ALIVE & KICKING KENYA LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER 2019 Alive & Kicking Kenya Limited Annual report and financial statements For the year ended 31st December 2019
CONTENTS PAGE
Company information 1
Report of the directors 2
Statement of directors' responsibilities 3
Report of the independent auditor 4 - 5
Financial statements:
Profit and loss account 6
Balance sheet 7
Statement of cash flows 8
Notes 9 - 13
Supplementary information:
Manufacturing account Appendix I
Schedule of operating expenditure Appendix II Alive & Kicking Kenya Limited Company information For the year ended 31st December 2019
Board of directors Philip Charles Carlton Appleton* (Chairman) Catherine Georgia Kenyatta* John Herbert* Nicholas Charles Allen* Martin Charles Barnard* Tristram Jones Parry* Guy Maughfling* Diana Carson* Josephine Ryan** Dr Joseph Jesse Masiga Evelyn Carol Radull Ali Hussein Kassim Wanjiku Kiragu Nzioka Siwadie Waita Shaka Philip John Kwach Rose Wairimu Maket William Sykes*
*British **Irish
Company secretary Equatorial Secretaries and Registrars P.O. Box 47323, 00100 Nairobi. Nairobi, Kenya.
Registered office Plot No. L.R. No. 209/9705 Mombasa Road P.O. Box 27641, 00506 Nairobi, Kenya.
Independent auditor RSM Eastern Africa LLP Certified Public Accountants 1st Floor, Pacis Centre, Slip Road, off Waiyaki Way, Westlands P.O. Box 349, 00606 Nairobi, Kenya.
Principal bankers Absa Bank Kenya PLC Westlands Branch, P.O. Box 14403, 00800 Nairobi, Kenya.
NCBA Bank Kenya PLC Mara and Ragati Road P.O. Box 30437, 00100 Nairobi, Kenya.
1 Alive & Kicking Kenya Limited Report of the directors For the year ended 31st December 2019 The directors submit their report together with the audited financial statements for the year ended 31st December 2019.
Directorate The directors who held office during the year and to the date of this report are set out on page 1. Principal activities
Alive & Kicking Kenya Limited is a social enterprise registered in Kenya in 2005, as a Company limited by guarantee without shares and “not for profit”. The Company provides ethical employment for people from vulnerable backgrounds including people living with disabilities and promotes access to play and wellness through our community outreach programs. The Company also upcycles used leather to balls, which are donated (waste to play).
The principal activity of the Company is the manufacturing and selling of durable, high quality, hand stitched leather sport balls including footballs, volley and rugby balls. Business review The Company has achieved an increase in revenue in 2019, mainly due to increased retail sales and targeted sales promotions during school holidays.
During the year the Company relocated its operations from Mombasa Road to a more spacious, value for money centre within Amref Child Development Centre in Mutuini, Dagoretti. The new location is increasing the Company's profile and brand awareness.
Our community impact during 2019 included working in collaboration with a number of community groups promoting awareness of health and wellness. It is estimated that 103,390 children and youth played with a ball donated by the Company and its partners during 2019. Further, the Company sustained over 45 ethical jobs in 2019, indirectly supporting 180 staff family members. The Company also successfully piloted a new product during 2019 known as a "business in a box" in collaboration with GIZ. The "business in a box" provided ball making material and training to refugees to assist their income generating opportunities and promote access to play and wellness. The impact results from the pilot project indicated that over 95% of participants reported increased income through ball sales and/or repairs. Scaling up "business in a box" will contribute towards income diversification for the Company and increase access to play and wellness to vulnerable children and youth which is the Company's core mission and vision.
Subsequently at the start of 2020, there has been decrease in retail sales by 60% mainly due a key consignment retail client Tusker Mattresses Limited not adhering to contractual payment terms. Therefore, making the Company to cease the supply of balls to them. Further as from March 2020, the country was affected by the global Covid-19 pandemic thus making it a difficult trading year with negative impact on the cash flows. The Company has reduced its operations since March 2020 with the main focus on business survival.
Statement as to disclosure to the Company's auditor With respect to each director at the time this report was approved: (a) there is, so far as the director is aware, no relevant audit information of which the Company's auditor is unaware; and (b) the director has taken all the steps that the director ought to have taken as a director so as to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Terms of appointment of the auditor
The directors approve the annual audit engagement contract, which sets out the terms of the auditor's appointment and the related fees. The agreed auditor's remuneration of KSh 375,000 has been charged to profit and loss in the year.
