Chubby Chums N.P.C
                                                                ( Registration number  2000/026162/08)
                                  Financial statements for the year ended 28 February 2014 Douglas Dix-Peek
                                                                   Chartered Accountant (S.A.)
                                                     Registered Auditor Published 29  August  2014

General Information

Country of incorporation and domicile

South Africa

Nature of business and principal activities

Non Profit Organisation that raises and distributes donations to other charitable organisations

Directors

M.H. Barnard

A.W. Graham

Registered office

136  Cydonia Street

Primrose Hill

Ekhuruleni

1401

Business address

136  Cydonia Road

Primrose Hill

Ekhuruleni

1401

Postal address

P.O. Box 2391

Primrose

1416

Bankers

FNB

Auditor

Douglas Dix-Peek

Company registration number

2000/026162/08

Chubby Chums N.P.C

( Registration number  2000/026162/08)

Financial Statements for the year ended 28 February 2014

Index

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

Index

Page

Directors' Responsibilities and Approval

3

Independent Auditor's Report

4

Directors' Report

5

6

Statement of Comprehensive Income

7

Statement of Changes in Equity

8

Statement of Cash Flows

9

Accounting Policies

10

Notes to the Financial Statements

11  -  12

Published

29  August  2014

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 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 company as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with the International Financial Reporting Standard for Small and Medium-sized Entities. The external auditor is 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 considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

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

The directors have reviewed the company’s cash flow forecast for the year to 28 February 2015 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 auditor is responsible for independently reviewing and reporting on the company's financial statements. The financial statements have been examined by the company's external auditor and their report is presented on page 4.

The financial statements set out on pages 5 to 12, which have been prepared on the going concern basis, were approved by the board on 28 August 2014 and were signed on its behalf by:

  

Director Director


Independent Auditor's Report

To the members of Chubby Chums N.P.C

I have audited the financial statements of Chubby Chums N.P.C, as set out on pages 6 to 12, which comprise the statement of financial position as at 28 February 2014, 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.

Directors' Responsibility for the Financial Statements

The company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and requirements of the  Companies Act 71 of 2008, and for such internal control as the directors 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

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards on Auditing. Those standards require that I 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 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.

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

Basis for Qualified Opinion

In common with similar organisations, it is not feasible for the company to institute accounting controls over donationsreceived prior to their initial entry in the accounting records.Accordingly, it wa impractical for us to extend our examination of donations received beyond the receipts actually received.

Qualified Opinion

In my opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of Chubby Chums N.P.C as at 28 February 2014, and its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and the requirements of the Companies Act 71 of 2008.

Other matter 1

Additional text

D. Dix-Peek

29  August  2014

Directors' Report

The directors submit their report for the year ended 28 February 2014.

1.       Review of activities

Main business and operations

The operating results for the year were satisfactory for the following reasons. The financial position of the company is sound. The company  obtained a grant of  R1,774,216 from Social Services between April 2013 and February 2014, of which R1,250,272 was deferred as income into future financial periods.

Net loss of the company was R 105,381 (2013: profit R 171,232), after taxation of R - (2013: R -).

Registered office

136  Cydonia Street

Primrose Hill

Ekhuruleni

1401

Business address

136  Cydonia Road

Primrose Hill

Ekhuruleni

1401

Postal address

P.O. Box 2391

Primrose

1416

2.       Going concern

The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

3.       Events after the reporting period

The directors are not aware of any matter or circumstance arising since the end of the financial year that has a material impact on the financial statements.

4.       Directors

The directors of the company during the year and to the date of this report are as follows:

Name

M.H. Barnard

A.W. Graham

5.       Secretary

The company had no secretary during the year.

6.       Auditor

Douglas Dix-Peek will continue in office in accordance with section 90 of the Companies Act 71 of 2008. 7.                Liquidity and solvency

The directors have performed the required liquidity and solvency tests required by the Companies Act 71 of 2008.


Figures in Rand

Note(s)

2014

2013

Assets

Non-Current Assets

 

 

 

Property, plant and equipment

2

94,518

107,205

Current Assets

 

 

 

Bank - Social Development Child Care and Protection  Directorate

 

1,147,540

-

Cash and cash equivalents

 

315,297

387,488

 

 

1,462,837

387,488

Total Assets

 

1,557,355

494,693

Reserves and Liabilities

Reserves

 

 

 

Accumulated Reserves

 

326,937

432,318

Liabilities

Non-Current Liabilities

 

 

 

Loans from Directors

3

62,374

57,874

Government grants deferred

4

1,147,540

-

 

 

1,209,914

57,874

Current Liabilities

 

 

 

Trade and other payables

 

20,504

4,501

Total Liabilities

 

1,230,418

62,375

Total Equity and Liabilities

 

1,557,355

494,693

Statement of Comprehensive Income

Figures in Rand

Note

2014

2013

Revenue

 

 

 

Donations -  cash

 

763,599

1,057,474

Donations - non cash

 

1,149,108

947,277

Donations Prevention Social development Child Care and Protection Directorate

 

626,676

-

 

5

2,539,383

2,004,751

Donations paid or distributed

 

(1,909,237)

(1,057,571)

Surplus

Operating expenses

 

630,146

947,180

Advertising

 

-

820

Annual duty

 

450

-

Auditor's remuneration

7

17,944

13,571

Bank charges

 

11,418

10,969

Bookkeeping fees

 

14,638

-

Computer expenses

 

5,317

710

Depreciation

 

30,048

27,047

Directors' emoluments

 

97,400

86,500

Fundraising and volunteers' costs

 

253,178

340,132

General expenses

 

-

100

Lease rentals on premises

 

29,130

19,871

Medical expenses and kits

 

