Botswana Institute of Chartered Accountants Annual...Impression House Tel: +267 3922984/3163808 Botswana Institute of Chartered Accountants Tel: +267 3972992 Fax: +267 3972982 Email:

Impression House Tel: +267 3922984/3163808

Botswana Institute of Chartered Accountants

Tel: +267 3972992Fax: +267 3972982Email: [email protected]: www.bica.org.bw

Botswana InstItute of Chartered aCCountants

2013annual report

Vision Statement To be the leading accountancy professional body with an internationally recognized professional accountancy qualification

BICA MissionTo protect public interest through:

• Promotingtheaccountancyprofession• Facilitatingqualityprofessionalaccountancyservices

through the monitoring and regulation of professional accountants

• Developingprofessionalaccountants

Core ValuesIntegrity

Excellence

Independence

Transparency and Accountability

Annual Report – 2013

Annual Report – 2013Contents

General Information 2President’s Report 3BICA Council 2013-2014 6BICA Secretariat 7Reports from Committees : Membership and Examinations 9Training & Professional Development 14Technical 17Tax 19Finance & Administrative 21Public Sector 24Northern 26Annual Financial Statements 29

Annual Report – 2013 | 1


2 | Annual Report – 2013

GENERAL INFORMATION INCORPORATION AND NATURE OF BUSINESS Botswana Institute of Chartered Accountants (the Institute) is the professional body for accountants domiciled in the Republic of Botswana. The Institute was incorporated in Botswana in terms of the Accountants Act of 2010. The role of the Institute is to represent its members’ interests, develop the Accounting profession, protect the public interest, and ensure observance of the highest professional and ethical standards by its members and to carry out any other functions expected of a professional accountancy and membership body. COUNCIL MEMBERS Ms Tshegofatso B. Modise PresidentMr Frederik C Els Vice-PresidentMr Rudi Binedell TreasurerMr Zaeem Anwar MemberMr Brian Dialwa Accounting Technician Member RepresentativeDr. Mpho N. Isaiah Ministerial AppointeeMr Vijay Kalyanaraman MemberMr Conductor P. Masena Ministerial AppointeeMs Lilly G. Matenge MemberMr Anantha Padmanaban Northern Region RepresentativeMs Boineelo Peter Ministerial Appointee

SECRETARIAT Mr Feliaty TJ Ndeke Chief Executive Officer (Acting) POSTAL ADDRESS REGISTERED OFFICE Private Bag 0021 Plot 50374, Block 3Gaborone Second & Third Floor, Fairgrounds Financial CentreBotswana Gaborone, Botswana HONORARY AUDITORS

V. K. Verma & Associates BANKERS

Stanbic Bank Botswana Limited Stanbic Investment Management Services (Proprietary) LimitedBank of Baroda (Botswana) Limited



Honourable Minister Kenneth O MatamboMinister of Finance and Development Planning

It is my honour and privilege to present on behalf of Council, the Annual Report of the Botswana Institute of Chartered Accountants for the year ended 31 December 2013.

BICA QuAlIfICAtIOnThe BICA Qualifi cation has now been offered since July 2011. The three accredited tuition providers, Botswana Accountancy College, Botho University and Ba Isago University College provide tuition to BICA students. As has been stated in the past, what makes the BICA qualifi cation unique from its competitors is that it requires students to gain practical work experience at BICA’s approved training employers before they complete their examinations. As a result of this, BICA has had to intensify its efforts in recruiting approved training employers so that eligible students get an opportunity to gain the much

required practical work experience at the earliest possible opportunity. The Institute is very proud of the positive relationship it has with its approved training employers and is grateful for the training opportunities availed to the BICA students.

The Institute continued to face challenges in the area of students striking the right balance between classroom work experience and the tuition providers offering their services at the required level. The student examination results have generally not been at a level that is acceptable to BICA, our twinning partner, the Institute of Chartered Accountants in England & Wales (ICAEW) and the World Bank. During the period under review a number of interventions were put in place with a view to addressing the situation. For instance, the Institute organised a one week Training-of-Trainers (tutors) Course for Lecturers for the accredited tuition providers in September 2013. The course was conducted by Kaplan Financials from the United Kingdom.

In addition the ICAEW ran a tutors conference in February 2014 with part of the agenda addressing the examiners feedback. Meetings were held with the ICAEW in which the tuitions academic leadership deliberated with the ICAEW on matters of strategic importance regarding the BICA programme.

As a way of improving the calibre of students admitted to the programme, the Institute revised the entry requirements for the BICA qualifi cation by restricting entry to the programme to AAT and University graduates.

On a positive note, we are happy to report that the Ministry of Education and Skills Development changed its policy regarding the continued sponsorship of university graduates for the BICA qualifi cation. Government sponsored the fi rst fi fty (50) university graduates for the July 2013 BICA intake. The Institute is grateful to the Government for this intervention.

THE REPORT OF THE PRESIDENT

Tshegofatso Modise

President



BICA ChIef exeCutIve OffICer (CeO)The new BICA CEO is billed to start on 14 April 2014. This key role will assist Council and BICA staff to make significant progress on the affairs of the institute and the BICA strategy.

BICA StrAtegy – 2013 - 2016The BICA strategy 2013 – 2016 which was approved by Council in the last quarter of 2012 was officially launched on 19 September 2013. The Institute is making concerted efforts to implement the plan. Intensified promotional activities concerning the BICA Qualification and the Institute in general have been carried out through radio, television, newspaper advertisements and billboards.

The Institute also participated in the BOCCIM Northern Trade Fair and a number of career fairs with the University of Botswana and Botho University. As a result of the aggressive advertising campaign conducted during the period under review, the Institute has seen its membership number grow from 1 629 at the beginning of 2013 to 1 835 by the end of the year, the bulk of the growth being in the technician level with 144 new technician memberships.

BOtSwAnA’S Own ACCOuntIng teChnICIAn QuAlIfICAtIOnAs part of its strategy for the period 2013 – 2016, BICA plans to establish its own Accounting Technician Qualification. The Institute is in advanced discussions with the Association of Accounting Technicians (AAT) of United Kingdom (UK) on how AAT will assist BICA in the establishment of Botswana’s own Accounting Technician Qualification. Subject to the availability of funds, we are confident that there will be substantial progress in that direction in the year 2014.

revISed PrOjeCt ImPlementAtIOn COmmIttee (PIC)The Project Implementation Committee has continued to serve as a useful forum for stakeholders to share ideas and make recommendations on

how BICA students’ results and the student learning experience in general can be improved.

memOrAndumS Of underStAndIng (mOu’S)The Institute collaborates with several other key stakeholders. It is important that such relationships are guided by written Memorandums of Understanding. BICA is currently working on a Memorandum of Understanding that will help define how the Institute and the Botswana Accountancy Oversight Authority (BAOA) will work together for the mutual benefit of the two organisations.

The Memorandum of Understanding with the Botswana Unified Revenue Service (BURS) was signed in April 2013. This Memorandum of Understanding defines the parameters within which the two organisations cooperate as they attempt to make improvements to the Botswana taxation system.

CAPACIty BuIldIngDuring the period under review the Institute commissioned a consultancy project to improve its Information Technology Infrastructure. In particular, the project involved the upgrading and provision of a virtualisation solution to the Institute. The Institute is confident that it will have an enhanced Information Technology Infrastructure once the project is fully implemented.

PAn AfrICAn federAtIOn Of ACCOuntAntS (PAfA)The Institute continues to play an active role in the affairs of the Pan African Federation of Accountants (PAFA). The Acting Chief Executive Officer and the President attended the second African Congress of Accountants and the PAFA Annual General meeting in Accra, Ghana from 14 – 17 May 2013. The President presented a very well received paper at the conference on promoting small medium enterprises in a growing economy.

International Accounting Standards Board (IASB) Meeting with World Standard Setters. The President represented BICA at the World

Standard Setters meeting on 26 to 27 September 2013 where certain interpretation and amendments to accounting standards were being considered. The President also held meetings with AAT (UK) and ICAEW in London later that week on matters of strategic importance to BICA.

InternAtIOnAl federAtIOn Of ACCOuntAntS (IfAC)The Institute was represented by the President and the Acting Chief Executive Officer at the IFAC Council meeting that was held on the 13 – 14 November 2013 in Seoul, South Korea. The attendance enabled the Institute to be heard, with participation in various meetings and exercising its vote on matters that required members to vote.

COnCluSIOnWe wish to conclude by thanking the Government of Botswana and the Ministry of Finance and Development Planning through the office of the Accountant General for the support it has continued to give to the Institute through various means but most importantly grants and operating subventions. The Institute also acknowledges the support from various stakeholders such as the Office of the Accountant General, the World Bank, ICAEW, BICA Committees and Members, BICA Staff and Council Members. We are confident that with this support BICA will be able to meet its mandate.

It is our honour and privilege to present, on behalf of Council, the Annual Report of the Botswana Institute of Chartered Accountants for the financial year ended December 31, 2013.

Tshegofatso Modise President



NAMES COUNCIL DISCMEM & EXAM

TAX PSCFIN &

ADMINTECH T & P D NORTH PIC

Tshegofatso Modise 5/6 - - - - - - 3/5 - 2/3

Frederik Els 5/6 - - - - 1/4 3/4 - - 1/3

Rudi Binedell 4/6 - - - - 3/4 1/4 - - -

Zaeem Anwar 5/6 - 6/8 - - - - - -

Brian M Dialwa 5/6 - -- - - - - - - -

Mpho Isaiah 5/6 - - - - - - - - -

Vijay Kalyanaraman 4/6 - - - - - - - - 1/3

Conductor Masena 5/6 - - - - - - - - -

Lilly Matenge 5/6 - - - 1/1 - - - - -

Feliaty Ndeke 5/6 - - 3/4 - 4/4 3/4 2/5 - 2/3

Anantha Padmanaban 4/6 - - - - - - - 11/11 -

Boineelo Peter 5/6 - - - - - - - - -

NOTE: DISC = Disciplinary Committee

MEM & EXAM = Membership and Examinations Committee

PSC = Public Sector Committee

FIN & ADMIN = Finance and Administrative Committee

TECH = Technical Committee

T & P D = Training and Professional Development Committee

PIC = Project Implementation Committee

ATTENDANCE AND MEETINGS OF COUNCIL AND OTHER COMMITTEES FROM JANUARY 2013 TO DECEMBER 2013



BICA COUNCIL 2013-14

Standing(l-r); Anantha Padmanaban, Dr. Mpho Isaiah, Vijay Kalyanaraman, Mothusi Brian Dialwa, Feliaty TJ Ndeke, Zaeem AnwarSitting (l-r); Conductor P. Masena, Lilly G. Matenge, Tshegofatso B. Modise, Boineelo Peter

Not in picture; Frederik C. Els, Rudi Binedell



BICA SECRETARIAT 2013-14

Standing (l-r); Letsalo Morapedi, Othusitse Siele, Boemo Gaolathe, Mokeresete Kgosimore, Priscilla Setimela, Oupa Gaofi se, Thapelo Selelo, Itumeleng Selebalakhai, Cornelious Radikara, Gofaone Marena, Regina Ramanteba,

Veronica Mogapi, Tshepang Monare, Pule Mogale, Joseph GontseSitting (l-r); Ookeditse Khachana, Othusitse Gatang, Keneilwe Rathedi, Feliaty TJ Ndeke,

Orebeile Seboka, Khumoetsile P. Modisa



FRANCISTOWN SATELLITE OFFICE

Mmilili Kenneth Onkemetse Phuthego



MEMBERSHIP AND EXAMINATION COMMITTEE

Our Institute strives to provide its members with a wide range of resources and benefits to enable them to stay at the top of the profession and to continue to attract high calibre individuals who can develop and maintain the high standard of technical and professional expertise and services desired in Botswana.

