Braleen Court Body Corporate (Registration number SS191/1992) Annual financial statements for the year ended 28 February 2010

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1 Annual financial statements for the year ended 28 February 2010 Russell James and Company Incorporated Chartered Accountants (S.A.) Registered Auditors Issued 20 August 2010

2 Index The reports and statements set out below comprise the annual financial statements presented to the board of trustees: Index Page Independent Auditor's report 2-3 Trustees' Responsibilities and Approval 4 Trustees' Report 5-6 Statement of Financial Position 7 Statement of Comprehensive Income 8 Statement of changes in equity 9 Statement of Cash Flows 10 Accounting Policies 11 Notes to the Annual Financial Statements The following supplementary information does not form part of the annual financial statements and is unaudited: Statement of Financial Performance Tax Computation 16 Page 1

3 Independent Auditor's report To the board of trustees of We have audited the accompanying annual financial statements of, which comprise the trustees' report, the statement of financial position as at 28 February 2010, the statement of comprehensive income, the statement of changes in equity and statement of cash flows for the year then ended, a summary of significant accounting policies and other explanatory notes, as set out on pages 5 to 13. Trustees' Responsibility for the Financial Statements The body corporate's trustees are responsible for the preparation and fair presentation of these annual financial statements in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and in the manner required by the Sectional Titles Act, 1986 (Act No. 95 of 1986). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of annual 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. Auditor's' Responsibility Our responsibility is to express an opinion on these annual 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 annual financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual financial statements. The procedures selected depend on the auditor's' judgement, including the assessment of the risks of material misstatement of the annual 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 annual financial statements in order to design audit procedures that are appropriate in 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 the trustees, as well as evaluating the overall presentation of the annual 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 annual financial statements present fairly, in all material respects, the financial position of the body corporate as of 28 February 2010, and of its financial performance and its cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and in the manner required by the Sectional Titles Act, 1986 (Act No. 95 of 1986). Emphasis of Matter Without qualifying our opinion, we draw attention to the note on going concern in the notes to the annual financial statements, which indicates that the body corporate had accumulated losses of R (97,996) and that the body corporate's total liabilities exceed its assets by R (97,996) for the year ended 28 February Page 2

4 Supplementary Information We draw your attention to the fact that the supplementary information set out on pages 14 to 16 does not form part of the annual financial statements and is presented as additional information. We have not audited this information and accordingly do not express an opinion thereon. Russell James and Company Incorporated Chartered Accountants Registered Auditors Per: A.M. Holmes 20 August 2010 Mulbarton Page 3

5 Trustees' Responsibilities and Approval The trustees are required to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the body corporate as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with the International Financial Reporting Standard for Small and Medium-sized Entities. The external auditors are engaged to express an independent opinion on the annual financial statements. The annual financial statements are prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates. The trustees acknowledge that they are ultimately responsible for the system of internal financial control established by the body corporate and place considerable importance on maintaining a strong control environment. To enable the trustees to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the body corporate and all employees are required to maintain the highest ethical standards in ensuring the body corporate s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the body corporate is on identifying, assessing, managing and monitoring all known forms of risk across the body corporate. While operating risk cannot be fully eliminated, the body corporate endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The trustees are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The trustees have reviewed the body corporate s cash flow forecast for the year to 28 February 2011 and, in the light of this review and the current financial position, they are satisfied that the body corporate has or has access to adequate resources to continue in operational existence for the foreseeable future. The external auditor's is responsible for independently reviewing and reporting on the body corporate's annual financial statements. The annual financial statements have been examined by the body corporate's external auditor's and their report is presented on page 2. The annual financial statements set out on pages 5 to 16, which have been prepared on the going concern basis, were approved by the board on 20 August 2010 and were signed on its behalf by: Trustee Trustee Page 4

