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Eddie Chikamhi Senior Sports Reporter
THE long-awaited ZIFA Annual General Meeting sailed through with little drama yesterday after delegates adopted the association’s audited financial statements which, however, had received an adverse opinion from an independent auditor.
The association’s spokesperson confirmed that the delegates adopted the audited financial statements as at December 31, 2019, and approved the budgets, the payment of the legacy debt project and staff rationalization currently taking place in the ZIFA structures.
The meeting, which was supposed to take place in May and had been postponed several times, also approved new projects that have been put in place by ZIFA, including the construction of new provincial offices.
However, the audit report prepared by external auditors, PNA Chartered Accountants, said the association’s inflation adjusted consolidated financial statements do not conform to International Financial Reporting Standards.
An adverse opinion is a professional opinion made by an auditor indicating that a company’s financial statements are misrepresented, misstated, and do not accurately reflect its financial performance and health.
Audit partner at PNA Chartered Accountants Shepherd Nhondova said in his report to the association’s members that the basis of the adverse report was, among other issues, the non-compliance with International Accounting Standard (IAS) 21 after the association presented their financials at the rate of the USD 1:1 to the ZWL.
Nhondova also pointed out that ZIFA were in breach of International Financial Reporting Standards after failing to furnish the auditors with relevant documents
“The inflation adjusted consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) requirements and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates,” he wrote to the ZIFA members.
“…the decision to change the functional currency only on 22 February 2019 in accordance with SI 33/19 resulted in misstatement to the financial performance and cash flows of the Group, as transactions denominated in USD were not appropriately translated during that period.
“Although the board members acknowledge, that there was a functional currency change and that the rates of exchange rate between the USD and local currency was not 1:1, they have maintained their functional currency as ZWL and have presented the financial statements in ZWL using an exchange rate of 1:1, in compliance with SI 33/19 for periods January and February 2019.
“This constitutes a departure from the requirements of International Accounting Standard 21, and therefore the financial statements have not been prepared in conformity with IFRS.
“Had the Association applied the requirements of IAS 21, many of the elements of the accompanying separate financial statements would have been materially impacted and therefore the departure from the requirements of IAS 21 is considered to be pervasive.
“The financial effects on the separate financial statements of this departure and need for adjustments under IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ have not been determined,” the audit report noted.
The auditors also said the association could not provide them with share certificates, share register book, minutes of annual general meeting of the company and the company tax returns, related to ZIFA (Private) Limited.
“ZIFA (Private) Limited ZIFA (Private) Limited is a company established to acquire by purchase, lease exchange movable and immovable property.
“The financial statements for ZIFA (Private) Limited have been consolidated as at 31 December 2019. We were however not furnished with the share certificates, share register book, minutes of the annual general meeting of the company and the company tax returns.
“Consequently, we could not satisfy ourselves concerning any changes in the ownership structure of ZIFA (Private) Limited or any unrecorded liabilities of the company as at 31 December 2019.”
PNA Chartered Accountants also noted the material uncertainty related to ZIFA as a going concern following the devastating effects of COVID-19 on football this year.
“We draw attention to note 13 in the financial statements, which references the COVID-19 pandemic and its impact as a non-adjusting event after the reporting period.
“Due to the pandemic, football activities have not been operating at full capacity thus resulting in low projected cash flows in the year ending 31 December 2020.
“As stated in note 13, these events or conditions, along with other 5 matters as set forth in note 12, indicate that a material uncertainty exists that may cast significant doubt on the association’s ability to continue as a going concern.
“There are pending legal cases which are being handled by the Association’s lawyers. The contingent liabilities of the pending legal cases have been disclosed in the inflation adjusted financial statements on note 10. Our opinion is not modified in respect of this matter.”
Meanwhile, suspended ZIFA vice-president Gift Banda will spend more time on the sidelines after his issue was not included on the agenda.
Banda was suspended on January 18, 2019, over 14 charges emanating from his “appointment” of Bongani Mafu and Tonderayi Ndiraya as Warriors’ assistant coaches to replace Rahman Gumbo and Lloyd Mutasa. He has since appealed the decision and the matter is yet to be finalized.
“That issue could not be discussed at this meeting because it’s still before judicial bodies,” said Gwesela.
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