BICA membership continued to grow during the year with 1 835 members across various categories as at 31 December 2013; the Institute is hopeful that it will achieve its strategic goal of having 2 655 members by year 2016.

The Institute experienced a noticeable increase in the Accounting Technician category with the growth in the Associate and Fellow categories more in line with the growth experienced in the past few years. It is worth noting

that there has been a decrease in the number of the Associate (ACA) members which is mostly attributed to number of expatriate accountants who left Botswana during this period.The details of membership are set out in more detail in the table and chart below:

2009 2010 2011 2012 2013

Accounting Technicians 374 439 565 675 819

Associate (ACA) 416 371 345

Associate (ACPA) 538 590 248 312 388

Fellow (FCA) 176 189 192

Fellow (FCPA) 202 218 69 82 91

Total 1 114 1 247 1 474 1 629 1 835

Front (l-r); Ikgopoleng Gaokgorwe, Arumugam KanagaratnamBack (l-r); Mohamed I.S. Nasoordeen, Khumoetsile P. Modisa, Maemo Mesotlo

Not in picture; Arvind Prahlad, Mpho Masuge, Zaeem Anwar, Cornelious Radikara, Othusitse Siele



AnnuAl memBerShIP AdmISSIOnS

Membership growth as indicated below is partly as a result of aggressive promotional activities encouraging non registered accountants to register in line with the requirements of the Accountants Act.

CItIZen memBerShIP COmPOSItIOn

The Institute experienced a noticeable increase in the number of citizen registrations with 170 more citizens registered with the Institute in 2013 making a total of 963 as opposed to 793 in 2012.

Annual membership admissions Membership growth as indicated below is partly as a result of aggressive promotional activities encouraging non registered accountants to register in line with the requirements of the Accountants Act.

Citizen membership composition

0

100

200

300

400

500

600

700

800

900

2009 2010 2011 2012 2013

Accounting Technicians

Associate (ACA)

Associate (ACPA)

Fellow (FCA)

Fellow (FCPA)

0

50

100

150

200

250

300

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Num

ber o

f Mem

bers

Year Joined

Number of Members

Annual membership admissions Membership growth as indicated below is partly as a result of aggressive promotional activities encouraging non registered accountants to register in line with the requirements of the Accountants Act.

Citizen membership composition

0

100

200

300

400

500

600

700

800

900

2009 2010 2011 2012 2013

Accounting Technicians

Associate (ACA)

Associate (ACPA)

Fellow (FCA)

Fellow (FCPA)

0

50

100

150

200

250

300

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Num

ber o

f Mem

bers

Year Joined

Number of Members



Membership Category Citizen Non- Citizen Total Membership

2012 2013 2012 2013 2012 2013

FCA 48 51 141 141 189 192

FCPA 27 36 55 55 82 91

ACA 105 101 266 244 371 345

ACPA 136 166 176 222 312 388

ACCTECH 477 609 198 210 675 819

TOTAL 793 963 836 872 1629 1835

CertIfIed AudItOrS

The number of certifi ed auditors as at end of 31st December 2013 stood at 56. BICA registered 5 new auditors and recorded 3 resignations during the year.

As at December 2012

Admissions during 2013

Resignations during 2013

As at December 2013 Citizen Non-Citizen

Associate 9 4 0 13 0 13

Fellow 45 1 3 43 7 36

Total 54 5 3 56 7 49

memBer fIrmS

Section 33(1) of the Accountants Act 2010 provides that every fi rm that provides or intends to provide professional accounting services shall apply for registration with the Institute. The members of the public and employer organisations are reminded to only use registered member fi rms of the Botswana Institute of Chartered Accountants as these are the only fi rms that are legally permitted to offer such services.

The Institute has registered 28 Audit and 144 Non–audit Member Firms as at 31 December 2013.

Number of Member fi rms

Firms with Certifi ed Auditors 28

Firms without Certifi ed Auditors 144

Totals 172



BICA QuAlIfICAtIOn

The BICA qualification continues to be well received by key stakeholders and the general public. 361 students have enrolled in the BICA qualification since its inception in 2011. As can be expected some students have discontinued their studies, in spite of this by the end of 2013 there were over 350 students still active in the programme.

The support from Authorised Training Employers (ATE’s) continues to be tremendous with BICA having managed to recruit 88 ATE’s to assist students with the technical work experience required for the qualification.

The Government of Botswana continues to support the qualification with sponsorship for the majority of the students in the programme. Before 2013 Government sponsorship for these students was limited to those who had never received sponsorship for tertiary studies. In 2013 however, this policy was amended to the effect that the Government is now sponsoring students to the BICA qualification who had already attained (possibly through previous sponsorship) relevant degrees. This is a positive move from Government and BICA is very grateful for the support and we expect to see positive results from this initiative.

Examinations in various papers were held by the Institute as scheduled throughout the year and the results analysed by the Institute and other stakeholders raised concern about the low pass rates achieved by students.

Accordingly, steps are being taken to ensure that there is an improvement in this regard. Efforts aimed at identifying the probable causes of the poor results were made and the following initiatives were undertaken in trying to improve the results;

The training of trainers workshop was conducted in July with trainers from Kaplan Financial in the UK brought to Botswana to train lecturers of the three Institutions offering the BICA qualification and equipping them with necessary skills to teach the program

Continuous monitoring of the performance of the tuition providers to ensure high standards of tuition are maintained

Improving the quality of students who are enrolled into the program. BICA recruited 50 university graduates into the program in 2013 as a way of improving the results. BICA also reviewed its entry requirements for admitting students by excluding students with only AAT level 2 and 3 and A Levels in its effort to improve the suitability of students enrolled in the program.

Accreditation of tuition providers who wish to offer the BICA qualification. BICA has, in its effort to ensure that tuition providers have the necessary resources to enable it to offer the programme, developed accreditation procedures which ensure conformity with high standards set by BICA. So far three Institutions have been accredited.

BICA also continues in its effort to assist students to achieve better results by regularly updating the website with past papers for practice purposes.

BICA further continues to encourage tutors to enroll in the webinars which are normally conducted by ICAEW to equip themselves with any changes or necessary information which might assist them in delivering the tuition to students

Further areas which BICA continues to look into as possible interventions are:

Negotiations are ongoing with ICAEW to allow BICA students direct access to the ICAEW website

Formation of the student support forum where students can support each other as well to air their issues easily for further action

Consideration of the block release model as it appears that some students have weighty workload from authorised employers which negatively affects their studies.

COllABOrAtIOn wIth Other PrOfeSSIOnAl BOdIeS

BICA continues to work with other professional bodies such as AAT (Association of Accounting Technicians), ACCA (Association of Chartered Certified Accountants) and SAICSA (Southern African Institute of Chartered Secretaries and Administrators) in partnership agreements to support students of such bodies who are in Botswana.

AAt

This agreement came in to effect on 1 January 2013 and shall continue for one year. It is subjected to an annual review when notice of termination may



be given by either party. BICA has over the years provided administration and examination support to AAT students in Botswana and will continue to offer such support as part of the agreement. The Institute also continued to work with AAT in arranging the AAT awards ceremonies for AAT graduates and members.

BICA has further engaged AAT to assist in the development of the Botswana Technician qualification for which AAT has shown full support.

ACCA

The Institute has continued to maintain its Joint scheme agreement with ACCA in accordance with the joint scheme agreement for November 2013 to October 2016. BICA will continue to offer administration and examination support to ACCA students as well as encourage ACCA members in Botswana to become members of the Institute in its effort to continuously maintain a cordial relationship.

SAICSA

BICA continued its working relationship with SAICSA in providing administration support for the SAICSA examinations.

COnCluSIOn

2013 has been a challenging year for this committee and we believe we have made excellent progress in promoting our BICA qualification and in facilitating the education and training of accountants in Botswana.

I would like to thank all members of this committee and the BICA secretariat for their time and support given in ensuring that this committee progresses in meeting its mandate.

Zaeem AnwarChairman, Membership & Examination


14 | Annual Report – 201314 | Annual Report – 2013

TRAINING AND PROFESSIONAL DEVELOPMENT COMMITTEE

trAInIng And PrOfeSSIOnAl develOPment

The Training and Professional Development Committee continued to be the Committee primarily responsible for the BICA Qualifi cation and engaging members in issues of continuing professional development. I am happy to report that the Committee worked hard to ensure that its mandate was successfully carried out. The year 2013 can be seen as one in which the Institute has consolidated the positive developments that had been achieved with the establishment of the BICA Qualifi cation. This Committee is also charged with the responsibility of ensuring that there is a range of CPD events availed to members.

COntInuIng PrOfeSSIOnAl develOPment (CPd) eventS

The Institute continues to offer a wide spectrum of Continuing Professional Development (CPD) events to its members. The events are intended to ensure members are up to date with developments in the profession and remain relevant throughout their professional careers. The events which were covered this year included: International Financial Reporting Standards (IFRS), Balanced Score Card, IFRS for SMME, Advanced Excel, Audit update, Company Secretariat, IFRS (back to basics), Business Leadership, Taxation, and Fraud and Risk Management.

Ten CPD events were held in Gaborone and four in Francistown. A total of 824 participants attended the CPD events.

In line with the Strategic Plan 2013-2016, the Institute has plans to increase the number of CPD events it offers to its members. For example, BICA is planning to liaise with other Institutes with a view of offering their online CPD events to BICA members.

