REPORT FOR THE 6 MONTHS ENDED 31 MAY 2016

REPORT FOR THE 6 MONTHS ENDED 31 MAY 2016

Registration Number: 1985/003686/08

2 | REPORT FOR THE 6 MONTHS ENDED 31 MAY 2016

CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S REPORT 4

REPORT OF THE AUDIT, RISK AND FINANCE COMMITTEE 8

REPORT OF THE SOCIAL AND ETHICS COMMITTEE 10

THE INSTITUTE OF INTERNAL AUDITORS SOUTH AFRICA FINANCIAL STATEMENTS 12

GENERAL INFORMATION 12

INDEX 13

DIRECTORS’ RESPONSIBILITIES AND APPROVAL 14

INDEPENDENT AUDITORS REPORT 15

DIRECTORS’ REPORT 16

STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2016 17

STATEMENT OF COMPREHENSIVE INCOME 18

STATEMENT OF CHANGES IN EQUITY 18

STATEMENT OF CASH FLOWS 19

ACCOUNTING POLICIES 20

NOTES TO THE FINANCIAL STATEMENTS 23

DETAILED INCOME STATEMENT 27

LEADERSHIP ACADEMY FOR GUARDIANS OF GOVERNANCE FINANCIAL STATEMENTS 28

GENERAL INFORMATION 28

INDEX 29











REPORT FOR THE 6 MONTHS ENDED 31 MAY 2016 | 3

CONTENTS

It is our pleasure to present you with this Report. While it is our custom to produce an Annual Integrated Report, we produced a shorter Report for this period as our year end change has result-ed in the last financial period ending after six months. We have shifted our year end from November to May. This was primarily to bring our financial year in line with our membership year which runs from June to May. As our 2015 Integrated Report, which was released in April 2016, is fairly detailed, this report will only high-light those matters where an interim update is necessary.

OUR STRATEGY

The Board presides over an adaptive strategic plan, which typically has a three year horizon. The current strategy, which is supported by tactical operational plans, consists of four strategic imperatives which collectively are the driving force behind our approach to our activities. These are:

• Professionalise internal audit to meet current and anticipated market expectations and regulatory environment

• The IIA SA creating value for all of its stakeholders• Safeguarding and optimal utilisation of all relevant capitals• Long-term sustainability

In addition to its three-yearly strategy setting sessions, the Board meets annually, outside of the normal Board meetings, to specifi-cally focus on the strategy. In addition, the Board monitors progress against the strategy in every Board meeting. Furthermore, the vari-ous committees are each responsible for oversight over one or some components of the strategy.

The context, within which the strategy is set has a profound impact on the direction the Board decides to take. The key factors in the en-vironment that would guide the Board’s strategic decisions include:

1. Maturity of the profession, including the level of competence of internal auditors in South Africa;

2. The needs of the stakeholders of internal audit and the profes-sion’s ability to meet those needs;

3. The regulatory environment; 4. Degree to which leadership in organisations understand and

embrace the mandate and value of internal audit; and5. The pace at which the Secretariat can deliver given the limited

resources.

Professionalise internal audit to meet current and anticipated market expectations and regulatory environment

Our major focus under this strategic imperative has been to align our occupational qualifications and related learnerships to the require-ments of the recently established Quality Council for Trades and Oc-cupations (QCTO). At the time of writing this report, the new qualifica-tions, which will replace our current Internal Audit Technician (IAT) and General Internal Auditor (GIA), were in the QCTO approval process. These qualifications underpin the Institute’s designations IAT and PIA. Once the QCTO has approved these qualifications, they will be national qualifications that may be offered by any Skills Development Provider. The Institute has therefore established the Leadership Academy for Guardians of Governance (the Academy), which will be responsible for providing the learnerships and training that will form the base for the qualifications. The Institute itself has been appointed as the Assessment Quality Partner, which makes it responsible for the assessment process.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S REPORT

Chairman: Vonani ChaukeCEO: Claudelle von Eck


Number of PIAs: 506

Number of PIAs in the pipeline: 72

Number of CIAs in the pipeline: 190Number of active CIAs: 1103

Number of IATs in the pipeline: 582

Number of IATs: 1451

Executive Leadership NetworkService to Chief Audit Executives

Average number of technical queries dealt with per month: 7

Number of books sold: 1081Number of course attendees: 1094

Number of regional event attendees: 1283

Number of national event attendees: 371

The IIA SA creating value for all of its stakeholders


Non-profitBiggest financial capital challenge

Preference for electronicContributing to a paperless society

Technical guidanceMost important intellectual capital

Strategic alliancesApproach to social and relationship capital

Attracting talentBiggest human capital challenge

Our databaseMost important manufactured

capital

Safeguarding and optimal utilisation of all relevant capitals

Long-term sustainability

Membership feesBiggest contributor to the revenue

Collecting feesBiggest challenge to cash flow

Low feesBiggest challenge to funding the strategy

Strategic alliancesApproach to social and relationship capital

Corporate Governance IndexMost important advocacy tool

Number of paid up members at end of May: 8039*

* This figure includes all individuals who were members for the period 1 June 2015 – 31 May 2016 as at 30 September 2016. The number of members would fluctu-

ate over time as members who have lapsed have the option of reinstating their membership by paying for previous membership periods.


KEY CONCERNS IN RELATION TO THE STRATEGY

• The current staff complement does not match the increasing pressures on the secretariat.

• The rate at which vacancies are filled are too slow. This is primar-ily a result of the specialised skills required, transformation strat-egy and an inability to compete with the private sector.

• There is a greater than reasonable dependency on key person-nel as a result of the resource constraints.

KEY FOCUS AREAS FOR THE YEAR AHEAD

• Completing the establishment of the Academy • Taking the new qualifications to market under the QCTO

• Finalising the establishment of a student chapter• Gearing up for the impending regulation of the profession

The Institute has an ambitious strategy to bring to fruition. It will take a collective effort to make it reality. We therefore encourage members of the Institute to join us on this journey and get involved in the structures of the Institute.

Vonani ChaukeChairman

Dr Claudelle von EckChief Executive Officer

IIA SA BOARD MEMBERS

Below is a list of all the directors who held office during the reporting period. All non-executive Directors are appointed or re-appointed at the AGM, which was held on 20 April 2016.

