The Guardian’s Fund annual report...2 The Guardians Fund 201516 Contents Report of the accounting...

The Guardian’s Fund

annual report

2015/2016

The Guardian’s Fund • Annual Report 2015/16 Financial Year 2

ContentsReport of the accounting officer on the activities of the Guardian’s Fund 4for the year ended 31 March 2016

Report of the audit committee 9 Report of the auditor general to Parliament 12 Statement of financial performance for the year ended 31 March 2016 15 Statement of financial position as at 31 March 2016 15 Statement of changes in net assets for the year ended 31 March 2016 16

Cash flow statement for the year ended 31 March 2016 16

Accounting policies 17

Notes to the financial statements for the year ended 31 March 2016 20

Risk management statement 41


Report of the Accounting Officer


REPORT OF THE ACCOUNTING OFFICER ON THE ACTIVITIES OF THE GUARDIAN’S FUND FOR THE YEAR ENDED 31 MARCH 2016

Introduction

The Guardian’s Fund (GF) is a statutory trust established in terms of Chapter V of the Administration of Estates Act, 1965 (Act 66 of 1965). The GF consists of all monies received by the Master of the High Court under the Administration of Estates Act, or any other law or pursuant to an order of court, or any money accepted by the Master in trust for any known or unknown person. Whenever any money is received or accepted by the Master, he or she must open an account in the books of the GF in the name of the person to whom the money belongs, or in the name of the estate of which the money forms part. The Master must, on application of any person who has become entitled to receive money from the Fund, pay that money to the applicant.

The purpose of the GF is therefore to protect and manage monies of persons deemed to be legally incapable or lacking the capacity to manage their own affairs as well as undetermined, unknown or absent heirs and untraceable persons.

The GF is held under management of the Masters of the High Courts of South Africa.

Some of the functions of the GF performed with the prescripts of the said Act, inter alia, are to -

�� Invest trust monies held with the Public Investment Corporation (PIC);

�� Calculate interest accruing in respect of monies received on behalf of beneficiaries at the interest rate as determined by the Minister for Justice and Constitutional Development annually; and

�� Process inheritance applications and make the payments to persons entitled thereto.

Core Service Delivery Environment

The GF has representation in 6 Masters’ offices, namely:

Pretoria, Cape Town, Pietermaritzburg, Grahamstown, Bloemfontein and Kimberley.

An additional 79 points of service throughout the country were established to assist with the GF customer interaction and making services available, thereby relieving the financial burden on vulnerable beneficiaries having to travel long distances to the Masters Offices to submit their applications.

The GF has a strategic objective to process completed applications and make payment to beneficiaries within 40 days. The GF is pleased to report that the Target of 90% for the 2015/16 year was successfully achieved, as 93% of beneficiaries were paid out within the 40 days.


Coupled with this, all GF Offices are utilising the ABSA Bi-Online Electronic payment system and have achieved 99% EFT payment transactions for the 2015/16 financial year, which enhances the turnaround time in payment of benefits.

The GF currently operates 3 electronic stand-alone systems: Guardians Fund System (Administrative); ABSA EFT System (Payment) and Great Plains System (Accounting). With the growth of the Fund, it is necessary for the GF to evolve to a single, fully integrated financial system.

During the 2015/16 year, the GF had engagements with various parties in relation to financial systems, so as to improve alignment with the Government Pension Administration Agency.

Coupled with this, the Third Party Funds piloted a new SAP based Financial system which the GF will evaluate and assess functionality for adaptation for the GF environment and business rules. It is envisaged that in the 2016/17 year, the GF system modernisation strategy will be approved and implementation phases will commence.

Growth of Beneficiary Liability

As has been disclosed in more detail in the financials on pages 15 to 42, it is illustrated below that the Fund continues to show positive growth in the volume of transactions handled, as well as in the total funds under management.

Guardian’s Fund Beneficiary Receipts and Payments

1, 600

1,400

1,200

1,000

800

600

400

200

0

2011/12 2012/13 2013/14 2014/15 2015/16

Beneficiary Receipts 1,422 1,306 1,342 1,318 1,486

Beneficiary Payments 872 1,018 1,130 1,105 1,352

-13%

Rand Millions

14%12%

-2%

-2%

13%

22%5%


12,000

10,000

8,000

6,000

4,000

2,000

0

2011/12 2012/13 2013/14 2014/15 2015/16

Beneficiary Liability 7,253 7,976 8,589 9,365 10,106

Total Assets 7, 872 8,659 9,360 10,202 11,063

Rand Millions

8%8%

9%8%

8%9%

10%

12/03/31 13/03/31 14/03/31 15/03/31 16/03/31

10%

Guardian’s Fund - Transaction volumes (receipt and payments)

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

2011/12 2012/13 2013/14 2014/15 2015/16

Receipts transactions 24,422 25,883 18,312 17,824 22,054

Payments transactions 56,191 55,688 60,675 56,924 58,531

6%

-1%

-29%

-6%

-3%24%

3%9%

Guardian’s Fund- Total assets vs beneficary liabilities


Fraud Prevention and Detection

The GF has a Fraud Prevention Strategy, as well as a fully functional and capacitated Forensic Directorate, to ensure that all fraud and loss matters, as well as potential maladministration, is addressed pro-actively.

The GF also has a relationship with Law Enforcement agencies, and at times will engage them on matters should it be necessary, as was done in 2012/13 when the Special Investigations Unit was appointed to investigate loss of funds and the management of the Guardian’s Fund in Pretoria and Pietermaritzburg offices.

The GF also performs a risk assessment annually to identify and address any emerging risk areas in order to ensure the integrity and safety of the beneficiary funds within the GF.

Investment Management

The Office of the Chief Financial Officer, with assistance from the Office of the Chief Master, is responsible for formulation and supervision of the mandate given to the Investment Manager (the Public Investment Corporation).

With a balance sheet of R11 billion (and growing) in investable assets, the stewardship of GF assets is a challenging and complex endeavour. I would like to take this opportunity to extend my sincere gratitude to our expert investment advisors and also to colleagues at National Treasury who have ensured that the Department is able to discharge its obligations and match the expectations and the safeguarding of the GF assets and the growing of investments.

The GF is pleased to report that, in the 2015/16 year, the Fund generated more than R737 million in investment income and was able to pass an additional 50 basis points (above market interest rate) to the beneficiaries.

The rate of interest was 7.30% per annum for the financial year under review.

Acknowledgement

My appreciation towards the loyal support and valuable contributions of the various stakeholders is hereby acknowledged.

Approval

The annual financial statements as set out pages 15 to 42 have been approved by the Accounting Officer.

___________________

Mr V. MadonselaAccounting OfficerDepartment of Justice and Constitutional DevelopmentDate: 29 July 2016


Report of the Audit Committee


REPORT OF THE AUDIT COMMITTEE ON GUARDIAN’S FUND

1. REPORT OF THE AUDIT COMMITTEE

We are pleased to present our final report for the financial year ended 31 March 2016.

1.1 AUDIT COMMITTEE MEMBERS AND ATTENDANCE

The Audit Committee consists of the members listed below and is required to meet at least four times per annum as per its approved terms of reference. During the current year 4 meetings and 2 special meetings were held as indicated below.

Name of members Numbers of meetings attended

Number of special meetings attended

Status

Mr. Motsamai Karedi (Chairperson)

4 2 Reappointed- 25 November 2015

Mr. Cedric Boltman 4 2 Reappointed- 25 November 2015

Ms. Besky Ngunjiri 4 1 Reappointed - March 2015

Mr. Wilson Ramabulana 4 2 Reappointed- 25 November 2015

Mr Andy Sello 4 2 Reappointed- 25 November 2015

1.2 AUDIT COMMITTEE RESPONSIBILITY

We report that we have complied with its responsibilities arising from Section 38 (1) (a) (ii) of the Public Finance Management Act and Treasury Regulation 3.1.13. The Audit Committee also reports that it has adopted appropriate formal terms of reference on its Audit Committee Charter. The charter has regulated its affairs and the Audit Committee has discharged all its responsibilities as contained therein.

1.3 THE EFFECTIVENESS OF INTERNAL CONTROL

The Audit Committee is satisfied that key controls remained in place throughout the year under review and where shortcomings in the internal controls were identified; management has addressed them through implementation of audit action plans. Internal Audit validated the audit action plans and the Audit Committee reviewed same to ensure effective implementation by management.

10 The Guardian’s Fund • Annual Report 2015/16 Financial Year

There has also been an improvement in the risk maturity level within the Department and that had contributed to the effectiveness of controls.

1.4 INTERNAL AUDIT

The Department of Justice and Constitutional Development’s Internal Audit Unit is also responsible for the auditing of Guardian’s Fund.

The Internal Audit unit has discharged its responsibilities as per the internal audit charter and plans.

