ANNUAL FINANCIAL STATEMENTS IN TERMS SECTION 15 OF …abacus.devee.co.za/ArchiveFiles/AuditReports/AFS Provident 2015.pdf · annual financial statements in terms section 15 of the

ANNUAL FINANCIAL STATEMENTS IN TERMS SECTION 15 OF THE PENSION FUNDS ACT NO 24, 1956

AS AMENDED (PENSION FUNDS ACT)

NAME OF RETIREMENT FUND: ABACUS UMBRELLA PROVIDENT FUND

FINANCIAL SERVICES BOARD REGISTRATION NUMBER:

36968

For the period: 01/09/2014 to 31/08/2015

CONTENTS

Schedule Page

Schedule Page

A Regulatory information* 2 G Statement of changes in net

assets and funds 14

B Statement of responsibility by the Board of Fund*

4 HA Notes to the financial statements 15

C Statement of responsibility by the principal officer *

6 HB Report of the valuator* 23

D Report of the independent auditors

7 I Report of the independent auditors / Board of Fund (whichever is applicable) to the Registrar of Pension Funds

24

E Report of the Board of Fund* 9 IA Investment schedule pertaining to annual financial statements*

34

F Statement of net assets and funds

13 IB Assets held in compliance with Regulation 28

35 Report of the independent

auditors on compliance with regulation 28 to the Registrar of Pension Funds 39

* Not subject to any engagement by an auditor

ABACUS UMBRELLA PROVIDENT FUND

2

SCHEDULE A REGULATORY INFORMATION

For the period ended 31/08/2015 Registered office of the fund

Postal address: P O Box 829, Wilgeheuwel, 1736 Physical address: A3 Willow Crest Office Estate, Van Hoof Street, Roodepoort, 1724

Financial reporting periods

Current: 01/09/2014 To 31/08/2015 Previous: 01/09/2013 To 31/08/2014

Board of Fund

Full name E-mail address Capacity Date appointed or re-appointed date

Date resigned

Chairperson

Le Grellier, GD [email protected] C 13/03/2007

Trustees

Crawford, DL [email protected] I 26/02/2014

De Villiers, CM [email protected] I 26/02/2014

Le Grellier, GD [email protected] I 26/02/2014

Rollason, JD [email protected] I 26/02/2014

Schedule of meetings held by the Board of Fund in terms of the rules of the Fund

Meeting date Place of meeting Quorum (yes/no)

13/11/2014 Brefco (Pty) Ltd Yes



Fund officers

Principal officer

Full name: From Date: Postal address: Physical address: Tel number: Email address:

De Villiers, CM 01/11/2009 PO Box 527, Pinegowrie, 2123

51 Douglasdale Retirement Village, 28 Galloway Avenue, Douglasdale, 2191

(011) 704-1643

[email protected]

Monitoring Person

Full name: From Date: Postal address: Physical address: Tel number: Email address:

De Villiers, CM 01/11/2009 PO Box 527, Pinegowrie, 2123

51 Douglasdale Retirement Village, 28 Galloway Avenue, Douglasdale, 2191

(011) 704-1643

[email protected]


3

SCHEDULE A (Continue)

REGULATORY INFORMATION

For the period ended 31/08/2015 Professional service providers

Actuary/Valuator

Full name: From Date: Postal address: Physical address: Tel number:

Email address:

Colin Hendriks (Argen Actuarial Solutions)

01/03/2008 P.O. Box 413266, Craighall, 2024

Marlborough Gate, Hyde Lane, Hyde Park, 2196

(011) 441-2700

[email protected]

Auditor

Full name: From Date: Postal address: Physical address: Tel number:

Email address:

BDO South Africa Incorporated

01/09/2005 Private Bag x60500, Houghton, 2041

22 Wellington Road, Parktown

(010) 060 -5000

[email protected]

Benefit Administrator

Full name: From Date: Postal address: Physical address: Tel number: Reg Number:

Brefco (Pty) Ltd 01/03/2010 PO Box 829, Wilgeheuwel, 1736

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

(011) 958-0511 24/218

Investment administrator

Full name: Postal address: Physical address: Tel number: Reg Number

Momentum Manager of Managers (Pty) Ltd

PO Box 330 Gallo Manor 2052

2nd floor 6 Merchant Place Cnr of Fredman Drive and Gwen Lane Sandton

(086) 153-8732 19840

Investment advisor

Full name: Postal address: Physical address: Tel number: Reg Number

Sasfin Financial Advisory Services (Pty) Ltd

PO Box 95104, Grant Park, 2051

Sasfin House, 29 Scott Street, Waverley,2090

(011) 809-7500 5711

Participating Employers

All the participating employers have ceased contributing to the Fund. A list of the participating employers is available from the registered offices.


4

SCHEDULE B STATEMENT OF RESPONSIBILITY BY THE BOARD OF FUND For the period ended 31/08/2015

Responsibilities

The Board of Fund hereby confirm to the best of their knowledge and belief that, during the period under review, in the execution of their duties they have complied with the duties imposed by Pension Funds Act legislation and the rules of the Fund, including the following: 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 Fund; 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; 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

and all applicable legislation; ensured that fidelity cover was maintained and that 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. Approval of the annual financial statements

The annual financial statements of Abacus Umbrella Provident Fund are the responsibility of the Board of Fund. The Board of Fund 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.

The annual financial statements set out on pages 13 to 22 have been prepared for regulatory purposes in accordance with the Regulatory Reporting Requirements for Retirement Funds in South Africa, the rules of the fund and the Pension Funds Act. 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 Fund believes that all representations made to the independent auditors in the management representation letter during their audit were valid and appropriate. The report of the independent auditors is presented on page 7 and 8.

Notwithstanding the above-mentioned information, the Board of Fund would like to refer to paragraph 8 on page 12 of the Report of the Board of Fund. Instances of non-compliance

We are not aware of instances of non-compliance with laws and regulations, including the provisions of laws and

regulations that determine the reported amounts and disclosures in the financial statements.


5

SCHEDULE B (Continue)

STATEMENT OF RESPONSIBILITY BY THE BOARD OF FUND For the period ended 31/08/2015

These financial statements: were approved by the Board of Fund on 28 January 2016; are to the best of the Board members knowledge and belief confirmed to be complete and correct; fairly represent the net assets of the fund at 31 August 2015 as well as the results of its activities for the period

then ended; and are signed on behalf of the Board of Fund by:


6

SCHEDULE C STATEMENT OF RESPONSIBILITY BY THE PRINCIPAL OFFICER For the period ended 31/08/2015

I confirm that for the period under review the Abacus Umbrella Provident Fund has timeously submitted all

regulatory and other returns, statements, documents and any other information as required in terms of the Pension Funds Act and to the best of my knowledge all applicable legislation.

PRINCIPAL OFFICER* CM De Villiers 28/01/2016


7

SCHEDULE D REPORT OF THE AUDITOR TO THE BOARD OF FUND

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF THE ABACUS UMBRELLA PROVIDENT

FUND

Report on the Financial Statements We have audited the annual financial statements of the Abacus Umbrella Provident Fund (the “Fund”) set out on pages 13 to 22, which comprise the statement of net assets and funds as at 31 August 2015, 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 information. The financial statements are prepared for the purpose of reporting to the Registrar of Pension Funds.

Board of Fund’s Responsibility for the Financial Statements The Board of Fund is responsible for the preparation of these financial statements in accordance with the Regulatory Reporting Requirements for Retirement Funds in South Africa. The Board of Fund is also responsible for compliance with the requirements of the Rules of the Fund and the Pension Funds Act of South Africa and for such internal control as the Board of Fund determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

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 about 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 judgement, 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 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.

Opinion In our opinion, the annual financial statements of the Abacus Umbrella Provident Fund for the year ended have been prepared, in all material respects, in accordance with the Regulatory Reporting Requirements for Retirement Funds in South Africa.

Financial Reporting Framework Without modifying our opinion, we draw attention to the principal accounting policies in which the applicable financial reporting framework is identified, as prescribed by the Registrar. Consequently, the financial statements and related auditor's report may not be suitable for another purpose.


8


9

SCHEDULE E

REPORT OF THE BOARD OF FUND For the period ended 31/08/2015 1. DESCRIPTION OF THE FUND

1.1. Type of fund

The Fund is a provident fund and is a defined contribution fund. In terms of regulation 30(2)(t) (ii) of the Regulations to the Pension Funds Act, the umbrella fund is registered as a type A umbrella fund.

1.2. Benefits

1.2.1. Summary in terms of the rules of the Fund. The benefit structure of this fund is based solely on the accumulation of contributions plus investment income earned from the appropriate investments. 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. The benefits provided for are:

(a) Retirement benefit: Share of Fund (b) Withdrawal benefit: Share of Fund (c) Death benefit: Share of Fund.

1.2.2 Unclaimed benefits

1.2.2.1. Strategy of Board of Fund towards 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.

1.2.3 Beneficiary benefits

As there are no benefits for any beneficiaries of a former member the Board of Fund has not adopted a strategy towards beneficiaries.

1.3. Contributions

1.3.1. Description in terms of the rules of the fund.

1.3.1.1. Members’ contributions. The Fund is closed for new membership and contributions.

1.3.1.2. Employers’ contributions. The Fund is closed for new membership and contributions.

1.4. Rule amendments

1.4.1 There are no rule amendments for the period under review. All rule amendments are available for inspection at the Fund’s registered office. 1.4.2. Revised special rules

All amendments in respect of revised special rules are available for inspection at the Fund’s

registered office.


10

SCHEDULE E (continue)

REPORT OF THE BOARD OF FUND For the period ended 31/08/2015

1.5. Reserves

There is no Reserve Account for the period ended 31 August 2015.

2. INVESTMENTS

2.1. Investment strategy

The investment strategy of the Fund is set by the Board of Fund 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, which are selected in order to provide those members furthest away from retirement with high growth potential, 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 periods until retirement. Members between these extremes are moved progressively from portfolios at the longer “period to retirement” end of the continuum through a series of lower risk portfolios to the pre-retirement lowest risk portfolio.

2.1.2. Individual member choice The Fund does offer individual members the option of choosing one of the investment portfolios, 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.

2.1.4. Surplus apportionment

Not applicable.

2.1.5. Reserve accounts Not applicable.

2.2. Management of investments

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


11



3. MEMBERSHIP

Active members

Numbers at beginning of period 2 619 Adjustments* (3) Adjustments** (160) Additions *** 3 Transfers out (207) Withdrawals (289) Retirements (28) Deaths (8)

Numbers at end of period 1 927

Number at end of period (South African citizen) Not available

Number at end of period (non- South African citizen) Not available Note on adjustment

*The adjustments refer to members that were duplicated on the membership records. ** These adjustments refer to members who have received their final benefit but were not taken off the

membership. *** The additions refer re-activated members due to prior year claims being reversed

4. ACTUARIAL VALUATION

The statutory actuarial valuation as at 31 August 2013 was completed by the actuary on 29 August 2014. The valuation report has been submitted to the Financial Services Board and was accepted by the Registrar on 10 December 2014. The valuators report on page 23 states- "The Fund was in a sound financial position as at 31 August 2013". The next statutory actuarial valuation of the Fund is due as at 31 August 2016.

5. SURPLUS APPORTIONMENT OR NIL SCHEME

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 s 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 Fund, the Fund was willing to provide to employees of that employer surety for housing loans in terms of section19(5)(a) of the Pensions Funds Act. From April 2010 all employers have ceased contributing to the Fund and the Fund is not open to any new employers or contributions. Therefore no new guarantees for housing loans have been granted. Please refer to note 2.1 on page 17 for further details of the housing loans.

7. INVESTMENTS IN PARTICIPATING EMPLOYERS

The fund holds no direct investments in the participating employers.


12



8. SIGNIFICANT MATTERS

8.1. SIGNIFICANT MATTERS – CURRENT FINANCIAL PERIOD

8.1a The Fund is closed closed to new entrants and monthly contributions with effect from 30 April 2010. It is the Board of Funds’ intention to terminate the Fund after the members’ benefits are transferred and the statutory requirements have been met.

8.1b The administrators have begun the Section 14 transfer process and have paid 9 transfers thus far, as

listed on note 4 page 18 of the Notes to the Financial Statements.

8.1c During the period under review, the Board of Fund approved the creation of a provision for future de-registration and winding up costs. The provision is based on 1.5% of the investment asset value as at 31 August 2015. Please see note 9.1 on page 20 of the Notes to the Financial Statements.

8.2. SIGNIFICANT MATTERS – PRIOR PERIOD

For prior year matters please refer to previous Annual Financial Statements.

9. ADDITIONAL DISCLOSURE – Claims against the previous administrator

9.1a The Fund had issued summons against Santam Insurance Limited as insurers of the previous administrators Pioneer Employee Benefits (Pty) Ltd, for losses incurred as a result of maladministration.

9.1b The Board of Fund, acting on the advice of their lawyers withdrew the claim against Santam Insurance Limited on 14 September 2015.

9.2a The Board of Fund is negotiating a settlement of a claim against Self Assurance Benefit Administrators

(Pty) Ltd. 9.2b The claim against Self Assurance Benefit Administrators (Pty) Ltd is still in progress.

10. SUBSEQUENT EVENTS

There are no subsequent events to report.


13

SCHEDULE F STATEMENT OF NET ASSETS AND FUNDS As at 31/08/2015

Notes Current period

R Previous period

R

ASSETS

Non-curent assets 73 966 127 119 292 526

Investments (including investment and owner occupied properties)

1 73 966 127 119 292 526

Current assets 1 572 658 4 652 631

Accounts receivable 3 12 517 14 455 Cash at bank 1 560 141 4 638 176

Total assets 75 538 785 123 945 157 (Applicable to defined contribution funds) FUNDS AND LIABILITIES

Members’ funds and surplus account 72 824 944 119 321 985

Members’ individual accounts 72 825 049 119 319 597 Amounts to be allocated 14 (105) 2 388

Total funds and reserves 72 824 944 119 321 985 Non-current liabilities 2 309 170 906 662

Financial liabilities 10.1 1 790 000 0 Provisions 10.2 519 170 906 662

Current liabilities 404 671 3 716 510

Benefits payable 5 292 051 3 123 510 Accounts payable 6 112 620 593 000

Total funds and Liabilities 75 538 785 123 945 157


14

SCHEDULE G STATEMENT OF CHANGES IN NET ASSETS AND FUNDS For the period ended 31/08/2015

Notes

Members’ individual accounts Total Total

Accumulated funds Current period Previous period R R R

Net investment income 7 8 883 234 8 883 234 18 161 069 Other income (provide details) 8 0 0 640 538 Less:

Administration expenses 9 (2 745 504) (2 745 504) (652 037) Net income before transfers and benefits

6 137 730 6 137 730 18 149 570

Transfers and benefits (52 634 771) (52 634 771) (12 226 683)

Transfers to other funds 4 (42 879 910) (42 879 910) 0 Benefits 5 (9 754 861) (9 754 861) (12 226 683)

Net income after transfers and benefits

(46 497 041) (46 497 041) 5 922 887

Funds and reserves 119 321 985 119 321 985 113 399 098

Balance at beginning of period 119 321 985 119 321 985 113 399 098

Balance at end of period 72 824 944 72 824 944 119 321 985


15

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS For the period ended 31/08/2015 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 annual financial statements are prepared in accordance with Regulatory Reporting Requirements for Retirement Funds in South Africa, the rules of the Fund and the provisions of the Pension Funds Act in South Africa. 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, accounts payable, leases and borrowings. 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 initially measured at fair value, plus directly attributable transaction costs other than those classified at fair value through the Statement of Changes in Net Assets and Funds. Gains or losses arising from changes in the fair value are presented in the Statement of Changes in Net Assets and Funds in the period in which they arise.

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 not grant any guarantees for loans or any direct housing loans to its members in terms of Section19(5) of the Pension Fund Act.

Other Income 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 Investment 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.


16

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS For the period ended 31/08/2015 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.

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.


17

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS For the period ended 31/08/2015

1 Investments 1.1 Investment summary

Local Foreign Total Total Fair value

Current period

Current period

Current period

Previous period

Current period

R R R R R

Insurance policies 59 363 886 14 602 241 73 966 127 119 292 526 73 966 127

Total investments 59 363 886 14 602 241 73 966 127 119 292 526 73 966 127

2 Housing Loans

2.1 Housing loans guarantees

The Fund has granted guarantees to Standard Bank for outstanding loans amounting to R79 614 for 6 members of the Fund.

The amount of the guarantee may not exceed 70% of the benefit that a member would receive in terms of the rules of the fund and Section 19(5) of the Pension Funds Act if he or she had to terminate membership to the Fund voluntarily.

The total housing loan guarantee facility available to the Fund is R101 000 and is renewable on 31 March 2016.

The Fund has not granted any new guarantees for loans to members since April 2010.

3 Accounts receivable

Current period Previous period

R R

Income accrued 12 517 3 635

Due from Abacus Umbrella Pension Fund 0 10 820

TOTAL 12 517 14 455


18

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS – CONTINUED For the period ended 31/08/2015

4 Transfers to other funds/ Transfers payable

4.1 Transfers-out in terms of Section 14*

Effective

date

No. of

member

At beginning of period

Transfers approved

Return on

transfers Assets

transferred

At end

of

period

R R R R R Efund Umbrella Provident - Aero Ground Services (Pty) Ltd 01/09/2014 10 0 457 738 0 (457 738) 0 Efund Umbrella Provident - Business Benefit Secretarial (Pty) Ltd 01/09/2014 2 0 169 331 0 (169 331) 0 Efund Umbrella Provident - Compu-Clearing (Pty) Ltd 01/09/2014 39 0 18 569 749 0 (18 569 749) 0

Efund Umbrella Provident -De Vos, Richards Charted Accountants SA 01/09/2014 9 0 200 006 0 (200 006) 0

Efund Umbrella Provident - Vitrex (Pty) Ltd 01/09/2014 22 0 4 659 126 0 (4 659 126) 0 Acumen Provident Fund - X Holdings (Pty) Ltd 01/09/2014 1 0 7 585 774 0 (7 585 774) 0

TPC Provident Fund –Transpaco (Pty) Ltd 01/09/2014 75 0 5 849 497 0 (5 849 497) 0

Efund Umbrella Provident – Compu-Clearing (Pty) Ltd 01/06/2105 4 0 139 024 0 (139 024) 0

FundsatWork Umbrella Provident Fund – Spectrum Shipping Ltd 01/09/2014 45 0 5 249 665 0 (5 249 665) 0

Total Transfers-out terms of Sec 14* 0 42 879 910 0 (42 879 910) 0

Total transfers-out - paid 207 0 42 879 910 0 (42 879 910) 0

Included in the benefits transferred for the current period is returns allocated

4.2 Prospective approvals in terms of Section14*

Effective date

No. of

members

Applied for not yet

approved

(contingency)

R

Chemical Industries Nat Provident – Transpaco (Pty) Ltd 01/09/2014 24 2 609 341

Efund Umb Provident Fund – Pioneer Financial Planning 01/05/2015 10 2 508 699

Prescient Umb Provident Fund – 27 Four Invest Managers 01/08/2015 2 291 141

Total Prospective approvals in terms of Sec 14 5 409 181

Transfers approved - current

Transfers - previous period

Transfers approved 42 879 910 0

Statement of changes in net assets and funds 42 879 910 0


19

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS – CONTINUED For the period ended 31/08/2015 5 Benefits 5.1 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 3 712 991 (3 712 991) 0

Full benefit 0 3 712 991 (3 712 991) 0

Lump sums before retirement 3 123 510 6 041 870 (8 873 329) 292 051

Death benefits 0 118 400 (118 400) 0

Withdrawal benefits 3 123 510 5 923 470 (8 754 929) 292 051

Total 3 123 510 9 754 861 (12 586 320) 292 051

Included in the benefits for the current period is returns allocated.

An amount of R97 128 for prior year claims reversed is included in the withdrawal benefits.

Current period Previous period

Benefits for current period 9 754 861 12 226 683

Statement of changes in net assets and funds 9 754 861 12 226 683

6 Accounts payable

Current period R

Previous period R

Administration fees due to administrators 42 750 513 000

Auditors fees due 64 410 80 000

Trustees fees 5 460 0

Total accounts payable 112 620 593 000

7 Net investment income

Current period R

Previous period R

Income from investments 1 526 210 954 317

Dividends 419 744 203 251

Interest 1 106 466 751 066

Adjustment to fair value (provide details) 7 937 805 17 862 686

Sub-Total 9 464 015 18 817 003

Less

Expenses incurred in managing investments (580 781) (655 934)

Total 8 883 234 18 161 069


20

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS – CONTINUED For the period ended 31/08/2015 8 Other Income

Current Period Previous Period

R R

Liquidation income Pioneer Employee Benefits 0 148 392

Historical balances written off 0 492 146

Total other income 0 640 538

9 Administration expenses

Notes Current period

R Previous period

R

Actuarial fees 49 022 45 000

Actuarial fees provision written back 0 (200 720)

Administration fees 636 120 348 678

Audit fees 66 376 82 394

Fidelity Insurance 20 625 20 625

Levies 49 187 50 433

Legal Fees 30 760 301 662

Other admin expenses 9.1 1 793 855 2 084

Board of Fund expenses 9.2 99 559 1 881

Total 2 745 504 652 037

9.1 Other admin expenses


Details of Other admin expenses R R

Bank Charges 3 855 2 084

De registration provision* 1 790 000 0

Total other income 1 793 855 2 084

*During the period under review, the Board of Fund approved the creation of a provision for future de-

registration and winding up costs. The provision is based on 1.5% of the investment asset value as at 31 August 2014.

9.2 Board of Fund expenses

Current period R

Previous period R

Remuneration expenses 98 221 0

Meeting expenses 1 338 1 881

Total Board of Fund expenses 99 559 1 881


21

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS – CONTINUED For the period ended 31/08/2015 10 Financial liabilities and provisions 10.1 Financial liabilities


R R

Provision for cost for deregistration ( refer to note 9.1) 1 790 000 0

Total Financial liabilities 1 790 000 0

10.2 Provisions


R R

Provision for actuarial fees 40 668 45 000

Provision for rebuild cost (Legal fees) 478 502 861 662

Total Financial liabilities 519 170 906 662

11 Risk management policies

Risk management framework

The Board of Fund has overall responsibility for the establishment and oversight of the Fund’s risk

management policies.

The Fund’s risk management policies are established to identify and analyse the risks faced by the Fund, to

set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management

policies and systems are reviewed regularly to reflect changes in market conditions and the Fund’s

activities.

Solvency risk

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

Credit Risk

The Board of Fund 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 Fund 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.

Liquidity Risk

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


22

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS – CONTINUED For the period ended 31/08/2015 Risk management policies - continued

Market Risk

The Board of Fund monitors exposures in market risk to the value of a financial instrument that will fluctuate as a result of changes in market prices.

Interest rate Risk

The Board of Fund monitors exposures to interest rate risk by receiving regular reports of interest fluctuations.

Currency Risk

The Funds 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. The Board of Fund monitors this aspect of the Fund’s investments and limits it to SARB limits of total assets.

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.

12 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. The actuarial present value of promised retirement benefits, distinguishing between vested benefits and non-vested benefits is set out in the report of the valuator.

13 Related party transactions

Fund expenses to the value of R2 745 504. The participating employer made contributions to the Fund for members’ retirement and towards the Funds expenses to the value of R0. Principal Officer fees are included in the Board of Fund expenses. Administration fees were paid during the current year. Please refer to note 9 on page 20 of the administration expenses.

14 Amounts to be allocated

Current period R

Previous period R

Investment return to be allocated (105) 2 388

Total amounts to be allocated (105) 2 388

End of Schedule HA


23

SCHEDULE HB REPORT OF THE VALUATOR

Particulars of financial condition of the fund


24

SCHEDULE I

REPORT OF THE INDEPENDENT AUDITORS OF FACTUAL FINDINGS TO THE REGISTRAR OF PENSION FUNDS

REPORT OF THE INDEPENDENT AUDITOR OF ABACUS UMBRELLA PROVIDENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS We have performed the procedures agreed with the Registrar of Pension Funds (the “Registrar”) and set out below with respect to the audited financial statements (“annual financial statements”) and other information in the general ledger and management information comprising the accounting records of the Abacus Umbrella Provident Fund (the “Fund”) for the year ended 31 August 2015. Our engagement was undertaken in accordance with the International Standard on Related Services (ISRS) 4400 Engagements to perform agreed-upon procedures regarding financial information. Our procedures were performed solely to assist the Registrar in evaluating whether any instances of non-compliance with the requirements of the relevant sections of the Pension Funds Act of South Africa (the Act), regulations and rules of the Fund were identified. The responsibility for determining the adequacy or otherwise of the procedures agreed to be performed, is that of the Registrar. Procedures and findings Our procedures performed are set out in the numbered paragraphs in the attached table, which forms part of our report, together with our findings thereon. Unless otherwise indicated, all balances, lists, schedules etc. referred to in the table relate to the accounts/balances reflected in the annual financial statements of the Fund for the year ended 31 August 2015. Because the procedures do not constitute an audit, a review or other assurance engagement performed in accordance with the IAASB’s International Standards we do not express any assurance. Had we performed additional procedures, or had we performed an audit, a review, or other assurance engagement, other matters might have come to our attention that would have been reported. Restriction on use and distribution


25

SCHEDULE I - continued

REPORT OF THE BOARD OF FUND TO THE REGISTRAR OF PENSION FUNDS IN TERMS OF SECTION 15 OF THE PENSION FUNDS ACT Procedures and Findings

Procedures Findings

Statement of Net Assets and Funds

1 Investments

1.1 Inspect the list of investment balances reflected in the general ledger of the Fund as at 31 August 2015 for any investments in accordance with the terms of section 19(4) of the Act.

1.1.1 Agree details of the written confirmations obtained from the investment managers/insurers to the investment balances reflected in the general ledger.

Details of the written confirmations obtained from the investment managers/issuers agreed to the investment balances reflected in the general ledger.

1.1.2 Where investments held in the participating employer exceed 5% of the total assets as reflected in the financial statements, inspect the appropriate approval of the Registrar.

Not applicable, as the Fund does not have investments in the participating employer.

1.2 Obtain the signed investment policy statement and, where applicable, the portfolio management agreement/ investment mandate between the Fund and the investment administrator(s), and perform the following procedures on a sample of10 mandates (comprising the 3 largest by value of investments at year end and 7 other randomly selected mandates):

1.2.1 Inspect whether the underlying investments are in compliance with the signed investment policy statement and, where applicable, the portfolio management agreement/investment mandate.

The underlying investments were in compliance with the signed investment policy statement and, where applicable, the portfolio management agreement/investment mandate.

1.2.2 Inspect whether the investment mandate and the investment policy statement provide for securities lending transactions and investments in hedge funds, private equity funds and derivatives, as prescribed.

The investment mandate and the investment policy statement did not provide for securities lending transactions. However investments in hedge funds, private equity funds and derivatives, as prescribed are allowed indirectly.

1.2.3 Inspect whether the collateral and counterparty requirements as prescribed are complied with.

Not applicable.

1.2.4 For segregated portfolios, confirm directly with the investment administrator(s):

(a) whether scrip lending took place during the year and, if so,

(b) whether there was collateral provided by the counterparty/(ies) for any scrip lending activities and, if so,

(c) the percentage exposure covered by the collateral.

Report on the amount for a).

Not applicable, as the fund does not have segregated portfolios.


26

Procedures Findings

2 Member individual accounts (defined contributions funds as well as defined contribution section of hybrid funds)

2.1 Obtain a list of member individual accounts per participating employer that agrees in total to the Statement of Net Assets and Funds as at 31 August 2015.

2.2 Select a random sample of the lesser of 50 or 10% of the number of members (from participating employers selected in 8.1 below) from the list of members and perform the following procedures:

Not applicable, as no contributions were received throughout the year under review.

2.2.1 Compare the member and employer contributions received and allocated for the members selected as reflected on the administrator’s system, to information supplied by the participating employers for those members selected, for a randomly selected period of three months (including the last month of the year under review).

Not applicable.

2.2.2 Compare the member and employer contribution rates for the members selected as reflected on the administrator’s system, to the rules of the Fund, for a randomly selected period of three months (including the last month of the year under review).

Not applicable.

2.2.3 In respect of unitised investment products, for the three months selected in 2.2.1 and 2.2.2, calculate the conversion of the contributions at the unit price per the administration system on the dates that the contributions were invested and compare the units recalculated to the administration system units for the selected members. Inspect that the units were added to the existing units for that member.

Not applicable.

2.2.4 In respect of unitised investment products, calculate the conversion of units at the end of the year, at the year-end unit price per the administration system and agree the calculated amount to the member’s fund credit amount recorded in each member's record.

The conversion of the units at year- end was calculated correctly at the period unit price per administration system and agreed to the member’s fund credit amount recorded in each member's record.

2.2.5 In respect of unitised investment products, compare the unit price(s) as per investment manager/actuary/other authorised party at the period-end to the unit prices on the administration system used to calculate each member‘s credits at 31 August 2015..

The unit price(s) agreed to the unit prices on the administration system as per investment manager used to calculate each member’s credit at 31 August 2015.


27

Procedures Findings

2.2.6 In respect of non-unitised investment products, compare the interim and/or final return allocated to each individual member's account in the administrator's records for the year under review to the return approved in accordance with a resolution of the Board of Fund or the rules of the Fund or approved recommendation by the investment consultant/asset manager/fund valuator.

Not applicable, as this is a unitised fund.

2.3 Obtain a list of members who switched investment portfolios during the year from the Fund/administrator, select a random sample of the lesser of 50 or 10% of members who switched between investment portfolios during the year, and perform the following procedures:

2.3.1 Inspect evidence that the portfolios were switched in accordance with notification of the member’s instruction/ investment strategy (including life stage models) of the Fund and within a timeframe as specified in the service level agreement or client mandate between the administrator and the Fund.

The portfolios were switched in accordance with notification of the member’s instruction/investment strategy (including life stage models) of the Fund and were switched within the timeframe as specified in the service level agreement or client mandate between the administrator and the Fund.

2.3.2 Inquire as to whether any fees relating to switches were deducted, and if so, inspect evidence of the approval by the Board of Fund and/or in terms of a service level agreement or client mandate.

Fees were deducted in terms of the client mandate and Board approval.

2.4 For investment products obtain the Asset Liability Match (ALM) reconciliation per investment portfolio, excluding the reserve accounts, for member individual accounts from the administrator, and perform the following procedures:

2.4.1 Compare the investments per product on the ALM reconciliation to the investment certificates in total.

The investments per product on the ALM recalculated agreed to the investment certificates in total.

2.4.2 Compare the member individual accounts on the ALM reconciliation per investment portfolio to the administration system and to the total member individual accounts as disclosed in the Statement of Net Assets and Funds.

The values of investments specified by the members investment choice did agree to the members liabilities per product for that choice.

2.4.3 Inspect whether the total mismatch (in Rand) for all portfolios was within the range as prescribed by the Registrar.

The total mismatch for all portfolios was 0,0001%,amounting to R(105)


28

Procedures Findings

3 Accumulated funds (for defined benefit funds as well as defined benefit sections of hybrid funds)

3.1 Select a sample of the lesser of 50 or 10% of the number of members from the list of members provided by the administrator and perform the following procedures for each member selected:

Not applicable, as this a defined contribution fund.

3.1.1 Compare the member contributions received and allocated for the members selected as reflected on the administrator’s system, to information supplied by the participating employers for those members selected, for a randomly selected period of three months (including the last month of the year under review).

Not applicable.

4 Surplus apportionment scheme

4.1 If a surplus apportionment scheme was approved by the Registrar in the current year or if allocation and/or payments to members were made during the year, perform the following procedures:

The fund has no surplus apportionment scheme.

4.1.1 Active members:

Select a random sample of the lesser of 50 or 10% of number of active members to whom surplus has been apportioned in the approved surplus apportionment scheme and perform the following procedures:

Not applicable.

4.1.1.1 Agree the original surplus amount allocated to the selected member to the individual allocation on the member records per the administration system.

Not applicable.

4.1.1.2 Inspect whether the calculation of the relevant investment return from surplus apportionment date to date of allocation was in accordance with the requirements of the Act and allocated to the member records in the administration system.

Not applicable.

4.1.2 Former members and pensioners:

Select a random sample of the lesser of 50 or 10% of number of former members and pensioners as defined by the surplus apportionment scheme from the surplus schedules attached to the approved surplus apportionment scheme and perform the following procedures:

4.1.2.1 Agree the original surplus amount allocated to the selected member and/or pensioner to the individual allocation on the member records per the administration system.

Not applicable.


29

Procedures Findings

4.1.2.2 Inspect whether the calculation of the relevant investment return from surplus apportionment date to date of allocation was in accordance with the requirements of the Pension Funds Act and allocated to the member records in the administration system.

Not applicable.

4.1.2.3 Agree the total of the amount calculated in 4.1.2.1 and 4.1.2.2 to the surplus benefit paid per selected member and to the applicable amount per the administration system and other authorised supporting documentation.

Not applicable.

5 Member and employer surplus accounts

5.1 Obtain the analysis of the transactions in the member and/or employer surplus account per the annual financial statements, and perform the following procedure:

Not applicable, as the fund has no surplus accounts.

5.1.1 Inspect that the transactions are permitted in terms of the registered rules of the Fund and/or the Act.

Not applicable.

6 Reserves

6.1 Obtain the list of reserves and other related accounts (e.g. pensioner accounts) and the movements per the financial statements and/or in the actuarial valuation, and perform the following procedures:

Not applicable, as the fund has no reserve accounts.

6.1.1 Inspect whether the reserve and other related accounts (e.g. pensioner accounts) held by the Fund and/or reflected in the actuarial valuation are in accordance with the registered rules of the Fund.

Not applicable.

6.1.2 Inspect that the movements in reserves as disclosed in the annual financial statements are permitted in terms of the registered rules of the Fund and/or the Act.

Not applicable.

7 Other assets, liabilities and guarantees

7.1

Obtain the list of housing loans granted to members by the Fund in terms of section 19(5) of the Act as at 31 August 2015, and perform the following procedure:

The Fund does not grant direct housing loans.

7.1.1 Agree the total loans on the above list to the corresponding account in the annual financial statements.

Not applicable.

7.2 From the list in 7.1, randomly select a sample of the lesser of 50 or 10% of the number of members’ housing loans granted and perform the following procedures:

Not applicable.

7.2.1 Inspect evidence that the value of the loan provided does not exceed the amount permitted by the rules and the home loan agreement.

Not applicable.

7.2.2 Inspect evidence that the loan has been granted in terms of Section 19(5) (a).

Not applicable.


30

Procedures Findings

7.2.3 Inspect evidence that repayments are being made in accordance with the loan agreement.

Not applicable.

7.2.4 Inspect the interest charged on the outstanding loan and compare the rate used to the prescribed rate.

Not applicable.

7.2.5 If the Fund issued more than 100 loans or the total principal debt of all outstanding loans exceeded R500 000, inquire whether the Fund was registered as a credit provider under the National Credit Act, 2005 (the NCA).

Not applicable.

7.3 Obtain the list of housing loan guarantees and select a sample of the lesser of 50 or 10% of the number of housing loan guarantees and perform the following procedures:

7.3.1 For the sample selected, determine that each selected guarantee did not exceed the gross value of the benefit that the member would become entitled to had they withdrawn, as at the period end, in terms of the Act, the loan agreement and/or the rules of the Fund.

For the sample selected, the guarantees did not exceed the gross value of the benefit that the member would become entitled to had they withdrawn, as at 31 August 2015, in terms of the Act, the loan agreement and/or the rules of the Fund.

7.3.2 Inspect evidence that the guarantee has been granted in terms of Section 19(5) (a).

The guarantee had been granted in terms of Section 19(5) (a).

7.4 Obtain a list of other loans per the general ledger of the Fund as at 31 August 2015 and perform the following procedure:

7.4.1 Confirm that no loans were granted and/or investments made as prohibited in terms of section 19(5)B.

The Fund does not grant other loans.

Statement of Changes in Net Assets and Funds

8 Contributions

8.1 Select a sample of the lesser of 50 or 10% of the number of participating employers or pay points (whichever is the lower) from a list of participating employer/pay-points supplied by the Fund/administrator, select three months and perform the following procedures:

Not applicable, as no contributions were received throughout the year under review.

8.1.1 Compare, in total, the contributions received by or on behalf of the Fund to the remittance advices from the participating employer/pay-point.

Not applicable.

8.1.2 Inspect the bank statements 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.

Not applicable.


31

Procedures Findings

8.2 Select a sample of the lesser of 50 or 10% of the number of participating employers or pay points which reflect arrear contributions (whichever is the lower) at year-end from a list supplied by the Fund/administrator and perform the following procedure:

Not applicable.

8.2.1 Inspect the accounting records of the Fund to determine whether amounts disclosed as arrear contributions at 31 August 2015 have been paid to the Fund within the prescribed period in accordance with the requirements of section 13A of the Act. Where the amounts were received after the prescribed period, report the date of receipt and where they were not received, indicate as such.

There were no arrear contributions as at 31 August 2015.

9 Benefits

9.1 Obtain a list from the administration system of lump sum benefits reflected as expenses in the Fund’s Statement of Changes in Net Assets and Funds for the year under review and perform the following procedure:

9.1.1 Compare the list to the respective general ledger benefit expense accounts reconciliation.

The list agreed to the respective general ledger benefit expense accounts reconciliation.

9.2 Select a sample of the lesser of 50 benefits or 10% of the total number of benefits from the list and perform the following procedures:

9.2.1 Compare the benefit per selected member to the administration system and authorised supporting documentation in accordance with the procedures of the Fund.

The benefit per selected member agreed to the administration system and authorised supporting documentation in accordance with the procedures of the Fund.

9.2.2 For death benefits, where a portion of the benefit had been reinsured by the Fund, inspect a bank deposit or an accrual raised for the recovery from the insurer.

Not applicable, as no re-insurance proceeds were received or accrued during the period under review.

9.2.3 For a defined contribution fund

Agree the opening fund credit for the member to the opening fund credit report and determine whether contributions were added every month until the date of exit (either by Rand amount or in the case of unitised funds, by units). Agree the balance paid out to the member (inclusive of late payment interest where applicable) to the fund credit report or administration system as at the date of exit.

The opening fund credit for the member agreed to the opening fund credit report and contributions were added every month until the date of exit. The balance paid out to the member (inclusive of late payment interest where applicable) agreed to the fund credit report or administration system as at the date of exit.

9.3 Obtain a list of all benefits not yet paid at year-end, select a sample of the lesser of 50 benefits or 10% of the total number of benefits from the list and perform the following procedure:


32

Procedures Findings

9.3.1 Agree whether the benefits that are older than the period as set out in the Act or a shorter period defined by the Rules are classified as unclaimed benefits.

The benefits that were older than the period as set out in the Act or a shorter period defined by the Rules were not classified as unclaimed benefits.

10 Transfers

10.1 Compare the list of total section 14 transfers to and from the Fund to the corresponding accounts in the general ledger.

The list of total section 14 transfers from the Fund agreed to the corresponding account in the general ledger.

10.2 From the list of section 14 transfers paid/received and accrued to and from the Fund throughout the year select a sample of the lesser of 50 or 10% of the number of transfers in and the lesser of 50 or 10% of the number of transfers out, and perform the following procedures:

10.2.1 Agree the sample of section 14 transfers to and from the Fund to:

a) the section 14(1) documentation as approved by the Registrar in respect of each transfer; and/or

b) the section 14(8) documentation as prescribed.

The sample of section 14 transfers to and from the Fund agreed to:

a) the section 14(1) documentation as approved by the Registrar in respect of each transfer; and/or

b) not applicable.

10.2.2 Inspect whether the transfers to and from the Fund were received/paid within 60 days of Registrar approval for section 14(1) transfers and 180 days from application date for section 14(8) transfers and whether the growth and investment return had been allocated from the effective date of the transfer to the date of final settlement.

The transfers from the Fund were paid within 60 days of Registrar approval for section 14(1) transfers and growth and investment return was allocated from the effective date of transfer to the date of final settlement.

10.2.3 In respect of unitised funds, select a sample of the lesser of 50 or 10% of the number of members transferred from other funds and recalculate 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 added from the date of receipt to the date of purchase).

Not applicable, as there were no section 14 transfers to the Fund throughout the year ended 31 August 2015.

10.3 Individual transfers

Obtain the list of individual transfers throughout the year ended 31 August 2015, select a sample of the lesser of 50 or 10% of the number of individual transfers, and perform the following procedures:

There were on individual transfers to and from the fund throughout the period under review.

10.3.1 Agree the transfers to the approved recognition of transfer documentation.

Not applicable.

10.3.2 For individual transfers in selected

In respect of unitised funds, recalculate 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 added from the date of receipt to the date of purchase).

Not applicable, as there were no individual transfers in from other funds throughout the year ended 31 August 2015.


33

Procedures Findings

11 Pensioners paid

11.1 Obtain a copy of the list of pensioners and amounts paid for the year from the administration system and/or, for outsourced pensioners, confirmation from the insurer and perform the following procedure:

Not applicable, as the Fund does not have pensioners.

11.1.1 Agree the total pensions paid for the year ended 31 August 2015 to the corresponding account reconciliation to the general ledger balance.

Not applicable.

11.2 Select a sample of the lesser of 50 or 10% of the number of pensioners paid directly from the fund from the above list and perform the following procedures:

Not applicable.

11.2.1 Inspect the pensioner increases for authorisation by the Board of Fund.

Not applicable.

11.2.2 Inspect evidence obtained by the administrator/Fund supporting the fact that the pensioners selected exist.

Not applicable.

11.3 Where the Fund has purchased an annuity in the name of the Fund, obtain a written confirmation from the annuity provider summarising movements from opening market value to closing market value and perform the following procedures:

Not applicable.

11.3.1 Agree the closing market value of the annuity to the annual financial statements.

Not applicable.

11.3.2 Agree the pensioner payment per the confirmation from the insurer to the pensions paid disclosed in the notes to the annual financial statements.

Not applicable.

General

12.1 Inspect evidence that the Fund’s fidelity insurance cover was in place throughout the year ended 31 August 2015 and that the Fund’s fidelity insurance cover extends after year-end and report the date to which the subsequent fidelity insurance cover extends.

The Fund’s fidelity insurance cover was in place throughout the year ended 31 August 2015, and the Fund’s fidelity insurance cover extended after year-end. The subsequent fidelity insurance cover extended to 31 May 2016.

12.2 Confirm with the Fund’s GLA insurer as to whether the GLA policy has lapsed at year ended 31 August 2015.

Not applicable, as there is no risk premiums incurred throughout the year ended 31 August 2015.

12.3 Obtain the most recent statutory valuation signed and submitted by the valuator as at 31 August 2013 and perform the following procedures:

12.3.1 Report the funding status of the Fund per the report (whether the Fund was under-funded or fully funded).

Per the report the Fund was fully funded.

12.3.2 Where the Fund is under-funded, obtain evidence as to whether a scheme, as required in terms of section 18 of the Act in South Africa, has been approved by the Registrar.

Not applicable.


34

SCHEDULE IA – INVESTMENT SCHEDULE At 31/08/2015

Investments

1

Direct Investments

Compliant Insurance policy

Total Local Foreign (excluding Africa)

Total Foreign Total % foreign

exposure

TOTAL as per Regulation 28 (Schedule IB)

Note A Note L

R R R R R % R

Cash 1 560 141 13 895 506 15 455 647 14 749 281 706 366 706 366 4.57% 15 455 647

Debt Instruments 9 234 432 9 234 432 8 729 292 505 140 505 140 5.47% 9 234 432

Investment Properties

8 124 088 8 124 088 8 084 235 39 853 39 853 0.49% 8 124 088

Equities 42 712 101 42 712 101 29 361 219 13 350 882 13 350 882 31.26% 42 712 101

TOTAL INVESTMENTS

1 560 141 73 966 127 75 526 268 60 924 027 14 602 241 14 602 241 19.33% 75 526 268

A CASH

Instrument

Fair value Previous Period

R R

Local

Notes, deposits, money market instruments issued by a South African Bank, margin accounts, settlement accounts with an exchange and Islamic liquidity management financial instruments 1 560 141 4 638 176

Notes and coins, any balance or deposit in an account held with a South African bank List issuers/entities which exceeds 5% of total assets 1 560 141 4 638 176

Standard Bank of SA Ltd 1 560 141 4 638 176

L REGULATION 28 COMPLIANT INVESTMENTS COMPLIANT INSURANCE POLICIES

Instrument Local or Foreign Fair value Previous Period R

Linked Policies 73 966 127 73 966 127 119 292 526

Local & Foreign 73 966 127 73 966 127 119 292 526

Momentum High Equity 38 335 606 38 335 606 70 830 561

Momentum Low Equity 5 727 410 5 727 410 14 884 237

Momentum Medium Equity 17 752 642 17 752 642 18 300 937

Momentum Pre-Retirement 12 150 469 12 150 469 15 276 791

TOTAL NON-COMPLIANT INSURANCE POLICIES 73 966 127 73 966 127 119 292 526

P RECONCILIATION BETWEEN THE INVESTMENTS IN SCHEDULE H1 AND SCHEDULE IA

Fair value current

period (as per Schedule H1.1) Cash at bank

Non-compliant Insurance policies Total

Cash 1 560 141 13 895 506 15 455 647

Debt instruments including Islamic debt instruments 9 234 432 9 234 432

Investment properties and owner occupied properties 8 124 088 8 124 088

Equities 42 712 101 42 712 101

Insurance Policies 73 966 127 -73 966 127 -

TOTAL INVESTMENTS 73 966 127 1 560 141 - 75 526 268


35

SCHEDULE IB

ASSETS HELD IN COMPLIANCE WITH REGULATION 28 As at 31/08/2015

Fair value R A Total assets (Schedule IA -Total investments) 75 526 268 B1 Less: Reg 28 compliant investments

(certificate received from issuing entity):- 0

B.1.1 Collective Investment Schemes (Reg 28(8)(b)(i)) 0 B.1.2 Linked Policies (Reg 28(8)(b)(ii)) 0 B.1.3 Non-Linked policies (Reg 28(8)(b)(iii)) 0 B.1.4 Entity regulated by FSB (Reg 28(8)(b)(iv)) 0

B2 Less: Reg 28 Excluded investments 0

B.2.1 Insurance Policies ( Reg 28(3)(c)) 0

C Less: Investments not disclosed /data not available for disclosure [Refer

Schedule IAN] 0

D TOTAL ASSETS for REGULATION 28 DISCLOSURE 75 526 268

Max % or SARB

max limit

per issuer,

entity or instrume

nt

1 CASH 100% 15 455 647 20.46%

1.1 Notes, deposits, money market instruments issued by a South African Bank, margin accounts, settlement accounts with an exchange and Islamic liquidity management financial instruments 100% 14 749 281 19.53%

(a) Notes and coins, any balance or deposit in an account held with a South African bank 25% 1 883 619 2.49% (b) A money market instrument issued by a South African bank including an Islamic

liquidity management financial instrument 25% 12 762 960 16.90% (c) Any positive net balance in a margin account with an exchange 25% 163 835 0.22% (d) Any positive net balance in a settlement account with an exchange, operated for the

buying and selling of assets 25% (61 133) (0.08%)

1.2 Balances or deposits, money market instruments issued by a foreign bank including Islamic liquidity management financial instruments 706 366 0.93%

(a) Any balance or deposit held with a foreign bank 5% 348 743 0.46% (c) A money market instrument issued by a foreign bank including an Islamic liquidity

management financial instrument 5% 357 623 0.47%


36

SCHEDULE IB

ASSETS HELD IN COMPLIANCE WITH REGULATION 28 (CONTINUED) As at 31 August 2015

Max % or

SARB max

limit

per issuer,

entity or

instrument

2 DEBT INSTRUMENTS INCLUDING ISLAMIC DEBT

INSTRUMENTS

100% or 75%

9 234 432 12.23%

2.1 Inside the Republic 75/100% 8 729 292 11.56% (a) Debt instruments issued by, and loans to, the government of the

Republic, and any debt or loan guaranteed by the Republic

100%

723 951 0.96% 75% 10% (c) Debt instruments issued or guaranteed by a South African Bank

against its balance sheet:

75%

52 782 0.07%

(c)(i) Listed on an exchange with an issue market capitalisation of R20 billion or

more, or an amount or conditions as prescribed

75% 25%

24 776 0.03% (c)(ii) Listed on an exchange with an issuer market capitalisation of between R2

billion and R20 billion, or an amount or conditions as prescribed

75% 15%

1 621 0.01% (c)(iv) Not listed on an exchange 25% 5% 26 385 0.03%

(d) Debt instruments issued or guaranteed by an entity that has equity

listed on an exchange, or debt instruments issued or guaranteed by a

public entity under the Public Finance Management Act, 1999 (Act No.

1 of 1999) as prescribed:-

50%

3 214 836 4.26% (d)(i) Listed on an exchange 50% 10% 2 587 404 3.43% (d)(ii) Not listed on an exchange 25% 5% 627 432 0.83% (e) Other debt instruments: 25% 4 737 723 6.27% (e)(i) Listed on an exchange 25% 5% 1 177 292 1.56% (e)(ii) Not listed on an exchange 15% 5% 3 560 431 4.71%

2.2 Foreign 505 140 0.67% (c) Debt instruments issued or guaranteed by a South African Bank

against its balance sheet:-

418 144 0.55% (c)(i) Listed on an exchange with an issue market capitalisation of R20 billion or

more, or an amount or conditions as prescribed

418 144 0.55% (d) Debt instruments issued or guaranteed by an entity that has equity

listed on an exchange

81 816 0.11% (d)(i) Listed on an exchange 78 569 0.11% (d)(ii) Not listed on an exchange 3 247 0.00%

(e) Other debt instruments 5 180 0.01% (e)(i) Listed on an exchange 318 0.00% (e)(ii) Not listed on an exchange 4 862 0.01%

3 EQUITIES 75% 42 712 101 56.55%

3.1 Inside the Republic 75% 29 361 219 38.87%

(a) Preference and ordinary shares in companies, excluding shares in property

companies, listed on an exchange:-

75%

28 723 413 38.03%

(a)(i) Issuer market capitalisation of R20 billion or more, or an amount or conditions as

prescribed

75% 15%

26 117 232 34.58% (a)(ii) Issuer market capitalisation of between R2 billion and R20 billion, or an amount

or conditions as prescribed

75% 10%

2 443 820 3.24% (a)(iii) Issuer market capitalisation of less than R2 billion, or an amount or conditions as

prescribed

75% 5%

162 361 0.21%

(b) Preference and ordinary shares in companies, excluding shares in property

companies, not listed on an exchange

10% 2.5%

637 806 0.84%


37

3.2 Foreign SARB 13 350 882 17.68% (a) Preference and ordinary shares in companies, excluding shares in property

companies, listed on an exchange:-

SARB

13 326 735 17.65%


prescribed

SARB 15%



SARB 10%

607 651 0.81% (a)(iii) Issuer market capitalisation of less than R2 billion, or an amount or conditions as

prescribed

SARB 5%

792 938 1.05% (b) Preference and ordinary shares in companies, excluding shares in property

companies, not listed on an exchange

10% 2.5%

24 147 0.03%

4 IMMOVABLE PROPERTY 25% 8 124 088 10.76%

4.1 Inside the Republic 25% 8 084 235 10.71%

(a) Preference shares, ordinary shares and linked units comprising shares

linked to debentures in property companies, or units in a Collective

Investment Scheme in Property, listed on an exchange

25%

8 070 443 10.69%


prescribed

25% 15%



25% 10%

1 227 508 1.63% (a)(iii) Issuer market capitalisation of less than R3 billion or an amount or conditions as

prescribed

25% 5%

379 707 0.50%

(b) Immovable property, preference and ordinary shares in property

companies, and linked units comprising shares linked to debentures in

property companies, not listed on an exchange

15% 5%

13 792 0.02%

4.2 Foreign 25% 39 853 0.05% (a) Preference shares, ordinary shares and linked units comprising shares

linked to debentures in property companies, or units in a Collective

Investment Scheme in Property, listed on an exchange:-

25%

39 757 0.05%


prescribed

25% 15%

39 446 0.05% (a)(ii) Issuer market capitalisation of between R3 billion and R10 billion, or an amount


25% 10%

177 0.00% (a)(iii) Issuer market capitalisation of less than R3 billion or an amount or conditions as

prescribed

25% 5%

134 0.00%

(b) Immovable property, preference and ordinary shares in property

companies, and linked units comprising shares linked to debentures in

property companies, not listed on an exchange

15% 5%

96 0.00%

TOTAL ASSETS – REGULATION 28 75 526 268 100.00%


38

SCHEDULE IB – CONTINUED ASSETS HELD IN COMPLIANCE WITH REGULATION 28

As at 31 August 2015 INVESTMENT SUMMARY (REGULATION 28)

Local % of Fair

value

Foreign (Excluding

Africa) % of Fair

value Total

R % R % R

1 Balances or deposits, money market instruments issued by a bank including Islamic liquidity management financial instruments 14 749 281 19.53% 706 366 0.93% 15 455 647 20.46%

2 Debt instruments including Islamic debt instruments 8 729 292 11.56% 505 140 0.67% 9 234 432 12.23%

3 Equities 29 361 219 38.87% 13 350 882 17.68% 42 712 101 56.55%

4 Immovable property 8 084 235 10.71% 39 853 0.05% 8 124 088 10.76%

TOTAL (equal to the fair value of assets) 60 924 027 80.67% 14 602 241 19.33% 75 526 268 100%

Note: Maximum Foreign limits and disclosure in terms of South African Reserve Bank requirements

BREACHES IN TERMS OF SUB REGULATION 3 OF REGULATION 28 As at 31/08/2015

Total (Inside &

Foreign) Percentage of

Fair value

Regulation

28 limits

R %

Asset Limits in terms of sub regulation 3(f)

Other debt instruments not listed 3 565 293 4.72%

Equities not listed 661 953 0.88%

Immovable properties not listed 13 888 0.02%

Hedge funds , Private Equity funds and other assets 0 0.00%

TOTAL 4 241 134 5.62.% 35%

Asset Limits in terms of sub regulation 3(g)

Equities not listed 661 953 0.88%

Private Equity funds 0 0.00%

TOTAL 661 953 0.88% 15%

Asset Limits in terms of sub-regulation 3(h)

Cash and deposits with a South African Bank 1 883 619 2.49%

Debt instruments guaranteed by a South African Bank 52 782 0.07%

TOTAL 1 936 401 2.56% 25%


39

SCHEDULE IB INDEPENDENT AUDITOR’S REPORT ON ASSETS HELD IN COMPLIANCE WITH REGULATION 28 TO THE BOARD OF ABACUS UMBRELLA PROVIDENT FUND We have audited Schedule IB “Assets held in compliance with Regulation 28” of Abacus Umbrella Provident Fund (the Fund) at 31 August 2015 (the Schedule) for compliance with the requirements of Regulation 28 of the Pension Funds Act of South Africa (the Regulation), as set out on pages 35 to 38. Our engagement arises from our appointment as auditor of the Fund and is for the purpose of assisting the Board of Fund to report to the Registrar of Pension Funds (the ‘Registrar’). The information contained in Schedule IB has been extracted from the Fund’s underlying accounting records that were the subject of our audit engagement on the annual financial statements and forms the subject matter of this engagement. Our audit of the annual financial statements of the Abacus Umbrella Provident Fund for the year ended 31 August 2015 was conducted in accordance with International Standards on Auditing and in our report of date:_4/02/2016 we expressed a modified opinion on the financial statements, prepared, in all material respects, with the Regulatory Reporting Requirements for Retirement Funds in South Africa.

The Board of Fund’s Responsibility for the Schedule The Board of Fund is responsible for the preparation of the Schedule in accordance with the Regulatory Reporting Requirements for Retirement Funds in South Africa and in compliance with the Regulation, and for such internal control as the Board of Fund determines is necessary to enable the preparation of the Schedule that is free from material misstatements, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion based on our audit of the Schedule. 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 about whether the Schedule is 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 judgment, 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 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, Schedule IB “Assets held in compliance with Regulation 28” at 31 August 2015 by Abacus Umbrella Provident Fund has been prepared in all material respects in accordance with the Regulatory Reporting Requirements for Retirement Funds in South Africa and in compliance with the Regulation.


40

SCHEDULE IB INDEPENDENT AUDITOR’S REPORT ON ASSETS HELD IN COMPLIANCE WITH REGULATION 28 TO THE BOARD OF ABACUS UMBRELLA PROVIDENT FUND Restriction on Use

Documents

ANNUAL FINANCIAL STATEMENTS IN TERMS SECTION 15 OF …abacus.devee.co.za/ArchiveFiles/AuditReports/AFS Provident 2015.pdf · annual financial statements in terms section 15 of the