Name Position Appointed Status No. of meetings attended

Vonani Chauke Chairman (Previous Vice Chairman) 04/11 Active 3/3

Shirley Machaba Past Chairman 04/05 Active 1/3

Justine Mazzocco Past Past Chairman 04/05 Active 3/3

Claudelle von Eck CEO 01/10 Active 3/3

Molefi Nkhabu Vice Chairman (Previous Director) 04/13 Active 2/3

Faith Burn Director 04/15 Active 1/3

Ursula Basani Duiker Director 04/16 Active 1/1

James Gourrah Director 04/16 Active 1/1

Paresh Lalla Director 05/12 Active 3/3

Tshepo Mofokeng Director 04/15 Active 3/3

Rob Newsome Director 08/95 Active 1/3

Sikhuthali Nyangintsimbi Director 04/16 Active 1/1

Jan Opperman Director 04/15 Active 2/3

Lizelle Padayachee Director 04/16 Active 1/1

Kameetha Singh Director 04/15 Active 3/3

Arno Vorster Director 04/05 Active 3/3

Riaan Thiart Ex - Chairman 04/09 Resigned 04/16 2/2

Oupa Mbokodo Director 05/12 Resigned 04/16 2/2

Rudzani Nemaangani Director 04/14 Resigned 04/16 1/2

Dion Poole Director 04/14 Resigned 04/16 1/2

The Board met 3 times during the reporting period, being 01 December 2015 – 31 May 2016.


We are pleased to present our report for the financial year ended 31 May 2016.

The Audit, Risk and Finance Committee consists of the members list-ed below. The Committee adopted its terms of reference which are approved by the Board on an annual basis. The Committee is satis-fied that it has complied with these terms of reference.

AUDIT, RISK AND FINANCE COMMITTEE RESPONSIBILITIES

The Committee reports that it has complied with its responsibilities arising from the Companies Act 71 of 2008 (“the Act”) that became effective on 1 May 2011.

THE EFFECTIVENESS OF INTERNAL CONTROL AND RISK MANAGEMENT

The system of controls is designed to provide reasonable assur-ance that laws, policies and procedures are complied with, or-ganizational objectives are achieved, operations are effective and efficient, assets are safeguarded and financial and opera-tional information is reliable. The External Auditors provided the Board, the Committee and Management with assurance that the internal financial controls are appropriate and effective. This is achieved by means of the Risk Management process, as well as the identification of corrective actions and suggested enhance-ments to the controls and processes.

INTERNAL AUDIT

The Committee is satisfied that the Institute’s key risks have been identified and are receiving adequate attention from Management. Due to the size of the Institute, it is not feasible to have an in-houseInternal Audit function, nor is it feasible to outsource the function from a cost perspective. To this end, the Institute periodically engages the services of volunteers to conduct an Internal Audit on a pro bono basis. An Internal Audit was conducted during the 2015/2016 financial year.

The pro bono Internal Auditors report administratively to the CEO and functionally to the Audit, Risk and Finance Committee.

EXTERNAL AUDIT

The Committee is directly responsible for the appointment (subject to member ratification), compensation, retention, and oversight of the independent auditors. The Committee has satisfied itself that the auditors of the Institute are independent as defined by the Act. The Committee, in consultation with executive management, agreed to an audit fee for the 2016 six month financial period. The fee is considered appropriate for the work that could reasonably have been foreseen at that time. The Committee has nominated, for approval at the Annual General Meeting, Nexia SAB&T as the exter-nal auditor for the 2017 financial year.

RISK

The Institute’s risk register is continuously updated and reviewed quarterly to ensure that Management is addressing relevant issues. The Committee is satisfied that the risks identified are receiving ad-equate attention from Management.

FINANCE

The Committee reviews the budget, management accounts, finan-cial statements and other financial matters of the Institute and pres-ents them to the Board.

ANNUAL FINANCIAL STATEMENTS

The Committee has reviewed and recommended the annual financial statements for approval to the Board. The Board has subsequently ap-proved the financial statements which will be open for discussion at the Annual General Meeting which is scheduled for 26 October 2016.

Molefi NkhabuChairman of the Audit, Risk and Finance Committee

REPORT OF THE AUDIT, RISK AND FINANCE COMMITTEE

Chairman: Molefi Nkhabu


AUDIT, RISK AND FINANCE COMMITTEE MEMBERS

Name Position No. of meetings attended

Vonani Chauke Chairman (Resigned May 2016) 4/4

Molefi Nkhabu Member (Appointed Chairman May 2016) 3/4

Shirley Machaba Member (Appointed May 2015) 1/4

Kameetha Singh Member (Appointed May 2015) 4/4

James Gourrah Member (Appointed May 2016) 1/2

Claudelle Von Eck Ex Officio (Non-voting) member 4/4

Warren Elbourne Staff Liaison 4/4


The Social and Ethics Committee assists the Board in monitoring IIA SA’s performance as a good and responsible corporate citizen. This report by the Committee is prepared in accordance with the requirements of the Companies Act, 71 of 2008, as amended (the Companies Act) and describes how the Committee has discharged its statutory duties in terms of the Companies Act as well as addi-tional duties assigned to it by the Board in respect of the financial year ended 31 May 2016.

REPORTING PERIOD

This report is in respect of the period 01 December 2015 – 31 May 2016 (the Reporting Period).

COMMITTEE MEMBERS AND ATTENDANCE AT MEETINGS

During the Reporting Period, the Committee was comprised of three non–executive directors appointed by the Board, the Chief Executive Officer and two senior members of the Secretariat, being the Admin-istration and Infrastructure Portfolio Manager together with the Gov-ernance Officer. In addition to this, the Committee accommodated a representative of the IIA Tanzania as an invitee for mentoring purposes.

The Committee was chaired by Mr Arno Vorster. The table below de-tails the Committee composition, number of meetings held as well as meeting attendance. One Committee meeting was held during the Reporting Period. Since the Reporting Period was only 6 months long, the Committee will report on its adherence in terms of the minimum requirement of at least two meetings annually, as per the Committee’s Terms of Reference, in the next reporting period.

ROLES AND RESPONSIBILITIES

The Committee’s roles and responsibilities are governed by its Terms of Reference. The Terms of Reference are subject to annual review and approval of the Board.

The main objective of the Committee is to assist the Board in moni-toring the Institute’s performance as a good and responsible corpo-rate citizen. This is achieved by reviewing the Institute’s activities, having regard to any relevant legislation, other legal requirements as well as prevailing codes of best practice and making recommen-dations regarding matters in relation thereto. The Committee is sat-isfied that it has fulfilled its duties during the year under review, as further detailed below.

