Exhibit 99.3

 

THORT Chartered Accountants

  

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements

for the year ended 31 December 2015

      

These annual financial statements were prepared by:

West End Corporate Services (Pty) Ltd

These annual financial statements have been audited in compliance with the applicable requirements of the Companies Act

71 of 2008.

Published 08 July 2016

 

P O Box 3352, Dainfern 2055

Telephone: (011) 467 6711

Facsimile: 086 509 1438

E-mail: catherine@thortsa.co.za

www.thortsa.co.za

Partners: Catherine Hewett, CA.(SA), Adv. Tax. Cert

Ian Hewett, CA.(SA), Practice No. 945544

 

 

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Index

 

The reports and statements set out below comprise the annual financial statements presented to the shareholder:

 

Index	Page
Director’s Responsibilities and Approval	2
Independent Auditors’ Report	3
Director’s Report	4
Statement of Financial Position	5
Statement of Comprehensive Income	6
Statement of Changes in Equity	7
Statement of Cash Flows	8
Accounting Policies	9 - 11
Notes to the Annual Financial Statements	12 - 13
The following supplementary information does not form part of the annual financial statements and is unaudited:
Detailed Income Statement	14

 

Preparer
West End Corporate Services (Pty) Ltd
Published
08 July 2016

 

  

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Director’s Responsibilities and Approval

 

The director is required in terms of the Companies Act 71 of 2008 to maintain adequate accounting records and is responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is his responsibility to ensure that the annual financial statements fairly present the state of affairs of the company as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with Generally Accepted Accounting Principles (GAAP). The external auditors are engaged to express an independent opinion on the annual financial statements.

 

The annual financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

 

The director acknowledges that he is ultimately responsible for the system of internal financial control established by the company and places considerable importance on maintaining a strong control environment. To enable the director to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

 

The director is of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

 

The director has reviewed the company’s cashflow forecast for the year to 31 December 2016 and, in the light of this review and the current financial position, he is satisfied that the company has or has access to adequate resources to continue in operational existence for the foreseeable future.

 

The external auditors are responsible for independently auditing and reporting on the company’s annual financial statements. The annual financial statements have been examined by the company’s external auditors and their report is presented on page 3.

 

The annual financial statements set out on pages 4 to 14, which have been prepared on the going concern basis, were approved by board on 08 July 2016 and were signed on its behalf by:

 

/s/ WT James
WT James
Johannesburg
08 July 2016

 

  

THORT Chartered Accountants

  

Independent Auditors’ Report

 

To the Management of Cards Plus (Pty) Ltd

 

We have audited the annual financial statements of Cards Plus (Pty) Ltd, as set out on pages 5 to 13, which comprise the statement of financial position as at 31 December 2015, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

 

Director’s Responsibility for the Annual Financial Statements

 

The company’s director is responsible for the preparation and fair presentation of these annual financial statements in accordance with International Financial Reporting Standards, and requirements of the Companies Act 71 of 2008, and for such internal control as the director determines is necessary to enable the preparation of annual financial statements that are free from material misstatements, whether due to fraud or error.

 

Auditors’ Responsibility

 

Our responsibility is to express an opinion on these annual financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the annual financial statements are free from material misstatement.

 

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

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Opinion

 

In our opinion, the annual financial statements present fairly, in all material respects, the financial position of Cards Plus (Pty) Ltd as at 31 December 2015, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act 71 of 2008.

 

Emphasis of Matter

 

Without qualifying our opinion, we draw attention to note 8 to the annual financial statements which indicates that the company incurred a net loss of R 1,743,792 for the year ended 31 December 2015 and, as at that date, the company’s total liabilities exceeded its total assets by R 1,743,692. The note 8 also indicates that these conditions, along with other matters, indicate the existence of a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern.