By order of the board
…………………………………… Director
Nairobi …………..…………………... 2020
2 Alive & Kicking Kenya Limited Statement of directors' responsibilities For the year ended 31st December 2019
The Kenyan Companies Act, 2015 requires the directors to prepare financial statements for each financial year that give a true and fair view of the financial position of the Company as at the end of the financial year and of its profit or loss for that year. It also requires the directors to ensure that the Company keeps proper accounting records that: (a) show and explain the transactions of the Company; (b) disclose, with reasonable accuracy, the financial position of the Company; and (c) enable the directors to ensure that every financial statement required to be prepared complies with the requirements of the Companies Act, 2015.
The directors accept responsibility for the preparation and presentation of these financial statements in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and in the manner required by the Kenyan Companies Act, 2015. They also accept responsibility for: i) designing, implementing and maintaining internal control as they determine necessary to enable the presentation of financial statements that are free from material misstatement, whether due to fraud or error; ii) selecting suitable accounting policies and applying them consistently; and iii making accounting estimates and judgements that are reasonable in the circumstances.
Having made an assessment of the Company’s ability to continue as a going concern, the directors are not aware of any material uncertainties related to events or conditions that may cast doubt upon the Company’s ability to continue as a going concern.
The directors acknowledge that the independent audit of the financial statements does not relieve them of their responsibilities.
Approved by the board of directors on ………………………………….. 2020 and signed on its behalf by:
…………………………………… …………………………………… Director Director
3 REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF ALIVE & KICKING KENYA LIMITED
Opinion
We have audited the accompanying financial statements of Alive & Kicking Kenya Limited (the "Company"), set out on pages 6 to 13 which comprise the balance sheet as at 31st December 2019, the profit and loss account and statement of cash flows for the year then ended, and notes, including a summary of significant accounting policies.
In our opinion the accompanying financial statements give a true and fair view of the financial position of the Company as at 31st December 2019 and of its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the Kenyan Companies Act, 2015.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Kenya, and we have fulfilled our ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other information
The directors are responsible for the other information. Other information comprises the information included in the Annual Report, but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, other than that prescribed by the Kenyan Companies Act, 2015, as set out below. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Directors' responsibility for the financial statements
The directors are responsible for the preparation and fair presentation of the financial statements that give a true and fair view in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Kenyan Companies Act, 2015, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
4 REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF ALIVE & KICKING KENYA LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: · identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. · obtain an understanding of internal control relevant to the audit 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 Company's internal control. · evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. · conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. · evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Report on other matters prescribed by the Kenyan Companies Act, 2015
In our opinion the information given in the report of the directors on page 2 is consistent with the financial statements.
Certified Public Accountants Nairobi
………………………………….. 2020 .../2020
The signing partner responsible for the independent audit was CPA Elvis Ogeto, Practising Certificate No. 2303.
5 Alive & Kicking Kenya Limited Financial statements For the year ended 31st December 2019
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2019
2019 2018 REF Note KSh KSh
Revenue T.01 4 45,691,787 41,139,380
Cost of sales (29,613,683) (23,988,345)
Gross profit 16,078,104 17,151,035
Other income 5 1,290,204 5,365,355
Administrative expenses (14,605,633) (13,846,734)
Establishment expenses (2,921,698) (2,515,535)
(Loss)/profit before tax 6 (159,023) 6,154,121
Tax income/(expense) 7 1,699,516 (3,387,347)
Profit for the year 1,540,493 2,766,774
Fund balance brought forward 15,247,808 12,481,034
Fund balance carried forward 16,788,301 15,247,808
6 Alive & Kicking Kenya Limited Financial statements For the year ended 31st December 2019
BALANCE SHEET AT 31ST DECEMBER 2019
2019 2018 REF Note KSh KSh EQUITY Fund balance 16,788,301 15,247,808
Total equity 16,788,301 15,247,808
Non-current liabilities Related party loans 14 3,000,000 -
19,788,301 15,247,808
REPRESENTED BY
Non-current assets Deferred tax 8 3,307,780 1,608,264 Property, plant and equipment B.01 9 2,831,475 2,963,014
6,139,255 4,571,278 Current assets Inventories F.01 10 10,167,980 7,507,960 Trade and other receivables H.01 11 7,169,483 6,713,535 Cash at bank and in hand I.01 12 2,203,413 69,750 Current tax recoverable 776,293 737,848