COMPLIANCE REVIEW

The Committee has established a compliance matrix, adherence to which is monitored and evaluated at each meeting held. The com-pliance matrix addresses all relevant areas necessary to ensure that the Institute remains in keeping with its duties as a good and re-sponsible corporate citizen. Management plays a significant role in ensuring that the principles, as contained in the compliance matrix, are being implemented at an operational level. The compliance ma-trix is subject to annual review, however is amended as is necessary following legislative or other developments on an ad hoc basis.

MONITORING OF SUSTAINABLE DEVELOPMENT PRACTICES

The sustainable development practices of the Institute, which are monitored as part of the compliance matrix, include the following:• ethical leadership and corporate citizenship;• stakeholder relations;• broad-based black economic empowerment;• health and public safety;• labour relations and working conditions; and• training and skills development.

The Committee’s monitoring role includes the monitoring of rele-vant legislation, other legal requirements as well as prevailing codes of best practice, specifically with regard to matters relating to good corporate citizenship, the environment, health and public safety, consumer relationships, as well as labour and employment.

PUBLIC REPORTING AND ASSURANCE

As per the requirements of the Companies Act, the Committee re-ports, through one of its members, to the members of the Institute (de facto the shareholders of the Institute) on the matters within its

REPORT OF THE SOCIAL AND ETHICS COMMITTEE

Chairman: Arno Vorster


mandate at the institute’s Annual General meeting, to be held on 26 October 2016.

DEVELOPMENTAL AREAS

The Committee continues to monitor progress and developments in relation to King IV, with the intent of ensuring that the Institute is in keeping with best practice principles as at the onset of its release.In relation to industry specific legislation, the Committee continues to monitor relevant changes to the education and training land-scape, specifically with regard to the standards and regulations as per the South African Qualifications Authority (SAQA), Fasset and the Quality Council for Trades and Occupations (QCTO).

The principles contained in the Protection of Personal Information Act 4 of 2013 have been a key focus area for the Committee, with

a task team within the Secretariat being formed in order to provide the Committee with operational insight.

AREAS OF CONCERN

During the Reporting Period, the Committee has focused on the ability of the Institute to sustain its B-BBEE Level Rating, owing to the implementation of the newly amended Broad-Based Black Eco-nomic Empowerment (B-BBEE) Verification Codes. The Committee continues to seek means of ensuring that the Institute’s B-BBEE en-deavours are recognised, in light of it being a Non-Profit Company with limited resources.

Arno VorsterChairman of the Social and Ethics Committee

SOCIAL AND ETHICS COMMITTEE MEMBERS

Name Position No. of meetings attended

Arno Vorster Chairman 1/1

Jan Opperman Member 1/1

Vonani Chauke Member (Resigned May 2016) 1/1

Sikhuthali Nyangintsimbi Member (Appointed May 2016) 0/0

Claudelle Von Eck Member 1/1

Terusha Ramchund Member 1/1

Ulrich Maistry Member 1/1

Kafaso Millinga* Invitee 1/1

* Kafaso Millinga is the Chief Executive Officer of the IIA Tanzania


THE INSTITUTE OF INTERNAL AUDITORSSOUTH AFRICA FINANCIAL STATEMENTS

THE INSTITUTE OF INTERNAL AUDITORS SOUTH AFRICA(Registration number 1985/003686/08)

Financial statementsFor the 6 months ended 31 May 2016

Country of incorporation and domicileSouth Africa

Nature of business and principal activitiesThe Institute of Internal Auditors SA is a registered section 21 company as a professional body for Internal

Auditors. The Institute provides training, certification and promotion for Internal Auditors and is affiliated to the Institute of Internal Auditors Inc. based in the United States of America.

Registered office Unit 2, Bedfordview Office Park, 3 Riley Rd, Bedfordview, 2008

Business address Unit 2, Bedfordview Office Park, 3 Riley Rd, Bedfordview, 2008

Postal addressPO Box 2290, Bedfordview, Gauteng, 0028

Bankers Nedbank, Standard Bank, Investec, ABSA

Auditor’sNexia SAB&T Registered Auditors

Company registration number1985/003686/08

Level of assuranceThese financial statements have been audited in compliance with the applicable requirements of the Compa-

nies Act 71 of 2008.

PreparerThe financial statements were internally compiled by: Warren Elbourne

Bcom Accounting, DMS Dip in Fin Man

GENERAL INFORMATION


INDEX












DIRECTORS’ RESPONSIBILITIES AND APPROVAL

The directors are required by the Companies Act 71 of 2008, to maintain adequate accounting records and are responsible for the con-tent 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 Institute as at the end of the financial 6 months 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 Enti-ties. 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 directors acknowledge that they are ultimately responsible for the system of internal financial control established by the Institute and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the directors set standards for internal control aimed at reducing the risk of material misstatement 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 Institute and all employees are required to maintain the highest ethical standards in ensuring the Institute’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Institute is on identifying, assessing, managing and monitoring all known forms of risk across the Institute. While op-erating risk cannot be fully eliminated, the Institute endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the Institute’s cash flow forecast and, in the light of this review and the current financial position, they are satisfied that the Institute has or has access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently reviewing and reporting on the Institute’s annual financial statements. The annual finan-cial statements have been examined by the Institute’s external auditors and their report is presented on page 15.

The annual financial statements set out on pages 17 to 26, which have been prepared on the going concern basis, were approved by the board of directors on 20 September 2016 and were signed on its behalf by:

20 September 2016

Vonani Chauke, Chairman Date

20 September 2016

Dr Claudelle von Eck, Chief Executive Officer Date


INDEPENDENT AUDITORS’ REPORT To the members of the Institute of Internal Auditors South Africa We have audited the annual financial statements of The Institute of Internal Auditors South Africa as set out on pages 17 to 26, which comprise the statement of financial position as at 31 May 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's Responsibility for the Financial Statements The Institute’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards for Small and Medium-sized Entities and the requirements of the Companies Act of South Africa, and for such internal control as the Board determine is necessary to enable the preparation of financial statements that are free from material misstatements, 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 about 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 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 audit opinion Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of The Institute of Internal Auditors South Africa as at 31 May 2016, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards for Small and Medium-sized Entities and the requirements of the Companies Act of South Africa Supplementary information Without qualifying our opinion, we draw attention to the fact that supplementary information set out on page 27 does not form part of the financial statements and is presented as additional information. We have not audited this information and accordingly do not express an opinion thereon. Other reports required by the Companies Act As part of our audit of the financial statements for the year ended 31 May 2016, we have read the Directors’ Report for the purposes of identifying whether there are material inconsistences between this report and the audited financial statements. This report is the responsibility of the respective preparers. Based on reading this report we have not identified material inconsistencies between this report and the audited financial statements. However, we have not audited this report and accordingly do not express an opinion on these reports. ___________________ Nexia SAB&T Registered Auditors S. Kleovoulou 20 September 2016

DIRECTORS’ REPORT

The directors have pleasure in submitting their report on the financial statements of The Institute of Internal Auditors South Africa for the 6 months ended 31 May 2016.

