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South African Institute of Professional Accountants(Registration number 069 956 NPO)

Financial statementsfor the year ended 31 December 2012

SizweNtsalubaGobodo Inc.Registered Auditors

Issued 13 March 2013

South African Institute of Professional Accountants(Registration number 069 956 NPO)Financial Statements for the year ended 31 December 2012

General Information

Country of incorporation and domicile South Africa

Nature of business and principal activities Professional services

Board Members S Olsen (Ms.) (Chairman)

H Salie

K Naicker (Ms.)

R Naidoo

H Pretorius

S Gounden

A Parker

B Tamba

T Kubheka

R Ludwig (Observer)

Business address SAIPA House

Howick Close, Waterfall Park, Vorna Valley, Midrand, South Africa

Postal address P.O. Box 2407, Halfway House, South Africa

1685

Bankers First National Bank

Auditors SizweNtsalubaGobodo Inc.

Registered Auditors

Chief Executive S Daniels

Institute registration number 069 956 NPO

Executive Committee S Olsen (Ms.) (Chairman)

R Naidoo

K Naicker (Ms.)

H Salie

Audit and Risk Committee S Gounden (Chairman)

C Dibete (Ms.)

G Walters

H Pretorius

Investigating Committee H Salie (Chairman)

H Pretorius

M van Rensburg

K Naicker (Ms.) (alternate)

B Noble (Ms.) (alternate)

Disciplinary Committee Adv N Peremanov (Chairman)

S Dollie

A Mangolele

Board Secretary M Nkumanda

1


Index

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

Index Page

Independent Auditors' Report 3 - 4

Board Members' Responsibilities and Approval 5

Board Members' Report 6

Statement of Financial Position 7

Statement of Comprehensive Income 8

Statement of Changes in Equity 9

Statement of Cash Flows 10

Accounting Policies 11 - 14

Notes to the Financial Statements 15 - 25

The following supplementary information does not form part of the financial statements and is unaudited:

Statement of Financial Performance 26 - 27

2

Independent Auditors' Report

To the members of South African Institute of Professional Accountants

We have audited the financial statements of South African Institute of Professional Accountants set out on pages 6 to 25 whichcomprise the statement of financial position at 31 December 2012, and the statement of comprehensive income, statement ofchanges in equity and statement of cash flows for the year then ended, and the notes, comprising a summary of significantaccounting policies and other explanatory information.

Board's Responsibility for the Financial Statements

The Institute's Board is responsible for the preparation and fair presentation of these financial statements in accordance withInternational Financial Reporting Standards, and in the manner required by the Constitution, and for such internal control as theBoard determines necessary to enable the preparation of financial statements that are free from material misstatement, thatdue to fraud or error.

Auditor's Responsibility

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

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

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 financial statements present fairly, in all material respects, the financial position of the South African Instituteof Professional Accounts at 31 December 2012, and its financial performance and its cash flows for the year then ended inaccordance with International Financial Reporting Standards and the Constitution.

Other reports

As part of our audit of the financial statements for the year ended 31 December 2012, we have read the Members’ Report forthe purpose of identifying whether there are material inconsistencies between this report and the audited financialstatements.The Members’ Report is the responsibility of the members. Based on reading the Members’ Report we have notidentified material inconsistencies between this report and the audited financial statements. However, we have not audited theMembers’ Report and accordingly do not express an opinion thereon.

3

Independent Auditors' Report

Supplementary information

Without qualifying our opinion, we draw attention to the fact that supplementary information set out on pages 26 to 27 does notform part of the financial statements and is presented as additional information. We have not audited this information andaccordingly do not express an opinion thereon.

SizweNtsalubaGobodo Inc.Registered AuditorsCilliers van Zyl

Johannesburg

13 March 2013

4


Board Members' Responsibilities and Approval

The Board is required to maintain adequate accounting records and is responsible for the content and integrity of the annualfinancial statements and related financial information included in this report. It is its responsibility to ensure that the financialstatements fairly present the state of affairs of the Institute at the end of the financial year end the results of its operations andcash flows for the year ended, in conformity with International Financial Reporting Standards. The external auditors areengaged to express an independent opinion on the financial statements.

The financial statements are prepared in accordance with International Financial Reporting Standards and are based uponappropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

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

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

The Board has reviewed the Institute’s cash flow forecast and, in the light of this review and the current financial position, issatisfied that the Institute has or has access to adequate resources to continue in operational existence for the foreseeablefuture.

The external auditors are responsible for independently reviewing and reporting on the Institute's financial statements. Thefinancial statements have been examined by the Institute's external auditors and their report is presented on pages 3 to 4.

The annual financial statements set out on pages 6 to 27, which have been prepared on the going concern basis, wereapproved by the Board on 13 March 2013 and were signed on its behalf by:

Ms S Olsen (Chairman) S Daniels (Chief Executive)

5


Board Members' Report

The Board submits its report for the year ended 31 December 2012.

