ASP 1 by gyvwpsjkko

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									Supplier Park Development Company (Pty) Ltd




                                          2008
                                    Annual Repor t
Vision
By combining international best practice with local experience we will develop and
manage a world class supplier park environment for the Global Automotive Industry.




Mission
SPDC provides innovative turnkey solutions around physical infrastructure, logistics
and property services for the global automotive industry based on a supplier clustering
concept.


Our facilities are geared towards an effective production environment, smooth logistics
handling, centralized facilities and ICT Management thereby allowing the entrepreneur
to focus on core business, leading to improved global competitiveness.



Our Values
The people of the Supplier Park Development Company:
   Are client oriented and totally committed to service excellence;
   Forster a learning working environment, a culture of free flow of information, staff
   development, compassion, and are committed to the principles of employment
   equity;
   Will in all interactions and dealings, act in a professional and ethical manner;
   Will perform jobs with skill, diligence and integrity, and project a professional
   image;
   Are committed to upholding the highest corporate governance practice;
   Will carry developments in a socially and environmentally responsible manner.
Contents


Overview of ASP                               2


Phases of ASP                                 5


Ideal Location                                6


MEC Report                                    8


Chairman’s Report                             9


CEO’s Report                                  10


Economic Impact Report                        12


Meeting our Objectives                        15


Our Board                                     17


Our Team                                      18


Divisional Report Business Development        20


Divisional Report Operations & Construction   23


Development Partners                          26


Automotive Suppliers                          27
       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




    Overview of Automotive Supplier Park




    Automotive Supplier Park (ASP) is a Blue IQ development located        (OEM); ASP offers significant benefits, including:
    in Rosslyn, north of Tshwane, in the heart of Gauteng’s automotive
                                                                              Close proximity to vehicle manufacturers
    industry, boasting the highest concentration of vehicle
                                                                              Cost benefits through shared infrastructure, services and
    manufacturers in the country.
                                                                              facilities concept
                                                                              State-of-the-art ICT infrastructure and services
    Development of ASP commenced in 2002 with the mission to
                                                                              Central logistics warehouse and container terminal
    create a beneficial environment for automotive component
                                                                              Central Hub comprising offices, conference facilities and retail
    suppliers by providing infrastructure, logistics and services to the
                                                                              centre
    satisfaction of all stakeholders.
                                                                              World-class production environment with 24-hour security
                                                                              Local and Provincial Government support.
    By grouping different technologies, services and service providers,
    ASP achieves synergies and optimisation through economies of
                                                                           ASP comprises an area of over 130ha and is being developed in
    scale and contributes to the sustainability and growth of the
                                                                           five phases. Infrastructure for the first two phases (approximately
    South African automotive industry.
                                                                           50ha) has been completed with more than 100,000m of buildings
                                                                           erected. The total capital investment committed to date amounts
    The first of its kind in Africa and the first supplier park in the
                                                                           to more than R380 million.
    world to service more than one original equipment manufacturer




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                                                                     SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




 Overview of Automotive Supplier Park (continued)




Turnkey buildings are developed to tenant requirements and are         Critical to the success of ASP is its advanced Information and
designed to achieve optimised factory layout and process flows.        Communication Technology (ICT) infrastructure and services.
For smaller operations, shared mini-factories are available.           Tenants are offered a wide range of ICT services including least-
                                                                       cost routing IP telephony service, broadband internet and email,
The logistic centre comprises a warehouse of more than 34,000m         server access, back-up and data recovery services, access control
which serves ASP tenants and other automotive customers.               and CCTV monitoring.
A significant benefit for ASP tenants is the centrally located
container depot which is able to handle all the inbound and            ASP is an international benchmark project that has contributed
outbound container traffic of the park.                                significantly to the global competitiveness of the South African
                                                                       automotive industry. The project enjoys strong support from
The Central Hub incorporates offices for service providers, and        Local, Provincial Government as well as National Government,
a 4-star graded Conference Centre with facilities such as video        the automotive industry and service providers.
conferencing and boardrooms. A Retail Centre which houses a
canteen, coffee shop, fast food outlet, ATM and medical facilities
has been developed to service ASP tenants on a share service
basis.




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     SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




    Overview of Automotive Supplier Park (continued)


                                                           WHY ASP?
                                                Modelled on leading supplier parks in
                                                Europe, Japan and America, the ASP
                                                concentrates automotive component
                                                manufacturers, suppliers and service
                                                providers in one location to achieve
                                                synergies and cost benefits.


        Shared infrastructure, services                                                  Strategic location close
                 and facilities                                                                  to OEMs




             State-of-the-art ICT                       World-class production          Central logistics warehouse
                Infrastructure                               environment




              Turnkey buildings                                                             Optimised logistics
                                                                                                processes




4
ASP Phases
                 4
                     3

             5
                                                2
                                   1




                         Phase 1       49.3Ha
                         Phase 2       10.6Ha
                         Phase 3       11.4Ha
                         Phase 4       22.9Ha
                         Phase 5       36.5Ha
                         MSC Container Depot
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Ideal Location

The ASP is located in Rosslyn, north of Tshwane (Pretoria), in the heart of Gauteng’s automotive industry. The area boasts the
highest concentration of vehicle manufacturers in the country, including BMW, Nissan/Renault, and Ford/Mazda. The ASP is the
first supplier park in the world to service more than one OEM.




                                                                                          N1


                                                                                               Cullinan
                                                     N4                        Pretoria
                                                                                                          Bronkhorstspruit
                                                                                                    N4
                                                                          Centurion
                                                                                          R21                                N4
                                                                                  N1
                                                                         Midrand
                                                                                       Kempton Park
                                                                     Sandton                                  N12
                                              Krugersdorp
                                                  Roodepoort                        Benoni
                                                                     Johannesburg            Boksburg
                                                                                 Alberton
                                     Carletonville        N12
                                                                                                      Nigel
                                                                                                                             N17
                                                                                       N3
                                                                N1                               Heidelburg
    Distance to OEMs:

                                                          Vanderbijlpark
                                     1.3 km

                                                                                                     N3


                                     3.3 km

                                                                               Gauteng Province

                                      35 km


    Road/Rail Links

    •    Close proximity N4/N1 highways
    •    MSC Container Depot: 0.5km

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       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




    MEC’s Report

    In 1997 the Gauteng Provincial Government published its first Trade and Industry
    Strategy which outlined the need to focus on key economic sectors that have the
    potential to significantly shift the economic growth of the province.


    The Automotive Supplier Park (ASP) was established by Blue IQ Investment Holdings
    (Pty) Ltd, with a view to enhancing the efficiency of the automotive industry supply
    chain by targeting tenants to closely locate, thus resulting in clustering. This would
    help to keep the necessary resources in the province and thereby preserve jobs.
    The second and most important objective was to help improve the global
    competitiveness of the local automotive industry and to increase its export potential
    so as to ensure its sustainability.


    The Supplier Park Development Company (SPDC), which develops and manages
    the ASP, has recently been selected to establish the new supplier park in the eastern
    part of Tshwane. The economic benefits that we hope to achieve include:


        Increasing global competitiveness of the sector;
        Increase in local content of inputs supplied to OEM’s;
        Increasing exports and foreign currency earning for the Country;
        Expanding job opportunities to deal with unemployment.


    The total investment by Government in the ASP is well above R380 million and
    we will continue to invest to ensure that the park continues to grow in tandem
    with the industry needs.


    Whilst on the subject of continued investment, we would like to congratulate
    OEM stakeholders for the decisions taken to increase investment in South Africa
    through expansions. We in turn pledge our ongoing support to all OEM’s and all
    other industry players.


    I would like to thank the Board of Directors, management and team members at
    the SPDC and its holding company, Blue IQ, for their sterling work, as well as the
    OEM’s and component suppliers for their continued support to the success of the
    ASP.




    Paul Mashatile
    MEC Department of Economic Development
    Gauteng Provincial Government


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                SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Chairman’s Report
The concept of an Automotive Supplier Park (ASP) was implemented in 2002 by
Blue IQ Investment Holdings (Pty) Ltd as part of an overall strategy aimed specifically
to kick-start interventions in the Provincial economy. Six years down the road the
ASP’s positive results, borne out by empirical and scientific economic impact studies,
showed that its existence has contributed significantly to Provincial growth.


This was made possible through the collaboration and cooperation of Gauteng
Provincial Government, National Government, the City of Tshwane, the Original
Equipment Manufacturers (OEM’s), international institutions and other strategic
partners. The year under review has shown an increased number of jobs that were
created directly or indirectly, despite the decline in vehicle sales which has put the
South African automotive industry under challenge.


Over the past year, ASP managed to attract new tenants for a full occupancy of
existing buildings. Demand for new property space has also been identified and
further developments will be forthcoming in the new financial year. The success
of ASP has proven to be outstanding and hence SPDC management has been
tasked to carry out the further expansion of ASP, with the development of a new
BEE Supplier Park in Silverton. Our success has also indicated to be a benchmark
for similar developments around the country, which has received the support of
the Local, Provincial and National government to make it even more globally
competitive.


The success of SPDC, as it moves closer to commercial sustainability, has also
demonstrated that the model of providing a geographically and strategically
enabling environment, does work. It is a model that goes beyond the mere concept
of an industrial park. The ASP story is about a focussed environment that leads
to the success of all its stakeholders in unison.


The SPDC Team and Board of Directors will remain committed to render the highest
quality of services offered at ASP. At the same time, it must continue to work with
Blue IQ as its holding company to ensure that the progressive developments as
the Park continue to add to industry cohesion and ultimately Provincial growth.




Ms. Nomhle Canca
Chairman of the SPDC Board




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           SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     CEO’s Report
     The main highlight of the 2007/08 financial year, which was the sixth year of the existence
     of Supplier Park Development Company (Pty) Ltd (SPDC) and Automotive Supplier Park
     (ASP), was the celebration of the five years of existence of the company and the project.
     We used the function to punctuate the life cycle of both the company and the project.
     This was a necessary activity as it enabled us to take stock of what happened over the
     initial five years in terms of the successes that can be used as lessons to build our future
     on.

     This eloquent function was graced by both senior political figures and captains of the
     South African Automotive Industry. The senior political figures that attended were MEC,
     Mr Brian Hlongwa from Gauteng Provincial Government who gave a keynote speech,
     the Mayor of Tshwane Dr Gwen Ramakgopa who welcomed the guests on behalf of
     the City of Tshwane and Blue IQ Investment Holdings Company CEO and SPDC Chairman
     Ms Nomhle Canca. The automotive industry was represented by both ASP tenants, the
     OEM’s and National Association of Automotive Manufacturers of South Africa (NAAMSA).
     The automotive industry OEM’s CEO’s and senior directors that attended were BMW,
     FIAT, Ford, Iveco and Mahindra. Mr Bodo Donauer who is the MD of BMW delivered a
     speech from an automotive perspective. To crown it all, NAAMSA was represented by
     their Executive Mr Nico Vermeulen.

     The function had two objectives: viz to celebrate the successful five years of existence
     and to establish a platform through which we will promote ASP and position it in the
     automotive and property market place. The function was well received by the media
     and it is believed that the success thereof will have a knock-on effect on the 2008/09
     financial year and the years thereafter.

     The year under review marked the first year whereby the company operated as a
     fully-fledged company with most key functions that were previously outsourced, are
     now done internally. Key functions such as financial management, human resource
     management, marketing, construction management, facilities management and ICT
     support were established in house. While most of these functions were done internally
     during 2006/07, the insourcing of ICT and facilities management functions were finalized
     during the year under review.

     The result of business transformation was the enhancement of company performance
     in terms of growth and profitability. Income grew by 15% from the previous year and
     profit also increased significantly. Credit for good result must go to our new management
     team who showed character by adapting quickly to the challenges of the company which
     included perfoming duties effectively while carrying out a major transformation of the
     company’s whole business.

