Attached files
Exhibit 99.2
|
THORT Chartered Accountants |
 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements
for the year ended 31 December 2014
These annual financial statements were prepared
by:
West End Corporate Services (Pty) Ltd
These annual financial statements have been independently reviewed in compliance with the applicable requirements of the Companies
Act 71 of 2008.
Published 30 November 2015
P O Box 3352, Dainfern 2055
Telephone: (011) 467 6711
Facsimile: 086 509 1438
E-mail: catherine@thortsa.co.za
www.thortsa.co.za
Partners: Catherine Hewett, CA.(SA), Adv. Tax. Cert
Ian Hewett, CA.(SA), Practice No. 945544
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Index |
The reports and statements set out below comprise the annual financial statements presented to the shareholder:
| Index | Page |
| Director’s Responsibilities and Approval | 2 |
| Independent Reviewers’ Report | 3 |
| Director’s Report | 4 |
| Statement of Financial Position | 5 |
| Statement of Comprehensive Income | 6 |
| Statement of Changes in Equity | 7 |
| Statement of Cash Flows | 8 |
| Accounting Policies | 9 - 11 |
| Notes to the Annual Financial Statements | 12 - 13 |
| Detailed Income Statement | 14 |
| Preparer | |
| West End Corporate Services (Pty) Ltd | |
| Published | |
| 30 November 2015 |
| 1 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Director’s Responsibilities and Approval |
The director is required in terms of the Companies Act 71 of 2008 to maintain adequate accounting records and is responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is his responsibility to ensure that the annual financial statements fairly present the state of affairs of the company 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 Generally Accepted Accounting Principles (GAAP).
The annual financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.
The director acknowledges that he is ultimately responsible for the system of internal financial control established by the company and places considerable importance on maintaining a strong control environment. To enable the director 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 company and all employees are required to maintain the highest ethical standards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The director is 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 director has reviewed the company’s cash flow forecast for the year to 31 December 2015 and, in the light of this review and the current financial position, he is satisfied that the company has or has access to adequate resources to continue in operational existence for the foreseeable future.
The independent reviewers is responsible for independently reviewing and reporting on the company’s annual financial statements. The annual financial statements have been examined by the company’s independent reviewers and their report is presented on page 3.
The annual financial statements set out on pages 4 to 14, which have been prepared on the going concern basis, were approved by the board on 30 November 2015 and were signed on its behalf by:
| /s/ WT James | |
| WT James | |
Johannesburg
30 November 2015
| 2 |
| THORT Chartered Accountants |
|
| Independent Reviewers’ Report |
To the Management of Cards Plus (Pty) Ltd
We have reviewed the annual financial statements of Cards Plus (Pty) Ltd. set out on pages 5 to 13, that comprise the statement of financial position as at 31 December 2014, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.
Director’s Responsibility for the Annual Financial Statements
The company’s director is responsible for the preparation and fair presentation of these annual financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act 71 of 2008, and for such internal control as the directors determine necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error.
Independent Reviewers’ Responsibility
Our responsibility is to express a conclusion on the annual financial statements based on our review. We conducted our review in accordance with International Standards on Review Engagements (ISRE) 2400, Engagements to Review Financial Statements. ISRE 2400 requires us to conclude whether anything has come to our attention that causes us to believe that the annual financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. This Standard also requires us to comply with relevant ethical requirements.
A review of financial statements in accordance with ISRE 2400 consists primarily of making inquiries of management and others within the entity involved in financial and accounting matters, applying analytical procedures, and evaluating the sufficiency and appropriateness of evidence obtained.
A review also requires performance of additional procedures when the practitioner becomes aware of matters that cause the practitioner to believe the annual financial statements as a whole may be materially misstated.
The procedures performed in a review engagement are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these annual financial statements.
Unqualified Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the annual financial statements do not present fairly, in all material respects the financial position of Cards Plus (Pty) Ltd as at 31 December 2014 and its financial performance and cash flows for the year then ended, in accordance with International Financial Reporting Standards and the requirements of the Companies Act 71 of 2008.
Emphasis of Matter
Without qualifying our opinion we draw attention to note 8 of the annual financial statements.
Thort Chartered Accountants
30 November 2015
P O Box 3352, Dainfern 2055
Telephone: (011) 467 6711
Facsimile: 086 509 1438
E-mail: catherine@thortsa.co.za
www.thortsa.co.za
Partners: Catherine Hewett, CA.(SA), Adv. Tax. Cert
Ian Hewett, CA.(SA), Practice No. 945544
| 3 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Director’s Report |
The director has pleasure in submitting his report on the annual financial statements of Cards Plus (Pty) Ltd for the year ended 31 December 2014.
| 1. | Review of financial results and activities |
The annual financial statements have been prepared in accordance with International Financial Reporting Standards and the requirements of the Companies Act 71 of 2008. The accounting policies have been applied consistently compared to the prior year.
Full details of the financial position, results of operations and cash flows of the company are set out in these annual financial statements.
| 2. | Share capital |
There have been no changes to the authorised or issued share capital during the year under review.
| 3. | Directorate |
The director in office at the date of this report are as follows:
Director
WT James
| 4. | Events after the reporting period |
The director is not aware of any material event which occurred after the reporting date and up to the date of this report.
| 5. | Going concern |
The director believes that the company has adequate financial resources to continue in operation for the foreseeable future and accordingly the annual financial statements have been prepared on a going concern basis. The director has satisfied himself that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The director is not aware of any new material changes that may adversely impact the company. The director is also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the company.
| 6. | Review |
The financial statements are subject to an independent review and have been reviewed by Thort Chartered Accountants.
| 4 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Statement of Financial Position as at 31 December 2014 |
| 2014 | 2013 | |||||||||
| Note(s) | R | R | ||||||||
| Assets | ||||||||||
| Non-Current Assets | ||||||||||
| Property, plant and equipment | 2 | 3,667,642 | - | |||||||
| Goodwill | 3 | 356,799 | - | |||||||
| 4,024,441 | - | |||||||||
| Current Assets | ||||||||||
| Inventories | 1,418,773 | - | ||||||||
| Trade and other receivables | 758,000 | 100 | ||||||||
| Cash and cash equivalents | 1,041,418 | - | ||||||||
| 3,218,191 | 100 | |||||||||
| Total Assets | 7,242,632 | 100 | ||||||||
| Equity and Liabilities | ||||||||||
| Equity | ||||||||||
| Share capital | 4 | 100 | 100 | |||||||
| Accumulated loss | (1,589,221 | ) | - | |||||||
| (1,589,121 | ) | 100 | ||||||||
| Liabilities | ||||||||||
| Non-Current Liabilities | ||||||||||
| Other financial liabilities | 5 | 6,598,899 | - | |||||||
| Current Liabilities | ||||||||||
| Trade and other payables | 2,232,854 | - | ||||||||
| Total Liabilities | 8,831,753 | - | ||||||||
| Total Equity and Liabilities | 7,242,632 | 100 | ||||||||
| 5 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Statement of Comprehensive Income |
| 2014 | 2013 | |||||||||
| Note(s) | R | R | ||||||||
| Revenue | 14,033,930 | - | ||||||||
| Cost of sales | (6,878,230 | ) | - | |||||||
| Gross profit | 7,155,700 | - | ||||||||
| Other income | 14,930 | - | ||||||||
| Operating expenses | (8,764,952 | ) | - | |||||||
| Operating loss | (1,594,322 | ) | - | |||||||
| Investment revenue | 9,816 | - | ||||||||
| Finance costs | (4,715 | ) | - | |||||||
| Loss for the year | (1,589,221 | ) | - | |||||||
| 6 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Statement of Changes in Equity |
| Accumulated | ||||||||||||
| Share capital | loss | Total equity | ||||||||||
| R | R | R | ||||||||||
| Issue of shares | 100 | - | 100 | |||||||||
| Total contributions by and distributions to owners of company recognised directly in equity | 100 | - | 100 | |||||||||
| Balance at 01 January 2014 | 100 | - | 100 | |||||||||
| Loss for the year | - | (1,589,221 | ) | (1,589,221 | ) | |||||||
| Balance at 31 December 2014 | 100 | (1,589,221 | ) | (1,589,121 | ) | |||||||
| Note(s) | 4 | |||||||||||
| 7 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Statement of Cash Flows |
| 2014 | 2013 | |||||||||
| Note(s) | R | R | ||||||||
| Cash flows from operating activities | ||||||||||
| Cash used in operations | 7 | (161,052 | ) | (100 | ) | |||||
| Interest income | 9,816 | - | ||||||||
| Finance costs | (4,715 | ) | - | |||||||
| Net cash from operating activities | (155,951 | ) | (100 | ) | ||||||
| Cash flows from investing activities | ||||||||||
| Purchase of property, plant and equipment | 2 | (5,401,530 | ) | - | ||||||
| Cash flows from financing activities | ||||||||||
| Proceeds on share issue | 4 | - | 100 | |||||||
| Repayment of other financial liabilities | 6,598,899 | - | ||||||||
| Net cash from financing activities | 6,598,899 | 100 | ||||||||
| Total cash movement for the year | 1,041,418 | - | ||||||||
| Total cash at end of the year | 1,041,418 | - | ||||||||
| 8 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Accounting Policies |
| 1. | Presentation of Annual Financial Statements |
The annual financial statements have been prepared in accordance with Generally Accepted Accounting Principles (GAAP), and the Companies Act 71 of 2008. 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 |
The cost of an item of property, plant and equipment is recognised as an asset when:
| · | it is probable that future economic benefits associated with the item will flow to the company; and |
| · | the cost of the item can be measured reliably. |
Property, plant and equipment is initially measured at cost.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to. replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.
Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.
Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.
The useful lives of items of property, plant and equipment have been assessed as follows:
The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
| 1.2 | Financial instruments |
Initial recognition and measurement
Financial instruments are recognised initially when the company becomes a party to the contractual provisions of the instruments.
The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.
Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets.
For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.
| 9 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Accounting Policies |
| 1.2 | Financial instruments (continued) |
Trade and other receivables
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.
The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.
Trade and other receivables are classified as loans and receivables.
Trade and other payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.
| 1.3 | 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.
Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Tax expenses
Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:
| · | a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or |
| · | a business combination. |
Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.
Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.
| 1.4 | Share capital and equity |
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
| 10 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Accounting Policies |
| 1.5 | Turnover |
Turnover comprises of sales to customers and service rendered to customers. Turnover is stated at the invoice amount and is exclusive of value added taxation.
| 1.6 | Borrowing costs |
All borrowing costs are recognised as an expense in the period in which they are incurred.
| 11 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Notes to the Annual Financial Statements |
| 2014 | 2013 | |||||||
| R | R | |||||||
| 2. | Property, plant and equipment |
| 2014 | 2013 | |||||||||||||||||||||||
| Cost/ | Accumulated | Cost/ | Accumulated | |||||||||||||||||||||
| Valuation | depreciation | Carrying value | Valuation | depreciation | Carrying value | |||||||||||||||||||
| Plant and machinery | 9,614,425 | (6,259,322 | ) | 3,355,103 | - | - | - | |||||||||||||||||
| Furniture and fixtures | 163,625 | (103,202 | ) | 60,423 | - | - | - | |||||||||||||||||
| Motor vehicles | 236,037 | (49,175 | ) | 186,862 | - | - | - | |||||||||||||||||
| Office equipment | 75,487 | (63,874 | ) | 11,613 | - | - | - | |||||||||||||||||
| IT equipment | 359,407 | (343,619 | ) | 15,788 | - | - | - | |||||||||||||||||
| Computer software | 64,728 | (26,875 | ) | 37,853 | - | - | - | |||||||||||||||||
| Total | 10,513,709 | (6,846,067 | ) | 3,667,642 | - | - | - | |||||||||||||||||
Reconciliation of property, plant and equipment - 2014
| Opening | ||||||||||||||||
| balance | Additions | Depreciation | Total | |||||||||||||
| Plant and machinery | - | 4,946,683 | (1,591,580 | ) | 3,355,103 | |||||||||||
| Furniture and fixtures | - | 87,557 | (27,134 | ) | 60,423 | |||||||||||
| Motor vehicles | - | 236,036 | (49,174 | ) | 186,862 | |||||||||||
| Office equipment | - | 32,674 | (21,061 | ) | 11,613 | |||||||||||
| IT equipment | - | 33,852 | (18,064 | ) | 15,786 | |||||||||||
| Computer software | - | 64,728 | (26,875 | ) | 37,853 | |||||||||||
| - | 5,401,530 | (1,733,888 | ) | 3,667,642 | ||||||||||||
A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the company,
| 3. | Goodwill |
| 2014 | 2013 | |||||||||||||||||||||||
| Cost | Accumulated impairment | Carrying value | Cost | Accumulated impairment | Carrying value | |||||||||||||||||||
| Goodwill | 356,799 | - | 356,799 | - | - | - | ||||||||||||||||||
| 4. | Share capital |
| Authorised | ||||||||
| 1000 Ordinary shares | 1,000 | 1,000 | ||||||
| Issued | ||||||||
| Ordinary | 100 | 100 |
| 5. | Other financial liabilities |
| Held at amortised cost | ||||||||
| Penn Investment Inc (USA) | 6,598,899 | - | ||||||
| The loan is unsecured, interest free and has no fixed terms of repayment. |
The loan has been subordinated until such time as the assets of the company, fairly valued, exceed its liabilities.
