CTFA Annual Report 2020

EXECUTIVE COUNCIL'S REPORT The executive council presents his report for the year ended 31 December 2020. 1. Review of activities Main business and operations The principal activity of the association is that the Cosmetic Toiletry & Fragrance Association of South Africa (CTFA) represents and promotes the interest of its member companies. It is an authoritative voice for the industry in South Africa and actively articulates industry viewpoints to government departments. It continues to lead the industry forward with regard to setting regulations and standards, and encourages responsible advertising. There were no major changes herein during the year. The operating results and statement of financial position of the association are fully set out in the attached financial statements and do not in my opinion require any further comment. 2. Going concern The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. 3. Events after reporting date Impact of COVID-19 COVID-19 existed globally at the reporting date. COVID-19 in itself is not an event; however, the National State of Emergency and Lockdown are events which occurred during and, continue to occur after the reporting date as a result of COVID-19. It was concluded that the declaration of COVID-19 as a pandemic is such a non-adjusting event. The impact of COVID-19 on accounting standards that require the use of forward-looking information (expected credit losses) was assessed based on information available as at 31 December 2020. Management has considered the potential impacts on the association by taking a number of factors into consideration, including the macro-economic impact as well as the future revenue of the association. The association has also endeavoured to mitigate the effects of the pandemic on its operations and employees through the postponement of certain projects and having its staff work remotely. In the event that employees have to work on-site, there are strict social-distancing and other COVID-19 protocols to be adhered to. In the event that the association's cash flows are negatively impacted by the pandemic, management plans to utilised the association's reserves as a cash injection for operations. Government intervention appears to be slowing the spread of COVID-19 at different speeds in different countries. The severity will be influenced by the lockdown period and the easing thereof. It is anticipated that the COVID-19 pandemic may have a substantial impact on revenue countered by material reduction in expenses and therefore the residual impact on profitability for the year ending 31 December 2021 is not expected to be significant. It is, however, not possible to make an accurate estimate of its full financial effect for the year ahead as the virus's infection rate and impact on macro-economic conditions is uncertain. 4. Executive Councils There have been no changes in ownership during the current financial year. 5. Independent Auditors Watermans Registered Auditors were the independent auditors for the year under review. ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 6