ANNUAL FINANCIAL STATEMENTSabacus.devee.co.za/ArchiveFiles/AuditReports/AFS Provident 2009.pdf ·...

ANNUAL FINANCIAL STATEMENTS (Privately administered funds)

NAME OF RETIREMENT FUND: ABACUS UMBRELLA PROVIDENT FUND

FSB REGISTRATION NUMBER:

36968

SARS APPROVAL NUMBER:

41314

For the period: 1 SEPTEMBER 2008 to 31 AUGUST 2009

CONTENTS

Schedule Page

A * Regulatory information 2

B * Statement of responsibility by the board of trustees 5

C * Statement of responsibility by the principal officer 7

D * Report of the independent auditors 8

E Report of the board of trustees 9

F Statement of net assets and funds 12

G Statement of changes in net assets and funds 13

HA Notes to the financial statements 14

HB * Report of the valuator 21

I Report by the independent auditors to the Registrar of Pension Funds on factual findings

22

IA Schedule pertaining to annual financial statements 28

IB Assets held in compliance with Regulation 28. 30

Assurance report of the independent auditors to the Registrar of Pension Funds 31

* (Not subject to audit)

ABACUS UMBRELLA PROVIDENT FUND - 36968

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SCHEDULE A REGULATORY INFORMATION FOR THE PERIOD ENDED 31 AUGUST 2009

REGISTERED OFFICE OF THE FUND

Registered addresses applicable to 1 March 2010

Postal address: P O Box 52156, Saxonwold, 2132

Physical address: Rosebank Arena, Ist Floor, Cnr Cradock & Baker Streets, Rosebank, 2196

Registered addresses applicable from 1 March 2010

Postal address: P O Box 829, Wilgeheuwel, 1736

Physical address: A3 Willow Crest Off Estate, 655 Van Hoof Str, Roodepoort, 1724

FINANCIAL REPORTING PERIODS

Current: 01/09/2008 to 31/08/2009

Previous: 01/09/2007 to 31/08/2008

BOARD OF TRUSTEES

Full name Capacity Date appointed Date resigned

Chairperson:

Le Grellier, GD Chairman 13/03/2007

TRUSTEES:

Le Grellier, GD Independent 28/06/2005

Fleming, AM Employer 13/03/2007 31/10/2009

Rollason, JD Independent 03/04/2006

Crawford, DL Employer 29/10/2008

De Villiers, CM Independent 21/08/2009

FUND OFFICERS

PRINCIPAL OFFICER

Postal address: Physical address: Tel no:

Fleming, AM (Resigned 31/10/2009)

PO Box 52156, Saxonwold, 2132

Rosebank Arena, 1st Floor, Cnr Cradock & Baker Streets, Rosebank, 2196

(011) 646-1085

De Villiers (Appointed 01/11/2009), CM

PO Box 527, Pinegowrie, 2123

6, Mandeville Gardens, 65 Mandeville Road,Bryanston

(011) 704-1643

MONITORING PERSON Postal address: Physical address: Tel no:

Fleming, AM (Resigned 31/10/2009)



(011) 646-1085

De Villiers, CM (Appointed 01/11/2009)

PO Box 527, Pinegowrie, 2123

6, Mandeville Gardens, 65 Mandeville Road, Bryanston

(011) 704-1643


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REGULATORY INFORMATION - CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009 PROFESSIONAL SERVICE PROVIDERS BENEFIT ADMINISTRATOR

Postal address: Physical address: Tel no: FSB no:

Pioneer Employee Benefits (Pty) Ltd (In liquidation February 2009)



(011) 880-4710 24/388

Self-Assurance Benefit Administrators (Pty) Ltd (From 01/02/2009 to 28/02/2010)

PO Box 87343, Houghton, 2041

44 Restanwold Drive, Saxonwold, 2196

(011) 486-2334

24/329

Brefco (Pty) Ltd (Appointed 01/03/2010)

PO Box 829, Wilgeheuwel, 1736

A3 Willow Crest Office Estate, Van Hoof Street, Roodepoort, 1724

(011) 958-0511

24/218

AUDITOR

Postal address: Physical address: Tel no:

BDO South Africa Incorporated

Private Bag X60500, Houghton 2041

22 Wellington Road, Parktown 2193 (010) 060-5000

ACTUARY/VALUATOR Postal address: Physical address: Tel no:

Hendriks, C c/o Arthur Els & Associates Consulting Actuaries

P.O. Box 413266, Craighall, 2024

Marlborough Gate, Hyde Lane, Hyde Park, 2196

(011) 441-2700

RISK INSURER Postal address: Physical address: Tel no: FSB no:

Discovery Life P O Box 784262 Sandton 2146

16 Fredman Drive, Sandton, 2146

(011) 539-7288 33/336

Capital Alliance Life Limited

P O Box 31750, Braamfontein, 2017

4th Floor Rennie House, 19 Ameshoff Street, Braamfontein

(011) 628-5300 24/102

Hollard Life Assurance Co

P O Box 87428, Houghton, 2040

22 Oxford Road,Houghton. 2041

(011) 351-5000 24/333

Liberty Group Limited P O Box 2094, Johannesburg, 2000

Liberty Centre, 1 Ameshoff Street, Braamfontein

(011) 408-2999 24/2

Old Mutual Limited P O Box 207, Cape Town, 8000

Old Mutual Park, Jan Smuts Drive, Pinelands, 7405

(021) 217-1000 24/35

FUND CONSULTANT Postal address: Physical address: Tel no: FAIS no:

Pioneer Employee Benefits (Pty) Ltd No consultant appointed from March 2009



(011) 880-4710 24/388


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REGULATORY INFORMATION - CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009

INVESTMENT ADVISOR Postal address: Physical address: Tel no: FAIS no:

Sasfin Financial Advisory Services (Pty) Ltd

PO Box 95104, Grant Park, 2051

Sasfin House, 29 Scott Street, Waverley, 2090

(011) 809-7500 5711

INVESTMENT MANAGER(S) Postal address: Physical address: Tel no: FSB no:

Allan Gray Limited PO Box 51318, V&A Waterfront, Cape Town, 8002

Granger Bay Court, Beach Rd, V&A Waterfront, Cape Town

(021) 415-2300 24/437

Element Investment Managers

P. O. Box 13, Cape Town, 8000

8th floor, 125 Buitengracht Street, Cape Town, 8001

(021) 426-1313 24/663

Investec Asset Management (Pty) Ltd

P O Box 1655, Cape Town, 8000

36 Hans Strijdom Ave, Foreshore, Cape Town, 8001

(021) 416-2000 24/61

Investment Solutions Limited

P O Box 786055, Sandton, 2146

63 Wierda Rd East. Wierda Valley, 2196

(011) 505-6000 24/217

Sasfin Frankel Pollak Securities (Pty) Ltd

PO Box 95104, Grant Park, 2051

15 Scott Street, Waverley, 2090 (011) 809-7500 24/411

PARTICIPATING EMPLOYERS

A list of all the participating employers is available from the benefit administrator.