1. Review of financial results and activities

The financial statements have been prepared in accordance with International Financial Reporting Standard for Small and Medium-sized En-tities and the requirements of the Companies Act 71 of 2008. The accounting policies have been applied consistently compared to the prior 6 months, except for the adoption of new or revised accounting standards as set out in note 19.

Full details of the financial position, results of operations and cash flows of the Institute are set out in these financial statements.

2. Events after the reporting period

The directors are not aware of any material event which occurred after the reporting date and up to the date of this report.

3. Going concern

The directors believe that the Institute has adequate financial resources to continue in operation for the foreseeable future and accordingly the financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the Institute is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the Institute. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the Institute.

4. Auditors

Nexia SAB&T will continue in office in accordance with section 90 of the Companies Act 71 of 2008.

5. Secretary

The company secretary is T. Ramchund.


STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2016

NOTE(S) 6 MONTHS

ENDED 31 MAY 2016

2015

R R

Assets

Non-Current Assets

Property, plant and equipment 2 10 461 089 4 062 609

Intangible assets 3 42 072 5 005

10 503 161 4 067 614

Current Assets

Inventories 4 446 806 570 012

Loans to group companies 357 905 -

Trade and other receivables 5 7 420 696 10 605 721

Cash and cash equivalents 6 19 589 753 24 374 635

27 815 160 35 550 368

Total Assets 38 318 321 39 617 982

Equity and Liabilities

Equity

Reserves 15 704 164 9 464 876

Retained income 15 803 805 18 931 867

31 507 969 28 396 743

Liabilities

Current Liabilities

Trade and other payables 9 3 731 030 5 727 705

Deferred income 7 2 019 102 4 318 384

Provisions 8 989 386 1 104 316

Unidentified deposits 70 834 70 834

6 810 352 11 221 239

Total Equity and Liabilities 38 318 321 39 617 982


STATEMENT OF COMPREHENSIVE INCOME

NOTE(S)6 MONTHS

ENDED 31 MAY 2016

2015

R R

Revenue 10 13 156 295 52 251 965

Cost of sales 11 (6 432 738) (30 409 837)

Gross profit 6 723 557 21 842 128

Other income 12 594 668 7 636

Operating expenses (11 160 368) (24 798 425)

Operating (deficit) 13 (3 842 143) (2 948 661)

Investment revenue 14 714 083 1 343 692

(Deficit) for the 6 months (3 128 060) (1 604 969)

Other comprehensive income:

Revaluation reserve 6 387 362 -

Total comprehensive surplus (deficit) for the 6 months 3 259 302 (1 604 969)

STATEMENT OF CHANGES IN EQUITY

REVALUATION RESERVE

SPECIAL RESERVE

TOTAL RESERVES

RETAINED INCOME

TOTAL EQUITY

R R R R R

Balance at 01 June 2014 - 9 532 723 9 532 723 20 536 836 30 069 559

Loss for the 6 months - - - (1 604 969) (1 604 969)

Other comprehensive income - - - - -

Total comprehensive loss for the 6 months - - - (1 604 969) (1 604 969)

Special reserve expenditure ** - (67 847) (67 847) - (67 847)

Total changes - (67 847) (67 847) - (67 847)

Balance at 01 June 2015 - 9 464 876 9 464 876 18 931 867 28 396 743

Loss for the 6 months - - - (3 128 060) (3 128 060)

Other comprehensive income 6 387 362 - 6 387 362 - 6 387 362

Total comprehensive loss for the 6 months 6 387 362 - 6 387 362 (3 128 060) 3 259 302

Special reserve expenditure** - (148 074) (148 074) - (148 074)

Total changes - (148 074) (148 074) - (148 074)

Balance at 31 May 2016 6 387 362 9 316 802 15 704 164 15 803 807 31 507 969

** Special projects identified by the Board


STATEMENT OF CASH FLOWS

NOTE(S)6 MONTHS

ENDED 31 MAY 2016

2015

R R

Cash flows from operating activities

Cash receipts from customers 12 716 073 54 193 580

Cash paid to suppliers and employees (17 738 627) (54 979 866)

Cash used in operations 15 (5 022 554) (786 286)

Interest income 714 083 1 343 692

Net cash from operating activities (4 308 471) 557 406

Cash flows from investing activities

Purchase of property, plant and equipment 2 (245 573) (194 268)

Net proceeds on sale of property, plant and equipment 2 172 734 -

Purchase of other intangible assets 3 (45 668) -

Loans advanced to group companies (357 905) -

Net cash from investing activities (476 412) (194 268)

Total cash movement for the 6 months (4 784 883) 363 138

Cash at the beginning of the 6 months 24 374 636 24 011 497

Total cash at end of the 6 months 6 19 589 753 24 374 635


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 Enti-ties, and the Companies Act 71 of 2008. The financial statements have been prepared on the historical cost basis, except for biological assets at fair value less point of sale costs, 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, except for the changes set out in note 19 First-time adoption of the Interna-tional Financial Reporting Standard for Small and Medium-sized Entities 2015 Amendments.

1.1 Significant judgements and sources of estimation uncertainty

Critical judgements in applying accounting policies

Management are required to make critical judgements in applying accounting policies from time to time. The judgements, apart from those involving estimations, that have the most significant effect on the amounts recognised in the financial statements, are outlined as follows:

Key sources of estimation uncertainty

Provisions

Provisions are inherently based on assumptions and estimates using the best information available. Additional disclosure of these estimates of provisions are included in note 8 - Provisions.

1.2 Property, plant and equipment

The cost of an item of property, plant and equipment is recognised as an asset 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.

Office furniture equipment, IT equipment and computer software are carried at cost less accumulated depreciation and accumulated impair-ment losses.

Building is measure at fair value less any subsequent accumulated depreciation and any subsequent accumulated impairment losses.

