. Nature of business LIFELINE PRETORIA is a non-profit organisation registered in South Africa and is engaged in counselling services and provides training on personal growth and life skills. The organisation operates principally in and around the city of Pretoria in South Africa. 2. Review of financial results and activities The financial statements have been prepared in accordance with International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Non-Profit Organisation Act No. 71 of 1997. 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 organisation are set out in these financial statements. 3. Board members The board members in office at the date of this report are as follows: Board members Changes Flick Mullan Resigned 31 May 2016 Sonya Rayne (Chairperson) Andre Vest (Treasurer) Sharon Pearlman Jenny Tweehuijsen (Secretary) Tom Sebastian Sheila Houghton (Vice Chairperson) Dawn Mosdell Teresa da Silva (Ex-officio Director) Appointed 01 April 2015 4. Events after the reporting period The board members are not aware of any material event which occurred after the reporting date and up to the date of this report. 5. Auditors HP AUDIT continued in office as auditors for the organisation for 2016. 5
Statement of Financial Position as at 31 March 2016 Figures in Rand Note(s) 2016 2015 Assets Non-Current Assets Property, plant and equipment 2 31 214 12 804 Current Assets Other financial assets 3 303 701 280 596 Trade and other receivables 4 3 100 6 000 Cash and cash equivalents 5 748 977 686 058 1 055 778 972 654 Total Assets 1 086 992 985 458 Equity and Liabilities Equity Retained income 780 665 622 095 Liabilities Current Liabilities Trade and other payables 7 7 796 13 628 Deferred income 6 298 531 349 735 306 327 363 363 Total Equity and Liabilities 1 086 992 985 458 6
Statement of Comprehensive Income Figures in Rand Note(s) 2016 2015 Revenue 8 1 287 266 834 707 Cost of projects 9 (441 230) (263 788) Gross surplus 846 036 570 919 Profit on sale of asset 10 699 - Operating expenses (739 588) (363 249) Operating surplus/(deficit) 107 147 207 670 Investment revenue 12 29 655 13 632 Fair value adjustments 13 21 768 28 601 Surplus/(Deficit) for the year 158 570 249 903 Other comprehensive income - - Total comprehensive surplus/(deficit) for the year 158 570 249 903 7
Statement of Changes in Equity Figures in Rand Retained income Total equity Balance at 01 April 2014 372 192 372 192 Surplus for the year 249 903 249 903 Other comprehensive income - - Total comprehensive surplus/(deficit) for the year 249 903 249 903 Balance at 01 April 2015 622 095 622 095 Surplus for the year 158 570 158 570 Other comprehensive income - - Total comprehensive surplus/(deficit) for the year 158 570 158 570 Balance at 31 March 2016 780 665 780 665 8
Statement of Cash Flows Figures in Rand Note(s) 2016 2015 Cash flows from operating activities Cash generated from operations 16 72 851 570 293 Interest income 28 654 12 821 Dividends received 1 001 811 Net cash from operating activities 102 506 583 925 Cash flows from investing activities Purchase of property, plant and equipment 2 (38 250) (2 099) Fair value adjustment on investment (1 337) 48 870 Net cash from investing activities (39 587) 46 771 Total cash movement for the year 62 919 630 696 Cash at the beginning of the year 686 058 55 362 Total cash at end of the year 5 748 977 686 058 9
Accounting Policies 1. Presentation of Financial Statements The financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and the Non-Profit Organisation Act No. 71 of 1997. The 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 Rands. 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. Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. 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 Leasehold property Furniture and fixtures Motor vehicles Office equipment IT equipment Average useful life 10 years 6 years 5 years 6 years 3 years The residual value, depreciation method and useful life of each asset are reviewed at each annual reporting period if there are indicators present that there has been a significant change from the previous estimate. 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 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 Financial instruments at fair value All other financial instruments are measured at fair value through profit and loss. 10
Accounting Policies 1.3 Impairment of assets The company assesses at each reporting date whether there is any indication that an asset may be impaired. If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined. If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset (or group of assets) in prior years. A reversal of impairment is recognised immediately in profit or loss. 1.4 Share capital and equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. 1.5 Government grants Grants that do not impose specified future performance conditions are recognised in income when the grant proceeds are receivable. Grants that impose specified future performance conditions are recognised in income only when the performance conditions are met. Grants received before the revenue recognition criteria are satisfied are recognised as a liability. Grants are measured at the fair value of the asset received or receivable. 1.6 Revenue 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. Revenue 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. 1.7 Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred. 11
