Evans Karanja

ST. ANNA GUEST HOUSE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2019 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 COMPANY INFORMATION Board of Trustees Sr. Matilda …………………………. …………………………. ……………………………. …………………………. Registered Office St. Anna Guest House P.O Box 19100,40100 Milimani, Tom Mboya Road Kisumu Kenya Auditors Muthengi & Associates P.O Box- Nairobi Kenya Principal bankers ABC Bank P.O Box 46452, 00100 Nairobi Kenya I&M Bank P.O Box 424, 40100 Kisumu Kenya 1 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 REPORT OF THE TRUSTEES The Trustees submit their report and the audited financial statements for the year ended 31st December 2019 which disclose the state of affairs of the House. Registration The house operates under the Franciscan Sisters of Kenya which is registered in Kenya under the Trustess Act . Principal activities The principal activities is offering hospitality services. Results The profit for the year of Shs:171. 752 been added to retained earnings. Trustees The names of the trustees who held office during the year and to the date of this report are set out on page 1. Auditors The auditors,Muthengi & Associates have expressed willingness to continue in office. By order of the board ………………………… Trustee Date……..…………...... 2019 2 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 STATEMENT OF TRUSTEES' RESPONSIBILITIES The Trustees Act requires the trustees to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the house as at the end of the financial year and of its profit or loss for that year. It also requires the trustees to ensure that the trustees maintains proper accounting records that disclose, with reasonable accuracy, the financial position of the house. The trustees are also responsible for safeguarding the assets of the trustees. The trustees accept responsibility for the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error. They also accept responsibility for: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of i) the financial statements; ii) selecting and applying appropriate accounting policies; and iii) making accounting estimates and judgements that are reasonable in the circumstances. The trustees are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the house as at 31st December 2019 and of its profit/loss and cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Trustees Act. Nothing has come to the attention of the directors to indicate that the house will not remain a going concern for at least twelve months from the date of this statement. Approved by the board of trustees on ………………………………….. 2019 and signed on its behalf by: …………………………………… Trustee …………………………………… Trustee 3 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF FRANCISCAN SISTERS OF KENYA Report on the financial statements We have audited the accompanying financial statements of St. Anna Guest House, set out on pages 5 to 12 which comprise the statement of financial position as at 31st December 2019, 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. Trustees' responsibility for the financial statements The trustees are responsible for the preparation and fair presentation of these financial statements in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Trustees Act. 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. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the company'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 company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion the accompanying financial statements give a true and fair view of the state of financial affairs of the house as at 31st December 2019 and of its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the Trustees Act. Report on other legal requirements As required by the Trustess Act we report to you, based on our audit, that: i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; ii) in our opinion proper books of account have been kept by the House, so far as appears from our examination of those books; and iii) the House's statement of financial position and statement of comprehensive income are in agreement with the books of account. Certified Public Accountants PIN No. …………………………………. Nairobi ………………………………….. 2019 4 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 STATEMENT OF COMPREHENSIVE INCOME 2019 Shs 2018 Shs Notes Income Revenue Cost of Goods sold Gross profit Other income 2 1. 19,595,805 (6,796,507) 25,221,681 (8,185,436) 3 12,799,298 - 17,036,245 249,627 2 3 4 (6,977,098) -2,423,432 (3,227,015) -8,137,968.47 -3,256,345.18 -5,903,481.85 (12,627,546) -17,297,795.50 Expenditure Employment costs Administration expenses Establishment cost Profit for the year 171,752 5 -11,924.30 5 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 STATEMENT OF FINANCIAL POSITION Note Accumulated funds 2019 Shs 2018 Shs 7,543,626 7,371,874 7,543,626 7,371,874 REPRESENTED BY Non-current assets Property and equipment 5. 2,381,619 1,146,891 Current assets Accounts receivables Cash and cash equivalents Investments 6. 7. 8. 1,024,365 2,103,233 2,500,000 957,136 2,661,890 3,206,954 5,627,597 6,825,980 465,590 600,997 465,590 600,997 Net current assets 5,162,007 6,224,984 Net assets 7,543,626 7,371,874 Current liabilities Accounts payables 10. The financial statements on pages 5 to 12 were approved by the Board of Trustees for issue on……………………………..2019 and were signed on its behalf by …………………………………DIRECTOR Trustee …………………………...