ANNUAL REPORT 2014-2015 - Institute of Internal Auditors · ANNUAL REPORT 2014-2015 PROGRESS THROUGH SHARING page | 06 PRESIDENT'S REPORT (continued) Profound Appreciation In conclusion,

ANNUAL REPORT2014-2015


PROGRESS THROUGH SHARING

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CONTENTS

Abbreviations 2

The President's Report 3

The Chief Executive Officer's Report 7

Corporate Governance Report 9

Executive Committee Report 12

Ethics Committee Report 13

Annual Conference Committee Report 14

Continuous Professional Education Committee Report 17

Membership & Publicity Committee Report 19

Projects & Fundraising Committee Report 21

Research & Standards Committee Report 23

Audit Committee Report 24

Board of Directors 25

Directors' Responsibility for Financial Reporting 27

Finance Report for the Year Ended 31 March 2015 28

Independent Auditors' Report 31

Audited Financial Statements 32

Notice of Annual General Meeting 48

Proxy Form 49



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ABBREVIATIONS

IIAZ : Institute of Internal Auditors Zimbabwe

CIA : Certified Internal Auditor

CBOK : Common Body of Knowledge

IPPF : International Professional Practices Framework

CPE : Continuous Professional Education

ADB : African Development Bank

AGM : Annual General Meeting

QAR : Quality Assurance Review

COSO : Committee of Sponsoring Organisations

ACCA : Association of Chartered Certified Accountants

IODZ : Institute of Directors Zimbabwe

IIASB : International Internal Audit Standards Board

IFRS : International Financial Reporting Standards

IAS : International Accounting Standards

ZIMRA : Zimbabwe Revenue Authority

HIAP : Heads of Internal Audit Programs

AFIIA: African Federation of Institutes of Internal Auditors



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PRESIDENT'S REPORT

Mr Munyaradzi Tachivona I I A Z I M P R E S I D E N T

It is my pleasure as President of IIA Zimbabwe to report on the activities and financial performance of the Institute for the year ended 31 March 2015. This will be my final report as President as I am now serving the final year of my two year term as President. I want to express great appreciation to all IIA volunteers, members and staff who have supported me during my tenure as President. Through their collective efforts my tenure as President has been an enjoyable and of invaluable experience despite the tough economic environment we are operating in.

In the paragraphs that follow I bring to your

attention some of the major highlights of the year ended 31 March 2015.

MembershipOur membership year follows the calendar year (January to December). December 2014 exit figures reflect a marginal decrease of 1% in membership over comparative point in 2013 to 556 from 562.Although we lost some members this was largely mitigated by a gain of 40 members from central government as a result of a capacity building initiative of the African Development Bank (ADB). The long term financial survival of the institute is dependent on increasing membership numbers to at least double the current levels.

Continuous Professional EducationWe have largely been able to maintain total participants count at our CPE workshops. This year's CPE events were boosted by the first ever CIA Winter School we held in June 2014 and also by several in house training workshops we have hosted for our central government and local government stakeholders. We will continue to ensure that the institute maintains its position as the preferred and leading developer of internal audit professionals in Zimbabwe by providing up to date and relevant quality training.

Annual ConferenceWe ran a successful 2014 Annual Conference which attracted 202 delegates, compared to 161 delegates in 2013. This is of



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high significance as revenues generated at this event account for more than 50% of institute revenues. I am happy with the preparations and efforts I have seen being put in for the 2015 Annual Conference and sincerely hope that we have another success this year. I am also grateful to business partners who have supported the institute by taking up sponsorship packages we offered at the 2014 Annual Conference.

Certified Internal Auditor (CIA)The CIA is the internal audit profession's flagship certification. Those that hold the certification will have demonstrated a high level of competency in internal audit. I recommend all internal audit practitioners to get the CIA certification or any of the other IIA certifications. In this financial year we have witnessed an increase in registrations for the CIA certification – a more than doubling of the registrations we recorded on the prior financial year. Of the 136 who registered for modules, 34 passed their modules and 11 achieved the CIA certification having sat and passed all the modules. This is a very encouraging trend.

Malborough OfficesAfter getting all the internal and external approvals, construction on the vacant piece of land in Malborough, Harare which we acquired in the financial period ending 31 March 2013 commenced in March 2015. This is the first phase of developments on the stand which will comprise of an

administration building (with 4 offices, store room, board room, kitchen and toilets) and an outbuilding for the caretaker. This first phase is being funded entirely from internal resources. It is envisaged that developments in a second phase, in good time and funds permitting, will include conference rooms and a library/exam room. The successful completion of developments on the stand will go a long way in ensuring the long term sustainability of the institute and provide a solid foundation for growth of the profession in Zimbabwe.

Master Relationship Agreement (MRA)The MRA consolidates all the terms and conditions of The IIA affiliation into one master document including the roles and responsibilities and governance principles shared by each entity for the protection and growth of The IIA worldwide. Each of the 105 institutes affiliated to The IIA was required to sign a new affiliation agreement which came into effect on 1 January 2015. I am happy to announce that we signed the MRA and related addenda, after due process, and submitted within the set deadlines.

National Code On Corporate GovernanceSubsequent to our 31 March 2015 year end and on 9 April 2015 the Zimbabwe National Code on Corporate Governance was launched at a function officiated by Vice P r e s i d e n t H o n o u r a b l e E m m e r s o n Mnangagwa. This is a key milestone in the evolution of corporate governance in

PRESIDENT'S REPORT (continued)



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Zimbabwe and t he documen t , i f implemented/enforced, will bring internal audit to the forefront as a key component to any governance infrastructure. We participated in the drafting of sections of the code on Governance of Risk which, among o the r t h ings , has p r inc ip l e s and recommendations covering Internal Audit Function, Methodology and Mandate. We are happy that most our input made it into the final document.

Global CouncilI attended the 2015 Global Council meeting in Beijing, China. This was the largest Global Council event held so far with 193 delegates from 75 institutes. The programme over the two business days covered: -Ÿ High level overview of the 2015-2020

Global Strategic Plan, Ÿ four 30-minute General Sessions, each

followed by 90-minute Discussion Sessions on 4 key elements of the IIA 2015-2020 Global Strategic Plan being; Capacity Building, Professionalism, Advocacy / IIA as Leader and Sustainable Value.

Ÿ High level overview of the state of the global profession

In addition to serving as a forum where Institute leaders from around the world interact, collaborate, and network with each other, Global Council also offered Institute leaders an opportunity to contribute valuable input that shapes the strategic direction of

The IIA and the internal audit profession. A summary report of the outcomes of deliberations at the 2015 Global Council has since been produced. We will use this document in reviewing our current strategies.

FinancesAs can be seen in the financial results for the year we are in good financial health. We registered a surplus in the current year. We are in a position where we can meet our financial obligations as they fall due. Our good financial position has allowed us to start phase one developments on our piece of land in Malborough, Harare without resorting to borrowing. However, we should be concerned by the fact that our membership subscriptions are not sufficient to cover our administrative expenses. We should strive therefore to double our current membership numbers in order to achieve this equilibrium.