1. Review of activities

Main business and operations

The Institute is a qualification and membership body for professional individuals engaged in accounting and related services.

The operating results and state of affairs of the Institute are fully set out in the attached annual financial statements and do notin our opinion require any further comment.

2. Going concern

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

3. Events after the reporting period

The Board is not aware of any matter or circumstance arising since the end of the financial year.

4. Non-current assets

Details of major changes in the nature of the non-current assets of the Institute during the year were as follows:

The Institute purchased property, plant and equipment to the value of R1,462,554 (2011: R388,076) and intangible assets tothe value of R457,944 (2011: R10,864).

5. Board Members

The Board members of the Institute during the year and to the date of this report are as follows:

Name Designation Changes in BoardS Olsen (Ms.) ChairmanH SalieK Naicker (Ms.)R NaidooR Hattingh Term completed on 30 May 2012H PretoriusS GoundenA Parker Appointed on 13 March 2012B Tamba Appointed on 30 May 2012T Kubheka Appointed on 30 May 2012R Ludwig Observer

6. Secretary

SAIPA's Board secretary is M Nkumanda.

6


Statement of Financial PositionFigures in Rand Note(s) 2012 2011

Restated2010

Assets

Non-Current Assets

Property, plant and equipment 3 8,955,029 8,366,585 8,823,490

Intangible assets 4 345,119 17,505 22,696

Investments 5 163,008 105,043 101,657

9,463,156 8,489,133 8,947,843

Current Assets

Loans to related parties - - 426,262

Accounts receivable 7 3,565,405 3,464,088 1,450,334

Cash and cash equivalents 8 11,079,132 9,156,391 9,365,768

14,644,537 12,620,479 11,242,364

Total Assets 24,107,693 21,109,612 20,190,207

Equity and Liabilities

Equity

Designated funds 9,10,11 6,149,790 5,165,330 5,416,767

Accumulated funds 6,474,043 6,186,140 8,075,711

12,623,833 11,351,470 13,492,478

Liabilities

Non-Current Liabilities

Finance lease obligation 12 1,065,484 322,576 453,388

Current Liabilities

Finance lease obligation 12 239,349 130,812 108,537

Accounts payable 13 10,179,027 9,304,754 6,135,804

10,418,376 9,435,566 6,244,341

Total Liabilities 11,483,860 9,758,142 6,697,729

Total Equity and Liabilities 24,107,693 21,109,612 20,190,207

7


Statement of Comprehensive IncomeFigures in Rand Note(s) 2012 2011

Restated2010

Revenue 15 30,610,538 27,485,967 26,006,057

Other Income 16 5,098,346 3,881,854 4,630,743

Operating expenses (35,006,321) (34,050,760) (31,321,848)

Operating surplus/(deficit) 17 702,563 (2,682,939) (685,048)

Investment revenue 18 640,460 593,537 764,047

Finance costs 20 (128,624) (54,992) (72,109)

Surplus/(Deficit) for the year 1,214,399 (2,144,394) 6,890

Other comprehensive income 57,965 3,386 18,825

Total comprehensive income (loss) 1,272,364 (2,141,008) 25,715

8


Statement of Changes in Equity

Figures in RandDevelopment

FundRevaluation

FundBursary Funds Total Funds Accumulated

FundsTotal equity

Balance at 1 January 2011 4,995,819 70,948 350,000 5,416,767 8,075,711 13,492,478Changes in equityTotal comprehensive income for the year as previously reported - 3,386 - 3,386 (2,779,362) (2,775,976)Transfer (to)/from funds (254,823) - - (254,823) 254,823 -

Total changes (254,823) 3,386 - (251,437) (2,524,539) (2,775,976)

Opening balance as previously reported 4,740,996 74,334 350,000 5,165,330 5,551,172 10,716,502AdjustmentsPrior period errors - - - - 634,968 634,968

Balance at 1 January 2012 as restated 4,740,996 74,334 350,000 5,165,330 6,186,140 11,351,470Changes in equityTotal comprehensive income for the year - 57,964 - 57,964 1,214,399 1,272,363Transfer of funds 876,496 - 50,000 926,496 (926,496) -

Total changes 876,496 57,964 50,000 984,460 287,903 1,272,363

Balance at 31 December 2012 5,617,492 132,298 400,000 6,149,790 6,474,043 12,623,833

Note(s) 9 10 11

9


Statement of Cash FlowsFigures in Rand Note(s) 2012 2011

Restated2010

Cash flows from operating activities

Cash generated from operations 23 2,537,923 (897,101) (644,559)

Interest income 640,459 593,537 760,260

Dividends received - - 3,786

Finance costs (128,624) (54,992) (72,109)

Net cash from operating activities 3,049,758 (358,556) 47,378

Cash flows from investing activities

Purchase of property, plant and equipment 3 (1,462,553) (388,076) (1,437,402)