20,317,169 15,029,093 Current liabilities Trade and other payables K.01 13 6,668,123 4,352,563
6,668,123 4,352,563
Net current assets 13,649,046 10,676,530
19,788,301 15,247,808
The financial statements on pages 6 to 13 were approved for issue by the board of directors on …………………... 2020 and were signed on their behalf by:
…………….……………… ……………...…………………….. Director Director
7 Alive & Kicking Kenya Limited ` Financial statements For the year ended 31st December 2019
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER 2019
2019 2018 Note KSh KSh Cash flows from operating activities Profit for the year 1,540,493 2,766,774 Adjustments for: Tax (income)/expense 7 (1,699,516) 3,387,347 Depreciation of property, plant and equipment 9 478,412 523,380 Changes in operating assets and liabilities Increase in trade and other receivables (455,948) (3,431,308) Increase/(decrease) in trade and other payables 2,315,560 (3,053,844) Increase in inventories (2,660,020) (3,229,699)
Cash used in operations (481,019) (3,037,350) Income tax paid (38,445) -
Net cash used in operating activities (519,464) (3,037,350)
Cash flows from investing activities Purchase of property, plant and equipment 9 (346,873) (466,752)
Net cash used in investing activities (346,873) (466,752)
Cash flows from financing activities Loan advanced from related party 14 3,000,000 -
Net cash generated from financing activities 3,000,000 -
Net increase/(decrease) in cash and cash equivalents 2,133,663 (3,504,102)
Cash and cash equivalents at start of year 69,750 3,573,852
Cash and cash equivalents at end of year 12 2,203,413 69,750
8 Alive & Kicking Kenya Limited Financial statements For the year ended 31st December 2019
NOTES 1. General information Alive & Kicking Kenya Limited (the "Company") is domiciled in Kenya where it is incorporated under the Kenyan Companies Act, 2015 as a private Company limited by guarantee. The address of its registered office and principal place of business is L.R. No. 209/9705, Mombasa Road, P.O. Box 27641, 00506, Nairobi, Kenya. The Company provides ethical employment for people from vulnerable backgrounds including people living with disabilities and promote access to play and wellness through our community outreach programs. The Company also upcycles used leather to balls, which are donated (waste to play). The principal activity of the Company is the manufacturing and selling of durable, high quality, hand stitched leather sport balls including footballs, volley and rugby balls.
2. Basis of preparation and summary of significant accounting policies
These financial statements have been prepared on a going concern basis and in compliance with the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) issued by the International Accounting Standards Board. The financial statements are presented in Kenya Shillings (KSh). The measurement basis used is the historical cost basis except where otherwise stated in the accounting policies below. Revenue recognition
Revenue from sales of goods is recognised when the goods are delivered and title has passed. There is an arrangement with some supermarkets that hold inventory on consignment and sales are not recognised until the consignee reports a sale. Revenue is measured at the fair value of the consideration received or receivable, net of discounts and sales- related taxes collected on behalf of the Government of Kenya. Borrowing costs All borrowing costs are recognised in profit or loss in the period in which they are incurred.
Income tax
Tax expense represents the aggregate amount included in profit or loss for the period in respect of current tax and deferred tax.
Current tax is the amount of income tax payable or refundable in respect of the taxable profit or loss for the current and prior periods, determined in accordance with the Kenyan Income Tax Act.
Deferred tax is determined on differences arising between the carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases (known as temporary differences), using tax rates and laws enacted or substantively enacted at the balance sheet date and expected to apply when the asset is recovered or the liability is settled.
The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets or liabilities.
Deferred tax liabilities are recognised for all taxable temporary differences except those arising on the initial recognition of an asset or liability, other than through a business combination, that at the time of the transaction affects neither the accounting nor taxable profit or loss. Translation of foreign currencies All transactions in foreign currencies are initially recorded in Kenya Shillings, using the spot rate at the date of the transaction. Foreign currency monetary items at the balance sheet date are translated using the closing rate. All exchange differences arising on settlement or translation are recognised in profit or loss. Financial assets Trade and other receivables are initially recognised at the transaction price. Most sales are made on the basis of normal credit terms, and the receivables do not bear interest. Where credit is extended beyond normal credit terms, receivables are measured at amortised cost using the effective interest method. At the end of each reporting period, the carrying amounts of trade and other receivables are reviewed to determine whether there is any objective evidence that the amounts are not recoverable. If so, an impairment loss is recognised immediately in profit or loss.