Board And Management SuccessionIt is my pleasure to welcome Mr B. Vera and Mr M. Kavhumbura, who joined the board in September 2014. I also wish to extend my special appreciation to the following board members: Mr. S. Nyazenga, Mr. A. M. Mukuvisi, Mr. T. Marange and Mr. N. Nhapi; whose terms have come to an end in terms of the articles. Their invaluable contributions to the Board and diligent service to the profession for no financial gain is worth saluting.



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Profound AppreciationIn conclusion, I would like to thank my fellow Board Members, Management, Staff and all IIA Volunteers for their hard work and dedication to duty. My special appreciation goes to our Patron, the Auditor General, Mrs. M. Chiri, for the advice and support she has continuously rendered to the Institute over the years. I would also like to thank the Nominations Committee for their work to ensure that your Institute has a functional succession strategy. While welcoming the incoming new board members to be elected to the service of the profession, I would like to extend my sincere appreciation to the

outgoing board members for their immense contributions to the Institute.

Last but not least I must register my most unreserved appreciation to the members of the IIA. It is through your membership and your support of Institute events that ensures that the Institute remains the leader in advocating for and developing the internal audit profession in Zimbabwe.

MUNYARADZI TACHIVONAIIA [ZIMBABWE] PRESIDENT



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CHIEF EXECUTIVE OFFICER’S REPORT

M r R o y F. B v e k e r w a CHIEF EXECUTIVE OFFICER

The year under review was challenging as a result of the macroeconomic situation in the country. A number of companies went into liquidation resulting in our members losing jobs and subsequently failing to pay their subscriptions. Those companies which remained operating faced enormous pressure due to reduced demand for their products and services. In a poorly performing economy training becomes one of the first casualties in cost cutting by organisations. Thus quite a number of set training courses were aborted because of low take up. The Institute's performance was helped by a well attended 2014 annual conference with 202 participants. The Institute also benefitted

from the African Development Bank support for central government in which they paid for the membership subscriptions for 40 central government internal auditors. In addition ADB financed 6 in-house courses for government auditors and for 25 participants at the annual conference.

The African Development Bank is supporting 20 senior government internal auditors to acquire the Certified Internal Auditor qualification as part of their efforts to strengthen governance within central government. I have no doubt in my mind that all these measures taken by government with the support of ADB will have beneficial effect in improving administration in central government. We in the Institute take enormous pride in playing a role in the turnaround of our nation's fortunes.

The IIA Zimbabwe is proud to report that the construction of the IIA offices in Adylinn Avenue, Marlborough (Harare) began in earnest at the beginning of March 2015. The construction of permanent offices will go a long way in strengthening the Institute in discharging its mandate. In the past the IIA has constantly moved offices with attendant problems associated with this. The IIA Zimbabwe now joins the small league of elite African Institutes with their own home.

The secretariat of the Institute was strengthened by the employment of a



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CHIEF EXECUTIVE OFFICER’S REPORT (continued)

Technical Officer which has alleviated the pressure in holding courses and preparing for the annual conference. Her presence has released the CEO to spend more time on strategy, advocacy and the construction of the IIA Zimbabwe offices. The current strength of the Institute will help us march into the future with confidence in spite of the prevailing macroeconomic pressures. It opens the door to carry out in-house courses and tackle external quality assurance assignments. An additional vehicle was acquired to enhance our service delivery.

I am delighted that IIA Global is working together with the African Federation ( AFIIA) to strengthen Institutes in the African Region. To this end a symposium was organised in Kampala Uganda for all Institutes in the region. The whole idea is to have each Institute giving a minimum level of service to its members. IIA Zimbabwe needs to take its place in AFIIA as one of the strong Institutes in the region.

IIA Zimbabwe and Global continue to increase their service offering through a number of newsletters bringing members up to date with the latest developments. Recently Career Campus and Smart brief were added to the stable of communication platforms available to members.

I need to recognise the support of our partners in successfully hosting the 2014 Annual Conference. Allow me to mention some of them by name; CQS, EY, PWC, Zimpapers, Air Zimbabwe, Delta Corporation and African Sun. I am indebted to the invaluable contributions that I received from Board and staff of the Institute. All of them helped turn a fairly difficult year into a positive one.

ROY F. BVEKERWACHIEF EXECUTIVE OFFICER



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CORPORATE GOVERNANCE REPORT

The Institute of Internal Auditors subscribes to the principles of discipline, independence, accountability, transparency, responsibility, integrity, fairness and social responsibility, which are identified as the primary characteristics of good governance.

The primary objective of any system of corporate governance is to ensure that directors and managers, to whom the running of corporations has been entrusted by the members, carry out their responsibilities faithfully and effectively, placing the interests of the corporation and society ahead of their own.

This process is facilitated through the establishment of appropriate reporting and control structures within the organisation. The Board believes that the Institute's governance practices are strong in all material respects.

Directorate and Executive ManagementThe Board of Directors of the Institute (the Board) retains full and effective control over the Institute. The Board meets regularly, no less than four times a year to review strategy, planning, operational performance, acquisitions and disposals, stakeholder communications and other material matters relating to performance of executive management. All of the Directors of the Institute are non-executive, bringing objective judgement to bear on issues of strategy and performance. Decisions of a

material nature are taken by the Board and senior management. Directors are entitled to seek independent professional advice about the affairs of the Institute, at the Institute's expense, if they believe that course of action would be in the best interest of the Institute.

Details of attendance by the Directors at Board Meetings during the financial year ended 31st March 2015 are set out below:-

Financial StatementsThe Board is responsible for preparing financial statements and other information presented in the annual report in a manner that fairly presents the state of affairs and results of the operations of the Institute. The external auditors are responsible for carrying out an independent examination of the

NAME DESIGNATION ATTENDANCE

M Tachivona President 6/6

S Nyazenga 1st Vice President 4/6

A Mukuvisi 2nd Vice President 6/6

N Nhapi Board Member 6/6

T Mawere Board Member 6/6

T Marange Board Member 4/6

R Musiyiwa Board Member 4/6

T Mutenga Board Member 2/6

D Mkhize Board Member 3/6

M Kahombe Board Member 5/6

B Vera Board Member 3/4

M Kavhumbura Board Member 2/4

T Mapukute Past President 4/6



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CORPORATE GOVERNANCE REPORT (continued)

financial statements in accordance with International Standards on Auditing and reporting their findings thereon.

The annual financial statements contained in this report have been prepared in accordance with International Financial Reporting Standards. They are based on appropriate accounting policies and are supported by reasonable and prudent judgments and estimates. The directors have no reason to believe that the Institute's operations will not continue as a going concern in the year ahead.

Audit CommitteeThe Institute has an audit committee comprising representation by non-executive directors. The external auditors have unrestricted access to this committee. The audit committee reviews the effectiveness of internal controls in the Institute with reference to the findings of the auditors. Other areas covered include the review of important accounting issues, including specific disclosures in the financial statements and a review of the major audit recommendations.

Risk Management and Internal ControlThe directors are accountable for the process of risk management and for establishing appropriate risk and control policies. Executive managers are responsible for the identification and evaluation of key risks applicable to their areas of business. The Institute maintains internal controls and

systems designed to provide reasonable assurance as to the integrity and reliability of the financial statements and to adequately s a f e g u a r d , v e r i f y a n d m a i n t a i n accountability for its assets. Significant audit findings are reported to both executive management and the audit committee. Corrective action is taken to address internal control deficiencies identified in the execution of audit work. Nothing has come to the attention of the Directors that indicates any material breakdown in the functioning of the key internal controls and systems during the period under review.

