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FRIENDS CHURCH - SABATIA EYE HOSPITAL

COMPANY LIMITED BY GUARANTEE

REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2007

CONTENTS PAGE

DIRECTORS' REPORT 1

STATEMENT OF DIRECTORS' RESPONSIBILITIES 2

INDEPENDENT AUDITORS' REPORT 3

INCOME STATEMENT 4

BALANCE SHEET 5

STATEMENT OF CHANGES IN EQUITY 6

CASH FLOW STATEMENT 7

NOTES TO THE FINANCIAL STATEMENTS 8-12


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FRIENDS CHURCH - SABATIA EYE HOSPITAL

DIRECTORS' REPORT

FOR THE YEAR ENDED 31ST DECEMBER 2007

The Directors submit their report together with the audited financial statements for the year ended
31st December 2007

PRINCIPAL ACTIVITIES
The principal activities of the Hospital are, offering medical facilities for treatmet of opthalmic
diseases and ailments and provision of medical assistance to needy members of society
by offering treatment,low vision services and visual rehabilitation

RESULTS
The result of the year are set out in page 4.

PATRON
Hon.Musalia Mudavadi

DIRECTORS

The Directors who held office during the year were: -

1. Mr.Alfred Lulu Chairman


2. Dr Demissie Tadesse Hospital Director
3. Mr Hannington Mbato Director
4 Mr Mweresa Eboso "
5 Mr Ramesh Mehta "
6 Mr Javan Chondo "
7 Mr William Indumwa "
8 Ms Pricilla Muhonja "
9 Mr Charanjit S. Hayer "

EX- OFFICIO
1 Medical officer of Health ( Vihiga District)
2 District Commissoner (Vihiga District )

MANAGEMENT COMMITTEE
Mr Macdonald Sabwa Hospital Aministrative Officer
Mrs Mercylene Mbai Nurse in Charge
Mr Samwel Tsimbwela Accountant
Dr Isaac Wanjala Senior Ophthalmologist
Dr Demissie Tadesse Hospital Director
AUDITORS
The Company's Auditors, Messrs Mbaya & Associates have expressed their willingness to
continue in office and do so under the terms of section (159) 2 of the Companies Act ( Cap 486)

BY ORDER OF THE BOARD

SECRETARY

2008
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FRIENDS CHURCH - SABATIA EYE HOSPITAL

INCOME STATEMENT

FOR THE YEAR ENDED 31ST DECEMBER, 2007

2007 2006
K.SHS K.SHS

INCOME

DONATIONS 4 324,510 139,500

NET INCOME FROM PATIENTS 5 12,122,660 8,856,670

GRANTS FROM CHRISTOFFEL BLINDEN


MISSION 6 11,605,887 14,110,823

TOTAL INCOME 24,053,057 23,106,993

EXPENDITURE

PERSONNEL COSTS 12 9,619,052 8,402,834

ADMINISTRATIVE COSTS 13 2,614,079 2,539,280

TRANSPORT & TRAVEL COSTS 14 1,528,078 1,246,952

OTHER COSTS 15 3,772,529 4,491,559

ASSETS ACQUIRED USING DONOR FUNDS - 3,253,484

TOTAL EXPENDITURE 17,533,738 19,934,109

NET SURPLUS TRANSFRRED TO RESERVES 6,519,319 3,172,884


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FRIENDS CHURCH - SABATIA EYE HOSPITAL

BALANCE SHEET

AS AT 31ST DECEMBER, 2007


2007 2006
NOTES KSHS KSHS
ASSETS

NON CURRENT ASSETS


Property & Equipment 2 65,258,900 65,037,255

CURRENT ASSETS

Inventories 5 5,621,409 3,135,513


Trade and other receivables 8 3,371,294 2,061,146
Cash and Cash equivalents 17 17,478,535 16,798,858
26,471,238 21,995,517

TOTAL ASSETS 91,730,138 87,032,772

EQUITY AND LIABILITIES

CAPITAL AND RESERVES


Designated Funds 9 764,612 1,652,250
General Reserve 10 28,837,923 20,035,733
Capital Reserve 11 60,581,582 62,864,453
90,184,117 84,552,436

CURRENT LIABILITIES

Trade and other payables 7 1,546,021 2,480,336

TOTAL EQUITY AND LIABILITIES 91,730,138 87,032,772

The financial statements were approved by the board of directors on ……………………...and were
signed on its behalf by;

…………………………………………. CHAIRMAN

………………………………………….. HOSPITAL DIRECTOR


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FRIENDS CHURCH - SABATIA EYE HOSPITAL