1,239

3,197

Motor vehicle expenses

 

166,211

168,923

Printing and stationery

 

12,279

8,212

Repairs and maintenance

 

8,552

10,331

Staff refreshments

 

2,040

1,684

Stipends

 

9,087

880

Telephone and fax

 

76,215

83,001

Training

 

381

-

 

 

735,527

775,948

(Shortfall)  Surplus for the year

 

(105,381)

171,232

Other comprehensive income

 

-

-

Total comprehensive (loss) income for the year

 

(105,381)

171,232

Statement of Changes in Equity

Figures in Rand

Accumulated Reserves

Total equity

Balance at 01 March 2012

261,086

261,086

Shortfall for the year

171,232

171,232

 

-

-

Total comprehensive income for the year

171,232

171,232

Balance at 01 March 2013

432,318

432,318

Surplus for the year

(105,381)

(105,381)

 

-

-

Total comprehensive loss for the year

(105,381)

(105,381)

Balance at 28 February 2014

326,937

326,937


 

Statement of Cash Flows

Figures in Rand

Note(s)

2014

2013

Cash flows from operating activities

 

 

 

Cash generated from operations

8

1,088,210

190,183

Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment

2

(17,361)

(110,970)

Sale of property, plant and equipment

2

-

9,000

Purchase of other asset 3

 

(1,147,540)

-

Net cash from investing activities

 

(1,164,901)

(101,970)

Cash flows from financing activities

 

 

 

Repayment of shareholders loan

 

4,500

-

Net cash from financing activities

 

4,500

-

Total cash movement for the year

 

(72,191)

88,213

Cash at the beginning of the year

 

387,488

299,273

Total cash at end of the year

 

315,297

387,486


 

Accounting Policies

1.       Presentation of Financial Statements

The financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and the Companies Act 71 of 2008. The financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rands.

These accounting policies are consistent with the previous year.

1.1    Property, plant and equipment

Property, plant and equipment are tangible items that:

Ÿ   are held for use in the production or supply of goods or services, for rental to others or for administrative purposes; and

Ÿ   are expected to be used during more than one period.

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

Depreciation is provided using the straight-line method to write down the cost, less estimated residual value over the useful life of the property, plant and equipment, which is as follows:

Item

Average useful life

Plant and machinery

20 %

Office equipment and furniture

15 %

Computers

33 %

Cool room and storage

20 %

The residual value, depreciation method and useful life of each asset are reviewed at each annual reporting period if there are indicators present that there has been a significant change from the previous estimate.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss in the period.

1.2    Financial instruments

Initial measurement

Financial instruments are initially measured at the transaction price.  This includes transaction costs, except for financial instruments which are measured at fair value through profit or loss.

1.3    Government grants

Grants received before the revenue recognition criteria are satisfied are recognised as a liability.

Grants are measured at the fair value of the asset received or receivable.

1.4    Revenue

Donations are recognised upon receipt and their initial entry in the company's accounting records, subject to the proviso for Government Grants in Not 1.3 above.

Notes to the Financial Statements

Figures in Rand

 

 

2014        2013

2.             Property, plant and equipment

 

 

 

 

2014

 

2013

Cost / Valuation

Accumulated Carry in depreciation and

impairments

g value

Cost / Valuation

Accumulated Carry i depreciation and

impairments

ng value

Plant and machinery          30,426

(8,255)

22,171

13,065

(3,977)

9,088

Motor vehicles      114,100

(51,105)

62,995

114,100

(33,925)

80,175

Office equipment and furniture        44,168

(44,145)

23

44,168

(42,945)

1,223

Computers            23,967

(14,640)

9,327

23,967

(7,250)

16,717

Cool room and storage      37,373

(37,371)

2

37,373

(37,371)

2

Total       250,034

(155,516)

94,518

232,673

(125,468)

107,205

Reconciliation of property, plant and equipment - 2014

Opening      Additions              Depreciation        Total balance

Plant and machinery

9,088

17,361

(4,278)

22,171

Motor vehicles

80,175

-

(17,180)

62,995

Office equipment and furniture

1,223

-

(1,200)

23

Computers

16,717

-

(7,390)

9,327

Cool room and  storage

2

-

-

2

 

107,205

17,361

(30,048)

94,518

3.       Loans from Directors

M.H. Barnard        47,017 44,767

A.W. Graham

15,357

13,107

 

62,374

57,874

The loans are unsecured, interest free and have no fixed terms of repayment

4.       Government grants deferred

Grant from Prevention Social Development Child Care and Protection Directorate

carried forward                                                                                                                                   1,147,540

Unfulfilled conditions and other contingencies attaching to government assistance that have been recognised.

5.       Revenue

Donations - cash  763,599 1,057,474

Donations - non cash

1,149,108

947,277

Donations - Prevention Social Development Child Care and Protection Unit

626,676

-

 

2,539,383

2,004,751

6.       Taxation

No provision has been made for 2014 tax as the company has no taxable income.  (2013 -Nil).

Notes to the Financial Statements

Figures in Rand

2014

2013

7.             Auditor's remuneration

 

 

Fees provided

9,000

5,363

Fees underprovided in prior years

7,410

6,840

Tax and secretarial services

1,534

1,368

 

17,944

13,571

8.             Cash generated from operations

 

 

(Loss) profit before taxation Adjustments for:

(105,381)

171,232

Depreciation and amortisation

30,048

27,047

Movements in provisions

Changes in working capital:

-

(9,000)

Trade and other payables

16,003

904

Government grants deferred

1,147,540

-

 

1,088,210

190,183

9.             Directors' remuneration

Executive

2014

Emoluments        Total

M.H. Barnard

48,700

48,700

A.W. Graham

48,700

48,700

 

97,400

97,400