Technical Goals for the BICA Community Mark R. Waser mailto:[email protected] .
BICA 2016 Annual Report 2016...2016. BICA 2017-2021 STRATEGIC PLAN With the Institute’s 2013-2016...
Transcript of BICA 2016 Annual Report 2016...2016. BICA 2017-2021 STRATEGIC PLAN With the Institute’s 2013-2016...
A N N U A L R E P O R T 2 0 1 6
Nelson Mandela
D e v e l o p i n g P r o f e s s i o n a l A c c o u n t a n t s o f G l o b a l R e p u t eD e v e l o p i n g P r o f e s s i o n a l
CONTENTS
Corporate Profile 2
President’s Report 4
BICA Council 10
BICA Secretariat 12
REPORTS FROM COMMITTEES :
Membership and Examinations 14
Training & Professional Development 22
Technical 30
Tax 32
Finance & Procurement 34
Administrative 38
Public Sector 44
Northern 46
Annual Financial Statements 49
A N N U A L R E P O R T 2 0 1 6
“Education is the
most powerful
weapon which one
can use to change
the world.”
Nelson Mandela
D e v e l o p i n g P r o f e s s i o n a l A c c o u n t a n t s o f G l o b a l R e p u t e
1
INCORPORATION AND NATURE OF BUSINESS
Botswana Institute of Chartered Accountants (the
Institute) is a professional body of accountants
domiciled in the Republicof Botswana. The Institute
was incorporated in Botswana, in terms of the
Accountants Act 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.
BICA CORE VALUES
• Integrity
• Excellence
• Independence
• Transparency
• Accountability
HISTORICAL PERSPECTIVE
With the growth of the Botswana economy in the
80’s it became necessary for a more formal local
structure to regulate the affairs of accountants
in Botswana. The Accountants Act was passed
on 24 October 1988 the objective of which was
to provide for the regulation of accountants and
auditors in Botswana. The Botswana Institute of
Accountants was established with effect from 2
July 1990 following the proclamation of the Act.
The Accountants Act of 1988 was repealed
on 2 August 2010 by an Act of Parliament of
2010 the objective of which was, among other
things, to change the name of the Institute from
the Botswana Institute of Accountants to the
Botswana Institute of Chartered Accountants
(BICA) and to establish the Botswana Professional
Accountancy Qualification. The Accountants Act
of 2010 came into effect on 1 April 2011 following
the issuing of Statutory Instrument No. 21 of 2011.
Botswana Institute of Chartered
Accountants Corporate Profile
About Us
VISION
To support Botswana's
development through
a dynamic and ethical
accounting profession.
MISSION
To protect public interest through:
• Promoting the accountancy profession
• Supporting accountants
• Facilitating quality professionalaccountancy services throughthe monitoring and regulation ofAccountants
• Developing chartered accountants
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2. We have accredited the following tuition providers for the BICA Qualification;
• Botswana Accountancy College
• Botho University
• Ba Isago
• Arthur Portland
3. Our Membership classes are as follows;
• Accounting Technician (Acc Tech)
• Associate Chartered Accountant (ACA)
• Associate Certified Professional Accountant
(ACPA)
• Fellow Chartered Accountant (FCA)
• Fellow Certified Professional Accountant
(FCPA)
4. Services offered by BICA members
• Accountancy
• Audit and Assurance
• Management Accounting
• Public Sector Accounting
• Internal Audit
• Taxation
• Management Consulting
• Financial Management
1. Our Services
a) Establishing Botswana professional
accountancy qualification
b) Registration of accountants in all branches of
accounting
c) Promoting high quality accounting, auditing
and financial reporting standards and practices
d) Supervising the accounting profession in the
public interest
e) Promoting high standards of professional
ethics and business standards
f) Enhancing quality services offered by
professional accountants
g) Protecting the public and ensuring the highest
standards of professional accounting services
h) Contributing to the international developments
of accounting and auditing standards
i) Provision of administrative services to ACCA
Joint Examination Scheme, AAT and CIS.
5. Notable recent developments
• Reciprocal Membership Agreement (RMA)
signed with ICAEW in 2015 to boost BICA
graduates international expertise and presence
• Since the inception of the BICA Qualification in
2011, BICA has produced 8 qualified chartered
accountants, with many others in the pipeline
It is a legal requirement for all individuals providing
accounting and/or related services to register with BICA
For more information visit BICA at:
Plot 50374, Block 3
Fairgrounds Financial Centre,
Call 397 2992 or
Email: [email protected]
@bicabw
Botswana Institute of Chartered Accountants
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A N N U A L R E P O R T 2 0 1 6
The Institute closed the year with 3355 members compared to 2085 members at the end of 2015.
The Report of the President
4
It must be noted as reported in the 2015 annual
report that as much as it was challenging to
implement the 2013-2016 strategic plan due
to an ineffective organizational structure, the
new strategic plan aimed to be aligned with an
efficient structure for maximum returns. To this
end, the new BICA structure to support the new
strategic plan, was successfully implemented and
has been operational since the 1st July 2016.
The new structure saw the introduction of new
roles and the implementation of the Performance
Management System. The Institute is happy to
announce that there were no retrenchments from
the re-structuring exercise.
BICA GRADUATES EIGHT (8) CHARTERED ACCOUNTANTS
One of our strategic objectives is to increase the
number of professional accountants to meet the
demands of Botswana’s economy. The aim is not
only to increase professional accountants, but
citizen qualified chartered accountants. On that
note, I am proud to announce that the Botswana
Chartered Accountancy Qualification celebrated the
qualification of six (6) graduates at the inaugural
graduation and awards ceremony in October 2016.
Honourable MinisterKenneth O. MatamboMinister of Finance and Economic Development
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
2016.
BICA 2017-2021 STRATEGIC PLAN
With the Institute’s 2013-2016 strategy coming to
an end in 2016, the BICA Council and management
met through a facilitated workshop held from 29th-
31st October 2016 in order to review the strategy
and come up with a new five year strategy, the
‘2017-2021 Strategic Plan’. The exercise was a
success, and at the time of preparing the report,
the cascading of the strategic plan to various
departments had already begun.
Furthermore, in December 2016, two more
chartered accountants qualified with the BICA
Qualification, bringing the total number of BICA
qualified chartered accountants to eight (8).
In addition to the examinations, professional
development and ethics and professional
scepticism, the graduates underwent rigorous
training for a period of 450 days to gain practical
work experience, a pre-requisite to attain the
Qualification. The attainment of the 450 days of
practical work experience ensures that the BICA
qualified chartered accountants are employment
ready and this gives employers high calibre recruits
who can make a difference upon recruitment. We
sincerely believe that this breakthrough will now
make it easier to sell the BICA Qualification as
potential students would see that with the right
ingredients, the Qualification is attainable.
It is important to note that due to the Reciprocity
Membership Agreement (RMA) that is in place, upon
qualification, the BICA graduates qualify for the
dual membership of BICA and that of the Institute
of Chartered Accountants in England & Wales
(ICAEW). This arrangement is meant to boost their
international recognition, expertise and presence.
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A N N U A L R E P O R T 2 0 1 6
concluded her visit by giving a motivational talk to
the students. She was later to attend the inaugural
BICA graduation and awards ceremony, further
cementing ties between the two bodies.
MEMBERSHIP GROWTH
BICA continued to discharge its mandate of
ensuring the registration and regulation of all
accountants working in Botswana. The Institute
was mandated to have registered 3200 members
comprising of 1200 Professional Accountants and
2000 Accounting Technicians by the end of 2016.
To this end, the membership target for the year was
achieved. The Institute closed the year with 3355
members compared to 2085 members at the end
of 2015. This shows a total increase in members
by 1270 and it is the highest number of admissions
ever recorded in any single year since inception.
The Institute believes that there are still some
accountants working in the industry, who are not
registered with the Institute and continues to
appeal to BICA members and the general public to
alert the Institute if they are aware of such. This will
enhance compliance, reputation and integrity in the
accounting profession and the Institute will better
serve and effectively regulate the accounting
profession in Botswana.
BICA QUALIFICATION PROGRESS
In 2016, the Institute saw a number of students
writing advanced level examination papers, and this
shows a positive trajectory from the professional
level to the advanced level and therefore indicates
that more graduates may be in the pipeline.
Since practical work experience is an important
component of the Qualification, BICA now employs
a full time Apprenticeship Manager and Officer to
effectively handle this aspect which deals with
student placements, reviews and overall support.
For the Qualification to be a success, all stakeholders
should be on the same page. Thus in 2016, BICA
continued its engagement with Authorised
Training Employers (ATEs), tuition providers and
students to better appreciate the challenges and
agree on remedial action. This resulted in a number
of resolutions being proposed for consideration.
Our twinning partners, the ICAEW, continued to
give us the much needed support as evidenced
by the October 2016 visit by their President Ms
Hilary Lindsay; we had meetings where she shared
a lot of insights on the initiatives to undertake
in order to improve the Qualification. Lindsay
BIENNIAL INTERNATIONAL CONFERENCE
The Institute hosted a successful Biennial
International Conference on the 11-12 August
2016 under the theme “Leading, Building and
Innovating in Turbulent Times”. The key note
speaker was local entrepreneur Abel Monnakgotla
who addressed delegates from different sectors of
economy. Various pertinent topics that sought to
initiate debate and come up with sound solutions
were covered.
BICA then hosted its annual dinner dance on the
12th August 2016 at the Gaborone International
Convention Centre, where over 400 attendees
converged; confirmation that the dinner dance is
an important stakeholder engagement event in
the BICA calendar. The guest speaker was former
Minister and now Phakalane Golf Estate Director
David Magang, who educated the audience well
on the topic of “Mitigation against dependency on
diamonds”.
BENCHMARKING VISITS
During this reporting period, BICA was honoured to
host delegates from Accounting and Auditing Board
of Ethiopia (AABE) who came to benchmark with the
Institute. The delegates gave positive feedback on
what they learnt from BICA and from the Botswana
Accountancy Oversight Authority (BAOA).
The Report of the President [Continued]
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STAKEHOLDERS’ COCKTAIL
With the objective of formally introducing the
incoming President to stakeholders as well as
the President introducing the new Council and
updating stakeholders on the Institute’s operations
and plans for the duration of the tenure, the
Institute successfully hosted the stakeholders’
cocktail in Gaborone and Francistown on the 1st
and 7th June 2016 respectively. This platform also
gave stakeholders an opportunity to give feedback
to the Institute on its operations and where
improvements could be made.
PAN AFRICAN FEDERATION OF ACCOUNTANTS (PAFA)
The Institute continued to play an active role
in the affairs of the Pan African Federation of
Accountants (PAFA). The Institute complied with
all the PAFA requirements for 2016 and remains a
member in good standing.
The Institute itself sent officers from the Training
& Professional Development Department on a
benchmarking exercise to the Institute of Chartered
Accountants in England and Wales (ICAEW), in an
effort to ensure the successful delivery of the BICA
Qualification.
HUMAN RESOURCES
BICA experienced challenges with the recruitment
of the Director: Technical & Public Sector, and to
date this important position is yet to be filled. By
the end of 2016 however, interviews had already
been scheduled for early 2017.
INTERNATIONAL FEDERATION OF ACCOUNTANTS (IFAC)
As a full member of IFAC, the Institute continues to
play an active role in the affairs of IFAC. The Chief
Executive Officer and the Vice President attended
IFAC meetings hosted by the Conselho Federal de
Contabilidade (CFC), the Instituto dos Auditores
Independentes do Brasil (IBRACON) and the Brazilian
Accounting Foundation (FBC) in Brasilia from 14th
– 19th November 2016. They participated in
meetings and exercised BICA’s voting rights on key
decisions taken to shape the accounting profession
the world over. The Institute complied with all the
IFAC requirements for 2016 and remains a member
in good standing.
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The Report of the President [Continued]
CPD COMPLIANCE
A number of members were reminded on numerous
occasions to submit their CPD returns. The
reminders were followed by warning letters from
the Chairperson of the Training & Professional
Development Committee, and subsequently the
Final letter of Instruction from the President. Most
members heeded these reminders, but there were
some who unfortunately did not respond to any of
these reminders.
It is to this end that Council referred six (6)
members to the Disciplinary Committee for non
CPD compliance in 2016. Three (3) of the members
did not attend the hearings nor inform the Institute
in time of the reasons for non-attendance. The
hearings nonetheless continued in their absentia.
The sanctions meted out to the three (3) members
who did not attend the hearing was suspension
from the BICA register for a period of 12 months.
One (1) of the members requested removal from
the register since they were no longer rendering
accounting or related services. The Disciplinary
committee agreed with the request and the
member has since been removed from the BICA
register.
One (1) member attended the hearing and was
cautioned. In addition to the caution, the member
was further asked to contribute a sum of BWP
Maintaining Professional StandardsOne of the key responsibilities of the Institute is to
ensure that its members adhere the highest level
of Professional Standards through adherence to
the Professional code of conduct so as to protect
public interest.
BICA therefore has to consistently monitor its
Certified Auditors and members through Practice
Reviews and Continuous Professional Development
(CPD) as well as the code of conduct respectively.
During 2016 the following were undertaken:
Practice ReviewsCertified Auditors undergo go Practice Reviews
and if they do not pass the reviews first time,
they are given three (3) chances to rectify their
shortcomings, failing which their certificates are
revoked until such time that they can prove to
the Institute that they have gained appropriate
and relevant experience, under the supervision of
such practising member in the fields of auditing
and assurance services for at least two hundred
and forty hours (or proportion thereof) for each
completed period of twelve calendar months (or
proportion thereof) from date of revocation of the
certificate until re- application.
During the period under review, one (1) Certified
Auditor failed Practice Review three (3) times in a
row and Council decided to revoke their certificate.
1,500.00 towards the costs of the hearing and also
instructed to have complied with CPD requirements
within a period of 6 months from the date of the
hearing.
One (1) member was unable to attend the hearing
due to medical reasons at the time. The hearing was
therefore put on hold until they are in a position
to attend which should hopefully be sometime in
2017.
ADHERENCE TO THE CODE OF CONDUCT
Two members who had been referred to the
Disciplinary Committee by Council in 2015 and had
been found guilty of misconduct by the Committee
had appealed their sanctions to the Appeals
Committee in 2016. The Committee considered the
appeals and gave final sanctions as follows:
One (1) member was given a reprimand in terms of
section 45(1) of the Accountants Act 2010. One
(1) member’s practising certificate was withdrawn
for a period of two (2) years commencing on 17
December 2015.
I wish to take this opportunity to remind all members
that submission of CPD returns at the end of every
year is compulsory and not optional. The Institute
will continue to vigorously take action against
members who do not adhere to this requirement.
8
I further encourage all Members in Practice to carry
out their assignments diligently as that is the only
way that we can ensure that the public is protected.
CONCLUSION
On behalf of BICA Council, I wish to note and
acknowledge the support of the Government
of Botswana and the Ministry of Finance and
Economic Development through the office of
the Accountant General for their efforts in the
success of the Institute for the purpose of
ensuring excellence, transparency, accountability
and integrity in the accounting profession in the
country and by extension in the region and on the
international front.
Last but critically important, I thank our other key
stakeholders like Ministry of Tertiary Education,
Research & Technology, the Auditor General,
the World Bank, the ICAEW, AAT, ACCA, BICA
Qualification tuition providers, Approved Training
Employers, Government Departments, members,
member firms, BICA Committee Members and BICA
staff for their support in the implementation of
BICA’s various initiatives.