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SCHEDULE B STATEMENT OF RESPONSIBILITY BY THE BOARD OF TRUSTEES FOR THE PERIOD ENDED 31 AUGUST 2009.

RESPONSIBILITIES The board of trustees hereby acknowledges that under normal circumstances their duties would have included, amongst others, the items below. The board of trustees hereby state, to the best of their knowledge and belief that, during the period under review, in the execution of their duties they: ensured that proper registers, books and records of the operations of the fund were kept, inclusive of proper minutes

of all resolutions passed by the board of trustees; ensured that proper internal control systems were employed by or on behalf of the fund; ensured that adequate and appropriate information was communicated to the members of the fund, informing them

of their rights, benefits and duties in terms of the rules of the fund; took all reasonable steps to ensure that contributions, where applicable, were paid timeously to the fund or reported

where necessary in accordance with section 13A and regulation 33 of the Pension Funds Act in South Africa; obtained expert advice on matters where they lacked sufficient expertise; ensured that the rules and the operation and administration of the fund complied with the Pension Funds Act in

South Africa, the Financial Institutions (Protection of Funds) Act and all other applicable laws; ensured that fidelity cover was maintained. This cover was deemed adequate and in compliance with the rules of

the fund; and ensured that investments of the fund were implemented and maintained in accordance with the fund’s investment

strategy. With regard to the above, the trustees would like to put on record that certain instances of poor administration and record-keeping have subsequent to year-end 31 August 2006 been brought to their attention. As a result, the trustees have concerns about the standard of record-keeping and controls that were in fact implemented and executed and maintained by the then administrators, Pioneer Employee Benefits (Pty) Ltd and Self Assurance Benefit Administrators (Pty) Ltd. The difficulties experienced by the previous administrators relating to the fund, included a change in outsourced administration management, a high turnover of staff involved with the fund, poor record-keeping and poor financial reporting, resulting in a period of uncertainty with regards to the administration of the fund. Refer to notes 8 and 9 on page 11 of the report of the board of trustees. Accordingly there were certain shortcomings during this period, resulting in audit qualifications for the financial years ended 2006, 2007, 2008 and 2009. The board of trustees cannot

take full responsibility for the actions of the previous administrators, but undertakes to adhere to its duties until such time as the fund is finally terminated. The matters in question have been brought to the attention of the Financial Services Board.

APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS The annual financial statements of ABACUS UMBRELLA PROVIDENT FUND are the responsibility of the board of

trustees. The board of trustees fulfils this responsibility by ensuring the implementation and maintenance of accounting systems and practices adequately supported by internal financial controls. These controls, which are implemented and executed by the fund and/or its benefit administrators, provide reasonable assurance that: the fund’s assets are safeguarded; transactions are properly authorised and executed; and the financial records are reliable.

Apart from the exceptions resulting in the qualified audit report (due to the period of uncertainty discussed under “responsibilities” above), the annual financial statements set out on pages 12 to 20 have been prepared for regulatory purposes in accordance with: The basis of accounting applicable to retirement funds in South Africa as indicated in the principal accounting

policies contained in the notes to the financial statements on page 14; the financial rules of the fund; and the provisions of the Pension Funds Act in South Africa. These financial statements have been reported on by the independent auditors, BDO South Africa Incorporated, who was given unrestricted access to all financial records and related data, including minutes of all relevant meetings. The board of trustees believes that all representations made to the independent auditors during their audit were valid and appropriate. The report of the independent auditors is presented on page 8.


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These financial statements: were approved by the board of trustees on 14/02/2013

are certified by them to the best of their knowledge and belief to be correct; fairly represent the net assets of the fund at 31 August 2009 as well as the results of its activities for the period then

ended; and are signed on the board of trustees behalf by:


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SCHEDULE C STATEMENT OF RESPONSIBILITY BY THE PRINCIPAL OFFICER

I, to the best of my knowledge, confirm that for the period under review the Abacus Umbrella Provident Fund has

lodged with the Registrar of Pension Funds all such returns, statements, documents and any other information required in terms of the Pension Funds Act in South Africa.


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SCHEDULE D QUALIFIED REPORT OF THE INDEPENDENT AUDITOR’S TO THE BOARD OF TRUSTEES OF THE ABACUS UMBRELLA PROVIDENT FUND AND THE REGISTRAR OF PENSION FUNDS

Report of the Annual Financial Statements

We have audited the annual financial statements of Abacus Umbrella Provident Fund which comprise the report of the board of trustees, and the statement of net assets and funds as at 31 August 2009, and the statement of changes in net

assets and funds for the year then ended, and the notes to the financial statements, which include the principal accounting policies and other explanatory notes, as set out on pages 9 to 20. Board of Trustees’ Responsibility for the Financial Statements

The board of trustees is responsible for the preparation and presentation of these financial statements for regulatory purposes, in accordance with the basis of preparation applicable to Pension funds in South Africa, as set out in the notes to the financial statements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and presentation of 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 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the 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 presentation of the 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 management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Qualified Opinion

We draw attention to paragraphs 8 and 9 of the Report of the Board of Trustees, wherein the Board of Trustees explains the various matters that have resulted in us expressing a qualified audit opinion. Qualified Opinion

In our opinion, except for the effects of the matter described in the Basis of Qualified Opinion paragraph, the financial statements of Abacus Umbrella Provident Fund for the year ended 31 August 2009 have been prepared, in all

material respects, in accordance with the basis of preparation applicable to retirement funds in South Africa as set out in the notes to the financial statements.


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SCHEDULE E REPORT OF THE BOARD OF TRUSTEES FOR THE PERIOD ENDED 31 AUGUST 2009

1. DESCRIPTION OF THE FUND

1.1. TYPE OF FUND In terms of section 1 of the Income Tax Act 1962 the fund is classified as a provident fund. The fund is a defined contribution fund.

