the institute of risk management south africa ......no 16, 18de / 18th str., hazelwood, 0081 tel....

THE INSTITUTE OF RISK MANAGEMENT SOUTH AFRICA(Registration number 036-539-NPO)

FINANCIAL STATEMENTSFOR THE YEAR ENDED 28 FEBRUARY 2015

The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015

General Information

Executive Committee S Morland

C Palm

M Robins

P Tillman

N Pandor

C Brits

B Gutshwa

L Carlo

M Kuipers

A Mothibi

Business address 1st Floor, Block A

Grayston Ridge Office Park

144 Katherine Street

Sandton

2196

Postal address Postnet Suite 616

Private Bag X 43

Sunninghill

2157

Bankers First National Bank

Auditor's A Fell

Chartered Accountant (S.A.)

Registered Auditor

1


Index

The reports and statements set out below comprise the financial statements presented to the members:

Index Page

Independent Auditor's Report 3

Report of the Executive Committee 4

Statement of Financial Position 5

Statement of Comprehensive Income 6

Statement of Changes in Equity 7

Statement of Cash Flows 8

Accounting Policies 9 - 10

Notes to the Financial Statements 11 - 12

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A. FELLGeoktrooieerde Rekenmeesters (SA) & Geregistreerde OuditeureChartered Accountants (SA) & Registered Auditors Praktyk/Practice no. 947814

Kantore te / Oficce at: Bus / Box 15177, Lynn East, 0039Plot 80, Zeekoegat, Pretoria, 0002 E-mail/E-Pos: [email protected] 16, 18de / 18th Str., Hazelwood, 0081 Tel. 012 808 2151 (Zeekoegat)

Cell. 074 116 5000 (Zeekoegat)Tel. 012 346 8304 (Hazelwood)Fax. 086 672 6780

Independent Auditor's Report

To the members of The Institute of Risk Management South Africa

I have audited the financial statements of The Institute of Risk Management South Africa, as set out on pages 5 to 12, which comprise the statement of financialposition as at 28 February 2015, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flowsfor the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Executive Committee's Responsibility for the Financial Statements

The Institute's executive committee is responsible for the preparation and fair presentation of these financial statements. This responsibility includes: designing,implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards onAuditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financialstatements 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 dependon the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal control relevant to the Institute’s preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Institute’s internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of The Institute of Risk Management South Africa as at28 February 2015, and its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standard forSmall and Medium-sized Entities, and the requirements of the Companies Act 71 of 2008.

A FellChartered Accountant (S.A.)Registered Auditor

5 June 2015Pretoria

Vennoot / Partner: ANNELIEN FELL

Cell. 082 453 0262


Report of the Executive Committee

1. Historical Background

The Institute of Risk Management South Africa was formed as an Association of Persons following the amalgamation oftwo predecessor associations in September 2003.

The Institute is registered as a Non-Profit Organisation. Operating from permanent offices in Sandton, Johannesburg, witha full time staff, it is the authorative professional body representing individuals and companies committed to theenhancement of Enterprise Risk Management (ERM).

The Institute offers a range of services including the professional accreditation of members, interaction and discussion oncurrent risk issues, research and project development, skills development and opportunities for networking andprofessional development.

2. Committee members and secretary

The committee members of the Institute during the year and to the date of this report are as follows:

Committee members Designation ChangesS Morland PresidentC Palm Vice President Appointed 19 June 2014M Robins Vice PresidentP Tillman Honorary TreasurerN Pandor Honorary Secretary Appointed 19 June 2014C Brits Exco MemberB Gutshwa Exco MemberL Carlo Exco MemberM Kuipers Exco Member Appointed 19 June 2014A Mothibi Exco Member Appointed 19 June 2014

3. Date of authorisation for issue of financial statements

The financial statements have been authorised for issue by the Executive committe on 21 May 2015. No authority wasgiven to anyone to amend the financial statements after the date of issue.