Rudi Binedell BICA PRESIDENT
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BICA Council
[Seating: left to right ] Moshe C.Z Libengo, Zaeem Anwar, Rudi Binedell, Conductor Masena
[Standing] Michel Katombe, Peo Pillar, Helen Chilisa, Mpho Masuge, Verily Molatedi, Tshegofatso Modise,
Gosego Motsamai, Boineelo Peter
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NAMES Council T & PDPractice
ReviewTax Technical
Public
SectorM & E
Finance &
Procure
ment
Admini
strativeNorthern
Rudi Binedell 7/7 - - 4/5 2/2 - - - -
Gosego Motsamai 6/7 - - - - 2/5 - - - -
Peo Pillar 5/7 - - - - - - 6/8 - -
Tshegofatso B. Modise 5/7 4/5 - - - - - - - -
Moshe C.Z Libengo 6/7 - - - - - 9/11 - - -
Mpho Masuge 7/7 - - - - - - - - -
Dr. Mpho Isaiah 3/7 - - - - - - - - -
Zaeem Anwar * 5/7 - - 3/5 - - - - 4/5 -
Michel Katombe 6/7 - - - - - - - - 7/8
Boineelo Peter 3/7 - - - - - - - - -
Conductor P. Masena 2/7 - - - - - - - - -
Verily Molatedi 7/7 - 2/2 4/5 2/2 1/5 - 2/8 1/5 -
KEY NOTE:
T & PD = Training and Professional Development Committee
M & E = Membership & Examinations Committee
* = Member only joined Council in April 2016
ATTENDANCE AND MEETINGS OF COUNCIL AND OTHER COMMITEES FROM
JANUARY 2016 TO DECEMBER 2016
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A N N U A L R E P O R T 2 0 1 6
BICA Secretariat
[Seating: left to right ] Nametso Laletsang, Catherine Monyatsi, Regina Ramanteba, Verily Molatedi, Ookeditse Khachana, Masego Lesole
[Standing] Thapelo Selelo, Khumoetsile Pinkie Modisa, Othusitse M. Siele, Tshegofatso Nkepu, Pule Mogale, Gofaone Marena, Joseph Gontse,
Priscilla Setimela, Oupa Gaofise, Letsalo Morapedi, Othusitse Gatang, Tebogo Tebogo, Kelebogile Kagiso
Tumelo Tsheole, Keneilwe Rathedi, Boemo Gaolathe
[Not in picture] Orebeile Seboka, Mokeresete Kgosimore, Ompatile Gosalamang
12
Francistown Satellite Office
Merapelo Ramarula Thato Thipe Veronica Mogapi
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A N N U A L R E P O R T 2 0 1 6
Membership and Examinations
Committee
[Seating: left to right] Koketso Letsididi, Ntsebo Mothelesi, Mpho Masuge, Mohammed I.S Nasoordeen, Nametso Laletsang
[Standing] Thata T. N Monyepele, Tumelo Tsheole, Khumoetsile Pinkie Modisa, Moshe C.Z Libengo, Regina Ramanteba,
Othusitse M. Siele, Maemo Mesotlo
[Not in picture] Edson Simenti, Mompati Kgaimena, Tselayabone Kuate
14
1. Membership Drive
In an endeavour to ensure that all eligible
unregistered working accountants in Botswana
register with the Institute as per the provisions
in the Accountants Act of 2010, the Institute
embarked on a number of activities as follows;
1) A moratorium was published in November
2015 in the print media, Daily News and
Guardian newspapers, warning unregistered
accountants to register with the Institute by
31st January 2016. The moratorium was also
circulated via all social media channels, Twitter
and Facebook for maximum reach.
2) Letters were sent out to employers requesting
them to provide a list of their accounting
officers of which most employers did and
those who were identified as unregistered
accountants were issued with warning letters
and were given deadlines to have registered
with the Institute
3) Presentations were undertaken at various
organisations in an effort to create awareness
about the Institute’s mandate.
These concerted efforts managed to yield positive
returns as the Institute admitted 1270 members, a
milestone figure, since it is the highest number of
admissions ever recorded in any single year since
inception. The Institute believes that there are still
INTRODUCTION
The role of the Membership & Examinations
Committee is to ensure that applications for
membership satisfy requirements as prescribed
in the BICA Rules such as approved training,
examinations and fitness of membership
requirements.
The Committee’s mandate is to further oversee
compliance with the provisions of the Accountants
Act relating to registration of accountants by
recommending applicants to the BICA Council for
registration and admission.
Furthermore, with the introduction of the BICA
Qualification, the Committee was tasked with
overseeing the processes regarding newly
qualified BICA Chartered Accountants, which
included registration, examinations, technical
work experience, and professional development
and structured training in ethics. Through such
processes the committee has to date admitted
6 BICA qualified graduates to membership. Key
highlights for the year under review are as follow;
some accountants working in the industry, who are
not registered with the Institute and continues to
appeal to BICA members and the general public to
alert the Institute if they are aware of such. This will
enhance compliance, reputation and integrity in the
accounting profession and the Institute will better
serve and effectively regulate the accounting
profession in Botswana.
2. Introduction of Member Firm-Non Auditing Accounting Technician
The year 2016 saw BICA members resolving to
introduce a new category of member firm for
Accounting Technicians with effect from the 1st
January 2017 at the Annual General Meeting held
in April 2016.
The establishment of this new non-audit category
is in addition to two (2) other already existing
categories namely;
(a) Member Firm-Audit
(b) Member Firm- Non-Audit
This new Technician firm category may offer all
professional accounting services as defined in the
Accountants Act, with the exception of auditing and
assurance services as defined by the International
Auditing and Assurance Standards Board (IAASB).
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A N N U A L R E P O R T 2 0 1 6
This development should be able to curb people
from operating without proper registration thus
enhancing public protection and in turn assist in job
creation.
The Institute through various media made the public
aware of the introduction of the Member Firm-Non
Auditing Accounting Technician. The various media
used included social, print, radio, which are believed
to have a greater reach throughout the country.
3. Induction and awareness campaigns for Accounting Technician members
BICA strives to further the accounting profession
in Botswana by attracting and retaining members
who are well vested with the mandate of the
Institute. In such efforts BICA found it fit to
embark on induction and awareness campaigns
for Accounting Technician members with the
main objective of creating awareness on the
BICA mandate, membership and compliance,
Continuing Professional Development (CPD),
the BICA Qualification and BICA services and
membership benefits for new members in the
Accounting Technician category. These inductions
were followed by free CPD on Records Information
Management and Customs at every session which
gave the members four (4) units of CPD’s. This
was in an effort to emphasize and communicate
the importance of continuous professional
development.
It would be remiss not to mention the selfless
support in these inductions which were received
from BICA members, namely, Messrs Jonnah
Pongaponga and Nelson Muzimbawake. They
continue to go the extra mile in supporting BICA
initiatives as and when they can. They also helped
in presenting to Accounting Technician members
on the services offered by Member Firm-Non Audit
Accounting Technician.
These awareness campaigns were held in various
places as follows;
Gaborone - 21st October 2016
Palapye - 15th November 2016
Francistown - 16th November 2016
Maun - 18th November 2016
4. Membership Growth
The Institute was mandated to have registered
3200 members comprising of 1200 Professional
Accountants and 2000 Accounting Technicians
by the end of 2016. Therefore, the membership
target for the year has been achieved with a target
excess of 155 members.
The Institute closed the year with 3355 members
compared to 2085 members at the end of 2015.
This shows a total increase in members by 1270.
Out of the 3355 members, there were 2143
members in the Accounting Technician category
and 1212 in the professional accountants’
category.
The Accounting Technician members increased by
1170 from 973 members in December 2015 to
2143 as at December 2016 and the Professional
Accountants members increased by 100 from
1112 members in December 2015 to 1212 as at
December 2016.
Though much growth of membership is particularly
in the Accounting Technician category, it has
come to the Secretariat’s attention that many
accountants who fall in the Accounting Technician
category are members who were initially admitted
at the Accounting Technician category and later
during their career acquired membership of other
professional accountancy bodies and never
upgraded to the appropriate category.
BICA therefore urges members in the Accounting
Technician category who are Associate or Fellow
members of other professional accountancy
bodies to upgrade to appropriate BICA membership
categories.
.
Membership and Examinations Committee [Continued]
16
MEMBERSHIP ADMISSIONS FOR THE PAST 5 YEARS
The details of membership statistics are given in more detail in the table and chart below:
MEMBERSHIP CLASS Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016
Accounting Technician 565 67 819 859 973 2143
Associate 664 683 345 777 639 579
Fellow 245 189 283 295 473 633
Total 1474 1629 1835 1931 2085 3355
2011
2011
0
0500
5001000
1000
Num
bers
of
mem
bers
ACCOUNTING TECHNICIAN ASSOCIATE
ACCOUNTING TECHNICIAN
FELLOW
ASSOCIATE
Linear (ACCOUNTING TECHNICIAN)FELLOW
1500
1500
20002000
2500 2500
2013
2013
2015
2015
2012
2012
2014
2014
2016
2016
MEMBERSHIP GROWTH MEMBERSHIP TREND
YEARS
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A N N U A L R E P O R T 2 0 1 6
Out of the 2431 citizen members only 491 are
professional accountants and 1940 are Accounting
Technician citizen members. There is a slight
increase of 69 citizen professional accountants
from 422 in December 2015. Accounting Technician
citizen members have increased by 1151 members
from 789 in December 2015.
Membership admission for the past 5 years
It is worth noting that the Institute admitted 1353
new members in 2016, this being the highest
number of membership admissions in any one year.
Until December 2016, the Institute had not been
able to admit in excess of 300 new members as
illustrated in the table on the right. This is attributed
to the extensive membership drive undertaken to
ensure that all working accountants in Botswana
register with BICA as per the requirements of the
Accountants Act 2010.
Out of the 1270 members admitted as at December
2016, there were 1248 in the Accounting
Technician category and 105 in the professional
accountants’ category, with the latter category
constituting the Associate and Fellow members.
5. Citizen Membership Composition
Out of 3355 members, citizen membership stood
at 2431 as at December 2016 compared to 1211
in December 2015 which shows an increase in
members by 1220. A notable increase showed
in the Accounting Technician category while the
Associate and Fellow membership categories
showed a slight increase.
Membership and Examinations Committee [Continued]
More details on admissions are given in the table and chart below:
M
MEMBERSHIP CLASS YEAR JOINED
2011 2012 2013 2014 2015 2016
ACC-TECH 115 158 179 129 188 1248
PROFESSIONAL ACCOUNTANTS 150 103 96 80 60 105
TOTAL 265 261 275 209 248 1353
20110
200
400
ACCOUNTING TECHNICIAN PROFESSIONAL ACCOUNTANTS
600
800
1000
1200
1400
2013 20152012 2014 2016
MEMBERSHIP ADMISSION
18
The pie chart below, shows that majority of the
citizens members are Accounting Technicians with
a standing 80% of the overall citizen membership
composition and only 20% of the citizen
composition being professional accountants.
CITIZENS MEMBERSHIP COMPOSITION AS AT 31ST DECEMBER 2016
49120%
194080%
Acc - TechProfessionalAccountants
More details on citizen membership are given in the table and chart below;
Membership Citizen Non- Citizen Total MembershipCategory
Dec 2015 Dec 2016 Dec 2015 Dec 2016 Dec 2015 Dec 2016
Fellow 159 228 314 405 473 633
Associate 263 263 376 316 639 579
TOTAL NO OF PROFESSIONAL 422 491 690 721 1112 1212ACCOUNTANTS
ACCTECH 789 1940 184 203 973 2143
TOTAL 1211 2431 874 924 2085 3355
NON - CITIZEN CITIZEN
3000
2000
1000
2500
1500
500
0
2015 2016
CITIZEN VS NON CITIZEN MEMBERSHIP COMPOSITION
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A N N U A L R E P O R T 2 0 1 6
During the year 2016, we admitted one audit firm
and 28 non-audit firms. Thirty-one (31) audit firms
and 121 non-audit firms renewed their membership
in 2016. We closed the year with a total of 32 audit
firms and 149 non-audit firms.
Conclusion
The Institute has done a lot in creating awareness
about its mandate and registration of accountants
and member firms. The Institute is considering the
instigation of legal action against perpetrators. We
envisage that this will be done in the near future.
Lastly, I wish to take this opportunity to thank all
the members of the Membership and Examinations
Committee and the Secretariat for their continued
support and dedication to the Committee’s
mandate.
Moshe LibengoCHAIRPERSON
6. Certified Auditors
The number of Certified Auditors number stood
at 57 as at December 2016 compared to 59 in
December 2015 showing a decrease in the number
of Certified Auditors by two (2).
Four (4) Certified Auditors resigned, 2 were
suspended, whilst 5 members were admitted as
Certified Auditors.
The table below gives more details on the Certified
Auditors;
7. Member firms
The Institute continues to promote registration of
member firms and remind members of the public and
employers to use only registered member firms of
the Botswana Institute of Chartered Accountants
as these are the only firms legally permitted to
offer professional accounting services.
Member firm –Non audit will be subject to quality
reviews beginning 1st January 2017 and it is
expected that these developments will endeavour
to improve the quality of service provided by
member firms and enhance public protection which
is a key function of the Institute.
Membership and Examinations Committee [Continued]
20
21
A N N U A L R E P O R T 2 0 1 6
Training and Professional
Development Committee
[Seating: left to right ] Saad S. Sheikh, Lovemore Thusabantu, Jonnah Pongaponga, Vikash Ponangi, Nametso Laletsang
[Standing] Tshegofatso Modise, Susan Mopedi, Tshegofatso Nkepu, Shabani Ndzinge, Rebecca Mgadla, Regina Ramanteba,
Othusitse M. Siele, Lorato Tibone
[Not in picture] Aubrey Mbewe, Aswin Vaidyanatha, Bojosi Gosiame, Brian Dialwa
22
through relevant training and development. The
Committee ensures that those who partake in
BICA Professional Development events are offered
relevant and up to date courses which will enhance
their productivity and professionalism at the work
place.
Continuing Professional Development (CPD) Events
The Institute’s Continuing Professional Development
(CPD) events aim to ensure that learning and
development remains relevant to individual
members at all stages of their careers. BICA
continues to offer a wide spectrum of CPD events
to its members to ensure that members are up to
date with developments in the profession.
This year, the Institute conducted a number of
events in Gaborone, F/Town and Maun. The Institute
continued to experience some cancellations of
events, particularly in F/Town and Maun due to low
turnout. The Institute held 25 CPD events, seven in
F/Town, two in Maun and fifteen in Gaborone. Five
free CPD’s were also held in Palapye, Maun, F/town
and Gaborone.
INTRODUCTION
Per the BICA terms of reference “The role of
the Training & Professional Development
Committee of the Botswana Institute of
Chartered Accountants (“BICA”) is to advance
the accounting profession in Botswana
by strengthening the profession to meet
international standards and contribute to
the development of Botswana economy by
establishing and promoting adherence to high
quality professional standards.
In pursuing this, the Training & Professional
Development Committee is responsible for
ensuring that members of the Institute are
informed and educated on all the pronouncements
issued by the International Accounting Education
Standards Board of the International Federation of
Accountants (“IFAC”)”. It is in this regard that the
Training and Professional Development Committee
continues to ensure that BICA members continue
to enhance their development continuously
There is a growing interest from different
organisations for the Institute to hold in- house
training for their employees and due to resource
constraints the Institute has not been able to
accede to their request in 2016. Such requests will
be favourably considered in 2017.