Cost 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 prop-erty, plant and equipment as follows:

Item Depreciation method Average useful life

Buildings Straight line 50 years

Office furniture and equipment Straight line 5 years

IT equipment Straight line 3 years

Computer software Straight line 3 years

Land is not depreciated

The residual value, depreciation method and useful life of each asset are reviewed only where there is an indication that there has been a significant change from the previous estimate.

Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which would be deter-


mined using fair value at the end of the reporting period. Land and building are independently revalued every three years.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in surplus and defi-cit in the period.

1.3 Intangible assets

An intangible asset is recognised when: - it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and - the cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost.

Intangible assets are initially recognised at cost and subsequently at cost less accumulated amortisation and accumulated 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 life

Software 3 years The residual value, amortisation period and amortisation method for intangible assets are reassessed when there is an indication that there

is a change from the previous estimate.

1.4 Financial instruments

Initial measurement

Financial instruments are initially measured at the transaction price (including transaction costs except in the initial measurement of financial as-sets and liabilities that are measured at fair value through surplus or deficit unless the arrangement constitutes, in effect, a financing transaction in which case it is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial instruments at amortised cost

Financial instruments may be designated to be measured at amortised cost less any impairment using the effective interest method. These include trade and other receivables, loans and trade and other payables. At the end of each reporting period 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, including equity instruments that are publicly traded or whose fair value can otherwise be measured reliably, are measured at fair value through surplus and deficit.

Trade and other receivables

Receivables are measured at amortised cost using the effective interest method. At the end of each reporting period, the carrying amounts of trade and other receivables are reviewed to determine whether there is any objective evidence that the amounts are not recoverable. If so, an impairment loss is recognised immediately in profit or loss.

Trade and other payables

Trade payables are obligations on the basis of normal credit terms and do not bear interest.


Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially measured at fair value and subsequently recorded at amortised cost.

1.5 Impairment of assets

The company assesses at each reporting date whether there is any indication that property, plant and equipment or may be impaired.

If there is any such indication, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in surplus or deficit.

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 6 months. A reversal of impairment is recognised immediately in profit or loss.

1.6 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as leave pay and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not dis-counted.

1.7 Provisions and contingencies

Provisions are recognised when the Institute has an obligation at the reporting date as a result of a past event; it is probable that the Insti-tute will be required to transfer economic benefits in settlement; and the amount of the obligation can be estimated reliably.

Contingent assets and contingent liabilities are not recognised.

1.8 Revenue

Revenue is recognised to the extent that the Institute has transferred the significant risks and rewards of ownership of goods to the buyer, or has rendered services under an agreement provided the amount of revenue can be measured reliably and it is probable that economic ben-efits associated with the transaction will flow to the Institute. Revenue is measured at the fair value of the consideration received or receiv-able, excluding sales taxes and discounts.

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

Revenue comprises of subscription income, book sales, conference fees, educational course fees, certification fees and other ancillary in-come.

Membership income is accounted for on the accrual basis.


NOTES TO THE FINANCIAL STATEMENTS

2. PROPERTY, PLANT AND EQUIPMENT

2016Cost

2016Accumulated depreciation

2016 Carrying

Value

2015Cost

2015Accumulated depreciation

2015 Carrying

Value

R R R R R R

Buildings 10 016 272 (16 272) 10 000 000 3 628 910 - 3 628 910

Office equipment 852 322 (666 754) 185 568 983 322 (681 726) 301 596

IT equipment 613 789 (353 881) 259 908 526 370 (401 489) 124 881

Computer software 211 912 (196 299) 15 613 200 160 (192 938) 7 222

Total 11 694 295 (1 233 206) 10 461 089 5 338 762 (1 276 153) 4 062 609

Reconciliation of property, plant and equipment - 2016

Opening balance

Additions Disposals Revaluation Depreciation Total

R R R R R R

Buildings 3 628 910 - (5 768) 6 387 362 (10 504) 10 000 000

Office equipment 301 596 5 250 (81 234) - (40 044) 185 568

IT equipment 124 881 223 581 (43 902) - (44 652) 259 908

Computer software 7 222 16 742 (5 585) - (2 766) 15 613

4 062 609 245 573 (136 489) 6 387 362 (97 966) 10 461 089

Reconciliation of property, plant and equipment - 2015

Opening balance

Additions Disposals Depreciation Total

R R R R R

Buildings 3 628 910 - - - 3 628 910

Office equipment 281 602 105 087 - (85 092) 301 597

IT equipment 132 115 89 181 (6 630) (89 785) 124 881

Computer software 28 251 - - (21 029) 7 222

4 070 877 194 268 (6 630) (195 906) 4 062 609

Property, plant and equipment encumbered as security

The Institute has no assets classified under Property, Plant and Equipment pledged as security for liabilities and no restrictions have been imposed on any of its assets.

6 MONTHS ENDED

31 MAY 2016

2015

R R

Details of properties

Property 1: Unit 2, Bedfordview Office Park, Bedfordview Ext 928 & 328

- Purchase price: 20 October 2001 4 018 500 4 018 500

- Additions since purchase or valuation 6 387 362 -

- Building accumulated depreciation (405 862) (389 590)

10 000 000 3 628 910

Revaluation

The effective date of the revaluations was 25 May 2016. Revaluations were performed by independent valuer, Mr GC Jacobs, from Mirfin.

Mr, GC Jacobs is not connected to the Institute.

Land and buildings are re-valued independently every 3 years.

Income Capitalisation Approach method of valuation has been used in determination of market value of the property.