BOtSwAnA ACCOuntIng teChnICIAn QuAlIfICAtIOn

The Institute is in discussions with the Association of Accounting Technicians in the development of a Botswana Accounting Technician Qualifi cation. Our objective is to develop an

TRAINING AND PROFESSIONAL DEVELOPMENTStanding (L-r); Tshepang Monare, Saad Mubashir, Othusitse M. Siele, Aswin Vaidyanathan, Jonnah Pongaponga,

K.J. Bakthavathsalu, Ian Howarth, George Kiilu, Dr Ssegawa KaggwaSitting (l-r); Michaela Powell-Rees, Priya Iyer, Kudzai Chuma

Not in picture; Tshegofatso Modise, Feliaty TJ Ndeke, Vikash V.S. Ponangi



Accounting Technician qualification that will be a feeder to the full BICA Chartered Accountant qualification.

The Institute hopes to launch this accounting technician qualification in 2015 and focus will be placed in 2014 on managing the transition, branding and marketing this qualification.

BICA QuAlIfICAtIOn

The BICA qualification continues to attract new students locally and internationally with at December 2013 a cumulative 361 students having enrolled since inception of the programme in 2011. The interest in this programme is growing steadily. With the support from the Government and other stakeholders the qualification is expected to attract even more students, especially graduates from the University of Botswana.

In 2013 a number of initiatives were carried out to improve the success of this qualification. These include: review of entry qualifications; provision of enhanced induction to students; securing student sponsorship from the Department of Tertiary Education Financing (DTEF); providing training to Lecturers at the accredited Institutions; revising the qualification requirements in line with the changes effected by our twinning partner the Institute of Chartered Accountant in England & Wales (ICAEW); increasing the number of Authorised Training Employers in order to absorb more students who acquire Practical Work Experience; meeting with ATEs/QPRT to discuss challenges faced by the qualification; and assessing other educational Institutions that have requested permission to offer the qualification.

revIew Of entry QuAlIfICAtIOnS

This Institute reviewed its entry requirements for the BICA qualification and has now restricted entry to students who already hold a relevant University degree or who are AAT graduates. The review was undertaken in view of

the unacceptably low pass rate in the examinations due in part to students not being properly prepared with basic accounting knowledge. It is expected that the introduction of students with more solid grounding in accounting education will lead to improved student performance and pass rates. StudentS InduCtIOn

The Institute continues to induct new students to the programme. Two induction sessions were held for new students with students being instructed on the essential elements of the BICA Qualification.

exemPtIOnS

The Botswana Accountancy College’s Bachelor of Accounting and Finance degree programme was submitted to the ICAEW for accreditation and it has been granted exemption in selected areas by the ICAEW. BICA has in turn extended the same exemptions to our BICA qualification.

StudentS SPOnSOrShIP

Following submissions made to the Ministry of Education and Skills Development on the issue, the Institute is very pleased to note that the Government has changed its policy regarding the sponsorship of university graduates for the BICA Qualification. In recognition of the need to address the shortage of professional accountants in the country the Government has sponsored fifty university graduates in the July 2013 BICA intake. The Institute expects that enrolling degree holders will contribute to the improvement in the results achieved by BICA students.

trAIn the trAInerS

The first Train-the-Trainers workshop was held in 2011. At that stage only one tuition provider was provided with this training since it was the only institution which was offering the BICA qualification. Two additional institutions have since been accredited giving in total three institutions currently offering the BICA qualification.

In 2013, the Institute organised a further Train-the-Trainer workshop for lecturers at all three accredited Institutions, namely, Botho University, BA ISAGO University College and the Botswana Accountancy College. Forty lecturers from these Institutions attended this workshop. The workshop, which was conducted by Kaplan Financials of UK, was focussed on the requirements for lecturers to plan, structure and deliver an effective presentation and to effectively deal with the issues of each paper within the BICA qualification. From the evaluation reports from participants and reports from students, the workshop achieved its objectives and our students are receiving enhanced training. We intend to hold similar training in 2014.

exAmInAtIOnS

The Institute conducted two examination sessions for Certificate Level and Professional Level examinations during the period under review. As has been reported in the past, student examination results have generally not acheived a level that is acceptable to BICA or our twinning partner, the Institute of Chartered Accountants in England & Wales (ICAEW) and the World Bank. However, BICA is hopeful that the interventions that are mentioned above (such as revision of entry requirements and Train-the Trainers Workshop) will go a long way to ensuring an improvement in student results. The Institute will continue to exert efforts in improving the current trends of student performance.

AuthOrISed trAInIng emPlOyerS (AteS)

The Institute has recruited a total of 96 Authorised Training Employers (ATEs). The ATEs are an essential element of the BICA qualification as they provide students with the practical work experience they need to become professional accountants. Out of the 361 students, 200 were placed with an ATE. The remaining numbers of students are required to complete Certificate Level modules before they can be placed with the ATEs to ensure the foundation of basic knowledge is well entrenched.



All the ATEs’ appointed Qualified Persons responsible for the training have undergone an induction programme which assists in understanding the Institute’s expectations of them and delivering these.

Key ChAngeS tO the BICA QuAlIfICAtIOn

The BICA qualification has undergone some evolutionary change during the period under review. Some modules have been re-aligned, and new modules have been introduced; these changes did not only affect the syllabus but the Technical Work Experience and Initial Professional Development Programmes also.

The expectation is that by June 2014 the transition period will be at an end and the qualification well bedded down

ACCredItAtIOn

The institute continues to monitor and evaluate accredited institutions and welcomes new applications for accreditation.

AAt AwArdS nIght

The Institute hosted the AAT Awards Night on 24th October 2013. This glamorous event saw a number a number of AAT graduates be awarded their certificates with 6 being granted full membership of AAT.

AcknowledgementsI wish to thank all the members of the Committees and the BICA Secretariat for the good work they have continued to render to the Committee which has enabled us to satisfy our mandate.

Tshegofatso B. Modise Training and Professional DevelopmentCHAIRPERSON



teChnICAl COmmIttee

The chairmanship of this committee transferred this year from Rudi Binedell to myself, Freddie Els; we also saw the departure of several members with two, Mr. Duncan D Majinda, and Mr. Sonny Mabeju leaving the committee to join the Botswana Accounts Oversight Authority – a vehicle with which we hope to co-operate extensively in the future. I take this opportunity to thank all previous members of the committee for the valuable time and insights.

TECHNICAL COMMITTEE

gAAP In BOtSwAnA fOr entItIeS nOt reQuIred tO COmPly wIth IfrS

In September 2013 we launched our Botswana GAAP for entities not required to comply with IFRS. This launch resulted in this Micro GAAP coming into immediate effect and we expect to see entities applying the GAAP in the forthcoming year.

The establishment of our own customized GAAP is a very proud

achievement for BICA making Botswana one of the few countries in the world with its own simplifi ed but credible framework for fi nancial reporting for entities not required by law to comply with International Accounting Standards.

nBfIrA

With the establishment and commencement of the operations of the Non-Banking Financial Institution Regulatory Authority (NBFIRA),

Standing (l-r); Shashi Kumar Velambath, Feliaty TJ Ndeke, Cornelious RadikaraSitting (l-r); Prosenjit Gupta, Janet Magana, Sheya Edirisinghe

Not in picture; Frederik C. Els, Thomas Chitambo, Cecilia Ramatlapeng, Mythri Sambasivan-George, Gaffar Hassam



BICA has engaged in discussions with NBFIRA to resolve audit expectations of NBFIRA that do not comply with International Standards on Auditing. This committee will continue to liaise with NBFIRA.

Guideline for the Audit of Legal Practitioners’ Trust Accounts.

During the year the committee finalised and presented to Council for approval a guideline for the audit of Legal Practitioners’ Trust Accounts. Council approved the guideline and this has been distributed to all Practicing Members for immediate implementation. It is also freely available to be downloaded from our website.

AudIt threShOldS

Council requested the Technical Committee to consider whether representation should be made to the legislature body to amend the thresholds stipulated by the Companies Act and regulations. The current thresholds under which a company is not required to procure an audit report are if its total assets are less than P5 000 000 and its gross turnover is less than P10 000 000 in the preceding financial year and if none of its shareholders is a company.

The Committee debated this issue and concluded that the thresholds were reasonable and that there were no new issues that would trigger a revision of the thresholds.

dISSemInAtIOn Of InfOrmAtIOn

The committee continues its role of dissemination of information and implementation of guidelines through articles published in the BICA newsletters and through circulars to the members..

COmmentS And COntrIButIOnS tO glOBAl StAndArd SettIng BOdIeS

The Committee continues to be a significant stakeholder in the standard setting process with on-going communication with the global standard setting bodies (IFAC and IASB) as well as to the Botswana Accountancy Oversight Authority (BAOA).

ACKnOwledgementS

I wish to acknowledge the efforts made by the members of the committee and the secretariat in serving this committee.

FC ElsChairperson: BICA Technical Committee 2013



tAx COmmIttee

The primary role of the Tax Committee continues to be that of providing a forum for effective communication between BICA and Botswana Unifi ed Revenue Service (BURS), as well as making recommendations for effective and effi cient tax administration and policy improvements.

BICA and BURS formalised their relationship by signing a Memorandum of Understanding (MOU) on 22 April 2013 which memorandum creates the BURS/BICA Tax Consultative Committee (BBTCC). Under the MOU the two bodies will cooperate in addressing issues necessary for improving tax compliance through consultation and information sharing.

The MOU identifi ed the functions of the BURS/BICA Tax Consultative Committee (BBTCC) to be-:

To consult and engage on the review of the provisions of the Revenue laws with a view to coming up with effi cient tax legislation.

To engage one another on issues necessary for bringing simplicity to the tax systems

To work in partnership in disseminating to taxpayers at large any changes to the Revenue laws and operating procedures.

To promote capacity building initiatives targeted at enhancing tax compliance and achievement of desirable levels of service delivery.

To develop and implement service delivery standards and ensure that members observe such standards.

To ensure adherence to developed codes of conduct and good ethics by members.

To discuss emerging global and regional tax issues that impact the tax administration in Botswana and any other relevant matters incidental to the above.

develOPmentS durIng the yeAr 2013

Large taxpayers unit BURS provided BICA with the list of taxpayers registered with the Large Taxpayers Unit. The criteria used to select taxpayers for the Large Taxpayers Unit continues to be that

TAX COMMITTEE

Standing (l-r); Godfrey Aogon, Nigel Dixon-Warren, Feliaty TJ Ndeke, Ramnath KuduaSitting (l-r); PSV Siva Prasad, Elizabeth Chikerema, Vijay Kalyanaraman, Butler Phirie, Prof B.N. Swami

Not in picture; Watson Masikati, Gladys Makachiwa, Terry Brick, Virendra Verma, Oupa Gaofi se



of companies with a turnover of P100 million and above and companies with a total tax contribution of P10 million and above. BICA acknowledges the positive developments that have been reported by the taxpayers since the Large Taxpayers Unit became operational. BICA looks forward to more improvements in this area.