Directors' and Executive RemunerationAll board members serve in a voluntary capacity and receive no remuneration for their work as directors. The Executive Committee has been delegated by the Board with the responsibility of determining the remuneration of the executive management members. The chairman of the committee is obliged to report to the Board on its deliberations. The remuneration policy is formulated to attract, retain and motivate top quality talent in the best interests of the members.

Management ReportingThere are comprehensive management reporting disciplines in place which include the preparation of annual budgets, which are reviewed and approved by the Institute's Board of Directors. Monthly results and the



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CORPORATE GOVERNANCE REPORT (continued)

financial status of the Institute are reported against approved budgets and compared to the prior year.

Strategic Planning ProcessIn line with its mission to enhance the integrity, relevance and standing of the profession and the Institute, and to provide outstanding professional developmental services to its members, the overall strategy for the Institute of Internal Auditors Zimbabwe is clearly focused. Annual strategic plans are compiled at strategy workshops attended by all board members and executive management, with detailed

p l a n s f o r a c t i o n a n d a l l o c a t e d responsibilities.

Progress is reviewed regularly at the Board and committee meetings in order to continuously align the Institute's operations to its board approved strategic goals.

EthicsDirectors and employees are required to observe the highest ethical standards, ensuring that the business practices are conducted in a manner which, in all reasonable circumstances, is beyond reproach.



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EXECUTIVE COMMITTEE REPORT

Composition of the CommitteeThe committee is comprised of the President (Mr. M. Tachivona), the First Vice-President (Mr. S. Nyazenga), the Second Vice President (Mr. A. M. Mukuvisi) and past president (Mr. T. Mapukute). Details of meeting attendances by committee members are set out below:-

Name Designation Attendance

Outline of the Objectives / Terms of Reference of the CommitteeThe key role of the committee is to assist the Board of Directors in the fulfilment of its responsibilities for overseeing the affairs of the Institute by acting for the Board in between meetings on any matters that require immediate action, and therefore maintain continuing oversight of the operations of the Institute to ensure that activities are being performed in accordance with approved plans and programs.

Key tasks assigned to the committee during our last IIA Strategic Review workshop were to:-Ÿ C o n t i n u o u s l y m o n i t o r t h e

implementation of strategic action plans by board committees and the secretariat;

Ÿ Hire a Technical Officer;Ÿ Ensure the continued participation of IIA

Zimbabwe in global activities.

Major Achievements Realised by the CommitteeThe committee is pleased with the efforts of all board committees and the secretariat to implement the strategic action plans as outlined in the two-year IIA Zimbabwe Strategic Plan developed in November 2013. At each board meeting a tracker of each committee's progress against their strategic action plans is discussed. The achievements recorded by the various committees are outlined in the committee reports contained in this annual report.

The Technical Officer commenced work with effect from 1 May 2014. This appointment has strengthened the secretariat by enhancing service delivery to the IIA stakeholders. We are receiving positive feedback from seminar and workshop participants with regards to the quality of our training. With her efforts we were able to host our first Certified Internal Auditor (CIA) winter school at Mandel Training Centre in June 2014 as well as a successful CIA revision workshop for government heads of internal audit in October 2014. The Technical Officer has also attended a number of conferences exhibiting the services that the institute offers to captains of industry, human resources practitioners, accounting professionals, among others. The Technical Officer also


M Tachivona Chairperson 3/3

S Nyazenga Member 2/3

A Mukuvisi Member 3/3

T Mapukute Member 3/3



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EXECUTIVE COMMITTEE REPORT (continued)

played a key role by providing administrative and technical support to our quality assurance teams and contributed to the success of the 2014 Annual Conference.

The committee ensured the continued representation of the Institute at important global forums. The President represented IIA Zimbabwe at the 2015 Global Council Meeting in Beijing, China held in April 2015.More details about this meeting are in the President's report. The CEO attended the IIA International Conference in London in July 2014.

ETHICS COMMITTEE REPORT

Composition of the CommitteeThe committee is comprised of Angel Mukuvisi (Chairman) and Simon Nyazenga.

No meetings were held this year.

Committee ObjectivesThe overriding aim of the Ethics Committee is to ensure that the standards of professional conduct are upheld and that members behave in an appropriate manner in accordance with the Code of Ethics.

AchievementsThere were no disciplinary cases attended to.



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ANNUAL CONFERENCE COMMITTEE REPORT

CompositionThe committee comprises of 6 members. The members of the committee as at 31 March 2015 were:

Mrs. Tambudzayi Mawere (Chairperson)Mr. Munyaradzi Tachivona (IIA President)Mrs. Rumbidzai MusiyiwaMrs. Agnes DembetembeMr. Teerai Alex MarangeMr. Alois Makamure

Details of meeting attendance by committee members are set out below:

Two members exited the Committee after the September 2014 AGM namely Mrs. Rumbidzayi Musiyiwa and Mr. Alois Makamure.

Committee ObjectivesThe primary function of the committee is to provide oversight and support for the hosting of the Annual conference and Annual Dinner based on the requirements of the IIA Strategic Plan.

Major AchievementsThe Institute's flagship conference, The Annual Conference, remains the one offering where we are able to provide a service that appeals to a broad spectrum of individuals within our diverse membership base. It also provides an excellent opportunity to bring together Internal Auditors from all walks of life to share their experiences and network with each other. As is the custom, The Annual Conference was held during the month of September 2014 and was attended by 202 delegates, including speakers from diverse areas of expertise such as governance, risk, compliance, Information technology, the profession, and economic and social spheres. We continued to showcase the ability of the Institute to put together a world class learning and networking event on a value for money basis.

We were pleased with the attendance rate in this rather adverse economic climate. The Conference held from 11 to 13 September 2014 had the theme “Positioning Internal Audit for the Future” and our key note speaker was Douglas Mboweni the CEO of Econet Wireless. We are grateful to our sponsors and we encourage fellow auditors, risk and governance practitioners and Heads of Internal Audit in particular, to ensure organisations support this prestigious annual event.

NAME

T Mawere

M Tachivona

TA Marange

A Makamure

A F W Dembetembe

R Musiyiwa

TOTAL MEETINGS

9/10

8/10

8/10

5/7

8/10

2/7



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ANNUAL CONFERENCE COMMITTEE REPORT (continued)

The Annual Dinner is run at the end of the year in conjunction with a CPE course. Numbers were low for this event in comparison to 2013 with 45 delegates in attendance. Entertainment kicked off from the opening of the dinner with a select afro-jazz group. At the dinner we get to celebrate

the Internal Auditor of the year. However for the year 2014, there were no nominations for this award. Members are implored to take pride in participating in both the Annual Dinner function and in the selection of the Internal Auditor of the Year.

Annual Conference Attendances

2011 2012 2013 2014

215 188 161 202


R Musiyiwa Chairperson 6/6

A Mukuvisi Member 2/2

A Muchogo Member 6/6

R Majilana Member 4/6

M Manzungu Member 2/6



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CONTINUOUS PROFESSIONAL EDUCATION COMMITTEE REPORT

Composition of the CommitteeThe committee is comprised of two board members (Mrs Rumbidzai Musiyiwa and Mr. Angel Mukuvisi) and three co-opted members (Mr. Richard Majilana, Mr. Albert Muchogo and Mr. Muchengeti Manzungu).