1.2. BENEFITS 1.2.1. The benefit structure of this fund is based solely on the accumulation of contributions plus investment

income earned from the appropriate investments. 1.2.2. The fund provides lump sum benefits to members of the Fund when they retire or resign from their

employer as well as death benefits for their dependants should they die in service. 1.2.3. The benefits provided for are:

(a) Retirement benefit: Share of Fund (b) Withdrawal benefit: Share of Fund (c) Death benefit: Share of Fund plus a re-insured lump sum

1.3. CONTRIBUTIONS 1.3.1. Members contribute at various rates as specified in the Special Rules of the participating employer. 1.3.2. The employers contribute at various rates as specified in the Special Rules of the participating

employer.

1.4. RESERVES

In terms of the rules a Reserve Account has been established to allow Employers to contribute towards a reserve account which is used to meet fund expenses.

2. INVESTMENTS

2.1. INVESTMENT STRATEGY

The investment strategy of the fund is set by the board of trustees after taking due consideration of the advice of the fund’s investment and other professional advisors. This investment strategy complies with the provisions of regulation 28 of the Pension Funds Act in South Africa. The investments are managed according to the following principles: 2.1.1. General

Members are identified according to their “period to retirement” and are then placed into a suitable mix of different asset classes of investments, which are selected in order to provide those members furthest away from retirement with high growth potential, exceeding inflation over 3 to 5 year measurement periods, bearing in mind that they are able to withstand a greater standard deviation of investment returns, in that their investments have time to recover from investment return fluctuations. Members closest to retirement are placed in an asset mix that minimises the standard deviation of returns over time and is designed to protect the capital accumulated whilst delivering returns at least matching inflation over short term measurement periods until retirement. Members between these extremes are moved from portfolios at the longer “period to retirement” end of the continuum through a progressive series of lower risk portfolios to the pre-retirement lowest risk portfolio.

2.1.2. Individual members choice

The Fund does offer members an option of the investment products in which the fund is invested, if they do not wish to be invested in the default portfolios.

2.1.3. Unclaimed benefits

Complete records are maintained from the date the member exits the fund. Any unclaimed benefit will earn the same return the fund declares unless specifically requested to invest in another investment portfolio.


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REPORT OF THE BOARD OF TRUSTEES - CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009

2.2. MANAGEMENT OF INVESTMENTS

The fund’s investments consist of various types of investments which are managed on unitised principles. These investments were selected with the aim of achieving an optimum return, taking into account associated risks. Overall responsibility for investment and performance lies with the Trustees including the appointment of or changes to the investment manager(s). The board meets from time to time to discuss investment policies and to monitor the asset allocation and performance of the investment manager.

The fair value of the fund’s investments, administered by the investment administrators at the end of the period was:

Current period

R

Previous period R

Allan Gray Limited 61,225 56,668

Element Investment Managers 0 2,169

Investec Asset Management (Pty) Ltd 123,291 111,564

Investment Solutions 75,614,331 62,280,148

Sasfin Frankel Pollak Securities (Pty) Ltd 0 382

Total value of investments managed 75,798,847 62,450,931

3. MEMBERSHIP

Active members

Numbers at beginning of period 2,699

New members

Adjustments – duplicated members (Note 1) (10)

Additions – members reinstated (Note 2) 135

Additions 362

Members exit from fund

Withdrawals (190)

Retirements (11)

Deaths (5)

Numbers at end of period (Note 3) 2,980

Notes: 1. The adjustments refer to duplicated members that were reported in the opening balances and now being

combined during the year 2. Based on the revised portfolio returns as determined in conjunction with the actuary, members who had

exited the Fund may be entitled to a further benefit due to a revision of their Share of Fund. Although the amounts are small in many cases, the Trustees decided to not write off any such amounts. In effect these members are reinstated for administrative purposes.

3. In the number of members at the end of the period there are members’ who resigned and whose benefits have not necessarily been paid in full by the Fund.

4. ACTUARIAL VALUATION

The statutory actuarial valuation as at 31 August 2007 was completed by the actuary in March 2012. The valuation report has been submitted to the Financial Services Board and has been approved by the Registrar on 7

th May

2012. The next statutory actuarial valuation of the Fund is due as at 31 August 2010. As per the valuators report page 21, item 8 states - The Fund was in a sound financial position as at 31 August 2007.


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REPORT OF THE BOARD OF TRUSTEES - CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009

5. SURPLUS APPORTIONMENT

In a letter dated 29 October 2010 the Registrar of Pension Funds recorded that the fund a) does not have an actuarial surplus to apportion as at the surplus apportionment date, i.e. 31 August 2004, b) noted the Fund’s NIL return as at 31 August 2004 and, c) does not require the submission of a surplus apportionment scheme as envisage by section 15B(1) of the Act.

6. HOUSING LOAN FACILITIES

If requested by the Employer and approved by the Board of Trustees the Fund is willing to provide to employees of that employer surety for housing loans in terms of section 19(5)(a) of the Pension Funds Act. This facility was cancelled when the Fund was made “paid-up” and no further contributions were received. Please refer to note 2 on page 16 for further details of the housing loans facilities.

7. INVESTMENTS IN PARTICIPATING EMPLOYERS

The fund did not hold any investments in the participating employers.

8. SUBSEQUENT EVENTS

Pioneer Employee Benefits (Pty) Ltd was the appointed benefit administrator for the Fund until 28 February 2009. Self-Assurance Benefit Administrators (Pty) Ltd took over from Dynam-ique SA Fund Administrators (Pty) Ltd as the outsourced administrator from 1 November 2007 and was appointed by the Trustees as full benefit administrator from 1 March 2009. The Trustees would like to place on record that certain instances of poor administration and record-keeping were, subsequent to the year-ended 31 August 2006, brought to their attention. As a result, the Trustees have concerns about the standard of record-keeping and controls that were in fact implemented, executed and maintained by the then administrators, Pioneer Employee Benefits (Pty) Ltd and Self Assurance Benefit Administrators (Pty) Ltd. The difficulties experienced by the previous administrators relating to the Fund included a change in the outsourced administrator, a high turnover of staff involved with the Fund, poor record-keeping and poor financial reporting. All of these factors contributed to a period of uncertainty with regards to the administration of the Fund. In late 2008 Pioneer Employee Benefits (Pty) Ltd advised the Fund that it did not wish to continue its administration business. During March 2009 it placed itself into liquidation. The Fund then appointed Self-Assurance Benefit Administrators (Pty) Ltd (which had been the outsourced provider at the time) to continue with the administration in terms of a direct contract with the Fund. Self-Assurance Benefit Administrators (Pty) Ltd commenced with a rebuild process which was never concluded by them. The rebuild process was required to fix errors arising from the administration difficulties referred to above. In early 2010 Self-Assurance Benefit Administrators (Pty) Ltd advised the Fund that they were unable to continue with the rebuild or the on-going administration. The Fund appointed Brefco (Pty) Ltd with effect from 1 March 2010 to redo the rebuild process from 1 September 2005 and to deal with the day to day administration of the Fund.

