2015

3

Vision, mission and values 4

Core business 4

Governance and organisation 5-7

Board Member profiles 8-11

Chairperson’s report 12-13

Executive Manager’s report 14-15

Committee reports 17-34

• StandingDisciplinaryCommittee 16-17

• LegalandLiaisonCommittee 18-19

• HumanResourceandTrainingCommittee 20-21

• FidelityFundCommittee 22-23

• FinanceCommittee 24-25

Audited Financial Statements 26-79

2015Contents

SOUTH AFRICAN BOARD FOR SHERIFFS • 88 LOOP STREET, CAPE TOWN 8001 • T: 021 426 0577, F: 021 426 2598, E: contact @sheriffs.org.za

The SA Board for Sheriffs is a statuatory body established under Section 7 of the Sheriffs’ Act and has as its objectives the maintenance of the esteem of; the enhancement of the status of, and the improvement of the standard of training of and functions performed by sheriffs. Its general functions are set out in Section 16 of the Sheriffs’ Act. It also plays an indirect role in the appointment of sheriffs through it’s control over the issuing of Fidelity Fund Certificates, without which a person is not entitled to function as a sheriff.

4

Vision• WeareaBoardthatistransparent,and responsivetotheneedsofthesheriffs’ profession.

• Wepromoteaprofessionalsheriffsservice thatisrespectfulandefficient,todeliver justicetoallwithintegrityandaccountability.

• Weareaccountableintermsofour legislativemandateandstrivetoentrench thehumanrightscultureenvisagedbythe Constitution.

Mission• Wewillprovideaprofessionalandcredible servicetoallourclientsandother stakeholders.

• Wewilldevelopskilled,knowledgeable andmotivatedstaff.

• Wewilldevelopaunifiedandcommitted Boardwithfocusedleadership.

• Wewillconductallactivitiesandexecute ourmandateinamannerthatisaccountable tothepublicandtoGovernment.

• Wewillenhancetheimageandgoodwillof thesheriffs’profession.

ValuesAccountabilityWewillensurethatthemembersandofficialsoftheBoardcarryouttheirresponsibilitiesconscientiouslyandwithintegrity.

IntegrityWewillupholdtheethicalandmoralprinciplesembodiedintheCodesandPoliciesoftheBoardandtheConstitutionofSouthAfrica,actingalwayswithhonesty,fairnessandconsistency.

ProfessionalismWearecommittedtoservingourstakeholderswithcourtesy,tothebestofourabilitiesandwithdedication,tothehigheststandardsofserviceexcellence.

TransparencyWewillensurethatallourpracticesareopentointernalandexternalscrutiny. EfficiencyWearecommittedtomanagingtheresourcesoftheBoardefficientlyandeffectively,andwilltakestepstoeliminateallwastefulandfruitlessexpenditure.

RespectWevalueandrespecttheviewsofallourstakeholdersandwilltreateveryonewithdignityandconsideration.

EquityWearecommittedtoemploymentequityintherecruitmentofstaff,andopposedtoallformsofunfairdiscriminationinourrelationshipswithallstakeholdersandthepublic.

Core businessThecorebusinessoftheSouthAfricanBoardforSheriffsis:

• Totransformthesheriffs’profession,andthe SouthAfricanBoardforSheriffsandits staff,andtobringitinlinewithConstitutional imperatives.

• Toreviewallrelevantlegislation,amongothers theSheriffs’Act90of1986,andifnecessary lobbyforreforminamannerthatprotectsthe interestsofthesheriffs’professionandall stakeholders.

• Tocommunicateeffectivelywithall stakeholdersandsheriffs.

• Todisciplinesheriffs.

• Tomonitortheconductofsheriffs.

• Topromoteprofessionalism.

• Tosetstandardsfortrainingpeoplewhoare orintendparticipatinginthesheriffs’ profession.

• Todevelopnecessarytrainingprogrammes.

• Toformulatepolicydirectives.

• ToensureeffectivemanagementoftheBoard anditsOffice.

Vision, mission and Values

5

TheSouthAfricanBoard forSheriffs (theBoard)isaregulatorystatutorybodyestablishedbytheMinister intermsofSection7oftheSheriffsActNo 90 of 1986, and it has as its objectives themaintenanceoftheesteemof, theenhancementof the status of, and the improvement of thestandard of training of and functions performedbysheriffs.

This annual report is the third, reflecting theactivities of the Board that was appointed on1 March 2012 by the Minister of Justice andConstitutional Development. Great emphasis hasbeenplacedonensuringthatgovernancepracticesareadheredtoinanopenandtransparentmanner.

Fundamental to the Board and its operationsis adherence to the Sheriffs Act 90 of 1986,

subsequentamendmentsandallitsRegulations.The Board completed the implementation ofa three-year strategic plan to guide variousactivitiesduringits3yearterm.

The Board has achieved full compliance withGenerally Recognised Accounting Practice(GRAP),byensuringthatfinancialstatementsareprepared on an accrual basis as opposed to acashbasis.TheimplementationofGRAPrequiresa much more rigorous accounting structure,aswell as full disclosure in the annual financialstatements.Webelieve that the implementationofGRAPwillallowforgreateraccountabilityinfullcompliancewithgoodfinancialgovernance.

Governance and organisation

  Board Exec L&L T&C F&HRCons. Forum

SDC FF Tele-con OtherRemuneration

(R)

C Mabuza 6 5 2 32 20 338,597

H Choma 6 3 3 2 14 7 115,943

L Best 3 2 3 10 1 34,568

A Mawela 6 5 7 2 11 12 134,052

F Moeletsi 4 4 8 2 44,235

H Ntsikeni 3 4 7 42,915

N Nxumalo 2 3 7 30,458

P Roodt 6 4 5 2 22 13 140,097

T Seboka 4 3 3 3 7 21 11 132,373

T Tembe 5 2 3 5 19 5 101,882

H Mohamed 6 5 2 1 15 N/A

                      1,115,120

Note: H Mohamed is the Regional Head of the Department of Justice and Constitutional Development in the Western Cape and, as a Government employee, is not eligible to claim meeting allowances.

The Board has achieved full compliance with Generally Recognised Accounting Practice (GRAP), by ensuring that financial statements are prepared on an accrual basis as opposed to a cash basis.

Board members’ remuneration, disbursements and meeting attendance

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Governance Structure- March 2015

Executive CommitteeMrs C Mabuza – Chairperson SABFS

Adv H Mohamed – Deputy Chairperson & Ex officio DoJCD

Ms N Skosana – Chairperson Finance Committee

Mr T Tembe – Chairperson Legal & Liaison Committee

Mr M Magida – Chairperson HR & Training Committee

Mrs P Roodt – Chairperson Fidelity Fund Committee

Mr I Klynsmith – Chairperson Standing Disciplinary Committee

Finance CommitteeMs N Skosana – Chairperson

Mr L Mashapa – Member

Mrs P Roodt – Member

Standing Disciplinary CommitteeMr I Klynsmith – Chairperson

Mr T Tembe – Member

Ms NV Soga – Member

Fidelity Fund CommitteeMrs P Roodt – Chairperson

Ms L Lephadi – Member

Mr I Klynsmith – Member

Mr L Mashapa - Member

Audit & Risk CommitteeMr G Cronje - Independent Chairperson

Mr I KlynsmithMr M Magida

HR & Training CommitteeMr M Magida – Chairperson

Prof L Fernandez – Member

Ms NV Soga – Member

Adv H Mohamed

Legal & Liaison CommitteeMr T Tembe – Chairperson

Mr L Lephadi – Member

Mr M Magida – Member

Prof L Fernandez - Member

BOARD

Executive Committee

Fidelity Fund Committee

HR & Training Committee

Finance Committee

Standing Disciplinary Committee

Risk & Audit Committee

Legal & Liaison

Committee

Office Organogram- Office of the South African Board for Sheriffs as at 28 February 2015

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Executive ManagerVacant

GENERAL MANAGER: LEGAL & COMPLAINTS -

L. Mtunzi

GENERAL MANAGER: CORPORATE &

FINANCIAL SERVICES- A. Simon

MANAGER: TRAINING & COMMUNICATIONS -

V. Nel

PERSONAL ASSISTANT - S. Jones

ADMINISTRATION ASSISTANT - A. Tshabalala

ADMINISTRATION ASSISTANT -

E. Khophe

TRAINING OFFICER - L. Mdekazi

COMMUNICATION OFFICER -

Z. Abrahams

FINANCE OFFICER -C. Fortuin

SHAREPOINT ADMINISTRATOR -

L. Bell

ACTING EXECUTIVE MANAGER/MANAGER: HUMAN RESOURCES,

COMPLIANCE & ADMINISTRATION -

B. Luthuli

INVESTIGATIONS OFFICER - Z. Dimande

DATA CAPTURER -

S/P F. Mohamed

INVESTIGATIONS OFFICER -S. Nowers

LEGAL CASE

OFFICER -B. Goniwe

GENERAL CLERK -M. Dikgacwi

SENIOR LEGAL

ADMINISTRATOR -T. Scheepers

JUNIOR LEGAL ADMINISTRATOR -

P. Hull

GENERAL ASSISTANT -G. Ngqumba

RECORDS MANAGEMENT

CLERK -N. Silo

ASSISTANT BOOKKEEPER -

S. Doreen

BOOKKEEPER -Y. Olivier

ADMNISTRATION ASSISTANT -

L. Delport

CUSTOMER SERVICE ADMINISTRATOR / RECEPTIONIST -

E. Muller

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Charmaine Mabuza – Chairperson

CharmainewasoneofthefirstblackwomansheriffswhenappointedtotheNelspruitHighCourtmorethan10yearsago. Shewas subsequently also appointed as sheriff totheLowerCourt.ShewasappointedtotheSouthAfricanBoardforSheriffsin2006andforasecondtermin2009,whensheservedasdeputychairperson.Asapractisingsheriff herself she iswell awareof the challenges facingtheprofessionandbringsunique insight intoher roleaschairperson. Charmaine has championed the financialstability of sheriffs and the Office as key elements ofa sustainability programme and this, together with thetransformation of the sheriffs’ profession, remains keyobjectives for the Board. She sees the appointment of203newsheriffsduringthisBoard’s tenureasaglowingsuccess,andonetheywouldliketocontinuetobuildon.

Hishaam Mohamed – Deputy Chairperson

Hishaam is the Provincial Head of theDepartment of Justice and ConstitutionalDevelopment: Western Cape since 1997.HeholdsB.IurisandLLBlawdegrees,hasaMasters degree inPublicAdministration(CumLaude) andhascompletedaSeniorExecutiveManagementCourseatHarvardBusiness School, Boston USA. He wasadmitted as an advocate by the WesternCapeHighCourtin1995.HispracticeandresearchfocushasbeeninAdministrative,

Board Members’ Profiles

Constitutional & Family Law. He represents theMinisterof Justice andConstitutionalDevelopment on theSouthAfricanBoard forSheriffsand isalso responsible for thesheriffs’ administration at the Department of Justice.Hishaamhas servedas amemberof national regulatorybodies, forums and task teams, such as the ElectoralSystemsTaskTeam,SouthAfricanLiquorBoard,NationalChild Maintenance Task Team and The National TaskTeam on the Transformation of the Judicial System. Heis the chairperson of the Western Cape Justice, CrimePrevention and Security Cluster (JCPS). He is also thefounding member and chairperson of the SouthernSuburbsLegalAdviceCentre(aregisteredandoperatingTrust)thatprovidesfreelegaladvisetopoorcommunities.He is a recipient of numerous community and publicawards such as the Khayelitsha Achiever Award forGovernment Institution presented to him by the KDF &CityofCapeTownforoutstandingservice,dedicationandcommitmenttothecommunityofKhayelitsha.HewasalsoconferredanawardforinnovationbyhavingspearheadedcommunitysafetyforumsinSA.Hehasapassionforthedepartment’sflagshipOperationIsondloCampaignwhichcontinuestorestorethedignityofmanychildmaintenancebeneficiaries. The Auditor-General recently awarded histeamtheir18thcleanauditformanagingthecourtsintheWesternCapeProvince.

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Petro Roodt

Petro has been involved with the sheriffs’ profession since 1992 and brings considerable experience to her role as Board member. Of particular interest to her has been the handover process from outgoing to incoming sheriffs, an occurrence that should take place with unhindered service quality throughout. Petro views the plight of rural sheriffs with particular concern; challenges of viability are very real to this segment of the profession. An achievement she’s proud of is the clearing of the backlog of claims against the Fidelity Fund. With this done, new claims can be dealt with timeously and individuals who have suffered from poor service promptly compensated.

Thami Tembe

Thami is a member of the Magistrate’s Court Committees of the Law Society of South Africa and the KwaZulu Natal Law Society. This enables him to have insight on the needs of both sheriffs and attorneys in relation to Magistrates Court processes. As a practising attorney and a user of sheriffs’ services, Thami is fully aware of the role sheriffs play and the need for them in the justice system. He feels this brings a practical understanding to his work as a Board member, so that changes proposed are not only within law but also contribute to the improvement of the profession. At the same time, he encourages sheriffs to constantly upskill themselves by taking advantage of the training offered by the Board, as this will enable them to provide a better service to all South Africans, regardless of where they live or their social standing.

Nomakhosi Skosana

Nomakhosi has gained invaluable management experience in the corporate world, in South Africa and the wider African continent. She holds a Masters in Business Administration and a Bachelor of Commerce Accounting degree. She undertook various courses including Corporate Governance and Board Development; and Board Leadership Core Programme. Her career began in 1997 in the telecommunications industry and she spent some time in the banking and broadcasting industries, before returning to telecommunications. Her vast experience lies in finance, corporate governance, strategy, operational management and stakeholder management in various African operations. She is also non-executive director, Audit Committee member and shareholder secretary to operations in the rest of Africa.

Board Members’ Profiles

NomaJwara Victoria Soga

Ms Soga has been in the profession since 1993 when she started as a messenger in the King Williams Town sheriff’s office and later as a deputy sheriff. She was appointed as the sheriff for Alice in November 2002, acting sheriff for Fort Beaufort in 2008 and with effect from 1 December 2012 she was appointed sheriff of Port Elizabeth West. She has also been an active training facilitator and mentor for the South African Board for Sheriffs and the profession for a number of years.

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Ignatius Klynsmith

Ignatius has been a sheriff since 1981. He holds the B.JUR.ET.COM and LLB degrees as well as a Diploma in Human Rights. His extensive involvement over many years with the organised legal profession, inter alia as previous president of the Law Society of the Northern Provinces, previous member of the Rules Board for Courts and Sheriffs, previous chairperson of the Attorneys Fidelity Fund of South Africa, and present chairmanship of a Disciplinary Committee of the Law Society will be of great value in the exercise of his duties as a board member. He has been an acting judge and is presently a member of the North West University Council and presenter of a radio programme (Wat sê die Prokureur) at SABC / RSG on behalf of the Law Society of South Africa. Ignatius is an active member of both SASS and SANAPS.

Meko Magida

Meko Magida has over the past 25 years held numerous executive management and leadership positions in different sectors of South Africa’s corporates and public service. He is currently an HR executive at Golden Arrow Bus Services (Pty) Ltd (GABS) and also serves as a director, on behalf of GABS, in three commuter transport companies. Before joining GABS he was employed as a director for Institutional Support at the Western Cape Provincial Legislature. He is the co-founder of Magida Human Capital Corporation (MHCC), a consulting company specialising in organisational design and development, change management strategies, human capital management and systems thinking theories. He was also employed as a senior HR manager at Woolworths (Pty) Ltd. Meko sharpened his labour law skills during his term of employment at the Department of Labour, first as deputy director for Labour Relations and later as a director for Equal Opportunities. During his terms, as a director at the DoL, he also served as a commissioner in the Employment Equity Commission. This involved advising the Minister of Labour on matters pertaining to the implementation and monitoring of the Employment Equity Act of 1998. Meko also sits on the University Council of the Cape Peninsula University of Technology (CPUT), and also serves as one of the non-executive directors of the Western Cape Community Chest, a philanthropic and developmental NGO.

Professor Lovell Fernandez

Professor Fernandez is a professor in the Department of Criminal Justice at the University of the Western Cape (UWC). He holds Bachelor of Arts and Bachelor of Laws degrees from UWC, a Master in Comparative Law from New York University and a Doctorate in Philosophy (Law) from the University of Witwatersrand. He is currently the UWC director of the LLM programme on Transitional Criminal Justice and Crime Prevention. During 1996 he was a legal adviser to the then Minister of Justice, Dullah Omar.

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Lesiba Mashapa

Mr Lesiba Mashapa holds a BProc (cum laude) and LLM degree from the University of Pretoria. He has worked as a lecturer in law at the Tshwane University of Pretoria and joined a law firm in Johannesburg as a partner. He is currently the company secretary at the National Credit Regulator and he is also part of the executive management. Mr Mashapa has extensive experience in legal practice and credit regulation.

Mmathotho Lephadi

Ms Lephadi has BProc and LLB degrees and was a lecturer at the University of Bophuthatswana for one year. She was previously employed as a state advocate, legal adviser, a family advocate with the Department of Justice and Constitutional Development, corporate legal consultant and later corporate legal secretary for Eskom and group company secretary at Telkom SA Limited. She has 27 years experience in the legal field and was appointed as the sheriff for Randburg South West in December 2012.

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INTRODUCTIONChairing a Board with such dynamic membersthese past three years has been a privilege tome.Itwouldbeunfairtosingleoutanyparticularperson since the entire team gave so much ofthemselves for thebenefitof theprofession. It isnotoftenthatyoufindprofessionalsfromdifferentconstituenciesconnectatanintellectuallevelthatconsistentlypromotesgoodgovernance.Initially,a3yearstrategicplanwasestablished,inNovember2012,thatwouldguidetheactivitiesoftheBoardin its termofoffice.Withfinancial stabilityas itscornerstone,thisplanwastheframeworkonwhichtheworkoftheBoardandOfficewasbased,toatleasttheendofFebruary2015.

Inthepastyear,anumberofgoalswerereachedbytheBoard,whichIwillsharewithyou.Ahighlightof these achievements is the third consecutiveunqualifiedauditreportthatwehavereceivedthisyear.

TARIFF INCREASE FOR SHERIFFS

We are pleased to say that after vigorousengagement with both the office of the DeputyMinister and the Rules Board, the sheriff tariffincreasesweregazettedon23rdJanuary2015andimplementedon24thFebruary2015.

The Board recommended on the 2nd July 2014,thattherebeaninitialimmediateincreaseof33%inthesheriffs’tariffsandthattheannualadjustmentformula suggested in the Bloom Report be

implementedwitheffectfrom2015.Subsequently,theRulesBoardrecommendedto theHonorableMinisterofJusticeatravellingallowanceincreasefrom R3.50 to R5.00. Further, the Rules Boardrecommended to theMinisteran inflation relatedincreaseof14.25%inthesheriffs’tariffs.

ECONOMIC VIABILITY OF SHERIFFS’ OFFICES

It has come to the attention of the Board that,despite the tariff increase, some sheriffs’ officesarenotviableandthisaffectsservicedeliveryandaccesstojusticeforall.

The civil justice system cannot function properlywithout the sheriff and in order to sustain thesheriff’s profession, it would be necessary forthe Department of Justice and ConstitutionalDevelopment (DoJCD) to conduct a formalassessmentoftheviabilityofsheriffs’officesinatleasttheareasofdemarcationandtariffs.

NATIONAL EFFICIENCY ENHANCEMENT COMMITTEE (NEEC)

The Board through its chairperson participatedregularlyintheNEECmeetingsbyinvitationoftheChiefJustice.

REPRESENTATION OF SHERIFFS ON THE RULES BOARD

Thereisnodoubtthatthesheriffformsanintegralpart of the justice system; thiswasevident in theCivilJusticeReviewProjectinwhichtheBoardandtheprofessionparticipated.Despitethis,thesheriff’sprofessionisnotrepresentedontheRulesBoard.

TheBoardrecommendedtotheDeputyMinisterofJusticeandConstitutionalDevelopmentthathegivesurgentconsiderationthatsheriffsarerepresentedasapermanentmemberoftheRulesBoard.

THE CHIEF MASTER

Following many deliberations that took placebetween the chiefmaster, themasters of varioussub-divisionsofthehighcourtsandthesheriffs,apositionpaperwaspreparedbytheSABFSwithaviewtomakingrecommendationastothemanner

Chairperson’s Report

13

inwhichthesheriffscouldplayamoremeaningfulrolewithin the insolvencyenvironmentand, inparticular,pavethewayforthemoreinclusivedevelopmentoftheSection19procedurebytheroleplayers.

THE CIVIL JUSTICE REVIEW PROJECT (CJRP)

A key project of the DoJCS is the Civil JusticeReviewProject(CJRP).ThisprojectaimstochangethestructureofciviljusticeinSouthAfricaandcouldhaveoneofthegreatesteffectsonourcourtsifallthe objectives are achieved. The SABFS will playanintegralparttoensurethattheobjectivesoftheCJRPareachievedsoastoallowaccesstojusticeandcourtstothemostvulnerableinsociety.

RATIONALISATION OF COURTS

The recommended changes are made at theRegionalCo-ordinationCommittee(RCC),theserecommendationsaretakentotheDirectorGeneralwho submits the changes to theMinister who inturn gains approval at cabinet level and then thedecision is implemented. The primary function oftheRCCistoensurethatthelocationofthecourtsand areas of jurisdiction promote the principle ofaccesstojustice.There-demarcationofareaswillaffectsheriffs.Somesheriffswillbenefitandotherswillbeadverselyaffected.

Itwasagreedwith theDepartmentofJusticeandConstitutionalDevelopmentthatataskteamwillbeappointed,thatwillincludeaseniormemberofthejudiciaryaswellasasheriffandateamoftechnicalexpertsthatwilldrawthepointtopointmapsfortheNorthWestandGautengprovincesrespectively.

BANKING FORUM

AveryimportantcomponentoftheworkoftheSABFSliesinthebankingsector.TheSABFSisanimportantroleplayer in theBankingForumwheremattersofsales in execution, attachments and various otherordersofcourt,arediscussed.AstheConditionsofSalehasbecomeaverycontentiousissuewithnewcourtrulingsandlegislation,theSABFShasbroughtmanyofthesematterstotheattentionoftheRulesBoard in respect of the challenges faced by bothpartiesinrespectofoutdatedprescripts.

REGIONAL LAW SOCIETIES

The Law Society South Africa (LSSA) like theSABFSplaysavery importantrole in theoversightand professional affairs of the attorneys in SouthAfrica. The SABFS committed that it will ensurethat the sheriffs undertake the work allocated tothemfromtheattorneyswiththehighestdegreeof

professionalism,andinturnrequirestheattorneystorecognisethechallengesthesheriff’sprofessionisfacingintheexecutionoftheirwork.TheBoardhasmetwithalltheprovinciallawsocieties,wheremembers of the sheriff’s profession participated. Issues raised by attorneys mainly relate to poorservicedeliverybysheriffs,whereassheriffsraisedtheissueofnon-paymentoftheirfees.

TRAINING STRATEGY AND IMPLEMENTATION PLAN

TheBoardwouldliketocreatealearningpathfortheprofessionbyimplementingaseriesoftrainingprogrammes that will provide sheriffs and theirstaffwiththeopportunitytobetterunderstandthecivil justiceenvironment.Subsequently,theBoardappointedPriceWaterhouseCoopertodevelopaTrainingStrategyandImplementationPlanthatwillguide the Board and the profession for the nextnumber of years. The Board’s aim is to ensurethat the sheriffs and their staff, particularly thoseappointedsince2012,havetheabilitytoimpactonthe required service delivery standardswithin theciviljusticesystem.

BRANDING TO UNIFY THE PROFESSION

Standardisation of the sheriffs’ brand

Itisenvisagedthatintroducingauniformcorporateidentityacrossallsheriffs’officeswillbeavaluablestep inprofessionalisingthe imageofsheriffsandcreatingan identity that thepublicwillbeable torecognise and respect. A brandmanual detailingthe precise specifications to be used in eachapplicationhasbeendevelopedtoassistsheriffsinapplyingtheguidelinestotheirownoperations.

CONCLUSION

TheSABFShasmadegreatstridesinworkingwiththe fraternity and its stakeholders to benefit andgrow the sheriff’s profession. We wish the newBoardallthebestinitscontinuedefforts.

Mrs Charmaine Mabuza

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INTRODUCTION

As head of the Board’s administrative andoperational support staff, I am very proud andthankfultotheteamfortheirdedicationandloyaltyto the organisation. Working for a Board thathas strong leadership and focussed objectivespromotesprofessionalismandproductivity.

Our core business is our statutory obligation asa regulatory body and we strive to consistentlyprovideameaningfulservicetoallourstakeholders,especiallythepublic.

Our Board has spearheaded a number of greatachievements during the past three years,especially during the 2015 financial year. Thetariff increases for sheriffs was welcomed bytheprofession;however, the regularity thereof inrelation to the attorneys profession is still beingquestionedbyindividualsheriffs.

CONTINUOUS PROFESSIONAL DEVELOPMENT PROGRAMME

TheTrainingCommitteehasrenamedthistrainingprogrammeas theServiceDeliveryEnhancementProgramme,tobeinitiatedasof2015.

The programme is to equip all sheriffs with theskills and knowledge of the civil justice systemto performbetter than the expected standard, toachieveexcellenceincustomercareandtoimproveproductivity.

Aspartofits2012to2015strategicobjectivestheBoardhasmandatedtheofficetoassistatotalof25officesperyear.Itwasagreedthattheseofficeswould be nominated by the SDC and the Legaland Complaints division. The division identifiedoffices in need of assistance due to a range ofcomplaintsagainst them.Thetrainingprogrammewasdevelopedbasedon complaints receivedbytheBoardanditincludedanassessmentprocess.

NEEDS BASED TRAINING (NBT)

AnotherimportantlegoftrainingistheNBTprogramme.These courses are provided after due considerationand consultation with sheriffs in the field, and varyfromyeartoyeardependingonthecurrentchallengesfaced by them. Due to funding constraints and theimplementationoftheSheriffsIntroductoryCourse,theBoardhasnotbeenabletoprovidethisprogrammeforthepast3years.

Thesheriff’sofficeswererequestedtoidentifytraininggapsandlearningprogrammesthatstaffcanparticipatein, inordertoimprovetheirperformance.TheTrainingand Development division intends to develop andimplement learning programmes that are aligned tothestrategicgoalsoftheBoardinordertoimprovetheperformanceofthesheriff’soffices.Aquestionnairewasemailedtoallsheriffstocollectquantitativedataaboutthe training needs of each sheriff’s office in line withBoardobjectives.

RULES BOARD

The Rules Board for Courts of Law is an importantstakeholder with whom the SABFS continuouslyengageswithaviewtoenhancingtheenvironmentforsheriffs to conduct their business. The Rules Boarddesigns rules which sheriffs implement in respect ofhighcourtandmagistratecourtsonadailybasis.TheRulesBoardisveryimportantinestablishingtheeffectofprocessesandproceduresintheciviljusticesystem.

In the last financial year theSABFShas engaged theRules Board on several critical matters affecting theprofession,namely:

• Conditionsofsale

• Reservepriceatsalesinexecution

• Roleoftheindependentauctioneers

• Increaseinsheriff’stariffs

NATIONAL CONSUMER COMMISSION (NCC)

TheNCCapproachedtheBoard,followinganumberofcomplaintsagainstsheriffsfornotbeingincompliancewith the Consumer Protection Act (CPA). The Boardand theprofessionmetonseveraloccasionswith theNCCand it becameclear that the rules applicable to

Executive Manager’s Report

15

commercial auctioneering appear to have beenadoptedbytheCPAanditsregulations,nottakinginto account the “sui generis” nature of sales inexecution. Subsequently, a position paper wassubmittedtotheNCC.

The current Board will have to initiate follow upmeetings/workshopstoensuretheamendmentoftherulesoftheCPAtocaterforsalesinexecution.

LEGAL AID SOUTH AFRICA

The Consultative Forum of the SABFS metwith representatives of Legal Aid South Africaand discussed the matter of a service levelagreement. It was resolved that Legal Aid SouthAfrica would submit a draft SLA for sheriffs. Thefollowingmattersofmutualinterestwerealsodiscussed:

• Implementationoftheprotocol

• Financialsustainabilityoftheprotocol

• Probonoworkforsheriffs

The matter of upfront payments for sheriffs wasdiscussedand itwasadvised that LegalAidhasa standard operating procedure on payments tosheriffs.LegalAidadvisedthatwhileitisacceptedthatsheriffswishtoassistintheaccessofjusticetothosethatcannotaffordit,itiscommoncausethat the execution of judgments often involves asubstantial amount ofmoney for sheriff’s fees. Itwas resolved that a follow upmeetingwould beheldtofurtherreviewthematteroftheSLA.

INDEPENDENT REGULATOR FOR AUDITORS (IRBA)

TheSABFSiscurrentlyrelyingonsignedauditreportsfromeitherthemagistratesorauditorsastestimonyofthecorrectnessofthefiguressubmittedbysheriffswithregardstotheirtrustaccounts.However,itlateremergedthatsomeofthosecertificatesmayhavebeenobtainedfraudulentlyandthereforecannotbereliedupon.Thereare instanceswereprofessionalaccountants,andnotnecessarilyauditors,alsosignauditreports.TheSouthAfricanBoardforSheriffswishestointeractwithIRBAtodiscussthepracticeof accountants submitting fraudulentaudit reportsforsheriffstrustaccounts.

DEPUTY SHERIFFS

Deputy sheriffs are considered to play a crucialroleinallsheriffs’offices,astheyinteractwiththepublic, attorneys and other stakeholders; deputysheriffsareoftenthefaceofthesheriff’sprofession.Therefore,theHonorableDeputyMinister,JJeffery(MP), requested the Board to investigate thepossibility to regulate theappointmentofdeputysheriffs.

A study was conducted which revealed therelationship between the sheriff and the deputysheriffasanemployer/employeerelationshipandthat the involvementof theBoardcannotextendfurtherthanthecurrentposition,asoutlinedintheprovisionsoftheSheriff’sAct;thesheriffappointsa deputy sheriff, subject to the approval of theBoard.

ELECTRONIC DATA BASE

Theelectronicdatabase,SharePoint,was furtherupgradedduringthe2014financialyearwhichalsoenhancedthecapacityoftheBoardtoensurethatitcandeliveronitsmandate.SharePointisusedastheprimarydatabase tomaintain the informationon sheriffs as well as all other documents andpolicies of the Board. A dedicated administratorwas appointed to ensure that SharePoint ismaintainedatalltimes.

Bongi Luthuli

Our Board has spearheaded a number of great achievements during the past three years, especially during the 2015 financial year.

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Standing Disciplinary Committee

Thisreportwillendeavourtoarticulatetheactivitiesengaged upon by the Standing DisciplinaryCommittee during 2014/5 and supported bythe office of the Board in executing its strategicobjectives and any other activities that wereoutside of the strategic objectives. The StandingDisciplinaryCommitteeoftheoutgoingBoardwaselectedatameetingheldduringMarch2012,duringtheinductionandthefirstmeetingoftheoutgoingBoard.Itsinauguralmemberswere:

• MrThamiTembe(Chairperson)

• MrsPetroRoodt

• MrNicholasNxumalo.

Objectives of the Committee

• Todealwithallissuesrelatingtodisciplining oferrantsheriffsandtoensureassistanceis providedtothosewhoexperiencechallenges inrunningtheirofficesaccordingtoacceptable normsandstandards

• Toensurethatsheriffswhocommitactsof misconductarechargedanddisciplinary proceedingsarebroughtagainstthesesheriffs

• Toimposefinesonsheriffswhohavebeen foundguiltyofmisconduct

• TorecommendtotheBoardsheriffswho shouldbesuspendedandremoved

Committee Reports

Backlog on Disciplinary Matters

A number of interventionswere introduced to tryto deal with the backlog that existed. Amongstsuch interventions was the appointment of anexperienced service provider to assist staffin identifying whether matters are queries orcomplaints,theincreaseinthenumberofmeetingsof thecommitteeand themonitoringofstatistics.The committee is proud to announce that thebacklogwas cleared and the turnaround time forany complaint to be finalised is approximately 4months.

Mentorship Programme

Thecommitteenotedthattherewasalargeamountof complaints against newly appointed sheriffsandtookaresolutiontorecommendtotheBoardthat such sheriffs should bementored instead ofembarkingondisciplinaryprocedures. TheBoardapprovedsuchmentorshipprogrammesonacasebycasebasis.This interventionhasyieldedgoodresults due to the fact that most of the sheriffsfollowedtheadvicebythementorandthisreducedthenumberofcomplaintscomingtotheBoard.

Policy on Complaints against Board Members

The committee noted that therewere complaintsfromthesheriff’sprofessionalorganisationsaboutapossiblebiasbytheBoardinhandlingcomplaintsagainst Board members. In the spirit of goodgovernance the committee recommended theadoptionofapolicyonthehandlingofcomplaintsagainstBoardmembers.

Formal Disciplinary Hearings

Thecommitteeinexecutingitsmandate,hasduringitsterm,recommendedformaldisciplinaryhearingswhere itwas felt that thetransgressionwarranteda formal disciplinary hearing. Along with suchdisciplinaryhearingstherewererecommendationsfor certain sheriffs to be suspended. All theseformaldisciplinaryhearingsandrecommendationsforsuspension/removalareapprovedbytheBoard.Inensuringthatasuspension/removaltakesplace,the Board works with the Department of JusticeandConstitutionalDevelopment(DoJCD).

MrIgnatiusKlynsmith-Chairperson (March 2015)

17

ThecommitteeoptedforoutsourcingthechairingofdisciplinaryhearingsduetothefactthatBoardmemberswerenotalwaysavailabletositinhearingsand this would cause delays. This action hasprovedtobeaneffectivetool forfinalisingformaldisciplinary hearings. Recently, due to capacityproblems, the committee had recommendedthe use of attorneys in prosecuting the formaldisciplinary hearings. The Board approved thisdecisionontheconditionthatitwillbeaninterimmeasure.

Freezing of Trust Accounts and Business Accounts

The committee noted a trend in the complaintsthatinvolvethemisuseoftrustmoniesorfailuretopayovertrustmonies.Mostofthesheriffschargedwithsuchoffenceshavebeen foundtoberollingthe amounts in the trust account. In light of thisfinding, itwassuggestedthatwhenevertherearecomplaints for “failure to pay over trust money”theBoardshouldfreezethesheriff’strustaccount.SincetheSheriffsActdoesnotempowertheBoardto freeze the sheriff’s trust account, the Boardhas tomakeahighcourtapplication for freezingofthetrustaccount.Somesheriffsdonothaveatrust account and in that case the application isfor the freezingof thesheriff’sbusinessaccount.The committee is required to look into makingrecommendations to the DoJCD to change theAct, to empower the Board to freeze such trustandbusinessaccounts,sincetherearereasonablegroundstodoso.

Criminal Cases against Sheriffs

Duringitstermthecommitteeresolvedthatcriminalproceedings should be instituted against sheriffswhen it is clear that the sheriff misappropriatedtrustfunds.TheBoardapprovedthecommittee’srecommendation and as a result a number ofsheriffs/ex-sheriffswerecriminallycharged.

Investigation Reports

Thestaffcomplimentunderthelegaldivisionwas increased by appointing two investigators toconduct investigations on any matters thathave come to the Board for investigation. Theyconduct regular investigations and record allstatisticsannually.Thesereportshavehelpedthecommittee to take appropriate steps in dealingwithcomplaintsandsomeofthestepshavebeento recommendthatasheriffbeprovidedwithanassessor,oralternativelyamentor.

Province2013 / 2014

Investigations completed

2014 / 2015Investigations

completed

Eastern Cape 9 6

Gauteng 2 4

KwaZulu-Natal 4 4

Limpopo 8 1

Mpumalanga 4 1

North West 2 2

Northern Cape 1 2

Western Cape 1 1

Free State 0 5

Total 31 26

18

Legal And Liaison Committee

This committee has been able to execute itsmandate to the satisfaction of the Board. TheBoardhasadoptedalltheresolutionsmadebythiscommitteeduringthepastfinancialyear.

Thepreviousmembersofthecommittee(2014/15)wereasfollows:

• MrThakaSeboka(Chairperson)

• AdvHishaamMohamed

• ThamiTembe.

The committee will surely benefit from the factthatMrTembeservedon thiscommittee for thepast3yearsandwillnowperformthedutiesofthechairperson.

TheLegalandLiaisonCommitteeobjectivesare:

• ToconsiderlegalmattersrelatingtotheSABFS andthesheriffsprofession

• Toprovidelegaladviceonappropriatecourseof actionwithregardtolegalissuesfacingthe Board

• Tocompileapanelofappropriateexperts approvedbytheBoard

• Toadviseonpolicyguidelinesregarding dueprocessthatistobefollowedduring investigationofallegationsofimproperconduct bysheriffs

Committee Reports

• Toadviseondemarcationofsheriffs’ boundaries

• Todealwithmattersrelatingtostakeholders andliaisethereononbehalfoftheBoard

• ToadvisetheBoardwherenecessaryon thebusinessoftheConsultativeForum.

An important development of this committeehas been the establishment of a ConsultativeForum comprising of members of the Board,the Department of Justice and ConstitutionalDevelopment and both sheriffs voluntaryassociations,togetherwithtwoofficialsfromtheSABFSmanagementwithnovotingrights.

The committee also ensured that most sheriffsenter into a service level agreement with theSABFS.ItalsoensuredtherevisionoftheCodeofConductandtheCharterwhichisnowknownasthePledge.

Some matters the committee deliberated uponduringtheyear:

• Termsofreference–ConsultativeForum

• ServiceLevelAgreement

• CodeofConduct

• Pledge

• ResiduefromUnclaimedTrustMoney

• IT3BForm

• LegalAidProtocol

• FundingforVoluntarySheriffsAssociations

• LabourCourtGuidelines

• Section118Municipalityrates

• EmploymentGuidelinesfordeputysheriffs.

The appointment of 14 new permanent sheriffsin the reporting period 2014/15, combinedwiththe82appointed in2013/14and121appointedin1012/13haschangedthedemographicsoftheprofession significantly. It is worth mentioningthat 5 of the appointed sheriffswere previouslydeputies.Itisworthfurthernotingthat5deputieswereappointedasactingsheriffs.

MrThamiTembe–Chairperson (March 2015)

19

TherewascontinuousconsultationwiththeofficeoftheMasteroftheHighCourtrelatingtomattersof liquidations and insolvencies. We have cometo an understanding that thesemattersmust behandled by the sheriffs.Without any doubt, thiswillcontributetotheliquidityandsustainabilityofsheriff’soffices.

The committee has dealt with the office of theNational Consumer Commission to ensure thatsheriffs remain compliant to the NCA. MeetingswerealsoconductedandattendedbytheBoardonanationalaswellasonaregionallevelwithall

law societies in the country. The committeemetwiththeBankingForumtoevaluateandstabilisetheConditionsofSale in termsofwhichsheriffsdisposeofcourtdeterminedfixedproperties.

The committee has further liaisedwith BusinessAgainst Crime (BACSA) with regard toWarrantsof Deliveries (this relates to the attachment andremoval of especially vehicles financed by thebanks). Currently this is being carried out in anunclarifiedandsubstantiallyillegalmannerbythesocalled‘Tracers’.

Active sheriffs as at 28 February 2015 

Gender Race

  Total Male Female White African Indian Coloured

Eastern Cape 50 35 15 13 33 0 4

Free State 30 25 5 18 10 0 2

Gauteng 42 27 15 20 12 7 3

KwaZulu-Natal 36 26 10 10 14 10 2

Limpopo 26 22 4 8 18 0 0

Mpumalanga 24 18 6 14 10 10 0

North West 23 17 6 12 8 1 2

Northern Cape 16 13 3 11 1 1 3

Western Cape 47 35 12 19 6 3 19

Total 2015 294 218 76 125 112 22 35Total 2014 303 229 74 137 112 21 33

% Increase -2% -2% 1% -5% 0% 2% 3%

Activite deputy sheriffs as at 28 February 2015 

Gender Race

  Total Male Female White African Indian Coloured

Eastern Cape 84 62 22 30 43 0 10

Free State 63 52 11 35 27 0 2

Gauteng 217 176 41 132 69 12 4

KwaZulu-Natalv 109 86 23 31 37 40 1

Limpopo 45 38 7 17 28 0 0

Mpumalanga 51 37 14 30 21 0 0

North West 56 46 10 17 34 1 4

Northern Cape 25 16 9 18 2 0 5

Western Cape 135 113 22 71 12 1 51

Total 2015 785 626 159 381 273 54 77Total 2014 710 570 140 361 204 41 104

% Increase 5% 5% 6% 3% 14% 14% -15%

20

Human Resources & Training Committee

The final year of the committee’s three-year termwas used to consolidate the Boards’ three-yearstrategic objectives in respect of training andcommunication.

During2014/15 theTrainingandCommunicationCommittee consisted of the following Boardmembers:

• MsLauraBest(Chairperson)

• AdvHlokoChoma

• MrHumphreyNtsikeni.

The newly formed HR and Training Committeewill have a broader set of responsibilities and itsmembershiphasincreasedto4BoardmembersasfromMarch2015.

Auctioneering 2013ATASAwas appointed by the Board to conductthe Auctioneering Learnership Programme in2013.The first milestone, which amounted toR609600.00,waspaidtoATASAandthesecondmilestone will only be paid once they meet theServicesSETArequirements

Afinalmeetingbetweenallpartieswasconductedin November 2014 at the Services Seta officein Cape Town. It was agreed that the SABFSwould confirm the number of learners thatwould commit to completing the programme.

Committee Reports

The 21 learners responded positively. Theinformationwas submitted to theServicesSetafortheirconsiderationandapprovaltoextendtheprogrammeuntilOctober2015.

Continuos Professional Development ProgrammeThe Continuos Professional DevelopmentProgramme (CPDP) was conducted in July,August and September 2014. The facilitatorfor the learning programme was Mr AllanMurugan.Healsoconductedassessmentsandthese results will be added to each sheriff’sHR file. The CPD programme was completedsuccessfully with 29 sheriffs and 2 deputiesattending the 3 respective sessions in EastLondon,PretoriaandBloemfontein.

Training Strategy and Implementation PlanA skills audit was identified to ascertain thecurrent level of capacity existing within thesheriffsprofessionaswellastoestablishthegapsin respectof formal learning.Theobjective is toprovide the Board with results of an extensiveaudit survey thatwouldbeanalysed todevelopacleartrainingstrategyandimplementationplan.This document would become the blueprint forthe following five to seven years. The contentof the programmes will cater for compulsoryknowledgeandskillsaccording to job titlesandspecialisationsfordifferentcategoriesofstaff,inthe form of credit bearing and informal trainingprogrammesforthesheriffs’profession.

Sheriffs Introductory Course (SIC) 2014Due to the ever changing legislation that thesheriffs have to adhere to, it was imperativeto update the course material for the SIC. Thepersons responsible for this activity were MrsEstelleCarelse (facilitatorandassessor),MrNel(moderator and author of the unit standards,course material and assessment tools) and MrMurugan(facilitatorandauthorofcoursematerial).

Intotal67learnersparticipatedintheSheriffsIntroductoryCourse(2014).

The independent SASSETA verifier was veryimpressed with the project, in particular theefforts of the moderator/training manager andperformanceoftheassessors.

MekoMagida–Chairperson (March 2015)

21

Public relations programme

KHAYELITSHA IMBIZO

The South African Board for Sheriffs (SABFS)identifiedtheKhayelitshacommunityaspartofitsannualoutreachprogrammeandhostedaservicedelivery Imbizo in Khayelitsha with the aim toimproveandenhancetherelationshipbetweenthesheriffandthelocalcommunity.

KAGISO MAGISTRATE COURT - OPENING

KagisoMagistrate’sCourtisthe29thbranchcourtto be converted into a full services’ court duringthis era of the fourth administration since theadvent of democracy in 1994. TheBoard hostedaninformationdesktoanswerquestionsfromthecommunityandtoprovideinformationpamphlets.

POLOKWANE ROAD SHOW

TheSABFShostedits5thRoadShowinPolokwane,Limpopo, on 12th June 2014. Sheriffs have beenrequestingthepresenceoftheBoardinthenorthernprovinces and Polokwanewas therefore selectedasthehostcity.

WORLD SHERIFFS DAY

The South African Board for Sheriffs (SABFS)celebrated the 7th annual World Sheriffs Day on 12th June 2014. All sheriffs were notified of thedayand informedof the themefor theyear:“TheProtectionofHumanRightsandtheSheriff”.

Sheriffs were encouraged to participate intheir respective towns/cities by doing outreachwork within their communities. Board memberscelebratedtheWorldSheriffsDay in theLimpopoProvincebyreachingouttoadisadvantagedruralcommunityinSeshego.

HABITAT FOR HUMANITY: NELSON MANDELA BUILD

In an effort to commemorate this great manNelson Mandela and to show our support forMandela Day and serve our communities, theSABFS participated in the Habitat for HumanityBuild.TheBuildtookplace in thedisadvantagedcommunityofPelicanParkinCapeTown,WesternCapeon15thJuly2014.TenSABFSstaffmembersvolunteeredatthesite.

The websiteThewebsitecontinuestogrowasacommunicationplatform and we are constantly finding ways toimprovethesite.Wehaveseentremendousgrowthin the amount of visitors to the SABFS websitewhichproves that thesite isavaluablesourceofinformationtoits1500dailyvisitors.

The following improvementsweremadeduring thepastyear:

• Anonlinecomplaintsformthatenablesthe omplainanttosubmittheircomplaintelectronically andinsodoingspeedupthetimeinwhicha complaintreachestheofficeoftheBoard.

• Streamlinedsheriffsearchfunctionalityfor fasterandmoreefficientuse.

• Westreamlinedtheauctionuploadfunctionto bemoreuserfriendly.Sheriffsareabletologin usingtheirusernameandpassword.

Information pamphletsThepamphletshavebeendevelopedinanefforttoeducate the public and create awareness aroundtheroleofthesheriff.Thepamphletsareavailableinnineoftheofficiallanguages.

SMS communication programmeTheSABFShascontractedVOXOriontoprovideuswithansmsshortcodeserviceforsheriffscontactdetails. The aim of this service is to provide ourstakeholdersandthegeneralpublicaccessibilitytosheriffscontactdetails.

NewsletterThe Siyanazisa is the SABFS quarterly newsletterwhich is distributed to the profession andstakeholders, keeping them abreast of alldevelopmentswithintheprofession.Thenewslettercontinuestobewell receivedbystakeholdersandincludesarticlesonthe:

• LabourRelationsAmendmentAct6of2014

•Applicationforad-hocsheriffappointments

• RelationshipbetweentheChiefMasterof theHighCourtandthesheriffsinrelationto liquidationsandinsolvencymatters

The newsletter is distributed via the post office,emailedanduploadedtotheSABFSwebsite.

The South African Sheriffs’ Guide: Practice and ProcedureProf Paleker from UCT was contracted on 13th December 2012, to author a new SheriffsGuideforthesheriffsprofession.Itwasagreedthathewouldbeassistedby theReferenceGroup toverifythecontentofthepublication.

To assist the author we appointed Juta LawPublishers for their experience in editing,proofreadingandindexing.

22

Fidelity Fund Committee

Section 26 of the Sheriffs Act deals with theestablishment and control of the Fidelity Fund(theFund) for sheriffs, throughwhichall formsofpaymentsaremadebothbythesheriffsandothersourcesof revenuestreams.ThemoniesaccruedintheFundareinvestedinpropertyandinvariousbanks.Itscapitalisguaranteedandinterestaccruedtherein is re-invested to keep theFund fluid. ThefundsoftheFidelityFundarereceivedfrominterestearnedonsheriffs’trustaccounts,interestaccruedfrom investments and via applications for FidelityFund Certificates as well as sheriffs and deputysheriffs’IDcards.

Members of the committee during the 2014/15financialyearwere:

• MrsPetroRoodt(Chairperson)

• AdvHishaamMohamed

• MrAbelMawela.

Objectives of the Fidelity Fund CommitteeThemainobjectivesarethefollowing:

• ConsiderapplicationsforFidelityFund Certificatesbysheriffsandmake recommendationstotheBoard.

Committee Reports

• ConsiderclaimsagainsttheFidelityFund,asper delegationofauthority,andmake recommendationstotheBoard.

• Overseeandreviewinvestmentportfolioand ensurecompliancetotheinvestmentstrategy oftheBoard.

PetroRoodt–Chairperson (March 2015)

Fund revenue 2015

Fidelity Fund certificates - 2%

Interest received - investments - 31%

Interest received - Trust Accounts - 67%

Fund expenses 2015

Depreciation - 2%

Insurance - 11%

Legal fees - 2%

Administration fees - 84%

Utilities - 1%

23

File no Claimant Sheriff Rand value

F288 L Van den Heever Butler: Thabazimbi 6 066.72

F290 E Palane Kgatla: Ritavi 5 300.00

F278 Rupert De Jager Pretorius: Musina 640 000.00

F249 William Inglis Inc - Standard Bank Alberts: Riversdale 355 000.00

F250 William Inglis Inc - Standard Bank Alberts: Riversdale 355 000.00

F274 Johan Nel Attorneys Alberts: Riversdale 19 000.00

F276 Strydom Britz Mobulatsi Inc. Pretorius: Musina 81 500.00

F253 Mendelow & Jacobs Attoneys Alberts: Riversdale 98 000.00

F248 Ervin Nel Coetzee: Maitland 8 642.77

Total claims paid 1 859 169.49

Insurance

FIDELITY GUARANTEE INSURANCE

TheBoardusestheFidelityGuaranteeInsuranceto cover the Fidelity Fund against claims thatemanate from sheriffs who are dishonest in theexecution of their duties. Currently, the FidelityGuaranteehasanaggregatecoverofR3millionperyearwhichcanbereinstatedifexhausted.TheexcessorfirstportioncoverbytheFidelityFundisR350000.00.

PROFESSIONAL INDEMNITY INSURANCES

Professional Indemnity Insurance is the covertaken by sheriffs to cover their professionalnegligence i.e. their actions or omissions whileexecutingtheirdutiesassheriffs.TheBoarddoesnotissueasheriffwithaFidelityFundCertificateunlessthereisproofthatthesheriffhasprocuredthe Professional Indemnity Insurance. The suminsuredforeachofficeisR2millionperyearanditiseffectivefromDecembertoNovemberofthefollowingyear.

TheFidelityFundsubsidisesthesmallerofficeofasheriffthatoperateswithoutadeputy,toasheriffwith three (3) deputies. The bigger offices withfour(4)andmoredeputiesarenotsubsidised.

ItcametotheattentionoftheBoardthatthereisavarietyofactionsbysheriffsthatarenotcoveredunder the Professional Indemnity Insurancepolicyandthatcustomaryshortterminsuranceisrequiredtocovertheseactions.

AlthoughtheBoardisnotobligedinlawtoensurethat sheriffs take out short term insurance, weinitiatedawarenessonthisaspectbypublishing2articlesinnewsletterstoprovideanexplanationandguidance.

Claims Submitted to the Fidelity Fund InsuranceThe Board entered into an agreement withinsurerstoindemnifythefundintermsofSection29oftheSheriffsAct,throughPrimakBrokers.

SeveralclaimsweresubmittedtoPrimakintermsoftheIndemnityFundInsurancepolicyheldwithSantamInsurancebytheFidelityFund.

MostoftheclaimswerebelowtheexcessamountofR350,000.00.TheclaimsagainstthePIforthelateSheriffMoganewastreatedasoneclaimandan amount of R2,840,228.47 (inclusive of VAT)was paid by the insurer during the 2013/2014financialyear.

LIST OF CLAIMS PAID

Case No. ERF NO. Claimant Amount

Case No 27289/07 Erf 2918 ABSA Bank AM Motshwane 290 660.00

24

Finance Committee

In the main the Finance Committee is a sub-committeeoftheBoardandisanswerabletotheBoard. Itsmain objective is to advise andguidethe Board in the execution of finance relatedresponsibilities.

The Finance & HRCommittee of the 2014/2015financialyearconsistedofthefollowingmembers:

• MrAbelMawela(Chairperson)

• MsFredaMoeletsiand

• MrThakaSeboka.

Objectives of the HR and Finance Committee for 2014/15 were articulated as follows:

• TheFinance&HRCommitteeisthecommittee oftheSABoardforSheriffs(“theBoard’)andis answerabletotheBoard.

• TheoverallobjectiveoftheFinance&HR Committeeistoassisttheboardmembers todischargetheirdutiesrelatingtothe safeguardingofassets,theoperationof adequateproceduresandcontrolsandthe reviewingoffinancialinformationand preparationofannualfinancialstatements whichmaybeprovidedtostakeholders includingdonors.Also,thecommitteeis responsibleforadvisingtheBoardinHR relatedissues.

• TheFinance&HRCommitteedoesnot relievetheboardmembersofanyoftheir

Committee Reports

responsibilities,butassiststhemtofulfilthose responsibilities.

• TheFinance&HRCommitteeisanadvisory committeeandnotanexecutivecommittee. Assuchitshallnotperformanymanagement functionsorassumeanymanagement responsibilitiesandshallhaveanobjective independentrole,operatingasoverseerand makerofrecommendationstotheBoardforits approvalorfinaldecision.

• TheFinance&HRCommitteeisresponsible forensuringthatthereisduecompliancewith theKingCodeofCorporatePractice,the PFMA,HRbestpracticeandforreporting thereontotheBoard.

PropertyTheSABFSacquiredanewofficebuildingduringthe2014financialyear.ThisbuildingwasboughtforcashandwasfinancedbytheFidelityFundandtheSABFS.ThevalueofthepropertyinvestedbytheFidelityFundatthetimeofthepurchasedatewasequalto10%ofthevalueofthefundatthedateofpurchase.ThiswasintermsoftheSheriffsAct90of1986.

TheSABFSdisposedofitsoldofficessituatedat4SpinStreet,CapeTown in the samefinancialyear.Itwassoldatlessthanitsbookvalueasthemarketconditionswerenotasellers’market.Thisinformationwascorrectly recorded in thebooksoftheFidelityFundaswellastheSABFS.

Generally Recognised Accounting Practice (GRAP)The SABFS and the Fidelity Fund havesuccessfully migrated to the new accountingreporting standards as required by the PublicAudit Act. The important change required wasthat the SABFS and the Fidelity Fund had toconverttoaccrualaccounting.Asitsmainpillar,accrual accounting demands that all expensesand revenue must be provided for in the yearit was incurred and earned, respectively. TheSABFSandtheFidelityFundarefullycompliantwiththestandardsofGRAP.

MsNSkosana–Chairperson (March 2015)

25

Levies received - 31%

Administrative fees - 56%

Investment income - 2%

SASSETA grants - 7%

Other income - 4%

Board Revenue 2015

Board & subcommittees - 15%

General Operations - 3%

Executive Manager’s Office - 5%

Contracts i.e. Cleaning, Office Maintenance - 1%

Legal & Complaints Division - 2%

Other General Office Expenditure - 8%

Formal Disciplinary Hearings - 3%

Personal Expenditure - 4%

Finance, Administration & Compliance Division - 38%

Staff Development - 1%

Contingency Budget - 5%

Communications Activities - 5%

Training - 10%

Board Expenses 2015

Fidelity Fund ManagementThe committee also has the responsibility toensurethattheFidelityFundismanagedproperly,in terms of its funds. The Board has approvedan investment strategy for the Fidelity Fund. Thestrategywasimplementedfully,wherefundswereavailable.StandardBankwastheonlybankthat did not receive its full allocation as per thestrategy.Thiswillbecorrectedinfutureasmoniesbecomeavailable.

Monthly investment reports are prepared andused to calculate the 8,5% management feepayableby theFidelityFundto theSABFS.Thismanagement feehasbeen increased from7.5%to 8.5% during the 2014 financial year. DuringthemonthofDecember2014andJanuary2015,someofthematuredinvestmentswerereinvestedas the Board has decided to leave the strategyunchangedforthecurrentperiod.

Project RecoupDuring the 2015 financial year, the Board willembarkonProjectRecoup.ProjectRecoup isaprojectwherebycertain identifiedshortcomingsandareasofconcernwereraisedbymanagementinrespectofsheriffs.TheseareasincludesheriffpracticeswhichnegativelyimpactontherevenueoftheBoardandtheFund.

South African Board for Sheriffs Established in terms of the Sheriffs Act No. 90 of 1986, as amended.

Financials

26

Statement of Board’s Responsibilities and Approval 28

Independent Auditor’s Report 29-30

Board Members’ Report 31

Statement of Financial Position 32

Statement of Financial Performance 33

Statement of Changes in Net Assets 34

Cash Flow Statement 35

Statement of Comparison of Budget and Actual Amounts 36

Accounting Policies 37-41

Notes to the Annual Financial Statements 45-35

The following supplementary information does not form part of the annual financial

statements and is unaudited:

Detailed Statement of Financial Performance 36-37

Annual Financial Statementsfor the year ended 28 February 2015

2015

27

28

Statement of Board’s Responsibility and Approval

TheBoard is requiredby theSheriffsActNo.90of1986tomaintainadequateaccountingrecordsand is responsible for the content and integrityof the annual financial statements and relatedfinancial information included in this report. Itis the responsibility of the Board to ensure thattheannualfinancial statements fairlypresent thestateof affairsof theentity as at theendof thefinancialyearandtheresultsofitsoperationsandcashflowsfortheperiodthenended.Theexternalauditorsareengagedtoexpressan independentopinion on the annual financial statements andwere given unrestricted access to all financialrecordsandrelateddata.

The annual financial statements have beenprepared in accordance with Standards ofGenerally Recognised Accounting Practice(GRAP) including any interpretations, guidelinesanddirectivesissuedbytheAccountingStandardsBoard.

The annual financial statements are based uponappropriate accounting policies consistentlyapplied and supported by reasonable andprudent judgements and estimates. The Boardacknowledgesthat it isultimatelyresponsible forthesystemofinternalfinancialcontrolestablishedby theentity andplaceconsiderable importanceonmaintaining a strong control environment. Toenable the Board tomeet these responsibilities,the Board sets standards for internal controlaimedat reducing the riskoferrorordeficit inacost effective manner. The standards includethe proper delegation of responsibilitieswithin aclearly defined framework, effective accountingprocedures and adequate segregation of dutiesto ensure an acceptable level of risk. Thesecontrols are monitored throughout the entityand all employees are required to maintain thehighest ethical standards in ensuring that theentity’sbusinessisconductedinamannerthatinall reasonable circumstances is above reproach.Thefocusof riskmanagement in theentity isonidentifying, assessing, managing and monitoringall known forms of risk across the entity. Whileoperating risk cannot be fully eliminated, theentityendeavourstominimise itbyensuringthatappropriate infrastructure, controls, systems andethicalbehaviourareappliedandmanagedwithinpredeterminedproceduresandconstraints.

The members are of the opinion, based onthe information and explanations given bymanagement, that the system of internal control

providesreasonableassurancethatthefinancialrecordsmaybe relied on for the preparation ofthe annual financial statements. However, anysystem of internal financial control can provideonly reasonable, and not absolute, assuranceagainstmaterialmisstatementordeficit.

The Board has reviewed the entity’s cash flowforecast for theyear to29thFebruary2016and,inthelightofthisreviewandthecurrentfinancialposition,it issatisfiedthattheentityhasaccesstoadequateresourcestocontinueinoperationalexistence for the foreseeable future.Theannualfinancial statements are prepared on the basisthat the entity is a going concern and that theBoard has neither the intention nor the needto liquidate or curtailmaterially the scale of theentity.

AlthoughtheBoardisprimarilyresponsibleforthefinancialaffairsoftheentity,itissupportedbytheentity’sexternalauditors.

The external auditors are responsible forindependently reviewing and reporting on theentity’s annual financial statements. The annualfinancial statements have been examined bythe entity’s external auditors and their report ispresentedonpages29to30.

Theannualfinancialstatementssetoutonpages31to55,whichhavebeenpreparedonthegoingconcern basis,were approvedby theBoard on 24thJune2015andweresignedonitsbehalfby:

Mrs C Mabuza (Chairperson of the Board)

Ms. N Skosana (Chairperson: Finance Committee)

Mr B Luthuli (Acting Executive Manager)

29

Independent Auditor’s Report to the Minister of Justice and Correctional Services on the Financial Statements of the South African Board for Sheriffs

REPORT ON THE FINANCIAL STATEMENTS

Introduction

We have audited the financial statements ofthe South African Board for Sheriffs set out onpages 33 to 53, which comprise the statementoffinancialpositionasat28thFebruary2015,thestatementoffinancialperformance,statementofchanges innet assets, thecashflowstatement,and thestatementofcomparisonofbudgetandactualamounts for theyear thenended,aswellasthenotes,comprisingasummaryofsignificantaccounting policies and other explanatoryinformation.

Accounting authority’s responsibility for the financial statements

The accounting authority is responsible forthe preparation and fair presentation of thesefinancial statements in accordance with theSouthAfricanStandardofGenerallyRecognisedAccounting Practice (SA Standards of GRAP)and the requirements of the Sheriffs Act, 1986(ActNo.90of1986)asamended,andthePublicAudit Act, 2004 ( Act No. 25 of 2004), and forsuch internal controls as the board membersdetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’s responsibility

Our responsibility is to express an opinion onthese financial statements based on our audit.Weconductedour audit in accordancewith thePublic Audit Act of South Africa, 2004 (Act No.25 of 2004) (PAA), the general notice issued interms thereof and International Standards onAuditing.Thosestandardsrequirethatwecomplywithethical requirements, andplanandperformthe audit to obtain reasonable assurance aboutwhether the financial statements are free frommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresin the financial statements. The proceduresselected depend on the auditor’s judgement,

includingtheassessmentoftherisksofmaterialmisstatement of the financial statements,whether due to fraud or error. In making thoserisk assessments, the auditor considers internalcontrolrelevanttotheentity’spreparationandfairpresentationof thefinancialstatements inordertodesign audit procedures that are appropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.

An audit also includes evaluating theappropriateness of accounting policies usedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverall presentation of the financial statements,policies used and the reasonableness ofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

We believe that the audit evidence we haveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

In our opinion the financial statements presentfairly,inallmaterialrespects,thefinancialpositionof the South African Board for Sheriffs as at 28thFebruary2015anditsfinancialperformanceand cash flows and statement of comparisonofbudgetandactualamounts for theyear thenended, in accordance with the SA Standard ofGRAPand the requirementsof theSheriffsAct,1986(ActNo.90of1986)asamended.

Emphasis of Matter

Wedrawattentiontothematterslistedbelow;ouropinionisnotmodifiedinrespectofthesematters:

PFMA

TheSouthAfricanBoard forSheriffs isawaitinga decision from National Treasury on whetherit should be subjected to requirements ofthe Public Finance Management Act (PFMA). Theentityhasthereforenotbeenauditedagainst

30

Independent Auditor’s Report continued

therequirementsofthePFMA,astheapplicationis still under consideration byNational Treasury. The entity has therefore maintained its financialyear for this reporting period as the end ofFebruaryintermsoftheSheriffsAct.ThefinancialstatementshavedisclosedthisfactinNote25.

Additional Matters

Unaudited supplementary information Thesupplementaryinformationsetoutonpages54to55doesnotformpartofthefinancialstatementsand is presented as additional information. Wehavenotaudited thisscheduleand,accordingly,wedonotexpressanopinionthereon.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the PAA and the GeneralNotice issued in terms thereof, we report thefollowingfindingsontheperformanceinformationagainst predetermined objectives, non-compliance with legislations as well as internalcontrol.Weperformedteststoidentifyreportablefindingsasdescribedundereachsubheadingbutnot to gather evidence to express assurance onthesematters.Accordingly,wedonotexpressanopinionorconclusiononthesematters.

Predetermined objectives

We did not audit performance againstpredetermined objectives, as the entity is notrequired to prepare a report on its performanceagainstpredeterminedobjectives.TheentitydoesnotfallwithintheambitofthePFMAandtheentity-specific legislationdoesnot require reportingonperformance against predetermined objectives.Therearenomatterstoreport.

Compliance with Legislations

AstheSouthAfricanBoardforSheriffsisawaitinga decision from National Treasury on whether itshouldbesubjectedtorequirementsofthePublicFinanceManagementAct,theentityhasthereforenot been audited against the requirements ofthe PFMA. However, the entity was audited

against compliance with the internal SupplyChain Management Policy. We did not identifyany instances of material non-compliance withspecificmatters in key legislation, as set out inthegeneralnoticeissuedintermsofthePAA.

Internal Control

Weconsideredinternalcontrolrelevanttoourauditof the financial statements, annual performancereport and compliance with legislation. We didnotidentifyanysignificantdeficienciesininternalcontrol.

SizweNtsalubaGobodo Inc.Director: Natalie ArendseRegistered auditor25 June 2015

Head Office20MorrisStreetEast,Woodmead,2191P.O.Box2939,Saxonwold,2132Tel:+27(0)112310600

Cape Town Office 2ndFloor,BlockA-CenturyFalls32CenturyBoulevardCenturyCity7441

31

Theboardmemberssubmittheirreportfortheyearended28thFebruary2015.

1. Review of activities

Main business and operations

TheentityisgovernedintermsoftheSheriffsActNo.90of1986.Theobjectivesof theBoardaretomaintain theesteem,enhance the statusandimprove the standard of training and functionsperformed by sheriffs who operates throughoutSouthAfrica.

2. Going concern

The annual financial statements have beenprepared on the basis of accounting policiesapplicable to a going concern. This basispresumes that fundswill be available to financefutureoperationsandthattherealizationofassetsandsettlementofliabilities,contingentobligationsandcommitmentswilloccurintheordinarycourseofbusiness.

Board Members’ Report

3. Events after the reporting period

Theboardmembersarenotawareofanymatteror circumstances arising since the end of thefinancialyearthatwouldmateriallyimpactonthefinancialpositionoftheentity.

4. Public Finance Management Act

The South African Board for Sheriffs (SABFS)is still undertaking numerous remedial steps toseek clarity on the matter of the SABFS beinga PFMA scheduled entity. Two opinions bothfromafinancialanda legalaspect inrespectoftheapplicabilityof thePFMAto theBoardhavebeen obtained. It has also further subsequentlyengaged with both National Treasury andthe Department of Justice and ConstitutionalDevelopment in this regard. Treasury remainsthesoleagency todeterminewho is listedasaPFMAentity in termsof the required legislation.Webelieve that resolutionon thismatterwillbeimminentastheSABFSwillseekafinaldecisionfromNationalTreasuryinthisregard.

NAME CHANGES

P Roodt Reappointed 1 March 2015

H Mohamed Reappointed 1 March 2015

T Thembe Reappointed 1 March 2015

C. Mabuza (Chairperson) Reappointed 1 March 2015

H.J. Choma Term ended 28 February 2015

N. Nxumalo Term ended 28 February 2015

TF Seboka Term ended 28 February 2015

L Best Term ended 28 February 2015

A Mawela Term ended 28 February 2015

5. Board Members

Theboardmembersduringtheyearandtothedateofthisreportareasfollows:

NAME CHANGES

F. Moeletsi Term ended 28 February 2015

H. Nsikeni Term ended 28 February 2015

N. Soga Appointed: 01 March 2015

M. Lephadi Appointed: 01 March 2015

I. Klynsmith Appointed: 01 March 2015

L. Mashapa Appointed: 01 March 2015

L. Fernandez Appointed: 01 March 2015

M. Magida Appointed: 01 March 2015

N. Skosana Appointed: 01 March 2015

32

Statement of financial position as at 28 February 2015

Figures in Rand Note(s) 2015 2014

Assets

Current Assets

Tradeandotherreceivables 7 1 018 242 2 609 507 Loanfromrelatedparty 9 1 886 966 9 118 345 Cashandcashequivalents 8 7 849 095 168 304

10 754 303 11 896 156

Non-Current Assets

Property,plantandequipment 4 2 563 065 2 530 308

Intangibleassets 5 1 258 516 809 988 3 821 581 3 340 296

Total Assets 14 575 884 15 236 452

LiabilitiesLong Term Liabilities 10 7 176 21 149

Current Liabilities

Tradeandotherpayables 11 1 225 738 1 628 803 Provisions 12 2 781 328 2 249 339 Total Liabilities 4 014 242 3 899 291 NetAssets 10 561 642 11 337 161

Accumulated Surplus 10 561 642 10 561 642

Total Net Assets 10 561 642 11 337 161

33

Figures in Rand Note(s) 2015 2014

Revenue 5 301 027 4 398 784

Other income 11 697 268 14 427 346

Operating expenses (18 079 698 ) (18 437 668 )

Operating surplus 15 (1 081 403 ) 388 462

Investment revenue 17 305 884 200 898

Finance costs - 42 841 (Deficit)/Surplus for the year 28 (775 519 ) 632 201

Statement of financial performance for the period ended 28 February 2015

34

Statement of changes in net assets for the year ended 28 February 2015

Figures in Rand Accumulated surplus

Total net assets

Balance at 01 March 2012 10 704 960 10 704 960

Changes in net assetsSurplus for the year 632 201 632 201

Balance at 01 March 2013 11 337 161 11 337 161

Changes in net assetsDeficit for the year (775 519) (775 519)

Balance at 28 February 2014 10 561 642 10 561 642

35

Figures in Rand Note(s) 2015 2014

Cash flows from operating activities

ReceiptsReceipts from sheriffs and Fidelity Fund 22 286 136 77 806 830 PaymentsPayments to suppliers and Fidelity Fund (21 212 715) (77 672 255)

Net cash from operating activities 19 1 073 421 134 575

Cash flows from investing activities

Purchase of property, plant and equipment 4 (384 221) (2 549 114)Proceeds on sale of assets 2 664 16 826 Purchase of intangible assets 5 (533 560) (529 487)Proceeds from loan from related party 7 231 379 (4 473 972)Interest income 305 884 243 739 Finance cost (803) (95 748)Net cash flows from investing activities 6 621 343 (7 387 756)

Cash flows from financing activities

Increase Finance lease obligations - 17 263 Payments made (13 973) (11 772)Net cash flows from finance activities 10 (13 973) 5 491

Net increase/(decrease) in cash and cash equivalents 7 680 791 (7 247 690)

Cash and cash equivalents at the beginning of the year 168 304 7 415 994

Cash and cash equivalents at the end of the year 8 7 849 095 168 304

7 849 095

Cash flow statement for the year ended 28 February 2015

36

Figures in Rand Approved budget

Actual amounts on comparable

basis

Difference between

budget and actual

Note

Revenue

Levies received 5 200 000 5 301 027 101 027 26Administrative fees 9 300 000 9 755 002 455 002 26Investment income 300 000 285 648 (14 352 ) 26SASSETA grants 1 514 833 1 297 257 (217 576 ) 26

Other income 100 000 665 245 565 245 26

Total revenue 16 414 833 17 304 179 889 346 26

Operating Expenses

Board and sub committees 1 837 907 2 744 557 906 650 26Executive Manager's Office 970 000 948 480 (21 520 ) 26Legal and Complaints Division 283 224 306 048 22 824 26Formal Disciplinary Hearings 468 025 516 500 48 475 26Finance, Administration and Compliance Division 587 820 744 568 156 748 26

Communication Activities 1 033 050 976 029 (57 021 ) 26Training 1 660 333 1 812 996 152 663 26General Operations 332 125 435 569 103 444 26Contracts i.e Cleaning, Office Maintenance 201 275 231 156 29 881 26

Other General Office Expenditure 1 262 940 1 468 992 206 052 26Personnel Expenditure 7 640 000 6 900 157 (739 843 ) 26Staff Development 135 800 140 003 4 203 26Contingency Budget - 854 643 854 643 26

Total expenses 16 412 499 18 079 698 1 667 199 26

Net Surplus 2 334 (775 519 ) (777 853 ) 26

Statement of comparison of budget and actual amounts for the year ended 28 February 2015

37

1. Presentation of Annual Financial Statements

The annual financial statements have beenprepared in accordance with the effectiveStandards of Generally Recognised AccountingPractice (GRAP) including any interpretations,guidelinesanddirectivesissuedbytheAccountingStandardsBoard.

These annual financial statements have beenpreparedonanaccrualbasisofaccountingandareinaccordancewithhistoricalcostconventionunlessspecifiedotherwise.TheyarepresentedinSouthAfricanRand.

Asummaryofthesignificantaccountingpolicies,which have been consistently applied, aredisclosedbelow.

Theseaccountingpoliciesareconsistentwiththeprevious period, except for the changes set outinNote2.

1.1 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY

In preparing the annual financial statements,management is required tomake estimates andassumptionsthataffecttheamountsrepresentedin the annual financial statements and relateddisclosures. Use of available information andthe application of judgement is inherent in theformationofestimates.Actualresultsinthefuturecould differ from these estimates which maybe material to the annual financial statements.Significantjudgementsinclude:

Trade receivablesThe entity assesses its trade receivables forimpairmentattheendofeachreportingperiod.Indeterminingwhetheranimpairmentlossshouldberecordedinsurplusordeficit,thesurplusmakesjudgementsastowhetherthereisobservabledataindicatingameasurabledecreaseintheestimatedfuturecashflowsfromafinancialasset.

Theimpairmentfortradereceivablesiscalculatedon a portfolio basis, based on historical loss

Accounting Policies

ratios,adjustedfornationalandindustryspecificeconomicconditionsandotherindicatorspresentatthereportingdatethatcorrelatewithdefaultsontheportfolio.Theseannuallossratiosareappliedtoloanbalancesintheportfolioandscaledtotheestimatedlossemergenceperiod.

Fair value estimationThe carrying value less impairment provision oftrade receivables andpayables are assumed toapproximatetheirfairvalues.

ProvisionsProvisions were raised and managementdeterminedanestimatebasedontheinformationavailable.

Effective interest rateTheentityusedtheprimeinterestratetodiscountfuturecashflows.

Allowance for doubtful debtsOn debtors, an impairment loss is recognisedin surplus and deficit when there is objectiveevidence that it is impaired. The impairmentis measured as the difference between thedebtors carrying amount and the present valueof estimated future cash flows discounted atthe effective interest rate, computed at initialrecognition.

1.2 PROPERTY, PLANT AND EQUIPMENT

Property,plantandequipmentaretangiblenon-current assets (including infrastructure assets)thatareheldforuseintheproductionorsupplyof goods or services, rental to others, or foradministrativepurposes,andareexpectedtobeusedduringmorethanoneperiod.

The cost of an item of property, plant andequipmentisrecognisedasanassetwhen:

• itisprobablethatfutureeconomicbenefits orservicepotentialassociatedwiththeitem willflowtotheentity;and

• thecostoftheitemcanbemeasuredreliably. Property,plantandequipmentisinitially measuredatcost.

38

Accounting Policies continued

The cost of an item of property, plant andequipment is thepurchasepriceandothercostsattributable to bring the asset to the locationand condition necessary for it to be capable ofoperatinginthemannerintendedbymanagement.Trade discounts and rebates are deducted inarrivingatthecost.

Where an asset is acquired at no cost, or for anominalcost,itscostisitsfairvalueasatdateofacquisition.

Costsincludecostsincurredinitiallytoacquireanitemofproperty,plantandequipmentandcostsincurredsubsequently toaddto, replacepartof,orservice it. Ifa replacementcost is recognisedin the carrying amount of an item of property,plantandequipment, thecarryingamountof thereplacedpartisderecognised.

Recognition of costs in the carrying amount ofanitemofproperty,plantandequipmentceaseswhen the item is in the location and conditionnecessaryforittobecapableofoperatinginthemannerintendedbymanagement.

Property,plantandequipmentarecarriedatcostlessaccumulateddepreciationandanyimpairmentlosses.

Property,plantandequipmentaredepreciatedonthe straight linebasis over their expectedusefullivestotheirestimatedresidualvalue.

The useful lives of items of property, plant andequipmenthavebeenassessedasfollows:

Item Average useful life

Land&buildings 50yearsBurglaralarms 10yearsComputerequipment 4yearsFurnitureandfixtures 4yearsKitchenappliances 3yearsOfficeequipment 3years

Theresidualvalue,theusefullifeanddepreciationmethodofeachassetarereviewedattheendofeachreportingdate.Iftheexpectationsdifferfromprevious estimates, the change is accounted forasachangeinaccountingestimate.

Each part of an item of property, plant andequipmentwithacostthatissignificantinrelationtothetotalcostoftheitemisdepreciatedseparately.

The depreciation charge for each period isrecognised in surplus or deficit unless it isincludedinthecarryingamountofanotherasset.Items of property, plant and equipment arederecognisedwhen the asset is disposed of orwhen there are no further economic benefits orservice potential expected from the use of theasset.

The gain or loss arising from the derecognitionof an item of property, plant and equipmentis included in surplus or deficit when the itemis derecognised. The gain or loss arising fromthe derecognition of an item of property, plantand equipment is determined as the differencebetween the net disposal proceeds, if any, andthecarryingamountoftheitem.

Use of estimates and management judgementIn assessing the remaining useful lives andresidualvaluesofproperty,plantandequipment,management has made judgements basedon historical evidence as well as the currentconditionofproperty,plantandequipmentunderitscontrol.

1.3 INTANGIBLE ASSETS

Anassetisidentifiedasanintangibleassetwhenit:

• iscapableofbeingseparatedordividedfrom anentityandsold,transferred,licensed, rentedorexchanged,eitherindividually ortogetherwitharelatedcontract,assetsor liability;or

• arisesfromcontractualrightsorotherlegal rights,regardlesswhetherthoserightsare transferableorseparatefromtheentityorfrom otherrightsandobligations.

Anintangibleassetisrecognisedwhen:

• itisprobablethattheexpectedfutureeconomic benefitsorservicepotentialthatareattributable totheassetwillflowtotheentity;and

• thecostorfairvalueoftheassetcanbe measuredreliably.

Intangibleassetsare initially recognisedatcost.When an intangible asset is acquired at no ornominalcost,thecostshallbeitsfairvalueasatthedateofacquisition.

39

An intangibleassetarisingfromdevelopment (orfromthedevelopmentphaseofaninternalproject)isrecognisedwhen:

• itistechnicallyfeasibletocompletetheasset sothatitwillbeavailableforuseorsale;

• thereisanabilitytouseorsellit;

• itwillgenerateprobablefutureeconomic benefitsorservicepotential;

• thereareavailabletechnical,financialand otherresourcestocompletethedevelopment andtouseorselltheasset;and

• theexpenditureattributabletotheassetduring itsdevelopmentcanbemeasuredreliably.

Intangibleassetsarecarriedatcostlessany accumulatedamortisationandanyimpairment losses.

The amortisation period and the amortisationmethodforintangibleassetsarereviewedateachreportingdate.

Amortisation is provided to write down theintangibleassets,onastraightlinebasis,totheirresidualvaluesasfollows:

Initial recognition and measurement

Item Average Useful life

Computersoftware 3yearsCopyrightMaterial 10yearsElectronicDatabase 10years

1.4 FINANCIAL INSTRUMENTS

ClassificationTheentityclassifiesfinancialassetsandfinancialliabilitiesintothefollowingcategories:

• Financialinstrumentsatfairvalue;

• Financialinstrumentsatamortisedcosts;and

• Financialinstrumentsatcost.

Initial recognition and measurement Financialinstrumentsarerecognisedinitiallywhenthe entity becomes a party to the contractualprovisionsoftheinstruments.

The entity classifies financial instruments, ortheir component parts, on initial recognition as

afinancialasset,afinancial liabilityoranequityinstrument inaccordancewith thesubstanceofthecontractualarrangement.

Financial instruments are measured initially atfair value, except for equity investments forwhichafairvalueisnotdeterminable,whicharemeasuredatcostandareclassifiedasavailableforsalefinancialassets.

For financial instruments which are not at fairvaluethroughsurplusordeficit,transactioncostsare included in the initial measurement of theinstrument.

Subsequent measurementLoansandreceivablesaresubsequentlymeasuredat amortised cost, using the effective interestmethod,lessaccumulatedimpairmentlosses.

Financial liabilities at amortised cost aresubsequentlymeasuredatamortisedcost,usingtheeffectiveinterestmethod.

Impairment of financial assetsAt each end of the reporting period the entityassessesallfinancialassets,otherthanthoseatfairvaluethroughsurplusordeficit,todeterminewhether there is objective evidence that afinancial asset or group of financial assets hasbeenimpaired.

Foramountsduetotheentity,significantfinancialdifficultiesofthedebtor,probabilitythatthedebtorwillenterbankruptcyanddefaultofpaymentsareallconsideredindicatorsofimpairment.

Wherefinancialassetsareimpairedthroughuseofanallowanceaccount,theamountofthelossisrecognisedinsurplusordeficitwithinoperatingexpenses.Whensuchassetsarewrittenoff,thewriteoff ismadeagainst the relevantallowanceaccount. Subsequent recoveries of amountspreviously written off are credited againstoperatingexpenses.

Trade and other receivablesTrade receivables are measured at initialrecognition at fair value, and are subsequentlymeasured at amortised cost using the effectiveinterestratemethod.

40

Appropriateallowancesforestimatedirrecoverableamounts are recognised in surplus or deficitwhen there is objective evidence that the assetis impaired. Significant financial difficulties ofthe debtor, probability that the debtor will enterbankruptcyorfinancialreorganisation,anddefaultor delinquency in payments (more than 30 daysoverdue) are considered indicators that the tradereceivableisimpaired.

The allowance recognised is measured as thedifference between the asset’s carrying amountand the present value of estimated future cashflows discounted at the effective interest ratecomputedatinitialrecognition.

The carrying amount of the asset is reducedthroughtheuseofanallowanceaccount,andtheamountof thedeficit is recognised in surplusordeficit within operating expenses.When a tradereceivableisuncollectible,itiswrittenoffagainstthe allowance account for trade receivables.Subsequent recoveries of amounts previouslywrittenoffarecreditedagainstoperatingexpensesinsurplusordeficit.

Tradeandotherreceivablesareclassifiedasloansandreceivables.

Trade and other payablesTradepayablesareinitiallymeasuredatfairvalue,andaresubsequentlymeasuredatamortisedcost,usingtheeffectiveinterestratemethod.

Cash and cash equivalentsCashandcashequivalentscomprisecashonhandanddemanddepositsandothershorttermhighlyliquid investments that are readily convertible toa known amount of cash and are subject to aninsignificant risk of changes in value. These areinitially recorded at fair value and subsequentlyrecordedatamortisedcost.

1.5 LEASES

Aleaseisclassifiedasafinanceleaseifittransferssubstantially all the risks and rewards incidentaltoownership.Aleaseisclassifiedasanoperatinglease if it does not transfer substantially all therisksandrewardsincidentaltoownership.

Finance leases - lesseeFinance leases are recognised as assets andliabilities in the statement of financial position

atamountsequal to the fairvalueof the leasedproperty or, if lower, the present value of theminimum lease payments. The correspondingliabilitytothelessorisincludedinthestatementoffinancialpositionasafinanceleaseobligation.Minimum lease payments are apportionedbetween the finance charge and reduction ofthe outstanding liability. The finance charge isallocated to each period during the lease termsoastoproduceaconstantperiodicrateontheremainingbalanceoftheliability.

Operating leases - lessorOperatingleaserevenueisrecognisedasrevenueonastraightlinebasisovertheleaseterm.Initial direct costs incurred in negotiatingand arranging operating leases are added tothe carrying amount of the leased asset andrecognisedasanexpenseovertheleasetermonthesamebasisastheleaserevenue.

Theaggregatecostofincentivesisrecognisedasareductionofrentalrevenueovertheleasetermonastraightlinebasis.

Theaggregatebenefitofincentivesisrecognisedas a reductionof rental expenseover the leasetermonastraightlinebasis.

Income for leases isdisclosedunder revenue instatementoffinancialperformance.

Operating leases – lesseeOperating leasepaymentsare recognisedasanexpense on a straight line basis over the leaseterm. The difference between the amountsrecognised as an expense and the contractualpayments are recognised as an operating leaseassetorliability.

1.6 EMPLOYEE BENEFITS

Short-term employee benefitsThecostofshort termemployeebenefits, (thosepayable within 12 months after the service isrendered, such as paid vacation leave and sickleave,bonuses,andnonmonetarybenefitssuchas medical care), are recognised in the periodin which the service is rendered and are notdiscounted.

The expected cost of compensated absencesis recognised as an expense as the employeesrenderservicesthatincreasetheirentitlementor,

Accounting Policies continued

41

inthecaseofnonaccumulatingabsences,whentheabsenceoccurs.

Theexpectedcostofsurplussharingandbonuspayments is recognised as an expense whenthereisalegalorconstructiveobligationtomakesuchpaymentsasaresultofpastperformance.

Defined contribution plansPayments to defined contribution retirementbenefitplansarechargedasanexpenseastheyfalldue.

Payments made to industry managed (or stateplans) retirementbenefit schemesaredealtwithas defined contribution planswhere the entity’sobligation under the schemes is equivalent tothosearisinginadefinedcontributionretirementbenefitplan.

1.7 PROVISIONS AND CONTINGENCIES

Provisionsarerecognisedwhen:

• theentityhasapresentobligationasaresultof apastevent;

• itisprobablethatanoutflowofresources embodyingeconomicbenefitsorservice potentialwillberequiredtosettlethe obligation;and

• areliableestimatecanbemadeofthe obligation.

Theamountofaprovisionisthebestestimateoftheexpenditureexpectedtoberequiredtosettlethepresentobligationatthereportingdate.

Wheresomeoralloftheexpenditurerequiredtosettleaprovisionisexpectedtobereimbursedbyanother party, the reimbursement is recognisedwhen, and only when, it is virtually certain thatreimbursementwillbereceivediftheentitysettlesthe obligation. The reimbursement is treated asaseparateasset.Theamountrecognisedforthereimbursement does not exceed the amount oftheprovision.

Provisionsarenotrecognisedforfutureoperatingdeficits.

Contingent assets and contingent liabilities arenot recognised. Contingencies are disclosed inNote28.

1.8 REVENUE FROM EXCHANGE TRANSACTIONS

Revenue is the gross inflow of economicbenefitsorservicepotentialduringthereportingperiodwhen those inflows result in an increasein net assets, other than increases relating tocontributionsfromowners.

An exchange transaction is one in which theentityreceivesassetsorservices,orhasliabilitiesextinguished, and directly gives approximatelyequal value (primarily in the form of goods,services or use of assets) to the other party inexchange.

Fairvalueistheamountforwhichanassetcouldbe exchanged, or a liability settled, betweenknowledgeable,willingpartiesinanarm’slengthtransaction. An exchange transaction will berecognised as and when the Board receives adeclarationfromthesheriff.

MeasurementRevenue is measured at the fair value of theconsiderationreceivedorreceivable,netoftradediscountsandvolumerebates.

Sale of goodsRevenue from the sale of goods is recognisedwhen all the following conditions have beensatisfied:

• theentityhastransferredtothepurchaserthe significantrisksandrewardsofownershipof thegoods;

• theentityretainsneithercontinuingmanagerial involvementtothedegreeusuallyassociated withownershipnoreffectivecontroloverthe goodssold;

• theamountofrevenuecanbemeasured reliably;

• itisprobablethattheeconomicbenefitsor servicepotentialassociatedwiththe transactionwillflowtotheentity;and

• thecostsincurredortobeincurredinrespect ofthetransactioncanbemeasuredreliably.

Rendering of servicesWhen the outcome of a transaction involvingthe rendering of services can be estimatedreliably, revenueassociatedwith thetransactionis recognised by reference to the stage ofcompletion of the transaction at the reportingdate. The outcome of a transaction can be

42

estimatedreliablywhenallthefollowingconditionsaresatisfied:

• theamountofrevenuecanbemeasured reliably;

• itisprobablethattheeconomicbenefitsor servicepotentialassociatedwiththe transactionwillflowtotheentity;

• thestageofcompletionofthetransactionat thereportingdatecanbemeasuredreliably;and

• thecostsincurredforthetransactionand thecoststocompletethetransactioncanbe measuredreliably.

Interest, royalties and dividendsRevenuearising from theusebyothersofentityassetsyieldinginterest,royaltiesanddividendsisrecognisedwhen:

• Itisprobablethattheeconomicbenefitsor servicepotentialassociatedwiththe transactionwillflowtotheentity;and

• Theamountoftherevenuecanbemeasured reliably.

Interest is recognised, insurplusordeficit,usingtheeffectiveinterestratemethod.

Investment income will be recognised as andwhentheFundbecomesentitledtotheincome.Service fees included in thepriceof theproductarerecognisedasrevenueovertheperiodduringwhichtheserviceisperformed.

1.9 REVENUE FROM NON-EXCHANGE TRANSACTIONS

Revenue comprises gross inflows of economicbenefits or service potential received andreceivable by an entity, which represents anincrease in net assets, other than increasesrelatingtocontributionsfromowners.

Conditionson transferred assets are stipulationsthat specify that the futureeconomicbenefitsorservicepotentialembodiedintheassetisrequiredtobeconsumedby the recipient as specifiedorfutureeconomicbenefitsorservicepotentialmustbereturnedtothetransferor.

Controlofanassetariseswhentheentitycanuseorotherwisebenefitfromtheassetinpursuitofitsobjectivesandcanexcludeorotherwiseregulatetheaccessofotherstothatbenefit.

Non-exchange transactions are transactionsthat are not exchange transactions. In a nonexchange transaction, an entity either receivesvalue fromanother entitywithout directly givingapproximatelyequalvalue inexchange,orgivesvalue toanotherentitywithoutdirectly receivingapproximatelyequalvalueinexchange.

Restrictionsontransferredassetsarestipulationsthat limit or direct the purposes for which atransferredassetmaybeused,butdonotspecifythatfutureeconomicbenefitsorservicepotentialisrequiredtobereturnedtothetransferorifnotdeployedasspecified.

Stipulations on transferred assets are terms inlaws or regulations, or a binding arrangement,imposedupontheuseofa transferredassetbyentitiesexternaltothereportingentity.

RecognitionAn inflow of resources from a non-exchangetransactionrecognisedasanassetisrecognisedasrevenue,excepttotheextentthataliabilityisalsorecognisedinrespectofthesameinflow.

As the entity satisfies a present obligationrecognised as a liability in respect of an inflowof resources from a non-exchange transactionrecognised as an asset, it reduces the carryingamountoftheliabilityrecognisedandrecognisesanamountofrevenueequaltothatreduction.

MeasurementRevenue from a non-exchange transaction ismeasured at the amount of the increase in netassetsrecognisedbytheentity.

When,asaresultofanon-exchangetransaction,theentityrecognisesanasset,italsorecognisesrevenue equivalent to the amount of theasset measured at its fair value as at the dateof acquisition, unless it is also required torecognisea liability.Wherea liability is requiredtoberecogniseditwillbemeasuredasthebestestimate of the amount required to settle theobligationatthereportingdate,andtheamountoftheincreaseinnetassets,ifany,recognisedasrevenue.Whenaliabilityissubsequentlyreduced,becausethetaxableeventoccursoraconditionis satisfied, the amount of the reduction in theliabilityisrecognisedasrevenue.

Accounting Policies continued

43

1.10 COMPARATIVE FIGURES

Wherenecessary,comparativefigureshavebeenreclassifiedtoconformtochangesinpresentationinthecurrentyear.

1.11 IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE

Irregular expenditure, asdefined inSection 1 ofthe Public Finance Management Act (PFMA) isexpenditure,otherthanunauthorisedexpenditure,incurred in contravention of, or that is not inaccordancewith:

a)arequirementofthePFMA(ActNo.29of 1999);or

b)arequirementoftheStateTenderBoardAct (ActNo.86of1968),oranyregulationsmade intermsoftheAct;or

c)arequirementinanyprovinciallegislation providingforprocurementproceduresinthat provincialgovernment.

Fruitless expenditure means expenditure whichwasmadeinvainandwouldhavebeenavoidedhadreasonablecarebeenexercised.

All expenditure relating to fruitless andwastefulexpenditure is recognised as an expense in thestatementoffinancialperformanceintheyearthatthe expenditure was incurred. The expenditureisclassifiedinaccordancewiththenatureoftheexpense,andwhererecovered,itissubsequentlyaccounted for as revenue in the statement offinancialperformance.

1.12 BUDGET INFORMATION

Theentityistypicallysubjecttobudgetarylimitsintheformofappropriationsorbudgetauthorisations(or equivalent), which is given effect throughauthorisinglegislation,appropriationorsimilar.

Generalpurposefinancialreportingbyentityshallprovide information on whether resources wereobtainedandusedinaccordancewiththelegallyadoptedbudget.

The annual financial statements and the budgetarenotonthesamebasisofaccounting,thereforeareconciliationbetweenthestatementoffinancialperformanceandthebudgethavebeenincludedintheannualfinancialstatements.RefertoNote26.

2. Changes in accounting policy

The annual financial statements have beenprepared in accordance with Standards ofGenerallyRecognisedAccountingPracticeonabasisconsistentwiththeprioryearexceptwherenewstandardsbecameavailable.

3. New standards and interpretations 3.1 STANDARDS AND INTERPRETATIONS ISSUED, BUT NOT YET EFFECTIVE

Theentityhasnotappliedthefollowingstandardsand interpretations, which have been publishedand are mandatory for the entity’s accountingperiodsbeginningonorafter01April2014orlaterperiods.

GRAP 20 Related PartiesThe objective of this standard is to ensure thata reporting entity’s financial statements containthe disclosures necessary to draw attentionto the possibility that its financial position andsurplusordeficitmayhavebeenaffectedbytheexistenceof relatedparties andby transactionsandoutstandingbalanceswithsuchparties.

An entity that prepares and presents financialstatementsundertheaccrualbasisofaccounting(inthisstandardreferredtoasthereportingentity)shallapplythisstandardin:

• identifyingrelatedpartyrelationshipsand transactions;

• identifyingoutstandingbalances,including commitments,betweenanentityandits relatedparties;

• identifyingthecircumstancesinwhich disclosureoftheitemsin(a)and(b)is required;and

• determiningthedisclosurestobemadeabout thoseitems.

Thisstandardrequiresdisclosureofrelatedpartyrelationships,transactionsandoutstandingbalances,includingcommitments,intheconsolidatedandseparatefinancialstatementsofthereportingentityinaccordancewiththeStandardofGRAPonConsolidatedand

44

SeparateFinancialStatements.Thisstandardalsoappliestoindividualfinancialstatements.

Disclosure of related party transactions,outstanding balances, including commitments,and relationshipswith related partiesmay affectusers’ assessments of the financial position andperformanceofthereportingentityanditsabilitytodeliveragreedservices,includingassessmentsoftherisksandopportunitiesfacingtheentity.Thisdisclosurealsoensuresthatthereportingentityistransparentaboutitsdealingswithrelatedparties.

Thestandardstatesthatarelatedpartyisapersonor an entity with the ability to control or jointlycontrol the other party, or exercise significantinfluenceovertheotherparty,orviceversa,oranentity that issubject tocommoncontrol,or jointcontrol.Asaminimum,thefollowingareregardedasrelatedpartiesofthereportingentity:

• Apersonoraclosememberofthatperson’s familyisrelatedtothereportingentityifthat person;

• hascontrolorjointcontroloverthereporting entity;

• hassignificantinfluenceoverthereporting entity;or

• isamemberofthemanagementoftheentityor itscontrollingentity.

Anentityisrelatedtothereportingentityifanyofthefollowingconditionsapply:

• theentityisamemberofthesameeconomic entity(whichmeansthateachcontrollingentity, controlledentityandfellowcontrolledentityis relatedtotheothers);

• oneentityisanassociateorjointventureofthe otherentity(oranassociateorjointventure ofamemberofaneconomicentityofwhich theotherentityisamember);

• bothentitiesarejointventuresofthesame thirdparty;

• oneentityisajointventureofathirdentityand theotherentityisanassociateofthethirdentity;

• theentityisapost-employmentbenefitplanfor thebenefitofemployeesofeithertheentity oranentityrelatedtotheentity.Ifthereporting entityisitselfsuchaplan,thesponsoring employersarerelatedtotheentity;

• theentityiscontrolledorjointlycontrolledbya personidentifiedin(a);and

• apersonidentifiedin(a)(i)hassignificant influenceoverthatentityorisamember ofthemanagementofthatentity(orits controllingentity).

Thestandardfurthermorestatesthatarelatedpartytransactionisatransferofresources,servicesorobligationsbetweenthereportingentityandarelatedparty,regardlessofwhetherapriceischarged.

The standard elaborates on the definitions andidentificationof:

• Closememberofthefamilyofaperson;

• Management;

• Relatedparties;

• Remuneration;and

• Significantinfluence.

Thestandardsetsouttherequirements,interalia,forthedisclosureof:

• Control;

• Relatedpartytransactions;and

• Remunerationofmanagement.

The effective date of the standard is for yearsbeginningonorafter01April2013.

An entity shall apply Standards of GRAP forannual financial statements covering periodsbeginning on or after a date to be determinedby theMinister of Finance in a regulation to bepublished in accordancewithSection91(l)(b) ofthePFMA.

Accounting Policies continued

45

4. Property, plant and equipment

Figures in Rand 2015 2014

Cost Accumulated Depreciation

Carrying value

Cost Accumulated Depreciation

Carrying value

Burglar alarms 2 700 (2 700 ) - 2 700 (2 700 ) - Computer equipment 786 583 (381 303 ) 405 280 635 515 (355 140 ) 280 375 Furniture and fixtures 503 801 (370 661 ) 133 140 502 589 (315 732 ) 186 857 Kitchen appliances 12 936 (9 838 ) 3 098 12 416 (6 170 ) 6 246 Office equipment 149 132 (119 831 ) 29 301 149 330 (95 104 ) 54 226 Land & buildings 2 114 558 (122 312 ) 1 992 246 2 020 280 (17 676 ) 2 002 604 Total 3 569 710 (1 006 645 ) 2 563 065 3 322 830 (792 522 ) 2 530 308

Reconciliation of property, plant and equipment 2015

Opening Balance

Additions Disposals Depreciation

charge

Accumulated Depreciation on disposals

Closing Balance

Burglar alarms - - - - - Computer equipment 280 375 288 211 (137 143 ) (162 436 ) 136 273 405 280 Furniture and fixtures 186 857 1 212 - (54 929 ) - 133 140 Kitchen appliances 6 246 520 - (3 668 ) - 3 098 Office equipment 54 226 - (199 ) (24 867 ) 141 29 301 Land & buildings 2 002 604 94 278 - (104 636 ) - 1 992 246

2 530 308 384 221 (137 342 ) (350 536 ) 136 414 2 563 065

Reconciliation of property, plant and equipment 2014

Opening Balance

Additions Disposals Depreciation charge

Accumulated Depreciation on disposals

Closing Balance

Burglar alarms - - - - - Computer equipment 124 199 267 475 (48 836 ) (104 048 ) 41 585 280 375 Furniture and fixtures 6 002 210 534 (1 944 ) (29 678 ) 1 943 186 857 Kitchen appliances 5 139 3 650 - (2 543 ) - 6 246 Office equipment 25 353 47 175 (6 171 ) (18 301 ) 6 170 54 226

- 2 020 280 - (17 676 ) - 2 002 604 160 693 2 549 114 (56 951 ) (172 246 ) 49 698 2 530 308

Land & buildings

TheBoardhaveacquiredabuildingsituatedat88LoopStreet,CapeTown.ThebuildingwasboughtinthenameoftheSABFSastheFidelityFundarenotapersonapertheAct.

Thebuildinghavebeenaccountedforasfollows:

2015 2014

Cost of building 13 370 326 13 370 326 less portion accounted for in the books of the Fidelity Fund (12 127 897) (12 127 897)

1 242 429 1 242 429 Additions as per Board Approval 777 851 777 851 Renovations 2015 94 278 -

Net Total as per Note 4 above 2 114 558 2 020 280

Notes to the annual financial statements

46

Notes to the annual financial statements

5. Intangible Assets

Figures in Rand 2015 2014

Cost Accumulated Amortisation

Carrying value Cost Accumulated

Amortisation Carrying

value

Computer Software 261 765 (174 570 ) 87 195 281 792 (239 417 ) 42 375 Publications 893 966 (26 000) 867 966 442 371 (13 000 ) 429 371 SharePoint Database 348 872 (45 517) 303 355 348 872 (10 630 ) 338 242 Total 1 504 603 (246 087 ) 1 258 516 1 073 035 (263 047 ) 809 988

Reconciliation of intangible assets 2014

Opening Balance Additions Disposals Amortisation

Accumulated Amortisation on disposals

Closing Balance

Computer Software 42 376 81 965 (101 993 ) (37 146 ) 101 993 87 195 Publications 429 371 451 595 - (13 000 ) 867 966 SharePoint Database 338 241 - - (34 886 ) - 303 355

809 988 533 560 (101 993 ) (85 032 ) 101 993 1 258 516

Reconciliation of intangible assets 2013

Opening Balance

Additions Disposals Amortisation Accumulated Amortisation on disposals

Closing Balance

Computer Software 43 794 31 250 - (32 668 ) - 42 376 Publications 261 250 181 121 - (13 000 ) - 429 371 SharePoint Database 30 747 317 116 - (9 622 ) - 338 241

335 791 529 487 - (55 290 ) - 809 988

47

Notes to the annual financial statements

Figures in Rand 2015 2014

6. Financial assets by category

The accounting policies for financial instruments have been applied to the line items below:

Loans and receivablesTrade and other receivables 1 018 242 2 609 507 Cash and cash equivalents 7 849 095 168 304

8 867 337 2 777 811

7. Trade and other receivablesAccrued income 793 861 2 310 556 Provision for bad debts (130 195) (130 195)Other receivables 310 653 429 146 Value added taxation 43 923 -

1 018 242 2 609 507

The ageing of trade and other receivables at the reporting date

The ageing of accounts receivables are as follows:

30 days 784 733 695 569 90 days plus 233 509 1 913 938

1 018 242 2 609 507

8. Cash and cash equivalents

Cash and cash equivalents consist of:Cash on hand 1 029 257 Bank balances 105 693 115 895 Short-term deposits 7 742 373 52 152

7 849 095 168 304

9. Receivable from related partyFidelity Fund for Sheriffs – owing amount 1 886 966 9 118 345

The loan is unsecured, interest free and has no fixed terms of repayment.

10. Long term liabilitiesFinance lease liabilities

Vodacom Laptops 21 149 15 658 Addition : Apple Mac - 17 263 Less: Payments made (13 973) (11 772)

7 176 21 149

11. Trade and other payables

Accrued expenses 1 225 738 1 363 993 Value Added Taxation - 264 810

1 225 738 1 628 803

48

Notes to the annual financial statements

Figures in Rand 2015 2014

12. Provisions

Leave provision 77 693 116 448 Value Added Taxation 2 703 635 2 132 891

2 781 328 2 249 339

13. Financial liabilities by category

The accounting policies for financial instruments have been applied to the line items below:

Financial liabilities by category

Trade and other payables 1 225 738 1 363 993

14. RevenueLevies received 5 301 027 4 398 784 Administrative fees received 9 755 002 10 000 259 Fines and penalties 643 272 408 300 SASSETA grants 1 297 257 3 614 821

Grant DOJ & CD - 385 653

16 996 558 18 807 817

The amounts included in revenue arising from exchange of goods or service are as follows:

Administrative fees received 9 755 002 10 000 259 9 755 002 10 000 259

The amounts included in revenue arising from non-exchange transactions are as follows:

Levies received 5 301 027 4 398 784 Fines and penalties 643 272 408 300 SASSETA grants 1 297 257 3 614 821 Grant DOJ & CD - 385 653

7 241 556 8 807 558

15. Operating (deficit)/surplusOperating (deficit)/surplus for the year is stated after accounting for the following:

Lease rentals on operating lease 301 289 183 438 Depreciation on property, plant and equipment 350 537 172 246 Amortisation of intangible assets 85 032 55 290 Auditor’s remuneration 138 296 82 850 Consulting fees 1 566 656 969 978 Employee costs 7 771 648 8 506 364

16. Auditors remunerationAudit fees 138 296 82 850

Other services - - 138 296 82 850

49

Notes to the annual financial statements

Figures in Rand 2015 2014

17. Investment RevenueInterest revenueShort-term deposits 305 884 200 898

18. Taxation

No provision has been made for 2014 taxation as the receipts and accruals to the entity are exempt from income tax in terms of Section 10(1)cA)(i) of the Income Tax Act.

19. Cash generated from operations(Deficit)/Surplus before taxation (775 519) 632 201 Adjustments for:Depreciation 350 537 172 246 Amortisation 85 032 55 290 Interest received (305 884) (243 739)Gain on sale of assets (1 737) (9 573)Finance costs 803 95 748 Changes in working capital:Trade and other receivables 1 591 265 201 463

Provisions 531 989 (5 816)

Trade and other payables (403 065) (763 245)

1 073 421 134 575

Receipts and Payments Receipts and payments for 2014 includes amounts relating to investments which matured and which were reinvested by the Board on behalf of the Fidelity Fund. These monies were directed through the bank account of the Board. Claims paid were also channelled through the Board current accounts in ABSA & Standard Bank. This practice was stopped during the current financial year.

20. CommitmentsOperating leases – as lessee (Office space, office equipment and telephone systems)

Minimum lease payments due - within one year 269 243 269 243

- in second to fifth year inclusive 897 477 1 022 891 1 166 720 1 292 134

21. Related partiesRelationships

Common board members Fidelity Fund for Sheriffs

The Sheriffs Board was established under the Sheriff’s Act and the Fidelity Fund is managed by the Board on behalf of the Minister of Justice and Correctional Services. The Board enters into various transactions, on arm’s length with Fidelity Fund. The Board and the Fund had common board members for the year.

Related party balances

Receivable from related party

Fidelity Fund for Sheriffs 1 886 966 9 118 345

Administration fees charged to related party

Rent paid by related party

Fidelity Fund for Sheriffs 9 755 002 10 000 259

The Administrative fee is based on an agreement signed between the Board and the Fidelity fund.

50

Notes to the annual financial statements

Figures in Rand 2015 2014

22. Risk managementFinancial risk management

Theentity’sactivitiesexposeittoavarietyoffinancialrisks:liquidityrisk,interestrateriskandcreditrisk.

Liquidity riskTheentity’sriskto liquidity isaresultof thefundsavailabletocoverfuturecommitments.Theentitymanagesliquidityriskthroughanon-goingreviewoffuturecommitments.

Cashismanagedprudentlybykeepingsufficientcashinbankaccounts.CashisreceivedfromsheriffsandtheFidelityFund.

Interest rate riskThe Board has interest-bearing assets and the income and operating cash flows are substantiallydependentonthechangesinthemarketinterestrates.Theinterest-bearingassetsconsistofshortterminvestmentswithfloatinginterestratethatexposetheBoardtocashflowinterestraterisks.Theinterestrateusedisbasedontheprimerate.

Credit riskCreditriskconsistsmainlyofcashdeposits,cashequivalentsandtradedebtors.Theentityonlydepositscashwithmajorbankswithhighqualitycreditstandingandlimitsexposuretoanyonecounter-party.

Trade receivablescompriseawidespreadcustomerbase.Managementevaluatedcredit risk relatingto customers on an on-going basis. If customers are independently rated, these ratings are used.Otherwise, if there isno independent rating, riskcontrolassesses thecreditqualityof thecustomer,takingintoaccountitsfinancialposition,pastexperienceandotherfactors.IndividualrisklimitsaresetbasedoninternalorexternalratingsinaccordancewithlimitssetbytheBoard.Theutilisationofcreditlimitsisregularlymonitored.

23. Going ConcernTheannualfinancialstatementshavebeenpreparedonthebasisofaccountingpoliciesapplicabletoagoingconcern.Thisbasispresumesthatfundswillbeavailabletofinancefutureoperationsandthattherealisationofassetsandsettlementofliabilities,contingentobligationsandcommitmentswilloccurintheordinarycourseofbusiness.

24. Events after the reporting dateTheBoardisnotawareofanymattersorcircumstancesarisingsincetheendofthefinancialyearwhichsignificantlyaffectthefinancialpositionoftheBoardortheresultofoperations.

25. Public Finance Management ActTheSouthAfricanBoardforSheriffshasappliedtotheNationalTreasuryforlistinginthePublicFinanceManagementActschedulesasrequiredbyS47(2)ofthePFMA.TheentityhasthereforenotbeenauditedagainsttherequirementsofthePFMA,astheapplicationisstillunderconsiderationbyNationalTreasury.TheentityhasthereforemaintaineditsfinancialyearforthisreportingperiodastheendofFebruaryintermsoftheSheriffsAct.

51

Notes to the annual financial statements

Figures in Rand 2015 2014

26. Explanation of variances between Actual and Budget

RevenueTheoverrecoveryofrevenuebyR889,346representing5.42%isattributedtothefollowing:

LeviesTheoverrecoveryofleviesof1.94%isduetotheappointmentofnewsheriffs.

Administrative fee

Theoverrecoveryof4.89%canbeattributedtotheappointmentofnewsheriffsduringthecurrentandpreviousfinancialyears.

Investment incomeTheunderrecoveryof4.78%onthislineitemisadirectresultofthereductioninavailablecashintheBoardduetotheslowgrowthintheFidelityFundwheremonieswereinvestedinlongerterminvestments.

SASSETA grantsTheunderrecoveryof14.36%onthislineitemisduetopartofthecontractrevenuebeingrecognisedinthepreviousfinancialyear.

Other incomeTheoverrecoveryof565.25%onthislineitemisduetosheriffsbeingfinedforlatesubmissionoflegalobligations.

Operating expensesTotalexpensesisoverbudgetbyR1,667,199representinga10.6%underrecoverywhichisattributedtothefollowing:

Board and sub committees

Theoverrecoveryof49.33%onthislineitemisduetotheimpactoftheresignationofthepreviousexecutivemanagerduringthefinancialyearunderreview.Moremeetingsthanplannedwereheldduringtheyearunderreview.

Executive manager's officeTheunderrecoveryofthislineitemof2.22%wasduetothenatureoftheprojectsundertakenduringtheyearunderreview.Legalcostrelatingtotheresignationoftheexecutivemanagerhaveimpactedtheunderrecoveryofthislineitem.

Legal and complaints division

Theoverrecoveryofthelineitemof8.06%isduetothenumberofinvestigationsperformedduringtheyear.Moreinvestigationswereperformed.

Formal disciplinary hearings

Theoverrecoveryof10.36%onthislineitemisdirectlyrelatedtothenumberofDChearingsheldduringtheyearunderreview.ThenumberofDC'sweremorethanthepreviousyear.

52

Notes to the annual financial statements

Figures in Rand 2015 2014

26. Explanation of variances between Actual and Budget(continued)Finance, Administration and Compliance Division

The over recovery of 26.67% on this line item is due to the overspend on a report relating to themanagementofsheriffofficemandatedbytheBoard.

Communication activitiesTheunderrecoveryof5.52%onthislineitemwasduetothefactthatcertainactivitiesplannedforthisyearhavenottakenplace;however,ithasbeenscheduledforthenextfinancialyear.

TrainingTheoverrecoveryof9.19%onthislineisduetotheincreasespendonexpensesnotcoveredbyfundingfromexternalsourcesofrevenue.Sheriffswereidentifiedwhoreceivedadditionaltraining.

General operationsTheoverrecoveryof10.70%onthislineitemrelatestothedepreciationprovidedonthenewassetsacquiredduringthecurrentfinancialyear.

ContractsTheoverrecoveryof14.85%onthislineitemisduetotheincreaseinthemaintenanceofthebuildingrelatingtotheroofrepairs.

Other general office expenditureThis over recovery of 16.32% on this line item is due to annual increases in leasing charges as well as increase recruitment expenses.

Personnel expenditureThe under recovery of 9.68% in this line item is due to saving obtained with vacant positions and performance bonuses being paid in the next financial year.

Staff developmentThe over recovery of 3.09% in this line item was due to performance work plans implemented against certain staff members.

ContingencyThe over recovery of 100% in this line item relates to the VAT ruling issued by SARS on the write back of Input VAT previously claimed. Refer to Note 28

53

Notes to the annual financial statements

Figures in Rand 2015 2014

27. Executive management and board member's remuneration

The following persons are employed by the Board in their respective executive capacities during the financial year.

Executive Management remuneration

H Kagee Executive Manager 402 847 930 142 BZ Luthuli Finance, HR, IT and Acting Executive Manager 551 388 515 452 MB Maseko Head of Inspectorate(resigned 31st May 2013) - 193 845 VP Nel Training and Communication Manager 445 238 494 394 L Mtunzi General Manager Legal And Complains 532 332 563 323 AC Simon General Manager Corporate and Financial Services 571 097 584 189

2 502 902 3 281 345

Board members emoluments(non-executive)

N. Nxumalo 30 458 51 241 H.J. Choma 115 943 81 378 C. Mabuza 338 597 57 242 T.F. Seboka 132 373 102 866 P. Roodt 140 097 97 233

H. Mohamed - - L. Best 34 568 35 448 H. Ntsikeni 42 915 47 581 F.R. Moeletsi 44 235 59 690 A.Mawela 134 052 73 523 T. Tembe 101 882 77 287

1 115 120 683 489

28. VAT Ruling impact

Net(deficit)/surplusasperincomestatement (775 519) 632 201 Vatapportionmentadjustment 1 278 415 - Surplusfortheyear 502 896 632 201

Value Added Taxation(VAT)

TheSouthAfricanBoardforSheriffshavesubmittedaTaxRulingapplicationtoSouthAfricanRevenueServices(SARS).ThisapplicationwastoclearthepositionoftheSABFSandtheFidelityFund.ItwasclearfromdiscussionsandthesubmissionthatthetwobodiesareoneandnoVATischargeablebytheSABFStotheFidelityFundontheadministrativefeescharged.TheSABFSwill,howeverinfuturehavetoapplyonlyaportionoftheVATpercentagetoitsexpenses.Thisrulingwasissuedonthe29thJanuary2015andwasappliedfromthe2011financialyeartothecurrentfinancialyear,whichcausedtheamounttobewrittenbackoninputVATpreviouslyclaimedtobetreatedasanexpenseinthecurrentfinancialyear.TheeffectofthisrulingcausedtheSABFStoincuradeficitforthecurrentyearofR775,519.

54

Figures in Rand Note(s) 2015 2014

Revenue

Levies received 5 301 027 4 398 784 Administrative fees 9 755 002 10 000 259 SASSETA grants 1 297 257 3 614 821 Fines and penalties 643 272 408 300 DOJ&CD - 385 653 Sales of promotional material 14 16 996 558 18 807 817 Total revenue

Other income Investment income 305 884 200 898 Profit on sale of assets 1 737 9 573 Interest income - 42 841 Other income - 8 740

Operating income 17 304 179 19 069 869

Detailed statement of financial performance for the period ended 28 February 2015

55

Detailed statement of financial performance for the period ended 28 February 2015

Figures in Rand 2015 2014

Operating expensesAccommodation 458 019 390 627 Auditor’s remuneration 138 296 82 850 Bad debts - 130 195 Bank charges 28 229 31 505 Catering expenses 225 244 148 262 Cleaning 63 408 40 783 Communication and public education 644 840 1 515 609 Consulting fees 1 566 656 969 978 Criminal and credit clearance 10 967 24 834 DC & Inspections 100 500 49 000 Depreciation 435 569 227 536 Electricity and water 143 479 74 649 Employee costs 7 771 648 8 506 364 Finance charges 803 95 748 Gifts 8 849 5 618 Impairment of assets - 140 852 IT expenses 68 106 54 271 Insurance 96 048 70 313 Lease rentals on operating lease 301 289 183 438 Legal fees 789 499 300 040 Parking expenses 49 119 27 500 Postage 71 929 156 627 Printing and stationery 553 135 398 504 Recruitment expenses 127 806 46 236 Repairs and maintenance 156 454 137 455 Security 11 294 15 521 Staff welfare 88 248 112 497 Subscriptions 42 887 40 044 Telephone and fax 282 024 335 979 Training 1 952 999 2 646 469 Travel – local 1 892 354 1 478 364

18 079 698 18 437 668

(Deficit)/Surplus for the year (775 519) 632 201

Financials

56

Fidelity Fund for Sheriffs Established in terms of the Sheriffs Act No. 90 of 1986, as amended.

57

Statement of Board’s Responsibilities and Approval 58

Independent Auditor’s Report 59-60

Board Members’ Report 61

Statement of Financial Position 62

Statement of Financial Performance 63

Statement of Changes in Net Assets 64

Cash Flow Statement 65

Statement of Comparison of Budget and Actual Amounts 66

Accounting Policies 67-72

Notes to the Annual Financial Statements 73-78

The following supplementary information does not form part of the annual financial

statements and is unaudited:

Detailed Statement of Financial Performance 79

Annual Financial Statementsfor the year ended 28 February 2015

2015

58

Statement of Board’s Responsibility and Approval

TheBoardisrequiredbytheSheriffsAct,No.90of1986tomaintainadequateaccountingrecordsand is responsible for the content and integrityof the annual financial statements and relatedfinancial information included in this report. Itis the responsibility of the Board to ensure thattheannualfinancial statements fairlypresent thestateof affairsof theentity as at theendof thefinancialyearandtheresultsofitsoperationsandcashflowsfortheperiodthenended.Theexternalauditorsareengagedtoexpressan independentopinion on the annual financial statements andwere given unrestricted access to all financialrecordsandrelateddata.

The annual financial statements have beenprepared in accordance with Standards ofGenerally Recognised Accounting Practice(GRAP) including any interpretations, guidelinesanddirectivesissuedbytheAccountingStandardsBoard.

The annual financial statements are based onappropriate accounting policies consistentlyapplied and supported by reasonable andprudent judgments and estimates. The Boardacknowledgesthat it isultimatelyresponsible forthesystemofinternalfinancialcontrolestablishedby theentity andplaceconsiderable importanceonmaintaining a strong control environment. Toenable the Board tomeet these responsibilities,the Board sets standards for internal controlaimedat reducing the riskoferrorordeficit inacost-effective manner. The standards includethe proper delegation of responsibilitieswithin aclearly defined framework, effective accountingprocedures and adequate segregation of dutiesto ensure an acceptable level of risk. Thesecontrols are monitored throughout the entityand all employees are required to maintain thehighest ethical standards in ensuring that theentity’sbusinessisconductedinamannerthatinall reasonable circumstances is above reproach.Thefocusof riskmanagement in theentity isonidentifying, assessing, managing and monitoringall known forms of risk across the entity. Whileoperating risk cannot be fully eliminated, theentityendeavourstominimise itbyensuringthatappropriate infrastructure, controls, systems andethicalbehaviourareappliedandmanagedwithinpredeterminedproceduresandconstraints.

The members are of the opinion, based onthe information and explanations given bymanagement that the system of internal control

providesreasonableassurancethatthefinancialrecordsmaybe relied on for the preparation ofthe annual financial statements. However, anysystem of internal financial control can provideonly reasonable, and not absolute, assuranceagainstmaterialmisstatementordeficit.

The Board has reviewed the entity’s cash flowforecast for theyear to29thFebruary2016and,inthelightofthisreviewandthecurrentfinancialposition,it issatisfiedthattheentityhasaccesstoadequateresourcestocontinueinoperationalexistence for the foreseeable future.Theannualfinancial statements are prepared on the basisthat the entity is a going concern and that theBoard has neither the intention nor the needto liquidate or curtailmaterially the scale of theentity.

AlthoughtheBoardisprimarilyresponsibleforthefinancialaffairsoftheentity,itissupportedbytheentity’sexternalauditors.

The external auditors are responsible forindependently reviewing and reporting on theentity’s annual financial statements. The annualfinancial statements have been examined bythe entity’s external auditors and their report ispresentedonpages59to60.

Theannualfinancialstatementssetoutonpages61to79,whichhavebeenpreparedonthegoing-concernbasis,were approvedby theBoard on 24thJune2015andweresignedonitsbehalfby:

Mrs C Mabuza (Chairperson of the Board)

Ms. N Skosana (Chairperson: Finance Committee)

Mr B Luthuli (Acting Executive Manager)

59

Independent Auditor’s Report to the Minister of Justice and Correctional Services on the Financial Statements of the South African Board for Sheriffs

REPORT ON THE FINANCIAL STATEMENTS

Introduction

We have audited the financial statements ofthe South African Board for Sheriffs set out onpages 62 to 78, which comprise the statementoffinancialpositionasat28thFebruary2015,thestatementoffinancialperformance,statementofchanges innet assets, thecashflowstatement,and thestatementofcomparisonofbudgetandactualamounts for theyear thenended,aswellasthenotes,comprisingasummaryofsignificantaccounting policies and other explanatoryinformation.

Accounting authority’s responsibility for the financial statements

The accounting authority is responsible forthe preparation and fair presentation of thesefinancial statements in accordance with theSouthAfricanStandardofGenerallyRecognisedAccounting Practice (SA Standards of GRAP)and the requirements of the Sheriffs Act, 1986(ActNo.90of1986)asamended,andthePublicAudit Act, 2004 ( Act No. 25 of 2004), and forsuch internal controls as the board membersdetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’s responsibility

Our responsibility is to express an opinion onthese financial statements based on our audit.Weconductedour audit in accordancewith thePublic Audit Act of South Africa, 2004 (Act No.25 of 2004) (PAA), the general notice issued interms thereof and International Standards onAuditing.Thosestandardsrequirethatwecomplywithethical requirements, andplanandperformthe audit to obtain reasonable assurance aboutwhether the financial statements are free frommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresin the financial statements. The proceduresselected depend on the auditor’s judgement,

includingtheassessmentoftherisksofmaterialmisstatement of the financial statements,whether due to fraud or error. In making thoserisk assessments, the auditor considers internalcontrolrelevanttotheentity’spreparationandfairpresentationof thefinancialstatements inordertodesign audit procedures that are appropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.

An audit also includes evaluating theappropriateness of accounting policies usedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverall presentation of the financial statements,policies used and the reasonableness ofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

We believe that the audit evidence we haveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

In our opinion the financial statements presentfairly,inallmaterialrespects,thefinancialpositionoftheFidelityFundforSheriffsasat28thFebruary2015 and its financial performance and cashflows and statement of comparison of budgetand actual amounts for the year then ended, inaccordancewith theSAStandardofGRAPandthe requirements of the Sheriffs Act, 1986 (ActNo.90of1986)asamended.

Emphasis of Matter

Wedrawattentiontothematterslistedbelow;ouropinionisnotmodifiedinrespectofthesematters:

PFMA

The Fidelity Fund for Sheriffs is awaiting adecision from National Treasury on whetherit should be subjected to requirements of thePublic Finance Management Act (PFMA). Theentityhasthereforenotbeenauditedagainstthe

60

Independent Auditor’s Report continued

requirements of the PFMA, as the application isstillunderconsiderationbyNationalTreasury.Theentity has thereforemaintained its financial yearforthisreportingperiodastheendofFebruaryintermsoftheSheriffsAct.ThefinancialstatementshavedisclosedthisfactinNote20.

Additional Matters

Unaudited supplementary information Thesupplementaryinformationsetoutonpage79doesnotformpartofthefinancialstatementsandis presented as additional information.We havenotauditedthisscheduleandaccordinglywedonotexpressanopinionthereon.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the PAA and the GeneralNotice issued in terms thereof, we report thefollowingfindingsontheperformanceinformationagainst predetermined objectives, non-compliance with legislations as well as internalcontrol.Weperformedteststoidentifyreportablefindingsasdescribedundereachsubheadingbutnot to gather evidence to express assurance onthesematters.Accordingly,wedonotexpressanopinionorconclusiononthesematters.

Predetermined objectives

We did not audit performance againstpredetermined objectives, as the entity is notrequiredtoprepareareportonitsperformanceagainst predetermined objectives. The entitydoesnot fallwithin theambitof thePFMAandthe entity-specific legislation does not requirereportingonperformanceagainstpredeterminedobjectives.Therearenomatterstoreport.

Compliance with legislations

As the Fidelity Fund for Sheriffs is awaiting adecision from National Treasury on whether itshouldbesubjectedtorequirementsofthePublicFinanceManagementAct,theentityhasthereforenot been audited against the requirements ofthe PFMA. However, the entity was auditedagainst compliance with the internal Supply

Chain Management Policy We did not identifyany instances of material non-compliance withspecificmatters in key legislation, as set out inthegeneralnoticeissuedintermsofthePAA.

Internal Control

Weconsideredinternalcontrolrelevanttoourauditof the financial statements, annual performancereport and compliance with legislation. We didnotidentifyanysignificantdeficienciesininternalcontrol

SizweNtsalubaGobodo Inc.Director: Natalie ArendseRegistered auditor25 June 2015

Head Office20MorrisStreetEast,Woodmead,2191P.O.Box2939,Saxonwold,2132Tel:+27(0)112310600

Cape Town Office 2ndFloor,BlockA-CenturyFalls32CenturyBoulevardCenturyCity7441

61

Theboardmemberssubmittheirreportfortheyearended28thFebruary2015.

1. Review of activities:

Main business and operations

TheFidelityFundforSheriffs(theFund)isengagedandgovernedintermsoftheSheriffsAct,No.90of1986.TheFundiscontrolledandmanagedbytheSouthAfricanBoard forSheriffs (theBoard),which shall utilise the money in the Fund inaccordancewiththeSheriffsAct,No.90of1986.

The operating results and state of affairs of theentity are fully set out in the attached annualfinancial statements and do not, in our opinion,requireanyfurthercomment.

2. Going concern

The annual financial statements have beenprepared on the basis of accounting policiesapplicable to a going concern. This basispresumes that fundswill be available to financefutureoperationsandthattherealisationofassetsandsettlementofliabilities,contingentobligations

Board Members’ Report

and commitments will occur in the ordinarycourseofbusiness.

3. Events after the reporting period

Theboardmembersarenotawareofanymatteror circumstances arising since the end of thefinancialyearthatwouldmateriallyimpactonthefinancialpositionoftheentity.

4.4. Public Finance Management Act (PFMA)

TheBoardisstillundertakingnumerousremedialsteps toseekclarityon thematterof theBoardbeing a PFMA-scheduled entity. Two opinions,bothfromafinancialandalegalaspect,inrespectoftheapplicabilityofthePFMAtotheBoardhavebeen obtained in the previous financial year. IthasalsofurthersubsequentlyengagedwithbothNationalTreasuryandtheDepartmentofJusticeand Constitutional Development in this regard.Treasury remains the sole agency to determinewho is listed as a PFMA entity in terms of therequired legislation. We believe that resolutiononthismatterwillbeimminentastheBoardwillseekafinaldecisionfromNationalTreasuryinthisregard.

5. Board Members

Theboardmembersduringtheyearandtothedateofthisreportareasfollows:

NAME CHANGES

P Roodt Reappointed 1 March 2015

H Mohamed Reappointed 1 March 2015

T Thembe Reappointed 1 March 2015

C. Mabuza (Chairperson) Reappointed 1 March 2015

H.J. Choma Term ended 28 February 2015

N. Nxumalo Term ended 28 February 2015

TF Seboka Term ended 28 February 2015

L Best Term ended 28 February 2015

A Mawela Term ended 28 February 2015

NAME CHANGES

F. Moeletsi Term ended 28 February 2015

H. Nsikeni Term ended 28 February 2015

N. Soga Appointed: 01 March 2015

M. Lephadi Appointed: 01 March 2015

I. Klynsmith Appointed: 01 March 2015

L. Mashapa Appointed: 01 March 2015

L. Fernandez Appointed: 01 March 2015

M. Magida Appointed: 01 March 2015

N. Skosana Appointed: 01 March 2015

62

Statement of financial position as at 28 February 2015

Figures in Rand Note(s) 2015 2014

Assets

Current Assets

Investmentsheldforsale 5 - 634 796 Tradeandotherreceivables 7 102 669 323 807 Cashandcashequivalents 8 24 299 919 30 154 164

24 402 588 31 112 767

Non-Current Assets

Investmentinproperty 4 11 818 388 12 020 520 Investments held to maturity 8 79 245 642 74 751 995 Total Assets 115 466 618 117 885 282

Liabilities

Current Liabilities

Tradeandotherpayables 10 3 999 742 5 750 198 Payabletorelatedparty 9 1 886 966 9 118 345 Provisions 12 2 256 427 2 547 087 Total Liabilities 8 143 135 17 415 630 Net Assets 107 323 483 100 469 652

Net Assets

Accumulated Surplus 107 323 483 100 469 652

Total Net Assets 107 323 483 100 469 652

63

Figures in Rand Note(s) 2015 2014

Revenue 13 12 726 643 16 262 652

Otherincome - 20 509

Operatingexpenses (11 712 138) (13 895 292)

Operating surplus 14 1 014 505 2 387 869

Investmentrevenue 5 839 326 5 773 105

Fairvalueadjustments - 44 879

Surplus for the year 6 853 831 8 205 853

Statement of financial performance for the year ended 28 February 2015

64

Statement of changes in net assets for the year ended 28 February 2015

Figures in Rand Accumulated surplus

Total net assets

Balance at 01 March 2012 92 263 799 92 263 799

Changes in net assetsSurplus for the year 8 205 853 8 205 853

Balance at 01 March 2013 100 469 652 100 469 652

Changes in net assetsSurplus for the year 6 853 831 6 853 831

Balance at 28 February 2014 107 323 483 107 323 483

Figures in Rand Note(s) 2015 2014

Cash flows from operating activities

ReceiptsReceipts from sheriffs and SABFS 21 897 419 21 815 544

Less cash payments to suppliers and SABFS (21 294 078) (24 551 978)

Net cash from operating activities 16 (603 341) (2 736 434)

Cash flows from investing activitiesInterest income 5 839 326 5 773 105 Movement in investment held to maturity (4 493 647) (19 138 519)Movement in financial assets 634 796 1 240 851 Net movement in investment in property - (9 127 897)Proceeds from loan from related party (7 231 379) 4 473 971 Net cash flows from investing activities (5 250 904) (16 778 489)

Net increase) in cash and cash equivalents (5 854 245) (19 514 923)

Cash and cash equivalents at the beginning of the year 30 154 164 49 669 087

Cash and cash equivalents at the end of the year 8 24 299 919 30 154 164

65

Cash flow statement for the year ended 28 February 2015

66

Figures in Rand Approved budget

Actual amounts on comparable

basis

Difference between

budget and actual

Note

Revenue

Fidelity fund certificates 400 000 385 073 (14 927) 21Interest income - Trust Accounts 12 200 000 12 341 570 141 570 21Interest income - Investments 5 300 000 5 839 326 539 326 21

Total revenue 17 900 000 18 565 969 665 969 21

Operating Expenses

Administration fees 9 300 000 9 755 002 (455 002) 21Audit fees 45 000 47 663 (2 663) 21Bank charges 10 000 6 728 3 272 21Building maintenance 75 000 - 75 000 21Claims against the Fidelity Fund 750 000 8 643 741 357 21Consulting fees 400 000 56 928 343 072 21Depreciation 208 000 202 132 5 868 21Finance charges - 13 (13) 21Insurances 1 600 000 1 238 564 361 436 21Legal fees 300 000 305 506 (5 506) 21Utilities 150 000 90 959 59 041 21

Total expenses 12 838 000 11 712 138 1 125 862 21

Net surplus 5 062 000 6 853 831 (1 791 831) 21

Statement of comparison of budget and actual amounts for the year ended 28 February 2015

67

1. Presentation of Annual Financial Statements

The annual financial statements have beenprepared in accordance with the effectiveStandards of Generally Recognised AccountingPractice (GRAP) including any interpretations,guidelines and directives issued by theAccounting Standards Board. These annualfinancial statements have been prepared on anaccrualbasisofaccountingandareinaccordancewith historical cost convention unless specifiedotherwise. They are presented in South AfricanRand.

Asummaryofthesignificantaccountingpolicies,which have been consistently applied, aredisclosedbelow.

Theseaccountingpoliciesareconsistentwiththeprevious period, except for the changes set outinNote2.

1.1 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY

In preparing the annual financial statements,management is required tomake estimates andassumptionsthataffecttheamountsrepresentedin the annual financial statements and relateddisclosures. Use of available information andthe application of judgement is inherent in theformationofestimates.Actualresultsinthefuturecould differ from these estimates which maybe material to the annual financial statements.Significantjudgementsinclude:

Trade receivablesThe entity assesses its trade receivables forimpairment at the end of each reporting period.Indeterminingwhetheranimpairmentlossshouldberecordedinsurplusordeficit,theentitymakesjudgementsastowhetherthereisobservabledataindicatingameasurabledecreaseintheestimatedfuturecashflowsfromafinancialasset.

Theimpairmentfortradereceivablesiscalculatedon a portfolio basis, based on historical lossratios,adjustedfornationalandindustryspecificeconomicconditionsandotherindicatorspresentatthereportingdatethatcorrelatewithdefaultson

Accounting Policies

theportfolio.Theseannuallossratiosareappliedtoloanbalancesintheportfolioandscaledtotheestimatedlossemergenceperiod.

Fair value estimationThe carrying value less impairment provision oftrade receivables andpayables are assumed toapproximatetheirfairvalues.

ProvisionsProvisions were raised and managementdeterminedanestimatebasedontheinformationavailable. Additional disclosures of theseestimatesofprovisionsareincludedinNote12.

Effective interest rateTheentityusedtheprimeinterestratetodiscountfuturecashflows.

Allowance for doubtful debtsOn debtors an impairment loss is recognisedin surplus and deficit when there is objectiveevidence that it is impaired. The impairmentis measured as the difference between thedebtors carrying amount and the present valueof estimated future cash flows discounted atthe effective interest rate, computed at initialrecognition.

1.2 PROPERTY, PLANT AND EQUIPMENT

Property,plantandequipmentaretangiblenon-currentassetsthatareheldforuseintheproductionorsupplyofgoodsorservices,rentaltoothers,orforadministrativepurposes,andareexpectedtobeusedduringmorethanoneperiod.

The cost of an item of property, plant andequipmentisrecognisedasanassetwhen:

• itisprobablethatfutureeconomicbenefits orservicepotentialassociatedwiththeitem willflowtotheentity;and

• thecostoftheitemcanbemeasuredreliably.

Property, plant and equipment is initiallymeasuredatcost.

The cost of an item of property, plant andequipmentisthepurchasepriceandothercosts

68

attributable to bring the asset to the locationand condition necessary for it to be capable ofoperatinginthemannerintendedbymanagement.Trade discounts and rebates are deducted inarrivingatthecost.

Where an asset is acquired at no cost, or for anominalcost,itscostisitsfairvalueasatdateofacquisition.

Costsincludecostsincurredinitiallytoacquireanitemofproperty,plantandequipmentandcostsincurredsubsequently toaddto, replacepartof,orservice it. Ifa replacementcost is recognisedin the carrying amount of an item of property,plantandequipment, thecarryingamountof thereplacedpartisderecognised.

Recognition of costs in the carrying amount ofanitemofproperty,plantandequipmentceaseswhen the item is in the location and conditionnecessaryforittobecapableofoperatinginthemannerintendedbymanagement.

Property, plant and equipment is carried at costlessaccumulateddepreciationandanyimpairmentlosses.

The useful lives of items of property, plant andequipmenthavebeenassessedasfollows:

Item Average useful lifeBuildings 50years

Theresidualvalue,theusefullifeanddepreciationmethodofeachassetarereviewedattheendofeachreportingdate.Iftheexpectationsdifferfromprevious estimates, the change is accounted forasachangeinaccountingestimate.

Each part of an item of property, plant andequipment with a cost that is significant inrelationtothetotalcostoftheitemisdepreciatedseparately.

The depreciation charge for each period isrecognisedinsurplusordeficitunlessitisincludedinthecarryingamountofanotherasset.

Items of property, plant and equipment arederecognised when the asset is disposed of orwhen there are no further economic benefits orservice potential expected from the use of theasset.

The gain or loss arising from the derecognitionof an item of property, plant and equipment is

included in surplus or deficit when the item isderecognised. The gain or loss arising fromthe derecognition of an item of property, plantand equipment is determined as the differencebetween the net disposal proceeds, if any, andthecarryingamountoftheitem.

1.3 FINANCIAL INSTRUMENTS

ClassificationTheentityclassifiesfinancialassetsandfinancialliabilitiesintothefollowingcategories:

• Financialinstrumentsatfairvalue;

• Financialinstrumentsatamortisedcosts;and

• Financialinstrumentsatcost.

Initial recognition and measurement Financialinstrumentsarerecognisedinitiallywhenthe entity becomes a party to the contractualprovisionsoftheinstruments.

The entity classifies financial instruments, ortheir component parts, on initial recognition asafinancialasset,afinancial liabilityoranequityinstrument inaccordancewith thesubstanceofthecontractualarrangement.

Financial instruments are measured initially atfair value, except for equity investments forwhichafairvalueisnotdeterminable,whicharemeasuredatcostandareclassifiedasavailableforsalefinancialassets.

For financial instruments which are not at fairvaluethroughsurplusordeficit,transactioncostsare included in the initial measurement of theinstrument.

Subsequent measurementLoansandreceivablesaresubsequentlymeasuredat amortised cost, using the effective interestmethod,lessaccumulatedimpairmentlosses.

Financial liabilities at amortised cost aresubsequentlymeasuredatamortisedcost,usingtheeffectiveinterestmethod.

Impairment of financial assetsAt each end of the reporting period the entityassessesallfinancialassets,otherthanthoseatfairvaluethroughsurplusordeficit,todeterminewhether there is objective evidence that afinancial asset or group of financial assets hasbeenimpaired.

Accounting Policies continued

69

Foramountsduetotheentity,significantfinancialdifficultiesofthedebtor,probabilitythatthedebtorwillenterbankruptcyanddefaultofpaymentsareallconsideredindicatorsofimpairment.

Wherefinancialassetsare impaired throughuseofanallowanceaccount,theamountofthe lossisrecognisedinsurplusordeficitwithinoperatingexpenses.Whensuchassetsarewrittenoff, thewrite off ismadeagainst the relevant allowanceaccount. Subsequent recoveries of amountspreviously written off are credited againstoperatingexpenses.

Trade and other receivablesTrade receivables are measured at initialrecognition at fair value, and are subsequentlymeasured at amortised cost using the effectiveinterestratemethod.

Appropriate allowances for estimatedirrecoverableamountsarerecognisedinsurplusordeficitwhenthereisobjectiveevidencethattheassetisimpaired.Significantfinancialdifficultiesof the debtor, probability that the debtor willenterbankruptcyorfinancialreorganisation,anddefault or delinquency in payments (more than30daysoverdue)areconsideredindicatorsthatthetradereceivableisimpaired.

The allowance recognised is measured as thedifference between the asset’s carrying amountand the present value of estimated future cashflows discounted at the effective interest ratecomputedatinitialrecognition.

The carrying amount of the asset is reducedthroughtheuseofanallowanceaccount,andtheamountof thedeficit is recognised insurplusordeficitwithin operating expenses.When a tradereceivableisuncollectible,itiswrittenoffagainstthe allowance account for trade receivables.Subsequent recoveries of amounts previouslywrittenoffarecreditedagainstoperatingexpensesinsurplusordeficit.

Tradeandotherreceivablesareclassifiedasloansandreceivables.

Trade and other payablesTradepayablesareinitiallymeasuredatfairvalue,and are subsequently measured at amortisedcost,usingtheeffectiveinterestratemethod.

Cash and cash equivalentsCash and cash equivalents comprise cash onhand and demand deposits and other shortterm highly liquid investments that are readilyconvertible toaknownamountofcashandaresubject to an insignificant risk of changes invalue.Theseareinitiallyrecordedatfairvalueandsubsequentlyrecordedatamortisedcost.

1.4 PROVISIONS AND CONTINGENCIESProvisionsarerecognisedwhen:

• theentityhasapresentobligationasaresult ofapastevent;

• itisprobablethatanoutflowofresources embodyingeconomicbenefitsorservice potentialwillberequiredtosettlethe obligation;and

• areliableestimatecanbemadeofthe obligation.

Theamountofaprovisionisthebestestimateoftheexpenditureexpectedtoberequiredtosettlethepresentobligationatthereportingdate.

Wheresomeoralloftheexpenditurerequiredtosettleaprovisionisexpectedtobereimbursedbyanother party, the reimbursement is recognisedwhen, and only when, it is virtually certain thatreimbursementwillbereceivediftheentitysettlesthe obligation. The reimbursement is treated asaseparateasset.Theamountrecognisedforthereimbursement does not exceed the amount oftheprovision.

Provisionsarenotrecognisedforfutureoperatingdeficits.

Contingent assets and contingent liabilities arenot recognised. Contingencies are disclosed inNote23.

1.5 REVENUE FROM EXCHANGE TRANSACTIONS

Revenueisthegrossinflowofeconomicbenefitsorservicepotentialduringthereportingperiodwhenthose inflows result in an increase in net assets,otherthanincreasesrelatingtocontributionsfromowners.

An exchange transaction is one in which theentityreceivesassetsorservices,orhasliabilitiesextinguished, and directly gives approximately

70

equalvalue(primarilyintheformofgoods,servicesoruseofassets)totheotherpartyinexchange.

Fairvalueistheamountforwhichanassetcouldbe exchanged, or a liability settled, betweenknowledgeable,willingparties inanarm’s lengthtransaction. An exchange transaction will berecognised as and when the Fund receives adeclarationfromthesheriffs.

MeasurementRevenue is measured at the fair value of theconsiderationreceivedorreceivable,netoftradediscountsandvolumerebates.

Sale of goodsRevenue from the sale of goods is recognisedwhen all the following conditions have beensatisfied:

• theentityhastransferredtothepurchaserthe significantrisksandrewardsofownershipof thegoods;

• theentityretainsneithercontinuingmanagerial involvementtothedegreeusuallyassociated withownershipnoreffectivecontroloverthe goodssold;

• theamountofrevenuecanbemeasured reliably;

• itisprobablethattheeconomicbenefitsor servicepotentialassociatedwiththetransaction willflowtotheentity;and

• thecostsincurredortobeincurredinrespect ofthetransactioncanbemeasuredreliably.

Rendering of services

Whentheoutcomeofa transaction involvingtherendering of services can be estimated reliably,revenue associated with the transaction isrecognisedbyreferencetothestageofcompletionof the transaction at the reporting date. Theoutcomeofatransactioncanbeestimatedreliablywhenallthefollowingconditionsaresatisfied:

• theamountofrevenuecanbemeasured reliably;

• itisprobablethattheeconomicbenefitsor servicepotentialassociatedwiththe transactionwillflowtotheentity;

• thestageofcompletionofthetransactionat thereportingdatecanbemeasuredreliably; and

• thecostsincurredforthetransactionand

thecoststocompletethetransactioncanbe measuredreliably.

InterestRevenuearisingfromtheusebyothersofentityassetsyieldinginterest,royaltiesanddividendsisrecognisedwhen:

• Itisprobablethattheeconomicbenefitsor servicepotentialassociatedwiththe transactionwillflowtotheentityand;

• Theamountoftherevenuecanbemeasured reliably.

Interestisrecognised,insurplusordeficit,usingthe effective interest rate method. Interest asrevenue will be recognised when a declarationisreceivedfromasheriffalongwithanauditor’sreport.

Investment income will be recognised as andwhentheFundbecomesentitledtotheincome.Fidelityfundapplicationswillberecognisedwhenthecertificateisissued.

1.6 REVENUE FROM NON-EXCHANGE TRANSACTIONS

Revenue comprises gross inflows of economicbenefits or service potential received andreceivable by an entity, which represents anincrease in net assets, other than increasesrelatingtocontributionsfromowners.

Conditionsontransferredassetsarestipulationsthatspecifythatthefutureeconomicbenefitsorservicepotentialembodiedintheassetisrequiredtobeconsumedbytherecipientasspecifiedorfuture economic benefits or service potentialmustbereturnedtothetransferor.

Controlofanassetariseswhentheentitycanuseorotherwisebenefitfromtheassetinpursuitofitsobjectivesandcanexcludeorotherwiseregulatetheaccessofotherstothatbenefit.

Non-exchange transactions are transactionsthat are not exchange transactions. In a non-exchange transaction, an entity either receivesvalue fromanother entitywithout directly givingapproximatelyequalvalue inexchange,orgivesvalue toanotherentitywithoutdirectly receivingapproximatelyequalvalueinexchange.

Restrictionsontransferredassetsarestipulations

Accounting Policies continued

71

that limit or direct the purposes for which atransferredassetmaybeused,butdonotspecifythatfutureeconomicbenefitsorservicepotentialis requiredtobereturnedtothetransferor ifnotdeployedasspecified.

Stipulations on transferred assets are terms inlaws or regulations, or a binding arrangement,imposedupon theuseofa transferredassetbyentitiesexternaltothereportingentity.

RecognitionAn inflow of resources from a non-exchangetransactionrecognisedasanassetisrecognisedasrevenue,excepttotheextentthataliabilityisalsorecognisedinrespectofthesameinflow.

As the entity satisfies a present obligationrecognised as a liability in respect of an inflowof resources from a non-exchange transactionrecognised as an asset, it reduces the carryingamountoftheliabilityrecognisedandrecognisesanamountofrevenueequaltothatreduction.

MeasurementRevenue from a non-exchange transaction ismeasured at the amount of the increase in netassetsrecognisedbytheentity.

When,asaresultofanon-exchangetransaction,theentityrecognisesanasset,italsorecognisesrevenue equivalent to the amount of theasset measured at its fair value as at the dateof acquisition, unless it is also required torecognise a liability.Where a liability is requiredtoberecogniseditwillbemeasuredasthebestestimate of the amount required to settle theobligationat the reportingdate,and theamountoftheincreaseinnetassets,ifany,recognisedasrevenue.Whenaliabilityissubsequentlyreduced,becausethetaxableeventoccursoraconditionis satisfied, the amount of the reduction in theliabilityisrecognisedasrevenue.

1.7 COMPARATIVE FIGURESWherenecessary,comparativefigureshavebeenreclassifiedtoconformtochangesinpresentationinthecurrentyear.

1.8 BUDGET INFORMATION

The entity is typically subject to budgetarylimits in the form of appropriations or budgetauthorisations(orequivalent),whichisgiveneffect

through authorising legislation, appropriation orsimilar.

Generalpurposefinancialreportingbyentityshallprovide information on whether resources wereobtainedandusedinaccordancewiththelegallyadoptedbudget.

Theannualfinancialstatementsandthebudgetareonthesamebasisofaccounting.Areconciliationbetween the statement of financial performanceandthebudgethavebeenincludedintheannualfinancialstatements.RefertoNote21.

2. Changes in accounting policyThe annual financial statements have beenprepared in accordance with Standards ofGenerallyRecognisedAccountingPracticeonabasisconsistentwiththeprioryear.

3. New standards and interpretations3.1 STANDARDS AND INTERPRETATIONS ISSUED, BUT NOT YET EFFECTIVE

Theentityhasnotappliedthefollowingstandardsand interpretations, which have been publishedand are mandatory for the entity’s accountingperiodsbeginningonorafter01April2013orlaterperiods:

GRAP 20: Related PartiesThe objective of this standard is to ensure thata reporting entity’s financial statements containthe disclosures necessary to draw attentionto the possibility that its financial position andsurplusordeficitmayhavebeenaffectedbytheexistenceof relatedparties andby transactionsandoutstandingbalanceswithsuchparties.

An entity that prepares and presents financialstatementsundertheaccrualbasisofaccounting(inthisstandardreferredtoasthereportingentity)shallapplythisstandardin:

• identifyingrelatedpartyrelationshipsand transactions;

• identifyingoutstandingbalances,including commitments,betweenanentityanditsrelated parties;

72

• identifyingthecircumstancesinwhichdisclosure oftheitemsin(a)and(b)isrequired;and

• determiningthedisclosurestobemadeabout thoseitems.

This standard requires disclosure of relatedparty relationships, transactionsandoutstandingbalances, including commitments, in theconsolidated and separate financial statementsof the reporting entity in accordance with theStandardofGRAPonConsolidatedandSeparateFinancial Statements. This standard also appliestoindividualfinancialstatements.

Disclosure of related party transactions,outstanding balances, including commitments,and relationshipswith related partiesmay affectusers’ assessments of the financial position andperformanceofthereportingentityanditsabilitytodeliveragreedservices,includingassessmentsoftherisksandopportunitiesfacingtheentity.Thisdisclosurealsoensuresthatthereportingentityistransparentaboutitsdealingswithrelatedparties.Thestandardstatesthatarelatedpartyisapersonor an entity with the ability to control or jointlycontrol the other party, or exercise significantinfluenceovertheotherparty,orviceversa,oranentity that issubject tocommoncontrol,or jointcontrol.Asaminimum,thefollowingareregardedasrelatedpartiesofthereportingentity:

• Apersonoraclosememberofthatperson’s familyisrelatedtothereportingentityifthat person;

• hascontrolorjointcontroloverthereporting entity;

• hassignificantinfluenceoverthereporting entity;and

• isamemberofthemanagementoftheentity oritscontrollingentity.

Anentityisrelatedtothereportingentityifanyofthefollowingconditionsapply:

• theentityisamemberofthesameeconomic entity(whichmeansthateachcontrolling entity,controlledentityandfellowcontrolled entityisrelatedtotheothers);

• oneentityisanassociateorjointventureof theotherentity(oranassociateorjointventure ofamemberofaneconomicentityofwhich theotherentityisamember);

• bothentitiesarejointventuresofthesame thirdparty;

• oneentityisajointventureofathirdentityand theotherentityisanassociateofthethird entity;

• theentityisapost-employmentbenefitplan forthebenefitofemployeesofeithertheentity oranentityrelatedtotheentity.Ifthereporting entityisitselfsuchaplan,thesponsoring employersarerelatedtotheentity;

• theentityiscontrolledorjointlycontrolledby apersonidentifiedin(a);and

• apersonidentifiedin(a)(i)hassignificant influenceoverthatentityorisamemberof themanagementofthatentity(orits controllingentity).

The standard furthermore states that a relatedparty transaction is a transfer of resources,services or obligations between the reportingentityandarelatedparty,regardlessofwhetherapriceischarged.

The standard elaborates on the definitions andidentificationof:

• Closememberofthefamilyofaperson;

• Management;

• Relatedparties;

• Remuneration;and

• Significantinfluence.

Thestandardsetsouttherequirements,interalia,forthedisclosureof:

• Control;

• Relatedpartytransactions;and

• Remunerationofmanagement.

The effective date of the standard is for yearsbeginningonorafter01April2013.

An entity shall apply Standards of GRAP forannual financial statements covering periodsbeginning on or after a date to be determinedby theMinister of Finance in a regulation to bepublished in accordancewithSection91(l)(b) ofthePFMA.

Accounting Policies continued

73

4. Property, plant and equipment

Figures in Rand 2015 2014

Cost Accumulated Depreciation

Carrying value

Cost Accumulated Depreciation

Carrying value

Investment in Building 12 127 897 (309 509) 11 818 388 12 127 897 (107 377) 12 020 520

Reconciliation of property, plant and equipment 2015

Opening Balance

Additions Disposals Depreciation

Charge

Accumulated Depreciation on disposals

Closing Balance

Investment in Building 12 020 520 - - (202 132) - 11 818 388

Reconciliation of property, plant and equipment 2014

Opening Balance

Additions Disposals Depreciation Charge

Accumulated Depreciation on disposals

Closing Balance

Investment in Building 3 475 129 12 127 897 (3 825 831) (183 893) 427 218 12 020 520

Notes to the annual financial statements

Details of property 2015 2014

The property is situated at 88 Loop Street, Cape Town.

The property is situated at 88 Loop Street Cape Town

-Purchase price: 13 370 326 13 370 326 -South African Board for Sheriffs (1 242 429) (1 242 429)

12 127 897 12 127 897

TheInvestmentinBuildingrepresent10%ofthevalueoftheFidelityFundsassetsatthedateofpurchaseofthebuildingat88LoopStreet,CapeTownatthe31stJuly2013.

74

Notes to the annual financial statements

Figures in Rand 2015 2014

5. Other financial assets

At amortised cost

Liberty Life - 634 796

Cash and cash equivalents - 634 796

Theinsurancepoliciesrelatetolifepoliciestakenoutbytheentityonformerboardmembers. Theinsurancepolicieshavebeenmeasuredatsurrendervalue.TheBoardhasmadeadecisiontosurrenderthepolicyandthepolicywaspaidoutonthe19thMarch2014.

6. Financial assets by category

The accounting policies for financial instruments have been applied to the line items below:

Loans and receivables

Trade and other receivables 102 669 323 807 Investments held to maturity 79 245 642 74 751 995 Cash and cash equivalents 24 299 919 30 154 164

103 648 230 105 229 966

7. Trade and other receivables

Trade receivables 161 820 187 532 Provision for bad debts (78 318) (78 318)Accrued income 19 167 214 593

102 669 323 807

The ageing of trade and other receivables at the reporting date

The ageing of accounts receivables are as follows:

30 days 59 603 - 90 days plus 43 066 323 807

102 669 323 807

8. Cash and cash equivalents

Cash and cash equivalents consist of:Bank balances 24 299 919 30 154 164

Investments held to maturity 79 245 642 74 751 995

75

Figures in Rand 2015 2014

9. Payable to related partySouthAfricanBoardforSheriffs–owedamount 1 886 966 9 118 345

Theamountisunsecured,interestfreeandhasnofixedtermsofrepayment.

10. Trade and other payablesAccruedexpenses - 1 559 867

Incomereceivedinadvance - - Sundrycreditors 78 798 132 997 Trustliabilities 3 690 973 3 229 713 SARS-VAT 229 971 827 621

3 999 742 5 750 198

11. Financial liabilities by category

The accounting policies for financial instruments have been applied to the line items below:

Financial liabilities by category

Tradeandotherpayables 78 798 1 692 864

12. Provisions

Provisionforuninsuredclaims 2 256 427 2 547 087

13. Revenue

Rentalreceived - -

Fidelityfundcertificates 385 073 374 095 Interestonsheriffstrustaccounts 12 341 570 13 397 129 Proceedsfrominsuranceclaims - 2 491 428

12 726 643 16 262 652

The amounts included in revenue arising from exchange of goods or service are as follows:

Rentalreceived - - Fidelityfundcertificates 385 073 374 095

385 073 374 095

The amounts included in revenue arising from non-exchange transactions are as follows:

Interestonsheriffstrustaccounts 12 341 570 13 397 129

14. Operating surplusOperatingsurplusfortheyearisstatedafteraccountingforthefollowing:

Depreciationonproperty,plantandequipment 202 132 183 893 Auditor’sremuneration 47 663 48 000 Dividendincome - 20 509 Fairvalueadjustments - 44 879 LossonsaleofAassets - 398 614

15. TaxationNoprovisionhasbeenmadefor2015taxationasthereceiptsandaccrualstotheentityareexemptfromincometaxintermsofSection10(1)cA)(i)oftheIncomeTaxAct.

Notes to the annual financial statements

76

Notes to the annual financial statements

Figures in Rand 2015 2014

16. Cash generated from operationsSurplus before taxation 6 853 831 8 205 853 Adjustments for:Depreciation 202 132 183 893 Dividend income - (20 509)Fair value adjustments - (44 879)Interest income (5 839 326) (5 773 105)Loss on sale of assets - 398 614 Changes in working capital:Trade and other receivables 221 138 306 527 Provisions (290 660) (3 509 471)Trade and other payables (1 750 456) (2 483 356)

(603 341) (2 736 434)

17. Related PartiesRelationshipsCommon board members South African Board for Sheriffs

The Sheriffs board was established under the Sheriff’s act and the Fidelity fund is managed by the board on behalf of the Minister of Justice. The Board enters into various transactions, on arm’s length with Fidelity Fund. The Board and the Fund had common board members for the year.

Related party balances

Payable amount – Owing to related party

South African Board for Sheriffs 1 886 966 9 118 345

Related party transactions

Administration fees charged by related party

South African Board for Sheriffs 9 755 002 10 000 259

The Sheriffs Board was established under the Sheriff’s Act and the Fidelity Fund is managed by the Board on behalf of the Minister of Justice. The Board enters into various transactions, on arm’s length with the Fidelity Fund. The Board and the Fund had common board members for the year.

18. Risk management

Financial risk management Theentity’sactivitiesexposeittoavarietyoffinancialrisks:liquidityrisk,interestrateriskandcreditrisk.

Liquidity risk Theentity’srisktoliquidityisaresultofthefundsavailabletocoverfuturecommitments.Theentitymanagesliquidityriskthroughanon-goingreviewoffuturecommitmentsandcreditfacilities. Cashismanagedprudentlybykeepingsufficientcashinbankaccounts.CashisreceivedfromsheriffsandtheFidelityFund.

Interest rate risk TheBoardhasinterest-bearingassetsandtheincomeandoperatingcashflowsaresubstantiallydependentonthechangesinthemarketinterestrates.Theinterest-bearingassetsconsistofshortterminvestmentswithfloatinginterestratethatexposetheBoardtocashflowinterestraterisks.Theinterestrateusedisbasedontheprimerate.

Credit risk Creditriskconsistsmainlyofcashdeposits,cashequivalentsandtradedebtors.Theentityonlydepositscashwithmajorbankswithhighqualitycreditstandingandlimitsexposuretoanyonecounter-party.

77

Notes to the annual financial statements

Figures in Rand 2015 2014

19. Events after the reporting dateTheBoardisnotawareofanymattersorcircumstancesarisingsincetheendofthefinancialyearwhichsignificantlyaffectthefinancialpositionoftheBoardortheresultofoperations. 20. Public Finance Management Act TheFidelityFundforSheriffshasappliedtotheNationalTreasuryforlistinginthePublicFinanceManagementActschedulesasrequiredbyS47(2)ofthePFMA.TheentityhasthereforenotbeenauditedagainsttherequirementsofthePFMA,astheapplicationisstillunderconsiderationbyNationalTreasury.TheentityhasthereforemaintaineditsfinancialyearforthisreportingperiodastheendofFebruaryintermsoftheSheriffsAct. 21. Explanation of variances between Actual and Budget Revenue TheoverrecoveryofrevenuebyR665,969representing3.72%isattributedtothefollowing:

Sale of goods Theunderrecoveryof3.73%onthislineitemisdirectlyrelatedtothenumberofsheriffanddeputysheriffappointmentsfortheyearunderreview.Newlyappointedsheriffsonlyappointedtheirdeputiesinthenewfinancialyear.

Interest received on trust accounts Theoverrecoveryof1.16%ofthislineitemisdirectlylinkedtothefactthattheBoardismoreactivelyensuringthatcorrectandcompetedinformationissubmittedbythesheriffs.

Interest receive on investments Theoverrecoveryof10.18%onthislineitemisadirectresultofthenewinvestmentstrategyimplementedbytheBoardduringthepreviousfinancialyear. Operating expenses TotalexpensesisunderbudgetbyR1,125,862representinga8.77%underrecoverywhichisattributedtothefollowing:

Administrative fees Theoverrecoveryof4.89%onthislineitemisduetotheincreaseingrowthintheFidelityFundduetotheincreasedamountreceivedforinterestontrustaccounts.

Audit fees Theoverrecoveryof5.92%onauditfeesisduetheVATrulingandthereductionintheinputVATthatcanbeclaimed.

Bank charges TheunderrecoveryonthislineitemisduetolesstransactionsontheFidelityFundbankaccounts.

Building maintenance AllbuildingexpenditurewascoveredbySABFS.

Claims against the Fidelity Fund Theoverrecoveryofclaimsof98.85%isdirectlyrelatedtoclaimsnotyetfinaliseandwhicharestillunderinvestigationbytheFidelityFund.

Consulting fees Theoverrecoveryof85.77%onthislineitemisrelatedtothefactthatnospecialprojectswereundertaken.

Depreciation Theoverrecoveryof2.82%isduetodepreciationbudgetbeingbasedonahigheramountforthebuilding.

Insurance Theunderrecoveryof22.59%inthislineitemisduetothezeropercentincreaseintheinsurancepremiumfortheyearunderreview.

Legal fees Theoverrecoveryof1.84%inlegalfeesisduetolegalfeesforanoldmatterbeingpaidduringthecurrentfinancialyear.

Utilities Thisunderrecoveryof39.36%wasduetotherevisedbudgetbeingsetbeforetheamountdueonthenewbuildingwasavailable.

78

Notes to the annual financial statements

Figures in Rand 2015 2014

22. Claims against the Fidelity Fund

Amountexpensedinthecurrentyear 8 643 525 928

Amountexpensedinpreviousfinancialyears 1 850 527 5 872 964

Totalclaimspaidfortheyear 1 859 170 6 398 892

23. VAT Ruling impact

ValueAddedTaxation(VAT)

Surplusasperincomestatement 6 853 831 8 205 853

VATapportionmentadjustment 257 478 -

Surplusfortheyear 7 111 309 8 205 853

TheSouthAfricanBoardforSheriffshassubmittedaTaxRulingapplicationtoSouthAfricanRevenueServices(SARS).ThisapplicationwastoclearthepositionoftheSABFSandtheFidelityFund.ItwasclearfromdiscussionsandthesubmissionthatthetwobodiesareoneandnoVATischargeablebytheSABFStotheFidelityFundontheadministrativefeescharged.TheSABFSwillhowever,infuturehavetoapplyonlyaportionoftheVATpercentagetoitsexpenses.Thisrulingwasissuedonthe29thJanuary2015andwasappliedfromthe2011financialyeartothecurrentfinancialyear,whichcausedtheamounttobewrittenbackoninputVATpreviouslyclaimedtobetreatedasanexpenseinthecurrentfinancialyear.TheeffectofthisrulingontheFidelityFundwasareductioninthesurplusforthecurrentyearofR257,478.

24. Contingencies

Litigation

Asat28thFebruary2015,claimsamountingtoR7,227,090(2014:R7,084,200)areunderlitigationagainsttheFidelityFund,inrespectofcertainsheriffs,withapossiblelossamountingtoR4,048,898(2014:R3,197,000)theoutcomeofwhichwasuncertainatthedateofissuingthesefinancialstatements.ShouldtheactionbesuccessfultheFidelityFunddoeshaveinsurancecovertocoverlitigationcostsandclaimsforanamountofR3million.

79

Detailed statement of financial performance for the year ended 28 February 2015

Figures in Rand Note(s) 2015 2014

Revenue

Fidelity fund certificates 385 073 374 095 Interest on sheriffs trust accounts 12 341 570 13 397 129

Operating income 12 726 643 13 771 224

Other incomeInterest income 5 839 326 5 773 105 Proceeds from insurance claims - 2 491 428 Dividend income - 20 509 Fair value adjustments - 44 879

5 839 326 8 329 921

Total Revenue 18 565 969 22 101 145

Operating expensesAdministration fees 9 755 002 10 000 259 Audit fees 47 663 48 000 Bad debts - 78 318 Bank charges 6 728 72 259 Claims against the Fidelity Fund 22 8 643 525 928 Consulting fees 56 928 751 055 Depreciation 202 132 183 893 Finance charges 13 9 Insurance 1 238 564 919 058 Legal fees 305 506 700 308 Levies - 109 965 Loss on sale of assets - 398 614 Utilities 90 959 107 626

11 712 138 13 895 292

Surplus for the year 6 853 831 8 205 853

Notes

Notes

Notes

SOUTH AFRICAN BOARD FOR SHERIFFS

88 LOOP STREET, CAPE TOWN 8001 T: 021 426 0577, F: 021 426 2598 E: contact@sheriffs.org.za

2015