The annual report and the annual return are different documents with different audiences. The report goes to the members; the return goes to the Registrar. This article deals with the report. The return has its own article.
The obligation
Section 74(1) of the Associations Incorporation Act 2023 requires the committee of every incorporated association, “at least once every calendar year”, to prepare an annual report on the affairs of the association. Two exceptions exist. The report need not be prepared where every member has given written notice waiving the right to inspect it (section 74(2)), or where the association is a member benefit association whose rules state that annual reports need not be prepared (section 74(3)). A public benefit association cannot dispense with the report through its rules. Failure by the committee is an offence by every committee member, with a fine of up to K5,000 or three months (section 74(4)). The Registrar may extend the period for a special reason, even beyond the calendar year (section 74(5)).
Availability to members
Section 75 requires a copy of the report to be made available for inspection “at the principal place of business of the incorporated association and at the place where the incorporated association’s records are kept, if different, on working days between the hours of 9:00 a.m. and 5:00 p.m. not less than one month before the date fixed for holding the annual meeting of members”. The report is not required to be posted to every member, though the rules may require that and section 140 allows delivery by email. The one-month window means the report must be finished well before the meeting, which for an association with a 31 December balance date that needs audited statements within four months (section 79) points to an annual meeting no earlier than June.
What the report must contain
Every annual report must be in writing, dated, and must:
- describe, so far as the committee reasonably believes it will not harm the association’s objectives, the nature of its activities and the activities in which it has an interest, whether as a member of another association or otherwise;
- include all financial statements required by the Act;
- describe any change in accounting policies since the last report;
- state the particulars of any material interests disclosed by committee members during the year;
- state, for each committee member and former committee member, the total remuneration and value of other benefits (including reimbursed expenses) received during the year;
- state the number of employees (other than committee members) whose remuneration and benefits exceeded the employee threshold amount (K150,000 a year in the draft Regulation);
- state the total value of donations received and made;
- state the total value of membership dues received;
- state the total value of grants received;
- state the names of the committee members and public officer at the date of the report and of anyone who ceased to hold those offices during the year;
- be signed on behalf of the committee by two committee members; and
- contain any other information required by the rules or the regulations.
The disclosures that matter
Items 4 to 9 are the transparency core of the Act. Remuneration is disclosed by name, including expense reimbursements, so members can see what each office-holder received. Material interests disclosed under section 40 are listed. The employee threshold disclosure reveals highly paid staff without naming them. The donation, dues and grant totals let members and, through the financial statements filed with the annual return, the Registrar see where the money came from, and they are the figures against which the section 78 thresholds are tested. An association that receives grants of any amount, or donations above K500,000, or gross revenue above K2,000,000 (draft Regulation figures), must include audited financial statements under item 2. See financial statements and audit.
Describing activities
Item 1 is qualified: the committee describes activities “so far as the committee reasonably believes that it will not be harmful to the objectives”. An advocacy body or a church working in a sensitive area may withhold detail that would expose beneficiaries or partners. The qualification is not a licence to say nothing; the report must still give members a fair picture of what was done with their money.
Report, return and financial statements
| Document | Sections | Prepared by | Goes to | When |
|---|---|---|---|---|
| Annual report | 74–76 | Committee | Members (inspection) | Each calendar year; a month before the annual meeting |
| Financial statements | 78–80 | Committee; audited | Members via the report; Registrar with the return | Within four months of balance date |
| Annual return | 77 | Committee | Registrar | In the allocated month each year |
Section 84(1)(g) requires copies of written communications to all members in the last seven years to be available for inspection, and the annual report is such a communication. Keep every report, with the date it was made available, for seven years.
Sources
- Associations Incorporation Act 2023 — ss 40, 74, 75, 76, 77, 78, 79, 84(1)(g), 140
- Associations Incorporation Regulation 2026 (draft) — regs 6, 7, 8; not gazetted; not on PacLII
Before relying on anything here, read the current text of the Associations Incorporation Act 2023 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.