9. SIGNIFICANT MATTERS

Specifically, in support of the auditor’s qualifications, the trustees would like to report as follows: 9.1 Due to several changes of administrators, certain supporting documents could not be located. In particular, the

signed administration agreements between the administrator, i.e. Pioneer Employee Benefits (Pty) Ltd and the various participating employers were not made available.

9.2 The fund has accounted for reinsurance premiums and administration fees on the basis of actual contributions

received and banked into the fund’s bank account. This actual contribution has been allocated in the fund’s accounting records as contributions received and reinsurance premiums. No rate confirmations from the risk insurers were made available for audit purposes. The trustees are of the opinion that this matter is dealt with appropriately and has no significant impact on the financial status of the fund.

9.3 Due to the lack of documentation and the various changes in administration, the trustees took a prudent

decision to reconstruct member’s fund records from 2006. This resulted in member’s benefits being paid on a partial basis, with a final agterskot payment to be made after the completion of the rebuild process.


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SCHEDULE F STATEMENT OF NET ASSETS AND FUNDS AT 31 AUGUST 2009

Notes Current period

R

Previous period R

ASSETS

Non-current assets 75,798,847 62,450,931

Investments 1 75,798,847 62,450,931

Current assets 17,094,594 19,255,936

Accounts receivable 3 5,272,653 7,365,553

Contributions receivable 8 1,098,095 1,489,401

Cash at bank 10,723,846 10,400,982

TOTAL ASSETS 92,893,441 81,706,867

FUNDS AND LIABILITIES

Members’ funds and surplus account 86,209,927 74,578,350

Members’ individual accounts 86,209,927 74,578,350

Total funds and reserves 86,209,927 74,578,350

Non-current liabilities 1,639,816 1,413,825

Provisions 11.1 1,639,816 1,413,825

Current liabilities 5,043,698 5,714,692

Benefits payable 6 582,476 626,203

Accounts payable 7 4,461,222 5,088,489

TOTAL FUNDS AND LIABILITIES 92,893,441 81,706,867


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SCHEDULE G STATEMENT OF CHANGES IN NET ASSETS AND FUNDS FOR THE PERIOD ENDED 31 AUGUST 2009

Notes Members’ accounts

R

Total Current period

R

Total Previous period

R

Contributions 16,850,809 16,850,809 21,754,974

Contributions received and accrued 8 16,850,809 16,850,809 21,754,974

Other items 1,846,889 1,846,889 1,090,006

Reinsurance proceeds 1,846,889 1,846,889 1,090,006

Investment income 8,555,758 8,555,758 (684,743)

Net investment income 9 8,555,758 8,555,758 (684,743)

Less: Expenses (5,386,799) (5,386,799) (6,660,009)

Re-insurance premiums (3,489,953) (3,489,953) (4,392,070)

Administration expenses 10 (1,896,846) (1,896,846) (2,267,939)

Net income before transfers and benefits

21,866,657 21,866,657

15,500,228

Transfers and benefits (10,235,080) (10,235,080) (33,281,828)

Transfers from other funds 4 1,328,457 1,328,457 10,843,787

Transfers to other funds 5 0 0 (32,230,503)

Benefits 6 (11,563,537) (11,563,537) (11,895,112)

Net income after transfers and benefits

11,631,577 11,631,577

(17,781,600)

Funds and reserves 74,578,350 74,578,350 92,359,950

Balance at beginning of period 74,578,350 74,578,350 92,359,950

Balance at end of period 86,209,927 86,209,927 74,578,350


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SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 2009 PRINCIPAL ACCOUNTING POLICIES

The following are the principal accounting policies used by the fund, which are consistent with those of the previous period.

PURPOSE AND BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements are prepared for regulatory purposes in accordance with the Regulations to the Pension Funds Act. The Regulations require that the basis of accounting applied by the pension funds comprise of general adherence to Generally Accepted Accounting Practice, as applied to retirement funds in South Africa, except for the following requirements applicable to the;

Disclosure of cash flow information

Disclosure of prior year adjustments

Presentation of consolidated financial statements in which investments in subsidiaries are consolidated in accordance with the standard on consolidated and separate financial statements.

The financial statements are prepared on the historical cost and going concern bases, modified by the valuation of financial instruments and investment properties to fair value, and the revaluation of property, plant and equipment to market value.

FINANCIAL INSTRUMENTS Measurement

Financial instruments include cash and bank balances, investments, housing loans, receivables and accounts payable. Financial instruments are initially measured at cost as of trade date, which includes transaction costs. Subsequent to initial recognition, these instruments are measured as set out below.

Investments

Investments are measured at fair value. The fair value of marketable securities is calculated by reference to the applicable Stock Exchange quoted selling prices at the close of business on the statement of funds and net assets date

Collective Investment Schemes

Investments are measured at fair value. The fair value of marketable securities is calculated by reference to the applicable insurer, investment manager or the Stock Exchange quoted selling prices at the close of business on the statement of funds and net assets date.

Housing loans

The fund did grant guarantees for housing loans to its members in terms of Section19(5) of the Pension Fund Act.

Other loans Not applicable.

Insurance policies Insurance policies linked to listed investments are valued at fair value and are therefore equivalent to market value of the underlying assets as certified by the Insurer concerned.

Accounts receivable Accounts receivable are stated at realisation value.

Cash and cash equivalents

Cash and cash equivalents are measured at fair value.

Accounts payable Accounts payable are stated at the actual amounts due.

PROVISIONS Provisions are brought into account for known obligation as a result of past events, for which it will be required to settle the obligation. A reliable estimate has been made of the amount of the obligation.

CONTRIBUTIONS Contributions are brought to account on the accrual basis.


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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 2009 PRINCIPAL ACCOUNTING POLICIES - CONTINUE

DIVIDEND INCOME, INSURANCE POLICY INCOME, INTEREST AND RENTALS Interest is recognised when it is determined that such income will accrue to the fund. Insurance policy income and dividends are recognised when declared by the insurer. Gains and losses on investments are recognised during the period in which the change arises.

TRANSFERS TO AND FROM THE FUND Transfers to or from the fund are recognised on approval being granted by the Financial Services Board as required in terms of Section 14 and 13B of the Pension Funds Act. Individual transfers are recognised when the individual member’s transfer is received or paid.


