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The Accountants Act of 1988 was repealed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

2

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: bica-memberships@bica.org.bw

@bicabw

Botswana Institute of Chartered Accountants

3

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.

5

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]

6

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.

7

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

9

A N N U A L R E P O R T 2 0 1 6

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

10

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

11

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

13

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).

15

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

17

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

19

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.

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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: bica@bica.org.bw

Web: www.bica.org.bw