YOUNG ENTREPRENEURS PROGRAM (“BADER”) FINANCIAL STATEMENTS
31 DECEMBER 2008
INDEPENDENT AUDITORS’ REPORT TO THE ADMINISTRATIVE COMMITTEE OF
YOUNG ENTREPRENEURS PROGRAM (“BADER”)
We have audited the accompanying financial statements of Young Entrepreneurs Program (“Bader”), which comprise the balance sheet as of 31 December 2008 and the statement of revenues and expenses, cash flow statement, and statement of changes in general fund for the year then ended , and a summary of significant accounting policies and other explanatory notes.
Directors’ Responsibility for the Financial Statements
The Directors’ are 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’ 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 control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate for 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.
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 Bader as of 31 December 2008 and its surplus for the year and its cash flows for the year then ended in accordance with the International Financial Reporting Standards.
Ernst & Young
22 June 2009
Beirut, Lebanon
STATEMENT OF REVENUES AND EXPENSES
Year ended 31 December 2008
| |
|
|
|
| |
|
|
|
| |
Notes |
2008 |
2007 |
| |
|
US$ |
US$ |
| |
|
|
|
| REVENUES |
|
|
|
| Donations and membership fees |
3 |
137,876 |
46,640 |
| Interest income |
|
3,708 |
7,948 |
| Other Income |
|
- |
2,396 |
| |
|
|
|
| TOTAL REVENUES |
|
141,584 |
56,984 |
| |
|
|
|
| EXPENSES |
|
|
|
| Service expense |
|
- |
(20,000) |
| Administration expenses |
4 |
(51,078) |
(30,758) |
| Salaries and related benefits |
|
(79,017) |
(36,400) |
| Depreciation expense |
|
(5,451) |
(1,697) |
| |
|
|
|
| TOTAL EXPENSES |
|
(135,546) |
(88,855) |
| |
|
|
|
| SURPLUS (DEFICIT) FOR THE YEAR |
|
6,038 |
(31,871) |
BALANCE SHEET
At 31 December 2008
| |
Notes |
2008 |
2007 |
| |
|
US$ |
US$ |
| ASSETS |
|
|
|
| Non current assets |
|
|
|
| Equipment |
5 |
22,132 |
6,613 |
| |
|
|
|
| Current assets |
|
|
|
| Accounts receivable and prepayments |
6 |
110,062 |
81,497 |
| Bank balances and cash |
7 |
145,016 |
115,550 |
| |
|
|
|
| |
|
255,078 |
197,047 |
| |
|
|
|
| TOTAL ASSETS |
|
277,210 |
203,660 |
| |
|
|
|
| |
|
|
|
| FUND BALANCES AND LIABILITIES |
|
|
|
| Fund balances |
|
|
|
| General fund |
|
206,968 |
200,930 |
| |
|
|
|
| Current liabilities |
|
|
|
| Accounts payable and accruals |
8 |
70,242 |
2,730 |
| |
|
|
|
| TOTAL FUND BALANCES AND LIABILITIES |
|
277,210 |
203,660 |
| |
|
|
|
| |
|
|
|
| The financial statements of Young Entrepreneurs Program (“BADER”) were authorized for issue on behalf of the administrative committee on 22 June 2009 by:
Robert Fadel (President) Michel Abchee (Treasurer) |
CASH FLOW STATEMENT
Year ended 31 December 2008
| |
Notes |
|
|
| |
|
2008 |
2007 |
| |
|
US$ |
US$ |
| OPERATING ACTIVITIES |
|
|
|
| Surplus for the year |
|
6,038 |
(31,871) |
| Adjustments for: |
|
|
|
| Depreciation |
5 |
5,451 |
1,697 |
| Interest income |
|
(3,708) |
(7,948) |
| |
|
|
|
| |
|
7,781 |
(38,122) |
| Working capital changes: |
|
|
|
| Accounts receivable and prepayments |
|
(28,565) |
(31,442) |
| Accounts payable and accruals |
|
67,512 |
(2,153) |
| |
|
|
|
| Net cash from operating activities |
|
46,728 |
(71,717) |
| |
|
|
|
| INVESTMENT ACTIVITIES |
|
|
|
| Purchase of equipment |
5 |
(20,970) |
(556) |
| Interest income received |
|
3,708 |
7,948 |
| |
|
|
|
| Net cash used in investing activities |
|
(17,262) |
7,392 |
| |
|
|
|
| |
|
|
|
| INCREASE (DECREASE) IN BANK BALANCES AND CASH
|
|
29,466 |
(64,325) |
| |
|
|
|
| Bank balances and cash at beginning of the year/period |
|
115,550 |
179,875 |
| |
|
|
|
| BANK BALANCES AND CASH AT THE END OF THE YEAR
|
|
145,016 |
115,550 |
STATEMENT OF CHANGES IN GENERAL FUND
Year ended 31 December 2008
| |
|
US$ |
| |
|
|
| Balance at 1 January 2007 |
|
232,801 |
| |
|
|
| Deficit for the year |
|
(31,871) |
| |
|
|
| Balance at 31 December 2007 |
|
200,930 |
| |
|
|
| Surplus for the year - 2008 |
|
6,038 |
| |
|
|
| Balance at 31 December 2008 |
|
206,968 |
NOTES TO THE FINANCIAL STATEMENTS
31 December 2008
1-ACTIVITIES