9 Alive & Kicking Kenya Limited Financial statements For the year ended 31st December 2019
NOTES (CONTINUED)
2. Basis of preparation and summary of significant accounting policies (continued)
Property, plant and equipment. Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful life, using the reducing balance method.
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of an asset, the depreciation of that asset is revised prospectively to reflect the new expectations. On disposal, the difference between the net disposal proceeds and the carrying amount of the item sold is recognised in profit or loss.
Leases
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease.
Impairment of non-financial assets
At each reporting date, property, plant and equipment is reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.
Similarly, at each reporting date, inventories are assessed for impairment 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 of inventory (or group of similar items) is impaired, its carrying amount is reduced to selling price less costs to complete and sell, and an impairment loss is recognised immediately in profit or loss.
If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the revised estimate of its recoverable amount (selling price less costs to complete and sell, in the case of inventories), but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset (group of related assets) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
Inventories
Inventories are stated at the lower of cost and selling price less costs to complete and sell. Cost is calculated using the weighted average method.
Financial liabilities
Financial liabilities are initially recognised at the transaction price (including transaction costs). Trade payables are obligations on the basis of normal credit terms and do not bear interest. Interest bearing liabilities are subsequently measured at amortised cost using the effective interest method.
Employee benefits - post-employment benefits
The Company and the employees contribute to the National Social Security Fund (NSSF), a national defined contribution scheme. Contributions are determined by local statute and the Company's contributions are charged to the profit and loss account in the year to which they relate.
10 Alive & Kicking Kenya Limited Financial statements For the year ended 31st December 2019 NOTES (CONTINUED) 3. Judgements and key sources of estimation uncertainty
No significant judgements have had to be made by the directors in preparing these financial statements.
The directors have, however, had to make key assumptions regarding the recoverable amount of impaired trade receivables. The recoverable amount of such receivables at the end of the reporting period has been estimated at KSh 5,753,480 (2018: KSh 5,639,426). 2019 2018 4. Revenue Ref KSh KSh
Sale of goods T.01 45,691,787 41,139,380
5. Other income
Gain on disposal of property, plant and equipment - 34,713 Freight recoveries 1,111,574 3,022,760 Exchange gain/(loss) 169,695 (220,990) Grant income - Alive and Kicking UK 8,935 2,528,872
1,290,204 5,365,355 6. (Loss)/profit before tax (a) The following items have been recognised as expenses in determining (loss)/profit before tax:
Employee benefits expense (see 6(b) below) 19,328,629 18,022,265 Depreciation of property, plant and equipment 478,412 523,380
(b) Employee benefits expense Wages, salaries and allowances 19,180,829 17,899,065 Retirement benefit costs: - National Social Security Fund 147,800 123,200
19,328,629 18,022,265
The average number of persons employed during the year, by category, were: Number Number Production 38 33 Sales and distribution 6 10 Management and administration 11 5 Total 55 48
2019 2018 7. Tax (income)/expense KSh KSh
Current tax - - Deferred tax (Note 8) (1,699,516) 3,387,347
Tax (income)/expense (1,699,516) 3,387,347
The tax expense for the year differs from the theoretical amount that would result from applying the statutory tax rate of 30% (2018: 30%) to (loss)/profit before tax as follows: (Loss)/profit before tax (159,023) 6,154,121
Tax calculated at the statutory rate of 30% (47,707) 1,846,236 Tax effect of: (Over)/under provision for deferred tax (2,069,791) 1,093,605 Expenses not deductible for tax purposes 417,982 447,506