Proceeds from disposal of property, plant and equipment 3 - 233,780 -

Purchase of other intangible assets 4 (457,944) (10,864) (35,436)

(Increase)/Decrease in loans to related parties - 426,262 (24,333)

Revaluation of financial assets - - 41,872

Revaluation of shares (57,965) (3,386) (18,824)

Net cash from investing activities (1,978,462) 257,716 (1,515,995)

Cash flows from financing activities

Finance lease movements 851,445 (108,537) 561,925

Total cash movement for the year 1,922,741 (209,377) (906,692)

Cash at the beginning of the year 9,156,391 9,365,768 10,272,460

Total cash at end of the year 8 11,079,132 9,156,391 9,365,768

10


Accounting Policies

1. Presentation of Financial Statements

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). Thefinancial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set outbelow. They are presented in South African Rands.

These accounting policies are consistent with those of the previous year.

1.1 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect theamounts presented in the annual financial statements and related disclosures. Use of available information and the applicationof judgement are inherent in the formation of estimates. Actual results in the future could differ from these estimates, which maybe material to the annual financial statements. Significant judgements include:

Accounts receivable/loans and receivables

The Institute measures its accounts receivables and/or loans and receivables for impairment at each Statement of FinancialPosition date. In determining whether an impairment loss should be recorded in the Statement of Comprehensive Income, theInstitute makes judgements as to whether there is observable data indicating a measurable decrease in the estimated futurecash flows from a financial asset.

Provisions

Provisions are recognised when: the Institute has an obligation at the reporting date as a result of a past event; it is probable that the Institute will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably.

1.2 Property, plant and equipment

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 Institute and the cost of the item can be measured reliably.

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

Depreciation is provided using the straight line method to write down the cost, less estimated residual value over the useful lifeof the property plant and equipment as follows:

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

Item Average useful lifeLand IndefiniteBuildings 50 yearsFurniture and fixtures 10-12 yearsMotor vehicles 5 yearsOffice equipment 5 yearsIT equipment 3 years

The residual value and the useful life of each asset is reviewed at the end of each financial year-end.

The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount ofanother asset.

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

11


Accounting Policies

1.3 Intangible assets

An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets are initially recognisedat cost. All research and development costs are recognised as an expense unless they form part of the cost of another assetthat meets the recognition criteria.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful lifeComputer software 2 yearsWebsite 2 years

1.4 Financial instruments

Initial recognition

The Institute classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financialliability or an equity instrument in accordance with the substance of the contractual arrangement. Financial assets and financialliabilities are recognised on the Institutes Statement of Financial Position when the Institute becomes party to the contractualprovisions of the instrument.

Fair value determination

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and forunlisted securities), the Institute establishes fair value by using valuation techniques. These include the use of recent arm’slength transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and optionpricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.

Loans to (from) related parties

These include loans that are recognised initially at fair value plus direct transaction costs. Subsequently these loans aremeasured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflectirrecoverable amounts.

On loans receivable an impairment loss is recognised in profit and loss when there is objective evidence that it is impaired. Theimpairment is measured as the difference between the investment's carrying amount and the present value of estimated futurecash flows discounted at the effective interest rate computed at initial recognition.

Impairment losses are reversed in subsequent periods when an increase in the investment's recoverable amount can berelated objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amountof the investment at the date the impairment is reversed shall not exceed what the amortised cost would have been had theimpairment not been recognised.

Accounts receivable

Accounts receivable are measured at initial recognition at fair value, and are subsequently measured at amortised cost usingthe effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in surplus ordeficit when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability thatthe debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicatorsthat the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carryingamount and the present value of estimated future cash flows discounted at the effective interest rate computed at initialrecognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the asset isrecognised in the Statement of Comprehensive Income within operating expenses. When an accounts receivable isuncollectable, it is written off against the allowance account for accounts receivables. Subsequent recoveries of amountspreviously written off are credited against operating expenses in the Statement of Comprehensive Income.

Accounts payable

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

12


Accounting Policies

1.4 Financial instruments (continued)

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments thatare readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initiallyand subsequently recorded at fair value.

Available-for-sale financial assets

These financial assets are non-derivatives that are either designated in this category or not classified elsewhere. Investmentsare recognised and derecognised on a trade basis, where the purchase or sale of an investment is under a contract whoseterms require delivery of the investment within the timeframe established by the market concerned.

These investments are measured initially and subsequently at fair value. Gains and losses arising from changes in fair valueare recognised directly in equity until the security is disposed of, or is determined to be impaired.

1.5 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease isclassified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases – lessee

Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair valueof the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor isincluded in the statement of financial position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease.

The lease payments are apportioned between the finance charge and reduction of the outstanding liability.The finance chargeis allocated to each period during the lease term so as to produce a constant periodic rate of on the remaining balance of theliability.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference betweenthe amounts recognised as an expense and the contractual payments is recognised as an operating lease asset. This liability isnot discounted.