     A major unexpected challenge we faced during the year under review is the changes
     of the composition of the Board of Directors of the company. The Chairman of the
     Board, Dr Paulo Fernandes resigned and Ms Nomhle Canca was appointed as the new
     Chairman. Three new directors were appointed to the board viz Ms Grathel Motau, Mr
     Bongani Phakathi and Mr Younaid Waja. The appointment of these directors enabled
     the company to have a full board complement of five board members and also enabled
     the company to establish its own Audit and HR Board sub committees, which are
     independent of our holding company (Blue IQ Holdings).


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                                                                          SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




CEO’s Report (continued)
To this end, we would like to thank the past board members,                 SPDC together with Gauteng Provincial Government, Blue IQ and
especially the past Chairman Dr Paulo Fernandes for his contribution        the City of Tshwane played a major role in assisting Ford in their bid
in the amount of research work towards the feasibility of a supplier        to win the contract. Our role was to model a mini Supplier Park next
park development in Tshwane which he did through Automotive                 to the Ford production plant in Silverton which will focus on developing
Industrial Development Centre (AIDC), our sister company, which             BEE suppliers. The value of the mini Supplier Park will be to contribute
also established SPDC in 2002. We would also like to welcome the            toward the reduction of the cost of the vehicle production. It has
new board members especially Ms Nomhle Canca in her new role                now been confirmed that SPDC will develop and manage the Ford
as the Chairman of the Board. Ms Canca has been serving on the              mini Supplier Park.
board since 2004 as a director. We are looking forward to their
leadership and contributions which we believe will assist in taking         Our relationships with various stakeholders were enhanced during
the company to the next level.                                              the year under review. The 5 year celebration function successfully
                                                                            brought the respective politicians from Gauteng Province and the
Regarding the land development, we met several targets during the
                                                                            City of Tshwane together with the captains of the automotive
year which included the long overdue transfer of Phases 1, 2 and
                                                                            industry. We congratulate Ford Motor Company and the whole
3 land from City of Tshwane to SPDC and confirmation by the
                                                                            team that rallied behind their bid. We worked very closely with the
Council of Tshwane to make the land for Phase 4, which forms part
                                                                            City of Tshwane in the study of phases 3, 4 and 5 infrastructure.
of ASP, available for the project. We are now finalising the details
                                                                            We are also participating in the City’s power initiatives. The Premier
thereof so that we can develop part thereof for an extension of the
                                                                            of Gauteng Province together with the MEC for Finance and Economic
Mediterranean Shipping Company (MSC) depot. As the infrastructure
of phase 3, 4 and 5, where ASP intends to expand, was developed             Development and the SPDC board member visited BMW in Germany

about 20 years ago. This infrastructure is now either damaged,              while senior members of our management team visited Fiat in Brazil

deteriorated due to obsolescence or was vandalized. We have                 and Tata Motors in India. We also joined DTI and BUSA on their
conducted the study that confirmed the status of the whole                  local and international business missions. We are now working very
infrastructure and informed us of how much work needs to be done            closely with Gauteng Economic Development Agency (GEDA). Other
within various elements of the infrastructure. The study was conducted      relationships that were cemented include NAAMSA and NAACAM
in conjunction with the City of Tshwane and they have pledged to            while we still maintained our good relationship with SAPOA.
assist so that the property may be ready to be developed for the
                                                                            Operationally, we improved our controls by introducing MDA property
various new tenants.
                                                                            management system which produces automatic rent rolls and tenant
Logistics centre, which is operated by UTi, was extended by                 statements and eliminated monthly manual data capturing.
10 000m during the year to give final space of 34 000m . We                 The system will also improve our lease and space management once
welcomed Schenker as a new tenant to our factory buildings in               all building details have been verified and captured.
phase 2. We experienced excessive demand for office space to the
extent that we ended converting some of the Retail Centre space             Comparison of operating costs incurred versus the amount recovered
in phase 1 for office use. The following office tenants took occupation     from tenants can also be done easily if any variances identified to
at ASP: Kempston Logistics and Kempston Outsourcing. We also                individual tenant or building level.
developed a Training/Fitment Centre for Geely Motors and provided
parking space for BMW to support of their VDC operation.                    In conclusion, I would like to thank Gauteng Provincial Government
                                                                            and Blue IQ for the continued support they give to the project.
A long awaited Motor Industry Development Programme (MIDP)
                                                                            I would also like to thank our board for the visionary leadership and
announcement was postponed to August 2008. The effect thereof
                                                                            also congratulate and welcome new board members aboard. I also
has been felt across the South African automotive industry as
                                                                            thank every SPDC management and staff member and stakeholders
potential automotive investors postponed their decisions pending
                                                                            who are continuing to contribute to the success of the Park, every
this important announcement.
                                                                            year.
Ford Motor Company defied all odds, including MIDP doubts, by
announcing that they will be investing R1,5 bn in the South African
production plants to be split between Silverton and Port Elizabeth.
The Silverton plant will produce T6 bakkies to be sold to the local
market and also exported to the world markets while the PE plant            Papi Mphahlele
will produce engines.                                                       CEO


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        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Economic Impact Report
     The following is an extract from the Economic Impact Study            1.3 Employment
     Conducted by KPMG in July 2008. The complete report, providing
                                                                           The survey provided insight into employment dynamics at ASP.
     details on methodology, assumptions and definitions is available
     from SPDC upon request.                                               The distribution of employees by designation, skills level and
                                                                           population group was provided. Of the responses obtained, in
     1.1 Methodology                                                       2006/07 there were 1,617 employees at ASP. This grew to 1,717
                                                                           in 2007/08. This indicates an increase of approximately 6%.
     The economic impact measured for ASP includes job creation,           This increase is higher than the industry average increase of 2.5%
     GDP contribution, tax impact and other non-quantifiable impacts.      reported by the National Association of Component and Allied
     Non-quantifiable impacts were determined through tenant               Manufacturers (NAACAM). This could be due to the growth in
     interviews as well as information obtained from SPDC. Non             the number of tenants at ASP from 2006/07 to 2007/08.
     quantifiable impacts in this case include: attraction of further
     investment, higher levels of productivity, specialised ASP            The majority (51%) of employees are in the semi-skilled category.

     development knowledge for the use with the creation of new            Previously Disadvantaged Individuals make up 85% of those

     automotive parks, and the ASP’s link to the Pretoria North            employed at ASP.

     development initiatives.
                                                                           1.4 Revenue
     Quantifiable impacts were obtained using a First Generation           In terms of revenue, 5 of the tenants interviewed provided
     Economic Impact model, based on a Social Accounting Matrix            revenue information. The revenue contribution of these tenants
     for Gauteng. Different inputs into the model, based on the data       grew by 15.1% between 2006/07 and 2007/08.
     gathered and certain assumptions that had to be made due to
     the lack of data or other reasons, were used to obtain the results.   1.5 Decision to become a tenant at ASP

     Data for the study was obtained through primary research              The survey assessed the reasons why tenants chose to move to
     consisting of face-to-face interviews with ASP tenants, tenant-       ASP. The main reason for tenants moving to ASP is its close

     completed questionnaires, and follow-up telephone interviews          proximity to the vehicle manufacturers and markets, followed

     to verify information provided. The research sample comprised         by networking opportunities and ICT services. The least important
                                                                           reason was a cheaper cost of labour.
     responses from 20 ASP tenants out of a total of 26 tenants at
     the ASP.


     Data was also obtained from SPDC, as well as Statistics South
     Africa.


     1.2 Overview of tenants and operations at Automotive
     Supplier Park


     There are currently 26 tenants at ASP comprising component
     manufacturers (35%), service providers (38%) and other categories
     (27%). Most of the tenants are related in some way to the
     automotive industry. Although service providers make up the
     largest number of tenants, component manufacturers are by far
     the largest employers at ASP.


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                                                                              SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Economic Impact Report (continued)
1.6 Economic impact of ASP

1.6.1 Employment impact

The impact on employment of ASP was obtained using a First Generation Economic Impact model based on the Social Accounting
Matrix for Gauteng. Various data inputs were introduced into the system to see how employment was affected. The size of the inputs
was based on certain assumptions and the information provided by tenants and SPDC. The table below summarises the direct and
indirect employment impacts obtained.

Table – Employment impacts of ASP

 Man-years                                        2002              2003             2004           2005         2006        2007        Total


 Impact of SPDC CAPEX on employment            394.34          1224.05              975.95        668.44       550.95      399.32     4213.05
 Impact of SPDC OPEX on employment                18.75             76.95           123.36        155.14       181.34      200.33      755.87
 Impact of tenant OPEX on employment          3040.33          3730.43             8522.89      13926.68     16984.07    17375.74    63580.13
 Impact of tenant CAPEX on employment          126.68              126.68           193.61        411.90       511.50      515.17     1885.54
 Total                                         3580.1          5158.11             9815.81      15162.16     18227.86    18490.56    70434.59

Source: SPDC and tenant data, calculations by KPMG

The study indicates that ASP supported 18,490 direct and indirect jobs in 2007/2008.

The total employment created by ASP since its inception in 2002 (both direct and indirect) using the above data is 70,435
man-years. The contribution is higher than indicated in previous studies which provided the impact on direct employment only.
Different results could also have been obtained due to different assumptions used as well as different estimation techniques.

1.6.2 GDP impact

The impact on GDP of ASP was also calculated using a First Generation Economic Impact model based on the Social Accounting
Matrix for Gauteng. Various data inputs were introduced into the system to see how GDP was affected. The size of the inputs was
based on certain assumptions and the information provided by tenants and SPDC. The table below summarises the direct and indirect
GDP impacts obtained.


Table 2 – GDP impacts of ASP

 R million                                                 2002             2003         2004         2005        2006        2007       Total


 Impact of SPDC CAPEX on GDP (current prices)             27.83        100.19           81.76        58.03       51.53       41.44     360.77
 Impact of SPDC OPEX on GDP (current prices)               1.71             8.11        13.31        17.35       21.84       26.77      89.08
 Impact of tenant OPEX on GDP (current prices)        153.07           250.30          696.33      1064.00     1386.02     1584.76    5134.48
 Impact of tenant CAPEX on GDP (current prices)            6.38             7.40        11.59        25.51       34.13       38.14     123.14
 TOTAL                                                    188.99             366       802.99      1164.89     1493.52     1691.11    5707.47

Source: SPDC and tenant data, calculations by KPMG


The study indicates that ASP contributed almost R1.7 billion to Gauteng GDP in 2007. This is higher than was estimated in the
previous study due, possibly, to different assumptions used, as well as different estimation techniques.

The total impact on GDP by ASP since its inception in 2002, is R5,707 billion.


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        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Economic Impact Report (continued)
     1.6.3 Tax impact


     The direct and indirect impact on tax revenue generated by ASP was also calculated using a First Generation Economic Impact model
     based on the Social Accounting Matrix for Gauteng. The tax impact is one of the outputs of the model. Various data inputs were
     introduced into the system to see how GDP was affected. The size of the inputs was based on certain assumptions and the information
     provided by tenants and SPDC. The table below summarises the tax impacts of ASP.


     Table 3 – GDP impacts of ASP

      R million                                           2002        2003     2004          2005       2006          2007       Total


      Impact of SPDC CAPEX on tax (current prices)         5.67       20.40    16.65         11.82     10.49           8.44     73.46
      Impact of SPDC OPEX on tax (current prices)          0.30        1.42     2.33          3.04      3.83           4.70     15.62
      Impact of tenant OPEX on tax (current prices)       50.41       71.23   164.82        280.95    369.27       418.93     1355.60
      Impact of tenant CAPEX on tax (current prices)       2.10        2.44     3.81          8.40     11.24          12.56     40.55
      TOTAL                                               58.48       95.49   187.61        304.21     394.83      444.63     1485.23

     Source: SPDC and tenant data, calculations by KPMG


     The study indicates that ASP tenants and downstream suppliers contributed over R444 million to tax revenue in 2007. This is higher
     than the previous study estimated due to the inclusion of both direct and indirect tax revenue in this study as well as different
     assumptions being applied to the data used as input into the model.