COlleCtIOn Of OutStAnIdng tAxeS SuBjeCt tO An OBjeCtIOn

After recommending some improvements to forms ITA 57 and 60 in the previous year, BICA informed Botswana Unified Revenue Service that there were no further recommendations for changes to the forms. BICA now looks forward to Botswana Unified Revenue Service implementing the amended forms.

regIStrAtIOn Of IndIvIduAlS fOr tAx PurPOSeS

BICA continues to work with BURS in facilitating the registration of individuals for tax purposes; this year BURS placed officers in several public areas to assist the public in obtaining tax

numbers and submitting returns; BICA commends BURS for this initiative.

COmPIlAtIOn Of dePArtmentAl guIdAnCe PrACtICe nOteS

BICA and BURS agreed on the need for BURS to consolidate all existing Departmental Guide Notes (DGNS) and to provide consolidated Practice Notes. It was also agreed that BURS would provide Departmental Guide Notes in areas such as Withholding Tax on Commission and Brokerage Fees, Management of Consultancy Fees, Administration of 3% Withholding Tax on Construction Operations etc. The issue of sucvh guidance will greatly assist the stakeholders in correct interpretation of the tax laws. dOIng BuSIneSS COmmIttee

BICA continued to participate in the affairs of the ‘Doing Business Committee’. In addition to strengthening the relationship between BICA and the other participants in the Doing Business Committee, BICA’s involvement in this committee affords the Institute an excellent opportunity to directly

contribute towards improving the business environment in Botswana.

ACKnOwledgementS

BICA and BURS continue to work very together as they strive to improve the taxation system in Botswana. BICA wishes to thank the Commissioner General, Mr K. Morris, and his BURS team for the active role they have played in the BURS/BICA Tax Consultative Committee meetings. BICA also acknowledges the work done and cooperation experienced between the two bodies outside the structures of the meetings.

I also wish to thank the members of the BICA Tax Committee for the valuable input that they bring to bear on the work of the Committee. The BICA Secretariat is also acknowledged for the useful coordination role it plays in ensuring that the work between BURS and BICA is facilitated.

Vijay KalyanaramanChairperson of Tax Committee



THE FINANCE AND ADMINISTRATIVE COMMITTEE

the fInAnCe And AdmInIStrAtIve COmmIttee

IntrOduCtIOn

This Committee is responsible for the Finance and Administration functions. The finance function covers the area of financial reporting including financial statements, management accounts, budgets and audit. The administration part consists of Public Relations, Human Resources, Information Technology and any other related functions.

fInAnCe

The main duties of the Committee under the Finance Function are;

To oversee the monthly/quarterly management accounts reporting to Council, monitor comparison of actual financial performance to budget and monitoring the cash

forecasts to facilitate decision making. Decision making could take the form of investment of cash surpluses or organizing loans and/or overdrafts to alleviate cash shortages.

To recommend budgets for presentation to Council and recommend different sources of income.

Recommending the students and members’ fee structures for presentation to the Annual General Meeting.

To recommend salary increases for staff to Council

To oversee the preparation of year-end financial statements for Audit and the preparation of the Annual Report

To present the Audited Financial Statements and the Annual Report to the AGM.

To offer assistance on request by Secretariat on the engagement of new staff, dismissal, disciplinary staff matters and any other related Human Resources issues.

InfOrmAtIOn teChnOlOgy

The information technology subcommittee is responsible for ensuring that the Information Technology Department of the Institute implements services that afford BICA information Technology users an opportunity to work effectively and efficiently. It is the responsibility of the IT Department to store, protect, process, transmit, and later retrieve information as necessary. As Information Technology is the driving force of every organization in the modern business world, the Institute

Standing (l-r); Evans Munalula, Oupa Gaofise, Tshepang Monare, Feliaty TJ Ndeke, Ragunathan Duraisami, Ajay Bhatnagar, Kulandai Omprakash, Vikash Ponangi, Maemo Mesotlo, Edward Bogatsu, Sudashan Karupaiyah

Sitting (l-r); Devaprasad Arakkal, Regina Ramanteba, Rudi Binedell, Ookeditse Khachana, Keneilwe Rathedi



embraced new technologies and used them to deliver business products and services economically, efficiently and effectively. The Committee, through the IT sub-committee, has provided a detailed plan for upgrading the existing IT Infrastructure and network. The plan is based on a systematic process of documenting and managing changes to the Information Network in order to permit effective planning by the Institute`s Information Services to serve the Institute’s information technology users. The strategy was to look at all the aspects of modern IT governance with a view of upgrading and introducing a virtualization solution on all IT servers run by the Institute.

A tender invitation for the upgrading and virtualization of the infrastructure will be extended to interested bidders to provide solutions as indicated below:

Virtualization solution

Mail Transfer Agent

Message Store Systems

Authorization / Directory

Global Filtering

Anti-spam, Anti- Virus Solutions

Band width management

Fibre-SAN Storage Solutions

Disaster Recovery Solutions

Backup Solutions

Cabling architecture

Accounting systems integration, MMS, CAMS and Pastel

The IT subcommittee has the responsibility to ensure that all recommended solutions are implemented cost effectively.

humAn reSOurCeS

The terms of reference for this sub-committee cover the following significant areas:

Human Resource Policies and Procedures

Performance Reviews

BICA Reward System

Employment/Termination

Employee Relations

A tender has been issued for the provision of consultancy services for the review of the organizational structure, pay structure, job profiles, conditions of service, and development of a comprehensive incentive scheme; BICA expects this review to be undertaken during the second quarter of 2014.

trAInIng & CAreer develOPment mAnAgement

The Institute continues to focus on the retention of staff through a conducive working environment coupled with career development and progression opportunities; three members of staff are currently enrolled with the University of Stellenbosch New Managers Development Programme and will be graduating in March 2014.

StAff turnOver & reCruItment

In 2013, the Institute lost its Chief Executive Officer, Duncan Majinda, and its Technical Director, Sonny Mabeju, to the newly formed Botswana Accountancy Oversight Authority (BAOA); we wish both Duncan and Sonny well in their new appointments and thank them for their contribution to BICA. A CEO has been appointed who will assume her role in mid April.

gOvernment InternShIP PrOgrAmme

The Institute continues to assist the Government of Botswana in its efforts to curb unemployment and provide training to graduates. In April 2013, the Institute took on board one Information Technology Graduate who is working under the supervision of the Information Technology Manager. To date, the Institute has employed four interns in various departments who came through the Government internship programme.

CuStOmer ServICe And COmPlAIntS POlICIeS

The need for BICA services to be more customer-focused has never been greater.

In line with the BICA strategy for 2013-2016, BICA came up with two policies that aim to provide high quality and efficient service to its customers. The Customer Service Policy and Standards have been designed to provide a comprehensive benchmark against which the current level of service delivery can be assessed and will form a building block for improving the delivery of services to our customers.

The Customer Complaints Policy aims to assist BICA to provide a quality service to its members and work in an open and accountable way that builds the trust and respect of all the stakeholders. One of the ways in which the Institute can continue to improve its services is by listening and responding timely to the views of its stakeholders.

PuBlIC relAtIOnS

Public Relations Committee continues to identify, establish and maintain mutually beneficial relationships between the Institute and the various stakeholders on whom its success depends.



COmmunICAtIOn

Using different platforms, the Secretariat continues to effectively and efficiently communicate with all the members and other stakeholders.

The BICA News, the Institute’s quarterly newsletter, is published regularly with articles from members and key stakeholders. With the advent of the BICA qualification, the newsletter has been improved to include a student section and is now also distributed to students. The hard copy of the newsletter is now complemented by an easy-to-read electronic version which is uploaded onto the BICA website.

mArKetIng And BrAndIng

BICA is currently examining ways in which to lift its visibility through various activities. BICA has employed an external agency to develop a communication and marketing strategy for 2013 which is further enhancing the Institute’s image.

BICA is now being actively marketed through billboards, radio and television

SPOrtIng And SOCIAl eventS

Sporting and social events afford members an opportunity to network and interact with professional colleagues from other organizations. The events also enable the Institute to reinforce its relationship with its stakeholders through their sponsorship

and coordination of such events. The following events were successfully held in 2013:

event SPOnSOr

Netball Office of the Auditor General

Pool Botswana Accountancy College

Golf Deloitte

Soccer PricewaterhouseCoopers

Volleyball BDO

Cricket Grant Thornton

Up Kgale Challenge KPMG

I would like to once more express my gratitude to the BICA Secretariat and Council for the support given to the Committee. My sincere thanks also go to the Committee members for giving so much of their valuable time towards the affairs of the Institute.

Rudi BinedellCHAIRMAN



PuBlIC SeCtOr COmmIttee AnnuAl rePOrt 2013 – 2014

It is my pleasure to present the second committee report for newly formed Public Sector committee for 2013-2014.

As mentioned in my previous report for 2012/2013, this committee was formed to drive the Public Sector initiatives in Botswana. The composition of the committee is a mixture of individuals with significant experience in the area of International Public Sector Accounting Standards (IPSAS) and International Financial Reporting Standards (IFRS), key stakeholders within the Public Sector representing the offices of the Auditor General, the Accountant General, the Government Internal Audit Department, Institute of Internal Auditors, Institute of Directors and Botswana Public Accounts Committee of the National Assembly and the Local Government.

Because the implementation of the Strategy for the Public Sector Committee largely depended on the engagement of an IPSAS expert, the BICA Council has taken a decision that an IPSAS expert will be engaged, finances permitting, as soon as possible.

During the year the following initiatives were achieved

1. Newsletter articles: Various articles were published in the last two issues of the BICA Newsletter. The articles included IAASB Proposals for Enhancing the Auditors Report: Potential Impact on Audits of Unlisted Entities, and Ethics go beyond application in our accounting careers.

2. Review of Government Annual Statement of Accounts. The BICA Technical Director held meetings with the Assistant Accountant General with the objective of the

meetings to come up with ways to rationalise the structure of the Government Financial Statements within the requirements of the appropriate legislation. This is still a work in progress.

3. Public Sector Curriculum – the Technical Director met with various stakeholders (tuition providers) such as the University of Botswana, Botswana Accountancy College, Ba Isago and Botho College with a view to persuade them to include the Public Sector Accounting, Financial Management and Auditing in their curricula. Because of the extensive research involved in this project, the curriculum is still a work in progress and ie expected to be finalised soon and registered with the Tertiary Education Council.

PUBLIC SECTOR COMMITTEE

Standing (l-r); Madhavan Venkatachary, James Tinwaro, John Mbekomize, Jayn Phalalo, Carlson NlebesiSitting (l-r); Regina Ramanteba, Peter Kesitilwe, Lilly Matenge, Obed Nokane

Not in picture; Michael Lesolle, Tebogo Tomango, Kagiso Balopi, Edmond Shoko, Gosego Motsamai, Mark Sims,Dingiswayo Sikunyane, Dimpho Seleka, Jeanette Makgolo



4. Review of the Auditor General’s Report and Identification of Areas of Improvement – The Auditor General’s report was studied and reviewed and it was observed that the report focused on various aspects of financial auditing. The same offer was also extended to the Public Accounts Committee.