S Morland P Tillman

4


Statement of Financial Position as at 28 February 2015Figures in Rand Note(s) 2015 2014

Assets

Non-Current Assets

Property, plant and equipment 2 184 836 128 926

Intangible assets 3 600 417 -

785 253 128 926

Current Assets

Trade and other receivables 4 881 875 637 127

Cash and cash equivalents 5 4 268 480 4 290 037

5 150 355 4 927 164

Total Assets 5 935 608 5 056 090

Equity and Liabilities

Equity

Retained surplus 4 991 121 3 901 100

Liabilities

Current Liabilities

Trade and other payables 6 685 442 550 249

Income received in advance 259 045 604 741

944 487 1 154 990

Total Equity and Liabilities 5 935 608 5 056 090

5


2015 2014

Revenue

Annual Subscriptions 2 353 451 1 906 912

Breakfast income (123 692) (29 701)

Conference income 1 376 241 932 157

Dinner income 19 240 46 405

Other event income 51 442 145 037

Royalties 12 100 10 203

Sale of books and booklets 250 705

Training income 1 441 171 838 751

Website related income 38 290 34 570

5 168 493 3 885 039

Other income

Interest received 7 228 472 154 406

Profit on exchange differences 21 028 6 875

SARS Employment Tax Incentive received 2 190 -

251 690 161 281

Operating expenses

Accounting fees 42 600 33 173

Advertising and media 275 996 212 586

Auditors remuneration 10 30 950 26 100

Bad debts - 110 700

Bank charges 27 655 20 423

Computer expenses 101 349 74 506

Debtor collection fees 3 550 -

Depreciation, amortisation and impairments 51 183 40 941

Employee costs 2 708 937 2 000 730

Education and technical development 89 331 -

General expenses 51 526 37 605

Insurance 9 768 8 042

Internet costs 123 886 117 458

Lease rentals on operating lease 571 453 294 909

Members' meeting costs 36 085 5 745

Printing and stationery 11 677 6 756

Repairs and maintenance 30 053 45 575

Security 7 566 7 306

Telephone and fax 54 541 36 895

Travel - local and overseas 98 396 32 264

4 326 502 3 111 714

Operating profit 1 093 681 934 606

Finance costs 8 (3 660) (145)

Profit for the year 1 090 021 934 461

6


Statement of Changes in Equity

Figures in RandRetainedsurplus

Total equity

Balance at 1 March 2013 2 966 638 2 966 638

Profit for the year 934 462 934 462

Balance at 1 March 2014 3 901 100 3 901 100

Profit for the year 1 090 021 1 090 021

Balance at 28 February 2015 4 991 121 4 991 121

Note(s)

7


Statement of Cash FlowsFigures in Rand Note(s) 2015 2014

Cash flows from operating activities

Cash generated from operations 11 461 141 657 592

Interest income 228 472 154 406

Finance costs (3 660) (145)

Net cash from operating activities 685 953 811 853

Cash flows from investing activities

Purchase of property, plant and equipment 2 (107 093) (121 666)

Purchase of other intangible assets 3 (600 417) -

Net cash from investing activities (707 510) (121 666)

Total cash movement for the year (21 557) 690 187

Cash at the beginning of the year 4 290 037 3 599 850

Total cash at end of the year 5 4 268 480 4 290 037

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Accounting Policies

1. Presentation of financial statements

The financial statements have been prepared on the historical cost basis, and incorporate the principal accountingpolicies 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 operatingin the manner intended by management.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurredsubsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an itemof 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 theuseful life of the property, plant and equipment, which is as follows:

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Depreciation method Average useful life

Furniture and fixtures Straight line 6 - 10 yearsIT Equipment Straight line 3 years

The residual value, depreciation method and useful life of each asset are reviewed at each higher (lower) if there areindicators 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 recognisedin profit or loss in the period.

1.2 Intangible assets

Intangible assets are initially recognised at cost and subsequently at cost less accumulated amortisation andaccumulated impairment losses.

Research and development costs are recognised as an expense in the period incurred.

Amortisation is provided to write down the intangible assets, on a straight-line basis, as follows:

Item Useful lifeCapitalised development cost - Code of good practise 5 yearsCapitalised development cost - Board examinations 5 years

If the institute is unable to make a reliable estimate of the useful life of an intangible asset, the life is presumed to be 10years.

The residual value, amortisation period and amortisation method for intangible assets are reassessed when there is anindication that there is a change from the previous estimate.