3. INTANGIBLE ASSETS

2016Cost

2016Accumulated amortisation

2016 Carrying

Value

2015Cost

2015Accumulated amortisation

2015 Carrying

Value

R R R R R R

Software 42 072 - 42 072 5 005 - 5 005

Reconciliation of intangible assets - 2016

Opening balance

Additions Amortisation Total

R R R R

Software 5 005 45 668 (8 601) 42 072

Reconciliation of intangible assets - 2015

Opening balance

Amortisation Total

R R R

Software 39 307 (34 302) 5 005

6 MONTHS ENDED

31 MAY 2016

2015

R R

4. INVENTORIESBooks 446 806 570 012

5. TRADE AND OTHER RECEIVABLESTrade receivables 6 386 683 8 930 441

Prepayments 657 900 251 923

Deposits 63 915 63 915

VAT - 84 266

Sundry debtors 312 198 1 275 176

7 420 696 10 605 721

6. CASH AND CASH EQUIVALENTSCash and cash equivalents consist of:

Cash on hand 423 885 39 577

Bank balances 19 165 868 24 335 058

19 589 753 24 374 635

7. DEFERRED INCOMEFees in advance: Membership 1 891 102 4 313 560

Fees in advance: Learnerships 128 000 -

Fees in advance: Regional events - 4 824

2 019 102 4 318 384


8. PROVISIONS

Reconciliation of provisions - 2016 Opening balance

Utilised during the

year

Reversed during the

year

Total

R R R R

Provision for audit fees 106 800 63 567 (105 949) 64 418

Leave pay provision 997 516 364 486 (437 034) 924 968

1 104 316 428 053 (542 983) 989 386

Reconciliation of provisions - 2015 Opening balance

Additions Utilised during the

year

Total

R R R R

Provision for audit fees - 106 800 - 106 800

Leave pay provision 834 374 667 317 (504 175) 997 516

834 374 774 117 (504 175) 1 104 316

6 MONTHS ENDED

31 MAY 2016

2015

R R

9. TRADE AND OTHER PAYABLESTrade payables 577 862 2 978 815

VAT 362 931 -

Debtors with credit balances 1 659 553 1 457 289

IA Inc. QAR Royalty 244 179 244 179

Accruals 886 505 1 047 422

3 731 030 5 727 705

10. REVENUERevenue 13 156 295 52 251 965

11. COST OF SALESCosts 6 432 738 30 409 837

12. OTHER INCOMEProfit and loss on sale of assets 36 245 7 636

Administration fees 558 423 -

594 668 7 636

13. OPERATING (DEFICIT)Operating (deficit) for the year is stated after accounting for the following

Property, plant and equipment 36 245 7 636

Amortisation of intangible assets 6 629 34 302

Depreciation on property, plant and equipment 97 966 195 906

Employee costs 8 680 519 18 019 272

14. INVESTMENT REVENUEInterest revenue

Bank 714 083 1 343 692


6 MONTHS ENDED

31 MAY 2016

2015

R R

15. CASH USED IN OPERATIONSLoss before taxation (3 128 060) (1 604 969)

Adjustments for:

Depreciation and amortisation 104 595 230 208

Profit on sale of assets (34 273) 6 630

Interest received (714 083) (1 343 692)

Movements in provisions (114 930) 269 942

Special reserves expenditure (148 074) (67 847)

Changes in working capital:

Inventories 123 206 201 624

Trade and other receivables 3 185 026 1 941 615

Trade and other payables (1 996 677) 457 001

Deferred income (2 299 284) (876 798)

(5 022 554) (786 286)

16. RELATED PARTIESRelationships

Members of key management: Claudelle Von Eck

Related party balances and transactions with other related parties

Related party balances

Loan accounts - Owing (to) by related parties

Leadership Academy for Guardians of Governance 357 905 -

Related party transactions

Administration fees paid to (received from) related parties

Learnership Academy for Guardians of Governance (558 423) -

17. DIRECTORS’ REMUNERATIONExecutive

2016Emoluments Other

benefits*Bonus Total

R R R R

Claudelle Von Eck 927 050 17 672 286 457 1 231 179

2015Emoluments Other

benefits*Total

R R R

Claudelle Von Eck 2 027 317 32 058 2 059 375

18. COMPARATIVE FIGURESThe reporting period is shorter than a year, therefore comparative amounts are not comparable to the current balances.

19. EARLY ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS FOR SMALL AND MEDIUM-SIZED ENTITIES 2015 AMENDMENTSThe Institute has early adopted the International Financial Reporting Standards for Small and Medium-sized Entities and this resulted in change in ac-counting policy for Building from cost model to revaluation model. The impact of the change has been disclosed on note 2 Property, plant and equip-ment.


DETAILED INCOME STATEMENT

NOTE(S) 6 MONTHS ENDED

31 MAY 2016

2015

R R

Revenue

Revenue 13 156 295 52 251 965

Cost of sales 11 (6 432 738) (30 409 837)

Gross profit 6 723 557 21 842 128

Other income

Administration fees 558 423 -

Interest received 14 714 083 1 343 692

Gains on disposal of assets 36 245 7 636

1 308 751 1 351 328

Operating expenses

AGM costs (14 229) (6 894)

Auditors remuneration (42 378) (209 413)

BEE - (278 882)

Bad debts provision - 500 000

Bank charges (53 381) (112 621)

Consulting fees (16 277) (77 041)

Debtors correction (398 409) (1 763 713)

Depreciation, amortisation and impairments (104 595) (230 208)

Disciplinary hearing (737) (173 790)

Electricity and water (290 243) (745 774)

Employee costs (8 680 519) (18 019 272)

Entertainment (15 690) (18 652)

Exchange rate difference (2 241) 979

Insurance (40 340) (68 262)

Library costs - (5 679)

Marketing expenses (89 116) (163 566)

Office expenses (46 635) (185 293)

Postage (4 285) (22 004)

Printing and stationery (24 443) (109 369)

Prizes (2 489) (2 810)

Public relations (188 789) (449 936)

Recruitment (111 401) (596 868)

Repairs and maintenance (41 782) (151 269)

Telephone and fax (377 364) (710 662)

Training (87 803) (334 736)

Travel - Local (41 566) (209 460)

Travel - Overseas: Committee members refreshments (157 425) (68 980)

Travel - Regional Governors/Board committees (50 665) (156 633)

Travel – local refreshments (16 142) (120 878)

Travel - overseas (261 424) (306 739)

(11 160 368) (24 798 425)

Deficit for the 6 months (3 128 060) (1 604 969)

The supplemary information presented does not form part of the financial statements and is unaudited


LEADERSHIP ACADEMY FOR GUARDIANS OF GOVERNANCE FINANCIAL STATEMENTS

LEADERSHIP ACADEMY FOR GUARDIANS OF GOVERNANCE (Registration number 2013/079823/07)

Financial statementsfor the 6 Months ended 31 May 2016

Country of incorporation and domicileSouth Africa

Nature of business and principal activitiesThe Leadership Academy provides training, certification and promotion for Internal Auditors and is affiliated

to the Institute of Internal Auditors South Africa.

Registered office Unit 2, Bedfordview Office Park, 3 Riley Rd, Bedfordview, 2008

Postal addressPO Box 2290, Bedfordview, Gauteng, 0028

Bankers Nedbank

Auditor’sNexia SAB&T - Registered Auditors

Company registration number2013/079823/07

Level of assuranceThese financial statements have been audited in compliance with the applicable requirements of the

Companies Act 71 of 2008.