1.5 AUDITOR-GENERAL SOUTH AFRICA

The Audit committee accepts and concurs with the unqualified audit opinion of the AGSA on Guardian’s Fund for the year ended 31 March 2016.

1.6 REPORTS

1.6.1 The quality of in-year management and monthly/quarterly reports submitted in terms of the PFMA

The Audit committee has reviewed the monthly and quarterly reports and where concerns were raised, management acted on them and the Audit Committee monitored progress throughout the year.

1.6.1 Evaluation of financial statements

We have reviewed and discussed the audited annual financial statements with management and also reviewed the Department’s compliance with legal and regulatory provisions. We have also reviewed the Auditor-General South Africa’s report, management letter and management’s responses to it and the Audit Committee is satisfied with the contents thereof.

_________________

M KarediChairperson of the Audit CommitteeDate: 29 July 2016


Report of the Auditor-General to Parliament


Report of the Auditor-General to Parliament on Guardian’s Fund

Report on the financial statements

Introduction

1. I have audited the financial statements of the Guardian’s fund set out on pages 15 to 42 which comprise statement of financial position as at 31 March 2016, the statement of financial performance, statement of changes in net assets, and cash flow statement for the year then ended, as well as the notes, comprising a summary of significant accounting policies and other explanatory information.

Accounting Officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP), and for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor-general’s responsibility

3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards on Auditing. Those standards require that I comply with ethical requirements, and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of ma-terial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effective-ness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Guardian’s fund as at 31 March 2016 and its financial performance and cash flows for the year ended, in accordance with South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP).


Report on other legal and regulatory requirements

7. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) and the general notice issued in terms thereof, I have a responsibility to report findings on compliance with legislation and internal control. The objec-tive of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these matters.

Predetermined objectives

8. I did not audit performance against predetermined objectives, as the Fund is not required to prepare a report on its performance against predetermined objectives. The Fund does not fall within the ambit of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and is not subject to entity-specific legislation that requires reporting on performance against predetermined objectives.

Compliance with legislation

9. I performed procedures to obtain evidence that the Guardian’s Fund had complied with applicable legislation re-garding financial matters, financial management and other related matters. I did not identify any instances of mate-rial non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA.

Internal control

10. I considered internal control relevant to my audit of the financial statements, and compliance with legislation. I did not identify any significant deficiencies in internal control.

Auditor-General Pretoria29 July 2016


Financial Statements

15The Guardian’s Fund • Annual Report 2015/16 Financial Year

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2016

Notes 2016 2015

R R

Revenue Investment revenue 3 737 137 008 641 996 674

Less: Expenditure

Management fees 11 3 003 967 2 730 734

Losses: Financial Instruments 16 6 889 066

Surplus/(deficit) for the year before distribution to beneficiaries

734 133 041 632 376 874

Distribution to beneficiaries - Interest paid on beneficiary monies

4 613 066 875 566 430 525

Surplus/(deficit) for the year 121 066 166 65 946 349

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2016

Notes 2016 2015

R R

ASSETS

11 062 971 776 10 200 130 246

Other receivables 7 390 231 255 527

Financial instruments 5 10 626 438 574 9 903 520 852

Cash and cash equivalents 6 436 142 971 296 353 866

Total assets 11 062 971 776 10 200 130 246 LIABILITIES

10 106 873 295 9 365 097 931

Beneficiary liability 8 10 103 430 409 9 359 808 888

Other payables 9 3 442 886 5 289 043

Total liabilities 10 106 873 295 9 365 097 931

CAPITAL AND RESERVES

956 098 481 835 032 315

Accumulated surplus/(deficit) 10 956 098 481 835 032 315

Total net assets 956 098 481 835 032 315

Total net assets and liabilities 11 062 971 776 10 200 130 246


STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 31 MARCH 2016

AccumulatedSurplus (Deficit)

Total Equity

Balance as at 1 April 2015 835 032 315 835 032 315

Surplus/(deficit) for the year 121 066 166 121 066 166

Balance as at 31 March 2016 956 098 481 956 098 481

STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 31 MARCH 2015

AccumulatedSurplus (Deficit)

Total Equity

Balance as at 1 April 2014Less: Restatement - Note 17.1

770 472 098

1 386 132

770 472 098

1 386 132

Restated Opening Balance as at 1 April 2014 769 085 966 769 085 966

Prior year surplus before restatement:

Restated adjustment - Note 17.1

68 318 298

2 371 949

68 318 298

2 371 949

Balance as at 31 March 2015 835 032 315 835 032 315

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2016

Notes 2016R

2015R

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts on behalf of beneficiaries -735 642 162 -640 747 722

Cash paid to beneficiaries and creditors 617 811 453 572 003 737

Cash generated from/(utilised in) operations 13 -117 830 709 -68 743 985

Investment income received 736 746 776 641 741 146

Interest paid to beneficiaries -613 066 874 -566 430 525

Creditor payments -4 750 045 -5 578 368

Net cash inflows/(outflows) from operating activities 1 099 148 988 269

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash flows from investing activities 9 981 470 -193 096 014

Net investments of beneficiary monies in PIC 9 981 470 -193 096 014

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash flow financing activities 128 708 488 207 845 143

Increase/(decrease) in beneficiary liability 128 708 488 207 845 143

Net increase/(decrease) in cash and cash equivalents 139 789 106 15 737 398

Cash and cash equivalents at the beginning of the year 296 353 866 280 616 468

Cash and cash equivalents at end of the year 6 436 142 971 296 353 866


GUARDIAN’S FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016

ACCOUNTING POLICIES

1. GENERAL INFORMATION The Guardian’s Fund is a statutory trust established in terms of Chapter V of the Administration of Estates Act, 1965 (Act 66 of

1965).

The purpose of the Guardian’s Fund is to protect and manage monies of persons deemed to be legally incapable or lacking the capacity to manage their own affairs as well as undetermined, unknown or absent heirs and untraceable persons.

The Guardian’s Fund is held under management of the Masters of the High Court of South Africa.

2. PRINCIPAL ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have

been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation The financial statements have been prepared on the historical cost basis, except for investments that have been measured at

fair value. The financial statements are presented in Rands. The financial statements have been prepared on a going concern basis.

Statement of compliance The financial statements of the Guardian’s Fund have been prepared in accordance with South Africa Standards of Generally

Recognised Accounting Practice as required by the Public Finance Management Act (Act No. 1 of 1999) (PFMA).

2.2 Summary of significant accounting policies

2.2.1 Financial instruments Financial instruments at Fair Value The classification depends on the purpose for which the financial assets were acquired, and is determined by management at

the initial recognition of the financial assets. Financial instruments are classified at fair value and are comprised of a portfolio of money market instruments. Money market investments were designated at fair value as these instruments are non-derivative instruments and payments can be determined by the fund.

Fair value financial assets are measured with consideration that unrealised gains and losses are recognised directly in surplus or deficit. Interest earned whilst holding fair value financial investments is reported as interest income using the effective interest rate. Dividends earned whilst holding fair value financial investments are recognised in the statement of changes in net assets as “other operating income” when the right of the payment has been established. The losses arising from impairment of such investments are recognised in the statement of financial performance in “impairment losses on financial investments”, and adjusted on a monthly basis.

Financial assets, other than those at Fair Value Through Profit or Loss (FVTPL), are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

(i) Date of recognition Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulations

or convention in the marketplace are recognised on the date that the Guardian’s Fund commits to purchase or sell the asset.

(ii) Initial recognition of financial instruments The classification of financial instruments at initial recognition depends on the purpose for which the financial instruments

were acquired and their characteristics. All financial instruments are measured initially at their fair value, and transaction costs on financial instruments at fair value through surplus or deficit are recognised in surplus or deficit.


(iii) Subsequent Measurement Financial Instruments at fair value through surplus or deficit are subsequently measured at fair value, with gains and losses

arising from changes in fair value being included in surplus or deficit for the period.

(iv) De-recognition The financial instrument is de-recognised when the contractual agreement in respect of the financial assets is terminated.

2.2.2 Cash and cash equivalents Demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash, and

are subject to an insignificant risk of changes in value, are disclosed under another category of financial instrument, depending on the nature.

Cash and cash equivalents that do not have fixed and determined payments will be classified as available-for-sale financial assets.

Cash and cash equivalents and bank borrowings are recorded at face value.

2.2.3 Revenue recognition The Guardian’s Fund recognises revenue when the amount of revenue can be reliably measured, it is probable that future

economic benefits will flow to the entity, and specific criteria in terms of the Estates Act,1965 (Act 66 0f 1965), have been met.

Interest Income Interest revenue is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable,

which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

2.2.4 Financial Liability This includes Beneficiary Liability and Other Payables

(i) Initial Recognition The Financial Liability is initially recognised at historical cost at the date of receipt of the monies due by the Fund to external

parties.