The 9th BICA Biennial International Conference
The Institute held its 9th International Biennial
Conference on the 11th and 12TH August 2016
under the theme “Leading, Building and Innovating
in Turbulent times”. A total of 10 schedules topics/
papers were discussed during the conference and
a panel discussion topic on “The finance Voice:
Steering the Conversation in Turbulent times”
was conducted. This was a very relevant topic for
finance professionals in the turbulent times the
economy of Botswana is going through. It gave
useful insights on how the finance professional
can drive the organisation in such times. The
turnout was good and the debates very intriguing.
It was a worthwhile, informative conference. The
conference was followed by a dinner dance.
23
A N N U A L R E P O R T 2 0 1 6
Year of Number Suspensions Fail and Active Completed
Enrolment Enrolled terminated
2011 60 41 5 7
2012 194 151 4 38
2013 106 68 1 37
2014 170 88 1 81
2015 102 19 83 1
2016 105 105 7
Total 737 367 11 351 8
CPD Compliance
This year the compliance return submission rate
was 87% and the compliance rate was 93%. This
is due to various follow up efforts which were done
during the year. The Institute was also able to
identify 6 members who were not compliant with
their CPD and they were recommended to Council
for appropriate action and subsequently taken
through the disciplinary process.
The Institute took a deliberate stance that
the Accounting Technicians in 2016 would
not be sampled but would instead be inducted
on the importance of Continuing Professional
Development. The Institute conducted induction
programmes in four areas of the Country that
is, Gaborone, Palapye, F/Town and Maun. These
inductions were followed by 4 free CPD’s, which
were given in an effort to buttress BICA’s position
on CPD compliance.
BICA Qualification Performance
The table on the right shows the number of
students enrolled in the BICA qualification and
those who graduated since 2011 when the
qualification started;
The table also shows that 378 students did
not renew their students’ membership in 2016.
Eleven students failed their last attempts and
their studies were terminated, whilst 351students
reactivated their membership. Eight students
have now completed their studies since the BICA
qualification started in 2011.
2016 BICA Qualification
There are 737 students in the BICA students’
data base and only 351 students are actively
involved with the qualification. This means most
of the students are unable to continue with the
programme due to various reasons, some of them
being that they are unable to pay subscriptions and
examination fees when they were dropped from
the Government Sponsorship.
Advanced level exam results
This year the Institute registered students for
advanced level examinatios for the first time.
Twenty-three (23) students sat for advanced level
examinations in July and 5 of them successfully
passed and graduated from the programme. In
November 2016, again 23 students registered
and sat for advanced level examinations. Of the
23 students who registered to write in November,
13 students came from those who wrote in July
and 9 were new advanced level exam entrants.
Two students passed the exam. In terms of all the
elements of the qualifications, 14 students were
expected to graduate, of which 7 managed to
complete.
Training and Professional Development Committee [Continued]
24
meetings also resolved to strengthen their
relationships as ATE’s and Tuition providers to
enhance stakeholder management, which will
benefit BICA students and for the success of the
BICA Qualification.
The ATE’s were also informed that BICA would be
introducing Service Level Agreements in 2017, so as
to monitor the students’ practical work experience
progress more efficiently and effectively.
It is hoped that the BICA Qualification will yield
better results in the coming strategic period of
2017 to 2021.
The Institute continues to hold consultative
meetings with the ATEs and Tuition Providers
to discuss pertinent issues relating to Tuition
and placement of students with the Authorised
Training Employers (ATEs).
In July 2016, the Institute changed the mode of
delivery from two days class sessions and three
days practical work experience to block release
mode of delivery. A decision to change to block
release was discussed at Tuition Providers/
Authorised Training Employers (ATE’s) Consultative
meeting which was held in October 2015. The
Authorised Training Employers
Since July 2016, BICA now has a fulltime ATE
Manager and an Officer under this section to
deal with student placements, student reviews
and support more effectively and efficiently.
BICA’s appeal to employers to take on board more
students for Practical Work Experience continues.
BICA Qualification Stakeholder Consultative Meetings
In 2016 BICA continued with its engagement
with Authorised Training Employers (ATEs), Tuition
Providers and Students. Two sessions were held
with students with a view to understand their
challenges with the qualification and also assist
them to overcome those challenges. This resulted
in a number of resolutions being proposed for
consideration, such as students staying at one ATE
for a mandatory one year before moving to another
ATE. Another resolution was that the students
allowance be left at a minimum of three thousand
pula per month and that BICA should exercise some
flexibility when it comes to students allowances
since some ATE’s expressed their interest to take
students on board but were constrained by the
prevailing economic hardships. The consultative
Main reason for introducing the block release was
to ensure that students have enough time with
Lecturers and Tuition providers, and to provide a
flexible environment for ATE’s.
The amount of time taken per module was
standardised and Tuition Providers are to spend
at least 100 hrs per module in delivering the BICA
qualification. The 100 hours include tuition, test,
and mock examinations and debriefs by Tuition
Providers. The reports received from the Tuition
Providers regarding the block release and 100 hours
Lecturers/Students contact time are encouraging
and the Institute expects to see improved results
going forward
BICA Support for Students
BICA continued in its efforts to assist the students
in the development of their professional and ethical
skills. There is an increased access to the range of
learning materials in the ICAEW website which is
open to all BICA Students and lecturers, and past
examination papers are also available in the BICA
website. Local variant resource materials are also
available for students and lectures. More online
computer based examination practice is being given
to students at both certificate and professional
levels.
25
A N N U A L R E P O R T 2 0 1 6
With the recently qualified graduates on board,
BICA intends to now be able to gain mileage as
this will encourage others that the qualification is
indeed attainable.
BICA intends to motivate the students on exam
techniques, employability skills, motivational and
tutorial sessions and also engage the students in
the social media platform.
This year the Institute conducted two meetings
with the students to discuss their performance
and to motivate them. The students had the
opportunity to meet with the ICAEW President
Dr Hilary Lindsay who motivated them on the
qualification and addressed the students on the
benefits of lifelong learning on the 7th October
2016.These initiatives are expected to motivate
students and help yield better results.
Monitoring of the Tuition Providers
The Institute continues to use the service level
agreement to monitor the Tuition Providers. The
Committee continued to engage the Tuition
Providers over the performance of the students
after every examination session to account for
the performance of the students. This year, the
Institute visited Tuition Providers to discuss the
performance of their students and to discuss how
the qualification could be improved. The Institute
also held a meeting with the Tuition Providers
who are offering the qualification to discuss the
performance of the students
Graduation and Awards Ceremony
In addition to the December 2015 first BICA
graduate, Ms Whitney Kalaote, BICA saw the
qualification of an additional five graduates. The
Inaugural graduation ceremony was held on the
7th October 2016. All the stakeholders and the
Government representatives were invited including
the media fraternity. All the six students who
graduated were from the Botswana Accountancy
College.. It is our hope that in 2016 more graduates
will emerge from this prestigious qualification
including from the other Tuition Providers.
It is important to note that in addition to the 6
graduates mentioned above, in December 2016,
two more students completed the qualification and
are to graduate in 2017.
Twenty-two awards were awarded to a total
of 12 students. This was in recognition of their
outstanding performance in different modules.
Most awards (9) went to Mr Temo Timothy
Bolokwe for his outstanding performance in
different modules. Whitney Kalaote and Goitseone
Tukula were given the BICA President and the Chief
Executive Officer awards respectively in recognition
of their contribution towards the development of
the qualification.
The Awards recipients received recognition
certificates, and monetary rewards sponsored
by different companies, Grant Thornton, Botho
University, Botswana Accountancy College, Arthur
Portland, RSM Group and KPMG. The graduates
were presented with encrypted plaques/trophies
and a token of appreciation in the form of money
sponsored by Sharma & Associates. The Institute
would like to thank all those who contributed to the
success of the event.
Training and Professional Development Committee [Continued]
26
Qualification Level Module / SubjectAward Prize (minimum amount)
Award Winner Award Sponsor
Certificate
Accounting P1 000.00 Memory Gideon BAC
Management Information P1 000.00 Temo Timothy Bolokwe BAC
Assurance P1 000.00 Goitseone Tukula BAC
Business and Finance P1 000.00 Temo Timothy Bolokwe BAC
Principles of Taxation P1 000.00 Temo Timothy Bolokwe Botho University
Law P1 000.00 Onneile Maripe Botho University
Annual Award P2 000.00 Temo Timothy Bolokwe Grant Thornton
Annual Award P2 000.00 Temo Timothy Bolokwe Grant Thornton
Professional
Financial Management P1 000.00 Mohammed Abbobakar BAC
Audit and Assurance P1 000.00 Lame Ramakgala & Tumediso Dumelang KPMG
Tax Compliance P1 000.00 Temo Timothy Bolokwe BAC
Business Planning Taxation P1 000.00 Gorata Doreen Gaebepe BAC
Financial Accounting and
ReportingP1 000.00 Temo Timothy Bolokwe Botho University
Business Strategy P1 000.00 Temo Timothy Bolokwe Botho University
Financial Reporting P1000.00 Temo Timothy Bolokwe RSM Group
Financial Accounting P1000.00 Mosireletsi Mogotlhwane Arthur Portland
Annual Award P2 000.00 Temo Timothy Bolokwe Grant Thornton
Annual Award P2 000.00 Temo Timothy Bolokwe Grant Thornton
The event was attended by the ICAEW President and the ICAEW Senior Business Development Manager. The following table shows how awards were distributed,
awards prizes and students who won the awards:
27
A N N U A L R E P O R T 2 0 1 6
Training and Professional Development Committee [Continued]
Qualification Level Module / SubjectAward Prize (minimum amount)
Award Winner Award Sponsor
Advanced
Corporate Reporting P1 000.00 Tumalano Dinake KPMG
Strategic Business Management P1 000.00 Whitney Kalaote BAC
Case Study P1 000.00 Temo Timothy Bolokwe BAC
Annual Award P2 000.00 Tumalano Dinake Grant Thornton
Special AwardsChief Executive Officer’s Award P2500.00 Mr Goitseone Tukula BICA
BICA President’s Award P3000.00 Whitney Kalaote BICA
Graduate Awards
Graduate award P1 501.00 Whitney Kalaote Sharma & Associates
Graduate award P1 501.00 Rinomasa Kamuvete Sharma & Associates
Graduate award P1 501.00 Onneile Maripe Sharma & Associates
Graduate award P1 501.00 Tumalano Dinake Sharma & Associates
Graduate award P1 501.00 Oreneile Kago Mudongo Sharma & Associates
Graduate award P1 501.00 Neo Shirley Kwape Sharma & Associates
BICA President’s Award P3000.00 Whitney Kalaote BICA
ICAEW VISIT
The Institute sent two officers to ICAEW for bench
marking exercise in October 2016. The bench
marking exercise did not cover the qualification
only but the officers had an opportunity to explore
other services that are offered by the ICAEW.
This included the disciplinary process followed by
the ICAEW and services that ICAEW gives to its’
members. This visit is expected to yield results in
improving the BICA qualification delivery.
CONCLUSION
It has been a very hectic year, highlighted by
the Biennial conference and the inaugural BICA
graduation. I wish to thank members of the
Committee and Secretariat for a successful year.
Tshegofatso Modise
Chairperson
28
29
A N N U A L R E P O R T 2 0 1 6
[Seating: left to right ] Lindiwe Lovemore, Susan Swaniker Tettey, Verily Molatedi, Cecilia Ramatlapeng
[Standing] Dr. J. Josiah, Shashi K. Velembath, Prosenjit Gupta, Mohammed Osman, Sheyan Edirisinghe
[Not in picture] Francois Roos, Rudi Binedell, Thomas Chitambo
Technical Committee
30
The Technical Committee worked on this
assignment and after much debate agreed to
recommend to Council that Accounting Technician
Services must be defined as follows-:
“BICA will register member Firms owned by
accounting Technicians, which firms may offer
all Professional Accounting Services as defined
in the Accountants Act 2010 with the exception
of Auditing and Assurance Services as defined
by the International Auditing and Assurance
Standards Board”.
Council agreed with this recommendation and
presented it to the AGM in April 2016 which in turn
approved it.
PROPOSED CHANGES TO THE ACCOUNTANTS ACT 2010
The Accountants Act 2010 and the Financial
Reporting Act 2010 have duplications as far as
Certified Auditors are concerned. Work is ongoing
to separate these.
In addition to separation of duplications, the
Committee went through the whole Act to
also identify areas which are impediments in
the implementation of the Act. These were
recommended to Council and have now been
submitted to the Government of Botswana for
consideration.
INTRODUCTION
The role of the Technical Committee is
to oversee the technical aspects of the
profession in Botswana, particularly in the
areas of International Financial Reporting
Standards (IFRS) and International
Standards on Auditing (ISAs).
The Institute was still without a Technical Director
during the whole of 2016 and this has continued
to hamper the work of the Committee. On a
positive note however, we have now received a few
applications which we believe we can consider for
interviews.
We are hopeful that from the interviews which will
be carried out, we will be able to identify a suitable
candidate to join the Institute in 2017 and be able
to assist the Committee to fulfill its mandate.
Despite these challenges, the following activities
were carried out during 2016.
SERVICES THAT CAN BE OFFERED BY ACCOUNTING TECHNICIANS
The 2015 AGM proposed that instead of proposing
that Accounting Technicians be prohibited from
registering non-audit firms with BICA, Council
should define the services that can be offered by
Accounting Technicians.
ADVISE TO GOVERNMENT ON A FINANCIAL REPORTING MATTER
Government asked the Technical Committee to
advise on a technical matter relating to some
Public Finance Management Reform Programme. A
number of meetings were held at the Ministry of
Finance and Economic Development to address this
issue.
This shows that BICA is playing a meaningful role
in the economy.
WAY FORWARD
The other key assignment which the Committee will
complete before the next Annual General Meeting
in April 2017 is the changes to the BICA Rules.
CONCLUSION
I wish to thank Members of the BICA Technical
Committee for their dedication in ensuring that
the Committee carries out its mandate despite the
continued capacity challenges. I thank Council for
their usual support and the Secretariat for their
continued support to the Committee.
Rudi BinedellCHAIRPERSON
31
A N N U A L R E P O R T 2 0 1 6
Taxation Committee
[Seating: left to right ] Bonu Swami, Elizabeth Chikerema, Verily Molatedi, Nametso Laletsang
[Standing] Terrence Brick, Godfrey Aogon, Siva Prasad, Watson Masiakti, Zaeem Anwar
[Not in picture] Gladys Makachiwa, Narayanaswamy Narasimhan, Nigel Dixon, Rudi Binedell, Virenda Kumarverma, Ramnath Kudua
32
BICA had also met the International Monetary
Fund Consultant who is working on these reviews.
The Consultant will continue to meet relevant
stakeholders including BICA to get a holistic view in
the process of the review.
BICA/BURS MEETINGS
In the meetings held between BICA and BURS a
number of milestones were achieved which were:
• E-Services Platform
- The E-services platform was facilitated to
enable e-filing of tax returns. Whilst there
were teething problems, the platform has
received positive response from tax payers
and useful feedback to further improve it.
• Cases on the website
- Tax Rulings and Rulings from the past
3-4 years were posted on the website for
reference, which was a request made by
BICA for its’ members
• Scanner project – This was completed and fully
operational. It has helped in that tax payers
can now scan their identification documents
instead of going to BURS to submit in person.
• BURS now allow tax payers to provide a
photocopy of ITW9 for submission
• Tax clearance certificate
- BURS no longer requires more than 5
years’ reconciliation to get the certificate. It
is now 3 years, which improves efficiency.