5. Dissemination of Information – the emphasis in this area was to identify complicated areas in the Public Sector Accounting Standards and Auditing Standards and issue clarifications to stakeholders. The Committee with the assistance of the BICA Technical Director had made comments on an Invitation to Comment on Auditors’ Report issued by the IAASB

Medium to long term strategy (2 to 3 years).

The Institute may take a little longer to achieve its medium to long term strategy due to lack of an IPSAS expert to assist the Public Sector Committee.

My sincere appreciation goes to all members of the Public Sector Committee who served the Committee and most importantly those who contributed articles to the BICA Newsletter. I would also like to thank the BICA Secretariat who also contributed to ensure that the committees’ decisions are implemented.

Lilly G. MatengeCHAIRPERSON



nOrthern COmmIttee

As the Chairperson of the BICA Northern Committee, it gives me great pleasure to present the Committee’s report for the year 2013. It is quite appropriate to first appreciate the guidance and leadership of our former Chairperson, Mr Chileshe, who served the Committee with earnest dedication and commitment for the past years since its inception. May I also extend my heartfelt gratitude to the Committee members for their confidence in my capabilities to take on the leadership baton and with their promised support; the Northern Committee will meaningfully contribute to the mandate of the Institute.

NORTHERN COMMITTEE

Indeed the year 2013 brought many changes to the Committee as we saw the long serving Secretarial representative and Committee Secretary, Pinkie, relocating to the Head Office in Gaborone. Her guidance and contribution has been much appreciated. The composition of the Committee also saw some new faces as four Accounting Technician members joined to fill in the gap left by members who left due to other commitments and saw it fit to give others an opportunity to serve the Institute.

StrAtegIC PlAn OBjeCtIveS

The Committee identified four (4) key focus areas from the BICA 2013-2016 Strategic Plan as a priority for the Northern Region. In order to realise the attainment of these focus areas, the

Committee set its own strategies within the overall strategy and outlined the anticipated challenges.

The identified focus areas are: i. Positioning the BICA Qualification

and Brand.

ii. Increasing the number of BICA members and professional accountants in the country.

iii. Ensuring that BICA attains sustainability.

iv. Improving the services that BICA offers.

SOCIAl ACtIvItIeS

In its continued endeavour to create awareness and increase BICA membership in the Northern Region,

Front Row: (Left to Right) Kebareng M. Makone, Sinclair S. Sithole, Leggy BojosiBack Row: (Left to Right) Anantha Padmanaban, Christopher Makombe, Michel Katombe,

Mmilili M. Kenneth, Emmanuel M. MarufuNot in Photo: Carlos Chileshe, Segopotso Mokgatla, Jionathan Msiska, Craig Granville, Bradshaw Zinyemba



the committee conducted a Family Fun Day that was well attended by both members and visitors.

CPd eventS

There Northern Region conducted four CPD workshops in the year 2013.

StAKehOlderS COCKtAIl

The 2013 Stakeholder Cocktail was also an opportunity for this committee and our members to meet to meet and be introduced to the newly appointed BICA President and to other Council Members present. This event also saw the launch of the BICA Strategic Plan 2013-2016 in the region and the Micro GAAP.

2014 PlAnS StrAtegy

Although the Committee will continue working on the four key focus areas, a decision was reached to undertake the following activities with the expectation that if achieved, this will aid achieve the attainment of the key focus areas.

i. Identify and meet BICA members and registered firms in the region. The committee representatives will visit the identified members and firms in their location or business area and convene one meeting to solicit direct feedback on their experiences with the services offered by the Institute.

ii. Employers and other stakeholders to be approached with the objective to encourage them to register their qualifying staff members for the BICA Membership and also to make use of the services offered by BICA.

iii. Together with the support of the Secretariat, the Committee shall attend and conduct career fairs around the region. The main objective of this undertaking will be to increase awareness on the BICA Qualification and persuade qualifying and prospective candidates to register and study for the BICA Qualification.

ACKnOwledgementS

My sincere appreciation is extended to the members of my Committee who are keen to be part of the team that will achieve and realise the BICA 2013-2016 Strategic Plan Objectives. I also extend my admiration to the services of the Secretariat through the regional satellite office. Lastly my acknowledgments and gratitude are to the support and open feedback I get from the Council.

Anantha Padmanaban ChairpersonNorthern Committee





Statement of responsibility 30

Report of the independent auditors 31

Statement of Comprehensive Income 32

Statement of Financial Position 33 Statement of changes in accumulated funds 34

Statement of Cash Flows 35 Accounting policies 36 – 48

Notes to the fi nancial statements 49 – 57

AnnuAl fInAnCIAl StAtementSfOr the yeAr ended 31 deCemBer 2013



STATEMENT OF RESPONSIBILITYCOunCIl APPrOvAl Of the AnnuAl fInAnCIAl StAtementSfOr the yeAr ended 31 deCemBer 2013

StAtement Of reSPOnSIBIlIty

The Council members are responsible for the preparation of annual financial statements for each financial year, which give a true and fair view of the state of affairs of the Institute as at the end of the financial period and of the surplus or deficit and cash flows of the Institute for that period.

The Council members consider that, in preparing the financial statements for the year ended 31 December 2013 on pages 32 to 57, the Institute has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates. The Council members also consider that all applicable accounting standards have been followed and confirm that the financial statements have been prepared on the going concern basis.

The Council members are responsible for ensuring that the Institute keeps accounting records which disclose with reasonable accuracy at any time the financial position of the Institute and which enable them to ensure that the financial statements comply with the Accountants Act of 2010.

The Council members are also responsible for taking such steps that are reasonably open to them to safeguard the assets of the Institute and to prevent and detect fraud and other irregularities.

The auditors’ responsibilities are stated in their report to the members.

The members of the Council are satisfied that the Secretariat introduced and maintained adequate internal controls to ensure that dependable records exist for the preparation of the Institute’s financial statements, to safeguard the assets of the Institute and to ensure all transactions are duly authorised.

Against this background, the annual financial statements set out on pages 32 to 57 which are stated in Pula, the currency of Botswana, have been approved and authorised for issue on 19 March 2014 by the Council and signed on its behalf by:

Tshegofatso Modise Rudi BinedellPresident TreasurerPlace: Gaborone Place: Gaborone



REPORT OF THE INDEPENDENT AUDITORStO the memBerS Of BOtSwAnA InStItute Of ChArtered ACCOuntAntS rePOrt On the fInAnCIAl StAtementS

We have audited the accompanying financial statements of the Botswana Institute of Chartered Accountants, set out on pages 32 to 57 which comprise the statement of financial position as at 31 December 2013 and the statement of comprehensive income, statement of changes in net assets and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

COunCIl’S reSPOnSIBIlIty fOr the fInAnCIAl StAtementS

The Council members of the Institute are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards.

This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances and maintaining appropriate books of accounts.

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 judgment, 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 controls 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 controls. 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 Botswana Institute of Chartered Accountants as at 31 December 2013 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

rePOrt On Other legAl regulAtOry reQuIrement

In accordance with section 53 (9) of the Accountants Act of 2010 and Rule 42 of the BICA Rules, we confirm that:-

The Institute has kept proper accounting records with which the financial statements are in agreement ,

We have received all the information and explanations necessary for the performance of our audit,

The Institute has complied with all the financial provisions of this Act and

The statement of accounts prepared by the Institute was prepared on basis consistent with that of the preceding year and represents a true and fair view of the transactions and financial affairs of the Institute.

Virendra Kumar Verma – 1996004119 March 2014Gaborone



Notes 2013 2012 P P

Income

Revenue earned from services 1 8,278,202 8,198,394Government subvention received for recurrent budget 5,325,000 2,950,000Rental income 706,934 747,872Other income 2 472,446 478,077Recognition of deferred capital grant 15 147,059 147,059Total income 14,929,641 12,521,402

Operating expenses

Administration expenses 3 2,862,480 2,404,893Occupancy costs 4 391,765 412,802Public relations expenses 5 1,972,236 1,127,055Training and professional development expenses 6 3,139,622 2,402,935Staff costs 7 4,965,681 5,310,075Total operating expenses 13,331,784 11,657,760

Operating surplus 1,597,857 863,642Net finance expenses 8 (127,362) (206,632)Net surplus for the year 1,470,495 657,010

STATEMENT OF COMPREHENSIVE INCOMEfor the year ended 31 December 2013



Notes 2013 2012 P P

ASSETS

Non current assets

Property and equipment 9 11,533,538 11,866,568Intangible assets 10 109,730 13,881Deferred operating lease 11 17,697 432

11,660,965 11,880,881Current assets

Trade and other receivables 12 449,009 416,949Cash and cash equivalents 13 2,905,923 2,008,082

3,354,932 2,425,031

Total assets 15,015,897 14,305,912

FUNDS, RESERVES AND LIABILITIES

Funds and reserves

Accumulated funds 5,097,294 3,626,799

Non current liabilities

Bank loans 14 1,219,728 2,282,069Deferred capital grant 15 4,411,764 4,558,823

5,631,492 6,840,892

Current liabilities

Current portion of bank loans 14 402,063 412,730Trade and other payables 16 1,422,631 1,169,894Deferred income (advance payments for subscriptions) 1,884,968 1,339,818Provisions 17 577,449 915,779

4,287,111 3,838,221

Total funds and liabilities 15,015,897 14,305,912

STATEMENT OF FINANCIAL POSITION 31 December 2013



Accumulated

funds Total

P P

2012At beginning of the year 2,969,789 2,969,789Surplus for the year 657,010 657,010At end of the year 3,626,799 3,626,799

2013At beginning of the year 3,626,799 3,626,799Surplus for the year 1,470,495 1,470,495At end of the year 5,097,294 5,097,294

STATEMENT OF CHANGES IN ACCUMULATED FUNDS for the year ended 31 December 2013



2013 2012

P P

CASh flOwS frOm OPerAtIng ACtIvItIeS:

Surplus for the year 1,470,495 657,010Adjustments for :Net finance expenses 127,362 206,632Depreciation of property and equipment 716,674 697,025Gain on disposal of property and equipment - (40,000)Amortisation of intangible assets 10,641 15,527Recognition of deferred capital grant (147,059) (147,059)Surplus before working capital changes 2,178,113 1,389,135

Movement in trade and other receivables (32,060) (8,734)Movement in trade and other payables 252,737 57,590Movement in deferred income 545,150 (21,577)Movement in provisions (338,330) 227,371Movement in deferred operating lease (17,265) (2,607)Cash generated from operations 2,588,345 1,641,178