1.6 Impairment of assets

The Institute measures at each reporting period date, whether there is any indication that an asset may be impaired. If any suchindication exists, the Institute estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is notpossible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit towhich the asset belongs is determined.

If an impairment loss subsequently reverses the carrying amount of the asset (or group of related assets) it is increased to therevised estimate of its recoverable amount (selling price less cost to complete and sell in the case of inventories), but not inexcess of the amount that would have been determined had no impairment loss been recognised for the asset (or group ofassets) in prior years. A reversal of impairment is recognised immediately in profit and loss.

13


Accounting Policies

1.7 Employee benefits

Defined contribution plans

Contributions to a defined contribution plan in respect of services in a particular period are recognised as an expense in thatperiod.

1.8 Provisions and contingencies

Provisions are recognised when: the Institute has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the obligation.

Provisions are not recognised for future operating losses.

Contingent assets and contingent liabilities are not recognised (Note 26).

1.9 Revenue

Revenue from the sale of goods is recognised when all the following conditions have been satisfied: the Institute has transferred to the buyer the significant risks and rewards of ownership of the goods; the Institute retains neither continuing managerial involvement to the degree usually associated with ownership nor

effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the Institute and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with thetransaction is recognised by reference to the stage of completion of the transaction at the Statement of Financial Position date.The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the Institute; the stage of completion of the transaction at the Statement of Financial Position date can be measured reliably and the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall berecognised only to the extent of the expenses recognised that are recoverable.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable forgoods and services provided in the normal course of business, net of trade discounts and volume rebates, and value addedtax.

Interest is recognised, in profit or loss, using the effective interest rate method.

Dividends are recognised, in profit or loss, when the Institute’s right to receive payment has been established.

14


Notes to the Financial StatementsFigures in Rand 2012 2011 2010

2. New Standards and Interpretations

2.1 Standards and interpretations effective and adopted in the current year

In the current year, the Institute has not adopted any effective standards and interpretations as none is relevant to itsoperations.

Standard/Interpretation: Effective date:Years beginning on orafter

IFRS 7 Amendments to IFRS 7 (AC 144) DisclosuresTransfers of financial assets

1 January 2012

IAS 12 Income Taxes: Amendment: Deferred Tax: Recoveryof Underlying Assets

1 January 2012

The above standard had no impact on the Institute's financials during the year.

2.2 Standards and Interpretations early adopted

The Institute has chosen not to early adopt any standards and interpretations.

2.3 Standards and interpretations not yet effective

The Institute has chosen not to early adopt the following standards and interpretations, which have been published and aremandatory for the Institute’s accounting periods beginning on or after 1 January 2013 or later periods:

Standard/ Interpretation: Effective date:Years beginning on orafter

IFRS 9 Financial Instruments 1 January 2013 IAS 27 Separate Financial Statements 1 January 2013 IFRS 12 Disclosure of Interests in Other Entities 1 January 2013 IFRS 13 Fair Value Measurement 1 January 2013 IAS 1 Presentation of Financial Statements 1 January 2013 IAS 19 Employee Benefits Revised 1 January 2013

Management is currently reviewing the impact of these standards on the Institute.

2.4 Standards and interpretations not yet effective or relevant

The following standards and interpretations have been published and are mandatory for the Institute’s accounting periodsbeginning on or after 1 January 2013 or later periods but are not relevant to its operations:

Standard/ Interpretation: Effective date:Years beginning on orafter

IFRS 10 Consolidated Financial Statements 1 January 2013 IAS 27 Separate Financial Statements 1 January 2013 IFRS 11 Joint Arrangements 1 January 2013 IFRS 12 Disclosure of Interests in Other Entities 1 January 2013

Management is currenty reviewing the impact of these standards on the Institute.

15


Notes to the Financial Statements

3. Property, plant and equipment

2012 2011

Cost /Valuation

Accumulateddepreciation

Carrying value Cost /Valuation


Carrying value

Land 775,000 - 775,000 775,000 - 775,000Buildings 7,071,266 (808,583) 6,262,683 7,054,244 (667,527) 6,386,717Furniture and fixtures 452,946 (159,955) 292,991 424,547 (113,490) 311,057Motor vehicles 131,491 (72,320) 59,171 131,491 (46,022) 85,469Office equipment 767,173 (387,702) 379,471 911,026 (339,993) 571,033IT equipment 863,684 (625,091) 238,593 781,720 (544,411) 237,309Finance lease assets - Officeequipment

1,183,900 (236,780) 947,120 - - -

Total 11,245,460 (2,290,431) 8,955,029 10,078,028 (1,711,443) 8,366,585

2010

Cost /Valuation


Carrying value

Land 775,000 - 775,000Buildings 6,977,345 (527,980) 6,449,365Furniture and fixtures 289,936 (38,255) 251,681Motor vehicles 329,565 (98,953) 230,612Office equipment 873,068 (126,980) 746,088IT equipment 678,820 (308,076) 370,744Finance lease assets - Officeequipment