INTRODUCTION
The mandate of the Taxation Committee includes
amongst others;
1. Providing a platform where members can be
assisted on tax related issues, both technically
and administratively,
2. Advisory services on tax issues to the
Botswana Unified Revenue Services (BURS),
Ministry of Finance & Economic Development
(MFED) and Government as required,
3. Holding quarterly meetings with BURS to
discuss pertinent and emerging issues.
The Committee worked hard in 2016 to ensure
that its mandate was successfully carried out, and
the developments in 2016 were;
TAX ACTS & POLICY REVIEW
The Committee was engaged by the Ministry of
Finance and Economic Development (MFED) to
make submissions of suggested amendments
to the Taxation Acts & Policies. These were then
tabled at the Tax Review Committee before being
submitted to the policy makers. An in-depth
analysis of all the Acts was done, submitted
and presented to the Tax Review Committee in
November 2016.It is hoped that this contribution
made by the Committee will assist in enhancing
processes, procedures and policies which would be
fruitful for all parties concerned.
• Tax Technical sub-committee formed
- This sub-committee was formed to be able
to deal with emerging issues as a working
group in order to enhance effectiveness
and efficiencies since the main meeting
only happens quarterly.
CONCLUSION
I take this opportunity to thank members of the
Taxation committee, the Technical sub-committee
and the Secretariat who continue to demonstrate
commitment in seeing to it that the committee
successfully carries out its mandate.
Let me also thank the BURS Management team
for making time to assist BICA and its’ members
to improve efficiencies and effectiveness. Your
contribution is greatly appreciated. Lastly, I thank
the Government of Botswana for having trust in
the Institute through engaging the committee on
various assignments.
Rudi BinedellCHAIRPERSON
33
A N N U A L R E P O R T 2 0 1 6
Finance & Procurement
Committee
[Seating: left to right ] Othusitse Gatang, Peo Pillar, Catherine Monyatsi, Ookeditse Khachama
[Standing] Gopal R. Potulapat, Arukka Devaprasad
[Not in picture] Keneilwe Rathedi, Ompatile Gosalamang
34
The main duties of the Committee are:
- to review and recommend the annual budget to
Council
- to review and monitor the monthly management
accounts, including comparison of actual
financial performance to budget, monitoring
cash-flow, etc.
- analyzing student and member fee structures
and making recommendations on these to
Council
- assisting the Secretariat with selection and
application of appropriate accounting policies
- advising and guiding the Secretariat on all
aspects of financial management, including
maximizing revenue streams, optimum cost
control and investment decision for surplus
cash resources
- overseeing the preparation of year-end audit
and preparation of the annual report;
- assisting in the tender procedures where an
independent oversight is required by BICA
policies and procedures
INTRODUCTION
This committee is responsible for the
financial reporting of the Institute and
this includes the preparation of monthly
management accounts, annual budget,
annual financial statements and external
audit. The committee also provides
strategic direction on procurement and the
tendering processes.
The Institute reported a deficit of P1, 165 702
as compared to a surplus of P1 392 871 in 2015.
This was due to the following key projects that the
institute had to embark on to drive the mandate
forward.
The restructuring exercise and the performance management system: was a project which
resumed in the last quarter of 2015 and was
completed in the second quarter of 2016. As a
result of the restructuring exercise, two new staff
(Finance and Administration Manager and the
Senior Information Technology Officer) joined the
Institute, thus the staff costs increased by 13% as
compared to the previous year.
Marketing agency: was engaged to assist with
the development and execution of a marketing
strategy that will enhance the Institute’s brand and
the positioning of the BICA Qualification as well as
the membership growth.
35
A N N U A L R E P O R T 2 0 1 6
It must be noted that the Government of Botswana
continues to be an integral part in assisting
the Institute with funding to be able to meet
operational aspects and we are very grateful for
this assistance.
In conclusion, I wish to take this opportunity to thank
all the members of the Administrative Committee
and the Secretariat for their continued support and
dedication to the Committee’s mandate.
Peo PillarCHAIRPERSON
2017-2021 strategy development: following
the completion of the 2013- 2016 strategy, the
Institute engaged strategy consultants to assist
in coming up with a new strategy for the period
from 2017-2021. This increased the consultancy
fees by 28% in comparison to the previous financial
year end.
The training and professional development expenses: these increased by 41% during
the 2016 financial period due to the biennial
conference and increased seminars as a result of
repeated workshops and induction seminars for
accounting technicians which were held for the
first time during the period under review. The first
ever graduation for the BICA graduates was also
held during the year.
Despite the fact that a number of costs went up,
the Institute did well in all revenue streams except
for the Services to Other Professional Bodies
mainly AAT as this is driven by the number of
students who enroll for the programme. Overall,
the total revenue increased by 7% as compared to
the prior year.
Finance & Procurement Committee Report [Continued]
36
Build the career you have always dreamt of with Botswana’s
-
Fairgr ntr vat G r swana
Join the ranks of Botswana accounting
elites with BICA
Administrative Committee
[Seating: left to right ] Mohammed N. Rizvi, Ranjith Dinesh, Zaeem Anwar, Verily Molatedi, Vikash Ponangi
[Standing] Masego Lesole, Oupa Gaofise, Batabe Mokgautsi, Tebogo Tebogo, Catherine Monyatsi, Boemo Gaolathe
[Not in picture] Edson Simenti, L. Suresh Babu
38
1. 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 embraced new technologies and used
them to deliver business products and services
economically, efficiently and effectively. The IT
subcommittee is responsible for strategic planning,
oversight and direction of the IT infrastructure,
resources and services.
MYBICA PORTAL
Following the introduction of the portal in 2015,
The Institute is continuously enrolling members on
the online platform, MyBICA portal. Registrations
have increased from 471 mid- year to 900 at
the end of the year. The Institute encourages its
members to register for MyBICA as it gives them
the opportunity to interact with the Institute at
the comfort of their homes or workplaces. My BICA
portal gives members access to their membership
INTRODUCTION
This is a new Committee that came into
existence following the restructuring of the
Finance and Administrative Committees.
The Committee is an umbrella of all the
administrative functions being; Public
Relations, Human Resources, Information
Technology and any other related functions.
The membership of the Committee should ideally
cover experts in the main areas of the Committee
namely accountants, human resources specialist, IT
experts and public relations specialists. It may be
necessary to look outside the membership of the
Institute to get all these required specialists as it
is going to be a challenge to find them within the
membership.
From a Public Relations perspective, the
Committee requires members of the Institute
who would be able to market the Institute (brand
ambassadors) and give it a higher profile and also
make meaningful contributions to the Institute’s
communication and public relations strategies in
order to enhance visibility and improve branding.
The members of the Committee shall be primarily
drawn from membership of the Institute who have
submitted an application to serve on the Committee
during the new term after the April Annual General
meeting.
details in the Institute’s database and allows them
to amend details, view CPD statements, submit CPD
returns, view invoices and make online payments
to the Institute using credit or debit cards among
other things.
WEBSITE
The BICA Website is a secure platform for students,
members and the public to obtain information
on the Institute. Through the BICA website, the
Institute was able to reach out to a lot of people
and we are now content that the website had
helped the Institute in spreading education on
the accountancy profession. The IT department
working in conjunction with PR had throughout the
year ensured that the website is regularly updated
with the latest technical and general news.
OFFSITE BACKUP FACILITY
To ensure sufficient backup in case of emergencies
and in case the primary site is damaged or
destroyed BICA uses a facility that is not physically
located withinin HQ IT infrastructure to store and
replicate data.An agreement was reached with
VBN to host the BICA offsite backup servers.
39
A N N U A L R E P O R T 2 0 1 6
2. HUMAN RESOURCES
During the financial year 2016, the new BICA
structure was successfully implemented and has
been operational since the 1st July 2016. The new
structure saw the introduction of new roles and the
implementation of the Performance Management
System. The Institute is happy to announce that
there were no retrenchments from this exercise.
The Institute appointed a new Finance and
Administration Manager, Catherine Monyatsi. The
Institute also welcomed another new staff member,
Tebogo Tebogo who is the Senior Information
Technology Officer. One of the key positions, that
of Director: Technical & Public Sector still remains
vacant. However, at the time of writing this
report, The Institute had identified and shortlisted
candidates for the role with the interviews due to
follow in early 2017.
The Institute has always been blessed with staff
continuity and relatively low levels of staff turnover.
In line with this, there was only one resignation
during the year 2016.
In December 2016, BICA recognized the following
employees for long service with the Institute;
Mokeresete Kgosimore and Regina Ramanteba
for attaining ten years, as well as Thapelo Selelo,
Othusitse Gatang and Joseph Gontse for attaining
five years.
3. PUBLIC RELATIONS
Reporting to the Administrative Committee, the
Public Relations department is responsible for
managing and enhancing the BICA brand and
reputation in the public eye, ensuring that brand
communication for areas of responsibility are
consistent with the Institute’s needs. This is
done through the formulation and execution of
strategies that support the Institute’s mandate.
The section also coordinates and manages all
public relations activities geared towards creating
awareness about the BICA mandate as well as
positioning the BICA Qualification and brand. In
2016 the committee managed the following:
BICA BULLETIN
The committee facilitated the production of the
BICA Bulletin, the Institute’s newsletter. The
department was responsible for soliciting of
articles from members and other 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. In
order to reduce costs to ensure sustainability, the
hard copy of the newsletter is printed in limited
numbers for sharing with key stakeholders while
an easy-to-read electronic version is uploaded
onto the BICA website as well as being sent as an
electronic link and in PDF to members. In 2016, four
editions of the Bulletin were produced, one in each
quarter.
WEBSITE
The committee continued to discharge its
responsibility over the website. Regular updating
of the website was undertaken so that members
got reliable and up-to-date information. Efforts are
ongoing with the assistance of the IT department
to make the website as interactive as possible, with
the members’ log-in area already activated. In 2017
it is expected that the website will be revamped to
make it interactive, appealing and up to date.
SOCIAL MEDIA
In appreciating innovation to ensure improved
communication and stakeholder engagement,
BICA regularly updates members, students and
the public about the Institute’s developments and
the accountancy profession through social media
pages, which are Facebook (Botswana Institute of
Chartered Accountants) and Twitter (@BICABW).
The Institute has also launched a LinkedIn Account
(Botswana Institute of Chartered Accountants)
Administrative Committee [Continued]
40
electronic media being radio and newspapers
and communications was largely achieved
through articles, advertorials, press releases,
advertisements, radio interviews and public notices.
The traditional and electronic billboards were also
used as media to sell the BICA Qualification and
mandate. 2016 also saw BICA Graduates and
personnel on key talk shows on radio as a way of
further creating awareness about the Institute and
its mandate.
ADVERTISING
The committee ensured that all BICA events were
timeously and strategically advertised to reach the
intended audience. Advertising covered the BICA
graduates, BICA Qualification intake, events, general
notices to the public and any other information
that BICA found important and relevant and thus
wanted to impart to its target audience. This was
achieved through radio, social media, the website
and the newspapers.
MEMBER VALUE PROPOSITION (MVP) AND LIFESTYLE BENEFITS
The member value proposition (MVP) was
developed in 2016, while on the other hand the
members’ lifestyle benefits were also packaged
for communication with BICA members and
other stakeholders. A communication campaign
in 2016 to update and engage accounting
professionals about the Institute’s events and
any other business concerning the Institute and
topical issues in the accounting profession. The
social media pages have been well received and
monthly reports show that BICA is interacting
quite extensively with stakeholders through this
platform
MEDIA ENGAGEMENT
The Committee was responsible for communication
with stakeholders through the media. This
includes the choice of appropriate media, content
population, editing as well as setting strategic
dates to bring out communication pertaining to
the Institute and/or the accounting industry. The
PR sub-committee facilitated for the press to cover
important BICA events such as the Stakeholder’s
Cocktail in Gaborone and Francistown respectively,
the Biennial International Conference and Dinner
Dance, BICA Graduation and Awards Ceremony,
the annual AAT Awards, outreach projects being
the HRDC Fair, Business Botswana Northern Trade
Fair in Francistown and other events that took
place during the year. Press conferences were also
facilitated on the eve of major BICA events in order
to disseminate information to stakeholders.
The media communications tools that were
commonly used included mainstream print and
will be launched from early 2017 to share these
with members and stakeholders, and it is hoped
that these will improve the Institute’s standing
and market if further in its quest to register all
unregistered accountants in Botswana. The
Institute hopes that the more the members are
aware of the value proposition and lifestyle
benefits, the more they will use them and thus
serve as marketing agents for BICA.
OUTREACH PROJECTS
BICA participated at the following events as a way
of reaching out to create awareness and actively
engage with its stakeholders;
• Human Resource Development Council Fair –
winning the first prize
• Ledumang CJSS Career Fair
• Consumer Fair – winning the first prize
• Botho University Career Fair
• University of Botswana Expo
• University of Botswana Freshmen’s Expo
• Mookane CJSS Prize Giving Ceremony – the
Institute sponsored prizes for best students in
Commerce and Accounting to cultivate interest
among students to pursue accounting as a
career.
41
A N N U A L R E P O R T 2 0 1 6
MARKETING AND COMMUNICATIONS STRATEGY
The Institute engaged the services of a marketing
agency in June 2016 to assist with the development
and execution of a marketing strategy that will
enhance the Institute’s brand. The strategy, which
focuses more on the positioning of the BICA
Qualification as well as membership growth, will be
implemented from the beginning of 2017.
The Institute further undertook brand perception
and stakeholder satisfaction surveys in October
2016. The surveys aimed to establish baselines
regarding among others a stakeholder satisfaction
and brand perception whose findings will aid the
Institute’s short and long term strategic plan. The
results revealed that the institute was doing badly
in terms of stakeholder satisfaction and brand
perception indices. The brand perception index
stood at 47% while the stakeholder satisfaction
index stood at 53%. These unsatisfactory results
have triggered the Institute to formulate and
execute turn around strategies to address all
anomalies identified.
SPORTING AND SOCIAL ACTIVITIES
Sporting and social events continued to afford members an opportunity to network and interact with
professional colleagues from other organizations. The events also enabled the Institute to reinforce
its relationship with its stakeholders through their sponsorship and coordination of such events. The
following events were held successfully in 2016;
EVENT SPONSOR
Pool Botswana Accountancy College
Basketball Ernst & Young
Soccer Pricewaterhousecoopers
Table Tennis Botho University
Cricket Grant Thornton
Up-Kgale Challenge KPMG
The Auditor General sponsored netball tournament and the Deloitte sponsored golf tournament were not
held in 2016 due to the former moving office, while the latter could not secure the venue.
Lastly, I wish to take this opportunity to thank all the members of the Administrative Committee and the
Secretariat for their continued support and dedication to the Committee’s mandate.
Zaeem AnwarCHAIRPERSON
Administrative Committee [Continued]
42
43
A N N U A L R E P O R T 2 0 1 6
Public Sector Committee
[Seating: left to right ] Regina Ramanteba, Christian J. Mbekomize, Betty Skelemani, George Kiilu
[Standing] Lilly G. Matenge, Dingiswayo Sikunyane, Gasego Motsamai, Mark Sims, Jayn Phalalo.