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NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009

1. INVESTMENTS

1.1 INVESTMENT SUMMARY

Local

Foreign

Total Fair Value Current period

Total Fair Value Previous period

R R R R

Collective investment schemes 184,516 0 184,516 170,783 Insurance policies: - Linked related policies 65,278,613 10,335,718 75,614,331 62,280,148

TOTAL INVESTMENTS 65,463,129 10,335,718 75,798,847 62,450,931

2 HOUSING LOAN FACILITIES

2.1 HOUSING LOAN GUARANTEES

Loans were granted in terms of the rules of the fund and section 19(5) of the Pension Funds Act in South Africa.

The amount of the guarantee may not exceed 60.0% of the cash benefit that a member would receive if he or she had to terminate membership to the fund voluntarily.

The fund has granted guarantees to Standard Bank Ltd for outstanding loans amounting to R1,669,737 for 93 members.

3. ACCOUNTS RECEIVABLE

Current period

R

Previous Period R

Income accrued (interest due on current account)

45,742 108,528

Amount due from Abacus Umbrella Pension fund 1,574,192 3,018,518

Amount due from investment managers 384,502 2,357,208

Risk premiums paid in advance 2,578,505 1,852,503

Sundry Debtor (refund due from Old Mutual Employee Benefits)

28,797 28,797

Cash in transit (disinvestments from investments received after year-end)

660,915 0

TOTAL 5,272,653 7,365,553


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NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009 4. TRANSFERS RECEIVED FROM OTHER FUNDS

Effective date

No. of members

At beginning of period

Transfers approved

Assets transferred

At end of period

R R R R

In terms of section 14

0 1,082,811 (1,082,811) 0

Alta Hydraulic Supplies (Pty) Ltd 14/04/2009 6 0 821,295 (821,295) 0

Compu-Clearing (Pty) Ltd 08/07/2009 48 0 261,516 (261,516) 0

Individual transfers 6 0 245,646 (245,646) 0

Total

0 1,328,457 (1,328,457) 0

Current Period

Previous Period

R

R

Transfers approved

1,328,457

10,843,787

Statement of changes in net assets and funds 1,328,457

10,843,787

5. TRANSFERS TO OTHER FUNDS

Current Period

Previous Period

R

R

Transfers approved

0

(32,230,503)

Statement of changes in net assets and funds 0

(32,230,503)

6. BENEFITS

6.1 BENEFITS – CURRENT MEMBERS

At beginning of period

Benefits for current period Payments At end of period

R R R R

Lump sums on retirements 0 2,220,002 (2,220,002) 0

Full benefit 0 2,220,002 (2,220,002) 0

Lump sums before retirement 626,203 9,343,535 (9,387,262) 582,476

Death benefits 0 1,259,382 (1,259,382) 0

Withdrawal benefits 626,203 8,084,153 (8,127,880) 582,476

Total benefits awarded 626,203 11,563,537 (11,607,264) 582,476

Current Period

R

Previous Period R

Benefit awarded 11,563,537 11,895,112

Statement of changes in net assets and funds 11,563,537 11,895,112


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NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009 7. ACCOUNTS PAYABLE

Current period R

Previous period R

Admin fees due to administrators 1,782,718 1,338,287

Auditors fees due 581,856 507,474

Contributions paid in advance 283,200 0

Legislation levies due 17,631 65,980

Other creditors (unidentified transactions) 754,600 798,020

Risk premiums due to insurers 401,343 1,806,280

Sundry creditors (Sasani housing loans) 639,874 572,448

TOTAL ACCOUNTS PAYABLE 4,461,222 5,088,489

Note : Other creditors (unidentified transactions) these amounts were received into the Fund which have not been identified due to lack of information/source documents. We currently still investigating the deposits.

8. CONTRIBUTIONS

At beginning

of period Towards

retirement

Towards re-insurance

and expenses Contributions

received At end

of period R R R R R

Received and accrued

– Member contributions 0 4,225,766 0 (4,225,766) 0

– Employer contributions 1,489,401 8,251,081 4,373,962 (13,016,349) 1,098,095

TOTAL CONTRIBUTIONS 1,489,401 12,476,847 4,373,962 (17,242,115) 1,098,095

Current period

R

Previous period R

Towards retirement 12,476,847 16,272,629

Toward re-insurance and expenses 4,373,962 5,482,345

Statement of changes in net assets and funds 16,850,809 21,754,974

9. NET INVESTMENT INCOME

Current period R

Previous period R

Income from investments 955,218 640,694

Dividends 0 3,101

Interest 955,218 637,593

Adjustment to fair value 8,256,901 (1,294,296)

Sub – total 9,212,119 (653,602)

Less: Expenses incurred in managing investments (656,361) (31,141)

TOTAL INVESTMENT INCOME 8,555,758 (684,743)


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NOTES TO THE FINANCIAL STATEMENTS – CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009 10. ADMINISTRATION EXPENSES

Notes Current period

R

Previous period R

Actuarial fees 48,960 108,381

Administration fees 1,286,535 1,716,498

Audit fees 125,682 138,624

Audit services 125,682 138,624

Consultancy fees 115,945 93,877

Fidelity Insurance 15,000 (1,500)

Levies 154,528 98,460

Other (Specify if material) 8,563 7,068

Bank Charges 8,563 7,068

Trustee fees and remuneration 10.1 141,633 106,531

TOTAL ADMINISTRATION EXPENSES 1,896,846 2,267,939

10.1 TRUSTEE EXPENSES Current period

R Previous period

R

Remuneration 117,633 58,531

Other – Provision 24,000 48,000

Total trustee expenses 141,633 106,531

11. FINANCIAL LIABILITIES AND PROVISION

11.1 PROVISIONS Current period

R Previous period

R

Provision for actuarial fees 719,280 670,320

Provision for trustee expenses 132,512 108,512

Provision for insurance cost (FG & PI) 0 15,000

Provision for rebuild cost 0 619,993

Provision for project manager 47,669 0

Provision for PAYE reconciliation 50,000 0

Provision for SARS/FSB penalties 95,463 0

Provision for cost to obtain historical data (Everest/Sasfin)

94,646 0

Provision for previous administrator (Self-Assurance Benefit Administrator)

312,500 0

Provision for legal fees 187,746 0

TOTAL 1,639,816 1,413,825


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THE FINANCIAL STATEMENTS – CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009 12. RISK MANAGEMENT POLICIES

SOLVENCY RISK Continuous monitoring by the Board takes place to ensure that appropriate assets are held where the funds obligation to members is dependent upon the performance of specific portfolio assets and that a suitable match of assets exists for all other liabilities.

CREDIT RISK The Board monitors receivable balances on an on-going basis with the result that the fund’s exposure to bad debts is not significant. An appropriate level of provision is maintained.

LEGAL RISK Legal risk is the risk that the fund will be exposed to contractual obligations which have not been provided for. Legal representatives of the fund monitor the drafting of contracts to ensure that rights and obligations of all parties are clearly set out.

CASH FLOW RISK The board of trustees agreed an amount with the administrators that should be kept in the bank account to meet the fund’s cash flows requirements. If the agreed amount is insufficient, the administrator must disinvest to meet the required cash flow.

CURRENCY RISK The fund’s exposure to currency risk is mainly in respect of foreign investments made on behalf of members of the fund for the purpose of seeking desirable international diversification of investments.

LIQUIDITY RISK The fund’s liabilities are backed by appropriate assets and it has significant liquid resources.

MARKET RISK Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices of market interest rates.

INVESTMENTS Investments in insurance policies are valued at fair value as certified by the insurer. Investments are managed with the aim of maximising the fund’s returns while limiting risk to acceptable levels within the framework of statutory requirements. Continuous monitoring takes place to ensure that appropriate assets are held where the liabilities are dependent upon the performance of specific portfolios of assets and that a suitable match of assets exists for all non–market related liabilities.

13. PROMISED RETIREMENT BENEFITS

As a defined contribution fund, the fund in association with the principal and participating employers provides the members a course to save towards retirement. The fund liability to the promised retirement benefit is limited to the member’s equitable share of his/her share of fund. The member’s share of fund is the member’s retirement contributions plus the net return earned from the appropriate investment.

14. RELATED PARTY TRANSACTIONS

The following transactions between the principal employer and the fund occurred:(refer to note 8) The participating employers made contributions to the fund

- for members’ retirement to the value of R 8,251,081 - towards the fund’s expenses to the value of R 4,373,962

- o O o -

End of Schedule HA


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SCHEDULE HB REPORT OF THE VALUATOR


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SCHEDULE I REPORT OF THE INDEPENDENT AUDITORS OF ABACUS UMBRELLA PROVIDENT FUND TO THE REGISTRAR OF PENSION FUNDS ON FACTUAL FINDINGS Scope

We have performed the procedures agreed with you and enumerated below with respect to the accounting records of Abacus Umbrella Provident Fund for the period ended 31 August 2009, as required by you in terms of section 15 of the Pension Funds Act of South Africa, (the Act). Our engagement was undertaken in accordance with the International Standard on Related Services (4400) Engagements to perform agreed-upon procedures regarding financial information. The responsibility for determining the adequacy or otherwise of the procedures agreed to be performed is that of the Registrar of Pension Funds. Procedures and Findings

Our procedures and the corresponding findings thereon are set out in the table below.

Procedures

Findings

1 We selected a sample of the lesser of 50 or 10% of members from the complete listing of participating employers in the umbrella fund and for the following three months: October 2008, March 2009 and August 2009 and performed the following procedures:

1.1 We agreed, in total, the data received by the administrator to the cash received by the fund.

We found that the data received by the administrator agreed to the cash received by the fund.

1.2 We inspected the bank statements as appropriate, for the date on which the cash was received to determine whether the contributions were deposited with a registered bank in accordance with section 13A of the Act and whether late payment interest has been raised in terms of regulation 33, where applicable.

Contributions were deposited with a registered bank in accordance with section 13A of the Act and late payment interest had not been raised in terms of regulation 33 where applicable. We noted the exception in the Annexure A to Schedule I as detailed on page 27

1.3 We inspected the accounting records of the fund to determine whether amounts disclosed as arrear contributions at period-end have been paid to the fund in accordance with the requirements of section 13A of the Act.

We found that the arrear contributions were not paid to the fund in accordance with the requirements of s13A of the Act. Arrear contributions from prior periods amounting to R 152 714 is still due to the fund. The current administrator is in the process of investigating and collecting the arrear contributions.

2 We inspected the list of investments held by the fund for any investments prohibited in terms of section 19(4) of the Act.

We found that the fund does not hold investments prohibited in terms of section 19(4) of the Act.

2.1 Where investments held in the participating employer exceeded 5%, we inspected the appropriate Financial Services Board approval.

Not applicable.

2.2 We obtained written confirmations of investment balances and agreed details of the confirmations received to the investment balances reflected in the general ledger.

We found that the investment balances agreed to the details in the confirmations received from the investment managers.

3 We obtained the list of housing loans granted to members by the fund in terms of section 19(5) of the Act by the fund as at 31 August 2009 and performed the following procedures:

The fund does not grant housing loans.

3.1 We determined by inspection whether both the general rules of the fund and the special rules of the participating employer allow for the granting of housing loans.

Not applicable.

3.2 We agreed the loans on the above list to the account in the general ledger.

Not applicable.

3.3 From the above list, we selected a sample of the lesser of 50 or 10% of housing loans and determined whether the selected housing loans were granted in terms of the requirements of section 19(5) of the Act, in terms of the security provided and the interest rates applied to the loans.

Not applicable.


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Procedures

Findings

3.4 If the fund issued more than 100 loans or the total principal debt of all outstanding loans exceeded R500 000, we determined whether the fund was registered as a credit provider under the National Credit Act, 2005 (the NCA) and whether an assurance report had been issued to the National Credit Regulator in terms of section 16(1)(b) of the NCA and regulations 67 and 68 to the NCA.

Not applicable.

4 We obtained the list of housing loan guarantees granted to members by the fund in terms of section 19(5) of the Act as at 31 August 2009. We selected a sample of the lesser of 50 or 10% of housing guarantees from the list. For the sample selected, we compared the total for guarantees issued on behalf of the members to the total of member individual fund credits, to determine whether the total guarantees issued exceeded the total member individual fund credits allowed in terms of the Act and/or the rules of the fund.

The total guarantees issued did not exceed the total member individual fund credits.

5 We obtained a list of other loans as at 31 August 2009 and determined whether these loans were granted in terms of the requirements of section 19(5) B of the Act.

The fund does not grant other loans.

6 We obtained written confirmation from the fund’s insurer that fidelity insurance cover was in place throughout the period ended 31 August 2009.

Fidelity insurance cover was in place for the period ended 31 August 2009.

7 We obtained the list of section 14 transfers to and from the fund throughout the period ended 31 August 2009 and performed the following procedures:

7.1 We agreed the section 14 transfers to and from the fund to the approved section 14 documentation received from the Financial Services Board in respect of each transfer.

The section 14 transfers-in to the fund agreed to the approved section 14 documentation received from the Financial Services Board.

7.2 We agreed the above list of section 14 transfers to the corresponding account in the general ledger.

The list of section 14 transfers-in agreed to the corresponding account in the general ledger.

7.3 We determined by inspection whether the transfers were received/paid within 60 days of approval and whether the growth and interest return had been allocated from date of receipt/payment.

The transfers-in were received within 60 days of approval and growth and investment returns were allocated from date of receipt. The transfer-in from the Compu-Clearing Provident Fund was not received within 60 days of approval but late interest returns were allocated

7.4 In respect of unitised funds, we selected a sample of the lesser of 50 or 10% of the members transferred and recalculated the purchase of units for the amount received using the unit price per the administration system on the date of receipt. (Where units were purchased after date of receipt investment return was included from the date of receipt to the date of purchase)

The conversion of transfers in was correctly calculated and where units purchased after date of receipt investment return was added from date of receipts to date of purchase.

8 We obtained a list of accumulated member credits as reflected on the administrator’s member register as at 31 August 2009 and performed the following procedures:

8.1 We agreed the closing balance on the list to corresponding account in the annual financial statements as at 31 August 2009.

The closing balance on the list did not agreed to the corresponding accounts in the annual financial statements as at 31 August 2009.

Balance as per annual financial statements

R 86 209 927

Balance as per administrator’s listing

R 86 207 798

Difference R 2 129


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Procedures

Findings

8.2 We selected a sample of the lesser of 50 or 10% of the members from the list and performed the following procedures:

8.2.1 We agreed the member and employer contributions received for the selected members per the administrator’s system to information supplied by the participating employers for a sample of 3 months.

We found that the member and the employer contributions received for the selected member per the administrator’s system agreed to information supplied by the participating employers.

8.2.2 In respect of unitised investment products, we recalculated the conversion of the selected contributions at the unit price per the administration system on the dates that the contributions were invested and determined whether these units were correctly calculated and added to the existing units for the full period.

We recalculated the conversion of the selected contributions at the unit price per the administration system on the dates that the contributions were invested and determined that the units were correctly calculated and added to the existing units for the period.

8.2.3 In respect of unitised investment products, we recalculated the conversion of units at the end of the period at the period end unit price and agreed the amount to the member’s record on the member register.

We recalculated the conversion of units at the end of the period at the period end unit price and agreed the amount to the member’s record on the member register.

8.2.4 In respect of unitised investment products, we agreed the period end unit price as authorised in terms of the rules of the fund to the unit prices on the administration system used to calculate the member credits.

We agreed the period end unit price as authorised in terms of the unit price statement to the unit prices on the administration system used to calculate the member credits

8.2.5 In respect of non-unitised investment products, we agreed the return allocated to the member’s fund credit on the administrator’s records to the return approved in accordance with a resolution of the Board of Trustees or the general rules/special rules of the fund.

Not applicable.

8.3 We selected a sample of the lesser of 50 or 10% of members who switched between investment portfolios during the period and determined whether the portfolios were correctly switched and that the correct amount was switched in accordance with notification of the member’s election. We inspected whether any fees deducted were approved by the Board of Trustees.

Not applicable.

8.4 If a surplus apportionment scheme was approved by the FSB in the current period, we selected a sample of the lesser of 50 or 10% from the surplus schedules and we agreed the allocation of the fund surplus of the scheme to the individual allocation in the member records per the administration system.

Not applicable.

8.5 For unitised investment products where member portfolios are backed by specific portfolios, we agreed the values of investments specified by the members investment choice to the members liabilities per product for that choice and inspected the accuracy of reconciling items.

Not applicable.

9 We inspected the most recent statutory valuation report dated 31 August 2004 on the valuator’s findings relating to the funding levels of the fund and performed the following procedures:

9.1 We determined whether, in accordance with the valuation report dated 31 August 2007, the fund was under funded.

We found that in accordance with the valuation report, the fund was not underfunded.

9.2 Where a fund was under funded, we agreed that a scheme, as required in terms of section 18 of the Act, has been proposed and is being implemented, to remedy the shortfall.

Not applicable.


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Procedures

Findings

10 We obtained the analysis of the movements in the fund’s reserve accounts from the financial statements and performed the following procedures:

The fund does not have reserve accounts.

10.1 We agreed the opening balance to the prior period financial statements.

Not applicable.

10.2 We inspected the rules of the fund to determine whether the movements in the fund’s reserve accounts were in terms of the rules of the fund and the Act.

Not applicable.

11 We obtained a list of lump sum benefits reflected as expenses in the fund’s Statement of Changes in Net Assets and Funds and performed the following procedures:

11.1 We agreed the list to the respective general ledger benefit expense accounts.

We found that the list agreed to the respective general ledger benefit expense accounts.

11.2 We selected a sample of the lesser of 50 benefits or 10% of the total benefit expenses from the list and performed the following procedures:

11.2.1 We agreed the claim to the applicable, authorised supporting documentation.

We found that the claim agreed to the applicable, authorised supporting documentation.

11.2.2 For death benefits, where a portion of the benefit was reinsured by the fund, we determined whether the recovery from the insurer was received or accrued for by the fund.

We found that the claim agreed to the applicable, authorised supporting documentation.

11.2.3 We agreed the opening fund credit for the member to the opening fund credit report and determined whether contributions were added every month until the date of exit. [either by R amount or in case of unitised funds, by units] We agreed the balance paid out to member to the fund credit report or administration system as at the date of exit.

We found that the opening fund credit for the member agreed to the opening fund credit report and the contributions were added every month until the date of exit. We found that the balance paid out to member does not agree to the fund credit report or administration system as at date of exit as amounts are being retained by the fund pending finalisation.

11.2.4 We inspected whether the payments agreed to relevant authorisation.

We found that the payouts made by the fund agreed to relevant authorisation.

12 We obtained a copy of the listing of pensioners and performed the following procedures:

The fund does not have pensioners.

12.1 We agreed the total pensions paid to the corresponding account in the general ledger.

Not applicable.

12.2 We selected a sample of the lesser of 50 or 10 % of pensions paid from the above list and performed the following procedures:

12.2.1 We agreed the pensioner increases to authorisation by the Board of Trustees or other relevant supporting documentation.

Not applicable.

12.2.2 We inspected evidence supporting the fact that the pensioners selected were still alive.

Not applicable.

13 Where the fund has reinsured its pensioners with an insurer, we obtained a written confirmation of the pensions paid from the insurer including asset and liability balances and agreed this to the fund’s general ledger pension expense, asset and liability accounts.

Not applicable.

14 We selected a sample of the lesser of 50 or 10% of existing participating employers and determine whether recurring commissions were paid in terms of the rules of the fund, were limited to the LOA scale.

Not applicable.


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As the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any assurance on the procedures performed. Had we performed additional procedures or had we performed an audit or review of the relevant information, other matters might have come to our attention that would have been reported to you.

SCHEDULE I ANNEXURE A


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ABACUS UMBRELLA PROVIDENT FUND

1. Procedure 1.2:

We inspected the bank statements as appropriate, for the date on which the cash was received to determine whether the contributions were deposited with a registered bank in accordance with section 13A of the Act and whether late payment interest has been raised in terms of regulation 33, where applicable.

Finding:

Contributions were deposited with a registered bank in accordance with section 13A of the Act and late payment interest had not been raised in terms of regulation 33 where applicable. We noted the exceptions were noted as tabulated below:

Participating Employer: Months: Date Received

Field Support Services (Pty) Ltd

October 2008and March 2009

21 April 2009 and 21 April 2009

Mister Sweet (Pty) Ltd October 2008 12 November 2008,

SSAB Hardox (Pty) Ltd

March 2009 and August 2009

20 April 2009 and 15 September 2009

T - Plastafrica Mpumlanga

October 2008 and August 2009

11 November 2008 and 09 September 2009


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SCHEDULE IA SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 2009 INVESTMENTS

Direct

Investments Linked ins

polices Collective

investment Total Local Foreign

Foreign exposure

R R R R R R %

Cash and deposits 10,723,846 0 0 10,723,846 10,723,846 0 0.0

Collective investment schemes

0 0 184,516 184,516 184,516 0 0.0

Insurance policies: 0 75,614,331 0 75,614,331 65,278,613 10,335,718 13.7

Linked policies 0 75,614,331 0 75,614,331 65,278,613 10,335,718 13.7

Non-linked policies 0 0 0 0 0 0 0.0

TOTAL INVESTMENTS 10,723,846 75,614,331 184,516 86,522,693 76,186,975 10,335,718 11.9

DIRECT CASH AND DEPOSITS

Fair value Current period

R

Previous period

R

Total cash and deposits with Standard bank 10,723,846 10,400,982

COLLECTIVE INVESTMENT SCHEMES


R

Previous period

R


Element Investment Managers 0 2,169

Investec Asset Management (Pty) Ltd 123,291 111,564

Sasfin Frankel Pollak Securities (Pty) Ltd 0 382

Total Collective Investment Schemes 184,516 170,783

INSURANCE POLICIES Market Linked Insurance Policies


R

Previous period

R

Investment Solutions Ltd 75,614,331 62,280,148

Total Market Linked Insurance Policies 75,614,331 62,280,148


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SCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS - CONTINUED FOR THE PERIOD ENDED 31 AUGUST 2009 J RISK MANAGEMENT Credit / counter party risk

Counter party

Direct investment in counter party

Total per Counter Party

Exposure as a % of the fair value

R R %

Banks 10,723,846 10,723,846 12.4

Standard Bank 10,723,846 10,723,846

Insurance Companies 75,614,331 75,614,331 87.4

Investment Solutions 75,614,331 75,614,331

Other funds 184,516 184,516 0.2


Investec Asset Management 123,291 123,291

TOTAL 86,522,693 86,522,693 100.0


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SCHEDULE IB

ASSETS HELD IN COMPLIANCE WITH REGULATION 28

A Total assets of the fund as per Statement of Net Assets and Funds 92,893,441 B Less: Non-investment items of Statement of Net Assets and Funds: (6,370,748)

B.2 Current Assets (excluding cash at bank) (6,370,748)

C Sub-total (A-B) 86,522,693

Categories of assets % Fair Value % of

Fair Value

1. Deposits in banks, mutual banks, Postbank and SAFEX: 100% 16,475,638 19.0%

(a) Deposits and balances in current accounts with a bank 100% 16,475,638 19.0% (b) Deposits in current accounts with a bank outside the Republic 0 0.0%

3. Bills, bonds and securities issued or guarantees by SA governments 100% 11,232,381 13.0%

(a) Inside the Republic- 11,232,381 13.0% (b) Territories outside the Republic - 0 0.0%

Limitations in respect of investments in items 6 and 7 90% 58,813,484 68.0%

6. All investments in immovable properties and property companies: 25% 71,048 0.1%

These investments are subject to the following limitation: (a) Inside the Republic- 25% 71,048 0.1%

7. Shares in companies and equity unit trust schemes: 75% 58,742,436 67.9% Subject to the following limitations:

(a) Inside the Republic - 75% 43,966,951 50.9% (b) Territories outside the Republic 15% 10,335,718 11.9% (c) Inside the Republic - Units in equity investment schemes 75% 4,439,767 5.1%

10 Any other assets not referred to in this Annexure, excluding - 2.5% 1,190 0.0%

Limitations for investment in items 6-9, and items 10(a) and (b) 95% 58,814,674 68.0%

TOTAL (equal to the fair value of assets (C) above) 86,522,693 100.0%

Investments outside the Republic % Fair Value of Assets % of Fair Value

(d) Preference and ordinary shares in companies, convertible debentures outside the Republic.

15% 10,335,718 11.9%

TOTAL 10,335,718 11.9%

- o O o – End of Schedule IB


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SCHEDULE IB – CONTINUED QUALIFIED REPORT OF THE INDEPENDENT AUDITORS TO THE BOARD OF TRUSTEES OF ABACUS UMBRELLA PROVIDENT FUND AND THE REGISTRAR OF PENSION FUNDS

We have audited the attached Schedule IB ‘Assets of the fund held in compliance with Regulation 28’ (the “Schedule”) by Abacus Umbrella Provident Fund (the fund) as at 31 August 2009, as set out on page 30. Board of Trustees’ Responsibility for Schedule IB

The board of trustees is responsible for the preparation of the Schedule in accordance with Regulation 28 of the Pension Funds Act of South Africa (the Act), from information derived from the accounting records of the fund, and for ensuring that the Schedule is in compliance with Regulation 28 of the Act. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and presentation of the Schedule that is 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 the Schedule 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedule. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the Schedule, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and presentation of the Schedule 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 management, as well as evaluating the overall presentation of the Schedule. We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Qualified opinion

We were not provided with the regulation 28 certificate for Investec and thus were unable to determine whether the investments were held in accordance with Regulation 28. Qualified Opinion

In our opinion, except for the matter referred to in the preceding paragraph, Schedule IB ‘Assets of the fund held in accordance with Regulation 28’ by Abacus Umbrella Provident Fund as at 31 August 2009 has been prepared, in all material respects, in accordance with the requirements of Regulation 28 of the Pension Fund Act of South Africa. Other matter – Restriction on use and distribution

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