6 Trustees' Report The trustees submit their report for the year ended 28 February Review of activities Main business and operations The entity is a body corporate for the benefit of sectional title owners. In terms of the Sectional Titles Act 95 of 1986, the maintenance and management of the building and common property as provided for in the Act and the Rules prescribed thereby, or made thereunder, is under control of the trustees. Sectional title holders are obliged to contribute levies in proportion to their participation quota to enable the body corporate to defray its expenses. Net deficit of the body corporate was R 99,013 ( deficit R 18,221), after providing for taxation of R 963 ( R 101). 2. Going concern We draw attention to the fact that at 28 February 2010, the body corporate had accumulated deficits of R (97,996) and that the body corporate's total liabilities exceed its assets by R (97,996). These conditions give rise to a material uncertainty, which may cast doubt about the the body corporate's ability to continue as a going concern and therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business. 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 the reporting period The trustees are not aware of any matter or circumstance arising since the end of the financial year. 4. Contributions Contributions paid by sections owners and interest earned during the year were insufficient to meet expenditure, resulting in a levy deficit of R (99,013) ( R (18,221)). 5. Trustees The trustees of the body corporate during the year and to the date of this report are as follows: Name A. Semango H. Magwana K. Chetty M. Lepota P. Chetty R. Kenny V.E. van Ster Page 5

7 Trustees' Report 6. Managing Agent The managing agent of the body corporate is Astrodon (Proprietary) Limited of: Business address Postal address 15 Vermooten Street Brackenhurst Alberton 1448 P.O. Box Randhart Alberton Auditor's Re-appointment of Russell James and Company Incorporated as auditors for the following financial year, will be decided at the annual general meeting. Page 6

8 Assets Statement of Financial Position Note(s) R R Current Assets Trade and other receivables 2 4,817 1,802 Cash and cash equivalents 3 1,867 23,088 6,684 24,890 Total Assets 6,684 24,890 Equity and Liabilities Members' funds and reserves Accumulated deficit (97,996) 1,017 Liabilities Current Liabilities Current tax payable 1, Trade and other payables 4 103,512 23, ,680 23,873 Total Equity and Liabilities 6,684 24,890 Page 7

9 Statement of Comprehensive Income Note(s) R R Revenue 5 50, ,851 Other income 60,286 53,300 Operating expenses (209,083) (192,646) Operating (deficit) (98,344) (18,495) Investment revenue (Deficit) before taxation (98,050) (18,120) Taxation 7 (963) (101) Net (deficit) for the year (99,013) (18,221) Other comprehensive income - - Total comprehensive deficit for the year (99,013) (18,221) Page 8

10 Statement of changes in equity Unit owners Accumulated Total equity capital deficit R R R Balance at 01 March ,238 19,238 Changes in equity Total comprehensive deficit for the year - (18,221) (18,221) Total changes - (18,221) (18,221) Balance at 01 March ,017 1,017 Changes in equity Total comprehensive deficit for the year - (99,013) (99,013) Total changes - (99,013) (99,013) Balance at 28 February (97,996) (97,996) Page 9

11 Statement of Cash Flows Note(s) R R Cash flows from operating activities Cash receipts from customers 50, ,851 Cash paid to suppliers and employees (71,969) (133,235) Cash used in operations 9 (21,515) (12,384) Interest income Net cash from operating activities (21,221) (12,009) Total cash movement for the year (21,221) (12,009) Cash at the beginning of the year 23,088 35,097 Total cash at end of the year 3 1,867 23,088 Page 10

12 Accounting Policies 1. Presentation of Annual Financial Statements The annual financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rands. These accounting policies are consistent with the previous period. 1.1 Property, plant and equipment In terms of Section 16(1) of the Sectional Titles Act 95 of 1986, common property is owned by the Sectional Owners, jointly and in undivided shares, proportionate to the quotas of the respective sections. It is therefore, common practise not to capitalise property, plant and equipment, but to expense in the year of acquisition. 1.2 Tax Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Tax expenses The body corporate is taxed in terms of section 10(1)(e) of the Income Tax Act, In terms of this section, revenue other than from investments and other income up to R50,000 per annum of a body corporte, are exempt from taxation. Therefore, taxation is calculated and provided for on investment income and other income greater than R50,000 per annum less a portion of deductible administrative expenses. 1.3 Revenue Levies and recoveries are recognised as revenue once owners are invoiced. Ordinary levies are invoiced monthly, based on the proportional amount as per the approved budget. Other recoveries are recognised as and when becoming due by the owners.when the inflow of cash and cash equivalents is deferred, the fair value of the consideration receivable is the present value of all future receipts using the imputed rate of interest. Interest is recognised, in surplus or deficit, using the effective interest rate method. Page 11