(ii) Subsequent Recognition After initial recognition, the liability is measured at the value of the amount owing to the external parties, whom have a right

against the fund, after taking into account the provisions of the Estates Act, 1965 (Act 66 of 1965).

(iii) De-recognition The financial liability is de-recognised when the obligation of the Guardian’s Fund to the external parties has been extinguished.

2.2.5 Related Party Disclosure The Guardian’s Fund was established in terms of the Administration of Estates Act and operates within the Department of

Justice and Constitutional Development. The Guardian’s Fund resides in the Branch of the Office of the Chief Master, and all operating costs are funded by the Department.

The integration of the Guardian’s Fund sections in the Office of the Chief Master creates a complex environment in which to estimate the values of the related party (The Department of Justice and Constitutional Development).

Other Related Party transactions are disclosed in terms of the requirements of the standards as in Note 12.

2.2.6 Fraud and losses

(i) Initial Recognition Fraud is defined as the unlawful and intentional making of a misrepresentation resulting in actual or potential prejudice to

the Fund, while losses result from any other cause that may not be intentional. Fraud and losses are administered in line with


Section 12 of the Treasury Regulations and are disclosed in note 14 on the financial statements as and when they are discovered and reported by the relevant GF Offices to the Departments forensic directorate for investigation. They are not disclosed on the face of the balance sheet.

(ii) Subsequent Recognition and de-recognition A Loss Control Officer keeps a register in which particulars of all losses are recorded. For instance, steps taken, amount recovered

or not recovered and how the matter has been disposed of, must be recorded in this register. Every year the note is updated with the movement in the register.

2.2.7 Allocation account

(i) Initial Recognition The Guardian’s Fund operated in a manual environment prior to 31 March 2005. From 1 April 2005 an administrative electronic

system called the Guardian’s Fund System (GFS), from which the beneficiary liability figures are derived, was introduced. The allocation account is used primarily to apportion transactions that are received through the suspense account to the various types of beneficiary liabilities and also to cater for verification difference.

(ii) Subsequent Recognition The allocation account is adjusted yearly with all financial adjustments made to beneficiary accounts that relate to prior financial

periods.

(iii) De-recognition The allocation account will be de-recognised when the financial benefit to or obligation by the fund is extinguished.

2.2.8 Other Receivables

(i) Initial Recognition These are various amounts that are owed to the fund from its day to day operations. Other receivables are measured at initial

recognition at fair value.

(ii) Subsequent Recognition Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence

that the asset is impaired. Subsequently, these are reported at their net realisable value.

(iii) De-recognition Other receivables are de-recognised when they are fully paid or when there is objective evidence that the amounts will not be

collectible.

2.2.9 Interest paid to beneficiaries

(i) Initial Recognition Interest paid is an expense that represents monies paid to the beneficiaries by the Fund. It is credited to the beneficiary accounts

through the GFS. Interest is accrued from the next calendar month after receipt date up to five years after it has become claimable, unless it is legally claimed before such expiration.

(ii) Subsequent Recognition Interest paid is adjusted in retrospect every year because of the verification process and other adjustments to beneficiary

balances.


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

R

3.In

vest

men

t rev

enue

- 31

/03/

2016

Inte

rest

reve

nue -

PIC

-733

081

663

-350

870

289

-165

917

950

-89

327

859

-52

142

620

-56

274

927

-17

526

683

-1 0

21 3

33

Cash

and

cash

equ

ival

ents

:

Inte

rest

reve

nue -

PIC

-83

280

-83

280

Inte

rest

reve

nue -

ABSA

-3 9

72 0

65-1

225

464

-1 2

37 0

16-4

44 3

82-3

64 4

14-5

61 5

31-1

39 2

58

-737

137

008

-352

095

753

-167

154

966

-89

772

241

-52

507

034

-56

836

458

-17

665

941

-1 1

04 6

13

3.In

vest

men

t rev

enue

- 31

/03/

2015

Inte

rest

reve

nue -

PIC

-638

271

391

-297

130

957

-149

240

974

-78

126

192

-45

182

088

-52

150

129

-15

523

186

-917

865

Cash

and

cash

equ

ival

ents

:

Inte

rest

reve

nue -

PIC

-75

559

-75

559

Inte

rest

reve

nue -

ABSA

-3 6

49 7

25-1

160

367

-1 2

64 3

37-4

02 2

79-2

38 5

81-4

77 4

17-1

06 7

44

-641

996

674

-298

291

324

-150

505

311

-78

528

471

-45

420

669

-52

627

546

-15

629

930

-993

424


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

R

4.IN

TERE

ST P

AID

- 31/

03/2

016

Inte

rest

paid

to in

tere

st be

arin

g be

nefic

iaries

.In

tere

st is

calcu

lated

at th

e gaz

ette r

ate

and

capi

talise

d at

mon

th en

d.In

tere

st is

accru

ed fr

om th

e nex

t ca

lenda

r mon

th af

ter r

eceip

t date

up

to

five y

ears

after

it h

as b

ecom

e clai

mab

le,

unles

s it i

s leg

ally c

laim

ed b

efore

such

ex

pira

tion.

613

066

875

278

368

830

144

248

822

84 7

75 2

5232

587

037

55 5

82 2

3017

504

703

613

066

875

278

368

830

144

248

822

84 7

75 2

5232

587

037

55 5

82 2

3017

504

703

4.IN

TERE

ST P

AID

- 31/

03/2

015

Inte

rest

paid

to in

tere

st be

arin

g be

nefic

iaries

.In

tere

st is

calcu

lated

at th

e gaz

ette r

ate

and

capi

talise

d at

mon

th en

d

566

430

525

251

311

125

139

098

371

77 3

45 8

7329

769

841

52 8

14 6

4316

090

671

Inte

rest

is ac

crued

from

the n

ext

calen

dar m

onth

afte

r rec

eipt d

ate u

p to

fiv

e yea

rs aft

er it

has

bec

ome c

laim

able,

un

less i

t is l

egall

y clai

med

befo

re su

ch

expi

ratio

n.

566

430

525

251

311

125

139

098

371

77 3

45 8

7329

769

841

52 8

14 6

4316

090

671


GUA

RDIA

N’S

FUND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

5.FI

NANC

IAL I

NSTR

UMEN

TS -

31/0

3/20

16

PIC

Inve

stmen

tOp

enin

g ba

lanc

e as

at 1

Apr

il 20

159

903

520

852

4 73

9 58

0 94

22

290

479

050

1 19

1 03

4 44

767

9 26

7 11

977

5 52

7 42

522

7 63

1 86

8

Inve

stmen

t inc

ome r

eceiv

ed d

urin

g fin

ancia

l yea

r73

2 06

0 32

835

0 87

0 28

916

5 91

7 95

089

327

859

52 1

42 6

2056

274

927

17 5

26 6

83

Addi

tions

dur

ing

the y

ear

250

500

000

140

000

000

30 0

00 0

0037

000

000

18 5

00 0

0013

000

000

12 0

00 0

00

Disp

osals

dur

ing

the y

ear

-135

000

000

-45

000

000

-45

000

000

-5 0

00 0

00-

-32

000

000

-8 0

00 0

00

Tradi

ng C

ash

Mov

emen

t-1

21 6

44 1

07-1

9 82

5 61

3-3

4 90

2 40

8-2

0 10

3 74

9-1

3 72

8 44

6-2

2 41

3 85

6-1

0 67

0 03

6

Man

agem

ent e

xpen

ses

-2 9

98 4

99-1

424

230

-684

245

-367

575

-213

331

-234

673

-74

445

Clos

ing

bala

nce

as a

t 31

Mar

ch 2

016

10 6

26 4

38 5

745

164

201

389

2 40

5 81

0 34

71

291

890

982

735

967

962

790

153

823

238

414

070

In te

rms o

f sec

tion

87 of

the A

dmin

istra

tion

of Es

tates

Act, N

o. 66

of 1

965,

ben

eficia

ry m

onies

rece

ived

in th

e Gua

rdian

’s Fu

nd sh

ould

be i

nves

ted

with

the P

IC. A

ll mon

ies ex

cept

for t

hose

requ

ired

for i

mm

ediat

e di

sbur

sem

ents

are i

nves

ted

with

the P

IC. T

he ca

rryin

g am

ount

of fin

ancia

l inve

stmen

ts ap

prox

imate

s the

ir fai

r valu

e.

PIC

Inve

stm

ents

10 6

26 4

38 5

745

164

201

389

2 40

5 81

0 34

71

291

890

982

735

967

962

790

153

822

238

414

071

Mon

ey M

arke

t 0 - 3

mon

ths

3 76

2 18

0 44

41

955

825

200

809

739

232

421

734

834

209

648

584

256

796

415

108

436

179

Mon

ey M

arke

t 3 - 6

mon

ths

2 16

8 26

3 77

11

053

611

490

505

080

206

325

151

884

132

494

430

127

042

078

24 8

83 6

84

Mon

ey M

arke

t 6 - 9

mon

ths

1 05

2 48

4 01

341

6 44

5 38

727

2 49

4 81

313

5 18

9 96

349

705

344

143

025

093

35 6

23 4

12

Mon

ey M

arke

t 9 - 1

2 m

onth

s3

643

510

345

1 73

8 31

9 31

181

8 49

6 09

640

9 81

4 30

234

4 11

9 60

426

3 29

0 23

669

470

796


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

5.FI

NANC

IAL I

NSTR

UMEN

TS -

31/0

3/20

15

PIC

Inve

stmen

t

Open

ing

bala

nce

as a

t 1 A

pril

2014

9 07

8 95

1 79

84

263

606

533

2 13

5 15

2 58

71

111

301

089

628

025

802

733

671

818

207

193

969

Inve

stmen

t inc

ome r

eceiv

ed d

urin

g fin

ancia

l yea

r63

7 35

3 52

529

7 13

0 95

714

9 24

0 97

478

126

192

45 1

82 0

8852

150

129

15 5

23 1

86

Loss

es-4

734

855

-2 1

56 5

70-1

078

285

-1 5

00 0

00

Addi

tions

dur

ing

the y

ear

298

500

001

200

000

000

50 0

00 0

0024

000

000

10 0

00 0

003

500

000

11 0

00 0

00

Disp

osals

dur

ing

the y

ear

-68

500

000

-10

000

000

-16

500

000

-18

000

000

-4 0

00 0

00-1

8 00

0 00

0-2

000

000

Tradi

ng C

ash

Mov

emen

t-3

3 16

9 82

7-9

892

454

-23

000

646

-2 9

78 1

2925

3 41

05

926

894

-3 4

78 9

01

Man

agem

ent e

xpen

ses

-2 7

25 5

79-1

264

094

-641

795

-336

418

-194

181

-221

416

-67

675

Clos

ing

bala

nce

as p

er st

atem

ent

9 90

5 67

5 06

34

739

580

943

2 29

2 09

4 55

01

191

034

447

679

267

119

775

527

424

228

170

579

Prov

ision

for f

urth

er lo

ss on

ABIL

-2 1

54 2

11-1

615

500

-538

711

Clos

ing

Bala

nce

as a

t 31

Mar

ch 2

015

9 90

3 52

0 85

24

739

580

943

2 29

0 47

9 05

01

191

034

447

679

267

119

775

527

424

227

631

868

In te

rms o

f sec

tion

87 of

the A

dmin

istra

tion

of Es

tates

Act, N

o. 66

of 1

965,

ben

eficia

ry m

onies

rece

ived

in th

e Gua

rdian

’s Fu

nd sh

ould

be i

nves

ted

with

the P

IC. A

ll mon

ies ex

cept

for t

hose

requ

ired

for i

mm

ediat

e di

sbur

sem

ents

are i

nves

ted

with

the P

IC. T

he ca

rryin

g am

ount

of fin

ancia

l inve

stmen

ts ap

prox

imate

s the

ir fai

r valu

e.

PIC

Inve

stm

ents

9 90

5 67

5 06

34

739

580

942

2 29

2 09

4 55

01

191

034

447

679

267

119

775

527

425

228

170

579

Mon

ey M

arke

t 0 - 3

mon

ths

1 34

4 44

2 17

455

3 17

1 25

833

0 50

3 68

114

2 84

3 36

878

012

983

176

987

431

62 9

23 4

53

Mon

ey M

arke

t 3 - 6

mon

ths

1 33

5 07

2 88

379

2 17

1 56

127

7 53

9 12

712

7 59

0 82

997

569

127

35 0

06 9

105

195

329

Mon

ey M

arke

t 6 - 9

mon

ths

1 22

3 44

3 36

151

1 37

7 15

323

5 53

1 08

823

7 49

8 33

173

994

096

114

774

965

50 2

67 7

28

Mon

ey M

arke

t 9 - 1

2 m

onth

s6

002

716

644

2 88

2 86

0 97

11

448

520

654

683

101

918

429

690

913

448

758

119

109

784

069


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

R

6.CA

SH A

ND C

ASH

EqUI

VALE

NTS -

31

/03/

2016

ABSA

ban

k acc

ount

90

110

181

27

985

268

19

733

223

7 3

72 7

64

17

134

559

15

249

204

2 6

35 1

63

PIC

main

and

rese

rve ac

coun

ts 1

9 70

4 52

3 1

9 70

4 52

3

Tradi

ng C

ash

- PIC

326

328

264

5

6 56

9 93

7 8

6 80

9 47

9 5

5 06

7 04

4 4

4 79

1 61

8 4

8 34

2 34

4 3

4 74

7 84

2

436

142

971

8

4 55

5 20

5 1

06 5

42 7

02

62

439

808

61

926

177

63

591

548

37

383

005

19

704

523

For t

he p

urpo

ses o

f the

cash

flow

stat

emen

t:

Disc

lose

d as

:

Cash

and

Cash

Equi

valen

ts 9

0 11

0 18

1 2

7 98

5 26

8 1

9 73

3 22

3 7

372

764

1

7 13

4 55

9 1

5 24

9 20

4 2

635

163

PIC

main

and

rese

rve ac

coun

ts 1

9 70

4 52

3 1

9 70

4 52

3

Tradi

ng C

ash

- PIC

326

328

264

5

6 56

9 93

7 8

6 80

9 47

9 5

5 06

7 04

4 4

4 79

1 61

8 4

8 34

2 34

4 3

4 74

7 84

2

Tota

l cas

h an

d ca

sh e

quiv

alen

ts 4

36 1

42 9

71

84

555

205

106

542

702

6

2 43

9 80

8 6

1 92

6 17

7 6

3 59

1 54

8 3

7 38

3 00

5 1

9 70

4 52

3

The c

arryi

ng am

ount

of ca

sh an

d ca

sh eq

uiva

lents

appr

oxim

ates t

heir

fair v

alue d

ue to

their

shor

t-ter

m m

aturit

y.


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

R

6.CA

SH A

ND C

ASH

EqUI

VALE

NTS -

31

/03/

2015

ABSA

ban

k acc

ount

73

064

332

20

951

041

16

948

955

15

649

094

7 1

38 5

50

11

078

209

1 2

98 4

83

PIC

main

and

rese

rve ac

coun

ts 1

8 60

5 37

7 1

8 60

5 37

7

Tradi

ng C

ash

- PIC

204

684

157

3

6 74

4 32

5 5

1 90

7 07

1 3

4 96

3 29

5 3

1 06

3 17

2 2

5 92

8 48

7 2

4 07

7 80

6

296

353

866

5

7 69

5 36

6 6

8 85

6 02

6 5

0 61

2 38

9 3

8 20

1 72

2 3

7 00

6 69

6 2

5 37

6 28

9 1

8 60

5 37

7

For t

he p

urpo

ses o

f the

cash

flow

stat

emen

t:

Disc

lose

d as

:

Cash

and

Cash

Equi

valen

ts 7

3 06

4 33

2 2

0 95

1 04

1 1

6 94

8 95

5 1

5 64

9 09

4 7

138

550

1

1 07

8 20

9 1

298

483

PIC

main

and

rese

rve ac

coun

ts 1

7 61

7 10

9 1

8 60

5 37

7

Tradi

ng C

ash

- PIC

204

684

157

3

6 74

4 32

5 5

1 90

7 07

1 3

4 96

3 29

5 3

1 06

3 17

2 2

5 92

8 48

7 2

4 07

7 80

6

Tota

l cas

h an

d ca

sh e

quiv

alen

ts 2

96 3

53 8

66

57

695

366

68

856

026

50

612

389

38

201

722

37

006

696

25

376

289

18

605

377

The c

arryi

ng am

ount

of ca

sh an

d ca

sh eq

uiva

lents

appr

oxim

ates t

heir

fair v

alue d

ue to

their

shor

t-ter

m m

aturit

y.


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

R

7.OT

HER

RECE

IVAB

LES

- 31

/03/

2016

Absa

Inte

rest

rece

ivab

leTh

ese a

mou

nts r

elate

to in

ter-

est t

hat i

s rec

eivab

le fro

m Ab

sa

for t

he m

onth

of M

arch

201

6.

390

231

144

449

84 6

5827

488

44 5

0762

485

26 6

44

390

231

144

449

84 6

5827

488

44 5

0762

485

26 6

44

7.OT

HER

RECE

IVAB

LES

- 31

/03/

2015

Absa

Inte

rest

rece

ivab

leTh

ese a

mou

nts r

elate

to in

ter-

est t

hat i

s rec

eivab

le fro

m Ab

sa

for t

he m

onth

on M

arch

201

5.

255

527

90 3

4963

682

43 8

0419

814

32 3

505

530

255

527

90 3

4963

682

43 8

0419

814

32 3

505

530


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

8.BE

NEFI

CIAR

Y LIA

BILI

TY - 3

1/03

/201

6

Open

ing

bala

nce

as a

t 1

April

201

59

359

808

888

4 28

4 73

0 89

62

202

907

726

1 22

4 10

4 90

660

6 98

8 68

979

2 66

1 83

224

8 41

4 83

9

Mon

ies re

ceive

d du

ring

finan

cial y

ear

1 48

6 09

4 33

569

8 21

9 69

529

5 87

6 57

721

9 89

5 33

510

1 42

9 26

911

9 24

9 61

351

423

848

Paym

ents

to B

enefi

ciarie

s-1

352

226

159

-594

902

441

-308

673

964

-196

568

061

-72

034

554

-133

861

836

-46

185

304

Trans

fer to

SARS

30

year

-3 2

72 4

26-1

906

072

-483

514

-274

169

-429

123

-161

114

-18

434

5% C

omm

issio

n pa

yabl

e to S

ARS

-41

104

-11

120

-10

450

-298

-16

815

-2 4

21

Inte

rest

paid

to b

enefi

ciarie

s61

3 06

6 87

527

8 36

8 83

014

4 24

8 82

284

775

252

32 5

87 0

3755

582

230

17 5

04 7

03

Clos

ing

bala

nce

as a

t 31

Mar

ch 2

016

10 1

03 4

30 4

094

664

499

787

2 33

3 86

5 19

71

331

932

965

668

524

503

833

468

304

271

139

653

8.Be

nefic

iary

Liab

ility

Inter

est B

earin

g Ben

eficia

ry m

onies

9 1

51 1

97 3

78

4 1

42 6

55 8

29

2 1

96 1

91 4

94

1 2

65 2

37 1

34

495

406

536

7

94 2

36 3

42

257

470

043

Non-

Inter

est B

earin

g Ben

eficia

ry M

onies

(N

o Com

miss

ion)

659

040

229

3

47 7

25 9

76

111

718

616

5

8 25

9 17

3 1

03 3

48 6

58

26

858

838

11

128

967

Non-

Inte

rest

Bear

ing

Bene

ficiar

y Mon

ies

(Com

miss

ion)

252

902

967

1

60 8

32 4

06

20

424

331

7 8

75 6

12

57

413

941

5 1

30 5

57

1 2

26 1

20

Unall

ocate

d Be

nefic

iary M

onies

(Sus

pens

e ac

coun

t) 3

9 93

2 47

7 1

3 30

9 51

7 5

401

691

5

02 7

88

12

350

645

7 0

57 9

77

1 3

09 8

59

Bene

ficiar

y mon

ies - A

lloca

tion

acco

unt

(refer

to n

ote 1

5) -2

49 3

76

-496

213

-6

213

6

2 67

6 -4

53

195

191

-4

365

Accru

ed B

enefi

ciary

Liabi

lity

606

733

4

72 2

73

135

279

-4

420

5

176

-1

0 60

3 9

028

Clos

ing

bala

nce

as a

t 31

Mar

ch 2

016

10

103

430

409

4 6

64 4

99 7

87

2 3

33 8

65 1

97

1 3

31 9

32 9

65

668

524

503

8

33 4

68 3

04

271

139

653


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

8.BE

NEFI

CIAR

Y LI

ABIL

ITY

- 31/

03/2

015

Open

ing

bala

nce

as a

t 1 A

pril

2014

8 5

82 5

59 6

89

3 8

39 7

67 6

23

2 0

57 8

59 1

62

1 1

31 0

66 9

38

570

822

057

7

55 6

86 3

05

227

357

603

Mon

ies re

ceive

d dur

ing fin

ancia

l yea

r 1

318

742

117

6

32 1

84 9

93

274

040

044

1

92 6

39 2

22

80

549

321

98

948

044

40

380

493

Paym

ents

to B

enefi

ciarie

s -1

105

317

654

-4

37 6

47 8

89

-267

662

031

-1

76 9

18 6

31

-73

661

398

-114

033

782

-3

5 39

3 92

3

Trans

fer t

o SA

RS 3

0 ye

ar -5

848

526

-2

436

784

-9

66 8

41

-294

604

-1

235

091

-8

95 2

00

-20

006

Prio

r yea

r adj

ustm

ents

3 4

84 6

72

1 6

31 7

46

569

881

4

08 3

52

767

119

1

08 5

86

-1 0

12

5% C

omm

issio

n pa

yabl

e to S

ARS

-24

229

-17

607

-3 3

37

-3 2

85

Inte

rest

paid

to b

enefi

ciarie

s 5

66 2

12 8

18

251

248

813

1

39 0

67 5

11

77

203

628

29

750

019

52

851

164

16

091

683

Clos

ing

bala

nce

as a

t 31

Mar

ch 2

015

9 3

59 8

08 8

88

4 2

84 7

30 8

96

2 2

02 9

07 7

26

1 2

24 1

04 9

06

606

988

689

7

92 6

61 8

32

248

414

839

8.Be

nefic

iary

Liab

ility

Inte

rest

Bear

ing

Bene

ficia

ry m

onie

s 8

481

721

110

3

816

103

402

2

065

468

055

1

157

572

341

4

50 4

54 3

51

752

332

835

2

39 7

90 1

25

Non-

Inter

est B

earin

g Ben

eficia

ry M

onies

(N

o Com

miss

ion)

598

387

575

2

97 7

85 8

90

109

339

011

5

7 91

0 43

5 1

02 3

83 8

29

24

064

569

6 9

03 8

40

Non-

Inte

rest

Bear

ing

Bene

ficiar

y Mon

ies

(Com

miss

ion)

245

619

302

1

58 6

58 2

00

19

680

471

7 8

15 1

78

53

196

079

5 0

42 7

32

1 2

26 6

40

Unall

ocate

d Be

nefic

iary M

onies

(S

uspe

nse a

ccou

nt)

34

074

709

12

513

803

8 3

59 3

56

701

565

9

60 0

39

11

055

130

484

816

Bene

ficiar

y mon

ies - A

lloca

tion

acco

unt

(refer

to n

ote 1

5) -2

80 9

81

-399

482

-5

0 98

2 5

3 97

6 -4

53

120

326

-4

365

Accru

ed B

enefi

ciary

Liabi

lity

287

173

6

9 08

3 1

11 8

15

51

410

-5 1

57

46

240

13

782

Clos

ing

bala

nce

as a

t 31

Mar

ch 2

015

9 3

59 8

08 8

88

4 2

84 7

30 8

96

2 2

02 9

07 7

26

1 2

24 1

04 9

06

606

988

689

7

92 6

61 8

32

248

414

839


GUAR

DIAN

’S FU

ND

NOTE

S TO

THE

FINA

NCIA

L STA

TEM

ENTS

FOR

THE Y

EAR

ENDE

D 31

MAR

CH 2

016

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

9.TR

ADE A

ND O

THER

PAY

ABLE

S - 3

1/03

/201

6

SARS

pay

able

Open

ing

bala

nce

as a

t 1 A

pril

2015

5 2

89 0

43

6 2

86 2

78

-2 8

90 7

66

20

822

1 3

14 4

12

439

762

1

18 5

38

5% co

mm

issio

n 4

1 10

4 1

1 12

0 1

0 45

0 2

98

16

815

2 4

21

SARS

adju

stmen

t -4

15 1

13

-415

113

30 ye

ar - B

enefi

ciary

mon

ies 3

272

426

1

906

072

4

83 5

14

274

169

4

29 1

23

161

114

1

8 43

4

8 1

87 4

63

8 2

03 4

70

-2 3

96 8

02

295

289

1

760

350

1

88 1

84

136

972

Less

: SAR

S lia

bilit

y paid

dur

ing

finan

cial y

ear

-4 7

44 5

78

-2 4

54 3

90

-634

386

-6

4 30

0 -1

238

428

-3

33 0

66

-20

006

Clos

ing

Bala

nce

as a

t 31

Mar

ch 2

016

3 4

42 8

86

5 7

49 0

79

-3 0

31 1

88

230

989

5

21 9

22

-144

882

1

16 9

66

9.TR

ADE A

ND O

THER

PAY

ABLE

S - 3

1/03

/201

5

SARS

pay

able

Open

ing

bala

nce

as a

t 1 A

pril

2014

6 8

76 4

14

7 7

65 2

58

-2 5

95 9

40

158

305

1

541

622

-1

32 3

06

139

475

5% co

mm

issio

n 2

4 22

9 1

7 60

7 3

337

3

285

30 ye

ar - B

enefi

ciary

mon

ies 5

848

526

2

436

784

9

66 8

41

294

604

1

235

091

8

95 2

00

20

006

Prio

r yea

r SAR

S ad

justm

ents

-1 8

86 9

13

-442

869

-2

95 5

66

-286

443

-7

14 8

38

-147

197

10

862

255

9 7

76 7

79

-1 9

24 6

65

166

465

2

065

212

6

18 9

83

159

481

Less

: SAR

S lia

bilit

y paid

dur

ing

finan

cial y

ear

-5 5

73 2

12

-3 4

90 5

02

-966

101

-1

45 6

44

-750

800

-1

79 2

21

-40

944

Clos

ing

Bala

nce

as a

t 31

Mar

ch 2

015

5 2

89 0

43

6 2

86 2

77

-2 8

90 7

66

20

822

1 3

14 4

12

439

762

1

18 5

38

Thes

e pay

ables

relat

e to m

onies

whi

ch h

ave r

emain

ed u

nclai

med

for a

per

iod

of th

irty y

ears

as fr

om th

e date

upo

n wh

ich th

e ben

eficia

ries b

ecam

e ent

itled

to th

e said

m

onies

, as w

ell as

a 5%

adm

in fe

e tha

t is d

educ

ted

from

all in

solve

nt or

liqui

date

d es

tates

whe

reby

cred

itor p

aym

ent a

re n

eede

d to

be m

ade.

The s

aid m

onies

are f

orfei

ted

to th

e stat

e and

pay

men

t is m

ade f

rom

the G

uard

ian’s

Fund

to th

e Nati

onal

Reve

nue F

und

via th

e Dep

artm

ent o

f Jus

tice V

ote A

ccou

nt.


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

10.

ACCU

MUL

ATED

SUR

PLUS

/(D

EFIC

IT) -

31/

03/2

016

Open

ing

bala

nce

as a

t 1

April

201

5 -8

35 0

32 3

15

-506

349

482

-1

60 9

97 2

95

-17

564

914

-109

185

557

-1

9 46

4 87

9 -5

019

023

-1

8 60

5 37

6

Surp

lus fo

r the y

ear

-121

066

166

-7

2 30

2 69

4-2

2 22

1 89

9-4

629

414

-19

706

666

-1 0

19 5

55-8

6 79

2-1

099

146

Bala

nce

as at

31

Mar

ch 2

016

-956

098

481

-5

78 6

52 1

75

-183

219

194

-2

2 19

4 32

8 -1

28 8

92 2

23

-20

484

434

-5 1

05 8

15

-19

704

522

10.

ACCU

MUL

ATED

SUR

PLUS

/(D

EFIC

IT) -

31/

03/2

015

Open

ing

bala

nce

as a

t 1

April

201

4 -7

69 0

85 9

66

-460

633

378

-1

52 3

88 7

20

-17

797

018

-93

728

910

-21

373

392

-5 5

47 4

39

-17

617

109

Surp

lus fo

r the y

ear

-65

946

349

-45

716

104

-6 9

93 0

76

232

105

-1

5 45

6 64

7 1

908

513

1

067

127

-9

88 2

67

Bala

nce

as at

31

Mar

ch 2

015

-835

032

315

-5

06 3

49 4

82

-160

997

295

-1

7 56

4 91

4 -1

09 1

85 5

57

-19

464

879

-5 0

19 0

23

-18

605

376


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

11.

MAN

AGEM

ENT F

EES

- 31

/03/

2016

Inve

stmen

t Man

agem

ent F

ees -

PIC

Inve

stmen

t

3 0

03 9

67

1 4

24 2

30

684

245

3

67 5

75

213

331

2

34 6

73

74

445

5 4

67

Fees

are p

ayab

le to

The P

ublic

Inve

stmen

t Cor

pora

tion

Limite

d

for m

anag

ing

the G

uard

ian’s

Fund

inve

stmen

ts in

term

s of

the I

nves

tmen

t man

agem

ent

agre

emen

t.

3 0

03 9

67

1 4

24 2

30

684

245

3

67 5

75

213

331

2

34 6

73

74

445

5 4

67

11.

MAN

AGEM

ENT F

EES

- 31

/03/

2015

Inve

stmen

t Man

agem

ent F

ees -

PI

C In

vestm

ent

2 7

30 7

34

1 2

64 0

94

641

795

3

36 4

18

194

181

2

21 4

16

67

675

5 1

56

Fees

are p

ayab

le to

The P

ublic

In

vestm

ent C

orpo

ratio

n Lim

ited

for m

anag

ing

the G

uard

ian’s

Fund

inve

stmen

ts in

term

s of

the I

nves

tmen

t man

agem

ent

agre

emen

t.

2 7

30 7

34

1 2

64 0

94

641

795

3

36 4

18

194

181

2

21 4

16

67

675

5 1

56


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

12.

RELA

TED

PART

Y TRA

NSAC

TION

S - 3

1/03

/201

6

Nam

e of

rela

ted

party

:De

partm

ent o

f Jus

tice a

nd C

onsti

tutio

nal D

evelo

pmen

t.

Rela

tions

hip:

Depa

rtmen

t und

er co

mm

on M

inist

ry. Al

l adm

inist

ratio

n co

sts of

the G

uard

ian’s

Fund

are p

aid fo

r by t

he D

epar

tmen

t of J

ustic

ean

d Co

nstit

utio

nal D

evelo

pmen

t.

Tota

l adm

inist

ratio

n co

sts (

sala

ries)

disc

lose

d as

:77

395

588

Offic

e of t

he C

hief

Mas

ter

71 2

59 5

09

Offic

e of t

he C

FO6

136

079

Key p

erso

nnel

cost

s disc

lose

d as

:13

242

619

Leve

l 15

- Chi

ef M

aste

r/Chi

ef Fi

nanc

ial O

ffice

r (2)

2 94

1 26

9

Leve

l 14

- Chi

ef D

irecto

r (3)

3 64

2 34

8

Leve

l 13

- Dire

ctors

(1) a

nd M

aste

rs (6

)6

659

002

Nam

e of

rela

ted

party

:Th

e Pub

lic In

vestm

ent C

orpo

ratio

n Lim

ited

Rela

tions

hip:

In te

rms o

f sec

tion

87 of

the A

dmin

istra

tion

of Es

tates

Act, N

o. 66

of 1

965,

ben

eficia

ry m

onies

rece

ived

in th

e Gua

rdian

’s Fu

nd sh

ould

be i

nves

ted

with

the P

IC. D

etail

s of t

rans

actio

n va

lues

as st

ated

in N

otes

3, 5

& 1

1.

Nam

e of

rela

ted

party

:Th

e Pre

siden

ts Fu

nd/Th

ird Pa

rty Fu

nds/

Natio

nal P

rose

cutin

g Aut

horit

y/Sp

ecial

Inve

stiga

tion

Unit/

Lega

l Aid

Boa

rd/C

rimin

al As

set R

ecov

ery A

ccou

nt

Rela

tions

hip:

All p

artie

s abo

ve ar

e und

er th

e com

mon

cont

rol o

f the

Dep

artm

ent o

f Jus

tice a

nd C

onsti

tutio

nal D

evelo

pmen

t, but

ther

e is n

o flow

of tr

ansa

ction

s bet

ween

thes

e par

ties a

nd th

e Gu

ardi

an’s

Fund

.


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

12.

RELA

TED

PART

Y TRA

NSAC

TION

S - 3

1/03

/201

5

Nam

e of

rela

ted

party

:De

partm

ent o

f Jus

tice a

nd C

onsti

tutio

nal D

evelo

pmen

t.

Rela

tions

hip:

Depa

rtmen

t und

er co

mm

on M

inist

ry. Al

l adm

inist

ratio

n co

sts of

the G

uard

ian’s

Fund

are p

aid fo

r by t

he D

epar

tmen

t of J

ustic

e and

Con

stitu

tiona

l Dev

elopm

ent.

Tota

l adm

inist

ratio

n co

sts (

sala

ries)

disc

lose

d as

:68

865

076

Offic

e of t

he C

hief

Mas

ter

62 9

31 4

90

Offic

e of t

he C

FO5

933

586

Key p

erso

nnel

cost

s disc

lose

d as

:13

229

526

Leve

l 15

- Chi

ef M

aste

r/Chi

ef Fi

nanc

ial O

ffice

r (2)

2 79

0 51

3

Leve

l 14

- Chi

ef D

irecto

r (3)

3 71

6 29

9

Leve

l 13

- Dire

ctors

(1) a

nd M

aste

rs (6

)6

722

714

Nam

e of

rela

ted

party

:Th

e Pub

lic In

vestm

ent C

orpo

ratio

n Lim

ited

Rela

tions

hip:

In te

rms o

f sec

tion

87 of

the A

dmin

istra

tion

of Es

tates

Act, N

o. 66

of 1

965,

ben

eficia

ry m

onies

rece

ived

in th

e Gua

rdian

’s Fu

nd sh

ould

be i

nves

ted

with

the P

IC. D

etail

s of t

rans

actio

n va

lues

as st

ated

in N

otes

3, 5

& 1

1.

Nam

e of

rela

ted

party

:Th

e Pre

siden

ts Fu

nd/Th

ird Pa

rty Fu

nds/

Natio

nal P

rose

cutin

g Aut

horit

y/Sp

ecial

Inve

stiga

tion

Unit/

Lega

l Aid

Boa

rd/C

rimin

al As

set R

ecov

ery A

ccou

nt

Rela

tions

hip:

All p

artie

s abo

ve ar

e und

er th

e com

mon

cont

rol o

f the

Dep

artm

ent o

f Jus

tice a

nd C

onsti

tutio

nal D

evelo

pmen

t, but

ther

e is n

o flow

of tr

ansa

ction

s bet

ween

thes

e par

ties a

nd th

e Gu

ardi

an’s

Fund

.


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

13.

CASH

GEN

ERAT

ED F

ROM

/(UTI

LIzE

D IN

) OP

ERAT

IONS

- 31

/03/

2016

Surp

lus/

(defi

cit) b

efore

inte

rest

Plus

: SAR

S pa

id 4

744

578

2

454

390

6

34 3

86

64

300

1 2

38 4

28

333

066

2

0 00

6

Less

: Inv

estm

ent in

com

e rec

eived

-735

642

162

-3

51 9

51 3

04

-167

070

308

-8

9 74

4 75

3 -5

2 46

2 52

7 -5

6 77

3 97

3 -1

7 63

9 29

7

Plus

: Int

eres

t paid

613

066

875

2

78 3

68 8

30

144

248

822

8

4 77

5 25

2 3

2 58

7 03

7 5

5 58

2 23

0 1

7 50

4 70

3

Net c

ash

flows

from

ope

ratin

g ac

tiviti

es -1

17 8

30 7

09

-71

535

595

-22

310

863

-4 9

05 2

01

-18

637

061

-858

677

-1

14 5

88

13.

CASH

GEN

ERAT

ED FR

OM/(U

TILI

zED

IN)

OPER

ATIO

NS -

31/0

3/20

15

Surp

lus/

(defi

cit) b

efore

inte

rest

Plus

: SAR

S pa

id 5

573

212

3

490

502

9

66 1

01

145

644

7

50 8

00

179

221

4

0 94

4

Less

: Inv

estm

ent in

com

e rec

eived

-640

747

723

-2

98 2

00 9

75

-150

441

629

-7

8 48

4 66

7 -4

5 40

0 85

4 -5

2 59

5 19

6 -1

5 62

4 40

0

Plus

: Int

eres

t paid

566

430

525

2

51 3

11 1

25

139

098

371

7

7 34

5 87

3 2

9 76

9 84

1 5

2 81

4 64

3 1

6 09

0 67

1

Net c

ash

flows

from

ope

ratin

g ac

tiviti

es -6

8 74

3 98

5 -4

3 39

9 34

8 -1

0 37

7 15

7 -9

93 1

50

-14

880

213

398

668

5

07 2

15


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

14.

DISA

LLOW

ANCE

ACC

OUNT

(FRA

UD

AND

LOSS

ES) -

31/

03/2

016

Open

ing

Bala

nce

at a

t 1 A

pril

2015

9 1

66 0

51

6 3

50 0

80

811

688

3

54 4

46

239

925

1

361

593

4

8 31

9

Curre

nt ye

ar fr

aud

case

s 1

158

251

4

50 4

21

707

830

Curre

nt ye

ar lo

sses

6

389

130

6

158

121

1

75 1

19

44

534

161

7

449

3

746

Finali

sed

case

s - In

vesti

gatio

n fin

alise

d -8

896

965

-6

545

997

-6

74 9

19

-155

806

-1

497

050

-2

3 19

2

Case

s stil

l und

er in

vest

igat

ion

as a

t 31

Mar

ch 2

016

7 8

16 4

66

5 9

62 2

03

986

807

-2

75 9

40

84

280

322

414

7

36 7

02

14.

DISA

LLOW

ANCE

ACC

OUNT

(FRA

UD

AND

LOSS

ES) -

31/

03/2

015

Open

ing

Bala

nce

at a

t 1 A

pril

2014

7 1

90 8

99

3 5

67 7

93

1 9

63 8

25

76

993

221

923

1

339

766

2

0 59

9

Resta

tem

ent m

ovem

ent

1 4

53 3

15

1 7

88 0

60

-334

745

Curre

nt ye

ar fr

aud

case

s 1

484

017

6

78 9

27

684

117

9

5 97

3 2

5 00

0

Curre

nt ye

ar lo

sses

1

472

550

3

15 2

99

597

205

2

77 4

53

18

003

261

870

2

719

Finali

sed

case

s - In

vesti

gatio

n fin

alise

d -2

434

731

-2

433

459

-1

272

Case

s stil

l und

er in

vest

igat

ion

as a

t 31

Mar

ch 2

015

9 1

66 0

51

6 3

50 0

80

811

688

3

54 4

46

239

925

1

361

593

4

8 31

9


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

15.

BENE

FICI

ARY

MON

IES

- ALL

OCAT

ION

ACCO

UNT -

31/

03/2

016

Bala

nce

as a

t 31

Mar

ch 2

016

-249

376

-4

96 2

13

-6 2

13

62

676

-453

1

95 1

91

-4 3

65

-249

376

-4

96 2

13

-6 2

13

62

676

-453

1

95 1

91

-4 3

65

15.

BENE

FICI

ARY

MON

IES

- ALL

OCAT

ION

ACCO

UNT -

31/

03/2

015

Bala

nce

as a

t 31

Mar

ch 2

015

Thes

e tra

nsac

tions

orig

inate

from

year

di

ffere

nces

bet

ween

the G

uard

ians F

und

Syste

m an

d th

e cas

h bo

ok w

hich

will

be

adju

sted

thro

ugh

a con

trolle

d m

onito

red

RFS

Proc

ess.

-280

981

-3

99 4

82

-50

982

53

976

-453

1

20 3

26

-4 3

65

-280

981

-3

99 4

82

-50

982

53

976

-453

1

20 3

26

-4 3

65


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

Tota

lPr

etor

iaPi

eter

mar

itzbu

rgGr

aham

stow

nCa

pe To

wnBl

oem

font

ein

Kim

berle

yNa

t-Off

Inv

RR

RR

RR

RR

16.

LOSS

ES: F

INAN

CIAL

INST

RUM

ENTS

Bala

nce

as a

t 31

Mar

ch 2

015

-6 8

89 0

66

-3 7

72 0

70

-1 0

78 2

85

-1 5

00 0

00

-538

711

Thes

e los

ses r

elate

to th

e eco

nom

ic sit

uatio

n wi

th Af

rican

Ban

kLim

ited,

wher

e the

JSE I

nstru

ction

was

a 1

0% h

aircu

t on

all in

strum

ents.

Refer

to N

ote 5

: Fin

ancia

l Instr

umen

ts -6

889

066

-3

772

070

-1

078

285

-1

500

000

-5

38 7

11


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

As d

iscl

osed

in 2

015

As re

stat

ed in

20

16Pr

ior p

erio

d er

rors

fo

r the

fina

ncia

l yea

rs

endi

ng 3

1 M

arch

20

15

Pre-

prio

r per

iod

erro

r for

the

finan

cial

yea

r end

ing

31

Mar

ch 2

006

to

31 M

arch

201

4

Natu

re o

f res

tate

men

t

2015

/03/

31R

RR

R

17RE

STAT

EMEN

T OF

COM

PARA

TIVE

S

The

finan

cial s

tate

men

ts fo

r 31

Mar

ch 2

015

wer

e re

state

d d

ue t

o m

ore a

ccur

ate

finan

cial

info

rmat

ion b

ecom

ing

avail

able

and

as h

istor

ical

issue

s wer

e add

ress

ed.