 

Thort Chartered Accountants
Partner
08 July 2016

 

P O Box 3352, Dainfern 2055

Telephone: (011) 467 6711

Facsimile: 086 509 1438

E-mail: catherine@thortsa.co.za

www.thortsa.co.za

Partners: Catherine Hewett, CA.(SA), Adv. Tax. Cert

Ian Hewett, CA.(SA), Practice No. 945544

 

 

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Director’s Report

 

The director has pleasure in submitting his report on the annual financial statements of Cards Plus (Pty) Ltd for the year ended 31 December 2015.

 

1.

Review of financial results and activities

 

The annual financial statements have been prepared in accordance with International Financial Reporting Standards and the requirements of the Companies Act 71 of 2008. The accounting policies have been applied consistently compared to the prior year.

 

Full details of the financial position, results of operations and cash flows of the company are set out in these annual financial statements.

 

2.

Share capital

 

There have been no changes to the authorised or issued share capital during the year under review.

 

3.

Directorate

 

The director in office at the date of this report are as follows:

 

Director

WT James

 

4.

Events after the reporting period

 

The director is not aware of any material event which occurred after the reporting date and up to the date of this report.

 

5.

Going concern

 

The director believes that the company has adequate financial resources to continue in operation for the foreseeable future and accordingly the annual financial statements have been prepared on a going concern basis. The director has satisfied himself that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The director is not aware of any new material changes that may adversely impact the company. The director is also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the company.

 

6.

Auditors

 

Thort Chartered Accountants continued in office as auditors for the company for 2015.

 

At the AGM, the shareholder will be requested to reappoint Thort Chartered Accountants as the independent external auditors of the company and to confirm Partner’s name as the designated lead audit partner for the 2016 financial year.

 

  

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Statement of Financial Position as at 31 December 2015

 

						2015				2014
		Note(s)				R				R
Assets
Non-Current Assets
Property, plant and equipment			2				1,684,114				3,667,642
Goodwill			3				356,799				356,799
							2,040,913				4,024,441
Current Assets
Inventories							1,651,567				1,124,878
Trade and other receivables							1,372,138				758,000
Cash and cash equivalents							1,219,580				1,041,418
							4,243,285				2,924,296
Total Assets							6,284,198				6,948,737
Equity and Liabilities
Equity
Share capital			4				100				100
Accumulated loss							(1 743 792	)			(1,589,221	)
							(1,743,692	)			(1,589,121	)
Liabilities
Non-Current Liabilities
Other financial liabilities			5				6,439,630				6,598,899
Current Liabilities
Trade and other payables							1,588,260				1,938,959
Total Liabilities							8,027,890				8,537,858
Total Equity and Liabilities							6,284,198				6,948,737

 

  

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Statement of Comprehensive Income

 

						2015				2014
		Note(s)				R				R
Revenue							20,052,725				14,033,930
Cost of sales							(10,061,808	)			(6,378,230	)
Gross profit							9,990,917				7,155,700
Other income							19,017				14,930
Operating expenses							(10,213,821	)			(8,764,952	)
Operating loss							(203,887	)			(1,594,322	)
Investment revenue							56,101				9,816
Finance costs							(6,785	)			(4,715	)
Loss for the year							(154,571	)			(1,589,221	)

 

 

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Statement of Changes in Equity

 

						Accumulated
		Share capital				loss				Total equity
		R				R				R
Balance at 01 January 2014			100				-				100
Loss for the year			-				(1,589,221	)			(1,589,221	)
Balance at 01 January 2015			100				(1,589,221	)			(1,589,121	)
Loss for the year			-				(154,571	)			(154,571	)
Balance at 31 December 2015			100				(1,743,792	)			(1,743,692	)
Note(s)			4

 

  

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Statement of Cash Flows

 

				2015				2014
		Note(s)		R				R
Cash flows from operating activities
Cash (used in) generated from operations		7			396,736				(161,048	)
Interest income					56,101				9,816
Finance costs					(6,785	)			(4,715	)
Net cash from operating activities					446,052				(155,947	)
Cash flows from investing activities
Purchase of property, plant and equipment		2			(126,165	)			(5,401,530	)
Sale of property, plant and equipment		2			17,544				-
Net cash from investing activities					(108,621	)			(5,401,530	)
Cash flows from financing activities
Repayment of other financial liabilities					(159,269	)			6,598,899
Net cash from financing activities					(159,269	)			6,598,899
Total cash movement for the year					178,162				1,041,422
Cash at the beginning of the year					1,041,418				-
Total cash at end of the year					1,219,580				1,041,422

 

  

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Accounting Policies

 

1.