Committee objectivesTo forge relationships among academics, students, practitioners, administrators, and others for the primary purpose of promoting the role of internal auditing and internal auditing education within college/university curricula nationally.

To promote IIA's global certification programs that:Ÿ Are recognized as the global benchmark

for the professionŸ Cont r ibu te to the competency,

recognition, and professionalism of internal auditors

Ÿ Advocate the value and recognition of IIA internal audit certifications to all stakeholders nationally

To promote continuing professional development programs to internal audit practitioners..

Major AchievementsThe year ending March 2015 has been phenomenal with an exceptional increase in the total number of attendees attending in house courses, the launch of the Winter School and capacity building programmes done in collaboration with the African Development Bank.

Winter SchoolThe Internal Auditor's Winter School hosted for the first time in the history of IIA (Z), attracting a total of 30 attendees who were served by a high powered delegation of qualified and experienced presenters.

Col laborat ion wi th the Afr ican Development BankThe African development bank funded the capacity building of public sector internal auditors. A 5 day risk based internal auditing session was organised by the CPE committee and conducted for central government internal auditors. A total of 66 internal auditors were trained on risk based internal auditing. In addition to the above, 25 central



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CONTINUOUS PROFESSIONAL EDUCATION COMMITTEE REPORT (continued)

government Chief Internal Auditors were taken through CIA Parts 1-3 classes in preparation for the CIA examination.

Inhouse Courses There were 7 in house courses conducted in the year under review compared to the one in house course held in the year ending March 2014. This illustrates the manner in which awareness of the Institute as a training partner has increased, more inhouse courses are anticipated in the coming year.

Training ProgrammesA total of 8 CPE courses were conducted for the period under review whilst 9 were cancelled due to very low attendances.

In addition to the above, the courses continue to be highly rated by the attendees. The committee continues to improve course content and craft courses in response to the topical issues in each given period.

Composition of the CommitteeThe committee is comprised of two board members (Mr. Nobert Nhapi and Mr. Moses Kavhumbura) and four co-opted non-board members (Mr. Vincent Mutata, Mrs. Nyarai Chengeta Avery, Mr. Kudakwashe Masendu and Mr. Thompson Masvaure).

Details of meeting attendances by committee members are set out below:-

Outline of the Objectives / Terms of Reference of the Committee

The major tasks of the Committee are to:Ÿ d e v e l o p i n t e r n a l a n d e x t e r n a l

communication channels of the Institute.Ÿ maintain the regular publication of

Institute of Internal Auditors Zimbabwe magazine/ newsletter.


N Nhapi Chairperson 5/5

M Kavhumbura Board Member 1/1

V Mutata Committee Member 3/5

N Chengeta Committee Member 3/5

K Masendu Committee Member 3/5

T Masvaure Committee Member 4/5



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MEMBERSHIP & PUBLICITY COMMITTEE REPORT

Ÿ be responsible for membership drive, membership administration, classes of membership, admission requirements, issuing of certificates, database creation and maintenance.

Ÿ promote the Institute's visibility.Ÿ increase membership by identifying

potential members and their development.

Major Achievements

MembershipThe committee reviewed database r e q u i r e m e n t s a n d p r o p o s a l s f o r improvements being considered to enhance its capabilities. The database was integrated with Pastel and is updated whenever a member makes payment.

Membership recruitment programs were embarked on such as the promotion during the 2014 annual conference and the member-bring-a-member campaign currently running. A membership card is being introduced to enable members to benefit from discounts for accommodation at participating hotels.

Publicity was maintained through regular adverts in daily and weekly newspapers and through presentations at various fora. The Committee also held a radio interview for the Internal Audit Awareness month.



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MEMBERSHIP & PUBLICITY COMMITTEE REPORT (continued)

Membership decreased from 563 in the previous year to 561. Current Membership status is as follows:-

Increasing membership has become more difficult because of the current economic environment. Organisations easily forgo payment of subscriptions for auditors when they have financial challenges. Also, gains in membership are eroded by failure by members who leave the profession (e.g. due to promotion) to maintain membership.

Published ArticlesWe published the following articles in the press:-

Ÿ Have You Considered Joining the IIA?Ÿ Getting to Know Internal Auditing - The

Profession that Makes a DifferenceŸ Role of Internal AuditŸ The Three Lines of Defence in Risk

Management

The Institute magazine was produced in September 2014 as well as in January 2015.

2009 2010 2011 2012 2013 2014 1 1 1 1 1 5

132 347 444 537 562 556 133 348 445 538 563 561

Honorary MembershipGeneralTotal

Composition of the CommitteeThe committee is comprised of three board members (Mr. Tagarira Mutenga, Mr. Munyaradzi Tachivona and Mr. Tapiwa Mapukute) and two co-opted non-board members (Mr. Walter Matemera and Mr. Godwin Kanongovere).

Details of meeting attendances by committee members are set out below:-

Committee objectivesTo provide guidance and assistance to the IIA with respect to funding and implementing capital projects. The committee may, from time to time, be called upon to provide advice on fundraising activities for the IIA' operations.

Major AchievementsIIA Zimbabwe acquired a vacant piece of land in Marlbourough, Harare in 2013. Construction work on the stand commenced in March 2015, and the project consists of a


T Mutenga Chairperson 7/8

M Tachivona Board Member 4/8

T Mapukute Board Member 4/8

W Matemera Committee Member 4/8

G Kanongovere Committee Member 2/8



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PROJECTS & FUNDRAISING COMMITTEE REPORT

main house and an outbuilding. The original costs, according to the bill of quantities, estimated total material costs of $66 000, and labour costs of $25 000. An original total estimate of $91 000.The works on a 'labour-only basis' was awarded to Matachi Building Contractors (Private) Limited through a formal tendering process that attracted 11 bidders. Once completed, the project is expected to be used as IIAZ offices' permanent home.

Costs Of The ProjectIncorporating work done to date, revised estimates put total project cost at $112 000. The actual costs are expected to surpass the original estimates due to the following:-Ÿ The bill of quantities compiled in 2014

was updated to current prices of building materials.

Ÿ The original design was varied to accommodate the need for a special foundation that had not been foreseen at the time the plan was designed.

Ÿ Variation of materials resulting in the adoption of aluminium windows and sliding doors for better visual appeal.

As at 31 July 2015, the main house was at roof level, and the outbuilding had been developed up to wall plate level.

Time CompletionFrom the schedule of works it is estimated that the main house will be complete by no later than mid-September 2015. Although the initial completion date was estimated to be 30



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PROJECTS & FUNDRAISING COMMITTEE REPORT (continued)

June 2015, the contractors lost time when we encountered the need for a special foundation, and delays by City Council to connect the site to reticulated water supply.

Movement Into The New OfficesOnce the construction of the works is

completed, there is a need to level the stand with a dozer and prepare the site for occupation. This includes basic landscaping and site drainage activities. We expect that the property will be ready for occupation by end of September 2015.



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RESEARCH AND STANDARDS COMMITTEE REPORT

CompositionThe Research and Standards Committee is comprised of two board members (Mr Simon Nyazenga and Mrs Tambudzai Mawere) and two co-opted non-board members (Mr Charles Sigobodhla and Mr Casper Nduku) The details of meeting attendance by members is set out below:

Outline of Objectives/Terms of Reference of the CommitteeThe key role of the committee is to serve public interest by assisting the International Internal Audit Standards Board (IIASB) in developing, issuing, maintaining and promoting the Internal Standards for the Professional Practice of Internal Auditing (Standards) on a worldwide basis. It reviews exposure drafts, participates in research for standard setting and topics of interests to its stakeholders

The key tasks assigned to the committee during the strategic review were

Ÿ Continue to raise awareness and promote Quality assurance reviews

Ÿ Carry out Quality Assurance ReviewsŸ Represent institute on standard research

and developmentŸ Participate in local policy setting forums

–National Code on Corporate Governance for Zimbabwe (NCCGZ)

Major AchievementsŸ Marketed QARs through CPEs and other

professional forums like ACCA, IOD and government and state owned enterprises forums (15 forums done for the period under review)

Ÿ Performed Quality Assurance reviews for one listed company and one pension fund

Ÿ Compiled additional three proposals for QAR and one is promising

Ÿ Responded to the exposure draft on changes to the International Professional Practices framework

Ÿ Responded to four small online researches performed by IIA Global

Ÿ Participated in the CBOK 2015 Practitioner and Stakeholders survey (attended thirteen meetings and responded to six papers)

Ÿ Participated in the launch of the National Code on Corporate Governance for Zimbabwe(NCCGZ)

Ÿ Facilitated a presentation of two chapters in the NCCGZ


S Nyazenga Chairman 2/2

T Mawere Board Member 1/2

C Sigobodhla Committee Member 2/2

C Nduku Committee Member 1/2



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AUDIT COMMITTEE ANNUAL REPORT

CompositionThe committee comprises of 3 members as given below:Ms Mucharemba Kahombe (Chairperson)Mr Barnabas Vera (Board Member)Mr Tafireyi Nyamazana ( Co-opted Member)

Details of attendance are as given in the table:

Outline of Objectives/Terms of Reference of the CommitteeThe audit committee was appointed in order to assist the board of directors in fulfilling its oversight responsibilities for the financial reporting process, the system of internal control, the audit process, and the Institute's process for monitoring compliance with laws and regulations.

Major AchievementsIn line with its mandate the committee managed to achieve the following:

Ÿ Proposed for board adoption the terms of reference. These were approved and this helped define the committee's operating terms.

Ÿ Reviewed and proposed to the board for adoption the 2015/2016 IIA Zimbabwe's budget. This was later approved by the board.

Ÿ Handled issues related to the external auditor from fee negotiation, heard from the auditor regarding audited financial statements and worked on identifying, for recommendation to the AGM, an auditor to audit the accounts in the coming period.

Ÿ Reviewed issues related to the accounts including the credit policy, management of debtors and the audited financial statements to recommend for board approval. This included reviewing for appropriateness and sufficiency of management planned actions to address issues raised by external auditors in their report to management.

Ÿ With regards to quarterly management accounts the committee shall be reviewing the accounts and the risk interventions before presenting to the board.


M Kahombe Chairperson 3/3

B Vera Board Member 2/3

T Nyamazana Committee Member 3/3



page | 25

BOARD OF DIRECTORS

Tachivona MunyaradziPresident

Nyazenga Simon1st Vice President

Mukuvisi Angel2nd Vice President

Mawere TambudzaiBoard Member

Musiyiwa RumbidzaiBoard Member

Marange TeeraiBoard Member

Mkhize Douglas Board Member

Mutenga TagariraBoard Member

Nhapi NorbertBoard Member

Kavhumbura Moses Board Member

Vera Barnabas Board Member

Bvekerwa RoyChief Executive Officer

Kahombe MucharembaBoard Member

Mapukute TapiwaBoard Member



page | 27

DIRECTORS' RESPONSIBILITY FOR FINANCIAL REPORTING

The Board of Directors is responsible for the accurate presentation of the financial statements and related information. The Board is satisfied with the integrity of the information provided. The Institute's independent external auditors, Messrs HLB Ruzengwe & Company, have audited the financial statements and their report appears on page 31 of this annual report.

The Directors' responsibility includes maintaining the systems of internal control. The systems seek to provide reasonable assurance as to the accuracy and reliability of the financial systems as well as safeguard and maintain accountability over the Institute's assets.

M. Tachivona CHAIRMAN OF THE BOARD

The Directors have reviewed the performance and financial position of the Institute up to the point of signing of the financial statements and are satisfied that it is a true reflection of the Institute's position. They have also assessed the Institute's budgets and are satisfied that the Institute will continue as a going concern.

The financial statements set out on pages 32 to 47 were approved by the Board of Directors on 5 August 2015 and signed on its behalf by:-

R. F. BvekerwaCHIEF EXECUTIVE OFFICER



page | 28

FINANCE REPORT FOR THE YEAR ENDED 31 MARCH 2015

Financial Highlights

Operating EnvironmentThe operating environment continued to be affected negatively by lack of liquidity and other constraints which presented challenges to the institute.

Year on year inflation in March 2015 was at -1.2 %. The economy grew by 3% in 2014 but is expected to grow by 1.5% in 2015. Organisations are under pressure to take cost containment measures in view of reduced local aggregate demand for products. Such cost containment measures will inevitably lead to reduction in resource budgets provided to internal audit functions and this has an impact on subscriptions received from members and lower attendances at IIA workshops and seminars.

The institute, however, continues to experience increased activity which is reflected by the increase in total income and total expenses.

Financial PerformanceOur financial performance for year ended 31 March 2015 is best illustrated by the waterfall chart below. The chart compares our net surplus position between 31 March 2014 and 31 March 2015 showing what we did better in 2015 compared to 2014 and where there could be opportunities for improvement.

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

-

Sur

plu

s at

31 M

arch

201

4

Mem

ber

ship

Sub

scri

ptio

ns

Wor

ksh

ops

and

Sem

inar

s (n

et)

Oth

er I

ncom

e A

nd

Exp

ense

s

Surp

lus

at 3

1 M

arch

201

5

CIA

Exa

min

atio

ns

(net

)

Annu

al E

vent

s (n

et)

Qua

lity

Ass

uran

ce R

evie

ws

(net

)

Inte

rest

Rec

eive

d

IIA

Glo

bal

Mem

bers

hip

Impa

irm

ent

Los

s

Bad

Deb

ts

Doub

tful

Deb

t P

rovi

sion

Adm

inis

trat

ion E

xpen

ditu

re

Fall Rise

29,9

75

6,25

5

29,5

18

2,15

5

19,4

77

4,82

0

5,71

6

701

2,42

5

1,67

5

7,85

0

34,4

31

364

28,3

20

% Change

+16.0%

+17.4%

-5.5%

+23.8%

-3.6%

+32.7%

+42.0%

31 March

2015

$

546,624

518,304

28,320

264,845

55,172

79,107

133,524

31 March

2014

$

471,424

441,449

29,975

213,890

57,207

59,634

94,001

Total income

Total expenses

Net surplus

Total assets

Net current assets

Net cash inflow from

operating activities

Cash and cash

equivalents



page | 29

Our seminars and workshops (including HIAP seminars) generated the most improved performance compared to 2014. They generated better surpluses as compared to the previous year by $29,518. This is mainly attributed to an increased number of tailored in house courses we ran mostly for public sector internal auditors and also from the success of our first ever CIA winter school. Our annual events (2014 annual conference and 2014 annual dinner) combined registered better surplus than the 2013 editions by $19,477. This was mainly anchored on our 2014 annual conference being attended by 202 delegates, compared to 161 delegates in 2013.