Young Entrepreneurs Program (“Bader”) was established by ??? ???? No 99/AD dated 17 March 2006 issued by the Ministry of Interior and Municipalities as a non-profit organization. Bader’s mission is to initiate, train and encourage young entrepreneurs to invest and build their own business. Bader’s head office is at Berytech Building, Damascus Road, National Museum area, Beirut, Lebanon. The total number of members at Bader amounted to 28 as of 31 December 2006.
2-SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards.
The accounting books of Bader are maintained in Lebanese Lira and US Dollar.
Accounting convention
The financial statements are prepared under the historical cost convention.
Changes in accounting policies
Bader changed its accounting policy for the preparation of the financial statements for revenues, from cash basis to accrual basis with effect from 1 January 2008. The change in accounting policy has no material effect on the accounting for revenue during 2007.
Revenue recognition
Donations are accounted as revenue when collected. Donations are presumed to be unrestricted unless donor-imposed restrictions apply.
Restricted donations related to assets are included in the balance sheet as deffered income and recognized as income over the useful life of the assets in order to compensate the depreciation expense in the same period in which they are incurred.
Restricted donations related to compensate Bader for expenses incurred are recognized as donation revenue on a systematic basis in the same periods in which the expenses are incurred.
Membership fees are accounted for during the year when membership fees are due.
Income tax
Bader, being a non-profit organization, is exempted from income tax on profits in accordance with Lebanese fiscal regulations.
Equipment
Equipment is stated at cost less accumulated depreciation and any impairment in value.
Depreciation is calculated on a straight line basis over the estimated useful lives of the assets as follows:
| Office and computer equipment |
5 years |
| Furnitures and fixtures |
5 years |
Bader accounts for a full year depreciation during the year of acquisition.
The carrying value of equipment is reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying value exceed the estimated recoverable amount, the assets are written down to their recoverable amount.
Accounts receivable
Accounts receivable are stated at original invoice amount less a provision for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when there is no possibility of recovery.
Foreign currencies
Bader maintains its books and records in dual currencies, being Lebanese Lira (the local currency) and United States Dollars (the functional currency). Lebanese Lira transactions are translated to United States Dollars at the fixed rate of Lebanese Lira 1,507.5 to United States Dollars 1. Transactions in foreign currencies are recorded in Lebanese Lira and US Dollars at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the income statement.
Fair values
The fair value of interest-bearing items is estimated based on discounted cash flows using interest rates for items with similar terms and risk characteristics.
3-DONATIONS AND MEMBERSHIP FEES
Bader’s main source of funds consist primarily of members’ donations and membership fees.
| |
2008 |
2007 |
| |
US$ |
US$ |
| |
|
|
| Membership fees and subscribtions |
128,000 |
46,640 |
| Donations |
9,876 |
- |
|
|
|
|
137,876 |
46,640 |
|
The list of members is as follows:
Admic SAL, ABC SAL, Aishti SAL, Byblos Bank SAL, Patchi Industrial Co. SAL, Indevco SARL, BLF SAL, Les Affichages Picasso SAL, Kafalat SAL, BLOM Bank SAL, Berytech SAL, Butech, Sidem SAL, Benta Trading Co. SARL, FFA, Dar Al Handassa, Al Mawarid Bank SAL, Azadea Group, Rectangle Jaune, Deutshe Bank AG, Transmed, Info- Pro Management SARL, Murex, Chalhoub Group, SMLC, Mr Elie Saab, Mr Salaheddine Osseiran, Mr Azmi Mikati, Mr Nader Hariri, Mr Jihad El Murr, Mr Marcel Ghanem, Mr Fadi Daou, Mr Michel Fattal, Mr Nabil Fawaz, Mr Hisham Itani, Mr Elie Khoury, Mr Ramsay Najjar, Mrs Hala Fadel, Mrs Randa Abou Sleiman, Mr Harik Gerges.