…………DIRECTOR Trustee 6 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 STATEMENT OF CHANGES IN FUNDS Retained earnings Shs As at 1st January 2019 Profit during the year As at 31st December 2019 7,371,874 7,371,874 171,752 171,752 7,543,626 7,543,626 Retained earnings Shs As at 1st January 2018 7,383,798 Prior year adjustment Profit during the year (11,924) As at 31st December 2018 Total Shs 7,371,874 Total Shs 7,383,798 (11,924) 7,371,874 Prior year adjustment relates to recognition of balances not accounted for in the previous year and correction of opening balances from the previous year. 7 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 STATEMENT OF CASH FLOW 2019 Shs Cash flows from operating activities 2018 Shs Notes Surplus Adjustments for: Prior year adjustments Depreciation on property and equipment 9 171,752 (11,924) 518,788 442,896 690,540 430,972 Operating defict before working capital changes (Increase)/decrease in: Trade and other receivables Increase/(decrease) in: Trade and other payables 2,205,821 1,744,616 Cash generated from operations 2,070,414 2,287,959 Net cash from operating activities 2,760,954 2,718,931 Cash flows from investing activities Purchase of property and equipment (1,116,552) (1,173,695) Net cash investing activities (1,116,552) (1,173,695) (135,407) 543,343 Cash flows from financing activities Investments - - Net cash from/ (used in) financing activities - - 1,644,402 1,545,236 392,557 392,557 2,036,959 1,937,793 Net increase in cash and cash equivalents Cash and cash equivalents at beginning Cash and cash equivalents at end 11 8 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 NOTES TO THE FINANCIAL STATEMENTS 1. General Information St. Anna Guest House operates under the Franciscan Sisters of Kenya which is registered in Kenya under the Trustess Act . The address of its registered office and principal place of business is Milimani, Tom Mboya Road, P.O Box 19100, 40100, Kisumu. The principal activities is offering hospitality services. 2. Basis of preparation and summary of significant accounting policies These financial statements have been prepared on a going concern basis and in compliance with the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) issued by the International Accounting Standards Board. They are presented in Kenya Shillings (Shs), rounded to the nearest ten. The measurement basis used is the historical cost basis except where otherwise stated in the accounting policies below. Revenue recognition Revenue is recognised when received and other income is recognised when earned. Interest income is recognised on a time basis using the effective interest method. Dividend income is recognisedwhen the right to receive the payment is established. Property and equipment Items of property and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful lives, using the reducing balance method. The following annual rates are used for the depreciation of property and equipment: Depreciation rates 25% 12.50% 30% 12.50% Motor vehicle Furniture & fittings Computers Plant and machinery If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of an asset, the depreciation of that asset is revised prospectively to reflect the new expectations. On disposal, the difference between the net disposal proceeds and the carrying amount of the item sold is recognised in profit or loss. Financial liabilities Financial liabilities are initially recognised at the transaction price (including transaction costs). Trade payables are obligations on the basis of normal credit terms and do not bear interest. Financial risk management objectives and policies The House's activities expose it to a variety of financial risks, which include credit, and interest rate risks and effects of changing prices. The company's overall risk management programme focuses on acceptable level of risk and the unpredictability of risk and changes in the business environment and seeks to minimise the potential adverse effects of such risks on its financial performance. 9 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 2019 Shs 2. Income Accommodation & Food Caffeteria Hall hire 2018 Shs 10,787,540 8,611,765 196,500 19,595,805 3. Other Income Interest Income 16,023,767 8,962,258 235,656 25,221,681 249,627 - 249,627 4. Operating deficit The following items have been charged in arriving at operating deficit Staff cost Auditors' remuneration 6,977,098 80,000 10 8,137,968 80,000 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 5. 2018 Shs Computers Shs Total Shs Property and equipment Motor vehicle Shs 6. 2019 Shs Furniture Solar Panel & fittings Shs Cost as at- Additions 1,145,195 - 242,101 1,435,034 202,491 318,482 1,589,787 1,753,516 As at- 1,145,195 1,677,135 520,973 3,343,303 Accumulated depreciation As at- Charge for the year As at- 286,299 286,299 572,598 30,263 209,642 239,905 126,334 22,847 149,181 442,896 518,788 961,684 Net Book Value As at- 572,597 1,437,230 371,792 2,381,619 As at- 858,896 211,838 76,157 1,146,891 997,713 26,652 1,208,108 26,652 1,024,365 1,234,760 Accounts receivables Trade receivables Witholding Tax Receivable 11 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 2019 Shs 7. Cash and cash equivalents For the purpose of the cash flow statement, cash and cash equivalents comprise the following: Cash at bank 8. 2,103,233 2,661,890 2,103,233 2,661,890 Investments I&M Bank Investments 9. 2018 Shs 2,500,000 3,206,954 2,500,000 3,206,954 Related party transactions There are no related party transactions. 10. Accounts payables Provision for contigent liability Accruals Audit Fees 12 320,522 65,068 80,000 320,522 260,475 20,000 465,590 600,997 St. Anna Guest House Annual report and financial statements For the year ended 31st December 2019 SCHEDULE OF EXPENSES 1. Cost of Goods Kitchen supplies Caffeteria supplies Housekeeping 2. Employment expenses Payroll costs Medical 3. Administrative expenses Vehicle repairs & Maintenance Audit fees Office running expenses Bank Charges Local transport & Entertainment Telephone costs/Mobile/Internet CCTV/Alarm fence Gifts & Donations Generator Internet Advertisement & Marketing Website maintenance 3. Establishment costs Security Insurance Repairs & Maintenance Business licenses & Permits Electricity, Rent, Water & Sewarage Depreciation expense 13 2019 Shs 2018 Shs 6,121,940 674,568 6,921,704 135,553 1,128,179 6,796,507 8,185,436 6,925,924.28 51,174 8,071,624 66,345 6,977,098 8,137,968 173,750 80,000 1,541,973 2,586 42,401 53,224 182,500 12,500 173,880 55,688 104,930 - 8,190 80,000 2,021,713 1,084 23,740 77,914 621,800 34,483 155,172 56,897 128,215 47,138 2,423,432 3,256,345 766,568 8,621 894,649 205,750 832,640 518,788 138,617 60,855 3,820,026 220,127 1,220,961 442,896 3,227,015 5,903,482