- - -

Total 9,923,734 (1,100,244) 8,823,490

Reconciliation of property, plant and equipment - 2012

Openingbalance

Additions Otherchanges,

movements

Depreciation Total

Land 775,000 - - - 775,000Buildings 6,386,717 17,022 - (141,056) 6,262,683Furniture and fixtures 311,057 26,465 - (44,531) 292,991Motor vehicles 85,469 - - (26,298) 59,171Office equipment 571,033 73,394 (138,680) (126,276) 379,471IT equipment 237,309 161,772 - (160,488) 238,593Finance lease asset - Office equipment - 1,183,900 - (236,780) 947,120

8,366,585 1,462,553 (138,680) (735,429) 8,955,029


Openingbalance

Additions Disposals Reversal ofaccumulateddepreciation

Impairments Depreciation Total

Land 775,000 - - - - - 775,000Buildings 6,449,365 76,899 - - - (139,547) 6,386,717Furniture and fixtures 251,681 170,318 (35,707) - (32,997) (42,238) 311,057Motor vehicles 230,612 - (198,073) 112,241 - (59,311) 85,469Office equipment 746,088 37,958 - - (28,990) (184,023) 571,033IT equipment 370,744 102,901 - - (27,415) (208,921) 237,309

8,823,490 388,076 (233,780) 112,241 (89,402) (634,040) 8,366,585

16



3. Property, plant and equipment (continued)


Openingbalance

Additions Transfers Otherchanges,

movements

Depreciation Total

Land 775,000 - - - - 775,000Buildings 6,296,255 200,719 212,275 - (259,884) 6,449,365Furniture and fixtures 562,282 42,764 (212,275) (155,282) 14,192 251,681Motor vehicles 155,158 131,491 - - (56,037) 230,612Office equipment 47,613 865,198 - (44,877) (121,846) 746,088IT equipment 795,110 197,230 - (539,440) (82,156) 370,744

8,631,418 1,437,402 - (739,599) (505,731) 8,823,490

4. Intangible assets

2012 2011

Cost /Valuation

Accumulatedamortisation

Carrying value Cost /Valuation


Carrying value

Computer software 415,024 (123,751) 291,273 37,769 (20,264) 17,505Website 80,689 (26,843) 53,846 - - -

Total 495,713 (150,594) 345,119 37,769 (20,264) 17,505

2010

Cost /Valuation


Carrying value

Computer software 26,905 (4,209) 22,696Website - - -

Total 26,905 (4,209) 22,696

Reconciliation of intangible assets - 2012

Openingbalance

Additions Amortisation Total

Computer software 17,505 377,255 (103,487) 291,273Website - 80,689 (26,843) 53,846

17,505 457,944 (130,330) 345,119

17



4. Intangible assets (continued)


Openingbalance

Additions Amortisation Total

Computer software 22,696 10,864 (16,055) 17,505


Openingbalance

Additions Otherchanges,

movements

Amortisation Total

Computer software 238,648 35,436 (247,353) (4,035) 22,696

5. Investments

Available-for-saleListed shares at market value3,641 shares held in Sanlam Limited at a fair value of R44,77 (2011:R28,85)

163,008 105,043 101,657

Available-for-sale 163,008 105,043 101,657

Fair values are determined annually at Statement of Financial Position date.

The Institute has not reclassified any financial assets from cost or amortised cost to fair value or from fair value to cost oramortised cost during the current or prior years.

The maximum exposure to credit risk at the reporting date is the fair value of the debt securities classified as available for sale.

6. Financial assets by category

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

2012

Loans andreceivables

Available-for-sale

Total

Other financial assets - 163,008 163,008Trade and other receivables 3,565,405 - 3,565,405Cash and cash equivalents 11,079,132 - 11,079,132

14,644,537 163,008 14,807,545

2011

Loans andreceivables

Available-for-sale

Total

Other financial assets - 105,043 105,043Trade and other receivables 3,464,088 - 3,464,088Cash and cash equivalents 9,156,391 - 9,156,391

12,620,479 105,043 12,725,522

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7. Accounts receivable

Accounts receivable 3,485,417 3,182,710 1,142,822Provision for bad debts (693,393) (873,056) (640,569)Prepayments 730,238 144,000 900,784Deposits 26,651 369,222 16,135VAT - 622,029 -Other receivables 16,492 19,183 31,162

3,565,405 3,464,088 1,450,334

Accounts receivables pledged as security

Accounts receivable have not been pledged as security for any other financial obligation.

Credit quality of accounts receivables

The credit quality of accounts receivables that are neither past nor due nor impaired can be assessed by reference to historicalrepayment trends of individual debtors. Credit terms are offered only to members registered on the Institute's database withvalid details. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentionedabove.

Fair value of accounts receivables

The carrying value of accounts receivable approximates fair value.

Accounts receivables past due but not impaired

All accounts receivable that were past due have been provided for.

Accounts receivables impaired

As of 31 December 2012, accounts receivables of R693,393 (2011: R873,056 ; 2010: R640,569) were provided for.

Reconciliation of provision for impairment of trade and other receivables

Opening balance (873,056) (640,569) (42,008)Provision for impairment - (232,487) (598,561)Unused amounts reversed 179,663 - -

(693,393) (873,056) (640,569)

8. Cash and cash equivalents

Cash and cash equivalents consist of:

Cash on hand 9,707 7,075 12,157Bank balances 2,287,254 2,354,636 1,903,318Call account investments 8,782,171 6,794,680 7,450,293

11,079,132 9,156,391 9,365,768

Cession of Investment Account for Overdraft facility 500,000 500,000 500,000

Credit quality of cash at bank and short term deposits, excluding cash on hand

The credit quality of cash at bank and short term deposits, excluding cash on hand that are neither past due nor impaired canbe assessed by reference to historical information about counterparty default rates. None of the financial institutions with whichbank balances are held defaulted in prior periods and as a result a credit rating of high is ascribed to the financial institutions.The Institute's maximum exposure to credit risk as a result of the bank balances held is limited to the carrying value of thesebalances as detailed above.

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9. Development Fund

The fund was set up to undertake projects in the different regions.

Balance at the beginning of the year 4,740,996 4,995,819 4,583,943Movement for the year - 50% of entrance fee received 520,255 412,677 400,073 - 25% of net surplus 356,241 - 11,803Transfer of funds for development projects - (667,500) -

5,617,492 4,740,996 4,995,819

10. Revaluation Fund

Balance at the beginning of the year 74,334 70,948 52,123Increase/(decrease) in revaluation of shares 57,964 3,386 18,825

132,298 74,334 70,948

11. Bursary Fund

The fund was set up to distribute bursaries from reserves.

Balance at the beginning of the year 350,000 350,000 300,000Transfer from accumulated funds 50,000 - 50,000

400,000 350,000 350,000

12. Finance lease obligation

Minimum lease payments due - within one year 386,749 166,384 154,776 - in second to fifth year inclusive 1,188,702 352,941 519,326

1,575,451 519,325 674,102less: future finance charges (270,618) (65,937) (112,177)

Present value of minimum lease payments 1,304,833 453,388 561,925

Present value of minimum lease payments due - within one year 275,573 130,812 108,537 - in second to fifth year inclusive 1,029,260 322,576 453,388

1,304,833 453,388 561,925

Non-current liabilities 1,065,484 322,576 453,388Current liabilities 239,349 130,812 108,537

1,304,833 453,388 561,925

SAIPA leases certain office equipment under finance leases.

The average lease term is five years and the average effective borrowing rate is 9% (2011: 9%)

Interest rates are linked to prime at the contract date. The Finance leases have fixed repayments.

The Institute's obligations under finance leases are secured by the lessor's charge over the leased assets (Note 3).

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13. Accounts payable

Accounts payable 1,625,599 1,564,021 701,070Amounts received in advance 5,652,508 5,569,525 4,487,941VAT 81,866 - 99,204Other trade creditors 1,962,164 1,381,850 290,277Accrued leave pay 856,890 789,358 557,312

10,179,027 9,304,754 6,135,804

The accounts payable are interest free and are also unsecured. Fair value approximates carrying value.

14. Financial liabilities by category

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

2012

Financialliabilities atamortised

cost

Total

Other financial liabilities 1,304,833 1,304,833Trade and other payables 10,179,027 10,179,027

11,483,860 11,483,860

2011

Financialliabilities atamortised

cost

Total

Other financial liabilities 453,388 453,388Trade and other payables 9,304,754 9,304,754

9,758,142 9,758,142

15. Revenue

Approved training centres 2,081,410 2,007,782 2,152,614Entrance and Administration fees 1,692,010 1,384,186 1,429,023Other fees 6,525 452,457 82,337Technical income 336,071 718,692 19,151Membership fees 23,601,164 21,486,171 21,009,255National Convention 1,030,805 - -Professional Evaluation 1,862,553 1,436,679 1,313,677

30,610,538 27,485,967 26,006,057

16. Other income

CPD Income 4,279,305 3,372,659 3,440,616Advertising Income 819,041 509,195 1,190,127

5,098,346 3,881,854 4,630,743

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17. Operating surplus/(deficit)

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

Operating lease chargesPremises Contractual amounts 36,368 16,220 25,842Equipment Contractual amounts 131,397 170,785 123,912

167,765 187,005 149,754

Amortisation on intangible assets 103,487 16,055 4,035Depreciation on property, plant and equipment 762,272 634,040 505,731Employee costs 13,896,659 12,344,926 9,261,777Research and development - - 379,000Bad debts written off (520,154) (155,590) (678,212)

18. Investment revenue

Dividend revenueListed financial assets - Local - - 3,787

Interest revenueBank 640,459 593,537 760,260

640,459 593,537 764,047

19. National Convention

National Convention Income (1,030,805) - -National Convention Expenses 1,501,084 30,347 -

Deficit/(Surplus) for the National Convention 470,279 30,347 -

SAIPA hosted its 30th Anniversary Accounting Convention in July 2012 at the Birchwood Hotel & Convention Centre inGauteng.