CASh flOwS In InveStIng ACtIvItIeS:

Purchase of property and equipment (383,644) (339,223)Investment in intangible assets (106,490) (18,008)Proceeds from the disposal of property and equipment - 40,000Interest receivable 53,057 73,900Interest payable (180,419) (280,532)Cash flows in investing activities (617,496) (523,863)

CASh flOwS In fInAnCIng ACtIvItIeS

Repayment of bank loans (1,073,008) (1,051,937)Net cashflows in financing activities (1,073,008) (1,051,937)

Net increase in cash and cash equivalents 897,841 65,378Cash and cash equivalents at beginning of the year 2,008,082 1,942,704Cash and cash equivalents at end of the year 2,905,923 2,008,082

Represented by:Cash on hand 4,100 4,253Cash at bank 1,786,168 1,860,167Short term investments 1,115,655 143,662Cash and cash equivalents 2,905,923 2,008,082

STATEMENT OF CASHFLOWS for the year ended 31 December 2013



StAtement Of COmPlIAnCe The financial statements of the Botswana Institute of Chartered Accountants for the year ended 31 December 2013 were authorised for issue in accordance with the resolution of the Council on 19 March 2014. The financial statements have been prepared in accordance with the International Financial Reporting Standards promulgated by the International Accounting Standards Board (IASB), and interpretations issued by the standing Interpretations Committee of the IASB. The registered office is located at

Plot 50374, Fairgrounds Financial Centre2nd Floor Block 3Gaborone, Botswana BASIS Of PrePArAtIOn The financial statements have been prepared on the historic cost basis and incorporate the following principal accounting policies which are consistent with those applied in the previous financial year.

ChAngeS In ACCOuntIng POlICIeS

The accounting policies applied are consistent with those of the previous financial year, except as follows:The Institute has adopted the following new and amended IFRS and IFRIC interpretations during the year. Adoption of these revised standards and interpretations did not have any effect on the financial statements of the Institute. They did however give rise to additional disclosures, including in some cases, revisions to accounting policies.

IFRS 11 Joint ArrangementsIFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities — Non-monetaryContributions by Venturers. IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. The application of this new standard will impact the financial position of the Group. This is due to the cessation of proportionate consolidating the joint venture to equity accounting for this investment. Amendments to the transition guidance of IFRS 11 Joint Arrangements, thus limiting the requirements to provide adjusted comparative information. This standard and amendments became effective for annual periods beginning on or after 1 January 2013. These amendments are not expected to be relevant to the Institute.

IAS 19 Employee Benefits (Revised)The Institute did not apply the provisions of IAS 19 (Revised) as they relate to defined benefit plans. The Institute contributes to a defined contribution plan and therefore the provisions of this standard are not applicable.

IFRS 10 Consolidated Financial StatementsIFRS 10 creates a new, and broader, definition of control. This may result in changes to a consolidated group (i.e., more or fewer entities being consolidated). Assessing control will require a comprehensive understanding of an investee’s purpose and design, and the investor’s rights and exposures to variable returns, as well as rights and returns held by other investors. This may require input from sources outside of the accounting function, such as operational personnel and legal counsel, and information external to the entity. It will also require significant judgement of the facts and circumstances. These amendments are not expected to be relevant to the Institute.

IFRS 12 Disclosure of interests in other entitiesThe new disclosures will assist users to make their own assessment of the financial impact of management’s conclusion regarding consolidation. Additional procedures and changes to systems may be required to gather information for the preparation of the additional disclosures. These amendments are not expected to be relevant to the Institute.

SIGNIFICANT ACCOUNTING POLICIES



IFRS 13 Fair value measurementAlthough the change in presentation of OCI is relatively minor with respect to the overall financial statements, it will assist users to identify more easily the potential impact that OCI items may have on future profit or loss. The Institute does not expect that IFRS 13 will have a material impact on the financial statements.

IFRIC 20 Stripping Costs in the production phase of a surface mineThis interpretation is applied to production stripping costs incurred on or after the beginning of the earliest period presented. The interpretation does not require full retrospective application. Instead it provides a practical expedient for any stripping costs incurred and capitalised up to the start of the earliest period presented.Earlier application is permitted and must be disclosed. The Institute does not expect that IFRS 20 Disclosures will have material financial impact in future financial statements.

IFRS 1 Government LoansThese amendments give first-time adopters the same relief that existing preparers of IFRS financial statements had on the first time application of IAS 20 (as revised in May 2008) and, therefore, will reduce the cost of transition to IFRS. These amendments are not expected to be relevant to the Institute.

IFRS 7 Disclosures – Offsetting Financial Assets and Financial LiabilitiesThese amendments are applied retrospectively, in accordance with the requirements of IAS 8 for changes inaccounting policy. If an entity chooses to early adopt IAS 32 Offsetting Financial Assets and Financial Liabilities — Amendments to IAS 32, it also must make the disclosure required by IFRS 7 Disclosures — Offsetting Financial Assets and Financial Liabilities — Amendments to IFRS 7. The Institute does not expect that IFRS 7 Disclosures will have material financial impact in future financial statements.

Accounting standards and interpretations issued and effective

Standard number Standard name Effective date**

IAS 1 Financial Statement Presentation – Presentation of Items of Other Comprehensive Income (Amendment) 1 July 2012

IAS 19 Employee Benefits (Amendment) 1 January 2013IAS 27 Separate Financial Statements (as revised in 2011) 1 January 2013IAS 28 Investments in Associates and Joint Ventures (as revised in 2011) 1 January 2013

IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities (Amendment) 1 January 2013

IFRS 10 Consolidated Financial Statements 1 January 2013IFRS 11 Joint Arrangements 1 January 2013IFRS 12 Disclosure of Interests in Other Entities 1 January 2013IFRS 13 Fair Value Measurement 1 January 2013Improvements to IFRSs* Improvements to IFRS (issued in May 2012)* 1 January 2013

Circular 2/2013HEADLINE EARNINGS(Only relevant to compa-nies registered in SA)

This Circular, Circular 2/2013 has been updated for new IFRSs, chang-es made to IFRSs andInterpretations (IFRICs) between April 2009 and 30 April 2013.

1 May 2013

SIGNIFICANT ACCOUNTING POLICIES (continued)



Accounting standards and interpretations issued not yet effective

Standard number Standard name Effective date**

IAS 32 Financial Instruments: Presentation – Offsetting of Financial Assets and Financial Liabilities (Amendment) 1 January 2014

IFRS 9 Financial Instruments Classification and Measurement 1 January 2015

IAS 36 Disclosure requirements for the recoverable amount of impaired as-sets 1 January 2014

IFRS 10 Consolidated Financial Statements (Amendments - Investment En-tities)

1 January 2014

Legend: ** Annual periods beginning on or after…. unless otherwise indicated

* Through the annual improvements project, changes have been made to various standards, without the standards being issued as ‘Revised’. These improvements should be considered by audit teams and if they apply to an entity, the disclosures required per IAS 8.30 and IAS 8.31 should also be made for such improvements.

Accounting standards and interpretations issued and effective

Standard number Scope Effective date**

IAS 1

Financial Statement Presentation – Presentation of Items of Other Comprehensive Income (Amendment)

The amendments to IAS 1 change the grouping of items presented in OCI. Items that could be reclassified (or ‘recycled’) to profit or loss at a future point in time (for example, upon derecognition or settlement) would be presented separately from items that will never be reclassified. The amendment affects presentation only and has there no impact on the Group’s financial position or performance. The amendment becomes effective for annual periods beginning on or after 1 July 2012.

1 July 2012

IAS 19

Employee Benefits (Amendment)

The IASB has issued numerous amendments to IAS 19. These range from fundamental changes such as removing the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and re-wording. The Group is currently assessing the full impact of the amendments. The amendment becomes effective for annual periods beginning on or after 1 January 2013.

1 January 2013

IAS 27

Separate Financial Statements (as revised in 2011)

As a consequence of the new IFRS 10 and IFRS 12, what remains of IAS 27 is limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial statements. The amendment becomes effective for annual periods beginning on or after 1 January 2013.

1 January 2013

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011)

As a consequence of the new IFRS 11 and IFRS 12. IAS 28 has been renamed IAS 28 Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates. The amendment becomes effective for annual periods beginning on or after 1 January 2013.

1 January 2013




IFRS 7

Financial Instruments: Disclosures — Enhanced Disclosures on Financial Assets and Financial Liabilities

(Amendment)

These amendments require an entity to disclose information about rights to set-off and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with IAS 32. These amendments will not impact the Group’s financial position or performance and become effective for annual periods beginning on or after 1 January 2013.

1 January 2013

IFRS 10 Consolidated Financial Statements

IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also includes the issues raised in SIC-12 Consolidation — Special Purpose Entities. IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgement to determine which entities are controlled, and therefore, are required to be consolidated by a parent, compared with the requirements that were in IAS 27. Amendments to the transition guidance of IFRS 10 Consolidated Financial Statements, thus limiting the requirements to provide adjusted comparative information. This standard and amendments become effective for annual periods beginning on or after 1 January 2013.

1 January 2013

IFRS 11

Joint Arrangements

IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities — Non-monetaryContributions by Venturers. IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. The application of this new standard will impact the financial position of the Group. This is due to the cessation of proportionate consolidating the joint venture to equity accounting for this investment. Amendments to the transition guidance of IFRS 11 Joint Arrangements, thus limiting the requirements to provide adjusted comparative information. This standard and amendments become effective for annual periods beginning on or after 1 January 2013.

1 January 2013

IFRS 12 Disclosure of Interests in Other Entities

IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. Amendments to the transition guidance of IFRS 12 Disclosure of Interests in Other Entities, thus limiting the requirements to provide adjusted comparative information. This standard and amendments become effective for annual periods beginning on or after 1 January 2013.

1 January 2013

SIGNIFICANT ACCOUNTING POLICIES (continued) Accounting standards and interpretations issued and effective (continued)



IFRS 13

Fair Value Measurement

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The Group is currently assessing the impact that this standard will have on the financial position and performance. This standard becomes effective for annual periods beginning on or after 1 January 2013.

1 January 2013

Improvements to IFRSs*

These improvements are not expected to impact the Group’s financial position or performance, but include:

IFRS 1 First-time Adoption of International Financial Reporting Standards

This improvement clarifies that an entity that stopped applying IFRS in the past and chooses, or is required, to apply IFRS, has the option to re-apply IFRS 1. If IFRS 1 is not re-applied, an entity must retrospectively restate its financial statements as if it had never stopped applying IFRS.

IAS 1 Presentation of Financial Statements

This improvement clarifies the difference between voluntary additional comparative information and the minimum required comparative information. Generally, the minimum required comparative information is the previous period.