Tax (income)/expense (1,699,516) 3,387,347
11 Alive & Kicking Kenya Limited Financial statements For the year ended 31st December 2019 NOTES (CONTINUED) 8. Deferred tax Deferred tax is calculated using the enacted rate of 30% (2018: 30%). The following are the deferred tax (assets)/liabilities recognised by the Company: (Credited)/ At start of charged to year profit or loss At end of year Year ended 31st December 2019 KSh KSh KSh Deferred tax asset Tax losses (1,878,937) (1,677,616) (3,556,553) Unrealised exchange gain - 17,067 17,067 Provision for bad debts - (27,195) (27,195) (1,878,937) (1,687,744) (3,566,681) Deferred tax liability Property, plant and equipment 270,673 (11,772) 258,901 Net deferred tax asset (1,608,264) (1,699,516) (3,307,780)
Year ended 31st December 2018 Deferred tax asset Unrealised exchange gain (2,107,115) 228,178 (1,878,937) Provision for leave (69,201) 69,201 - Provision for bad debts (3,094,195) 3,094,195 - (5,270,511) 3,391,574 (1,878,937) Deferred tax liability Property, plant and equipment 274,900 (4,227) 270,673 Net deferred tax asset (4,995,611) 3,387,347 (1,608,264)
Under the Kenyan Income Tax Act, tax losses are allowable as a deduction only in the nine years succeeding the year in which they occurred. The tax losses of KSh 11,855,178 carried forward will expire as follows:
Arising in: Tax losses Expiring: KSh 2018 6,263,124 31st December 2027 2019 5,592,054 31st December 2028 11,855,178
9. Property, plant and equipment Computers, Plant and Motor copiers and Fixtures and equipment vehicles faxes fitting Total KSh KSh KSh KSh KSh Cost At start of year 2,810,034 883,928 1,353,938 4,674,732 9,722,632 Additions 288,723 - 14,400 43,750 346,873
At end of year 3,098,757 883,928 1,368,338 4,718,482 10,069,505
Accumulated depreciation At start of year 1,893,664 512,410 1,281,275 3,072,269 6,759,618 Annual depreciation 150,637 92,880 26,119 208,776 478,412 At end of year 2,044,301 605,290 1,307,394 3,281,045 7,238,030 Carrying amount At 31st December 2019 1,054,456 278,638 60,944 1,437,437 2,831,475
At 31st December 2018 916,370 371,518 72,663 1,602,463 2,963,014
12 Alive & Kicking Kenya Limited Financial statements For the year ended 31st December 2019
NOTES (CONTINUED)
9. Property, plant and equipment (continued)
The following annual rates are used for the depreciation of property, plant and equipment:
Rate - % Property, plant and equipment 12.5 per cent Motor vehicles 25.0 per cent Fixtures and equipment 12.5 per cent Computers, copiers and faxes 30.0 per cent
2019 2018 10. Inventories REF KSh KSh
Raw materials F.01 6,355,823 6,319,730 Finished goods 3,812,157 1,188,230 10,167,980 7,507,960
11. Trade and other receivables Trade receivables, net of provision for impairment H.0 5,753,480 5,639,426 Prepayments and deposits 1,416,003 1,074,109
7,169,483 6,713,535
12. Cash and cash equivalents Cash in hand and at bank I.01 2,203,413 69,750 13. Trade and other payables
Trade payables K.01 4,565,625 2,864,212 Accruals 2,102,498 1,488,351
6,668,123 4,352,563
14. Related party loan
Non-current Alive & Kicking UK Limited (Note 15(ii)) 3,000,000 -
Related party loan is unsecured, interest free and repayable within the next 3 years.
15. Related party transactions
The Company is related to other companies which are related through common directorships. The following transactions were carried out with related parties: 2019 2018 KSh KSh
i) Sale of goods to related party 3,436,595 1,285,850
ii) Loan advanced by related party (Note 14) 3,000,000 -
13 Alive & Kicking Kenya Limited Supplementary information For the year ended 31st December 2019
MANUFACTURING ACCOUNT 2019 2018 KSh KSh 1. COST OF SALES
Cost of raw and packing materials consumed 12,990,413 9,942,769 Direct production costs (1.1) 16,623,270 14,045,576
29,613,683 23,988,345
1.1 DIRECT PRODUCTION COSTS
Production wages 11,136,298 9,829,934 Depreciation of property, plant and equipment 150,637 150,949 Delivery charges 4,750,872 3,334,063 Custom duty - 444,281 Packaging cost 477,198 145,989 Printing cost 108,265 140,360
16,623,270.00 14,045,576.00
Appendix I Alive & Kicking Kenya Limited Financial statements For the year ended 31st December 2019