Presentation of Annual Financial Statements

 

The annual financial statements have been prepared in accordance with Generally Accepted Accounting Principles (GAAP), and the Companies Act 71 of 2008. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rands.

 

These accounting policies are consistent with the previous period.

 

1.1

Property, plant and equipment

 

The cost of an item of property, plant and equipment is recognised as an asset when:

·

it is probable that future economic benefits associated with the item will flow to the company; and

·

the cost of the item can be measured reliably.

 

Property, plant and equipment is initially measured at cost.

 

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

 

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.

 

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

 

The useful lives of items of property, plant and equipment have been assessed as follows:

 

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

 

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

 

1.2

Financial instruments

 

Initial recognition and measurement

 

Financial instruments are recognised initially when the company becomes a party to the contractual provisions of the instruments.

 

The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

 

Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets.

 

For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.

 

  

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Accounting Policies

 

1.2

Financial instruments (continued)

 

Trade and other receivables

 

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

 

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.

 

Trade and other receivables are classified as loans and receivables.

 

Trade and other payables

 

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

 

Cash and cash equivalents

 

Cash and cash equivalents comprise cash on hand and 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. These are initially and subsequently recorded at fair value.

 

1.3

Tax

 

Current tax assets and liabilities

 

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

 

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

 

Tax expenses

 

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

·

a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or

·

a business combination.

 

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

 

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

 

1.4

Share capital and equity

 

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

 

 

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Accounting Policies

 

1.5

Turnover

 

Turnover comprises of sales to customers and service rendered to customers. Turnover is stated at the invoice amount and is exclusive of value added taxation.

 

1.6

Borrowing costs

 

All borrowing costs are recognised as an expense in the period in which they are incurred.

 

 

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Notes to the Annual Financial Statements

 

		2015				2014
		R				R

2.

Property, plant and equipment

 

		2015												2014
		Cost/				Accumulated								Cost/				Accumulated
		Valuation				depreciation				Carrying value				Valuation				depreciation				Carrying value
Plant and machinery			9,575,648				(8,167,989	)			1,407,659				9,614,425				(6,259,322	)			3,355,103
Furniture and fixtures			173,505				(143,614	)			29,891				163,625				(103,202	)			60,423
Motor vehicles			350,152				(122,448	)			227,704				236,037				(49,175	)			186,862
Office equipment			75,487				(73,245	)			2,242				75,487				(63,874	)			11,613
IT equipment			361,577				(350,448	)			11,129				359,407				(343,619	)			15,788
Computer software			64,728				(59,239	)			5,489				64,728				(26,875	)			37,853
Total			10,601,097				(8,916,983	)			1,684,114				10,513,709				(6,846,067	)			3,667,642

 

Reconciliation of property, plant and equipment - 2015

 

		Opening
		balance				Additions				Disposals				Depreciation				Total
Plant and machinery			3,355,103				-				(27,144	)			(1,920,300	)			1,407,659
Furniture and fixtures			60,423				9,880				-				(40,412	)			29,891
Motor vehicles			186,862				114,115				-				(73,273	)			227,704
Office equipment			11,613				-				-				(9,371	)			2,242
IT equipment			15,788				2,170				-				(6,829	)			11,129
Computer software			37,853				-				-				(32,364	)			5,489
			3,667,642				126,165				(27,144	)			(2,082,549	)			1,684,114

 

A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the company.

 

3.