[Not in picture] Jeannete Makgolo, Ronald Phole, Verily Molatedi, Dimpho Seleka, Motlalepula Kabomo,
Madhavan Ventakachary, Obed Nokane, Boitumelo Mbaakanyi, Aubrey Mbewe, Kagiso Balopi
44
Office of the Accountant General. The objective of
such MoU is to create a formal basis for cooperation
and collaboration between the Office of the
Accountant General and BICA for the advancement
of high quality public financial management and
reporting within the Government of Botswana
through joint activity in areas including, but not
limited to:
• Advocacy for public financial management and
financial reporting reforms in Botswana,
• Cooperation in the development of solutions to
meet capacity needs in Government,
• Consideration of other options for working
together to promote public financial
management reforms
The Committee has been exploring various options
to assist the Office of the Accountant General
with finding solutions to train the finance staff
of the Government of Botswana on basic accrual
accounting as well IPSASs as they transition from
cash to accrual accounting. The high prices quoted
by the parties contacted to assist and the lack of in-
house capacity to draw up the training programme
to support implementation of accruals accounting
for the Government of Botswana have hindered
the achievement of this milestone. However, at
the time of preparation of the annual report, a sub-
The mandate of the BICA Public Sector
Committee (PSC) is to influence and
empower all stakeholders in the Public Sector
Accounting fraternity, namely the Accountant
General, the Ministry of Finance and Economic
Development, the Auditor General, Institute of
Directors, Institute of Internal Auditors, Local
Government and professional bodies such as
the International Public Sector Accounting
Standards Board (IPSASB) and the International
Organisation of Supreme Audit Institutions
(INTOSAI).
It has been a very challenging year for the Public
Sector Committee as the recruitment of the Public
Sector Director did not occur and this continued
to be an impediment for the Committee to fully
execute its mandate. The BICA Council then took
the decision to merge this position with that of the
Technical Director to become one and a candidate
has since been identified who will commence duty
from the 1st April 2017.
Having said that, the Institute continued to engage
with the Office of the Accountant General and a
Memorandum of Understanding (MoU) has been
drafted and awaits signing by both BICA and the
committee of the PSC was set up and tasked with
developing the training programme. BICA plans
to utilise the services of local training delivery
partners to deliver the programme once the design
and development are complete.
My sincere appreciation goes to all members of
the Public Sector Committee who served in the
Committee during the year and encourage them
to continue showing commitment to achieve the
Committee’s mandate. I would also like to thank the
BICA Council for their support and the Secretariat
who ensured that the Committee`s decisions were
implemented.
We look forward to a very busy year in 2017 for
the Public Sector Committee with the hope that
the recruitment of the Technical & Public Sector
Accounting Director would be concluded to assist
the Committee in fulfilling the mandate of BICA in
accordance with the new Strategic Plan for 2017-
2021.
Gosego MotsamaiCHAIRPERSON
45
A N N U A L R E P O R T 2 0 1 6
Northern Committee
[Seating: left to right ] Michel Katombe, Moabwa Dinyando, Christopher Makombe
[Standing] Thato Thipe, Anatha Padmanaban, Emmanuel Marufu, Phenyo Matenge, Jonathan Msiska
[Not in picture] Venkata Subba Rao Paluri, Raphinos Mushayavanhu, Bradshaw Zinyemba,
Oabona Gabalaolwe, Wame Mothibi, Nicholas Mauze
46
visited several non-registered accountants were
reminded about the need to abide by the Accountants
Act and it is hoped that they will comply.
PRESIDENT’S COCKTAIL
Once more BICA members and stakeholders graced the
President’s cocktail to welcome the new BICA President
Rudi Binedell and the new council. The cocktail is held to
introduce the new President and Council to the members
and stakeholders.
CONTINUOUS PROFESSIONAL DEVELOPMENT (CPD)
As part of its awareness campaign, BICA organised CPD
events which also served as induction for new Accounting
Technician members in Palapye, Francistown and Maun.
Adding to these, a free CPD event was conducted as
way to assist members increase compliance to CPD
requirements by the Institute.
Furthermore, thirteen (13) CPD events were planned
this year with only nine (9) taking place as the others
had to be cancelled due to low numbers. The increase in
registered members made these CPD events a success.
The CEO’s visit during the Business Botswana conference
culminated in a meeting between the Northern
committee and the Francistown Secretariat. Discussions
revolved around initiatives to improve CPD events in the
North, and it is hoped that these will be implemented
from 2017.
The Northern Committee is an integral part
of BICA whose mandate is to drive the BICA
strategy and ensure the Institute’s growth
in the Northern region by increasing the
Institute’s visibility and servicing its clientele
in the region. I present the report for 2016 on
behalf of the Committee as follows;
BICA NORTHERN REGION MARKETING AND AWARENESS CAMPAIGN
BICA continued its sensitisation campaign through
the various career fairs that were organised in the
North. Some of the notable attended career fairs
were at Botho University and Ba Isago University.
University qualifications are an entry point into the BICA
qualification and therefore the universities serve as key
stakeholders for the profession.
The Business Botswana Northern Fair was another
platform where BICA displayed outstanding increase in
its exposure and perception and scooped position one
(1) in the Professional Bodies and Associations Category.
In Maun, BICA Secretariat visited a good number of
accountants from various organisations. During such
visits, it was realised that the Institute’s efforts to create
awareness have to be increased. In the organisations
CORPORATE SOCIAL RESPONSIBILITY
The Northern Committee members, past and present,
raised funds for a good cause, which is to give back
to the community in which the Institute conducts its
business. Through those funds, the Institute through
the Committee procured and donated a photocopying
machine to the Francistown Society for the Deaf.
SOCIAL ACTIVITIES
The annual BICA family fun day keeps on getting better
and better. This year, with the assistance of a number
of sponsors, the Institute held another successful
event. Stakeholders and members came together at this
social event to show dedication to the profession by
networking and interacting in a less formal environment.
ACKNOWLEDGMENTS
I wish to express my gratitude for the commitment,
dedication and sacrifice that the Northern Committee
members have displayed in driving the BICA mandate in
the North. My gratitude also goes to the BICA Council,
the CEO and the entire Secretariat for their support.
Thank You!
Michel KatombeCHAIRPERSON
47
A N N U A L R E P O R T 2 0 1 6
4848
49
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
50 Statement of responsibility
51 Report of Independent Auditors
53 Statement of Profit or Loss and Other Comprehensive Income
54 Statement of Financial Position
55 Statement of changes in accumulated funds
56 Statement of Cash Flows
62 Accounting policies
72 Notes to the Financial Statements
Statement of responsibility 31 DECEMBER 2016
Council’s approval of Annual Financial Statements
The Council is responsible for the preparation
and fair presentation of the annual financial
statements of the Botswana Institute of Chartered
Accountants (“the Institute”). These financial
statements comprise the Statement of Financial
Position at 31 December 2016, the Statement
of Comprehensive Income, the Statement of
Changes in Accumulated Funds, the Statement of
Cash Flows for the year then ended, a summary of
significant accounting policies, and notes to the
annual financial statements.
The Institute’s annual financial statements are
prepared in accordance with International Financial
Reporting Standards (IFRS). They are based on
appropriate accounting policies that have been
consistently applied and that are supported by
reasonable and prudent judgments, including
judgments involving estimations. The going
concern basis has been adopted in preparing the
Institute’s annual financial statements. Based on
forecasts and available cash resources, the Council
has no reason to believe that the Institute will not
be a going concern in the foreseeable future.
The Council is also responsible for designing,
maintaining and implementing the systems of
internal controls of the Institute. These systems are
designed to provide reasonable, but not absolute,
assurance as to the reliability of the Institute’s
annual financial statements and to adequately
safeguard, verify and maintain accountability of
assets. These controls are monitored throughout
the Institute by management and employees with
the necessary segregation of authority and duties.
Processes are in place to monitor internal controls,
identify material breakdowns, and implement
timely corrective action.
The Council is also responsible for ensuring
that all the financial and other provisions of the
Accountants Act, 2010 and BICA rules are complied
with. Nothing has come to the attention of the
Council which contravenes the provisions of the
above Act and/or rules.
The Council is also responsible for the compilation
and presentation of the other information
contained in this report. The other information
comprises the President’s Report, the Reports from
various Committees and the Council’s Report.
The Institute’s annual financial statements have
been audited by an independent audit firm who
reports to the members of the Institute, was given
unrestricted access to all financial records and
related data including minutes of meetings of the
Council and other meetings of various Committees.
The Council believes that all representations made
to the independent auditors during their audit
were valid and appropriate.
Events after the end of the reporting period
There were no material events that occurred
after the end of the reporting period that require
adjustment to the statement of comprehensive
income or the statement of financial position,
or that require disclosure in the annual financial
statements.
Approval of annual financial statements
Against this background, the annual financial
statements of the Institute set out on pages 53
to 87 were approved by the Council on 08 March
2017 were simultaneoulsy authorised for issue
as of that date, and are signed on its behalf by
Rudi Binedell Peo Pillar
President Treasurer
Gaborone
5050
Report of the Independent AuditorsTO THE MEMBERS OF THE 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 53 to 87, which
comprise the statement of financial position as
at 31 December 2016, and the statement of
comprehensive income, statement of changes
in equity 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 is 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 control 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.
Auditors’ 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 auditors’ 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 control relevant to the entity’s
preparation and fair presentation of the financial
statements in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control.
An audit also includes evaluating the
appropriateness of accounting policies used and
the reasonableness of accounting estimates made
by management, as well as evaluating the overall
presentation of the financial statements.
51
A N N U A L R E P O R T 2 0 1 6
51
Report of the Independent Auditors [continued]
TO THE MEMBERS OF THE BOTSWANA INSTITUTE OF CHARTERED ACCOUNTANTS
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 of 31 December 2016, 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:
• We have received all information and
explanations which, to the best of our
knowledge and belief, were necessary for the
performance of our duties;
• The accounts and related records of the Institute
have been properly kept;
• The Institute has complied with all the financial
provisions of the Accountants Act with which it
is the duty of the Institute to comply; and
• The statement of accounts prepared by the
Institute was prepared on a basis consistent
with that of the preceeding year and represents
a true and fair view of the transactions and
financial affairs of the Institute.
Other information
In connection with our audit of the Institute’s
annual financial statements, our responsibility is to
read the other information and, in doing so, consider
whether the other information is materially
inconsistent with the annual financial statements
or our knowledge obtained during 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.
122 Gaborone International Finance Park Goel & Associates
Kgale Hill Audit Firm of Public Interest Entity (FAP 009 2017)
PO Box 60552 Practicing Member: Sanjay Goel
Gaborone Certified Auditor of Public Interest Entity
8 March 2017 BAOA Certificate Number: CAP 0027 2017
52
Statement of Profit or Loss and other Comprehensive IncomeFOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015
Notes Pula Pula
Continuing operations
Income
Revenue earned from services 1 13 131 757 10 452 225
Government subvention 2 4 554 143 6 100 000
Rental income 20.2 797 750 720 715
Other income 3 612 705 569 033
Recognition of deferred capital grant 16 147 059 147 059
19 243 414 17 989 032
Operating expenses
Administration expenses 4 5 799 073 4 807 117
Occupancy costs 5 443 361 449 657
Public relations expenses 6 2 553 667 2 041 392
Training and professional development expenses 7 4 684 676 3 313 912
Staff costs 8 7 064 760 6 234 614
20 545 537 16 846 692
Operating (deficit)/surplus (1 302 123) 1 142 340
Net finance income 9 136 421 250 531
Net (deficit)/surplus for the year (1 165 702) 1 392 871
The accounting policies and explanatory notes on pages 62 through 71 form an integral part of the financial statements.
53
A N N U A L R E P O R T 2 0 1 6
Statement Of Financial Position AT 31 DECEMBER 2016
2016 2015Notes Pula Pula
ASSETSNon-Current AssetsProperty, plant and equipment 10 11 123 618 11 852 711 Intangible assets 11 45 144 172 584 Deferred operating lease 12 33 842 49 674
11 202 604 12 074 969
Current AssetsInventories 13 235 058 681 345 Trade and other receivables 14 2 093 287 2 055 400
Cash and cash equivalents 15 8 839 361 7 237 558
11 167 706 9 974 303
TOTAL ASSETS 22 370 310 22 049 272
RESERVES AND LIABILITIESReservesAccumulated surplus 10 856 626 12 022 328
Non-Current LiabilitiesDeferred capital grant 16 3 970 587 4 117 646
Current LiabilitiesTrade and other payables 17 4 600 109 3 807 373
Deferred income 18 2 942 988 2 101 925
7 543 097 5 909 298
Total liabilities 11 513 684 10 026 944
TOTAL RESERVES AND LIABILITIES 22 370 310 22 049 272
The accounting policies and explanatory notes on pages 62 through 71 form an integral part of the financial statements.
54
Statement of Changes in Accumulated FundsFOR THE YEAR ENDED 31 DECEMBER 2016
Statement of Changes in Reserves
Accumulated Surplus
Balance at 1 January 2015 10 629 457
Changes in equity for 2015:
Surplus for the year 1 392 871
Balance at 31 December 2015 12 022 328
Changes in equity for 2016:
Deficit for the year (1 165 702)
Balance at 31 December 2016 10 856 626
The accounting policies and explanatory notes on pages 62 through 71 form an integral part of the financial statements.
55
A N N U A L R E P O R T 2 0 1 6
Statement of Cash Flows FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015Notes Pula Pula
CASH FLOWS FROM OPERATING ACTIVITIES:
(Deficit)/surplus for the year (1 165 702) 1 392 871
Adjustments for:
Net finance income 9 136 421 ( 250 531)
Depreciation of property and equipment 10 932 312 904 655
Amortisation of intangible assets 11 126 065 96 649
Loss on disposal of non-current assets 4 21 405 -
Loss on write-off of intangible assets 4 1 375 -
Movement in deferred operating lease 12 15 832 ( 1 494)
Recognition of deferred capital grant 16 ( 147 059) ( 147 059)
Surplus before working capital changes 352 193 1 995 091
Movement in inventory 446 287 ( 681 345)
Movement in trade and other receivables ( 37 887) 489 282
Movement in trade and other payables 792 736 629 863
Movement in deferred income 841 063 ( 304 870)
Cash generated from operations 1 690 006 2 128 021
56
Statement of Cash Flows [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015Notes Pula Pula
CASH FLOWS IN INVESTING ACTIVITIES:
Purchase of property and equipment ( 224 624) (1 119 622)
Investment in intangible assets - ( 119 544)
Net finance income 136 421 250 531
Cash flows in investing activities ( 88 203) ( 988 635)
Net increase in cash and cash equivalents 1 601 803 1 139 386
Cash and cash equivalents at beginning of the year 7 237 558 6 098 172
Cash and cash equivalents at end of the year 8 839 361 7 237 558
Represented by:
Balances with bank and on hand 4 473 637 4 568 727
Short Term Investments 4 365 724 2 668 831
Cash and cash equivalents 8 839 361 7 237 558
The accounting policies and explanatory notes on pages 62 through 71 form an integral part of the financial statements.
57
A N N U A L R E P O R T 2 0 1 6
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
General information
The Botswana Institute of Chartered Accountants
(BICA) (“the Institute”) is a body corporate
with perpetual succession and a common seal,
established by an Act of Parliament of Botswana.
The addresses of its registered office and principal
place of business and its principal activities are
disclosed in the general information page of these
financial statements.
Adoption of new and revised Standards
St a n d a rd s , A m e n d m e n t s a n d Interpretations
effective in the current period for the first time, but
are either not material to the amounts reported
and/or disclosed in the financial statements or are
not relevant to the Institute’s operations
The following new and revised IFRSs issued by
the IASB have been applied in the current period,
which are mandatorily effective for an accounting
period that begins on or after 1 January 2016. The
Institute has not early adopted any other standard,
interpretation or amendment that has been issued
but is not yet effective. The nature and effect of
these changes are disclosed below.
Amendments to IAS 1: Disclosure InitiativeThe Institute has applied these amendments for
the first time in the current year. The amendments
clarify that an entity need not provide a specific
disclosure required by an IFRS if the information
resulting from that disclosure is not material, and
give guidance on the bases of aggregating and
disaggregating information for disclosure purposes.
However, the amendments reiterate that an entity
should consider providing additional disclosures
when compliance with these specific requirements
in IFRS is insufficient to enable users of financial
statements to understand the impact of particular
transactions, events and conditions on the entity’s
financial position and financial performance.
In addition the amendments clarify that an
entity’s share of the other comprehensive income
of associates and joint ventures accounted for
using the equity method should be presented
separately from those arising from the Institute,
and should be separated into the share of items
that, in accordance with other IFRSs: (i) will not be
reclassified subsequently to profit or loss and (ii)
will be reclassified to profit or loss when specific
conditions are met.
As regards the structure of the financial statements,
the amendments provide examples of systematic
ordering or grouping of the notes.
The application of these amendments has not
resulted in any impact on the financial performance
or financial position of the Institute.
Amendments to IAS 16 and IAS 38: Clarification of Acceptance Methods of Depreciation and AmortisationThe Institute has applied these amendments for
the first time in the current year. The amendments
to IAS 16 prohibit entities from using revenue-
based depreciation method for the items of
property, plant and equipment .The amendments
to IAS 38 introduce a rebuttable presumption that
revenue is not an appropriate basis for amortisation
of an intangible asset. This presumption can
only be rebutted in the following two limited
circumstances:
a) When the intangible asset is expressed as a
measure of revenue; or
b) When it can be demonstrated that the
revenue and consumption of the economic
benefits of the intangible asset are highly
correlated.
As the Institute already uses the straight – line
method for depreciation and amortisation for its
property, plant and equipment, and tangible asset
respectively, the application of these amendments
have had no impact on the Institute’s annual
financial statements.
58
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
Amendments to IFRSs Annual Improvements to IFRSs 2012-2014 Cycle
Standard Amendment Impact on the these financial statements
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Changes in methods of disposal: The amendments to IFRS 5 introduce specific guidance in IFRS 5 for when an
entity reclassifies an asset (or disposal group) from held for sale to held for distribution to owners (or vice versa).
The amendments clarify that such a change should be considered as a continuation of the original plan of disposal
and hence requirements set out in IFRS 5 regarding the change of sale plan do not apply. The amendment also
clarifies the guidance for when held-for-distribution accounting is discontinued.
The application of this
amendment has had no
effect on the Institute’s
financial statements.
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Servicing contracts: The amendments (i) provide additional guidance to clarify whether a servicing contract is
continuing involvement in a transferred asset for the purpose of the disclosures required in relation to transferred
assets; and (ii) clarify that the offsetting disclosures are not explicitly required for all interim periods. However,
the disclosures may need to be included in the condensed interim financial statements to company with IAS 34:
Interim Financial Reporting.
The application of this
amendment has had no
effect on the Institute’s
financial statements.
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Discount rate: Regional market issue: The amendments clarify that the high quality corporate bonds used to
estimate the discount rate for post-employment benefits should be issued in the same currency as the benefits
to be paid. These amendments would result in the depth of the market for high quality corporate bonds being
assessed at currency level.
The application of this
amendment has had no
effect on the Institute’s
financial statements.
59
A N N U A L R E P O R T 2 0 1 6
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
Other standards, amendments and interpretations
which are effective for the financial year beginning
on 1 January 2016 are not applicable to the
Institute and have therefore not been included in
the discussion above.
1 . 2 St a n d a rd s , A m e n d m e nt s a n d Interpretations to existing standards in issue not yet effective and have not been early adopted by the Institute
Below is a list of new standards, amendments to
existing standards and interpretations that are
not yet mandatorily effective (but allow early
application) for the year ended 31 December
2016. The Council anticipates that all of the above
Standards and Interpretations will be adopted
in the Institute’s financial statements for the
period commencing 1 January 2017 or later as
and when these Standards and Interpretations
become applicable. The scope, effective dates
and the impact on the financial statements
upon their adoption of the above Standards and
Interpretations are discussed below.
Standard/Amendment/Interpretation Scope
Applicable for annual periods beginning on or after
Amendments to IAS 7 Disclosure Initiative
The amendment requires an entity to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities.
The Council does not anticipate that the application of the amendment will have a material impact on the
Institute’s annual financial statements.
1 January 2017 with earlier
application permitted.
IFRS 9 Financial Instruments (as revised in 2014)
In July 2014, the IASB Finalised the reform of Financial Instruments accounting and issued IFRS 9 (as revised in
2014), which contains the requirements for a) the classification and measurement of financial assets and liabili-
ties, b) the impairment methodology and c) general hedge accounting. IFRS 9 (as revised in 2014) will supersede
IAS 39 Financial Instruments; Recognition and Measurement upon its effective date
1 January 2018
IFRS 15 Revenue from contracts with customers
This IFRS deals with revenue recognition and establishes principles for reporting useful information to users
of financial statements about the nature, amounts, timing and uncertainty of revenue and cash flows arising
from an entity’s contracts with customers. Revenue is recognised when a customer obtains control of a good or
service and thus has the ability to direct the use and obtain the benefits from the good or service. The Standard
replaces IAS 18 Revenue and related interpretations.
The Institute currently does not have any such contracts but shall review the impact of IFRS 15.
1 January 2018
60
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
Standard/Amendment/Interpretation Scope
Applicable for annual periods beginning on or after
IFRS 16 Leases IFRS 16 introduces a comprehensive model for the identification of lease arrangements and accounting for both lessors and lessees. IFRS 16 will supersede the current lease guidance including IAS 17: Leases and the related
interpretations when it becomes effective.
IFRS 16 distinguishes leases and service contracts on the basis of whether an identified asset is controlled by a customer. Distinctions of operating leases (off balance sheet) and finance leases (on balance sheet) are removed for lessee accounting, and is replaced by a model where a right-of-use asset and a corresponding liability have to be
recognised for all leases by lessees (i.e. all on balance sheet) except for short-term leases of low value assets.
The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and impairment losses, adjusted for any re-measurement of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications, amongst others. Furthermore, the classification of cash flows will also be affected as operating lease payments under IAS 17 are presented as operating as cash flows; whereas under the IFRS 16 model, the lease payments will be split into a
principal and an interest portion which will be presented as financing and operating cash flows respectively.
In contrast to lessee accounting, IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17,
and continues to require a lessor to classify a lease either as an operating lease or a finance lease.
Furthermore, extensive disclosures are required by IFRS 16.
As at 31 December 2016, the Institute has non-cancellable operating lease commitments of P572 792 (note 20). IAS 17 does not require the recognition of any right-to-use asset or liability for future payments for these leases; instead, certain information is disclosed as operating lease commitments in note 21. A preliminary assessment indicates that these arrangements will meet the definition of a lease under IFRS 16, and hence the Institute will recognise a right-of-use asset and a corresponding liability in respect of all these leases unless they qualify for low value or short-term leases upon the application of IFRS 16. The new requirement to recognise a right-of-use asset and a related liability is expected to have a significant impact on the amounts recognised in the Institute’s financial statements and the Council is currently assessing its potential impact. It is not practicable to provide a reasonable
estimate of the financial effect until the Council has completed the review.
In contrast, the new provisions for finance lease where the Institute is a lessee are not applicable to the Institute as
the Institute does not have any significant finance leases.
1 January 2019 with earlier
application permitted
There are other amendments to IFRSs that are not yet effective but are not likely to have any material impact on the Institute and have therefore not been included in the table above.
61
A N N U A L R E P O R T 2 0 1 6
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
ACCOUNTING POLICIES
Index to Accounting Policies Page
Statement of compliance 63
Basis of preparation and presentation 63
Critical accounting judgments and key sources of estimation uncertainty 63
A Cash and cash equivalents 64B Employee benefits 64C Foreign currency translation 65D Financial instruments 65E Property and equipment 66F Depreciation 67G Impairment of non-financial assets 67H Inventories 68I Leases 68J Intangible assets 68K Lease Rights 69L Tax 69M Provisions 69N Revenue recognition 69O Government grants 70P Related party transactions 71Q Value added tax (VAT) 71
62
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
Statement of complianceThe financial statements have been prepared in
accordance with International Financial Reporting
Standards (IFRSs) adopted by the International
Accounting Standards Board (IASB) which comprise
IFRS, International Accounting Standards (IAS) and
Interpretations originated by the International
Financial Reporting Interpretations Committee
(IFRIC) or the former Standing Interpretations
Committee (SIC).
Basis of preparation and presentationThe financial statements are presented in Botswana
Pula (BWP or P), which is also the functional
currency. The financial statements, which assume
a going concern basis, have been prepared using
the accrual basis of accounting, except for cash
flow information. Further, the financial statements
have been prepared under the historical cost basis
except for certain financial instruments that are
measured at revalued amounts or fair values at the
end of each reporting period, as explained in the
accounting policies below.
Historical cost is generally based on the fair value
of the consideration given in exchange for goods
and services.
Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants
at the measurement date, regardless of whether
that price is directly observable or estimated using
another valuation technique. In estimating the fair
value of an asset or a liability, the Institute takes
into account the characteristics of the asset or
liability if market participants would take those
characteristics into account when pricing the asset
or liability at the measurement date. Fair value
for measurement and/or disclosure purposes in
these annual financial statements is determined
on such a basis, except for share-based payment
transactions that are within the scope of IFRS 2,
leasing transactions that are within the scope
of IAS 17, and measurements that have some
similarities to fair value but are not fair value, such
as net realizable value in IAS 2 or value in use in
IAS 36.
Critical accounting judgments and key sources of estimation uncertainty
Critical accounting judgements in applying the Institute’s accounting policiesIn the application of the Institute’s accounting
policies the Council is required to make judgements
apart from those involving estimations (see note
below), that they have made in the process of
applying the entity’s accounting policies. These
judgements are based on management’s best
estimates. There areas where critical accounting
judgements are as stated below:
Key areas of estimation uncertaintyThe preparation of financial statements in
accordance with IFRSs requires the use of certain
critical accounting estimates and assumptions.
These estimates and assumptions are based on
management’s best knowledge of the relevant
facts and circumstances taking into account
previous experience, but actual results may
materially differ from the amounts included in
the financial statements. The following are key
assumptions concerning the future, and other key
sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a
material adjustment to the carrying amounts of
assets and liabilities within the next financial year:
63
A N N U A L R E P O R T 2 0 1 6
Residual values and useful lives of Property, plant and equipmentAs described in note 2 (Accounting Policies) above,
the Institute reviews the estimated useful lives
and residual values of property and equipment at
the end of each annual reporting period. During
the financial year, the Council determined that the
residual lives of all assets of the Institute will have
no residual values of any significance at the end of
their useful lives; such useful lives being stated in
the Institute’s accounting policy on property and
equipment.
Use of leasehold land and buildingsThe Institute has leased out less than 10% of its
office building to third parties. In accordance with
IAS 40, the portion of the property which is leased
out, if saleable, should be classified as Investment
Properties. The Institute has not sectionalised its
land and buildings. It is also of the view that the
office property was developed for self-use by the
Institute, and is being rented out temporarily to
provide a return to the stakeholder. As the Institute
increases its services, it will utilize the currently
leased office premises for self-use, and hence has
classified all the leasehold land and buildings as
Property and Equipment under IAS 16.
Impairment of trade receivables The Institute assesses its seminar receivables for
impairment at the end of each reporting period. In
determine whether an impairment loss on seminar
receivables should be recorded in profit or loss, the
Institute makes judgements as to whether there is
observable data indicating a measurable decrease
in the estimated future cash flows from a financial
asset.
This evidence may include observable data
indicating that there has been an adverse change in
the payment status of debtors, or national or local
economic conditions. The impairment for seminar
receivables is calculated based on historical loss
ratios, adjusted for national and industry- specific
economic conditions and other indicators present
at the reporting date that correlate with defaults
on the portfolio.
Provisions for employee benefitsIn determining the liability for long-service
employee benefit (note 17), management has
made an estimate of how many employees will
leave employment in the next financial year, to
arrive at the current portion of the liability.
Management has decided to be prudent and
conservative in classifying the entire amount as a
current liability. (see note 17.3)
The financial statements incorporate the
accounting policies set out below, which have been
consistently applied in all material aspects to all the
years presented.
A Cash and cash equivalents Cash and cash equivalents include cash in hand,
deposits held at call with banks, other short-
term highly liquid investments with original
maturities of less than three months, and bank
overdrafts. Cash and cash equivalents are
carried in the statement of financial position
at fair value.
B Employee benefits Salaries, wages, social costs, paid annual leave,
paid sick leave, performance bonuses payable
within twelve months of the end of the
period, non-monetary benefits and workmen's
compensation insurance, payable to current
employees of the Institute, are recognized
when they accrue and are disclosed as short-
term employee benefits.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
64
Employees include full-time, part-time,
permanent, casual or temporary employees.
Employees also include the Executive
management personnel, but do not include
Council members who offer honorary services
to the Institute.
Pension fund contribution The Institute contributes to a defined pension
contribution plan for its employees. It makes
contributions to the Mompati Retirement
Annuity Fund administered by Botswana
Life Insurance Limited (BLIL). This operates
like 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.
For those employees who do not participate
in this Retirement Annuity Fund, provision is
made for statutory severance benefit in terms
of the Employment Act (Cap 47:01).
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 cost to the Institute at
the year end.
Contractual gratuity Contract staff members of the Institute
are entitled to gratuities at the end of their
contracts at the rates and in accordance
with the terms specified in their contracts of
employment. Gratuities are recognized at the
end of each financial year as they are accrued
and a provision is made up to the end of each
reporting period which approximates the
liability estimated as the employee renders
services to the Institute.
C Foreign currency translation The Institute’s presentation and functional
currency is the Botswana Pula.
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.’
At each reporting date, monetary assets and
liabilities denominated in foreign currencies
are converted using year-end spot foreign
exchange rates. Non-monetary assets
and liabilities carried at fair value that are
denominated in foreign currencies are
converted using foreign exchange rates
prevailing at the date when the fair value was
determined. Non-monetary items that are
measured in terms of historical cost in a foreign
currency are translated using the exchange
rate at the date of the transaction.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
65
A N N U A L R E P O R T 2 0 1 6
D Financial instruments Classification The Institute classifies its non-derivative
financial assets in the following categories:
• Financial assets at fair value through
profit or loss
• Loans and receivables
• Held-to-maturity investments, and
• Available-for-sale financial assets.
The classification depends on the purpose
for which the financial assets were acquired.
The Council determine the classification of
its investments at initial recognition and re-
evaluate this designation at each reporting
date.
Financial instruments are recognised on the
balance sheet on the trade date, the date
on which the Institute becomes a party to
the contractual provisions of the financial
instrument.
All financial instruments are required to be
classified and measured at fair value on initial
recognition. Measurement in subsequent
periods is dependent upon the classification of
the financial instrument.
During the year all financial assets were held
under the loans and receivables category.
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 reporting date, which are classified as
non-current assets.
The Institute’s loans and receivables comprise
trade and other receivables, 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.
Interest is recognised by applying the effective
interest rate.
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
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
66
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.
Financial liability at amortized cost Financial liabilities are measured at amortized
cost using the effective interest method.