SCHEDULE OF OPERATING EXPENDITURE 2019 2018 1. ADMINISTRATIVE EXPENSES KSh KSh
Employment: Salaries and wages U.06/11 7,535,518 6,219,913 Staff welfare U.06/12 656,813 474,771 National industrial training levy - 24,650
Total employment costs 8,192,331 6,719,334
Other administration expenses: Advertising and marketing U.09/16 565,010 527,474 Entertainment and travel U.09/7 230,890 378,677 Internet, postage and telephone U.09/1 71,335 382,408 Computer expenses 151,983 - Audit fees U.09/10 - Current year 375,000 375,000 Vehicle running 311,997 283,383 Printing and stationery 187,845 162,463 General expenses 149,720 150,777 Bank charges and commissions 174,950 172,895 Penalties and interest 227,108 - Office expenses U.09/15 42,075 50,197 Movement in provision for bad debts 90,648 (6,899,303) Bad debt written off 1,166,165 8,390,992 Withholding tax expense 4,500 - Professional fees U.09/11 2,664,076 3,152,437
Total other administration expenses 6,413,302 7,127,400
Total administrative expenses 14,605,633 13,846,734
2. ESTABLISHMENT EXPENSES
Rent and rates U.11/1 1,490,410 1,459,104 Electricity and water U.11/3 225,254 48,850 Security 2,000 24,542 Repairs and maintenance U.11/5 109,967 8,393 Insurance U.11/6 547,285 256,751 Licenses and subscriptions 219,007 345,464 Depreciation of property, plant and equipment 327,775 372,431
Total establishment expenses 2,921,698 2,515,535
Appendix II ALIVE & KICKING KENYA LTD PIN NO. P051168118V YEAR ENDED: 31ST DECEMBER 2019 PERIOD COVERED: 12 MONTHS
1. TAX COMPUTATION KSh KSh
Loss before tax as per financial statements (159,023) Add: Depreciation on property, plant and equipment 478,412 Fines and penalties 227,108 Bad debts written off 1,166,165 1,871,685
Less: Wear and tear allowance (439,172) Unrealised exchange gain (56,889) ` Decrease in provision for bad debts (6,808,655) (7,304,716) . Adjusted profit (5,592,054)
Loss b/f (6,263,124)
Loss carried forward (11,855,178) Tax
2. TAX ACCOUNT KSh
Tax charge for the year - Withholding tax paid (38,446)
Tax recoverable (38,446)
3. WEAR AND TEAR SCHEDULE Class II Class III Class IV 30.0% 25.0% 12.5% Total KSh KSh KSh KSh
W.D.V at 1st January 2018 426,539 488,410 1,145,820 2,060,769 Additions 14,400 - 332,473 346,873 440,939 488,410 1,478,293 2,407,642
Wear & tear allowance (132,282) (122,103) (184,787) (439,172)
W.D.V at 31st December 2019 308,657 366,307 1,293,506 1,968,470 Client: Alive and Kicking Kenya Limited Subject: Adjusting Journal Entries Balance sheet Profit and loss a/c No. DETAILS Dr - Shs Cr - Shs Dr - Shs Cr - Shs
1 WIP raw leather 18,519 Direct production payroll 18,519 (Being adjustment of raw leather misposted)
2 Tax expense (1,699,516) Deferred tax (1,699,516) (Being deferred tax charge for the year)
3 Vehicle Toyota original cost 26,072 Vehicle Toyota accumulated depreciation bf 26,072 Production equipment original cost 170,752 Production equipment accumulated depreciation bf 17,653 Computer equipment original cost 48,511 Computer equipment accumulated depreciation 84,909 Furniture and fittings original cost 207,150 Furniture and fittings accumulated depreciation 17,653 (Being reclassification of cost and depreciation balances)
4 Plant and equipment accumulated depreciation 37,323 Depreciation expense 37,323 Motor vehicle depreciation charge 30,120 Motor Vehicles accumulated depreciation 30,120 Computers, copiers & faxes accumulated depreciation 14,848 Depreciation charge 14,848 Fixtures and equipment accumulated depreciation 51,827 Depreciation charge 51,827 (Being correction of depreciation charge for the year)
4 Provision for audit fees 375,000 Audit fees 375,000 (Provision for current year)
5 Withholding tax expense 4,500 Withholding tax payable 4,500 (Being withholding tax payable on deemed interest)
6 Penalties and interest expense 990 Penalties and interest payable 990 (Being penalties and interest payable on unpaid withholding tax)
7 CC office costs payroll 42,684 Payroll control 42,684 (Being payroll control account misstatements now adjustments)
8 Stitching material -inventory 2,867 Stitching material-P&l 2,867 (Being classification of stitching material)
9 Directors remuneration 175,811 Insurance expense 175,811 (Being reclassifcation of directors liability insurance)