PreparerThe financial statements were internally compiled by: Warren Elbourne

Bcom Accounting, DMS Dip in Fin Man

GENERAL INFORMATION


INDEX


INDEPENDENT AUDITOR’S REPORT 31










DIRECTORS’ RESPONSIBILITIES AND APPROVAL

The directors are required by the Companies Act 71 of 2008, to maintain adequate accounting records and are responsible for the content and integ-rity 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 company as at the end of the financial 6 months 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 directors acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place con-siderable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of material misstatement or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management that the system of internal control provides reason-able assurance that the financial records may be relied on for the preparation of the financial statements. However, any system of internal financial con-trol can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the company’s cash flow forecast and, in the light of this review and the current financial position, they are satisfied that the company has or has access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently reviewing and reporting on the company’s annual financial statements. The annual financial statements have been examined by the company’s external auditors and their report is presented on page 31.

The annual financial statements set out on pages 33 to 39, which have been prepared on the going concern basis, were approved by the board of direc-tors on 20 September 2016 and were signed on its behalf by:

20 September 2016

Phuti Semenya, Chairman Date

20 September 2016

Dr Claudelle von Eck, Chief Executive Officer Date


INDEPENDENT AUDITORS’ REPORT To the members of the Leadership Academy for Guardians of Governance We have audited the annual financial statements of the Leadership Academy for Guardians of Governance as set out on pages 33 to 39, which comprise the statement of financial position as at 31 May 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's Responsibility for the Financial Statements The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards for Small and Medium-sized Entities and the requirements of the Companies Act of South Africa, and for such internal control as the Board determine is necessary to enable the preparation of financial statements that are free from material misstatements, 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 about 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 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 audit opinion Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of The Leadership Academy for Guardians of Governance as at 31 May 2016, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards for Small and Medium-sized Entities and the requirements of the Companies Act of South Africa Supplementary information Without qualifying our opinion, we draw attention to the fact that supplementary information set out on page 40 does not form part of the financial statements and is presented as additional information. We have not audited this information and accordingly do not express an opinion thereon. Other reports required by the Companies Act As part of our audit of the financial statements for the year ended 31 May 2016, we have read the Directors’ Report for the purposes of identifying whether there are material inconsistences between this report and the audited financial statements. This report is the responsibility of the respective preparers. Based on reading this report we have not identified material incons istencies between this report and the audited financial statements. However, we have not audited this report and accordingly do not express an opinion on these reports. __________________ Nexia SAB&T Registered Auditors S. Kleovoulou 20 September 2016

DIRECTORS’ REPORT

The directors have pleasure in submitting their report on the financial statements of Leadership Academy for Guardians of Governance for the 6 months ended 31 May 2016.

1. Nature of business

Leadership Academy for Guardians of Governance was incorporated in South Africa with interests in the Non-profit industry. The company operates 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 En-tities and the requirements of the Companies Act 71 of 2008. The accounting policies have been applied consistently compared to the prior 6 months.

Full details of the financial position, results of operations and cash flows of the company are set out in these financial statements.

3. Events after the reporting period

The directors are not aware of any material event which occurred after the reporting date and up to the date of this report.

4. Going concern

The directors believe that the Company has adequate financial resources to continue in operation for the foreseeable future and accord-ingly the financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the Institute is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the Company. The directors are also not aware of any material non-com-pliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the Company.

5. Auditors

Nexia SAB&T will continue in office in accordance with section 90 of the Companies Act 71 of 2008.


STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2016


31 MAY 2016

R R

Assets

Non-Current Assets

Property, plant and equipment 2 82 576

Intangible assets 3 4 582

87 158

Current Assets

Trade and other receivables 5 801 928

Cash and cash equivalents 6 4 195

806 123

Total Assets 893 281

Equity and Liabilities

Equity

Accumulated loss (215 965)

Liabilities

Current Liabilities

Trade and other payables 8 719 170

Loans from group companies 4 357 905

Provisions 7 32 171

1 109 246

Total Equity and Liabilities 893 281

STATEMENT OF COMPREHENSIVE INCOME


31 MAY 2016

R R

Revenue 9 4 636 689

Cost of sales 10 (2 971 486)

Gross profit 1 665 203

Operating expenses (1 884 546)

Operating loss 11 (219 343)

Investment revenue 12 3 378

Loss for the 6 Months (215 965)

Other comprehensive income -

Total comprehensive loss for the 6 Months (215 965)


STATEMENT OF CHANGES IN EQUITY

ACCUMULATED LOSS

TOTAL EQUITY

R R

Loss for the 6 Months (215 965) (215 965)

Other comprehensive income - -

Total comprehensive loss for the 6 Months (215 965) (215 965)

Balance at 31 May 2016 (215 965) (215 965)

STATEMENT OF CASH FLOWS


31 MAY 2016

R R

Cash flows from operating activities

Cash receipts from customers 562 418

Cash paid to suppliers and employees (830 743)

Cash used in operations 14 (268 325)

Interest income 3 378

Net cash from operating activities (264 947)

Cash flows from investing activities

Purchase of property, plant and equipment 2 (84 050)

Purchase of other intangible assets 3 (4 713)

Loans advanced to group companies 357 905

Net cash from investing activities 269 142

Total cash movement for the 6 Months 4 195

Total cash at end of the 6 Months 6 4 195


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 Enti-ties, and the Companies Act 71 of 2008. The financial statements have been prepared on the historical cost basis, except for biological assets at fair value less point of sale costs, 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, except for the changes set out in note 17 First-time adoption of the International Financial Reporting Standard for Small and Medium-sized Entities.

1.1 Significant judgements and sources of estimation uncertainty

Critical judgements in applying accounting policies

Management did not make critical judgements in the application of accounting policies, apart from those involving estimations, which would significantly affect the financial statements.

Key sources of estimation uncertainty

Provisions

Provisions are inherently based on assumptions and estimates using the best information available. Additional disclosure of these estimates of provisions are included in note 7 - Provisions.

1.2 Property, plant and equipment

Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses.

Cost 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 prop-erty, plant and equipment as follows:

Item Depreciation method Average useful life

Office equipment Straight line 5 years

IT equipment Straight line 3 years

The residual value, depreciation method and useful life of each asset are reviewed only where there is an indication 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.

1.3 Intangible assets

An intangible asset is recognised when: - it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and - the cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost.

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


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

Item Useful life

Computer software 3 years The residual value, amortisation period and amortisation method for intangible assets are reassessed when there is an indication that there

is a change from the previous estimate.

