Statement of Cash Flows

Statement of Cash Flows

Figures in R Note 2017 2016

Cash flows used in operating activities Profit for the year 46,374,196 40,430,636

Adjustments to reconcile profit

Adjustments for increase in inventories (1,004,329) (11,139,181) Adjustments for increase in trade accounts receivable (44,492,207) (12,504,888) Adjustments for decrease in trade accounts payable (5,852,677) (5,070,548) Adjustments for increase in other operating payables 107,501 506,784 Adjustments for depreciation and amortisation expense 581,895 248,985

Total adjustments to reconcile profit (50,659,817) (27,958,848) Net cash flows (used in) / from operations (4,285,621) 12,471,788

Dividend paid

Net cash flows used in operating activities

- (20,000,000)

(4,285,621) (7,528,212)

Cash flows used in investing activities

Purchase of property, plant and equipment (9,539,667) (1,253,423)

Cash flows used in investing activities (9,539,667) (1,253,423)

Cash flows from financing activities

Proceeds from other financial liabilities

Cash flows from financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

12,388,620 6,601,846

12,388,620 6,601,846

(1,436,668) (2,179,789)

(1,709,385) 470,404

11 (3,146,053) (1,709,385)

Accounting Policies

Figures in R

1. General information

Financials+ IFRS SME Proprietary Limited ('the company') retail outlet in central Pretoria.

The company is incorporated and domiciled in South Africa. The address of its registered office is 123 Murray Street, Pretoria, 0001.

2. Basis of preparation

The financial statements of Financials+ IFRS SME Proprietary Limited have been prepared in accordance with the Interna onal Financial Repor ng Standard for Small and Medium-sized En es and the Companies Act of South Africa. The financial statements have been prepared under the historical cost conven on, as modified by the revalua on of investment property, certain property, plant and equipment, biological assets and derivative financial instruments at fair value.

The prepara on of financial statements in conformity with the Interna onal Financial Repor ng Standard for Small and Mediumsized En es requires the use of certain cri cal accoun ng es mates. It also requires management to exercise its judgement in the process of applying the company's accounting policies.

3. Summary of significant accounting policies

The principal accoun ng policies applied in the prepara on of these annual financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

3.1 Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated deprecia on and any accumulated impairment losses. Historical cost includes expenditure that is directly a ributable to bringing the asset to the loca on and condi on necessary for it to be capable of operating in the manner intended by management.

The company adds to the carrying amount of an item of property, plant and equipment the cost of replacing parts of such an item when that cost is incurred if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Land is not depreciated. Deprecia on on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. The estimated useful lives range as follows:

Asset class Depreciation rate

Land Not depreciated Machinery 20.00% Motor vehicles 20.00% Office equipment 16.67% Computer equipment 33.33%

The assets' residual values, useful lives and deprecia on methods are reviewed, and adjusted prospec vely if appropriate, if there is an indication of a significant change since the last reporting date.

An asset's carrying amount is wri en down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Accounting Policies

Figures in R

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'other gains/(losses)' in the statement of comprehensive income.

3.2 Financial instruments

Trade and other receivables

Trade receivables are recognised ini ally at the transac on price. They are subsequently measured at amor sed cost using the effec ve interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objec ve evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Trade and other receivables are classified as debt instruments and loan commitments at amortised cost.

Other financial assets

Other financial assets are recognised ini ally at the transac on price, including transac on costs except where the asset will subsequently be measured at fair value.

Where other financial assets relate to shares that are publically traded, or where fair values can be measured reliably without undue cost or effort, these assets are subsequently measured at fair value with the changes in fair value being recognised in profit or loss. Other investments are subsequently measured at cost less impairment.

Debt instruments are subsequently stated at amor sed cost. Interest income is recognised on the basis of the effec ve interest method and is included in finance income.

Commitments to receive a loan that meet the conditions in paragraph 11.8(c) are be measured at cost less impairment.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, demand deposits and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown in current liabilities on the statement of financial position.

Trade and other payables

Trade payables are recognised ini ally at the transac on price and subsequently measured at amor sed cost using the effec ve interest method.

Other financial liabilities

Other financial liabili es are recognised ini ally at the transac on price, including transac on costs except where the liability will subsequently be measured at fair value.

Where the fair value of other financial liabili es can be measured reliably without undue cost or effort, these liabili es are subsequently measured at fair value with the changes in fair value being recognised in profit or loss.

Debt instruments are subsequently stated at amor sed cost. Interest expense is recognised on the basis of the effec ve interest method and is included in finance costs.

Other financial liabili es are classified as current liabili es unless the company has an uncondi onal right to defer se lement of the liability for at least 12 months after the reporting date.

Issued capital

Ordinary shares are classified as equity.

Accounting Policies

Figures in R

Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the me value of money is material, the ini al measurement is on a present value basis.

3.3 Inventories

Inventories are stated at the lower of cost and es mated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises packaging costs, raw materials, direct labour, other direct costs and related produc on overheads (based on normal opera ng capacity). At each repor ng date, inventories are assessed for impairment. If inventory is impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

3.4 Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change a ributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substan vely enacted by the reporting date in the countries where the company's subsidiaries operate and generate taxable income.

Deferred income tax is recognised on temporary differences (other than temporary differences associated with unremi ed earnings from foreign subsidiaries and associates to the extent that the investment is essen ally permanent in dura on, or temporary differences associated with the ini al recogni on of goodwill) arising between the tax bases of assets and liabili es and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each repor ng date and a valua on allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

3.5 Revenue

Revenue is measured at the fair value of the considera on received or receivable. Revenue is shown net of value-added tax, returns, rebates and discounts.

Revenue from the sale of goods is recognised when: a) significant risks and rewards of ownership of the goods have been transferred to the buyer; b) there neither con nuing managerial involvement to the degree usually associated with ownership nor effec ve control over the goods sold; c) the amount of revenue can be measured reliably; d) it is probable that the economic benefits associated with the transaction will flow to the entity; and e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest income is recognised using the effective interest method.

3.6 Employee benefits

Employee benefits are all forms of considera on given by an en ty in exchange for service rendered by employees or for the termination of employment.