     The total tax impact of ASP since inception is R1,485 billion.


     1.7 Way forward


     Tenants were asked to provide ideas to ASP of initiatives that could improve the general business environment. These include
     improvement of canteen and medical facilities, as well as general promotion of ASP.


     1.8 Conclusion


     In terms of the findings, ASP has made a large positive contribution to the Gauteng economy. The ASP has directly and indirectly
     contributed 70,435 man-years since its inception in 2002. The total impact on GDP by the ASP since its inception, is R5,707 billion
     in current prices. From 2002 to 2007, this represents 0.2% of Gauteng’s GDP over the period in current prices.

     Since the capital expenditure for ASP is approximately R312 million, this has been more than covered by the direct and indirect tax
     income of R1,485 billion. Therefore, ASP is an important investment for government which has yielded large positive returns on the
     initial investment and positively contributed to GDP and employment in the province.




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                                                       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Meeting our Objectives

     Key                    Outputs                                       Progress Made 2007/2008
     Performance
     Indicators


 1   Marketing &   Increase Visibility of ASP within             Forged close relations with DTi, NAACAM, NAAMSA
     Development   Government and Automotive                     & SAPOA, advertised in automotive related
                   Sectors                                       publications, implemented ASP Marketing Brochure,
                                                                 corporate video and website, conducted successful
                                                                 5th Year Anniversary Function and participated in
                                                                 various trade shows.

                   Secure OEM Tenant                             FIAT selected ASP as preferred site for OEM plant,
                                                                 waiting MIDP review

                   Attract New Component Suppliers               Achieved 96% factory occupancy levels, 97% Office
                   and Service Providers                         and Retail occupancy levels and welcomed 5 new
                                                                 automotive tenants and service providers to ASP.
                                                                 Received Letter of Intent for two new factory
                                                                 developments.

                   Expand Logistics Centre                       Logistic Centre Expanded by 10,000m

                   Attract Application of New                    Ongoing – injection moulding company decided
                   Technologies                                  to purchase existing company in Rosslyn. SPDC to
                                                                 pursue other opportunities.

                   Develop Vehicle Distribution Centre           BMW leased underutilized ASP parking area as
                   Concept                                       extension to their VDC

                   Tenant Retention                              Tenant Forums were conducted every 6 months,
                                                                 internal customer satisfaction survey conducted,
                                                                 improvement in customer satisfaction will be
                                                                 measured by conducting follow-up survey in
                                                                 2008/2009 financial year.

 2   Operations    Property Management System                    MDA Property Management System implemented

                   Facilities Management                         Maintenance Plan implemented, Service Level
                                                                 Agreements (SLA’s) reviewed to focus on service
                                                                 delivery, Help Desk response times monitored on
                                                                 daily basis.

                   ICT Services                                  ICT offering expanded, billing structure revised and
                                                                 SLA’s with tenants updated. VOIP offering expanded
                                                                 to tenants.




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      SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Meeting our Objectives (continued)

            Key                                  Outputs                            Progress Made 2007/2008
            Performance
            Indicators


      3     Property &              Transfer of Phases 1, 2 and 3         Phase 1,2 & 3 properties transferred
            Infrastructure          Properties
            Development
                                    Consolidation of Transferred          Consolidation of properties in process. Will be
                                    Properties                            completed in 2008/2009 financial year.

                                    Finalise the Sales Agreement of       Delayed due to City of Tshwane decision making
                                    Phase 4 Properties                    process. Awaiting City of Tshwane’s decision.

      4     Financial               Application for PFMA Schedule 3D      Motivation being prepared with assistance from
                                    Status                                Blue IQ

                                    Achieve Increase Return on            Rental income increased 10.43% year on year. New
                                    Investment                            project rentals are now based on BIQ IRR guidelines.

                                    Diversify Income Streams              New tenant (Orange Vibrator Motor) services
                                                                          automotive and mining industry.

                                    Financial Sustainability/ Corporate   Initial Risk management workshop concluded, in
                                    Governance                            compliance with all tax laws, in the process of
                                                                          complying with group policies e.g. Delegation of
                                                                          Authority, HR. Quarterly PFMA compliance report
                                                                          submitted to Blue IQ.




16
                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Our Board


            Ms. Nomhle Canca
            BA (Political Science), BA (Economics)
            Chairman of the Board
            Appointed 1 January 2008




            Mr. Papi Mphahlele
            BCom (Admin), BCom Hons (Marketing and Strategy), Certified Facilities Manager
            Chief Executive Officer: SPDC
            Appointed: 1 April 2006




            Mr. Younaid Waja
            BCom, BCompt Hons, CA (SA) and HDip Tax Law.
            Board Member and Chairman of the Audit Committee
            Appointment: 7 November 2007




            Mr. Bongani Phakathi
            BCom; Post Graduate Dip Industrial Relations
            Board Member and Chairman of Human Resources Committee
            Appointment: 9 January 2008




            Ms. Grathel Motau
            BCompt Hons; CA (SA)
            Board Member
            Appointed: 6 July 2007




                                                                                                    17
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Our Team




     Supplier Park Development Company has, during the period                Construction and Operations provides world-class facilities
     under review, progressed to be a fully-fledged operational company      and services management to ASP tenants, develops buildings
     in the three key functional areas, namely:                              per tenant requirements, and do construction of infrastructure
                                                                             and buildings.
        Business Development;
        Construction and Operations; and                                     Finance and Support renders all financial management services
        Finance and Support.                                                 in line with proper governance and business practices, collection
                                                                             of revenue, ensure proper procurement process followed,
     The daily operations of the Business Development, Construction          financial reporting, legal support and secretarial function.
     and Operations divisions led by respective General Managers,
     with Finance and Support led by the Chief Financial Officer.         Progress was also made in improving SPDC employee profile to
     SPDC management team is focused to ensure ASP continues to           reflect the demographics of the country.
     deliver world-class services and facilities.


     The roles as listed below played by each of the business divisions
     is to ensure the success of ASP:


        Business Development promotes ASP, by attracting new
        tenants, ensuring tenant retention and delivering external
        marketing and communication.



18
                                                                        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




The composition of SPDC work profile is illustrated in the following table:


SPDC WORKPLACE EQUITY PROFILE 31 MARCH 2008

                                                           Black                  Coloured           Indian           White
      OCCUPATIONAL CATEGORY                           M            F          M          F       M            F   M           F    Total
      Executive Management                            2            -          -          -       -            -   2                4
      Managers and Professionals                      5            2          -          1       -            -   2           -    10
      Technicians and Administrators                  2            8          -          -       -            -   1           -    11
      Service Workers                                 2            -          -          -       -            -   -           -    2
      Total                                           11           10         -          1       -            -   5           -    27




                                                                                                                                           19
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Divisional Report: Business Development
     Business Development

     Business Development is tasked with promoting ASP, attracting
     new tenants, ensuring tenant retention and e xternal
     communication. The department is headed by the General
     Manager: Business Development, supported by Customer
     Relationship Manager.

     During the year under review significant progress was made in
     the following key performance areas:

     Increasing Awareness of Automotive Supplier Park

     For the first time, SPDC became an associate member of NAACAM
     (National Association of Automotive Component and Allied
     Manufacturers), an association representing the majority of South
     African auto component manufacturers. Membership has proven
     an effective means of networking with the member companies
     and receiving information on developments and legislation
     affecting the industry. Awareness of ASP within the automotive
     component industry was increased by advertising in the NAACAM’s
     annual directory and quarterly newsletter. These publications are
     distributed at local and international automotive shows,
     extending awareness of ASP beyond the shores of SA. SPDC also
     participated in NAACAM-endorsed automotive exhibitions,
     specifically South African Automotive Week (SAAW), an exhibition
     focused on the auto components industry.

     Being a property development company SPDC deemed it necessary
     to become a member SAPOA (South African Property Owners
     Association). This enabled SPDC to increase awareness of ASP
     within the property development community and keep informed
     of trends and legislation in the property market.

     SPDC strengthened its relations with the Department of Trade
     and Industry (DTi) and Gauteng Economic Development Agency
     (GEDA) by hosting international visits to ASP and participating in
     overseas investment delegation visits.

     To support promotional activities Business Development undertook
     a complete overhaul of its marketing material. This included
     production of new marketing brochure, new corporate video
     and launch of new website.


     The highlight of the year was the celebration of ASP’s 5th
     anniversary at a gala dinner event attend by high profile
     government and automotive industry leaders include the mayor
     of Tshwane and CEO’s of a number of OEM’s.


20
                                                                    SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Divisional Report: Business Development (continued)
Attracting New Tenants to ASP

The year culminated in the completion of the second 10,215m extension
to the Logistics Centre building, increasing the size of the Logistic Centre
to 34,000m . The completion of this extension resulted in the total area
of erected buildings at ASP surpassing 100,000m . The Logistic Centre is
managed by UTi, a company specializing in automotive logistics and parts
distribution, and has been selected as the parts and accessories hub for a
number of OEM’s, including Fiat, Geely, Jaguar, John Deere, Land Rover and
Volvo.




A priority for the year under review was to reduce the vacancy levels at ASP. Factory vacancies were reduced from 7,900m to less
than 2,000m . Completion of tenant installations to address the demand for smaller factories ( 1500m ) contributed to the reduced
factory vacancy levels. All available factory space at ASP is expected to be leased by first quarter of 2008/2009 financial year. Retail
and office vacancies were reduced to less than 50m by converting premises originally earmarked for retail space to offices, thereby
satisfying increased demand for office space. We are pleased to have welcomed five new tenants to the ASP in the 2007/2008
financial year and three existing tenants expanding their premises.




                                                                                                                                           21
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Divisional Report: Business Development (continued)

     Tenant Retention

     Tenant retention is critical to the growth and sustainability of      The customer satisfaction survey will be conducted on an annual
     ASP. SPDC tenant retention strategy is to maintain close contact      basis, with future surveys to be performed by an independent
     with tenants and monitor customer satisfaction levels. The            research firm.
     Customer Relations Manager plays vital role in the tenant retention
     strategy, responsible for communication with tenants, receiving       Future growth of the ASP will be driven by developments in the
     tenant queries and ensuring service delivery                          South African automotive industry. It is clear that ASP is a ground
                                                                           breaking project which has contributed significantly to
     Tenants are invited to tenant forums which are arranged on a          competitiveness and sustainability of the South African automotive
     bi-annual basis. The tenant forums serve to communicate               industry. Given the turbulent environment that the industry
     developments at ASP and address tenant concerns. During the           currently faces ASP is expected to play an important role in
     year under review SPDC conducted an internal customer                 supporting the industry, thereby securing jobs and sustained
     satisfaction survey to gauge tenant satisfaction levels. The survey   economic growth.
     highlighted some problem areas which are currently being
     addressed by SPDC management. The results of the survey were
     also presented at the tenant forum for comment and feedback.




22
                                                                  SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Divisional Report: Operations and Construction
A strategic decision to restructure the Operations Division of      Property Development & Construction
SPDC to include the Construction and ICT functions has been
                                                                    The following construction projects were completed during the
implemented during the year. The implementation required that
                                                                    year under review:
outsourced services such as Facilities Management, ICT &
Construction Management be done in-house. All the necessary            Central Logistic Warehouse, Extension 2 (10 215m )
appointments were made and as from June 2007 all vacancies             Tenant Installation for:
were filled.
                                                                              SCHENKER                              Mini factory A7

The division is headed by the General Manager: Construction                   T & M Staff Hire                      Central Hub

and Operations and is organized around the following functional               Express Personnel                     Retail Centre

areas:                                                                        Kempton Outsourcing                   Retail Centre
                                                                              NBC                                   Retail Centre
   Property Development & Construction
   Property Management                                              Transfer of the stands in Phases 1, 2 and 3 from City of Tshwane

   Technical Facilities Management                                  Metro to SPDC have been completed. The consolidation of the

   Soft Services Management                                         stands has been initiated and will be completed during the

   ICT service and management                                       oncoming financial year.

   Security Services
                                                                    All properties in Phase 5 which have been transferred to SPDC
                                                                    during the previous financial years have now been rezoned to
                                                                    industrial use.


                                                                    Application for the closure of Fosfor and Tungsten roads submitted
                                                                    and awaiting Metro Council approval.




                                                                                                                                         23
          SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Divisional Report: Operations and Construction (continued)
     Property Management


     The normal lease renewal negotiation has been done. A revised
     lease agreement has been implemented for all new and renewed
     leases.


     All the vacant space within the Central Hub, Retail Centre as well
     as the mini factories has been filled.


     The implementation of a formal Property Management System
     (MDA) has been initiated and is currently running.


     Technical Facilities Management


     During the year under review, two Helpdesks (ICT and Technical
     Facilities Management) were consolidated to one point of contact
     for the tenants and all tenant requests are now logged at a
     central point.


     This allows SPDC to monitor and manage the individual function                         Our maintenance philosophy applied has been aligned to support
     more effectively. The attached graph indictes the progress achieved                    ASP strategy to be a world class business. The actual deliverable
     during the year under review:                                                          should improve during the forthcoming period to ensure that
                                                                                            average target of 95% completion is achieved on sustainable
                                                                                            basis.


                               Consolidated Data-Work completed on Time
          100.00

           90.00

           80.00

           70.00
                                                                                                      2008
           60.00
                                                                                                      2007
      %    50.00

           40.00

           30.00

           20.00

           10.00

               0
                   Jan   Feb   March   April   May   June   July   Aug   Sept   Oct   Nov    Dec




24
                                                                       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Divisional Report: Operations and Construction (continued)
Soft Services

During the year under review, the model of a fixed fee contract
for the canteen services has been revised and as of October 2007
the canteen is operated by Fedics on a full risk model. This implies
there is no more subsidisation from SPDC should the venture
succeed.

Service contracts for functions such as cleaning, gardening, and
hygiene and indoor plants have been awarded during the year.

ICT services

The basket of services and the charges have been standardised
during the period under review. . Formal Service Level Agreements
                                                                         The control room was also made operational on a 24 x 7 basis
have been entered into with our tenants.
                                                                         during the year. This improved SPDC ability to provide a full

Based on request from tenants, certain Assymetrical Digital              security monitoring service to our tenants.

Subscriber Line (ADSL) option has been made available which
                                                                         Shared Service Concept
proved to give financial beneficial to the tenants without impacting
SPDC negatively.                                                         The shared services concept which include Information
                                                                         Communication & Technology (ICT) services, the canteen, medical
Security Services
                                                                         facilities, conference centre, video conference facilities, security,
                                                                         facilities management and the internal shuttle service implemented
During the year under review, security service provider was
                                                                         at ASP is a resounding success. SPDC and all tenants have
appointed and took over from 1 May 2007. Thorburn Security
                                                                         benefited from the shared services.
Solutions has been appointed and to date the service received
was acceptable.




                                                                                                                                                 25
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Partners
     Development Partners
     The SPDC wishes to thank the following partners:


      Gauteng Provincial Government

      For continued support and vision with
      the project



      Blue IQ

      For continued support and vision with
      the project



      City of Tshwane

      For the special project status and
      participation in the land incentives




     Original Equipment Manufacturer (OEM) Support
     The SPDC wishes to thank the following Gauteng-based OEM’s for their ongoing support:


      BMW South Africa




      FIAT South Africa




      Ford Motor Company South Africa




      Nissan South Africa




26
                                                                 SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Automotive Suppliers
The SPDC wishes to thank the following automotive suppliers and service providers for their tenancy:

Factory Tenants

 Automotive Leather Company




 Autoseat Africa




 Cummins Emission Solutions




 D & B Interiors




 DUCO Coatings




 Grupo Antolin




 Lear Corporation




 Orange Vibrator Motor Company




 Rieter Feltex




 Schenker Logistics




                                                                                                                                  27
       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Automotive Suppliers
     SAS Automotive Systems




     Tappo Industires




     Werma Patterns and Moulds




     UTi




                     Lear Corporation                                          Rieter Feltex




                SAS Automotive Systems                                  Automotive Leather Company




              Werma Patterns and Moulds                                            UTI



28
                                       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Office Tenants
Automotive Industry Development
Centre



Express Personnel Services




JFS Technology




Geely Motor Corporation South Africa




Kempston Group




LTG Logistics SA




SEDA Automotive Technology Centre




Schnellecke South Africa




Tate & Mogotsi Staff Hire




                                                                                                        29
Contents
Directors and Administration                        31


Statement of Responsibility by Board of Directors   32


Report of the Independent Auditors to the Members   33


Directors’ Report                                   34


Corporate Governance Report                         37


Statement of Financial Performance                  44


Statement of Financial Positions                    45


Statement of Changes in Net Assets                  46


Cash Flow Statement                                 47


Notes to the Annual Financial Statements            48
                                        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Directors and Administration

COUNTRY OF INCORPORATION AND DOMICILE                             South Africa


COMPANY REGISTRATION NUMBER:                                      2001/017051/07


COMPOSITION OF BOARD OF DIRECTORS:                                NMJ Canca (Chairman)
                                                                  JMP Mphahlele (Managing Director)
                                                                  HG Motau
                                                                  JB Phakathi
                                                                  Y Waja


REGISTERED ADDRESS:                                               Automotive Supplier Park
                                                                  Central Hub
                                                                  30 Helium Road
                                                                  Rosslyn, Extension 2
                                                                  0200


AUDITORS:                                                         PricewaterhouseCoopers Inc.
                                                                  Pretoria


BANKERS:                                                          ABSA Bank Limited
                                                                  Rosslyn




                                                                                                         31
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Statement of Responsibility by Board of Directors
     The Directors are responsible for the preparation and fair presentation of the annual financial statements of Supplier Park Development
     Company (Proprietary) Limited, comprising the statement of financial position at 31 March 2008, the statement of financial performance,
     the statement of changes in net assets and the cash flow statement for the year then ended, and the notes to the financial statements,
     which include a summary of significant accounting policies, other explanatory notes, and the directors’ report. These statements have
     been prepared in accordance with South African Statements of Generally Accepted Accounting Practice, with the prescribed standards
     of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board.

     The Directors’ responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair
     presentation of these financial statements that are free from material misstatement, whether due to fraud or error; selecting and
     applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. The internal
     controls include a risk–based system of internal accounting and administrative controls designed to provide reasonable, but not
     absolute, assurance that assets are safe-guarded and transactions executed and recorded in accordance with generally accepted
     business practices. The Board however has the ultimate responsibility for this system of internal controls and reviews the effectiveness
     of its operation primarily through the Audit Committee.

     The Directors’ responsibility also includes maintaining adequate accounting records and an effective system of risk management.

     The Directors’ have made an assessment of the Company’s ability to continue as a going concern and there is no reason to believe
     the business will not be going concern in the year ahead.

     The external auditor is responsible for reporting on whether the Company's annual financial statements are fairly presented in
     accordance with SA GAAP and GRAP.

     Approval of annual financial statements

     The annual financial statements of Supplier Park Development Company (Proprietary) Limited, set out on pages 32-86 were approved
     by the board of directors on 02 June 2008 and signed on their behalf by:




     N Canca                                                                                                  P Mphahlele
     Chairman                                                                                                 Managing Director




     Certificate by the Company Secretary

     In my capacity as the company secretary, I hereby confirm in terms of the Companies Act, 1973, that for the financial year ended
     31 March 2008, the Company has lodged with the Registrar of Companies all such returns as are required in terms of this Act and
     that are required of a private Company and that all such returns are true, correct and up to date.




     J Mulaudzi
     Company Secretary (Acting)



32
                                                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Independent Auditor’s Report to the members of
Supplier Park Development Company

We have audited the annual financial statements of Supplier Park Development Company (Pty) Ltd, which comprise the directors’
report, the statement of financial position as at 31 March 2008, the statement of financial performance, the statement of changes
in net assets and the statement of cash flows for the year then ended, and a summary of significant accounting policies and other
explanatory notes, as set out on pages 34 to 84.


Directors’ Responsibility for the Financial Statements


The company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with
South African Statements of Generally Accepted Accounting Practice and in the manner required by the Companies Act of South
Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.


Auditor’s Responsibility


Our responsibility is to express an opinion on these 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 financial statements are free from material misstatement.


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 material 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 and fair presentation 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 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 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 financial statements present fairly, in all material respects, the financial position of the company as of 31 March
2008, and their financial performance and their cash flows for the year then ended in accordance with South African Statements
of Generally Accepted Accounting Practice and in the manner required by the Companies Act of South Africa.




____________________________
PricewaterhouseCoopers Inc
Director: MSI Gani
Registered Auditor
Pretoria
22 July 2008


                                                                                                                                          33
          SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Directors’ Report
     The Directors present their report, which forms part of the annual financial statements of the Company for the year ended
     31 March 2008.

     1.      NATURE OF BUSINESS

             Supplier Park Development Company (Pty) Ltd (“SPDC”) is a property development, investment and management company
             with its main focus being the Automotive Industry.
             The Company was established in 2002 to develop and manage the Automotive Supplier Park (“ASP”) project.
             The project is one of the Gauteng Provincial Government’s Blue IQ initiatives aimed at delivering strategic infrastructure to
             the South African automotive industry to stimulate sustainable economic growth and job creation:
                    The Company provides innovative turnkey solutions around infrastructure, logistics and property services for the
                    global automotive industry based on a supplier clustering concept.
                    Government Grants amounting to R325m have been received since inception.


     2.      COMPANY RESULTS

              2.1       Financial Highlights                                                             Restated
                                                                                  2008                     2007               Variance
                                                                                    R                        R
              Revenue                                                           42,509,349               37,862,469               12%
              Less Lease straight line adjustment                                3,953,346                4,352,742               -9%
              Total Income                                                      38,556,003               33,509,727               15%


              Surplus                                                           52,670,873               14,317,466             268%
              Total Non-Current Assets                                         345,166,085              264,380,817               31%
              Total Liabilities                                                325,547,404              325,385,552                5%
              Return on Assets (Revenue/Total Non-Current Assets)                        12%                     14%
              Return on Assets (Surplus/Total Non-Current Assets)                        15%                      5%


             2.2     Operational Highlights


             The increase in Rental Income compared to 2007 is a result of an increased occupancy rate. The total lettable area at Automotive
             Supplier Park is approximately 100,000m. Total non-current assets increased due to the completion of the Logistics
             Extension 2 building.

             The significant increase in the Fair Value adjustment relating to Investment Property is a result of the high occupancy rate at
             ASP compared to 2007. The valuation method is based on the future net cashflows of finalised lease contracts. In the prior
             year the occupancy rate was low and as result the Fair Value amount was impacted negatively.


             During the current financial period SPDC managed to reduce Operating Expenses compared to the previous period largely
             due to insourcing of previously outsourced ICT services as well as the reduction of canteen costs. Together with the positive
             Fair Value adjustment of Investment Property these savings contributed to the significant increase in the surplus in the current
             year.



34
                                                                  SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Directors’ Report (continued)
3.   POST REPORTING DATE EVENTS


     The directors are not aware of any material fact or circumstance which took place prior to the year end or between the
     accounting date and publication of this report which would adversely influence the assessment of the company’s financial
     state or the results of its operations.


4.   INTEREST OF DIRECTORS AND OFFICERS IN CONTRIBUTION FROM OWNER

     None of the directors and officers in office at the date of this report has any interest, direct and indirect, and non-beneficial
     interests in the Company’s share capital.

5.   RESTATEMENT OF PRIOR YEAR NUMBERS

     The changes in prior year figures resulted from additions to investment property, which were incurred in prior years but
     recorded in the current year. The investment property was subsequently restated to its fair value at the balance sheet date.


6.   SHARE CAPITAL

     Authorised Share Capital
     There were no changes to the authorised share capital during the 2008 financial year.

     Issued Share Capital
     2 650 629 ordinary shares of R0,01 each (2007: 2 650 629 shares). No shares were issued during the financial year.

7.   ORDINARY OWNERS' CONTRIBUTION

     The Company's Parent Company is Blue IQ Investment Holdings (Pty) Ltd.

     Listed below is an analysis of holdings extracted from the register of ordinary shareholders as at 31 March 2008.

                                                                     Contributions                    Contributions
                                                                       31/3/2008          %             31/3/2007          %
     Blue IQ Investment Holdings (Pty) Ltd – Ordinary shares          2,650,629          100            2,650,629         100

8.   GOING CONCERN

     The annual financial statements of the Company as set out on pages 34 - 88 were prepared on a going concern basis. The
     directors have reviewed current and future plans of the Company and are satisfied with the appropriateness of this basis.

9.   DIVIDEND POLICY

     In terms of the dividend policy, the directors have the discretionary power to determine the timing and the amount payable
     of any dividend payout. No dividends have been declared since the inception of SPDC.

     In terms of section 53(3) of the PFMA, the Company may not accumulate any surpluses without prior written approval of
     National Treasury. To date, the Company has not received such written approval and as a result, the Company has a potential
     liability in respect of surpluses for the reporting period which may be payable to the National Treasury should the Company
     not obtain permission to retain the funds. As at 31 March 2008, the Company’s cash surplus amounted to R48,820,701
     (2007: R77,252,776), which has been committed to current and future project and operating expenses.

                                                                                                                                         35
           SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Directors’ Report (continued)
     10.      DIRECTORS

              The following persons served on the Board of Directors during the period under review:

              Name                                                    Change in Appointment
              JMP Mphahlele (Managing Director)*
              P Fernandes (Chairman)                                  Resigned                  31 December 2007
              NMJ Canca (Chairman)                                    Appointed                 01 November 2004
                                                                      Chairman                  01 January 2008
              HG Motau                                                Appointed                 06 July 2007
              JB Phakathi                                             Appointed                 09 January 2008
              Y Waja                                                  Appointed                 07 November 2007

              * Executive Director

              10.1       Board Sub-committees

                        The following board sub-committees have been established:

              10.1.1     Audit Committee
                         Name                                         Change in Appointment
                         Y Waja (Chairman)                            Appointed                 07 December 2007
                         HG Motau                                     Appointed                 07 December 2007
                         L Boyce                                      Appointed                 07 December 2007
                         P Mahange                                    Resigned                  30 April 2008

              10.1.2     Human Resources Committee
                         Name                                         Change in Appointment
                         JB Phakathi (Chairman)                       Appointed                 03 March 2008
                         A Mhlongo                                    Appointed                 03 March 2008
                         JMP Mphahlele (Managing Director)*           Appointed                 03 March 2008

     11.      SECRETARY

              The Company Secretary Mr. Moya Sathekge resigned effective 15 April 2008 and Mr. John Mulaudzi was appointed as Acting
              Company Secretary.


              Registered office:
              Automotive Supplier Park
              Central Hub
              30 Helium Road
              Rosslyn, Extension 2
              South Africa




36
                                                                  SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Corporate Governance Report
Introduction

SPDC is dedicated to the highest standards of corporate governance and best practices. The directors of SPDC endorse the Code of
Corporate Practices and Conduct contained in the King Report, on Corporate Governance for South Africa 2002. As a public entity
SPDC is bound by the statutory duties and responsibilities imposed on it by the Public Finance Management Act.1 of 1999 (as amended)
(“PFMA”), andthe Companies Act, 1973 (as amended from time to time) and other applicable legislation.

SPDC subscribes to a strong set of values, which promotes innovation, creativity, individual empowerment and personal accountability.

The Board continues to refine and improve governance structures and policies, aiming for continual improvement.

Shareholder Compact

Shareholder performance agreements were concluded between SPDC and Blue IQ Investment Holdings (Pty) Ltd (hereinafter referred
to as “the Shareholder”). The Compact serves to promote and encourage good governance within SPDC as the respective roles and
responsibilities of the Board and the Shareholder are clearly defined ensuring that there is agreement on the mandate and key
objectives to be achieved by SPDC.


The Board and its subcommittees continually ensure that SPDC ensures that the targets set out in the respective shareholder compacts
are monitored or kept in check by the management of SPDC.

BOARD OF DIRECTORS

Composition

SPDC adopts a unitary structure and is also headed by an effective Board of five Directors. The appointment of Directors is done by
Blue IQ with emphasis being placed on the skills and business experience of the directors. The CEO is a member of the Board and
attends all Board meetings. Members of Executive Management are invited to attend Board and Board Committee meetings relevant
to their respective business units as and when required.

The current Board members are as follows:

    Ms NMJ Canca         : Non-Executive member (Chairman);
    Mr JMP Mphahlele : Executive member;
    Mr Y Waja            : Non-Executive member;
    Mr JB Phakathi       : Non-Executive member;
    Ms HG Motau          : Non-executive member.

Board Duties

The Board has a fiduciary duty to act in good faith, with due diligence and care, and in the best interest of the Company and all
stakeholders. It is the guardian of the values and ethics of the company. It is accountable to the Shareholder. The Board has full
and effective control over the company.




                                                                                                                                        37
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Corporate Governance Report (continued)
     Board Charter and Responsibilities


     The terms of reference are concisely set out in the Board Charter. The charter guides the Board’s agenda and influences its roles,
     tasks and responsibilities. The terms or reference are revised annually to ensure their effectiveness and relevance, and benchmarked
     against recent industry developments and Board practices.

     The key responsibilities of the Board are to:

         Formulate business policy;
         Develop strategy;
         Oversee management;
         Ensure proper governance framework, compliance with laws, regulations and best practices; and
         Ensure that SPDC’s business is being managed appropriately and prudently.
         Ensure appropriate and prudent business management

     Executive sessions and Meetings of non-executive Directors

     Non-executive directors meet separately to discuss issues of significance to the Board and its operations. The Board and subcommittees
     hold executive sessions where issues pertinent to business operations are identified and addressed with relevant management.

     Board Remuneration

     The remuneration of members of the Board is determined by the Shareholder. Members of the Board are remunerated by SPDC for
     services rendered. As much members are reimbursed for all reasonable expenses incurred in attending meetings of the Board. Details
     of the Board remuneration are set out elsewhere in this report.

     Board Meetings

     The frequency of the Board meetings are determined by the Board, but a minimum of four meetings are held per annum.
     The meetings are event driven rather than calendar driven. This ensures that the Board’s responsibilities are discharged timely.
     Further meetings are called should it be considered necessary.


     The attendance of Board meetings was as follows during the year under review:


                      DIRECTOR                                           MEETINGS ATTENDED


          NMJ Canca (Chairman)                                           04        04
          P Fernandes (Chairman)***                                                04
          JMP Mphahlele (CEO)                                                      05
          Y Waja*                                                                  01
          JB Phakathi**                                                            01
          HG Motau                                                                 04
          Total Number of meetings held                                            05


     * Appointed 07 November 2007
     ** Appointed 09 January 2008
     *** Resigned 31 December 2007


38
                                                                 SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Corporate Governance Report (continued)
Board Sub-committees

The Board discharges its responsibilities through various sub-committees which function in terms of Terms of Reference agreed upon
by the Board.

Audit Committee

In line with best practice, the Audit Committee consists of two independent non-executive Directors and one executive Director.
Its main function is to review the adequacy of internal control structures and to report on their effectiveness. Independent non-
executive Directors will be added to the subcommittee upon reconstruction of the Board.

The Audit Committee operates under its charter that has been reviewed and approved by the Board and it’s reviewed annually.

The charter defines the mandate of the Audit Committee as follows, inter alia:

   Oversee compliance with laws, regulations and best practices applicable to SPDC;
   Review the audit plan for the year ahead, and reports from external auditors on systems of accounting and operational
   controls, and the effectiveness of management response to these;
   The committee also reviews accounting policies and any proposed changes;
   Discuss all qualifications and emphasis of matter noted on draft financial statements, and resolve problems, reservations and
   significant disagreements between management and internal and external auditors; and
   Review annual financial statements before their submission and adoption by the Board.


Composition and Attendance of meetings:


The SPDC Audit Committee was established during the 2007/08 financial year. Prior to Juanuary 2008, the Blue IQ Audit Committee
conducted all Subsidiary Audit Committee meetings.


     DIRECTOR                               POSITION                MEETINGS ATTENDED


      Y Waja*                               Chairman                     03
     HG Motau****                           Member                       03
     L Boyce**                              Member                       03
     P Mahange***                           Member                       03
                      Total number of meetings held                      03


* Appointed 07 December 2007
** Appointed 07 December 2007
*** Resigned 30 April 2008
**** Appointed 07 December 2007

Human Resources Committee

The committee comprises one independent non-executive Director. Its main purpose is to oversee SPDC’s remuneration structures
in line with corporate principles, and that the reward and remuneration programme is market-related and complies with local laws
and regulations.


The Human Resources Committee operates under its charter that has been approved by the Board and is reviewed annually.


                                                                                                                                     39
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Corporate Governance Report (continued)
     The charter sets out the roles, tasks and responsibilities of the Human Resources Committee as follows, amongst others:


        Determine remuneration packages needed to attract, retain and motivate high-performing Directors and executive management;
        Approve remuneration levels and specific packages of executive Directors and, as appropriate, of other senior management,
        including all benefits;
        Co-ordinate its activities with the Chairman and Chief Executive Officer and consult them in formulating remuneration policy
        and specific packages; and
        Ensure remuneration levels relative to other comparable organisations are taken into account, and include a balance between
        guaranteed and performance-based remuneration.

     A report on remuneration appears elsewhere in this report.

     Attendance and composition of the Human Resources and Remuneration Committee:


           DIRECTOR                                POSITION                 MEETINGS ATTENDED


           JB Phakathi*                            Chairman                            0
           A Mhlongo*                              Member                              0
           JMP Mphahlele***                        Member and CEO                      0
                            Number of meetings held:                                   0

     * Appointed 03 March 2008
     ** Appointed 03 March 2008
     *** Appointed 03 March 2008

     Information to the Board

     Dates of Board meetings are scheduled annually in advance and the Board is timely provided with accurate information and
     documentation to fulfil its responsibilities. The Board has access to all information it may require. The Board is also entitled to seek
     independent professional advise at the Company’s expense should it be deemed necessary.

     All Board members enjoy access to management, including the Company Secretary, and to such assistance as may enable them to
     carry out their roles, tasks and responsibilities fully and effectively. The Company Secretary also ensures effective functioning and
     proper administration of Board activities and governance processes.

     Independence of the Board

     As required by best practices the roles of the Chairman and Chief Executive Officer are separate. This clear division of responsibility
     at the helm of the Company ensures a balance of authority and power, to ensure that no single individual has unrestricted decision
     making powers. At the same time, the Board and executive management work closely together in determining the strategic objectives
     of SPDC.

     The majority of the Board comprises of independent non-executive Directors, who bring objective and independent judgement to
     bear on issues affecting the business of SPDC.




40
                                                                    SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Corporate Governance Report (continued)
Delegation of Authority

The Board retains full and effective control over the operations of SPDC through well-formulated governing structures. As indicated,
the Board has formally agreed to the delegation of certain of its functions to its subcommittees where applicable, as well as to the
CEO and the Executive Management of the various business divisions of SPDC. The chairmen of the subcommittees of the Board
report regularly to the Board.

Adherence to the terms of delegation is closely monitored to ensure optimum compliance therewith.

The Executive Managers are accountable for the control, conduct and performance of their divisions within the agreed business
strategy. The CEO also sits with the BlueIQ CEO and heads of other subsidiary businesses in a monthly meeting called the Blue IQ
Management Forum (BGMF) to discuss institutional issues affecting the Blue IQ Group.

The Executive Management team are as follows:

         Papi Mphahlele (Chief Executive Officer)
         William Sebola (Chief Financial Officer)
         Roberto Bruzzaniti (GM: Business Development)
         Ludolf van der Merwe (GM: Construction and Operations)

Business planning

The Company’s strategic direction is regularly reviewed by the Board and the CEO considers the strategy for individual lines of business
with Executive Management on a planned basis. Annual budgets and three-year strategic plans are prepared with performance
targets for each line of business set by the Board in conjunction with Executive Management. Performance against the strategic
objectives is regularly monitored at Board level.

Internal Control

SPDC maintains systems of internal control focused on critical risk areas. These systems and controls are designed to provide
reasonable assurance with regard to the integrity and reliability of the financial statements and to ensure adequate safeguarding
and control of assets.

Operational structure, trained and selected employees, separation of duties and established procedures ensure that the policies are
implemented and adhered to. There are inherent limitations that influence the effectiveness of any system of internal control,
including the possibility of human error and the circumvention of control measured due to collusion.

Therefore even an effective internal control system can only provide reasonable assurance with regard to the preparation of financial
statements and the safeguarding of assets. Remedial steps are taken to effect improvements where deficiencies are identified.

Internal Audit and the Audit Committee

SPDC’s Internal Audit function operates on an operation level and carries out regular risk-focussed reviews of the system of internal
control. The Internal Audit function operates independently of Executive Management, with unrestricted access to the Chairman
of the Audit Committee.

An Internal Audit Charter, reviewed and approved by the SPDC Audit Committee, governs Internal Audit Activity within the Company.
Progress against the approved strategic three year audit rolling plan is reported regularly to the Audit Committee.

Risk and control failures are reported to the Audit Committee, were rectification procedures and progress are closely monitored.
Planned corrective actions are independently monitored for timely completion by Internal Audit and, as appropriate, by the Audit
Committee and Board.


                                                                                                                                           41
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Corporate Governance Report (continued)
     Interest in Contracts/Related Party Transactions

     The Board members declare their interests at every Board meeting and a register of interests is maintained by the Corporate Secretary.

     Full disclosure of transactions with related parties is set out in note 25 to the financial statements.

     Corporate Secretary

     The Corporate Secretary is appointed by the Board. This person is the compliance officer and information officer of SPDC and is
     responsible for the execution of all statutory requirements applicable to SPDC. The Directors have unrestricted access to the services
     of the Corporate Secretary, who also arranges appropriate training and orientation of Directors, where necessary.

     Code of Ethics

     The Board has adopted a code of ethics which commits SPDC and its staff to the highest standard of behaviour in dealing with
     stakeholders, including customers, suppliers and clients. Members of staff are expected to observe their ethical obligation in conducting
     business through fair, commercial and competitive practices.

     In business dealings on behalf of SPDC, employees are expected to avoid activities that might give rise to conflicts of interest.
     Employees are also expected to act in the exclusive interest of SPDC. Procedures have been put in place to deal with conflicts of
     interest where these arise in the course of employees’ day to day activities.

     The business code of ethics is reviewed regularly to ensure that it remains abreast of developments inside and outside the Company,
     and that it reflects current best practice.

     Fraud Prevention Policy

     The Board has adopted a prevention policy to protect the organisation, and the assets under its management, from any financial or
     other unlawful gains, including dishonest or other forms of unethical conduct. The Board expects the Directors and all employees to
     adopt the highest standards of honesty, propriety, personal integrity and accountability, and to be fully attentive to any irregular
     transactions and other unlawful behaviours affecting SPDC. This standard is also expected from all personnel with whom SPDC has
     business dealings.

     Employment Equity and Policies

     Internal controls, based on established policies and procedures, are applied by trained, skilled personnel with an appropriate segregation
     of duties and are monitored throughout SPDC. All employees are required to maintain the highest ethical standards in ensuring that
     SPDC’s business practices are conducted in a manner, which in all reasonable circumstances is above reproach. SPDC’s employment
     policies take the above into consideration and are regularly reviewed and updated to ensure their appropriateness.They are further
     designed to promote a working environment which supports the recruitment and retention of highly effective employees with a high
     ethical and moral standard.

     Working Environment

     SPDC considers that the establishment of the right working environment for its personnel is essential for their performance and
     development and the future of SPDC.




42
                                                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Corporate Governance Report (continued)
Discrimination

Employees are recruited and promoted on the basis of their suitability for the job, without discrimination in terms of race, religion,
national origin, colour, gender, age marital status, sexual orientation or disability unrelated to the task at hand. This principle is
balanced against the requirements to address issues of employment equity, and SPDC’s practices demonstrate cognisance of this
assumption.

Sustainability

The Board and Management take responsibility for ensuring the implementation of sustainability - economic, social and environmental
- to all business practices.

Compliance

SPDC aspires to a compliance approach which endorses the following principles and commitments:

   High standards of integrity and fair dealings in the conduct of SPDC’s business;
   Compliance with both the letter and the spirit of the law;
   Accountability to the shareholder and other stakeholders such as regulators, clients, employees and the business community at
   large;
   Commitment to the duty of care, skill and diligence; and
   Embracing the principles of integrity, transparency and accountability.




                                                                                                                                         43
       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Statement of Financial Performance
     For the year ended 31 March 2008

                                                                                       Restated
                                                          Note             2008          2007
                                                                            R             R


     Revenue                                                 2          42,509,349    37,862,469


     Grants and transfers recognized                         3          19,116,107    68,699,603
     Fair value adjustments                                 10          44,100,303    -52,285,568
     Operating income                                        4             795,747       338,756
     Administrative and personnel expenses                   5          -24,559,196   -23,843,393
     Operating expenses                                      6          -14,129,913   -18,643,517


     Operating surplus before finance income                            67,832,397    12,128,350


     Net finance income                                      7           1,937,559     3,012,922
     Finance income                                                      5,656,361     3,043,044
     Finance expenses                                                    -3,718,802       -30,122




     Surplus before tax                                                 69,769,956    15,141,272


     Income tax expense                                      8          -17,099,083     -823,806


     Surplus for the period                                             52,670,873    14,317,466




44
                                                     SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Statement of Financial Position
For the year ended 31 March 2008

                                                                                         Restated
                                              Note             2008                        2007
                                                                 R                           R
Assets


Non-current assets                                         345,166,085                 264,380,817
Property, plant and equipment                   9           67,166,260                  34,131,269
Investment property                            10          267,784,270                 221,998,463
Intangible assets                              11              131,988                   2,120,864
Operating lease receivables                   12.1          10,083,567                   6,130,221


Current assets                                              54,069,674                  82,022,216
Trade and other receivables                    12             5,248,973                  4,769,440
Cash and cash equivalents                      13           48,820,701                  77,252,776


Total assets                                               399,235,759                 346,403,033


Net assets and liabilities


Contributions from owners                      14                26,506                      26,506
Accumulated surplus                                         73,661,849                  20,990,975
Total net assets attributable to the parent                 73,688,355                  21,017,481



Non-current liabilities                                    292,663,687                 312,655,994
Unutilised government grants                   15           20,758,041                  71,797,550
Deferred government grants                     16          257,136,346                 240,034,638
Deferred tax liability                         17           14,769,300                     823,806



Current liabilities                                         32,883,717                  12,729,558
Trade and other payables                       18           28,606,535                  12,580,902
Current tax liability                           8             3,153,588                             -
Provisions                                     19             1,123,594                    148,656


Total net assets and liabilities                           399,235,759                 346,403,033




                                                                                                                      45
                                                                                                     SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008
Statement of Changes in Net Assets
For the year ended 31 March 2008
                                                Note   Share        Share            Non               Accumulated           Total
                                                       Capital     Premium       Distributable            Surplus            Equity
                                                                                   Reserve
                                                         R            R                R                     R                 R
Balance at 31 March 2005 as originally stated          26,506      1,307,345        -1,307,345                       -          26,506
- correction of prior period error - clerical                  -   -1,307,345        1,307,345                       -                  -
Balance at 31 March 2005 as restated                   26,506                -                   -                   -             26,506
Surplus for the year                                           -             -                   -                   -                  -
Balance at 31 March 2006 as originally stated          26,506                -                   -                   -             26,506
Surplus for the year                                           -             -                   -         6,868,629         6,868,629
                                                       26,506                -                   -         6,868,629          6,895,135
Effects of prior year error                                                  -                   -          -195,120          -195,120
Balance at 31 March 2006 - restated                    26,506                -                   -         6,673,509          6,700,015
Surplus for the year                                           -             -                   -       14,317,466         14,317,466
Balance at 31 March 2007 - restated                    26,506                -                   -        20,990,975        21,017,481
Surplus for the year                                           -             -                   -       52,670,873         52,670,873
Balance at 31 March 2008                               26,506                -                   -        73,661,849        73,688,354




                                                                                                                                                                      46
                                                               SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Cash Flow Statement
For the year ended 31 March 2008


                                                        Note            2008                         2007
                                                                         R                             R



Cash flows from operating activities
Receipts
Government grants received in cash                                               -                92,290,939
Cash receipts from customers                                          34,647,721                  34,048,279
Other income                                                             849,693                      338,756
Finance income                                           7              5,567,343                   3,043,044


Payments
Employee costs                                                         -8,917,313                            -
Suppliers                                                            -24,182,973                  -58,252,821
Finance expense                                                          -182,932                     -30,122



Net cash inflow from operating activities               20.1            7,781,539                 71,438,075


Cash flows from investing activities                                 -36,213,615                  -23,749,519


Proceeds from sale of property, plant and equipment                          4,200                           -
Government grant - deferred                                                      -                -18,700,717
Government grant - unutilised                                                    -                42,292,053
Acquisition of property, plant and equipment            9,11         -36,217,815                  -47,340,855
Acquisition of investment property


Cash flows from financing activities


Net (decrease)/ increase in cash and cash equivalents                -28,432,075                  47,688,556
Cash and cash equivalents at beginning of the year                    77,252,776                  29,564,220


Cash and cash equivalents at end of the year            13            48,820,701                  77,252,776




                                                                                                                                47
           SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements
     For the year ended 31 March 2008


     1.       Significant accounting policies


              Supplier Park Development Company (Proprietary) Limited (“the Company”) is domiciled in the Republic of South Africa.


     1.1      Basis of preparation


              The Annual Financial Statements have been prepared in accordance with the South African Statements of Generally Accepted
              Accounting Practices (SA GAAP) including any interpretations of such Statements issued by the Accounting Practices Board,
              with the prescribed Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board
              replacing the equivalent GAAP Statement as follows:


              Standard of GRAP                                                   Replaced statement of SA GAAP


              GRAP 1     : Presentation of annual financial statements           AC 101      : Presentation of annual financial statements
              GRAP 2     : Cash flow statements                                  AC 118      : Cash flow statements
              GRAP 3     : Accounting policies, changes in accounting            AC 103      : Accounting policies, changes in accounting
                          estimates and errors                                                 estimates and errors



              The Annual Financial Statements are presented in South African Rands, rounded to the nearest Rand. They are prepared on
              the historical basis except that the following assets and liabilities are stated at fair value: financial instruments classified as
              available-for-sale and investment property. Trade and other receivables and trade and other payables are reported at fair value.


              The accounting policies have been consistently applied to the results, other gains and losses, assets, liabilities and cash flows
              of the entities included in the Annual Financial Statements and are consistent with those used in the previous year. The
              accounting policies have been applied consistently by the Company.


              The recognition and measurement principles in the above GRAP and SA GAAP Statements do not differ or result in material
              differences in items presented and disclosed in the financial statements. The implementation of GRAP 1, 2 and 3 has resulted
              in the following significant changes in the presentation of the financial statements:


              In preparing these financial statements, the Company has adopted AC 144 (IFRS 7) Financial Instruments: Disclosures as well
              as the amendment to AC 101 (IAS 1) Presentation of Financial Statements relating to capital disclosures. The adoption of
              AC 144 and the amendment to AC 101 impacted the type and amount of disclosures made in these financial statements,
              but had no impact on the reported profits or financial position of the Company. In accordance with the transitional requirements
              of the standards, the Company has provided full comparative information.




48
                                                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

1.    Significant accounting policies (continued)

1.1   Basis of preparation (continued)
      1. Terminology differences:


                       Standard of GRAP                                           Replaced statement of SA GAAP
              Statement of financial performance                         Income statement
              Statement of financial position                            Balance sheet
              Statement of changes in net assets                         Statement of changes in equity
              Net assets                                                 Equity
              Surplus/deficit for the period                             Profit/loss for the period
              Accumulated surplus/deficit                                Retained earnings
              Contributions from owners                                  Share capital
              Distributions to owners                                    Dividends
              Reporting date                                             Balance sheet date

      2. The cash flow statement can only be prepared in accordance with the direct method.
      3. Specific information such as:
         (a) receivables from non-exchange transactions, including taxes and transfers;
         (b) taxes and transfers payable;
         (c) trade and other payables from non-exchange transactions;
             must be presented separately on the statement of financial position.

      4. The amount and nature of any restrictions on cash balances is required to be disclosed.

      Paragraph 11-15 of GRAP 1 has not been implemented as IPSAS 24 Presentation of Budget Information in Financial
      Statements has been issued, but is not yet effective. Included in Supplementary Company information is a comparison of
      budget and actual amounts. Although the inclusion of an explanation of the reasons for material differences between budget
      and actual amounts would enhance the usefulness of the financial statements, non-disclosure will not affect fair presentation.

1.2   Use of estimates and judgements


      The preparation of the Annual Financial Statements requires management to make judgements, estimates and assumptions
      that affect the application of policies and reported amounts of assets and liabilities, income and expenses.


      The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
      in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future
      periods if the revision affects both current and future periods.


      Actual results may differ from these estimates.


1.3   Functional and presentation currency

      These Annual Financial Statements are presented in South African Rands, which is the Company’s functional currency. All
      financial information presented has been rounded to the nearest South African Rand.



                                                                                                                                            49
           SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     1.       Significant accounting policies (continued)

     1.4       Revenue

              Rental income
              Rental income from investment property is recognised in the Statement of Financial Performance on a straight-line basis over
              the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income over the term of
              the lease.

              Service charge income
              Service charge income refers to recoveries from tenants for conference centre usage, ICT services, municipal services, telephone
              services and levies.

     1.5      Finance income

              Finance income is accrued on a time proportion basis, by reference to the principal outstanding and 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, over the period to maturity.

              Finance income reflects the interest earned on bank accounts that the Company utilises.

     1.6      Government grants

              Government grants income recognition
              Government grants are recognised initially when there is reasonable assurance that they will be received and that the Company
              will comply with the conditions associated with the grant.
              On receipt of the grant, the grants are classified as Unutilised Government Grants and when utilised are recognised as Deferred
              Grants.

              On utilisation of portions of the grant, the portions are recognised in accordance with the policies below:

              Government grants related to Company projects
              The portion of the grant that compensates the Company for project expenses incurred is recognised as operating income in
              the Statement of Financial Performance on a systematic basis in the same periods in which the project expenses are recognised.
              These amounts are presented separately in the Statement of Financial Performance and are not offset against the related
              expense.


              Government grants related to assets
              The portion of the grant that compensates the Company for the cost of an asset is recognised in the Statement of Financial
              Performance as operating income on a systematic basis over the useful life of the asset.




50
                                                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

1.    Significant accounting policies (continued)


1.7   Provisions


      A provision is recognised when the Company has a present legal or constructive obligation as a result of a past event, and it
      is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions
      are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of
      the time value of money and, where appropriate, the risks specific to the liability.


      Onerous contracts
      A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract
      are lower than the unavoidable cost of meeting its obligations under the contract. There were no onerous contracts for the
      year under review.

1.8   Property, plant and equipment


      Owned by the Company
      Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The cost of
      self-constructed assets includes the cost of materials, direct labour, the initial estimate, where relevant, of the costs of
      dismantling and removing the items and restoring the site on which they are located, and an appropriate proportion of
      production overheads.


      Property that is being constructed or developed for future use as investment property is classified as property, plant and
      equipment and stated at cost until construction or development is complete, at which time it is re-measured to fair value
      and reclassified as investment property. Any surplus or deficit arising on re-measurement is recognised in the Statement of
      Financial Performance.


      Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
      of property, plant and equipment.


      Construction work in progress
      Construction work in progress is stated at cost recognised to date less a provision for foreseeable losses and less progress
      billings. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads
      incurred in the Company’s contract activities based on normal operating capacity.


      Subsequent costs
      The Company recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of
      such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow
      to the Company and the cost of the item can be measured reliably. All other costs are recognised in the Statement of Financial
      Performance as an expense when incurred.




                                                                                                                                          51
           SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     1.        Significant accounting policies (continued)

               Depreciation
               Depreciation is charged to the Statement of Financial Performance on a straight-line basis over the estimated useful lives of
               each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:

                Infrastructure (Buildings)              20 years
                Computer Equipment                      3 years
                Office Equipment                        5 years
                Furniture and Fittings                  6 years
                Motor Vehicle                           5 years

               Depreciation methods, useful lives and residual values are reassessed at each reporting date. Changes resulting from this
               assessment are accounted for prospectively as changes in accounting estimates.


               Construction work in progress is not depreciated until it is utilised.


     1.9       Research and development costs


               Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
               understanding is recognised in the Statement of Financial Performance as an expense in the period incurred.


     1.10      Intangible assets


               Capitalised development expenditure
               Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses.


               Other intangible assets
               Intangible assets that are acquired by the Company which have finite useful lives are stated at cost less accumulated amortisation
               and impairment losses.

               The cost of minor software and licences are recognised in the Statement of Financial Performance as an expense when incurred.

               Expenditure on internally generated goodwill and brands is recognised in the Statement of Financial Performance as an
               expense when incurred.


               Subsequent expenditure
               Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits
               embodied in the specific asset to which it relates. All other expenditure is recognised in the Statement of Financial Performance
               as an expense when incurred.




52
                                                                     SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

1.     Significant accounting policies (continued)

       Amortisation

       Amortisation is charged to the Statement of Financial Performance on a straight-line basis over the estimated useful lives of
       intangible assets unless such lives are indefinite. Goodwill and intangible assets with an indefinite useful life are systematically
       tested for impairment at each reporting date. Other intangible assets are amortised from the date they are available for use.
       The estimated useful lives are as follows:

          Capitalised development expenditure             5 years
          Computer software                               1 year

1.11   Impairment

       Non-financial assets

       The carrying amounts of the Company’s assets, other than, investment property, inventories and deferred tax assets, are
       reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists,
       the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or
       its cash-generating unit exceeds its recoverable amount.

       The recoverable amount of assets is the greater of their fair value less costs to sell and value in use. In assessing value in use,
       the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
       assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely
       independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

       Impairment losses are recognised in the Statement of Financial Performance.

       Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any
       goodwill allocated to cash-generating units (company of units) and then, to reduce the carrying amount of the other assets
       in the unit (company of units) on a pro rata basis.

       Financial assets

       A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.
       A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative
       effect on the estimated future cash flows of that asset.

       An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
       carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.
       The amount of the cumulative loss that is recognised in the Statement of Financial Performance is the difference between
       the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the Statement
       of Financial Performance.

       All impairment losses are recognised in the Statement of Financial Performance.

       Where a financial asset has been impaired, the carrying amount of the financial asset is reduced through an allowance account.




                                                                                                                                              53
          SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     1.       Significant accounting policies (continued)

              Reversal of impairment - Non financial assets

              An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An
              impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
              would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

              Reversal of impairment - Financial assets


              An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
              recognised. For financial assets measured at amortised cost, the reversal is recognised in the Statement of Financial
              Performance.

     1.12     Leases

              Lease payments

              Payments made under operating leases are recognised in the Statement of Financial Performance on a straight-line basis
              over the term of the lease. Lease incentives received are recognised in the Statement of Financial Performance as an integral
              part of the total lease expense over the term of the lease.

     1.13     Finance costs

              Finance costs comprise interest payable on borrowings calculated using the effective interest method, and foreign exchange
              gains that are recognised in the Statement of Financial Performance.

     1.14     Employee benefits

              Retirement benefits

              The Company does not provide employee retirement benefits.

     1.15     Financial instruments

     1.15.1 Classification of non-derivative financial assets

              Non-derivative financial assets comprise of other investments, loans and other receivables, trade and other receivables, and
              cash and cash equivalents.

              Held-to-maturity investments

              A held-to-maturity investment is a financial asset with fixed or determinable payments and a fixed maturity that the Company
              has the positive intention and ability to hold to maturity. The Company does not hold any held-to-maturity investments.




54
                                                                        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

1.     Significant accounting policies (continued)

1.15   Financial instruments (continued)

1.15.1 Classification of non-derivative financial assets (continued)

       Loans and receivables

       This category is for financial assets with fixed or determinable payments that are not quoted in an active market, other than
       in the following circumstances:
           Those that the Company intends to sell immediately or in the near term, which shall be classified as held for trading,
           and those that the entity upon initial recognition designates as at fair value through profit or loss;
           Those that the Company upon initial recognition designates as available-for-sale;
           Those for which the holder may not recover substantially all of its initial investment, other than because of credit
           deterioration, which shall be classified as held for sale.
       Included in this category are loans and other receivables, trade and other receivables and cash and cash equivalents.

       Available-for-sale financial assets

       Any financial asset that does not fall into any of the other categories is classified as available-for-sale. The Company does
       not hold any available-for-sale financial assets.

       Financial assets at fair value through profit or loss

       A financial asset is classified as at fair value through profit or loss if it is held for trading or is designated as such upon initial
       recognition.


       Financial assets are designated on initial recognition as “at fair value through profit or loss” to the extent that it produces more
       relevant information because it either:
           Results in the reduction of measurement inconsistency (for accounting mismatch) that would arise as a result of measuring
           assets and liabilities and the gains and losses on them on a different basis; or
           Is managed as a company of financial assets and/or financial liabilities and its performance is evaluated on a fair
           value basis, in accordance with a documented risk management or investment strategy, and this is the basis on
           which information about the assets and/or liabilities is provided internally to the entity’s key management personnel.


       A financial asset is classified as held-for-trading if it is:
           Acquired for the purpose of selling in the short term;
           Part of a portfolio of identified financial instruments that is managed together and for which there is evidence of a recent
           pattern of short-term profit taking; or
           A derivative instrument.

       The Company has elected not to designate financial assets at fair value through profit or loss and does not have any financial
       assets categorised as held-for-trading.

1.15.2 Classification of non-derivative financial liabilities


       Non-derivative financial liabilities comprise of loans and borrowings and trade and other payables.



                                                                                                                                                 55
          SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     1.       Significant accounting policies (continued)

              Financial liabilities at fair value through profit or loss

              A financial liability is classified as at fair value through profit or loss if it is held for trading or is designated as such upon initial
              recognition.