It was themed "Accounting as a Catalyst for Change". The convention sessions raised thought provoking issues on the crucialrole that Accountants play in the changing economic environment and SME sector in the South African economy.

20. Finance costs

Finance leases 126,795 46,239 65,747Bank 1,829 8,753 6,362

128,624 54,992 72,109

21. Taxation

No provision has been made for 2012 as the Institute is exempt from income tax in terms of Section 30 and 10(1)(cN) of theIncome Tax Act.

22. Auditors' remuneration

External audit fee - Current year 144,375 189,700 85,226External audit fee accrual 97,870 56,700 -

242,245 246,400 85,226

22



23. Cash generated from operations

(Deficit)/Surplus for the year 1,214,399 (2,144,394) 6,890Adjustments for:Depreciation and amortisation 865,759 650,095 509,766Dividends received - - (3,787)Interest received (640,459) (593,537) (760,260)Finance costs 128,624 54,992 72,109Revaluation of shares 57,965 3,386 18,824Other non-cash items (Property, Plant and Equipment) 138,680 (22,839) 986,952Changes in working capital:Trade and other receivables (101,317) (2,013,754) (1,187,415)Trade and other payables 874,272 3,168,950 (287,638)

2,537,923 (897,101) (644,559)

24. Committee expenses

Charco 166,959 148,064 132,957Board 331,715 319,052 530,560Executive Committee 162,112 126,904 137,548Edcom 107,492 84,620 86,815Audit Committee 73,693 104,312 160,349Investigation and Disciplinary Committee 125,078 130,217 156,146Legislative projects and other 571,896 700,250 357,234Technical 66,805 67,990 65,894

1,605,750 1,681,409 1,627,503

25. Commitments

Authorised capital expenditure

Already contracted for but not provided for Website - - 20,000

Operating leases – as lessee (expense)

Minimum lease payments due - within one year 3,432 3,432 - - in second to fifth year inclusive 2,288 6,292 -

5,720 9,724 -

Operating lease payments represent rentals payable by the Institute for certain of its office equipment. Leases are negotiatedfor an average term of three years. Operating leases also include rental for storage facility.

26. Contingent asset

Professional Indemnity Policy Bonus

The Institute holds the right to a Professional Indemnity Policy Bonus which could result in the Institute receiving a future cashbenefit dependent on the outcomes of current and future members litigation claims. The amount of the bonus can currrentlynot be quantified and the outcome of the bonus is unknown.

27. First-time adoption of International Financial Reporting Standards

The Institute has applied IFRS 1, First-time adoption of International Financial Reporting Standards, to provide a starting pointfor the reporting under International Reporting and Accounting Standards. On principle these standards have been appliedretrospectively and the comparatives contained in these financial statements do not, as a result of first time adoption of IFRS,differ from those published in the financial statements published for the year ended 31 December 2011.

23



28. Key management emoluments

Executive

Executives - Short term benefits 2,332,611 2,238,750 1,744,050

29. Prior period adjustments

A debtors journal for the year ended 31 December 2010 was incorrectly reversed in 2011. Management discovered the journalin 2012, and corrected the misallocation retrospectively in 2011, which has resulted in a restatement of the 2011 accounts.The effect of the adjustments were as follows:

Statement of Financial PositionAccounts receivable - 723,864 -Liabilities - (88,896) -

Statement of Financial PerformanceMembership fees - (634,968) -

30. Comparative figures

Certain comparative figures have been reclassified. In 2011 the financial statements were restated to include the prior perioderror.

The effects of the reclassification are as follows:

Statement of Financial PositionAssets - 723,864 -Equity - (634,968) -Liabilities - (88,896) -

31. Risk management

Capital risk management

There are no externally imposed capital requirements.

Financial risk management

The Institute’s activities expose it to a variety of financial risks: market risk (including cash flow interest rate risk), credit risk andliquidity risk.

24



31. Risk management (continued)

Liquidity risk

The Institute’s risk to liquidity is a result of the funds available to cover future commitments. The Institute manages liquidity riskthrough an ongoing review of future commitments and credit facilities.

Cash flow forecasts are prepared and borrowing facilities are monitored.

The table below analyses the entity’s financial assets and financial liabilities into relevant maturity groupings based on theremaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table arethe contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances as the impact ofdiscounting is not significant.