13 Notes to the Annual Financial Statements R R 2. Trade and other receivables Municipal deposits 4,817 1, Cash and cash equivalents Cash and cash equivalents consist of: Bank balances 1,867 23, Trade and other payables Accrued audit fees 4,988 - Accrued expense - Centrec Trust Financial Services (Pty) Ltd 3,420 - Accrued expense - City of Johannesburg 13,539 14,664 Accrued expense - JHB Water (domestic effluence) 1,360 - Accrued expense - JHB Water (water) Accrued expense - Lennerts Meter Services CC Other payables - 9,004 Other payables - Key Realtors 5,398 - Other payables - Propell Finance (not funded levies) 74, Revenue 103,512 23,668 Levies received - funded 80, ,956 Levies received - not funded (38,337) 265 Electricity recoveries - funded 44,366 2,051 Electricity recoveries - not funded (35,775) - Garage levies received - 7, Investment revenue 50, ,851 Interest revenue Bank Page 12

14 Notes to the Annual Financial Statements R R 7. Taxation Major components of the tax expense Current Local income tax - current period Auditor's' remuneration Fees 4,988 4,389 Adjustment for previous year Cash used in operations 5,786 4,389 Deficit before taxation (98,050) (18,120) Adjustments for: Interest received (294) (375) Changes in working capital: Trade and other receivables (3,015) (2,909) Trade and other payables 79,844 9, Tax refunded (21,515) (12,384) Balance at beginning of the year (205) (104) Current tax for the year recognised in surplus or deficit (963) (101) Balance at end of the year 1, Page 13

15 Statement of Financial Performance Note(s) R R Revenue Levies received - funded 80, ,956 Levies received - not funded (38,337) 265 Electricity recoveries - funded 44,366 2,051 Electricity recoveries - not funded (35,775) - Garage levies received - 7, , ,851 Other income Rental income 60,286 53,300 Interest received ,580 53,675 Expenses (Refer to page 15) (209,083) (192,646) (Deficit) before taxation (98,050) (18,120) Taxation Net (deficit) for the year (99,013) (18,221) Page 14 The supplementary information presented does not form part of the annual financial statements and is unaudited

16 Statement of Financial Performance Note(s) R R Operating expenses Administration fees - Propell Finance 10,165 - Auditors remuneration 8 5,786 4,389 Bank charges 2,377 2,440 Cleaning 1,205 2,800 Employee costs 18,520 23,504 Insurance 7,916 7,472 Managing agents fees 4,925 20,063 Meter reading fees 2,977 2,706 Municipal expenses - assessment rates Municipal expenses - domestic effluence 15,701 14,101 Municipal expenses - electricity 89,084 - Municipal expenses - refuse removal - 2,415 Municipal expenses - water 45,881 54,715 Printing and stationery Repairs and maintenance - general 1,962 33,235 Repairs and maintenance - plumbing 2,056 24, , ,646 Page 15 The supplementary information presented does not form part of the annual financial statements and is unaudited

17 Tax Computation R Net loss per income statement (98,050) Permanent differences 101,488 Net loss for the year 98,050 Exempt income Levies and recoveries received for the year 50,453 Levies and recoveries received exempt (50,453) Rental income received 60,286 Interest received bank 294 Rental income and interest received - exempt up to R50,000 (50,000) Deductible expenses Audit fees incurred in the production of income as apportioned (3,158) Bank charges incurred in the production of income as apportioned (1,297) Managing fees incurred in the production of income as apportioned (2,687) Taxable income for ,438 Taxation 28c in the Rand 963 Tax liability Amount owing/(prepaid) at the beginning of year 205 Tax owing/(prepaid) for the current year Normal tax 963 Per calculation 963 1st provisional payment - 2nd provisional payment - Amount owing/(prepaid) at the end of year 1,168 Page 16

THE BODY CORPORATE OF THE ADDERLEY (Sectional Title Scheme number SS 260/2002) Annual financial statements for the year ended 31 July 2012 DRAFT

THE BODY CORPORATE OF THE ADDERLEY Annual financial statements for the year ended 31 July 2012 Index The reports and statements set out below comprise the annual financial statements presented to the members: