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 ABC Trading (Pty) Limited
(Registration Number: 2011 999999 99)
www.excel-skills.com
Financial statements for the year ended 28 February 2013

Table of contents Page

On
Onthis
thissheet:
sheet:
Statement of comprehensive income and retained earnings This
This sheet
sheet includes
includes aa complete
complete set
2set of
of financial
financial statem
statem
automatically
automatically compiled
compiled basedbased on
on the
the current
current reporting
reporting
selected
selected on
on the
the Set-up
Set-up sheet,
sheet, the
the account
account balances
balances thatthat
Statement of financial position the 3
the TBTB sheet
sheet and
and the
the financial
financial information
information that
that is
is include
include
sheet.
sheet. No
No user
user input
input isis required
required on
on this
this sheet
sheet butbut users
users
Statement of changes in equity the
the standard
standard financial
financial statements
statements4based
based on on their
their own
own rr
necessary.
necessary.
Statement of cash flows 5

Accounting policies and explanatory notes to the financial statements 6 - 12

Approval of financial statements

These financial statements were approved by the board of directors and authorised for issue on 20 March 2013.

Page 3 of 17
ABC Trading (Pty) Limited

Statement of comprehensive income and retained earnings for the year ended 28 February 2013

Notes 2013 2012

R R

Revenue 3 6,863,544 5,808,650

Cost of sales (5,178,530) (4,422,575)
Gross profit 1,685,014 1,386,075
Other income 4 88,850 25,000
Distribution costs 0 0
Advertising & marketing costs 0 0
Administrative expenses 0 0
Other expenses 0 0
Finance costs 5 (26,366) (36,712)
Profit / (Loss) before tax 6 1,747,498 1,374,363
Income tax expense 7 (278,868) (189,559)
Profit / (Loss) for the year 1,468,630 1,184,804
Retained earnings at start of year 2,171,350 2,003,765
Dividends (150,000) (100,000)
Retained earnings at end of year 3,489,980 3,088,569

Page 4 of 17
ABC Trading (Pty) Limited

Statement of financial position at 28 February 2013

Notes 2013 2012

R R

ASSETS

Non-current assets
Property, plant & equipment 8 2,749,945 2,521,455
Intangible assets 9 32,900 59,550
Investments 10 142,500 132,500
Deferred tax asset 11 0 2,912
2,925,345 2,716,417

Current assets
Inventories 12 57,380 47,920
Trade and other receivables 13 785,548 773,859
Cash and cash equivalents 14 49,700 35,075
892,628 856,854
Total assets 3,817,973 3,573,271

EQUITY & LIABILITIES

Equity
Share capital 15 45,000 40,000
Retained earnings 3,489,980 3,088,569
3,534,980 3,128,569

Non-current liabilities
Long term loans 16 240,000 160,000
Finance leases 17 23,163 44,624
Deferred tax liability 11 4,309 0
267,472 204,624

Current liabilities
Short term loans 16 10,000 100,000
Current portion of finance leases 17 21,461 19,884
Bank overdraft 14 83,600 115,507
Trade payables 19 354,530 415,520
Provisions 20 214,823 214,870
Interest payable 2,000 1,200
Dividends payable 150,000 100,000
Current tax liability 271,647 190,316
1,108,061 1,157,297
Total liabilities 1,375,533 1,361,921
Total equity & liabilities 4,910,513 4,490,490

Page 5 of 17
ABC Trading (Pty) Limited

Statement of changes in equity for the year ended 28 February 2013

Retained
Share Capital Earnings Total
R R R

At 01 March 2011 30,000 2,003,765 2,033,765

Profit / (Loss) for the year 0 1,184,804 1,184,804

Dividends 0 (100,000) (100,000)

Shares issued 10,000 0 10,000

At 29 February 2012 40,000 3,088,569 3,128,569

Profit / (Loss) for the year 0 1,468,630 1,468,630

Dividends 0 (150,000) (150,000)

Shares issued 5,000 0 5,000

At 28 February 2013 45,000 4,407,199 4,452,199

Page 6 of 17
ABC Trading (Pty) Limited

Statement of cash flows for the year ended 28 February 2013

Notes 2013 2012

R R

Cash flows from operating activities

Profit / (Loss) for the year 1,468,630 1,184,804
- Finance costs 26,366 36,712
- Income taxes 278,868 189,559
- Dividends received (27,000) (25,000)
Adjustments for non-cash income and expenses:
- Depreciation 262,360 0
- Amortisation 13,650 0
- (Fair value gains) / Impairment losses 68,000 0
- Increase / (Decrease) in provisions (47) 3,233
Cash flow included in investing activities:
- (Gains) / Losses on sale of equipment (56,590) 7,340
Changes in operating assets and liabilities:
- Decrease / (Increase) in trade and other receivables (11,689) (52,625)
- Decrease / (Increase) in inventories (9,460) (2,870)
- Increase / (Decrease) in trade and other payables (60,990) 25,330
Cash generated from operations 1,952,098 1,366,483
Interest paid (30,666) (39,712)
Income tax paid (190,316) (173,211)
Net cash from operating activities 1,731,116 1,153,560

Cash flows from investing activities

Proceeds from sale of property, plant & equipment 93,740 (7,340)
Purchases of property, plant & equipment (526,000) 20,000
Purchases of intangible assets (12,000) 0
Purchases of investments (10,000) (25,000)
Interest received 5,100 4,200
Dividends received 27,000 25,000
Net cash used in investing activities (422,160) 16,860

Cash flows from financing activities

Proceeds from issuance of shares 5,000 10,000
Proceeds from loans 20,000 40,000
Repayment of loans (30,000) (30,000)
Repayment of finance leases (64,884) (38,423)
Dividends paid (100,000) (80,000)
Net cash used in financing activities (169,884) (98,423)

Net increase / (decrease) in cash and cash equivalents 1,139,072 1,071,997

Cash and cash equivalents at beginning of year (80,432) (1,957)
Cash and cash equivalents at end of year 14 1,058,640 1,070,040

Page 7 of 17
ABC Trading (Pty) Limited

Accounting policies and explanatory notes to the financial statements for the year ended
28 February 2013

1. General information

ABC Trading (Pty) Limited is a limited company incorporated in South Africa. Their principal business activities are the
manufacture and sale of frozen foods. The address of its registered office and principal place of business is:
10 Berkshire Avenue, Northcliff, Johannesburg.

2. Basis of preparation and accounting policies

These financial statements have been prepared in accordance with the International Financial Reporting Standard for Small
and Medium-sized Entities issued by the International Accounting Standards Board. They are presented in the currency units
of South Africa.

Revenue recognition

Revenue from sales of goods is recognised when the goods are delivered and title has passed. Revenue is measured at the
fair value of the consideration received or receivable, net of discounts and sales-related taxes collected on behalf of the
government of South Africa.

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

Income tax

The income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based
on the taxable profit for the year.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements
and their corresponding tax bases (known as temporary differences). Deferred tax liabilities are recognised for all temporary
differences that are expected to increase taxable profit in the future. Deferred tax assets are recognised for all temporary
differences that are expected to reduce taxable profit in the future, and any unused tax losses or unused tax credits. Deferred
tax assets are measured at the highest amount that, on the basis of current or estimated future taxable profit, is more likely
than not to be recovered. The net carrying amount of deferred tax assets is reviewed at each reporting date and is adjusted to
reflect the current assessment of future taxable profits. Any adjustments are recognised in profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the taxable profit (tax loss) of the periods in which it
expects the deferred tax asset to be realised or the deferred tax liability to be settled, on the basis of tax rates that have been
enacted or substantively enacted by the end of the reporting period.

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated
impairment losses. Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated
useful lives, using the straight-line method. The following rates are used for the depreciation of property, plant and equipment:

Buildings 2%
Plant & equipment 20%
Furniture & fixtures 16.7%

If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of an asset,
the depreciation of that asset is revised accordingly to reflect the new expectations.

Page 8 of 17
Page 9 of 17
ABC Trading (Pty) Limited

Accounting policies and explanatory notes to the financial statements for the year ended
28 February 2013 (continued)

Intangible assets

Intangible assets are stated at cost less accumulated amortisation and any accumulated impairment losses. It is amortised
over its estimated life of five years using the straight-line method. If there is an indication that there has been a significant
change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised accordingly to
reflect the new expectations.

Impairment of assets

At each reporting date, property, plant and equipment and intangible assets are reviewed to determine whether there is any
indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable
amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If the
estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an
impairment loss is recognised immediately in profit or loss.

Similarly, at each reporting date, inventories are assessed for impairment by comparing the carrying amount of each item of
inventory (or group of similar items) with its selling price less costs to complete and sell. If an item of inventory (or group of
similar items) is impaired, its carrying amount is reduced to selling price less costs to complete and sell, and an impairment
loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the
revised estimate of its recoverable amount (selling price less costs to complete and sell, in the case of inventories), but not
in excess of the amount that would have been determined had no impairment loss been recognised for the asset (or group of
related assets) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership of the leased asset to the company. All other leases are classified as operating leases.

Rights to assets held under finance leases are recognised as assets of the company at the fair value of the leased property
(or, if lower, the present value of minimum lease payments) at the inception of the lease. The corresponding liability to the
lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned
between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are deducted in measuring profit or loss. Assets held under finance leases are
included in property, plant and equipment, and depreciated and assessed for impairment losses in the same way as
owned assets.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the lease.

Inventories

Inventories are stated at the lower of cost and selling price less costs to complete and sell. Cost is calculated using the
first-in, first-out (FIFO) method.

Trade and other receivables

Most sales are made on the basis of normal credit terms, and the receivables do not bear interest. Where credit is extended
beyond normal credit terms, receivables are measured at amortised cost using the effective interest method. At the end of
each reporting period, the carrying amounts of trade and other receivables are reviewed to determine whether there is any
objective evidence that the amounts are not recoverable. If so, an impairment loss is recognised immediately in profit or loss.

Page 10 of 17
Page 11 of 17
ABC Trading (Pty) Limited

Accounting policies and explanatory notes to the financial statements for the year ended
28 February 2013 (continued)

Trade payables

Trade payables are obligations on the basis of normal credit terms and do not bear interest.

Bank loans and overdrafts

Interest expenses are recognised on the basis of the effective interest method and are included in finance costs.

3. Revenue
2013 2012
R R

Sale of goods 6,743,544 5,688,650

Other revenue 120,000 120,000
6,863,544 5,808,650

4. Other income
2013 2012
R R

Dividends received 27,000 25,000

Gain on disposal of property, plant & equipment 61,850 0
Miscellaneous income 0 0
88,850 25,000

5. Finance costs
2013 2012
R R

Interest on loans and overdraft (21,250) (30,135)

Interest on finance leases (5,116) (6,577)
(26,366) (36,712)

6. Profit before tax

The following items have been recognised as expenses (income) in determining profit before tax:
2013 2012
R R

Cost of inventories recognised as expense 5,178,530 4,422,575

Foreign exchange (gains) / losses (1,000) 0
Loss on disposal of property, plant & equipment (5,260) (7,340)

7. Income tax expense

2013 2012
R R

Current taxation (271,647) (190,316)

Deferred taxation (refer to note 11) (7,221) 757
(278,868) (189,559)

Page 12 of 17
Income tax is calculated at 28.0 per cent (2012: 28.0 per cent) of the estimated assessable profit for the year.

Page 13 of 17
ABC Trading (Pty) Limited

Accounting policies and explanatory notes to the financial statements for the year ended
28 February 2013 (continued)

8. Property, plant & equipment

Land & Plant & Furniture &
Buildings Equipment Fittings Total
R R R R

Cost
At 01 March 2012 1,900,000 1,102,045 180,000 3,182,045
Additions 50,000 485,000 36,000 571,000
Disposals 0 (241,000) (6,000) (247,000)
At 28 February 2013 1,950,000 1,346,045 210,000 3,506,045

Accumulated depreciation
At 01 March 2012 390,000 228,590 42,000 660,590
Depreciation for the year 20,000 224,360 18,000 262,360
Impairment 10,000 30,000 3,000 43,000
Disposals 0 (204,850) (5,000) (209,850)
At 28 February 2013 420,000 278,100 58,000 756,100

Carrying amount
At 28 February 2013 1,530,000 1,067,945 152,000 2,749,945

The carrying amount of the companys property, plant & equipment includes an amount of R40,000 (2012: R60,000) in
respect of assets held under finance leases.

9. Intangible assets
Goodwill Trademarks Software Total
R R R R

Cost
At 01 March 2012 50,000 27,500 18,500 96,000
Additions 0 12,000 0 12,000
At 28 February 2013 50,000 39,500 18,500 108,000

Accumulated amortization
At 01 March 2012 20,000 7,500 8,950 36,450
Amortisation for the year 5,000 3,950 4,700 13,650
Impairment 25,000 0 0 25,000
At 28 February 2013 50,000 11,450 13,650 75,100

Carrying amount
At 28 February 2013 0 28,050 4,850 32,900

10. Investments
2013 2012
R R

Cost of investment - XYZ Company 142,500 132,500

Dividends received 27,000 25,000

Page 14 of 17
ABC Trading (Pty) Limited

Accounting policies and explanatory notes to the financial statements for the year ended
28 February 2013 (continued)

11. Deferred tax

The following are the deferred tax liabilities (assets) recognised by the company:

Foreign
Trademarks Software Exchange Loss Total
R R R R

At 01 March 2012 3,700 1,020 (7,632) (2,912)

Charge (credit) for the year (600) (680) 8,501 7,221
At 28 February 2013 3,100 340 869 4,309

The company has not recognised a valuation allowance against the deferred tax assets because, on the basis of past
years and future expectations, management considers it probable that taxable profits will be available against which the
future income tax deductions can be utilised.

12. Inventories
2013 2012
R R

Raw materials 42,600 36,450

Work in progress 1,140 900
Finished goods 13,640 10,570
57,380 47,920

13. Trade and other receivables

2013 2012
R R

Trade debtors 720,788 723,381

Amounts due by related parties 8,000 5,000
Prepayments 56,760 45,478
785,548 773,859

14. Cash and cash equivalents

2013 2012
R R

Cash on hand 2,700 2,075

Cash at bank 47,000 33,000
49,700 35,075
Bank overdraft (83,600) (115,507)
(33,900) (80,432)

The bank overdraft is secured by a floating lien over land & buildings owned by the company with a carrying amount of
R1,530,000 at 28 February 2013 (R0 at 29 February 2012). Interest is payable on the bank overdraft at 1 point
above the prime interest rate.

Page 15 of 17
ABC Trading (Pty) Limited

Accounting policies and explanatory notes to the financial statements for the year ended
28 February 2013 (continued)

15. Share capital

At 01 March 2012 40,000

Shares issued during the year 5,000
At 28 February 2013 45,000

The share capital balance as at 28 February 2013 comprise 45,000 ordinary shares (2012: 40,000) with a par value of
R1.00 fully paid, issued and outstanding. An additional 55,000 shares (2012: 60,000) are legally authorised
but unissued.

16. Loans
2013 2012
R R
Non-current
Long term loans 240,000 160,000

Current
Short term loans 10,000 100,000

The long term loans are secured by a floating lien over land & buildings owned by the company with a carrying amount of
R1,530,000 at 28 February 2013 (R0 at 29 February 2012). Interest is payable on the 5-year bank loan at a
fixed rate of 9 per cent of the principal amount.

17. Finance leases

The future minimum lease payments are as follows:

2013 2012
R R

Within one year 25,000 25,000

Later than one year but within five years 25,000 50,000
Later than five years 0 0
50,000 75,000
The obligation is classified as:
2013 2012
R R

Current liability 21,461 19,884

Non-current liability 23,163 44,624
44,624 64,508

18. Commitments under operating leases

The company rents equipment under operating leases. The leases are for an average period of 3 years, with fixed rentals
over the same period.
2013 2012
R R

Operating lease payments recognised as an expense during the year 11,850 13,400

Page 16 of 17
ABC Trading (Pty) Limited

Accounting policies and explanatory notes to the financial statements for the year ended
28 February 2013 (continued)

At year-end, the company has outstanding commitments under non-cancellable operating leases that fall due as follows:
2013 2012
R R

Within one year 12,000 12,000

Later than one year but within five years 24,000 30,000
Later than five years 0 0
36,000 42,000

19. Trade and other payables

2013 2012
R R

Trade payables 263,030 340,520

Amounts due to related parties 12,000 8,000
Accrued expenses 79,500 67,000
354,530 415,520

20. Provisions
Claims Leave Bonuses Total
R R R R

At 01 March 2012 54,300 61,500 99,070 214,870

Charged/(credited) to profit or loss:
- Additions during the year 61,000 81,010 70,373 212,383
- Charges during the year (45,700) (6,260) (97,170) (149,130)
- Reversed during the year (7,800) (53,600) (1,900) (63,300)
At 28 February 2013 61,800 82,650 70,373 214,823

21. Contingent liabilities

During 20?? a customer initiated proceedings against the company for faulty products. The customer asserts that
its total losses are CU?50,000 and has initiated litigation claiming this amount. The companys legal counsel do not
consider that the claim has merit and no provision has therefore been recognised in these financial statements.

22. Events after the end of the reporting period

On 14 March 20?? the directors voted to declare a dividend of CU?1.00 per share (CU?30,000 total) payable on 15 April
20?? to shareholders registered on 31 March 20??. Because the obligation arose after the end of the reporting period,
a liability is not shown in the statement of financial position at 28 February 20??.

23. Related party transactions

2013 2012
R R

Amounts owed by related parties and included in trade receivables 8,000 5,000
Amounts owed to related parties and included in trade payables (12,000) (8,000)

The total remuneration of directors and other members of key management in 2013 (including salaries and benefits) was
R362,900 (2012: R311,700).

Page 17 of 17