Bank debt and long-term debt are recognised
initially at fair value, net of any transaction
costs incurred, and subsequently at amortized
cost using the effective interest method.
The effective interest method is a method of
calculating the amortized cost of a financial
liability and of allocating interest expense
over the relevant period. The effective
interest rate is the rate that exactly discounts
estimated future cash payments through
the expected life of the financial liability, or
(where appropriate) a shorter period, to the net
carrying amount on initial recognition.
E Property and equipment Leasehold land and buildings held for use for administrative purposes are stated in the statement of
financial position at cost, less accumulated depreciation and accumulated impairment losses.
All other property and equipment are stated at cost, less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the
items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with the
item will flow to the Institute and the cost of the item can be measured reliably. All other repairs and
maintenance expenditures are charged to the income statement during the financial period in which
they are incurred.
Gains or losses arising on the disposal or retirement of an item of property and equipment is determined
as the difference between the sale proceeds and the carrying amount of the asset and is recognised
in profit or loss.
F Depreciation Depreciation is calculated using the straight-line method to allocate the cost or valuation of each
asset over the useful life of the asset as follows:
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
Leasehold land the shorter of 50 years or remaining lease period
Leasehold building the shorter of 50 years or remaining lease period
Furniture, fittings and equipment 4 years
Computer equipment 4 years
Office equipment 4 years
Motor Vehicle 4 years
Leasehold improvements 5 years
67
A N N U A L R E P O R T 2 0 1 6
Leasehold improvements are depreciated over
the shorter of their estimated useful lives or
the term of the related lease.
The asset's residual values, useful lives and
methods of depreciation are reviewed, and
adjusted if appropriate, at each financial year
end and accounted for on a prospective basis.
Major renovations are depreciated over the
remaining useful life of the related asset or
to the date of the next major renovation,
whichever is sooner.
An item of property and equipment is
derecognised upon disposal or when no future
economic benefits are expected from its use
or disposal. Any gain or loss arising on de-
recognition 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 derecognised.
G 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.
H Inventories Inventories are stated at the lower of cost
and estimated selling price less costs to
complete and sell. Inventories comprise of
BICA qualification text books held for sale by
the Institute.
The cost of books comprises of the costs of
purchase and other costs incurred in bringing
the books to their present location and
condition. Selling costs are excluded.
Cost is determined on a first-in and first-out
(FIFO) basis.
The above text books undergo impairment
when a revised amendment is announced or
an updated text book is released. The carrying
amount of such an item of text book is reduced
to nil, such impairment loss being recognised
immediately in profit or loss.
At the end of each reporting period, the
Institute assesses whether any other
inventories are impaired, i.e. the carrying
amount is not fully recoverable (e.g. because
of damage, obsolescence or declining selling
prices) by comparing the carrying amount of
each item of inventory, or group of similar items,
with its selling price less costs to complete and
sell. If an item, or group of items, of inventory
is impaired, the Institute reduces the carrying
amount of such inventory to its selling price
less costs to complete and sell, and recognizes
such reduction, which is an impairment loss,
immediately in profit or loss.
When inventories are sold, the Institute
recognizes the carrying amount of those
inventories as an expense in the period in
which the related revenue is recognized.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
68
I Leases 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.
The Institute had operating leases both as a
lessor and as a lessee.
Institute as a lessor 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 profit
or loss and other comprehensive income.
Institute as a lessee The Institute has entered into an operating
lease for its satellite office in Francistown.
The payments are recognised as an expense
in the Statement of profit or loss and other
comprehensive Income on a straight line over
the lease term. 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. Contingent rentals
arising under operating leases are recognised
as an expense in the period in which they are
incurred.
J Intangible assets Intangible assets comprise of 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 amortized over their useful lives on a
straight-line basis, 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.
K 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
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 lessor 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.
L Tax 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.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
69
A N N U A L R E P O R T 2 0 1 6
M 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 balance
sheet date, taking in to 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.
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
N 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:
i.) 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.
ii.) Seminar, workshop and conference
revenues relate to fees charged by the Institute
to individuals for participation in professional
development and similar professional events.
The income is recognized at the conclusion of
the specific event for which fees was received.
iii.) 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.
iv.) Fees for accreditation to the BICA
qualification are recognized over the applicable
course study period.
v.) Income from sale of BICA books and study
materials is recognised when all the following
conditions are satisfied:
a) The Institute has transferred to the
buyer the significant risks and rewards of
ownership of the goods;
b) The Institute retains neither continuing
managerial involvement to the degree
usually associated with ownership nor
effective control over the goods sold; and
c) The costs incurred or to be incurred
in respect of the transaction can be
measured reliably.
vi.) Government subvention is recognised
in the statement of comprehensive income
according to the policy on Government grants
as described in note O below.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
70
Rental income The Institute has entered into operating leases
with certain tenants while sub-leasing some
portions of its leasehold building. The receipts
are recognized on a straight line basis over the
term of the lease.
Other income Other income mainly comprises of receipts
from Annual Dinner Dance Event, AAT Annual
Awards Event, Income from sales of BICA
branded literature and merchandise, and
publication income from the sale of advertising
space in BICA’s quarterly magazine.
Event income is recognized when BICA hosts
the respective events.
Income from sales of BICA branded literature
and merchandise is recognised in the same
manner as if it is a sale of books and study
material as described above.
Income from the sale of advertising space in
the quarterly magazine is recognized when the
relevant advertisement is published.
Interest income Interest income is accrued on a time-proportion
basis using the effective interest method.
When a receivable is impaired, the Institute
reduces the carrying amount to its recoverable
amount, being the estimated future cash flow
discounted at original effective interest rate of
the instrument, and continues unwinding the
discount as interest income.
O Government 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.
P 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 to representation of up to
three members of the Institute's Council.
Transactions directly with the Government
of Botswana are treated as related party
transactions.
However transactions with entities related
to the Government of Botswana, such as the
Botswana Accountancy College, the University
of Botswana, the Botswana Unified Revenue
Services which are autonomous bodies on
their own, have not been treated as related
party transactions.
Q Value added tax (VAT) Revenue, expenses and assets are recognised
net of the amount of VAT, except where the
amount of VAT incurred is not recoverable from
the Botswana Unified Revenue Service (BURS).
In these circumstances the VAT is recognised
as part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables in the statement
of financial position are shown inclusive of
VAT. VAT receivable or payable at the end of
the reporting period is disclosed under other
receivables or other payables respectively.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
71
A N N U A L R E P O R T 2 0 1 6
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015Pula Pula
1 REVENUE EARNED FROM SERVICES
Membership fees received 6 256 089 4 731 423
Income from seminars and workshops 3 941 897 2 693 448
Services to other professional bodies 1 535 372 2 002 397
BICA admin fees, subscriptions and sale of books 1 398 399 1 024 957
13 131 757 10 452 225
2 GOVERNMENT SUBVENTION
Received from Government of Botswana 4 554 143 6 100 000
The Government of Botswana provides funding to cover running costs of the Institute by way of an annual
subvention from the Consolidated and Development Fund. An amount of P8 783 143 has been approved for
the financial year 2017/18. See note 19.
3 OTHER INCOME
Income from annual dinner dance fundraiser 218 464 148 527
Reimbursement of AAT annual award event expenses 186 786 194 468
Sale of publications 127 858 134 917
Sundry income 79 597 91 121
612 705 569 033
4 ADMINISTRATION EXPENSES 5 799 073 4 807 117
which includes the following:
- amortization of intangible assets (note 11) 126 065 96 649
- depreciation of property, plant and equipment 613 607 559 142
- loss on disposal of plant and equipment 21 405 -
- loss on write-off of intangible assets 1 375 -
72
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015Pula Pula
5 OCCUPANCY EXPENSES
Depreciation - leasehold land and buildings (note 10) 318 705 345 513
Rental payable Francistown satellite office 124 656 104 144
443 361 449 657
6 PUBLIC RELATIONS EXPENSES 2 553 667 2 041 392
which includes the following:
AGM, dinner dance and cocktail costs 737 711 671 033
Marketing and branding costs 1 242 123 994 115
7 TRAINING AND PROFESSIONAL DEVELOPMENT EXPENSES 4 684 676 3 313 912
which includes the following:
- inventory write-downs (note 13.2) 218 463 -
8 STAFF COSTS
Short-term employee benefits
Allowances, benefits and performance rewards 915 852 966 657
Leave pay 225 014 127 650
Group life cover,medical aid and uniform costs 101 704 122 806
Salaries and wages 4 467 867 3 933 551
Training, conferences and staff welfare 574 436 434 893
Post employment benefits
Gratuity and severence pay 561 012 378 690
Pension Fund contributions 218 875 270 367
7 064 760 6 234 614
73
A N N U A L R E P O R T 2 0 1 6
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015Pula Pula
8 STAFF COSTS
8.1 The average number of persons employed by the Institute during the year was 24 (2015: 22).
8.2 Included in the staff costs is remuneration paid to key management personnel (see note 19)
Short-term employee benefits 1 730 839 1 680 959
Post employment benefits 275 384 181 210
2 006 223 1 862 169
9 FINANCE INCOME / COSTS
Finance income 213 736 201 725
Exchange(loss)/ gain on cash and cash equivalents ( 77 315) 50 772
Finance costs - ( 1 966)
Net finance income 136 421 250 531
74
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
10 PROPERTY, PLANT AND EQUIPMENT
Leasehold Leasehold Furniture & Motor Computer & Leaseholdland buildings fittings vehicles office equip improvements Total
2016
Balance at 1 Jan 2016
Gross carrying amount 715 214 11 032 216 1 474 619 641 049 2 069 990 177 906 16 110 994
Acc depreciation ( 107 131) (1 733 618) (1 079 144) ( 287 992) ( 967 902) ( 82 496) (4 258 283)
Carrying amount 608 083 9 298 598 395 475 353 057 1 102 088 95 410 11 852 711
Additions at cost - - 78 218 - 101 703 44 703 224 624
Disposals at cost - - ( 125 239) ( 1 317) ( 316 940) ( 186) ( 443 682)
Depreciation on disposals - - 120 854 - 301 423 - 422 277
Depreciation charge ( 24 342) ( 294 363) ( 167 641) ( 48 567) ( 376 443) ( 20 956) ( 932 312)
Balance at 31 Dec 2016 583 741 9 004 235 301 667 303 173 811 831 118 971 11 123 618
At 31 Dec 2016
At cost 715 214 11 032 216 1 427 598 639 732 1 854 753 222 423 15 891 936
Acc depreciation ( 131 473) (2 027 981) (1 125 931) ( 336 559) (1 042 922) ( 103 452) (4 768 318)
Carrying amount 583 741 9 004 235 301 667 303 173 811 831 118 971 11 123 618
75
A N N U A L R E P O R T 2 0 1 6
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
10 PROPERTY, PLANT AND EQUIPMENT [continued]
Leasehold Leasehold Furniture & Motor Computer & Leaseholdland buildings fittings vehicles office equip improvements Total
2015
Balance at 1 Jan 2015
At cost 715 214 11 032 216 1 260 696 429 846 1 375 494 177 906 14 991 372
Accumulated depreciation ( 86 095) (1 409 141) ( 942 099) ( 180 286) ( 699 556) ( 36 451) (3 353 628)
Carrying amount 629 119 9 623 075 318 597 249 560 675 938 141 455 11 637 744
Additions at cost - - 213 923 211 203 694 496 - 1 119 622
Depreciation ( 21 036) ( 324 477) ( 137 045) ( 107 706) ( 268 346) ( 46 045) ( 904 655)
Balance at 31 Dec 2015 608 083 9 298 598 395 475 353 057 1 102 088 95 410 11 852 711
At 31 Dec 2015
At cost 715 214 11 032 216 1 474 619 641 049 2 069 990 177 906 16 110 994
Accumulated depreciation ( 107 131) (1 733 618) (1 079 144) ( 287 992) ( 967 902) ( 82 496) (4 258 283)
Carrying amount 608 083 9 298 598 395 475 353 057 1 102 088 95 410 11 852 711
10.1 Leasehold land and leasehold buildings:
(i) The leasehold land is located at Fairgrounds Financial Centre, Gaborone described as Lease Area No. 4466-KO, situate on Remainder of Lot 50676, Gaborone, to be
used for office accommodation only. The lease is for a period of 34 years commencing 15 October 2009.
(ii) The leasehold buildings comprise of a three storey office building on the above leasehold land.
76
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015Pula Pula
11 INTANGIBLE ASSETS
Computer Software
Cost
At beginning of the year 413 501 293 957
Acquisitions during the year - 119 544
Disposals during the year ( 64 844) -
At end of the year 348 657 413 501
Accumulated amortisation
At beginning of the year 240 917 144 268
Current year charge (note 4) 126 065 96 649
Reversal on disposals ( 63 469) -
At end of the year 303 513 240 917
Carrying amount
At end of the year 45 144 172 584
12 DEFERRED OPERATING LEASE
At beginning of the year 49 674 48 180
Movement for the year ( 15 832) 1 494
At end of the year 33 842 49 674
13 INVENTORIES
Study books - at cost 235 058 681 345
77
A N N U A L R E P O R T 2 0 1 6
13 INVENTORIES [continued]
2016 2015Pula Pula
13.1 Inventory write-downsIncluded in profit or loss for the year 218 463 -
13.2 Inventory recognised as an expense during the periodOpening balance of inventory 681 345 -
Add: Purchases 522 643 1 315 427
1 203 988 1 315 427
Less: Inventory write-downs ( 218 463) -
Less: Closing balance of inventory ( 235 058) ( 681 345)
750 467 634 082
14 TRADE AND OTHER RECEIVABLES
Trade receivables 2 110 924 1 894 730
Less: Allowance for doubtful debts ( 171 454) -
1 939 470 1 894 730
Staff advances and loans - 13 895
Prepayments and other receivables 153 817 146 775
2 093 287 2 055 400
14.1 Analysis of trade receivables past due but not impaired
Overdue 30 days - 60 days 179 254 -
Overdue 60 days - 90 days 118 501 3 245
Overdue above 90 days 756 243 15 470
1 053 998 18 715
14.2 Analysis of trade receivables neither past due nor impaired 885 472 1 876 015
Total trade receivables 1 939 470 1 894 730
14.3 Allowance for doubtful debts 171 454 -
14.4 The carrying amounts of trade and other receivables is a reasonable approximation of their fair values as at the end of the reporting period. The Institute did not hold any
collateral or security on its trade receivables.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
78
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
14.5 Trade receivables disclosed above include amounts that are past due at the end of the reporting period for which the Institute has not recognised an allowance for doubtful
debt because there has not been a significant change in credit quality and the amounts are still considered recoverable. There are no trade receivables that represent more
than 5% of the total trade receivables of the Institute other than those disclosed below. There is no material difference between the fair value of receivables and their
carrying amount.
In determining the recoverability of trade receivables the Institute considered any change in quality of the trade receivables from the date that the credit was initially
granted to the date of the reporting period. The consideration of credit risk is limited because the debtors base is large and unrelated.
14.6 The Institute's exposure to credit risk related to trade and other receivables is disclosed in note 20.5.
15 CASH AND CASH EQUIVALENTS
2016 2015Pula Pula
Balances with bank and on hand (note 15.1) 4 473 637 4 568 727
Short Term Investments (note 15.2) 4 365 724 2 668 831
8 839 361 7 237 558
15.1
15.2
15.3
Included in the bank balances is an amount of P2 131 649 (2015: P1 977 664) which is held in trust accounts for various international professional governing bodies.