Subscription revenues in 2015 declined by $6,255 compared to 2014 with declining private sector membership being the biggest contributor. These members pay a subscription rate of $150 per member. The loss in this category was mitigated by a gain of 40 members from central government membership though these are levied half the private sector membership rate. The subscription rate for central government auditors has been kept low to attract membership from this category. There were no changes in subscription rates when compared to the previous financial year.

As has been noted in the President's report it is of strategic importance for the institute to fund its administrative expenses from membership subscriptions for long term sustainability.

Although we made gains in the performance of our annual events, seminars and workshops we had challenges in collecting all amounts billed at our events. This led to the write off of $1,675 in amounts assessed as uncollectable. A further provision of $7,850 was made, an amount which the directors deemed as doubtful in their recovery.

The increase in administration expenses of $34,431 was mainly due to the decision taken to strengthen the secretariat which culminated in the recruitment of our Technical Officer in May 2014. Staff salaries were also reviewed with effect from January 2014 as a staff retention strategy.

Assets Our total assets increased by 23.8% to $264,845. During the year the institute acquired $12,741 (at cost) in assets being mainly a motor vehicle and computer equipment for smooth secretariat operations. A further $26,843 had been expended on the construction of the institute's offices which was still work in progress by year end.

FINANCE REPORT FOR THE YEAR ENDED 31 MARCH 2015 (continued)



page | 30

FINANCE REPORT FOR THE YEAR ENDED 31 MARCH 2015 (continued)

AuditThese financial statements have been audited by HLB Zimbabwe Chartered Accountants who were retained as the Institute's auditors at the last Annual General Meeting. The audit cost $4,600 (same cost as for the prior year).

OutlookIt is hoped that, at a minimum, the Institute retains its current members. The Institute has stepped up promotions in the print media and

M. Tachivona CHAIRMAN OF THE BOARD

5 August 2015

using other platforms and these initiatives are having a positive impact on membership. A busy schedule of seminars and workshops has been set for the year ending 31 March 2016 and this stream will continue to contribute significantly to revenues if supported well by auditors. Economic challenges being faced by most businesses and government, however, pose a significant risk.

R. F. BvekerwaCHIEF EXECUTIVE OFFICER



page | 31

REPORT OF THE INDEPENDENT AUDITORS

We have audited the accompanying financial statements for the Institute of Internal Auditors (Zimbabwe) set out on pages 32 to 47, which comprise the statement of financial position as at 31 March 2015, and statement of comprehensive income, statement of changes in reserves and statement of cash flows for the year ended 31 March 2015 and a summary of significant accounting policies and other explanatory information.

The Directors' Responsibility For The Financial StatementsThe Directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards (IFRS) 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.

Auditor's 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 auditor's 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 organisation'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 opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the Institute of Internal Auditors (Zimbabwe) for the year ended 31 March 2015 and of its financial performance and cash flows for the period then ended in accordance with International Financial Reporting Standards.

HLB Ruzengwe Chartered Accountants

TO THE MEMBERS OF THE INSTITUTE OF INTERNAL AUDITORS (ZIMBABWE)

26 August 2015



page | 32

AUDITED FINANCIAL STATEMENTS

THE INSTITUTE OF INTERNAL AUDITORS (ZIMBABWE)(Established in Zimbabwe in 1988 and incorporated in 2009) BUSINESS:The main purpose of the Institute is to provide a platform for the education and advancement of the internal auditor and the internal audit profession as well as being the medium of exchange of ideas and information among internal auditors in Zimbabwe.

BOARD OF DIRECTORSMr M Tachivona President

stMr S Nyazenga 1 Vice President

ndMr A M Mukuvisi 2 Vice President Ms M KahombeMr M KavhumburaMr T A Marange Mrs TMawereMr D MkhizeMrs R MusiyiwaMr T MutengaMr N Nhapi Mr B Vera

Ex-Officio Directors (Past Presidents)Mr T Mapukute

Chief Executive Officer Mr R F Bvekerwa

Registered Office: 7 Tait Avenue Hillside, Harare.

Auditors:HLB Zimbabwe Chartered Accountants 14 Downie Road, Alexandra Park, Harare

Bankers:Barclays Bank of Zimbabwe - Kurima House Branch, Harare

thCABS 4 Street Branch, Harare

Index To Financial Statements For The Year Ended 31 March 2015 PageReport of the Independent Auditors 31Statement of Financial Position 33Statement of Comprehensive Income 34Statement of Changes in Reserves 35Statement of Cash flows 36Notes to the Financial Statements 37 - 47



page | 33

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2015

Assets

Non-current Assets

Property And EquipmentWork In ProgressIntangible Assets

Current Assets

InventoriesAccounts ReceivableCash And Cash Equivalents

Total Assets

Reserves And Liabilities

Reserves

Accumulated FundNon Distributable Reserve

Current Liabilities

Trade And Other PayablesProvisions

Total Reserves And Liabilities

Notes

465

789

3.7

1011

2015USD

96 68026 843

-123 523

3 3294 469

133 524141 322

264 845

167 60911 086

178 695

74 27611 87486 150

264 845

2014USD

90 743-

2 42593 168

8 804 17 917 94 001

120 722

213 890

139 289 11 086

150 375

53 443 10 072 63 515

213 890

PRESIDENT CHIEF EXECUTIVE OFFICER 5 August 2015



page | 34

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2015

IncomeMembership Subscriptions Workshops And Seminars Heads Of Internal Audit ProgramCIA Examinations Study And Promotional Materials SalesAnnual EventsQuality Assurance Review FeesInterest Received Other Income

Expenditure Workshops And Seminars Expenses Annual Conference And DinnerIIA Global Membership Audit Fees Annual General Meeting Board ExpensesDepreciation Impairment LossCIA Examinations Dues Quality Assurance Review CostsCost Of Materials Sold Bad DebtsDoubtful Debt ProvisionInternational Trips And ConferencesAdministration ExpenditureDonations

Net Surplus For The Year

Notes

12

131415

16

2015USD

546 624 82 134

105 900 1 805

39 220 19 485

282 403 8 390 6 917

370

( 518 304) 49 656 202 693 12 943 4 600 2 939 2 540 6 804 2 425

35 260 3 590

16 945 1 675 9 850 7 498

158 886 -

28 320

2014USD

471 424 88 389 91 660 5 005

18 070 12 289

237 995 15 000 1 201 1 815

( 441 449) 68 134

177 762 12 242 4 600 5 616

4 192 4 874

- 16 265

5 380 8 997

- 2 000

6 402 124 455

530

29 975



page | 35

STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 31 MARCH 2015

Balance As At 31 March 2013

Surplus For The Year


Surplus For The Year


Accumulated FundUSD

109 314

29 975

139 289

28 320

167 609

Non DistributableReserve

USD

11 086

-

11 086

-

11 086

TotalUSD

120 400

29 975

150 375

28 320

178 695



page | 36

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2015

CASH FLOW FROM OPERATING ACTIVITIES

Surplus for the year

Adjustments for:-Impairment loss/ Asset write offDepreciation Operating surplus before working capital changes