Donations from Daimler Chrysler amounted to US$ 9,962 during the period.
4-ADMINISTRATION EXPENSES
| |
|
2008 |
2007 |
| |
|
US$ |
US$ |
| |
|
|
|
| Rent |
|
10,966 |
6,675 |
| Professional fees |
|
4,700 |
- |
| Entertainment and hospitality |
|
3,878 |
302 |
| Postage and telecommunication |
|
1,189 |
1,529 |
| Printing and office supplies |
|
8,280 |
15,382 |
| Bank charges |
|
281 |
67 |
| Schooling fees |
|
6,475 |
- |
| Other expenses |
|
15,309 |
6,803 |
| |
|
|
|
| |
|
51,078 |
30,758 |
5-EQUIPMENT
| |
|
2008 |
| |
|
US$ |
| |
|
|
| Cost: |
|
|
| At 1 January 2008 |
|
10,249 |
| Additions |
|
20,970 |
| |
|
|
| At 31 December 2008 |
|
31,219 |
| |
|
|
| Depreciation: |
|
|
| At 1 January 2008 |
|
3,636 |
| Depreciation charge for the year |
|
5,451 |
| |
|
|
| At 31 December 2008 |
|
9,087 |
| |
|
|
| |
|
|
| Net carrying amount |
|
22,132 |
| |
|
|
| |
|
|
| |
|
2007 |
| |
|
US$ |
| |
|
|
| Cost: |
|
|
| At 1 January 2007 |
|
9,693 |
| Additions |
|
556 |
| |
|
|
| At 31 December 2007 |
|
10,249 |
| |
|
|
| Depreciation: |
|
|
| At 1 Janaury 2007 |
|
1,939 |
| Depreciation charge for the period |
|
1,697 |
| |
|
|
| At 31 December 2007 |
|
3,636 |
| |
|
|
| |
|
|
| Net carrying amount |
|
6,613 |
6-ACCOUNTS RECEIVABLES AND PREPAYMENTS
| |
2008 |
2007 |
| |
US$ |
US$ |
| |
|
|
| Amount due from Building Block Fund (under establishment) |
75,872 |
75,872 |
| Amounts due from members |
21,021 |
- |
| Prepaid expense |
3,325 |
1,317 |
| VAT receivables |
9,844 |
4,308 |
| |
|
|
| |
110,062 |
81,497 |
Bader advanced US$ 26,790 to Building Block Fund (under establishment) during 2007 (2006: US$ 49,082). This amount was repaid to Bader when the fund was established in 2009.
7-BANK BALANCES AND CASH
| |
|
2008 |
2007 |
| |
|
US$ |
US$ |
| |
|
|
|
| Bank balances |
|
144,661 |
115,351 |
| Cash |
|
355 |
199 |
| |
|
|
|
| |
|
145,016 |
115,550 |
Bank balances include US$ 5,289 denominated in LBP. Bank balances carry interest at commercial rates.
8-ACCOUNTS PAYABLES AND ACCRUALS
| |
|
2008 |
2007 |
| |
|
US$ |
US$ |
| |
|
|
|
| Trade payables |
|
3,415 |
- |
| Withholding tax payable (contractual staff) |
|
1,671 |
2,730 |
| Social security payable |
|
7,252 |
- |
| Accrued expenses |
|
4,700 |
- |
| Deffered donations revenue |
|
53,204 |
- |
| |
|
|
|
| |
|
70,242 |
2,730 |
Withholding tax payable represents primarily withholding tax payable to the Department of Income Tax.
9-FAIR VALUES OF FINANCIAL INSTRUMENTS
Financial instruments comprise of financial assets, financial liabilities and derivatives.
Financial assets consist of cash and bank balances and receivables. Financial liabilities consist of payables. There are no derivatives.
The fair values of financial assets and liabilities are not materially different from their carrying values at the balance sheet date.
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