IAS 16 Property Plant and Equipment

This improvement clarifies that major spare parts and servicing equipment that meet the definition of property; plant and equipment are not inventory.

IAS 32 Financial Instruments, Presentation

This improvement clarifies that income taxes arising from distributions to equity holders are accounted for in accordance with IAS 12 Income Taxes.

IAS 34 Interim Financial Reporting

The amendment aligns the disclosure requirements for total segment assets with total segment liabilities in interim financial statements. This clarification also ensures that interim disclosures are aligned with annual disclosures.

1 January 2013


Standard number* Scope Effective date**




IAS 32 Financial Instruments: Presentation (Amendment) – Offsetting Financial Assets and Financial Liabilities

These amendments clarify the meaning of “currently has a legally enforceable right to set off ”. The amendments also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. These amendments are not expected to impact the Group’s financial position or performance. The amendment becomes effective for annual periods beginning on or after 1 January 2014.

1 January 2014

IFRS 9

Financial Instruments: Classification and Measurement

IFRS 9, as issued, reflects the first phase of the IASB’s work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after 1 January 2013, but Amendments to IFRS 9Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to 1 January 2015. In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of the Group’s financial assets, but will not have an impact on classification and measurements of financial liabilities. The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.

1 January 2015

IAS 36

Disclosure requirements for the recoverable amount of impaired assets

The IASB has issued amendments to IAS 36 - Impairment of Assets, to clarify the disclosure requirements about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal.

The amendments clarify the IASB’s original intention: that the scope of these disclosures is limited to the recoverable amount of impaired assets that is based on fair value less costs of disposal.

1 January 2014





IFRS 10

Consolidated Financial Statements

(Amendments

- Investment Entities)

The amendment provides an exception to the IFRS 10 principle that all subsidiaries must be consolidated. Entities that meet the definition of ‘Investment Entities’ must be accounted for at fair value through profit or loss in accordance with IFRS 9, Financial Instruments, or IAS 39, Financial Instruments: Recognition and Measurement, in the separate financial statements of a parent.

An investment entity is defined in IFRS 10 as an entity that: obtains funds from one or more investors for the

purpose of providing those investor(s) with investment management services;

commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

measures and evaluates the performance of substantially all of its investments on a fair value basis.

An investment entity accounts for its investments in subsidiaries, associates and joint ventures at fair value through profit or loss in accordance with IFRS 9, Financial Instruments, or IAS 39, Financial Instruments: Recognition and Measurement, as applicable, except for investments in subsidiaries, associates and joint ventures that provide services that relate only to the investment entity, which must be consolidated (investments in subsidiaries) or accounted for using the equity method (investments in associates or joint ventures).

1 January 2014

Legend: ** Annual periods beginning on or after…. unless otherwise indicated

* Through the annual improvements project, changes have been made to various standards, without the standards being issued as ‘Revised’. These improvements should be considered by audit teams and if they apply to an entity, the disclosures required per IAS 8.30 and IAS 8.31 should also be made for such improvements.

COmmentAry

IAS 8.30 requires disclosure of those standards that have been issued but are not yet effective. These disclosures are required to provide known or reasonably estimable information to enable users to assess the possible impact of the application of such IFRSs on an entity’s financial statements. Therefore, the Group might listed those standards and interpretations that are not yet effective, which it reasonably expects to, have an impact on its accounting policy, financial position or performance (i.e., omitting to list those standards and amendments that have no impact at all, such as IFRS 1).

fOreIgn CurrenCy trAnSlAtIOn

functional and presentation currency

The financial statements are presented in Botswana Pula as at 31 December each year. The Botswana Pula is also the Institute’s functional currency.




transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within ‘finance income or cost’. All other foreign exchange gains and losses are presented in statement of comprehensive income within ‘net foreign exchange gains’.

leASe rIghtS

Lease rights represent rights covered by contract or similar arrangement to occupy, lease out or otherwise utilise property. Separately acquired lease rights are shown at historical cost. Where land rights are acquired directly through agreement with government, the Institute records these at nominal amounts at the inception of the underlying lease/rental agreements or when such agreements are renewed.

Lease rights have a finite useful life based on the underlying contractual agreement assigning such right to the consignee and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight–line method to allocate the cost of lease rights over their estimated useful lives based on contractual terms.

SOftwAre

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their useful lives (which does not exceed two years) on a straight-line basis.

Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with the development of identifiable and unique software products controlled by the Institute, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Costs include the employee costs incurred as a result of developing software and an appropriate portion of relevant overheads.

ImPAIrment Of nOn-fInAnCIAl ASSetS

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

leASIng

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date; whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rental income is recognised on a straight line basis over the term of the relevant lease and is included in revenue in the statement of comprehensive income. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Operating lease payments are recognised as an expense on a straight line basis over the lease term.

SIGNIFICANT ACCOUNTING POLICIES (continued) fOreIgn CurrenCy trAnSACtIOn (continued)



BOrrOwIngS

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the statement of comprehensive income for the period in which they are incurred.

Borrowings are classified as current liabilities unless the Institute has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

emPlOyee BenefItS

Pension obligations

By virtue of its small size, the Institute cannot run a conventional pension fund for its staff. Instead, it makes contributions to the Mompati Retirement Annuity Fund administered by Botswana Life Insurance Limited (BLIL). This operates as a defined contribution plan where the Institute and staff members make fixed contributions based on pensionable earnings into the Fund. The Institute does not have a legal or constructive obligation to pay further contributions if the Fund fails to meet employee benefits from these life policies.

Where employees are not members of the Institute’s retirement benefit plan, provision is made for severance benefit as required in terms of Botswana’s labour laws or terminal service gratuity. Costs incurred herein are recognised in the statement of comprehensive income in the period in which they are incurred.

leave Pay

The Institute provides for leave pay at the end of the year based on the number of leave days accrued and the salary rate at the year end.

gratuity

Contract staff members of the Institute are entitled to gratuities at the end of their contract at the rates and in accordance with the terms specified in their contract of employment.

Gratuities are recognized at the end of each financial year as they are accrued and a provision is made equal to the liability estimated as the employee renders services to the Institute up to the balance sheet date.

fInAnCIAl ASSetS

Classification

The Institute classifies its financial assets under the loans and receivables category. Management determines the classification of its financial assets at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Institute’s loans and receivables comprise ‘trade and other receivables’ other than prepayments, ‘amounts due from related parties’ and ‘cash and cash equivalents’ in the balance sheet.




recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Institute commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Institute has transferred substantially all risks and rewards of ownership. Loans and receivables are carried at amortised cost using the effective interest method.

The Institute assesses at each balance sheet date whether there is objective evidence that a financial asset or a Group of financial assets is impaired. A significant or prolonged decline in the value of an asset below its cost is considered as an indicator that the assets are impaired.

de-recognition of financial assets

The Institute derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Institute neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Institute recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Institute retains substantially all the risks and rewards of ownership of a transferred financial asset, the Institute continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

trAde reCeIvABleS

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Institute will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 90 days overdue) are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against ‘administration expenses’ in the statement of comprehensive income.

CASh And CASh eQuIvAlentS

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

trAde PAyABleS

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

PrOvISIOnS

Provisions are recognised when the Institute has a present obligation (legal or constructive) as a result of a past event, and it is probable that the Institute will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risk 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.

SIGNIFICANT ACCOUNTING POLICIES (continued) fInACIAl ASSetS (continued)



When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the receivable can be measured reliably. Provisions are measured at the Institute’s best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to the present value where the effect is material.

revenue reCOgnItIOn

The Institute renders services to its members, its students and fellow professional institutes. Revenue earned from such services is measured at the fair value of the consideration received or receivable for the services rendered. Revenue is recognized net of Value Added Tax, rebates, discounts and similar price reductions. The Institute recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Institute and when specific accrual criteria set for each revenue stream, as set out below, have been met:

Membership fees, including admission fees and subscriptions are due for a calendar year or portion thereof, and are recognized as revenue over the underlying period for which the fees have been charged.

Seminar, workshop and conference revenues relate to fees charged by the Institute for participation in professional development and similar professional events, and are recognized when the member has attended the specific event.

Services to other professional bodies include registration, administration and similar services performed for fellow professional institutes. Revenue for such services is recognized when services are rendered.

Fees for accreditation to the BICA qualification are recognized over the applicable course study period.

The Institute earns publication income from the sale of advertising space in its quarterly magazine. Revenue from such sales is recognized when the relevant advertisement is published.

Revenue from the sale of the BICA branded literature and merchandise is recognized when the underlying items are collected by / delivered to customers.

Annual Awards -BICA jointly hosts annual graduation awards with AAT. This income therefore represents the contribution made by AAT towards these awards.

Dinner Dance -The Annual General Meeting culminates in the biggest celebratory occasion in the Institute Calendar with the exception of the Biennial International Conference. Organisations buy tables of ten for their employees.

IntereSt InCOme

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

the InStItute AS A leSSOr

The Institute has entered into an operating leases with third parties for the use of some of the office space in the building it owns. The receipts are recognized on a straight line basis over the lease term.

the InStItute AS leSSer

The Institute has entered into an operating lease to lease offices in Francistown.The payments are recognised as an expense in the Statement of Comprehensive Income on a straight line basis over the lease term.

SIGNIFICANT ACCOUNTING POLICIES (continued) PrOvISIOnS (continued)



PrOPerty And eQuIPment

land and Building

Land and Building held for use in the production or supply of goods or services, or for administrative purposes, is stated in the statement of financial position at cost less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

depreciation on buildings is charged to the statement of comprehensive income

Property and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Such cost includes the cost of replacing part of the property and equipment when that cost is incurred, if the recognition criteria are met. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the property and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in the statement of comprehensive income as incurred.

depreciation

Depreciation is calculated on a straight line basis over the useful life of the asset as follows: Leasehold land the shorter of 50 years or remaining lease periodLeasehold building the shorter of 50 years or remaining lease periodFurniture, fittings and equipment 4 yearsComputer equipment 4 yearsOffice equipment 4 yearsMotor vehicle 4 years

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year the asset is derecognized.

The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.

IntAngIBle ASSetS

Intangible assets include costs related to computer software

Costs that are directly attributable for the installation of identifiable computer software controlled by the Institute, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets.

Computer software costs recognised as assets are amortised over their useful lives, which does not exceed two years and are tested annually for impairment.