Goodwill

 

		2015												2014
		Cost				Accumulated impairment				Carrying value				Cost				Accumulated impairment				Carrying value
Goodwill			356,799				-				356,799				356,799				-				356,799
4.    Share capital
Authorised
1000 Ordinary shares																			1,000				1,000
Issued
Ordinary																			100				100

 

 

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Notes to the Annual Financial Statements

 

		2015				2014
		R				R

5.

Other financial liabilities

 

Held at amortised cost
Penn Investment Inc (USA)			6,439,630				6,598,899
The loan is unsecured, interest free and has no fixed terms of repayment.

 

The loan has been subordinated until such time as the assets of the company, fairly valued, exceed its liabilities.

 

Non-current liabilities
At amortised cost			6,439,630				6,598,899

 

6.

Taxation

 

No provision has been made for 2015 tax as the company has no taxable income. The company has an assessed loss available for set off against future taxable income.

 

7.

Cash (used in) generated from operations

 

Loss before taxation			(154,571	)			(1,589,221	)
Adjustments for:
Depreciation and amortisation			2,082,549				1,733,888
Loss on sale of assets			9,600				-
Interest received - investment			(56,101	)			(9,816	)
Finance costs			6,785				4,715
Other non-cash items			-				(356,799	)
Changes in working capital:
Inventories			(526,689	)			(1,124,878	)
Trade and other receivables			(614,138	)			(757,900	)
Trade and other payables			(350,699	)			1,938,963
			396,736				(161,048	)

 

8.

Going concern

 

We draw attention to the fact that at 31 December 2015, the company had accumulated losses of R (1,743,792) and that the company’s total liabilities exceed its assets by R (1,743,692).

 

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

 

The ability of the company to continue as a going concern is dependent on a number of factors. The most significant of these is that the director continue to procure funding for the ongoing operations for the company and that the subordination agreement referred to in note 5 of these annual financial statements will remain in force for so long as it takes to restore the solvency of the company.

 

  

Cards Plus (Pty) Ltd

(Registration number 2013/222236/07)

Annual Financial Statements for the year ended 31 December 2015

 

Detailed Income Statement

 

				2015				2014
		Note(s)		R				R
Revenue					20,052,725				14,033,930
Cost of sales					(10,061,808	)			(6,878,230	)
Gross profit					9,990,917				7,155,700
Other income
Discount received					2,055				838
Interest received					56,101				9,816
Profit and loss on exchange differences					16,962				14,092
					75,118				24,746
Operating expenses
Accounting fees					14,462				43,322
Administration and management fees					210,000				480,000
Advertising					361,138				97,050
Auditors remuneration					-				29,400
Bad debts					1,028				16,760
Bank charges					56,535				41,526
Cleaning					14,401				7,585
Computer expenses					173,534				101,324
Delivery expenses					10,180				140,616
Depreciation, amortisation and impairments					2,082,549				1,733,888
Discount allowed					421				612
Donations					10,460				2,500
Employee costs					5,279,672				4,333,194
Entertainment					22,207				13,661
General expenses					22,016				926
Insurance					190,725				177,574
Lease rentals on operating lease					1,000,858				781,144
Legal expenses					5,785				24,860
Levies					42,188				4,014
Motor vehicle expenses					167,629				188,481
Municipal expenses					151,342				221,646
Payroll administration					23,700				23,490
Printing and stationery					25,453				26,006
Profit and loss on sale of assets and liabilities					9,600
Repairs and maintenance					24,459				29,319
Secretarial fees					17,012				9,130
Staff welfare					106,190				50,827
Subscriptions					2,081				1,397
Telephone and fax					113,959				101,820
Training					4,418				34,067
Travel - local					9,356				9,572
Workmens compensation					60,463				39,241
					10,213,821				8,764,952
Operating loss					(147,786	)			(1,584,506	)
Finance costs					(6,785	)			(4,715	)
Loss for the year					(154,571	)			(1,589,221	)

 

The supplementary information presented does not form part of the annual financial statements and is unaudited