17.1

REST

ATEM

ENT O

F FI

NANC

IAL P

OSIT

ION

ASSE

TS

Finan

cial in

vestm

ents

avail

able-

for-s

ale (P

IC

inve

stmen

ts)9

905

675

063

9 90

3 52

0 85

2-2

154

211

Raise

d pr

ovisi

on fo

r los

s on

PIC

- ABI

L

Cash

and

cash

equi

valen

ts29

6 35

9 96

929

6 35

3 86

6-6

103

Bank

adj

ustm

ents

- cas

hboo

k re

state

d

Othe

r rec

eivab

les -

ABSA

Inte

rest

255

528

255

528

Tota

l ass

ets

10 2

02 2

90 5

6010

200

130

246

-2 1

60 3

14

LIAB

ILIT

IES

Tota

l lia

bilit

ies

9 36

3 50

0 16

49

365

097

931

211

635

1 38

6 13

2

Bene

ficiar

y Liab

ility

9 35

6 32

4 20

79

359

808

888

- Res

tate

men

t of I

nter

est a

nd C

apita

l adj

ustm

ents

217

707

1 38

6 13

2Pr

ior Y

ear

adju

stmen

ts d

ue t

o R

FS

data

cha

nges

sub

mitt

ed b

y GF

Of

fices

SARS

Adj

ustm

ent

1 63

5 82

325

1 09

1Re

versa

l of 2

014

SARS

Tran

sfers

Bank

adj

ustm

ents

affec

t ben

eficia

ry lia

bilit

ies-6

072

Bank

adj

ustm

ents

affec

ting

liabi

lity

Othe

r Pay

ables

7 17

5 95

75

289

043

-1 6

35 8

23-2

51 0

91Re

versa

l of p

revio

us ye

ars S

ARS

Trans

fers


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

As d

iscl

osed

in 2

015

As re

stat

ed in

20

16Pr

ior p

erio

d er

rors

fo

r the

fina

ncia

l yea

rs

endi

ng 3

1 M

arch

20

15

Pre-

prio

r per

iod

erro

r for

th

e fin

anci

al y

ear e

ndin

g 31

M

arch

200

6 to

31

Mar

ch 2

014

Natu

re o

f res

tate

men

t

RR

RR

17.1

REST

ATEM

ENT

OF F

INAN

CIAL

POS

ITIO

N -

CONT

INUE

S

CAPI

TAL A

ND R

ESER

VES

Tota

l lia

bilit

ies

9 36

3 50

0 16

49

365

097

931

211

635

1 38

6 13

2

Tota

l net

ass

ets

838

790

396

835

032

315

-2 3

71 9

49-1

386

132

Accu

mul

ated

surp

lus/

(defi

cit)

838

790

396

835

032

315

- Prio

r Yea

r adj

ustm

ents

-217

707

-1 3

86 1

32Pr

ior Y

ear

adju

stmen

ts d

ue t

o R

FS

data

cha

nges

sub

mitt

ed b

y GF

Of

fices

- Ban

k Adj

ustm

ent

-31

Bank

Adj

ustm

ents

affec

ted

thro

ugh

Inco

me

- Rais

ed p

rovis

ion

for l

oss P

IC :

ABIL

-2 1

54 2

11Ra

ised

prov

ision

for l

oss o

n PI

C - A

BIL

Tota

l net

ass

ets a

nd li

abili

ties

10 2

02 2

90 5

6010

200

130

246

-2 1

60 3

14


GUAR

DIAN

’S FU

NDNO

TES

TO TH

E FI

NANC

IAL S

TATE

MEN

TS FO

R TH

E YEA

R EN

DED

31 M

ARCH

201

6

As d

iscl

osed

in 2

015

As re

stat

ed in

20

16Pr

ior p

erio

d er

rors

fo

r the

fina

ncia

l yea

rs

endi

ng 3

1 M

arch

20

15

Pre-

prio

r per

iod

erro

r for

th

e fin

anci

al y

ear e

ndin

g 31

M

arch

200

6 to

31

Mar

ch 2

014

Natu

re o

f res

tate

men

t

RR

RR

17.2

REST

ATEM

ENT

OF P

ERFO

RMAN

CE

Reve

nue

Inve

stmen

t rev

enue

641

996

706

641

996

675

-31

Bank

Adj

ustm

ents

affec

ting

Inco

me

Less

: Exp

endi

ture

573

678

408

576

050

326

-2 3

71 9

18

Man

agem

ent f

ees

2 73

0 73

52

730

735

Loss

es :

Finan

cial I

nstru

men

ts4

734

855

6 88

9 06

6-2

154

211

Raise

d pr

ovisi

on fo

r los

s on

PIC

- ABI

L

Inte

rest

paid

to b

enefi

ciarie

s56

6 21

2 81

856

6 43

0 52

5-2

17 7

07In

creas

e in

in

tere

st p

ayab

le t

o

bene

ficiar

ies d

ue

to

decre

ase

of

bene

ficiar

y liab

ility a

t 31

Mar

ch 2

015

Surp

lus/

(defi

cit) f

or th

e ye

ar68

318

298

65 9

46 3

49-2

371

949


18. RISK MANAGEMENT

18.1 Introduction

As a client of the PIC, the Guardian’s Fund specifies its desirable risk parameters in accordance with its own risk appetite. This risk appetite informs the formal investment mandate given to the PIC. The mandate consciously promotes a responsible approach to risk to ensure the long term sustainability of the Fund and to protect the reputation of the Fund. The ultimate responsibility for investment risk management oversight lies with the PIC and not with the Guardian’s Fund.

18.2 Market risk

Market risk is the exposure to adverse change in the market value of our investment position caused by changes in prices and rates. The Fund’s activities expose it primarily to the risks of fluctuations in the interest rate.

Interest rate risk refers to the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Market risk exposures are measured using sensitivity analysis. A sensitivity analysis shows how net surplus and/or net assets would have been affected by changes in the relevant risk variable that were reasonably possible at the reporting date.

The GF was exposed to market risk in relation to the economic position of African Bank Limited, which resulted in Impairment losses (See Notes[5]). However, due to the GF managing Market and Concentration Risk, this did not have a significant impact on the GF, as displayed by the healthy profit gained in 2015 and 2016 (See Statement of Financial Performance).

18.3 Interest rate risk

This risk is the potential financial loss as a result of adverse movements in interest rates that affect the value of money market instruments. As a PIC client, Guardian’s Fund has exposure to interest rate risk through investments in money markets.

Sensitivity to interest rate movements is measured by the duration of the fixed interest exposure. Such duration is dictated in the Guardian’s Fund client investment mandate to PIC, relative to the appropriate benchmark.

Furthermore, these investment mandates prescribe how the assets should be managed by PIC, in line with Guardian’s Fund liquidity needs and its liability profile.

18.4 Interest rate risk sensitivity analysis

The sensitivity analysis below has been determined based upon financial instruments exposure to interest rates at the Statement of Financial position date.

The basis points increase or decrease, as detailed in the table below, were determined by management and represent management’s assessment of a reasonable change in interests rates. The positive number indicates an increase in net surplus and a negative number indicates a decrease in net surplus.

There is no change in the methods and assumptions used in preparing the sensitivity analysis from one year to the next. In the graph, the zero interest rate represents the base - as disclosed in the Audited Financial Statements.


Interest rate sensitivity analysis

The above sensitivity analysis shows that even with a 2% change (both ways) in the interest rate, the Guardian’s Fund would have earned sufficient interest investment income to cover the interest paid to fund beneficiaries at the gazetted rate of interest. (Base figures are as follows: Interest received - R737 million and Interest paid - R612 million).

18.5 Credit risk

Guardian’s Fund investment portfolios are exposed to the potential for credit-related losses that can result due to an individual, counterparty or issuer being unable or unwilling to honour contractual obligations.

To mitigate this risk, and minimize excessive credit exposure to one single counterparty, the Guardian’s Fund mandate to PIC states that PIC will only invest with local commercial banks or institutions that have a credit rating of at least “A” from one of the recognised domestic and/or international credit rating agencies.

18.6 Concentration risk

Concentration risk is the risk of losses arising due to poor diversification within funds, which can result in undesirable risk exposures. The Guardian’s Fund manages this risk through the PIC investment mandate, which dictates the level of concentration. Money market investments are spread across banks to reduce and diversify the client’s concentration risk.

18.7 Liquidity risk

Liquidity risk is the potential that there will not be adequate liquid assets available to meet the obligations of the Guardian’s Fund when they fall due.

The Guardian’s Fund manages this risk through the investment mandate that is signed with PIC. The mandate is in line with the Fund’s liquidity needs and liability profile of the Fund. Currently, the Guardian’s Fund liquid assets holding is R10.6 Billion.

18.8 Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, systems and external events. The Fund recognises the significance of the operational inherent in all the Fund’s activities. Operational risk is managed within acceptable levels through an appropriate level of management focus and resource allocation.

18.9 Compliance risk

Compliance risk is defined as the risk of legal sanctions, material financial loss, or loss to reputation the Fund may suffer as a result of its failure to comply with laws, its own regulations, code of conduct, and standards of best/good practice. Compliance is managed through the DFI and Procedure Manual which are updated regularly.

Interest received (R millions)

Interest paid (R Millions)

800700600500400300200100

0

-0.02 -0.015 -0.01 -0.005 0 0.005 0.01 0.015 0.02

Prime interest rate fluctuations

Rand

Mill

ions


RP300/2016

ISBN: 978-0-621-44885-6

The Department of Justice and Constitutional Development Tel: 012 315 1111

Private Bag X81, Pretoria, 0001

Momentum Centre, 329 Pretorius Street, Pretoria

www.justice.gov.za @DOjCD_zA DOJCD DOJCD

Date post:	30-Aug-2020
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

The Guardian’s Fund annual report...2 The Guardians Fund 201516 Contents Report of the accounting...

Documents