Costs associated with maintaining computer software are recognised as an expense as incurred.

tAxAtIOn

The Institute is exempt from Income Tax in accordance with paragraph xiv of the Second Schedule of the Income Tax Act(Cap 52:01) as amended.




relAted PArty trAnSACtIOnS

The Institute maintains a very close relationship with the Government of Botswana. The Government of Botswana provides significant income to the Institute through capital grants and operational subventions and also has a statutory right of representation with up to three members of the Institute’s Council. In accordance with relevant requirements of IFRS, the Institute has not treated its transactions with the Government of Botswana or other entities similarly related to the Government of Botswana, such as the Botswana Accountancy College and University of Botswana, as related party transactions.

gOvernment grAntS/ CAPItAl grAntS

Government grants are recognised when there is reasonable assurance that the grant will be received and all attached conditions will be compiled with. When the grant relates to an expense item it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. When the grant relates to an asset it is recognized as deferred income as a liability and it is released to income in equal amounts over the remaining lease period of the asset.

The Government of Botswana provided finance for BICA’s twinning agreement with the Institute of Chartered Accountants in England and Wales, which allowed for the legislative and other changes leading to formation of BICA. Such financial assistance has not been recognized in the financial statements of the Institute as it was governed by enabling agreements between the Government of Botswana, the World Bank and Institute of Chartered Accountants in England and Wales, and is regarded as financial assistance aimed at creating an enabling environment for the Institute’s intended operations.




NOTES TO THE FINANCIAL STATEMENTS31 December 2013

2013 2012 P P

1 Revenue earned from services

Membership fees received 3,346,969 2,929,736Income from seminars and workshops 2,775,111 2,738,187Services to other professional bodies 1,508,846 1,584,343BICA qualification, annual subscription and sale of materials 647,276 946,128

8,278,202 8,198,394

2 Other income

Dinner Dance income 211,661 117,758AAT annual award event reimbursement 101,071 137,708Sale of publications 56,458 43,369Sundry income 54,618 72,723Sale of promotional items 48,638 66,519Surplus on disposal of property and equipment - 40,000

472,446 478,077

3 Administration expenses

Amortisation of intangible assets 10,641 15,526Bank charges 66,014 59,988BOCCIM membership fees 2,362 4,532Cleaning and refreshments 152,662 126,196Computer consumables 52,266 45,632Consultancy fees 402,541 339,600Courier and postage 102,230 97,430Database licencing and maintenance 69,264 63,038Depreciation - equipment 371,161 329,918Francistown satellite office administration and travelling costs 36,958 32,920General office expenses 90,669 58,104Insurance 134,505 146,253Internet services 5,760 10,890Legal fees - 6,000Miscellaneous expenses 136,149 137,680Practice monitoring costs 261,849 235,575Photocopier rental, maintenance and supplies 213,380 150,606Printing and stationery 124,091 127,448Recruitment expenses 90,312 43,765Repairs and maintenance 126,437 102,417Subscriptions to professional bodies 116,648 32,221Telephone, fax and cellphone 157,221 152,633Training levy 16,106 15,391Utilities 62,854 54,330Website maintenance 60,400 16,800

2,862,480 2,404,893


4 Occupancy expenses 2013 P

2012 P

Depreciation - leasehold land and buildings 345,513 367,107Francistown satellite office rental payable 46,252 45,695

391,765 412,802

5 Public relations expenses

Advertising and promotions 58,295 79,561AGM, dinner dance and cocktail costs 701,331 475,012AAT annual award event costs 111,336 140,221Career fair 32,023 11,210Marketing and branding costs 828,076 209,520Publication expenses 123,937 90,921Purchase of promotional items 117,238 120,610

1,972,236 1,127,055

6 Training and professional development expenses

BICA qualification course materials and other costs 1,407,908 735,026BICA Accounting Technician qualification costs 31,808 -Business travel and accommodation to external meetings 367,492 266,572International conference - 277,246Seminars and workshops 1,332,414 1,124,091

3,139,622 2,402,935

7 Staff costs

Allowances and benefits 644,780 689,777Performance bonus 44,342 305,164Gratuity, severance and leave pay expense 374,984 500,703Group life cover,medical aid and uniform costs 94,542 105,737Pension fund contributions 228,429 176,945Salaries and wages 3,084,555 3,253,068Training, conferences and staff welfare 494,049 278,681

4,965,681 5,310,075

The average number of persons employed by the Institute during the year was 21 (2012-23)

8 Net finance expense

Interest receivable 53,057 73,900Interest payable (180,419) (280,532)Net finance expense (127,362) (206,632)

Interest is receivable from monies in the call account and ondeposit with Stanlib Management Services.

Interest is payable on the bank borrowings (note 14).

NOTES TO THE FINANCIAL STATEMENTS (continued)31 December 2013


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P


10 IntAngIBle ASSetS 2013 2012

P PComputer softwareCost

At beginning of the year 129,917 111,909Acquisitions during the year 106,490 18,008At end of the year 236,407 129,917

Accumulated amortisation

At beginning of the year 116,036 100,510Current year charge 10,641 15,526At end of the year 126,677 116,036

Carrying amount

At 31 December 109,730 13,881

The acquisition during the year is software costs relatedto the virtualization of IT network which is not complete at the year end

11 deferred OPerAtIng leASe

At beginning of the yearMovement for the yearAt end of the year

12 trAde And Other reCeIvABleS

Trade receivablesStaff advances and loansPrepayments and other receivables

13 CASh And CASh eQuIvAlentS

Balances with bank and on handMonies held on behalf of ACCAMonies held on behalf of ICAEWBalance in bank in Sterling account

Short Term Investments



432 (2,175)17,265 2,60717,697 432

110,965 73,315315,247 308,68122,797 34,953

449,009 416,949

1,182,841 971,978227,683 361,835126,056 309,592253,688 221,015

1,790,268 1,864,4201,115,655 143,6622,905,923 2,008,082



2013

P 2012

P

13 CASh And CASh eQuIvAlentS (continued)

Short Term Investments represent a money market fund with Stanlib Management Services.The interest is determined on the 7 day yield at the reporting date which at the year end was 5.35% (2012 - 5.85%).

An agreement exists between the Institute and other International professional bodies wherein students in Botswana pay their professional dues directly intoa BICA bank account and BICA expatriates these monies weekly to the International body.

14 BAnK lOAnSMortgage loanTotal 1,621,791 2,551,569Less current portion (402,063) (368,044)

1,219,728 2,183,525

This loan is secured by a first mortgage bond over leasehold land and buildings(see note 9.2) and is repayable over 120 months commencing July 2010.The loan is repayable in equal monthly installments of P58,658 inclusive ofinterest. Interest is charged at 2% below the prime rate which is currently 9.5%(2012 - 11%) per annum.

Vehicle loanTotal - 143,230Less current portion - (44,686)

- 98,544

This loan, which was fully repaid during the year, was repayable over 60 monthsin equal monthly instalment sof P5,711 and bore interest at 2% below primerate which was 11%.Total Bank Loans 1,621,791 2,694,799Less Current Portion (402,063) (412,730)

1,219,728 2,282,069





15 deferred CAPItAl grAnt 2013

P 2012

P

At beginning of the year 4,558,823 4,705,882Less recognised in the statement of comprehensive income (147,059) (147,059)At end of the year 4,411,764 4,558,823

This non refundable grant was received from the Government of Botswana for the construction of the BICA building It is recognised in the statement of comprehensive income over the period of the leasehold land being area no. 4466-KO (see note 9.2)

16 trAde And Other PAyABleS

Trade payables 321,684 191,320Vat accrual 125,313 105,206Other accruals 26,185 58,056Retention on capital project - 17,322Payables to other professional bodies 949,449 797,990

1,422,631 1,169,894

17 PrOvISIOnS

At beginning of the year 915,779 688,408Arising during the year 375,419 624,876Utilised during the year (713,749) (397,505)At end of the year 577,449 915,779

Provisions represents gratuities, severance benefits, annual leave and bonuses

18 relAted PArty dISClOSureS

trAdIng trAnSACtIOnS

remuneration of key management personnelSalary 512,469 1,051,007Allowances 552,468 644,431Bonuses 44,342 138,957

1,109,279 1,834,395

Grants - Government of Botswana 5,325,000 2,950,000

Amounts due from related parties

Government of Botswana 53,888 27,200

Staff advances and loans 36,954 65,549

Key management personnel comprise 2 employees (2012 - 3).



19 fInAnCIAl InStrumentS

Exposure to interest rate and credit risk is in the normal course of business.

19.1 Foreign exchange rate risk

The Institute invests with reputable financial institutions and is subject to cash flow interest rate risk.

19.2 Credit risk exposure

The following table summarizes the maximum exposures to credit risk without taking into accountcollateral held. There is no collateral received for all financial assets

2013 2012 P P

Total credit risk comprises:Cash and bank 1,790,268 1,864,420Short term Investments 1,115,655 143,662Trade debtors 449,009 416,949Total maximum exposure 3,354,932 2,425,031

19.3 Fair value of financial instruments

The fair value of all financial instruments is substantially identical to the carrying values reflected in the balance sheet. The table below summarises the information. No valuation methods have been used to measure the fair values since the carrying a mounts approximate fair values.

19.4 Classification of financial instruments

Loans and receivablesCash and cash equivalents 2,905,923 2,008,082Trade receivables 449,009 416,949Total 3,354,932 2,425,031

19.5 Financial instruments designated at fair value through profit or lossThere are no financial instruments which the institute has designated at fair value through profit orloss.

19.6 Financial assets pledged as collateralThe institute has not pledged any financial assets as collateral

19.7 Financial assets received as collateralThe institute has not received any financial assets as collateral





19 fInAnCIAl InStrumentS (continued)

19.8 Net gains and losses by financial instrument category 2013

P 2012

P

Loans and receivablesInterest income 53,057 73,900Interest expense (180,419) (280,532)Net interest income (127,362) (206,632)

20 CAPItAl COmmItmentS

The Institute has authorised and contracted for capital expenditure of 40,999 -

The expenditure will be financed from the Institute’s current resources.

21 eventS After the BAlAnCe Sheet dAte

The Council of the Institute is not aware of any matters or circumstances arising since the end of the financial year, not otherwise dealt with in these financial statements, that would have a significant effect on the opera-tions of the Institute or the result of its operations.







Vision Statement To be the leading accountancy professional body with an internationally recognized professional accountancy qualification

BICA MissionTo protect public interest through:

• Promotingtheaccountancyprofession• Facilitatingqualityprofessionalaccountancyservices

through the monitoring and regulation of professional accountants

• Developingprofessionalaccountants

Core ValuesIntegrity

Excellence

Independence

Transparency and Accountability

Impression House Tel: +267 3922984/3163808

Botswana Institute of Chartered Accountants

Tel: +267 3972992Fax: +267 3972982Email: [email protected]: www.bica.org.bw

Botswana InstItute of Chartered aCCountants

2013annual report

Documents

Botswana Institute of Chartered Accountants Annual...Impression House Tel: +267 3922984/3163808 Botswana Institute of Chartered Accountants Tel: +267 3972992 Fax: +267 3972982 Email: