PKF RademeyerWesson · iKhaya le Themba Home Based Care Non-Profit Company (Registration number 2004/023897/08) Financial statements for the year ended 28 February 2017

iKhaya le Themba Home Based Care Non-Profit Company (Registration number 2004/023897/08)

Financial statements

for the year ended 28 February 2017

PKF RademeyerWesson

iKhaya le Themba Home Based Care Non-Profit Company(Registration number 2004/023897/08)Financial Statements for the year ended 28 February 2017

General Information

Country of incorporation and domicile South Africa

Nature of business and principal activities Administration and running of home based care

Directors GT Banwell

GK Claassen

J De Beer

RP Gillespie

I Richardson

Registered office 12 Wingate Crescent

SUNNINGDALE

7441

Postal address PO Box 50110

WEST BEACH

7449

Auditors PKF RademeyerWesson

Chartered Accountants (SA)

Registered Auditors

Company registration number 2004/023897/08

Level of assurance These financial statements have been audited in compliancewith the applicable requirements of the Companies Act 71 of2008.

Preparer The financial statements were compiled under the supervisionof:

D Govender

Financial Manager

Issued 31 August 2017

1


Index

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

Page

Independent Auditor's Report 3 - 4

Directors' Responsibilities and Approval 5

Directors' Report 6

Statement of Financial Position 7

Statement of Surplus or Deficit and Other Comprehensive Income 8

Statement of Changes in Equity 9

Statement of Cash Flows 10

Accounting Policies 11 - 13

Notes to the Financial Statements 14 - 17

The following supplementary information does not form part of the financial statements and is unaudited:

Detailed Income Statement 18 - 19

2

PKF RademeyerWesson

T +27(0)21 914 8880 F +27(0)21 914 8881 E [email protected] W www.pkf.co.za/capetown Tyger Forum A | 2nd Floor | 53 Willie van Schoor Avenue | Tyger Valley | Cape Town | South Africa, 7530 PO Box 5700 | Tyger Valley | Cape Town | South Africa, 7536

Partners: FE Wesson - MJ Strydom - JH Kotze - M Louw - M Oosthuizen - I Potgieter

PKF RademeyerWesson is a member firm of the PKF South Africa Inc. network of legally independent firms in South Africa. PKF South Africa Inc. is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. PKF in South Africa practise as separate incorporated entities in the Eastern Cape, Free State, Gauteng, KwaZulu-Natal and Western Cape.

Independent Auditor's Report To the member of iKhaya le Themba Home Based Care Non-Profit Company Opinion

We have audited the financial statements of iKhaya le Themba Home Based Care Non-Profit Company set out on pages 7 to 17, which comprise the statement of financial position as at 28 February 2017, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements present fairly, in all material respects, the financial position of iKhaya le Themba Home Based Care Non-Profit Company as at 28 February 2017, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act 71 of 2008. Basis for opinion

We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the financial statements section of our report. We are independent of the company in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information

The directors are responsible for the other information. The other information comprises the Directors' Report as required by the Companies Act 71 of 2008, as well as the detailed income statement, presented on pages 18 to 19. Other information does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work We have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the Financial Statements

The directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act 71 of 2008, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

3


Directors' Responsibilities and Approval

The directors are required by the Companies Act 71 of 2008, to maintain adequate accounting records and areresponsible for the content and integrity of the financial statements and related financial information included in thisreport. It is their responsibility to ensure that the financial statements fairly present the state of affairs of thecompany as at the end of the financial year and the results of its operations and cash flows for the period thenended, in conformity with the International Financial Reporting Standard for Small and Medium-sized Entities. Theexternal auditor's is engaged to express an independent opinion on the financial statements.

The financial statements are prepared in accordance with the International Financial Reporting Standard for Smalland Medium-sized Entities and are based upon appropriate accounting policies consistently applied and supportedby reasonable and prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial controlestablished by the company and place considerable importance on maintaining a strong control environment. Toenable the directors to meet these responsibilities, the board of directors sets standards for internal control aimed atreducing the risk of error or loss in a cost effective manner. The standards include the proper delegation ofresponsibilities within a clearly defined framework, effective accounting procedures and adequate segregation ofduties to ensure an acceptable level of risk. These controls are monitored throughout the company and allemployees are required to maintain the highest ethical standards in ensuring the company’s business is conductedin a manner that in all reasonable circumstances is above reproach. The focus of risk management in the companyis on identifying, assessing, managing and monitoring all known forms of risk across the company. While operatingrisk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure,controls, systems and ethical behaviour are applied and managed within predetermined procedures andconstraints.

The directors are of the opinion, based on the information and explanations given by management, that the systemof internal control provides reasonable assurance that the financial records may be relied on for the preparation ofthe financial statements. However, any system of internal financial control can provide only reasonable, and notabsolute, assurance against material misstatement or loss.

The directors have reviewed the company’s cash flow forecast for the year to 28 February 2018 and, in the light ofthis review and the current financial position, they are satisfied that the company has or has access to adequateresources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently auditing and reporting on the company's financialstatements. The financial statements have been examined by the company's external auditors and their report ispresented on pages 3 to 4.

The financial statements set out on pages 6 to 19, which have been prepared on the going concern basis, wereapproved by the board of directors on 31 August 2017 and were signed on its behalf by:

Director Director

5

y 17 and were signed

Director


Directors' Report

The directors have pleasure in submitting their report on the financial statements of iKhaya le Themba Home BasedCare Non-Profit Company and its associates for the year ended 28 February 2017.

1. Review of financial results and activities

The financial statements have been prepared in accordance with International Financial Reporting Standard forSmall and Medium-sized Entities and the requirements of the Companies Act 71 of 2008. The accounting policieshave been applied consistently compared to the prior year.

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

2. Directors

The directors in office at the date of this report are as follows:

Directors ChangesGT BanwellGK ClaassenJ De Beer Appointed 26 January

2017RP GillespieCA Hiscock Resigned 18 April 2017I Richardson

3. Events after the reporting period

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

4. Going concern

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

5. Auditors

PKF RademeyerWesson continued in office as auditors for the company for 2017.

6. Secretary

The company had no secretary during the year.

6


Statement of Financial Position as at 28 February 2017

2017 2016Note(s) R R

Assets

Non-Current Assets

Property, plant and equipment 2 360,793 66,170

Investments in subsidiaries 3 - -

360,793 66,170

Current Assets

Inventories 5 13,754 40,077

Loan to group company 4 32,342 -

Trade and other receivables 6 11,896 36,175

Cash and cash equivalents 8 217,714 258,984

275,706 335,236

Total Assets 636,499 401,406

Equity and Liabilities

Equity

Retained income 590,089 349,177

Liabilities

Current Liabilities

Trade and other payables 9 46,410 52,229

Total Equity and Liabilities 636,499 401,406

7


Statement of Surplus or Deficit and Other Comprehensive Income

2017 2016Note(s) R R

Revenue 10 2,136,997 2,192,482

Cost of sales 11 (26,322) (82,210)

Gross profit 2,110,675 2,110,272

Operating expenses (1,875,185) (1,961,674)

Operating profit 235,490 148,598

Investment revenue 5,738 25

Finance costs (316) (54)

Surplus for the year 240,912 148,569

Other comprehensive income - -

Total comprehensive income for the year 240,912 148,569

8


Statement of Changes in Equity

Retainedincome

Total equity

R R

Balance at 01 March 2015 200,608 200,608

Surplus for the year 148,569 148,569Other comprehensive income - -


Balance at 01 March 2016 349,177 349,177

Surplus for the year 240,912 240,912Other comprehensive income - -


Balance at 28 February 2017 590,089 590,089

9


Statement of Cash Flows

2017 2016Note(s) R R

Cash flows from operating activities

Cash generated from operations 12 320,290 129,077

Interest income 5,738 25


Net cash from operating activities 325,712 129,048

Cash flows from investing activities

Purchase of property, plant and equipment 2 (334,640) (8,900)

Loans advanced to group companies (32,342) -

Net cash from investing activities (366,982) (8,900)

Total cash movement for the year (41,270) 120,148

Cash at the beginning of the year 258,984 138,836

Total cash at end of the year 8 217,714 258,984

10


Accounting Policies

1. Presentation of financial statements

The financial statements have been prepared in accordance with the International Financial Reporting Standard forSmall and Medium-sized Entities, and the Companies Act 71 of 2008. The financial statements have been preparedon the historical cost basis, except for biological assets at fair value less point of sale costs, and incorporate theprincipal accounting policies set out below. They are presented in South African Rands.

These accounting policies are consistent with the previous period.

1.1 Significant judgements and sources of estimation uncertainty

Critical judgements in applying accounting policies

In preparing the financial statements, management is required to make estimates and assumptions that affect theamounts represented in the financial statements and related disclosures. Use of available information and theapplication of judgement is inherent in the formation of estimates. Actual results in the future could differ from theseestimates which may be material to the financial statements.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carryingamounts of assets and liabilities are detailed in the accounting policies and/or notes to the financial statementswhere applicable.

1.2 Property, plant and equipment

Property, plant and equipment are tangible items that are held for use in the production or supply of goods orservices, or for rental to others or for administrative purposes; and are expected to be used during more than oneperiod.

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

Cost include costs incurred initially to acquire or construct an item of property, plant and equipment and costsincurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carryingamount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

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

Item Depreciation method Average useful life

Motor vehicles Straight line 10 yearsComputer equipment Straight line 3 yearsComputer software Straight line 2 yearsOther fixed assets Straight line 10 years

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

Gains and losses on disposals are recognised in profit or loss.

1.3 Financial instruments

Classification

Financial instruments are initially measured at the transaction price (including transaction costs except in the initialmeasurement of financial assets and liabilities that are measured at fair value through profit or loss) unless thearrangement constitutes, in effect, a financing transaction in which case it is measured at the present value of thefuture payments discounted at a market rate of interest for a similar debt instrument.

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Accounting Policies

1.3 Financial instruments (continued)

Financial instruments at amortised cost

These includes trade receivables, cash and cash equivalents, trade payables and loans to related parties. Thosedebt instruments which meet the criteria in section 11.8(b) of the standard, are subsequently measured atamortised cost using the effective interest method. Debt instruments which are classified as current assets orcurrent liabilities are measured at the undiscounted amount of the cash expected to be received or paid, unless thearrangement effectively constitutes a financing transaction.

At each reporting date, the carrying amounts of assets held in this category are reviewed to determine whetherthere is any objective evidence of impairment. If there is objective evidence, the recoverable amount is estimatedand compared with the carrying amount. If the estimated recoverable amount is lower, the carrying amount isreduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

Financial assets measured at fair value through profit and loss

All other financial instruments, including equity instruments that are publicly traded or whose fair value canotherwise be measured reliably, are measured at fair value through profit and loss.

Impairment of financial instruments measured at amortised cost

At the end of each reporting period, an entity shall assess whether there is objective evidence of impairment of anyfinancial assets that are measured at cost or amortised cost. If there is objective evidence of impairment, the entityshall recognise an impairment loss in profit or loss immediately.

If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be related objectivelyto an event occurring after the impairment was recognised, the entity shall reverse the previously recognisedimpairment loss either directly or by adjustment of an allowance account.

Amortised cost and effective interest method

The amortised cost of a financial asset or financial liability at each reporting date is the net of the following amounts:�� The amount at which the financial asset or liability is measured at initial recognition.�� Minus any repayments of the principal.�� Plus/minus the cumulative amortisation using the effective interest method of any difference between the

amount at initial recognition and maturity amount.�� Minus any reduction for impairment or uncollectibility.

Financial assets and financial liabilities that have no stated interest rate and are classified as current assets orcurrent liabilities are initially measured at an undiscounted amount.

The effective interest method is a method calculating the amortised cost of a financial asset or a financial liabilityand of allocating interest income and interest expense over the relevant period.

Interest expense is recognised on the basis of the effective interest method and is included in finance cost.

Interest income is recognised on the basis of the effective interest method and is included in investment revenue.

1.4 Inventories

Inventories are measured at the lower of cost and estimated selling price less costs to complete and sell, on thefirst-in, first-out (FIFO) basis.

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Accounting Policies

1.5 Revenue

Revenue is recognised to the extent that the company has transferred the significant risks and rewards ofownership of goods to the buyer, or has rendered services under an agreement provided the amount of revenuecan be measured reliably and it is probable that economic benefits associated with the transaction will flow to thecompany. Revenue is measured at the fair value of the consideration received or receivable, excluding sales taxesand discounts.

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

Fundraising and donations received are recognised on the date of cash receipt.

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Notes to the Financial Statements

2017 2016R R

2. Property, plant and equipment

2017 2016

Cost Accumulateddepreciation

Carryingvalue

Cost Accumulateddepreciation

Carryingvalue

Motor vehicles 419,244 (95,671) 323,573 129,244 (71,084) 58,160Computer equipment 26,400 (7,700) 18,700 - - -Computer software 18,240 (6,840) 11,400 - - -Other fixed assets 8,900 (1,780) 7,120 8,900 (890) 8,010

Total 472,784 (111,991) 360,793 138,144 (71,974) 66,170

Reconciliation of property, plant and equipment - 2017

Openingbalance

Additions Depreciation Total

Motor vehicles 58,160 290,000 (24,587) 323,573Computer equipment - 26,400 (7,700) 18,700Computer software - 18,240 (6,840) 11,400Other fixed assets 8,010 - (890) 7,120

66,170 334,640 (40,017) 360,793

3. Investments in subsidiaries

Name of subsidiary %holding2017

%holding2016

Carryingamount 2017

Carryingamount 2016

Indalo Natural Local TogetherProprietary Limited

%49.00 %100.00 - -

All the entities are incorporated in South Africa and share the year end of the company.

4. Loan to group company

Subsidiary

Indalo Natural Local Together Proprietary Limited 32,342 -

The loan is unsecured, bears interest at rates agreed upon between theparties involved and is repayable by mutual consent.

5. Inventories

Raw materials, components 13,754 40,077

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2017 2016R R

6. Trade and other receivables

Trade receivables 8,369 32,648Prepayments 3,527 3,527

11,896 36,175

7. Other financial assets

The loan is unsecured, bears interest at rates agreed upon between theparties involved and is repayable by mutual consent.

8. Cash and cash equivalents

Cash and cash equivalents consist of:

Cash on hand (6,196) 1,313Bank balances 223,910 257,671

217,714 258,984

9. Trade and other payables

Trade payables 1,393 1,395Accrued expense 45,017 50,834

46,410 52,229

10. Revenue

Community development income 15,601 87,892Enterprise development income 55,856 135,401Fund raising events income 568,753 144,424IKLT income 981,720 1,414,695Orphan and vulnerable children income 372,696 255,744Outreach income 132,457 60,624Sundry income 9,914 1,977Volunteer income - 91,725

2,136,997 2,192,482

11. Cost of sales

Sale of goodsCost of goods sold 26,322 82,210

15



2017 2016R R

12. Cash generated from operations

Surplus before taxation 240,912 148,569Adjustments for:Depreciation and amortisation 40,017 7,352Loss on sale of assets - 6,697Interest received (5,738) (25)Finance costs 316 54Changes in working capital:Inventories 26,323 (40,077)Trade and other receivables 24,279 (31,538)Trade and other payables (5,819) 38,045

320,290 129,077

13. Related parties

`

Relationships

Subsidiary Indalo Natural Local Together ProprietaryLimited

Entity with mutual key management personnel Indalo Development TrustDirectors GT Banwell

GK ClaassenJ De BeerRP GillespieI Richardson

Related party balances and transactions with other related parties

Related party balances

Loan accounts - Owing (to) by related partiesIndalo Natural Local Together Proprietary Limited 32,342 -

Related party transactions

Income received from related partiesIndalo Natural Local Together Proprietary Limited (10,000) -

Expenses paid to related partiesIndalo Natural Local Together Proprietary Limited 18,640 -

Donations paid to related partiesIndalo Development Trust 500 -

14. Contingencies

The company had an investment in the subsidiary, Indalo Natural Local Together Proprietary Limited, which it soldto Indalo Development Trust at an amount of R500,000. The directors of the respective companies have agreedthat this amount will be disclosed in the financial statements as a contingent asset.

This amount will only be receivable by mutual consent at a future date as determined by the parties involved.

16



15. Categories of financial instruments

Note(s) Debtinstrumentsat amortised

cost

Financialliabilities atamortised

cost

Equity andnon financialassets andliabilities

Total

Categories of financial instruments - 2017

Assets

Non-Current AssetsProperty, plant and equipment 2 - - 360,793 360,793

Current AssetsInventories 5 - - 13,754 13,754Loans to group companies 4 32,342 - - 32,342Trade and other receivables 6 8,369 - 3,527 11,896Cash and cash equivalents 8 217,714 - - 217,714

258,425 - 17,281 275,706

Total Assets 258,425 - 378,074 636,499

Equity and Liabilities

Equity

Equity Attributable to Equity Holders of Parent:Accumulated profit - - 590,089 590,089

Total Equity - - 590,089 590,089

Liabilities

Current LiabilitiesTrade and other payables 9 - 46,411 - 46,411

Total Liabilities - 46,411 - 46,411

Total Equity and Liabilities - 46,411 590,089 636,500

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Detailed Income Statement

2017 2016Note(s) R R

Revenue

Community development income 15,601 87,892

Enterprise development income 55,856 135,401

Fund raising events income 568,753 144,424

IKLT income 981,720 1,414,695

Orphans and vulnerable children income 372,696 255,744

Outreach income 132,457 60,624

Sundry income 9,914 1,977

Volunteer income - 91,725

10 2,136,997 2,192,482

Cost of sales

Purchases (26,322) (82,210)

Gross profit 2,110,675 2,110,272

Other income

Interest received 5,738 25

Expenses (Refer to page 19) (1,875,185) (1,961,674)

Operating profit 241,228 148,623


Profit for the year 240,912 148,569

18The supplementary information presented does not form part of the financial statements and is unaudited


Detailed Income Statement

2017 2016Note(s) R R

Operating expenses

Accounting fees 3,010 12,000

Administration and management fees 171,447 125,040

Advertising 30,234 26,823

Auditors remuneration 18,240 -

Bad debts - 4,637

Bank charges 20,207 23,614

Community development 58,862 63,021

Computer expenses 19,687 27,699

Contingency - 3,000

Depreciation, amortisation and impairments 40,017 7,352

Donations 5,000 30,000

Employee costs 895,194 990,780

Enterprise development expenses 30,127 -

Entertainment - 3,837

Fundraising events 155,022 86,566

General expenses 1,009 6,000

Insurance 16,936 1,849

Interest SARS - 1,795

Lease rentals on operating lease 15,000 -

Motor vehicle expenses 73,377 92,134

Orphans and vulnerable children 192,129 146,435

Outreaches expenses 58,947 49,051

Postage 29 159

Printing and stationery 14,362 21,984

Profit and loss on sale of assets and liabilities - 6,697

Repairs and maintenance 4,359 -

Secretarial fees - 450

Skills training 11,566 2,512

Small assets 5,314 1,000

Staff welfare 2,800 1,341

Subscriptions 10,500 99,406

Telephone and fax 14,610 14,638

Training 7,200 2,710

Volunteers - 109,144

1,875,185 1,961,674

19The supplementary information presented does not form part of the financial statements and is unaudited

Documents

PKF RademeyerWesson · iKhaya le Themba Home Based Care Non-Profit Company (Registration number 2004/023897/08) Financial statements for the year ended 28 February 2017