Changes in working capitalDecrease /(Increase) in inventoriesDecrease in accounts receivableIncrease in accounts payableIncrease in provisionsNET CASH FLOW FROM OPERATING ACTIVITIES

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of property and equipmentWork in progressNET CASH FLOW FROM INVESTING ACTIVITIES

NET INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT 31 MARCH 2014

CASH AND CASH EQUIVALENTS AT 31 MARCH 2015

NOTES

9

2015USD

28 320

2 425

6 804 37 549

5 475 13 448 20 833

1 802 79 107

( 12 741)( 26 843)( 39 584)

39 523

94 001

133 524

2014USD

29 975

- 4 873 34 848

( 5 239) 28 635

488 902

59 634

( 2 088)-

( 2 088)

57 546

36 455

94 001



page | 37

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2014

1. General Information The Institute of Internal Auditors was established in Zimbabwe in 1988 and incorporated in 2009. The main purpose of the Institute is to provide a platform for the education and advancement of the internal auditor and the internal audit profession as well as being the medium of exchange of ideas and information among internal auditors in Zimbabwe.

2. Basis Of Preparation

2.1 Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

2.1.1 New and revised IFRSs applied with no material effect on the financial statements The following new and revised IFRSs have been adopted in these financial statements. The application of these new and revised IFRSs has not had any material impact on the amounts reported for the current and prior years but may affect the accounting for future transactions or arrangements.

·� �IAS 32 Amendments: Offsetting Financial Assets and Financial Liabilities for annual periods beginning on or after 1 January 2014

·� �IAS 36 Amendments: Recoverable amounts disclosures for Non Financial Assets for annual periods beginning on or after 1 January 2014

2.1.2 New and Revised IFRSs issued but not yet effective·��IFRS 9 : Financial Instruments (2009 and 2010) effective for annual periods beginning

on or after 1 January 2018·� �IFRS 14 : Regulatory Deferral Accounts for annual periods beginning on or after 1

January 2016·� �IFRS 15 : Revenue from contracts with customer for annual periods beginning on or

after 1 January 2017·� Amendments to IAS 16 and IAS 38 : Clarification of acceptable methods of

depreciation and amortisation for annual periods beginning on or after 1 January 2016



page | 38

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2014 (continued)

3. Accounting Policies The principal accounting policies of the Institute are set out below and unless otherwise stated, are in all material respects consistent with those applied in the previous year.

3.1 Revenue Revenue is measured at the fair value of the consideration received or receivable. It is recognised when it is probable that future economic benefits associated with a transaction will flow to the Institute and the benefit can be reliably measured. Subscriptions and joining fees are accounted for on an accrual basis. Interest is recognised on a time basis using the effective interest rate method.

3.2 Property And Equipment Property and equipment are stated at historic cost less accumulated depreciation. Subsequent costs are included in the assets carrying value only when it is probable that future economic benefits associated with the item will flow to the Institute and the cost of the item can be measured reliably. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Repairs and maintenance costs are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred.

The residual values and useful lives of all assets are assessed at the end of each financial year and if the residual value as determined at year end is greater than or equal to the carrying amount as at the date no depreciation will be charged to the asset. If the residual value is less than the carrying amount then the carrying amount is depreciated over the revised remaining life of the asset on a straight line basis as follows:

Computer Equipment 33% Office Equipment 20% Furniture and Fittings 20% Motor Vehicles 20% Vacant land is not depreciated

Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are recognised in the statement of comprehensive income.



page | 39


3.3 Provisions Provisions are recognised when:-

Ÿ The Institute has a present obligation - (legal or constructive) as a result of a past event.Ÿ It is probable that an outflow of resources embodying economic benefits will be

required to settle the amount of the obligation.Ÿ A reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

3.4 Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined using the first in first out basis. Net realizable value is the estimated selling price in the ordinary course of the business less estimated costs of selling.

3.5 Financial Assets All financial assets are recognised and de-recognised on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the time frame established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.

Financial assets are classified into the following specified categories: financial assets 'at fair value through profit or loss' (FVTPL), 'held-to-maturity' investments, and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The Institute`s financial assets comprise of held to maturity, cash and cash equivalents and receivables.

3.5 .1 Receivables Receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Receivables are initially recognised at fair value plus any directly



page | 40


attributable transaction costs. Trade receivables are subsequently measured at cost less impairment losses (provisions for bad debts). A provision for bad debts is recognised in the income statement when recovery of the amount due as per the original terms is considered doubtful. Receivables not collectible are written off against the related provisions. Subsequent recoveries of amounts previously written off are credited to the income statement in the year of recovery.

3.5.2 Cash And Cash Equivalents For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand, deposits held on call with banks, other short term highly liquid investments and bank overdrafts. Bank overdrafts are included under current liabilities on the balance sheet.

3.5.3 Held To Maturity Investments Held to maturity financial assets are non-derivative financial assets that are designated as held to maturity. They are non derivatives financial assets with fixed or determinable payments and fixed maturity that the Institute has a positive intention to hold to maturity.

3.6 Financial Liabilities Financial liabilities are recognised at amortised cost, namely original debt less principal payments and amortisation.

3.6.1 Accounts Payable Trade payables are obligations to pay for the goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non- current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortized cost using the effective interest method.

3.7 Non Distributable Reserves Non distributable reserves comprises of values of assets that were in existence in 2009 which were converted from Zimbabwean dollar to United States Dollar values through currency revaluation.



page | 41


3.7.1 Donated Assets Donated assets are capitalized on receipt at estimated market values as established by the Directors.

3.8 Employee Benefits The cost of retirement benefits applicable to National Social Security Authority is determined by the systematic recognition of legislated contributions. Short term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided.

3.9 Intangible Assets An intangible asset is separable, i.e. capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability; or arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

An intangible asset with an indefinite useful life should not be amortised. The useful life of such an asset should be reviewed each reporting period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If they do not, the change in the useful life assessment from indefinite to finite should be accounted for as a change in an accounting estimate referred to note 5.



page | 42


4 Property And Equipment

Cost/ revaluationBalance at 1 April 2013AdditionsBalance at 31 March 2014

Balance at 1 April 2014AdditionsBalance at 31 March 2015

Accumulated depreciationBalance at 1 April 2013Charge for the yearBalance 31 March 2014

Balance at 1 April 2014Charge for the yearBalance 31 March 2015

Carrying amountAt 1 April 2013At 31 March 2014At 31 March 2015

TotalUSD

106 5242 088

108 612

108 61212 741

121 353

12 9964 873

17 869

17 8696 804

24 673

93 52890 74396 680

LandUSD

82 7341 200

83 934

83 934 -

83 934

- - -

-

- -

82 73483 93483 934

MotorVehicles

USD

6 335 - 6 335

6 3358 013

14 348

3 5901 2674 857

4 8572 6027 459

2 7451 4786 889

Furnitureand

FittingsUSD

5 806 406

6 212

6 2121 4817 693

3 4421 1674 609

4 6091 1215 730

2 3641 6031 963

ComputerEquipment

USD

8 725 - 8 725

8 7253 247

11 972

4 7921 8186 610

6 6102 4589 068

3 9332 1152 904

OfficeEquipment

USD

2 924 482

3 406

3 406 - 3 406

1 172 621

1 793

1 793 623

2 416

1 7521 613

990



page | 43


5 Intangible Asset

Accounting Software

USD

2 425 -

- 2 425 -

( 2 425) -

Balance as at 1 April 2013AdditionsAssessed impairment Balance as at 31 March 2014AdditionsAssessed impairment Balance as at 31 March 2015

The accounting software was upgraded during the year and the recoverable amount of the previous asset became zero due to the new contract entered into with Pastel software provider requiring payment of licence renewal fees every year. The Institute no longer has control over the asset as economic benefits from the use of the software are subject to the payment of licence fees of $355 per year. As a result of the above changes, the intangible asset was derecognised through impairment during the year.

6 Construction Work In ProgressDuring the year, the institute entered into a contract with Matachi Building Contractors (Pvt) Ltd to construct a building. The contractual liability to Matachi Building Contractors (Pvt) Ltd is USD 25 000 payable in stages of completion with no amount due as at 31 March 2015. The following relates to the expenses incurred to date:



page | 44


Balance at 1 April 2013Construction expenditure incurred during the yearBalance at 31 March 2014

Balance at 1 April 2014Construction expenditure incurred during the yearBalance at 31 March 2015

Building USD

- - -

-

26 843 26 843

Total USD

- - -

-

26 843 26 843

7 Inventory Education material - CIA Gleims books/CDs Promotional merchandise

8 Accounts Receivable Trade debtors Deposits Staff debtors Prepayments

Provision for doubtful debts

As at 31 March 2015 amounts due from trade receivables at a value of USD10 000 (2014: nil ) were impaired and written off. Movement in the allowance for impairment of receivables were as follows:

Opening balance Amount written off Increase in provision Closing balance 31 March 2015

2015USD

989 2 340 3 329

10 366 800

1 673 1 480

14 319( 9 850) 4 469

10 000( 10 000)

9 850 9 850

2014USD

6 702 2 102 8 804

23 841 800 949

2 327 27 917

( 10 000) 17 917

8 000 -

2 000 10 000



page | 45

9 Cash And Cash Equivalents Petty cash Short term investments CABS savings account Barclays bank current USD account

10 Trade And Other Payables Deferred income Accruals Payroll creditors IIA-Global exam and membership fees Sundry creditors

11 Provisions Audit fees Leave pay

12 Membership Subscriptions Subscriptions received Registration fees Re-registration fees

13 Certified Internal Auditor Examinations CIA exam fees received CIA registration fees

14 Study And Promotional Materials Sales CIA Gleim books Internal audit standards Promotional material sales


2015USD

180 100 897

7 669 24 778

133 524

42 041 1 311

71 26 218 4 635

74 276

4 600 7 274

11 874

73 434 5 825 2 875

82 134

32 780 6 440

39 220

19 305120 60

19 485

2014USD

201 69 094

8 947 15 759 94 001

36 360 1 477

466 11 588 3 552

53 443

4 600 5 472

10 072

81 964 4 700 1 725

88 389

14 385 3 685

18 070

11 834120

335 12 289



page | 46


15 Annual Events Annual conference Annual conference sponsorship Annual dinner

16 Administration Expenditure Included in administration expenditure is: Salaries and wages Depreciation -Property and equipment Impairment of intangible asset

250 625 29 018

2 760 282 403

72 901 6 804 2 425

200 630 33 655

3 710 237 995

49 927 4 873

-

2015USD

2014USD

17 Pension and Other Post Retirement Obligations Contributions are made to the National Social Security Authority Scheme by both the Institute and the employees.

17.1 National Social Security Authority Scheme This is a defined benefit scheme promulgated under the National Social Security Authority Act (Chapter 17.04). The Institute's obligations under the scheme are limited to specific contributions legislated from time to time. These are 3.5% of pensionable emoluments up to a maximum of USD700 for each employee per month with the employee and employer contributing the same amount.

18 Financial Instruments and Risk Management

18.1 Financial instruments Financial instruments carried on the statement of financial position include cash and bank balances, accounts receivables and accounts payables. The particular recognition methods are disclosed on the individual policy statements associated with each item.

18.2 Interest rate risk management The Institute has adopted a non speculative policy on managing interest rate risks. Only approved financial institutions with sound capital bases are used to invest surplus funds.



page | 47


18.3 Credit rate risk management Financial assets, which potentially subject the Institute to concentrations of credit risk, consist principally of cash, short term deposits and receivables. The Institute's cash equivalents are placed with high creditworthy financial institutions. The Institute performs on-going credit evaluations of the financial condition of its customers and trade debtors are presented net of allowances and bad debts.

18.4 Value of financial instruments The estimated net fair values of all financial instruments approximate the carrying amount shown in the financial statements.

19 Events After The Reporting Period No adjusting or significant non adjusting events have occurred between the reporting date and the date of authorisation of these financial statements.

20 Going Concern The Directors have assessed the ability of the Institute to continue operating as a going concern and believe that preparation of these financial statements on a going concern is still appropriate.



page | 48

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given of an Annual General Meeting (AGM) of the Institute of Internal Auditors (Zimbabwe), as follows: -

Date: Thursday, 24 September 2015Venue: Elephant Hills Hotel, Victoria FallsTime: 1430 Hours

Agenda1. Consideration and adoption of minutes of the Annual General Meeting held on 12 September 2014.2. Matters arising from minutes of the Annual General Meeting held on 12 September 2014.3. President's report for the year ended 31st March 2015.4. Consideration and approval of the audited financial statements for the year ended 31 March 2015.5. To approve the remuneration of auditors HLB Ruzengwe for the year ended 31 March 2015 and to consider the appointment of Baker Tilly Gwatidzo as auditor for the ensuing year.6. To elect officers of the Institute for the period September 2015 to September 2017.7. To elect directors in terms of the Articles of Association of the Institute of Internal Auditors Zimbabwe.

By Order of the IIA Zimbabwe Board

R. F. BvekerwaSecretary



page | 49

PROXY FORM FOR THE ANNUAL GENERAL MEETING

For use at the Annual General Meeting to be held on Thursday 24 September 2015 at 14:30 hours

at the Elephant Hills Hotel, Victoria Falls.

I.....................................................................................................................................................

being a member of the Institute of Internal Auditors Zimbabwe and entitled to vote at any general

meeting of the Institute do hereby appoint......................................................................................

or failing him/her...........................................................................................................................

or failing them the chairman of the meeting as my proxy to vote on my behalf at the Annual

General Meeting of the Institute to be held on the 24th September 2015 and at any adjournment

thereof.

Signed:....................................................................Date:..............................................................

Address:........................................................................................................................................

.......................................................................................................................................................

.......................................................................................................................................................

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+263 2901307-8 | +263 743351 | +263 774 163 667

7 Tait Avenue, Hillside, Box 6170, Harare, Zimbabwe

[email protected]

www.iiazim.co.zw

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Documents

ANNUAL REPORT 2014-2015 - Institute of Internal Auditors · ANNUAL REPORT 2014-2015 PROGRESS THROUGH SHARING page | 06 PRESIDENT'S REPORT (continued) Profound Appreciation In conclusion,