| Non-current liabilities | ||||||||
| At amortised cost | 6,598,899 | - |
| 12 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Notes to the Annual Financial Statements |
| 2014 | 2013 | |||||||
| R | R | |||||||
| 5. | Other financial liabilities (continued) |
| 6. | Taxation |
No provision has been made for 2014 tax as the company has no taxable income. The company has an assessed loss available for set off against future taxable income.
| 7. | Cash used in operations |
| Loss before taxation | (1,589,221 | ) | - | |||||
| Adjustments for: | ||||||||
| Depreciation and amortisation | 1,733,888 | - | ||||||
| Interest received - investment | (9,816 | ) | - | |||||
| Finance costs | 4,715 | - | ||||||
| Goodwill | (356,799 | ) | - | |||||
| Changes in working capital: | ||||||||
| Inventories | (1,418,773 | ) | - | |||||
| Trade and other receivables | (757,900 | ) | (100 | ) | ||||
| Trade and other payables | 2,232,854 | |||||||
| (161,052 | ) | (100 | ) |
| 8. | Going concern |
We draw attention to the fact that at 31 December 2014, the company had accumulated losses of R (1,589,221) and that the company’s total liabilities exceed its assets by R (1,589,121)
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.
The ability of the company to continue as a going concern is dependent on a number of factors. The most significant of these is that the director continue to procure funding for the ongoing operations for the company and that the subordination agreement referred to in note 5 of these annual financial statements will remain in force for so long as it takes to restore the solvency of the company.
| 13 |
Cards Plus (Pty) Ltd
(Registration number 2013/222236/07)
Annual Financial Statements for the year ended 31 December 2014
| Detailed Income Statement |
| 2014 | 2013 | |||||||||
| Note(s) | R | R | ||||||||
| Revenue | 14,033,930 | - | ||||||||
| Cost of sales | (6,878,230 | ) | - | |||||||
| Gross profit | 7,155,700 | - | ||||||||
| Other income | ||||||||||
| Discount received | 838 | - | ||||||||
| Interest received | 9,816 | - | ||||||||
| Profit and loss on exchange differences | 14,092 | - | ||||||||
| 24,746 | - | |||||||||
| Operating expenses | ||||||||||
| Accounting fees | 43,322 | - | ||||||||
| Administration and management fees | 480,000 | - | ||||||||
| Advertising | 97,050 | - | ||||||||
| Auditors remuneration | 29,400 | - | ||||||||
| Bad debts | 16,760 | - | ||||||||
| Bank charges | 41,526 | - | ||||||||
| Cleaning | 7,585 | - | ||||||||
| Computer expenses | 101,324 | - | ||||||||
| Delivery expenses | 140,616 | - | ||||||||
| Depreciation, amortisation and impairments | 1,733,888 | - | ||||||||
| Discount allowed | 612 | - | ||||||||
| Donations | 2,500 | - | ||||||||
| Employee costs | 4,333,194 | - | ||||||||
| Entertainment | 13,661 | - | ||||||||
| General expenses | 926 | - | ||||||||
| Insurance | 177,574 | - | ||||||||
| Lease rentals on operating lease | 781,144 | - | ||||||||
| Legal expenses | 24,860 | - | ||||||||
| Levies | 4,014 | - | ||||||||
| Motor vehicle expenses | 188,481 | - | ||||||||
| Municipal expenses | 221,646 | - | ||||||||
| Payroll administration | 23,490 | - | ||||||||
| Printing and stationery | 26,006 | - | ||||||||
| Repairs and maintenance | 29,319 | - | ||||||||
| Secretarial fees | 9,130 | - | ||||||||
| Staff welfare | 50,827 | - | ||||||||
| Subscriptions | 1,397 | - | ||||||||
| Telephone and fax | 101,820 | - | ||||||||
| Training | 34,067 | - | ||||||||
| Travel - local | 9,572 | - | ||||||||
| Workmens compensation | 39,241 | - | ||||||||
| 8,764,952 | - | |||||||||
| Operating loss | (1,584,506 | ) | - | |||||||
| Finance costs | (4,715 | ) | - | |||||||
| Loss for the year | (1,589,221 | ) | - | |||||||
| 14 |