At 31 December 2012 Less than 1year

Between 1and 2 years


Over 5 years

Accounts receivable 2,835,167 - - -Short term deposits 8,782,171 - - -Bank balances 2,296,961 - - -Investments - - - 163,008Accounts payable (4,444,653) - - -




Over 5 years

Accounts receivable 2,698,059 - - -Short term deposits 6,794,680 - - -Bank balances 2,361,711 - - -Investments - - - 105,043Accounts payable (2,945,871) - - -




Over 5 years

Accounts receivable 549,550 - - -Short term deposits 7,450,293 - - -Bank balances 1,915,475 - - -Loans to related parties 462,262 - - -Investments - - - 101,657Accounts payable (1,548,659) - - -

Interest rate risk

The Institute's interest rate risk arises mainly from cash and cash equivalents. Interest rate is managed by having both fixedand variable interest rate agreements with banks.

Cash flow interest rate risk

`

Financial instrument Currentinterest rate

Due in lessthan a year

Call account - FNB %4.50 8,782,171Cash in current bankinginstitutions

%0.05 2,296,961

Credit risk

Credit risk consists mainly of cash and cash equivalents and accounts receivable. The Institute deposits cash only with majorbanks with high quality credit standing and limits exposure to any one counterparty.

Accounts receivable comprise a widespread membership base. Management evaluates credit risk relating to members on anongoing basis.

25


Statement of Financial PerformanceFigures in Rand Note(s) 2012 2011 2010

Revenue

Approved Training Centres 2,081,410 2,007,782 2,152,614

Entrance and Administration Fees 1,692,010 1,384,186 1,429,023

Technical income 336,071 718,692 19,151

Membership Fees 23,601,164 21,486,171 21,009,255

National Convention 19 1,030,805 - -

Other fees 6,525 452,457 82,337

Professional Evaluation 1,862,553 1,436,679 1,313,677

15 30,610,538 27,485,967 26,006,057

Other income

Advertising 819,041 509,195 1,190,127

Dividend revenue 18 - - 3,787

Interest received 18 640,459 593,537 760,260

CPD income 4,279,305 3,372,659 3,440,616

5,738,805 4,475,391 5,394,790

Expenses (Refer to page 27) (35,006,320) (34,050,761) (31,321,849)

Operating surplus/(deficit) 17 1,343,023 (2,089,403) 78,998

Finance costs 20 (128,624) (54,992) (72,109)

Surplus/(Deficit) for the year 1,214,399 (2,144,395) 6,889

26The supplementary information presented does not form part of the financial statements and is unaudited


Statement of Financial PerformanceFigures in Rand Note(s) 2012 2011 2010

Expenses

Advertising and Exhibitions (1,673,842) (2,572,667) (2,378,522)

Approved training centres (889,612) (830,086) (581,615)

Attendance fees (758,261) (717,597) (941,460)

Auditors remuneration 22 (242,245) (246,400) (85,226)

Bad debts written-off (520,154) (155,590) (678,212)

Bank charges (184,952) (152,842) (178,647)

Computer expenses (707,247) (661,851) (733,044)

Consulting and professional fees (1,701,084) (2,594,630) (2,155,372)

CPD expenses (2,832,155) (2,708,975) (3,067,565)

Depreciation and amortisation (865,759) (650,095) (509,766)

Donations (9,000) (1,750) (1,510)

Employee costs (13,896,659) (12,344,926) (9,261,777)

Entertainment (74,161) (174,995) (126,386)

Fines and penalties - (1,336) (471)

IFAC meeting sponsorships (354,290) - -

Impairment of assets 21,165 81,024 (986,952)

Insurance (240,811) (152,267) (181,671)

Lease rentals on operating lease (167,765) (187,005) (149,754)

Legal expenses (124,306) (523,678) 9,040

Motor vehicle expenses (22,062) (89,492) (79,819)

National Convention 19 (1,501,084) (30,347) -

Postage (171,385) (191,182) (146,838)

Printing and stationery (395,718) (491,692) (651,347)

Professional evaluations (638,941) (384,340) (274,949)

Promotions (600,865) (98,750) (144,555)

Provision for bad debts 179,664 (232,487) (598,561)

Publications (1,692,506) (2,503,014) (2,145,359)

Research and development costs - - (379,000)

Regional grant (81,877) (66,000) (82,500)

Repairs and maintenance (261,316) (229,656) (347,765)

Security (11,544) (8,515) (10,996)

Website expenses (823,244) (946,507) (656,494)

Staff welfare (377,738) (269,276) (388,146)

Strategic operations (538,483) (527,988) (59,416)

Subscriptions (263,049) (744,530) (716,475)

Telephone and fax (686,876) (461,916) (418,703)

Travel - local (588,006) (850,491) (1,341,826)

Travel - overseas (606,480) (469,068) (365,290)

Utilities (344,868) (272,282) (238,040)

Venue and Catering (358,804) (587,562) (266,860)

(35,006,320) (34,050,761) (31,321,849)

27The supplementary information presented does not form part of the financial statements and is unaudited

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