An agreement exists between the Institute and such other governing bodies wherein students in Botswana pay their professional dues directly into the Institute’s bank
account and the Institute repatriates these monies weekly to the respective bodies.
Short Term Investments represent investment in Stanlib Botswana Money Market Fund with Stanlib Investment Management Services. The interest is determined on
7-day yield, which at the reporting date was 3.34% (2015: 4.48%).
For the purposes of the cash flow statement, cash and cash equivalents include cash in hand and at banks.
16 DEFERRED CAPITAL GRANT
At beginning of the year 4 117 646 4 264 705
Recognised in the statement of profit or loss and comprehensive income ( 147 059) ( 147 059)
3 970 587 4 117 646
16.1 This non-refundable grant was received from the Government of Botswana for the construction of the Institute's building. It is recognised in the statement of profit or
loss and other comprehensive income over the period of the lease of the leasehold land as stated in note 10.1.
79
A N N U A L R E P O R T 2 0 1 6
17 TRADE AND OTHER PAYABLES
2016 2015Pula Pula
Trade payables 313 474 482 772
Dues to professional bodies 2 131 477 1 977 664
Provision for legal expenses - 106 249
VAT accrual 296 161 68 567
Provisions for employee benefits - note 17.3 1 645 182 885 174
Other accruals 213 815 286 947
4 600 109 3 807 373
17.1 The carrying amounts of trade and other payables are a reasonable approximation of their fair values as at the end of the reporting period.
17.2 The average credit period on purchases of certain goods is 30 days. No interest is charged on trade payables for the first 60 days from the date of the invoice. Thereafter
interest may be charged at 1.5% per month on the outstanding balance by some suppliers. The Institute has financial risk management policies in place to ensure that all
payables are paid within the credit time frame.
17.3 Provisions for employee benefits:Provision for performance rewards 273 131 240 299
Provision for leave pay 467 502 273 544
Provision for severence pay and gratuity 904 549 371 331
1 645 182 885 174
Disclosed as:Current 1 645 182 885 174
1 645 182 885 174
Movement of provision during the year 31 December 2016
Provision for Provision for Provision for gratuity
performance rewards (1) leave pay (2) & severance pay (3)
Balance at beginning of the year 240 299 273 544 371 331 Additional provision made during the year 132 397 231 133 533 218 Amounts used during the year ( 99 565) ( 37 175) -
273 131 467 502 904 549
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
80
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
17.3 Provisions for employee benefits [continued]
i) The provision is in respect of performance rewards payable to the Institute’s staff subject to approval by the Council.
ii) The provision is in respect of leave accrued up to the end of the reporting period in accordance with the conditions of employment, which accrue within 12 months of
reporting date.
iii) The provision is in respect of severance pay payable to some of the Institute’s staff in accordance with the Employment Act (Cap 47:01), as amended by the
Employment (Amendment) Act, 2010 and gratuitity pay in accordance with the contract of employments. The obligations are payable on the date of termination of
the employment or end of contract of service, whichever is earlier. These calculations are based on a management’s valuation as at the reporting date. Management
has further assumed that all employees may request their dues within the next 12 months, and hence the entire provision is classified as a current liability.
18 DEFERRED INCOME
Deferred income comprises of membership subscriptions and registration fees received in advance
19 RELATED PARTY TRANSACTIONS AND BALANCES
2016 2015Pula Pula
Related party transactions where control exists include the following, whether there have been transactions or not:
The Executive Council members, being the level of Director and above, are considered key management of the Institute. Non-executive Council members of the Institute
do not receive remuneration for services rendered. The Government of Botswana remains a principal stakeholder of the Institute.
Subvention received from Government of Botswana (note 2) 4 554 143 6 100 000
Compensation of key management personnel (refer to note 8.2)
81
A N N U A L R E P O R T 2 0 1 6
20 FINANCIAL INSTRUMENTS
2016 2015Notes Pula Pula
The Institute has classified its financial assets and financialliabilities in the following categories:
20.1 Financial assetsTrade receivables Loans and receivables 14 2 110 924 1 894 730
Cash and cash equivalents Loans and receivables 15 8 839 361 7 237 558
10 950 285 9 132 288
20.2 Financial liabilitiesTrade payables Financial liabilities at 313 474 482 772
Dues to professional bodies amortized cost 17 2 131 477 1 977 664
2 444 951 2 460 436
20.3 Financial risk management The Institute’s financial instruments are exposed to certain financial risks, including market risk (which includes interest rate risk and foreign exchange risk), credit risk and
liquidity risk.
Interest rate risk The Institute has exposure on cash flow interest rate risk that arises mainly from its deposits with banks. The Institute’s interest rate risk exposure is reduced by the annual
escalation of its fixed deposits with banks.
Foreign exchange risk The Institute transacts with other International Professional Bodies and is exposed to foreign exchange risk arising from various currencies, primarily with respect to the
Pound Sterling.
The Institute’s risk management objective is to manage cash flow risk related to foreign denominated cash flows. The Institute is exposed to currency risk related to changes
in rates of exchange between the above foreign currencies and the local currency in which it operates which is the Botswana Pula. A significant change in the currency
exchange rate between the above currencies and the Botswana Pula could have a material effect on the Institute’s surplus. There are no open forward cover contracts.
As at 31 December 2016, the Institute is exposed to currency risk through trade receivables, trade payables and certain bank accounts denominated in Pound Sterling. The
currency risk profile is illustrated in note 20.11. It demonstrates that the receivables in the Pound Sterling exceed the payables in the same currency thus eliminating the
foreign exchange risk.
The impact of a Pound Sterling change against the Pula by 10% at 31 December 2016 is calculated in note 20.11.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
82
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
20.3 Financial risk management [continued]
Credit risk Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Institute. The Institute only deals with its members
and other credit worthy counterparties as a means of mitigating the risk of financial loss from defaults.
Trade receivables consist of a large number of customers spread across diverse industries and geographical areas. On-going credit evaluation is performed on the financial
condition of trade receivables.
With respect to credit risk arising from the other financial assets of the Institute, which comprise cash and cash equivalents, the Institute’s exposure to credit risk arises from
default of the counter party. The Institute limits material counter party credit risk on these assets by dealing with highly accredited financial institutions.
The Institute believes that its maximum exposure to credit risk as at 31 December 2016 is the carrying value of its financial assets as summarised in note 19.4.
Liquidity risk Ultimate responsibility for liquidity risk management rests with the Council, which has put in place a planning and forecasting process to help determine the funds required
to support the Institute’s short, medium and long term funding and liquidity requirements. The Institute ensures that there is sufficient committed capital to meet its short
term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents.
The Institute’s only non-current liabilities are in the form of a non-refundable grant (see note 16). All current liabilities are settled within one year. It has adequate liquidity
ratios and solvency ratios.
Capital risk management The Institute’s objectives when managing its capital include insuring a sufficient combination of positive operating cash flows and equity financing in order to meet its capital
programs in a way that maximizes the shareholder return given the assumed risks of its operations while, at the same time, safeguarding the Institute’s ability to continue as
a going concern. The Institute considers the following items as capital: excess cash balances and the accumulated funds and reserves. The non-refundable deferred capital
grant was for the development of the Institute’s office premises and is not considered as capital. The Institute is not subject to any externally imposed capital requirements.
The Institute has a low gearing ratio and has a well balanced plan for its immediate capital commitments.
Planning, annual budgeting and controls over major investment decisions are the primary tools used to manage the Institute’s capital. Updates are made as necessary to both
capital expenditure and operational budgets in order to adapt to changes as required by time to time.
The Council reviews the capital structure of the Institute at least on a semi-annual basis.
83
A N N U A L R E P O R T 2 0 1 6
20 FINANCIAL INSTRUMENTS [continued]
2016 2015Notes Pula Pula
20.4 Net gains and losses by financial instrument categoryLoans and receivables Finance income 9 213 736 201 725
Exchange (loss)/ gain on cash and cash equivalents 9 ( 77 315) 50 772
Finance costs 9 - ( 1 966)
136 421 250 531
20.5 Credit risk exposureTotal credit risk comprises: Cash and bank 15 4 473 637 4 568 727
Short term Investments 15 4 365 724 2 668 831
Trade receivables 14 2 110 924 1 894 730
10 950 285 9 132 288
20.6 Fair values of financial instruments The carrying values of certain financial instruments maturing in the short-term approximates their fair values. These financial instruments include cash and cash equivalents,
trade receivables which are classified as loans and receivables, and trade payables which are classified as amortized cost.
20.7 Financial instruments designated at fair value through profit or loss There are no financial instruments which the Institute has designated at fair value through profit or loss.
20.8 Financial assets pledged as collateral The Institute has not pledged any financial assets as collateral.
20.9 Financial assets received as collateral The Institute has not received any financial assets as collateral.
20.10 Fair value measurement Assets and liabilities are all measured using level 3 Fair value hierachy and are categorised as indicated under 20.1 and 20.2 above.
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
84
Notes to the Financial Statements [continued] FOR THE YEAR ENDED 31 DECEMBER 2016
20.11 FOREIGN CURRENCY RISK PROFILE
Assets and liabilities are all measured using the level 3 Fair value hierachy and are categorised as indicated under 19.1 and 19.2 above
Pound BotswanaSterling (GBP) Pula
31 December 2016 1.000 12.7300 31 December 2015 1.000 16.2670
The following is the net foreign currency exposure of the Institute: GBP BWP EQUIVALENT
31 December 2016AssetsTrade and other receivables 1 305 325 16 616 787 Cash and cash equivalents 2 131 649 27 135 892 Total assets 3 436 974 43 752 679
LiabilitiesTrade and other payables 2 131 477 27 133 702Total liabilities 2 131 477 27 133 702
Net foreign currency exposure 1 305 497 16 618 972
31 December 2015AssetsTrade and other receivables 1 620 717 20 631 727 Cash and cash equivalents 1 798 381 22 893 390 Total assets 3 419 098 43 525 118
LiabilitiesTrade and other payables 2 186 698 27 836 666
Total liabilities 2 186 698 27 836 666
Net foreign currency exposure 1 232 400 15 688 452
20.12 The strengthening of GBP against the Pula by 10% at 31 December 2016 would have had an approximate positive impact of P130 000 (2015: 123 000) on the Institute’s deficit, with all
other variables held constant. For a 10% weakening of the GBP against the Pula there would be a negative impact of P130 000 (2015: 123 000) on the Institute’s deficit.
85
A N N U A L R E P O R T 2 0 1 6
Notes to the Financial Statements [continued] FOR THE YEAR 31 DECEMBER 2016
21 OPERATING LEASE COMMITMENTS
21.1 The Institute as a lessee
21.1.1 Leasing arrangements
Operating leases relate to the Institute's operating office premises in Francistown satellite office, with lease term of 5 years, with an option to extend for a further 5 years. All operating lease
contracts contain market review clauses in the event that the Institute exercises its option to renew. The Institute does not have the option to purchase the leased asset at the expiry of the
leased period.
2016 2015Pula Pula
21.1.2 Payments recognized as an expense 124 656 104 144
21.1.3 Non-cancellable operating lease commitments 123 420 143 022
Not later than 1 year 449 372 330 380
Later than 1 year but not later than 5 years - -
Later than 5 years 572 792 473 402
21.2 The Institute as a lessor21.2.1 Leasing arrangements
Operating lease relates to part of the office building at Farigrounds, Gaborone leased out with lease term of 3 years, escalating by 10% per annum, with an option to
renew for a further 3 years at the choice of the lessee. The lease contract contains market review clauses in the event that the lessee exercises its option to renew. The
tenant does not have the option to purchase the leased asset at the expiry of the lease period.
86
Notes to the Financial Statements [continued] FOR THE YEAR 31 DECEMBER 2016
2016 2015Notes Pula Pula
21.2.2 Lease income received 797 750 720 715
21.2.3 Non-cancellable operating lease commitmentsNot later than 1 year 840 448 619 139
Later than 1 year but not later than 5 years 1 126 394 241 508
Later than 5 years - -
1 966 842 860 647
22 CONTINGENT LIABILITIES
The Council members confirm that as at the reporting date there were no contingent liabilities which required disclosure.
23 CONTRACTUAL CAPITAL COMMITMENTS
The Council members of the Institute confirm that there were no significant contractual capital commitments as at the reporting date which require disclosure.
24 EVENTS AFTER THE END OF THE REPORTING PERIOD
There were no material events that occurred after the end of the reporting period that require adjustment to the statement of profit or loss and other comprehensive income
or the statement of financial position, or that require disclosure in the annual financial statements.
87
A N N U A L R E P O R T 2 0 1 6
Notes to the Financial Statements [continued] FOR THE YEAR 31 DECEMBER 2016
2016 2015Pula Pula
ADMINISTRATION EXPENSES
Amortisation of intangible assets 126 065 96 649
Bad debts 171 454 52 383
Bank charges 134 906 106 523
BOCCIM memebership fees 2 402 2 402
Cleaning and refreshments 257 980 247 161
Computer consumables 170 336 75 277
Consultancy fees 1 342 711 1 050 460
Courier and postage 135 251 135 222
Database Licencing and maintenance 187 543 224 918
Depreciation - equipment 613 607 559 142
Entertainment expenses - 2 941
Francistown satellite office adminstration and travelling costs 93 056 72 634
General office expenses 109 880 96 033
Insurance 196 860 75 914
Internet services 80 300 24 288
Legal expenses 159 609 131 329
Levies 79 893 63 620
Licences and permits 128 102 36 471
Loss on disposal of non-current assets 21 405 -
Loss on write-off of intangible assets 1 375 -
Motor vehicle expenses 44 538 16 835
Photocopier rental, maintenance and supplies 289 978 335 928
Practice monitoring costs 285 985 218 750
Printing and stationery 137 504 146 111
Recruitment expenses 13 820 84 906
Repairs and maintenance 179 063 363 931
Security expenses 5 852 -
Subscriptions to professional bodies 238 965 178 797
Sponsorships 24 969 -
Telephone, fax and cellphone 207 570 202 531
Training Levy 14 969 17 068
Transport charges 12 333 14 800
Utilities 133 399 150 093
VAT penalties 171 393 -
Website maintenance 26 000 24 000
5 799 073 4 807 117
This schedule is presented solely for the information of the members and is not covered by the opinion.
88
Notes to the Financial Statements [continued] FOR THE YEAR 31 DECEMBER 2016
2016 2015Pula Pula
PUBLIC RELATIONS EXPENSES
Advertising and promotions 49 710 69 686
AGM, dinner dance and cocktail costs 737 711 671 033
AAT annual award event costs 172 438 178 912
BICA graduation 280 053 -
Marketing and branding costs 1 242 123 994 115
Purchase of promotional items 71 632 127 646
2 553 667 2 041 392
TRAINING AND PROFESSIONAL DEVELOPMENT EXPENSES
BICA qualification course materials and other costs 1 830 266 1 336 508
Business travel and accommodation to external meetings 418 100 382 572
International conference 362 988 -
Publication expenses 121 876 155 272
Seminars and workshops 1 951 446 1 439 560
4 684 676 3 313 912
This schedule is presented solely for the information of the members and is not covered by the audit opinion.
89
A N N U A L R E P O R T 2 0 1 6
Notes
90
Notes
91
A N N U A L R E P O R T 2 0 1 6
Notes
92
Plot 50374, Block 3,
Fairgrounds Financial Centre,
Tel: 267 397 2992
Fax: 267 397 2982
Email: [email protected]
Web: www.bica.org.bw