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31ST DECEMBER, 2007

DESIGNATED CAPITAL GENERAL


FUNDS FUND FUND TOTAL

K.shs K.shs K.shs K.shs

As at 1 January 2006 - 51,161,926 25,311,892 76,473,818

Surplus for the year - - 3,172,884 3,172,884

Assets acquired during


the year - 3,253,484 - 3,253,484

Transfer of assets 11,010,739 (11,010,739) -

Funds from Donors 1,652,250 - - -

Depreciation transfer - (2,561,696) 2,561,696 -

At 31st December 2006 1,652,250 62,864,453 20,035,733 84,552,436

At 1st January 2007 1,652,250 62,864,453 20,035,733 84,552,436

Surplus for the year - - 6,519,319 6,519,319

Received During the year 764,612 - - 764,612

Utilised during the year (1,652,250) - - (1,652,250)

Depreciation transfer - (2,282,871) 2,282,871 -

At 31st December 2007 764,612 60,581,582 28,837,923 90,184,117


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FRIENDS CHURCH - SABATIA EYE HOSPITAL

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER, 2007

1. ACCOUNTING POLICIES

a) Basis of preparation

The financial statements have been prepared under the historical cost convention.

b) Property and equipment

All property and equipment is initially recorded at cost and is stated at historical cost less
accumulated depreciation

c) Depreciation

Property and equipment are depreciated on a reducing balance basis at rates calculated
to write them off to a residual value over their expected useful life.

The following rates have been used :-


RATES %

Land & Buildings Nil


Motor Vehicles 25
Office Furniture & Fittings 12.5
Computers 30

c) Inventories

Inventories are stated at the lower of cost and net realizable value.

d) Revenue
Income comprises of the amount received from donations , grants ,treatment of
patients and dispensing of medicines. Grants and donations from Christoffel
Blinden Mission are realised in the income and expenditure account on receipt basis.

e) Foreign Currency Transactions

Foreign currency transactions are translated at the ruling rates at the transaction dates
Monetary items denominated in foreign currencies at the balance sheet date are translated
into kenya shillings at the rate ruling at that date.

f) Trade receivables
Trade receivables are carried at anticipated realisable values. An estimate is made for doubtful
receivables based on review of outstanding amounts at the year end. Bad debts are written off
off during the year in which they are identified.
FRIENDS CHURCH - SABATIA EYE HOSPITAL 10

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31ST DECEMBER, 2007

2007 2006
KSHS KSHS
3 INCOME FROM PATIENTS
Admission fees 6,481,594 5,918,875
Consultation fee 1,484,130 1,260,440
Sale of drugs 3,468,145 2,349,279
Sale of eye glasses 1,199,045 951,389
Mobile Clinics Income 1,066,434 1,440,415
Miscellaneuous income 94,084 7,046
Lions camp income 3,080,810 3,220,245
Sponsored Patients- Oud Africa 1,622,250 444,000
Kitchen meals Income 240,922 202,102

18,737,414 15,793,791

4 DONATIONS
Local Donations - 139,500
Foreign Donations 324,510 -
324,510 139,500

5 NET INCOME FROM PATIENTS


INCOME FROM PATIENTS 18,737,414 15,793,791

LESS; COST OF SALES


Opening Inventories 3,135,513 2,707,903
Add ; Hospital Supplies 9,100,650 7,364,731
12,236,163 10,072,634
Less; Closing Inventories (5,621,409) (3,135,513)
6,614,754 6,937,121

Net Income 12,122,660 8,856,670

6 GRANTS FROM CHRISTOFFEL BLINDEN MISSION

Grants for general operations 7,033,378 7,585,864


Grants in kind 4,572,509 3,271,475
Capital grants - 3,253,484
TOTAL GRANTS RECEIVED 11,605,887 14,110,823

NB; Other Income Received from CBM as reimbursements have been


credited directly to the income account they relate to.

7 TRADE PAYABLES
Trade Payables 1,101,146 2,012,947
Accruals 444,875 467,389
1,546,021 2,480,336
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FRIENDS CHURCH - SABATIA EYE HOSPITAL

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31ST DECEMBER, 2007


2007 2006
KSHS KSHS
8 TRADE RECEIVABLES
Trade receivables 2,888,927 1,504,275
Staff Advances 97,399 111,133
Prepayments 384,968 445,738
3,371,294 2,061,146

9 DESIGNATED FUNDS
Balance at 1st january 2006 1,652,250 -
Donations received during the year 764,612 2,096,250
Utilised during the year (1,652,250) (444,000)
Balance at 31st December 2006 764,612 1,652,250

The funds are donations received for sponsorshp of poor patients to pay for their hospital bills
The funds are from Oud Africa and Kenya Society for the Blind

10 GENERAL FUND
Balance brought forward 20,035,733 25,311,892
Add; Net surplus for the year 6,519,319 3,172,884
Depreciation transfer 2,282,871 2,561,696
Transfer of assets - (11,010,739)
28,837,923 20,035,733
11 CAPITAL FUND
Balance brought forward 62,864,453 51,161,926
Add; Assets acquired during the year - 14,264,223
Depreciation on assets (2,282,871) (2,561,696)
60,581,582 62,864,453