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Accounting Policies

1.3 Revenue

Revenue is recognised to the extent that the institute has transferred the significant risks and rewards of ownership ofgoods to the buyer, or has rendered services under an agreement provided the amount of revenue can be measuredreliably and it is probable that economic benefits associated with the transaction will flow to the institute. Revenue ismeasured at the fair value of the consideration received or receivable, excluding sales taxes and discounts.

Interest is recognised, in profit or loss, using the effective interest rate method.

10


Notes to the Financial StatementsFigures in Rand 2015 2014

2. Property, plant and equipment

2015 2014

Cost Accumulateddepreciation

Carrying value Cost Accumulateddepreciation

Carrying value

Furniture and fixtures 173 451 (40 736) 132 715 95 173 (14 753) 80 420IT equipment and computersoftware

219 162 (167 041) 52 121 190 347 (141 841) 48 506

Total 392 613 (207 777) 184 836 285 520 (156 594) 128 926

Reconciliation of property, plant and equipment - 2015

Openingbalance

Additions Depreciation Total

Furniture and fixtures 80 420 78 278 (25 983) 132 715IT equipment and computer software 48 506 28 815 (25 200) 52 121

128 926 107 093 (51 183) 184 836

Reconciliation of property, plant and equipment - 2014

Openingbalance

Additions Depreciation Total

Furniture and fixtures 4 025 80 519 (4 124) 80 420Computer software 44 176 41 147 (36 817) 48 506

48 201 121 666 (40 941) 128 926

3. Intangible assets

2015 2014

Cost Accumulatedamortisation

Carrying value Cost Accumulatedamortisation

Carrying value

Capitalised developmentcost - Code of practice

255 904 - 255 904 - - -

Capitalised developmentcost - Board examinations

344 513 - 344 513 - - -

Total 600 417 - 600 417 - - -

4. Trade and other receivables

Trade receivables 737 655 415 266Prepayments - 45 716Deposits 144 220 176 145

881 875 637 127

5. Cash and cash equivalents

Cash and cash equivalents consist of:

Bank balances 423 267 518 974Short-term deposits 3 845 213 3 771 062

4 268 480 4 290 036

11


Notes to the Financial StatementsFigures in Rand 2015 2014

6. Trade and other payables

VAT 160 498 97 489Other payables 50 958 37 938Accrued expenses 473 986 414 822

685 442 550 249

7. Investment revenue

Interest revenueBank 228 472 154 406

8. Finance costs

Bank 109 145Late payment of tax 3 551 -

3 660 145

9. Taxation

No provision has been made for 2015 tax as the Institute is exempt from taxation in terms of Section 10(1) of the IncomeTax Act 1962, as ammended.

10. Auditor's remuneration

Fees 30 000 24 500Tax and secretarial services 950 1 600

30 950 26 100

11. Cash generated from operations

Profit before taxation 1 090 021 934 462Adjustments for:Depreciation and amortisation 51 183 40 941Interest received - investment (228 472) (154 406)Finance costs 3 660 145Changes in working capital:Trade and other receivables (244 749) (74 786)Trade and other payables 135 193 87 608Income received in advance (345 695) (176 372)

461 141 657 592

12. Commitments

Operating leases – as lessee (expense)

Minimum lease payments due - within one year 389 946 418 223 - in second to fifth year inclusive 563 122 1 927 388

953 068 2 345 611

Operating lease payments represent rentals payable by the institute for certain of its office properties and are negotiatedfor an average term of three years. No contingent rent is payable.

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General InformationBusiness addressPostal addressBankersAuditor's

IndexIndependent Auditor's ReportReport of the Executive CommitteeStatement of Financial PositionStatement of Comprehensive IncomeOperating expensesStatement of Changes in EquityStatement of Cash FlowsAccounting Policies-ACPPresentation of financial statements-ACPProperty, plant and equipment-ACPIntangible assets-ACPRevenue-ACP

Notes to the Financial StatementsProperty, plant and equipmentIntangible assetsTrade and other receivablesCash and cash equivalentsTrade and other payablesInvestment revenueFinance costsTaxationAuditor's remunerationCash generated from operationsCommitments

the institute of risk management south africa ......no 16, 18de / 18th str., hazelwood, 0081 tel....

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