Notes to the Financial Statements Figures in Rand 2016 2015 2. Property, plant and equipment Cost / Valuation 2016 2015 Accumulated depreciation and impairments Carrying value Cost / Valuation Accumulated depreciation and impairments Carrying value Furniture and fixtures 110 119 (107 240) 2 879 110 119 (106 754) 3 365 Motor vehicles 150 000 (149 998) 2 150 000 (149 998) 2 Office equipment 34 483 (21 249) 13 234 18 716 (17 570) 1 146 IT equipment 115 324 (117 722) (2 398) 115 324 (107 046) 8 278 Leasehold improvements 87 162 (69 665) 17 497 64 679 (64 666) 13 Total 497 088 (465 874) 31 214 458 838 (446 034) 12 804 Reconciliation of property, plant and equipment - 2016 Opening balance Additions Depreciation Total Furniture and fixtures 3 365 - (486) 2 879 Motor vehicles 2 - - 2 Office equipment 1 146 15 767 (3 679) 13 234 IT equipment 8 278 - (10 676) (2 398) Leasehold improvements 13 22 483 (4 999) 17 497 Reconciliation of property, plant and equipment - 2015 12 804 38 250 (19 840) 31 214 Opening Additions Depreciation Total balance Furniture and fixtures 1 752 2 099 (486) 3 365 Motor vehicles 28 800 - (28 798) 2 Office equipment 1 462 - (316) 1 146 IT equipment 18 961 - (10 683) 8 278 Leasehold improvements 13 - - 13 50 988 2 099 (40 283) 12 804 A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the organisation. 3. Other financial assets At fair value Unit trusts 303 701 280 596 Current assets At fair value 303 701 280 596 4. Trade and other receivables Trade receivables 3 100 6 000 12
Notes to the Financial Statements Figures in Rand 2016 2015 5. Cash and cash equivalents Cash and cash equivalents consist of: Cash on hand 2 250 297 Bank balances 746 727 685 761 6. Deferred income 748 977 686 058 Donation for salary of director 240 000 - National Lottery 58 531 349 735 7. Trade and other payables 298 531 349 735 Trade payables 7 796 13 628 8. Revenue Courses 298 270 319 235 Services 24 254 43 980 Fundraising 292 258 135 491 Donations and Pledges 381 280 132 896 Lotto Grant 291 204 203 105 9. Cost of sales 1 287 266 834 707 Rendering of services Cost of services 441 230 263 788 10. Other income Recoveries 699-11. Employee cost Indirect employee costs Basic 490 622 168 271 Total employee costs Indirect employee costs 490 622 168 271 12. Investment revenue Dividend revenue Local 1 001 811 Interest revenue Bank 28 654 12 821 29 655 13 632 13
Notes to the Financial Statements Figures in Rand 2016 2015 13. Fair value adjustments Other financial assets 21 768 28 601 14. Taxation No provision has been made for 2016 tax as the organisation is exempt from income tax in terms of section 10(1)(cN) of the Income Tax Act. 15. Auditors' remuneration Fees - 15 048 16. Cash generated from operations Surlpus/(Deficit) before taxation 158 570 249 903 Adjustments for: Depreciation and amortisation 19 840 40 283 Dividends received (1 001) (811) Interest received - investment (28 654) (12 821) Fair value adjustments (21 768) (28 601) Changes in working capital: Trade and other receivables 2 900 6 940 Trade and other payables (5 832) (16 335) Deferred income (51 204) 331 735 72 851 570 293 14
Detailed Income Statement Figures in Rand Note(s) 2016 2015 Revenue Courses 298 270 319 235 Services 24 254 43 980 Fundraising 292 258 135 491 Donations and pledges 381 280 132 896 Lotto Grant 291 204 203 105 8 1 287 266 834 707 Cost of projects Purchases (441 230) (263 788) Gross surplus 846 036 570 919 Other income Recoveries 699 - Dividends received 12 1 001 811 Interest received 12 28 654 12 821 Fair value adjustments 13 21 768 28 601 52 122 42 233 Expenses (Refer to page 16) (739 588) (363 249) Surplus/(Deficit) for the year 158 570 249 903 15 The supplementary information presented does not form part of the financial statements and is unaudited
Detailed Income Statement Figures in Rand Note(s) 2016 2015 Operating expenses Accounting fees (46 427) (13 900) Advertising (9 434) (5 894) Auditors remuneration 15 - (15 048) Bad debts (6 000) - Bank charges (3 578) (3 495) Cleaning (8 764) (3 622) Computer expenses (14 500) - Conference costs (5 162) (11 221) Depreciation, amortisation and impairments (19 840) (40 283) Employee costs (490 622) (168 271) Entertainment (4 784) (2 484) Gifts (636) (170) Insurance (26 609) (13 343) Legal expenses (2 850) - Motor vehicle expenses (7 868) (5 398) Municipal expenses (6 309) (9 854) Printing and stationery (8 014) (18 204) Rent paid (3 179) (1 500) Repairs and maintenance (1 480) (15 269) Security (765) (8 243) Telephone and fax (69 137) (27 050) Workmans compensation (3 630) - (739 588) (363 249) 16 The supplementary information presented does not form part of the financial statements and is unaudited