1.4 Financial instruments

Initial measurement

Financial instruments are initially measured at the transaction price (including transaction costs except in the initial measurement of finan-cial assets and liabilities that are measured at fair value through profit or loss).

Financial instruments at amortised cost

Financial instruments may be designated to be measured at amortised cost less any impairment using the effective interest method. These include trade and other receivables, loans and trade and other payables. At the end of each reporting period 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, including equity instruments that are publicly traded or whose fair value can otherwise be measured reliably, are measured at fair value through profit and loss.

Trade and other receivables

Receivables are measured at amortised cost using the effective interest method. At the end of each reporting period, the carrying amounts of trade and other receivables are reviewed to determine whether there is any objective evidence that the amounts are not recoverable. If so, an impairment loss is recognised immediately in profit or loss.

Trade and other payables

Trade payables are obligations on the basis of normal credit terms and do not bear interest.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially measured at fair value and subsequently recorded at amortised cost.

1.5 Impairment of assets

The company assesses at each reporting period date whether there is any indication that an asset may be impaired. If any such indication ex-ists, the company estimates the recoverable amount of the asset.

If there is any such indication, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the esti-mated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recog-nised immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset 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 6 months. A reversal of impairment is recognised immediately in profit or loss.


1.6 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as leave pay and sick leave, bo-nuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

1.7 Provisions and contingencies

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event; it is probable that the com-pany will be required to transfer economic benefits in settlement; and the amount of the obligation can be estimated reliably.

Contingent assets and contingent liabilities are not recognised.

1.8 Revenue

Revenue is recognised to the extent that the company has transferred the significant risks and rewards of ownership of goods to the buyer, or has rendered services under an agreement provided the amount of revenue can be measured reliably and it is probable that economic benefits associated with the transaction will flow to the company. Revenue is measured at the fair value of the consideration received or re-ceivable, excluding sales taxes and discounts.

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

NOTES TO THE FINANCIAL STATEMENTS

2. PROPERTY, PLANT AND EQUIPMENT 6 MONTHS ENDED 31 MAY 2016

2016

Cost Accumulateddepreciation

and impairments

Carrying value

R R R

Furniture and fixtures 64 834 (940) 63 894

IT equipment 19 216 (534) 18 682

Total 84 050 (1 474) 82 576

Reconciliation of property, plant and equipment - 2016 Opening balance

Additions Depreciation Total

R R R R

Furniture and fixtures - (64 834) (940) 63 894

IT equipment - (19 216) (534) 18 682

- 84 050 (1 474) 82 576

3. INTANGIBLE ASSETS 6 MONTHS ENDED 31 MAY 2016

Cost Accumulatedamortisation

Carrying value

R R R

Computer software 4 713 (131) 4 582

Reconciliation of intangible assets - 2016 Opening balance

Additions Amortisation Total

R R R R

Computer software - 4 713 (131) 4 582


6 MONTHS ENDED

31 MAY 2016

R

8. TRADE AND OTHER PAYABLESTrade payables 482 108

Accruals 237 062

719 170

9. REVENUERendering of services 4 636 689

10. COST OF SALESRendering of services

Cost of services 2 971 486

11. OPERATING LOSSOperating loss for the year is stated after accounting for the following:

Amortisation on intangible assets 131

Depreciation on property, plant and equipment 1 474

Employee costs 764 068

12. INVESTMENT REVENUEInterest revenue

Bank 3 378

13. AUDITOR’S REMUNERATIONFees 32 171

6 MONTHS ENDED

31 MAY 2016R

4. LOANS TO (FROM) GROUP COMPANIESFellow subsidiaries

Institute of Internal Auditors South Africa (357 905)

5. TRADE AND OTHER RECEIVABLESTrade receivables 625 940

Prepayments 65 333

VAT 110 655

801 928

6. CASH AND CASH EQUIVALENTSCash and cash equivalents consist of:

Bank balances 4 195

7. PROVISIONSReconciliation of provisions - 2016 Opening

balanceAdditions Total

R R R

Provision for audit fees - 32 171 32 171


6 MONTHS ENDED

31 MAY 2016

R

14. CASH USED IN OPERATIONSLoss before taxation (215 965)

Adjustments for:

Depreciation and amortisation 1 605

Interest received (3 378)

Movement in provisions 32 171

Changes in working capital:

Trade and other receivables (801 928)

Trade and other payables 719 170

(268 325)

15. RELATED PARTIESRelationships

Members of key management: Claudelle von Eck

Related party balances and transactions with other related parties

Related party balances

Loan accounts - Owing (to) by related parties

Institute of Internal Auditors South Africa (357 905)

Related party transactions

Administration fees paid to (received from) related parties

Institute of Internal Auditors South Africa 558 423

16. COMPARATIVE FIGURESNo comparative figures have been presented as these are the first financial statements of the company.

17. FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS FOR SMALL AND MEDIUM-SIZED ENTITIES

The company has adopted the International Financial Reporting Standards for Small and Medium-sized Entities, for the first time for the 2016 financial year end. The adoption of International Financial Reporting Standing for Small and Medium-sized Entities does not have a material effect on the financial statements.


DETAILED INCOME STATEMENT

NOTES 6 MONTHS ENDED

31 MAY 2016

R R

Revenue

Rendering of services 4 636 689

Cost of sales

Purchases (2 971 486)

Gross profit 1 665 203

Other income

Interest received 12 3 378

Operating expenses

Auditors remuneration 13 32 171

Administration fees 558 423

Bank charges 10 603

Consulting fees 6 716

Depreciation, amortisation and impairments 1 605

Disciplinary hearings 263

Electricity and water 58 887

Employee costs 764 068

Entertainment 3 734

Insurance 12 885

Marketing expense 17 121

Office expense 13 699

Office refreshments 14 750

Postage 760

Printing and stationery 8 533

Prizes 1 624

Public Relations 47 725

Recruitment 5 596

Repairs and maintenance 14 357

Telephone, fax and internet 159 690

Training 81 891

Travel - local 35 947

Use of equipment 33 498

1 884 546

Loss for the 6 Months (215 965)

The supplemary information presented does not form part of the financial statements and is unaudited


Unit 2, Bedfordview Office Park, 3 Riley Road, Bedfordview, 2008

Telephone: +27 11 450 1040 • Email: [email protected] • Web: www.iiasa.org.za

Documents

REPORT FOR THE 6 MONTHS ENDED 31 MAY 2016