12 PERSONNEL COSTS
Salaries and wages 9,410,013 8,156,562
Staff medical insurance 209,039 246,272
9,619,052 8,402,834
13 ADMINISTRATIVE COSTS
Telephone and postage & E-mail 323,348 443,529
Printing and Stationery 427,443 445,767
Security 351,547 336,000
Light and water 453,198 286,412
Insurances 420,678 357,896
Repairs and Maintenance 281,217 465,777
Bank charges 70,633 53,549
Legal fee 91,200 -
Audit and Accountancy fee 121,800 110,200
Advertising 14,090 -
Newspapers & periodicals 14,875 10,100
Licenses and workpermits 44,050 30,050
2,614,079 2,539,280
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FRIENDS CHURCH - SABATIA EYE HOSPITAL

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31ST DECEMBER, 2007


2007 2006
K.Shs K.Shs
14 TRANSPORT AND TRAVEL COSTS
Motor Vehicle running expenses 1,182,850 976,325
Travelling and accommodation 345,228 270,627
1,528,078 1,246,952
15 OTHER COSTS
Ward Maintenance - 78,745
Depreciation 2,282,871 2,561,696
Subscriptions 74,350 32,764
Staff trainig 877,608 503,260
Staff uniforms and linen 242,260 263,398
General Office expenses - 101,805
Donations 22,000 2,610
Anniversary expenses - 266,816
Poor Patients Sponsorship 273,440 680,465
3,772,529 4,491,559

16 CASHFLOWS FROM OPERATING ACTIVITIES


Surplus for the year 6,519,319 3,172,884
Adjustment for ; Depreciation 2,282,871 2,561,696
8,802,190 5,734,580
WORKING CAPITAL CHANGES
Changes in designated fund (887,638) 1,652,250
Changes in trade and other payables (934,315) 1,502,202
Changes in trade and other receivables (1,310,148) 729,319
changes in inventories (2,485,896) (427,610)
(5,617,997) 3,456,161
Net cash generated from operating activities 3,184,193 9,190,741

17 CASH AND CASH EQUIVALENTS


For the purposes of the cash flow statement, cash and cash equivalents
comprise of the following
Bank balance 17,346,448 16,686,604
Cash in hand 132,087 112,254
17,478,535 16,798,858

18 CURRENCY
These financial statements are presented in Kenya shillings ( K.shs)

19 REGISTERED OFFICE
Sabatia Eye Hospital
Kisumu - Kapsabet Road
P.O. Box 214
Wodanga
-
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FRIENDS CHURCH - SABATIA EYE HOSPITAL

CASHFLOW STATEMENT

FOR THE YEAR ENDED 31ST DECEMBER 2007

2007 2006
Note K.shs K.shs

CASHFLOW FROM OPERATING ACTIVITIES

Cash generated from operating activities 16 3,184,193 9,190,741

CASHFLOW FROM INVESTING ACTIVITIES

Acquisition of property and equipment (2,504,516) (16,437,025)


Changes in capital reserve - 3,253,484

NET CASHFLOW FROM INVESTING ACTIVITIES (2,504,516) (13,183,541)

NET INCREASE/(DECREASE) IN CASH AND


CASH EQUIVALENT 679,677 (3,992,800)

CASH AND CASH EQUIVALENT AT


BEGINNING OF YEAR 16,798,858 20,791,658

CASH AND CASH EQUIVALENT AT END OF


YEAR 17 17,478,535 16,798,858
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FRIENDS CHURCH - SABATIA EYE HOSPITAL

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31ST DECEMBER, 2007

2 PROPERTY AND EQUIPMENT

LAND AND MOTOR HOSPITAL FURNITURE


BUILDINGS VEHICLES EQUIPMENT & FITTINGS COMPUTERS TOTAL

COST/VALUATION KSHS KSHS KSHS KSHS KSHS KSHS

At 1st January, 2007 52,725,009 7,791,561 11,628,532 2,519,625 1,353,780 76,018,507

Additions 705,116 1,330,015 469,385 - 2,504,516

At 31st December, 2007 53,430,125 7,791,561 12,958,547 2,989,010 1,353,780 78,523,023

DEPRECIATION

At 1st January, 2007 - 4,527,742 3,936,904 1,796,756 719,850 10,981,252

Charge for the year - 815,955 1,127,705 149,032 190,179 2,282,871

At 31st December, 2007 - 5,343,697 5,064,609 1,945,788 910,029 13,264,123

NET BOOK VALUE

At 31st December, 2007 53,430,125### 2,447,864### 7,893,938


### 1,043,222### 443,751
### 65,258,900

At 31st December, 2006 52,725,009 3,263,819 7,691,628 722,869 633,930 65,037,255