              A financial liability is classified as held-for-trading if it is:
                  Incurred principally for the purpose of selling or re-purchasing in the short term;
                  Part of a portfolio of identified financial instruments that is managed together and for which there is evidence of
                  a recent pattern of short-term profit taking; or
                  A derivative instrument.

              The Company has elected not to designate financial liabilities at fair value through profit or loss and does not have any financial
              liabilities categorised as held-for-trading.

              Financial liabilities at amortised cost

              Financial liabilities that are not held-for-trading are classified as financial liabilities at amortised cost. Included in this category
              are loans and borrowings and trade and other payables.

     1.15.3 Measurement of non-derivative financial instruments

              Non-derivative financial instruments are stated initially at fair value plus, for instruments not at fair value through profit or
              loss, any directly attributable transaction costs. Subsequent to initial recognition these financial instruments (which are
              applicable to the Company) are measured as set out below:

              Loans and receivables

              Loans and receivables originated by the entity are stated at fair value using the effective interest method less any impairment
              losses. This does not apply to the Company currently.

              Financial liabilities at amortised cost

              Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.

              Offsetting

              Financial assets and financial liabilities are offset and the net amount reported in the Statement of Financial Position when
              the Company has a legally enforceable right to set off the recognised amounts, and intends to either; settle on a net basis,
              or to realise the financial asset and financial liability simultaneously.




56
                                                                     SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

1.     Significant accounting policies (continued)

1.15.4 Derecognition of financial assets and financial liabilities


       The Company derecognises a financial asset:
           when the contractual rights to the cash flows from the asset expires;
           where there is a transfer of contractual rights to receive cash flows on the asset in a transaction in which substantially
           all the risks and rewards of ownership of the asset are transferred, or
           where the Company retains the contractual rights to the cash flows from these assets but assumes a corresponding
           liability to transfer these contractual rights to another party and consequently transfers all substantially all the risks and
           benefits associated with the assets
       Where the Company retains substantially all the risks and rewards of ownership of the financial asset, the Company continues
       to recognise the asset.
       The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

1.16   Cash and cash equivalents

       Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form
       an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the
       purpose of the cash flow statement. However, currently the Company does not make use of bank overdrafts.

1.17   Investment property

       Investment properties are properties which are held either to earn rental income or for capital appreciation or for both.
       Investment properties are stated at fair value. An external, independent valuer, having an appropriate recognised professional
       qualification and recent experience in the location and category of property being valued, values the portfolio annually. The
       fair values are based on market values, being the estimated amount for which a property could be exchanged on the date
       of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the
       parties had each acted knowledgeably, prudently and without compulsion.

       Any gain or loss arising from a change in fair value is recognised in the Statement of Financial Performance.

       When an item of property, plant and equipment is transferred to investment property following a change in its use, any
       differences arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair
       value is recognised directly in equity if it is a gain. Upon disposal of the item the gain is transferred to retained earnings. Any
       loss arising in this manner is recognised immediately in the Statement of Financial Performance.

       If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment and its fair value at
       the date of reclassification becomes its cost for accounting purposes. When the Company begins to redevelop an existing
       investment property for continued future use as investment property, the property remains an investment property, which is
       measured based on fair value model, and is not reclassified as property, plant and equipment during the redevelopment.

       A property interest under an operating lease is classified and accounted for as an investment property on a property-by-
       property basis when the Company holds it to earn rentals or for capital appreciation or both. Any such property interest under
       an operating lease classified as an investment property is carried at fair value.




                                                                                                                                             57
          SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     1.       Significant accounting policies (continued)

     1.18     Non-current assets held for sale

              Non-current assets (or disposal company) are classified as held for sale if their carrying amount will be recovered through a
              sale transaction rather than continued use. This condition is regarded as met only when the sale is highly probable and the
              asset (or disposal company) is available for immediate sale in its present condition. Management must be committed to the
              sale, which should be expected to qualify for recognition as a complete sale within one year of date of classification. Immediately
              before classification as held for sale, the assets (or components of a disposal company) are remeasured in accordance to the
              Company’s accounting policies. Thereafter generally the assets (or disposal company) are measured at the lower of their
              carrying amount and fair value less cost to sell.

              Impairment losses on initial classification as held for sale are included in the Statement of Financial Performance, even when
              there is a revaluation. The same applies to surpluses and deficits on subsequent remeasurement. Any impairment deficit on
              a disposal company first is allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that
              no deficit is allocated to inventories, financial assets, deferred tax assets and investment property, which continue to be
              measured in accordance with the Company’s accounting policies. Surpluses are not recognised in excess of any cumulative
              impairment loss.

     1.19     Taxation

              Income tax expense comprises current and deferred tax. Income tax is recognised in the Statement of Financial Performance
              except to the extent that it relates to items recognised directly into owners’ contribution, in which case it is recognised into
              owners contribution.

              Current Tax

              Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted
              at the reporting date, and any adjustment to tax payable in respect of previous years.

              Deferred Tax

              Deferred tax is provided using the Statement of Financial Position liability method, providing for temporary differences between
              the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
              The following temporary differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of
              assets or liabilities that affect neither accounting nor taxable profit nor differences relating to investments in subsidiaries to
              the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the
              expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or
              substantively enacted at the reporting date.

              A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
              which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the
              extent that it is no longer probable that the related tax benefit will be realised.




58
                                                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

1.     Significant accounting policies (continued)

1.20   Related parties

       The Company operates in an economic environment currently dominated by entities directly or indirectly owned by the South
       African Government. As a result of the constitutional independence of all three spheres of government in South Africa, only
       parties within the provincial sphere of Government will be considered to be related parties.


       Key management is defined as being individuals with the authority and responsibility for planning, directing and controlling
       the activities of the entity. We regard all individuals reporting directly to the Chief Executive Officer as key management per
       the definition of the standard.

       Other related party transactions are also disclosed in terms of the requirements of the standard. The objective of the standard
       and the financial statements is to provide relevant and reliable information and therefore materiality is considered in the
       disclosure of these transactions.

1.21   Irregular, fruitless and wasteful expenditure

       Irregular expenditure means expenditure, other than unauthorised expenditure, incurred in contravention of or that is not
       in accordance with the requirement of any applicable legislation.

       Fruitless and wasteful expenditure means expenditure that was made in vain and could have been avoided had reasonable
       care been exercised.

       Any irregular, fruitless and wasteful expenditure is charged against income in the period in which it is incurred. In accordance
       with the requirements of the Public Finance Management Act, the details of fruitless and wasteful expenditure incurred are
       included in note 26 to the financial statements.

1.22   Comparatives

       Comparative figures are reclassified or restated where necessary to afford a proper and more meaningful comparison of
       results.




                                                                                                                                          59
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008


                                                                     Note       2008         2007
                                                                                  R            R


     2. Revenue


        Rental Income
              - Gross Rental Income: Investment Property                      31,674,933   27,320,963


        Services Income                                                       10,834,416   10,541,506
              - Service income conference centre and canteen                    893,908     2,128,836
              - Rendering of ICT services                                      2,524,508    1,740,431
              - Rendering of Municipal services                                3,994,983    3,546,502
              - Rendering of Telephone services                                1,477,928    1,486,462
              - Levies received                                                1,943,089    1,639,275


                                                                              42,509,349   37,862,469


     3. Grants and transfers recognised


        Related to assets                                                16   19,116,107   68,699,603


                                                                              19,116,107   68,699,603


     4. Other income


        Sundry income                                                            65,132      338,756
        Movement in provision for impairment                                    726,415             -
        Surplus on disposal of minor assets                                        4,200            -
                                                                                795,747      338,756




60
                                                                 SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

5. Administrative and Personnel Expenses


   Administrative Expenses                                                          2008                       2007
                                                                                     R                           R

   The following items have been charged in arriving at total expenditure:
        Communication and marketing costs                                        1,217,256                      718,904
        Communication and marketing contract                                     1,081,395                      629,919
        Advertising and promotions                                                 135,861                       88,985


   Consulting and professional fees                                              2,460,431                    9,368,844
        Consulting fees                                                          1,852,671                    5,866,280
        Legal fees                                                                 374,294                      163,115
        Logistics and facilities management                                         31,816                    1,952,288
        Financial management                                                        13,250                      661,376
        Recruitment fees                                                           188,400                      725,785


   Tax penalties                                                                 1,797,527                              -


   Depreciation and amortisation                                                 5,167,499                    6,377,202
        Depreciation                                                             3,046,638                    3,832,165
        Amortisation                                                             2,120,861                    2,545,037


Administrative Expenses - carried forward                                       10,642,713                    16,464,950




                                                                                                                                  61
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     5. Administrative and Personnel Expenses - continued                  2008          2007
                                                                             R            R


     Administrative Expenses - brought forward                           10,642,713   16,464,950


        Travel Expenses                                                    409,810       389,861
            Travel - local                                                   89,361      224,922
            Travel - overseas                                              320,449       164,939


        Audit Fees                                                         910,310       125,625
            External audit fees                                            718,308                 -
            Forensic audit fees                                                   -      115,125
            Internal audit fees                                            192,002        10,500


        Repairs and maintenance                                           2,066,031      786,746


        Leasing expenses                                                  1,367,029                -


        Consumable, Printing and Stationery                                162,671       650,298
            Consumables                                                           -       47,654
            Printing and stationery                                        162,671       602,644


        Operating leases straightlined                                     185,289         1,710


     Total Administrative Expenses                                       15,743,853   18,419,190



        Salaries and wages                                                7,109,604    4,789,266
        Bonus                                                              985,490       386,000
        Leave accrual                                                        92,940      135,894
        Termination Benefits                                               503,903                 -
        Cellphone                                                            40,280       13,386
        Staff training                                                       83,126       99,657


     Total Personnel Expenses                                             8,815,343     5,424,203


     Total Administrative and Personnel Expenses                         24,559,196   23,843,393




62
                                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

                                                                     2008                       2007
                                                                       R                          R


6. Operating Expenses


   Property operating expenses                                         3,604,429                  3,268,396
       Security and access control                                    2,063,695                   1,794,127
       Cleaning costs                                                   397,859                       431,643
       Insurance                                                        709,091                       572,496
       Waste management                                                    46,298                      16,796
       Park landscaping and gardening                                   387,486                       453,334


Service charge expenses                                               9,204,685                  13,433,767
    ICT service management and computer expenses                        807,767                   2,343,195
    Catering and conference centre costs                                692,744                   2,157,259
    Telephone and fax                                                 2,022,537                   1,239,800
    Rates and taxes                                                     314,015                   4,828,091
    Electricity and water                                             5,367,622                   2,865,422


Credit losses incurred                                                  439,779                       974,794


Other operating expenses                                                881,020                       966,560
    Conference fees                                                        41,541                      81,416
    Courier and postage                                                    11,717                      27,101
    Entertainment expenses                                                 40,005                     128,423
    Storage expenses                                                           0                      179,808
    General expenses-gifts                                                 78,930                       8,960
    Other operating expenses                                            631,409                       481,404
    Subscriptions                                                          77,418                      59,448


Total Operating Expenses                                             14,129,913                  18,643,517




                                                                                                                    63
       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

                                                                               2008         2007
                                                                                 R            R
     7. Net finance income
        Interest on Accounts Receivable                                         89,018      127,204
        Interest income on bank balances                                      5,567,343    2,915,840
        Finance income                                                        5,656,361    3,043,044


        Finance expense                                                      -3,718,802      -30,122
           Interest on late VAT output payment                               -3,453,088
           Interest on late submission of tax returns                           -82,782
           Interest on late capital expenditure payment                        -182,932
           Interest on late payments for services received                                   -30,122


        Net finance income                                                    1,937,559    3,012,922


     8. Income tax expense
        SA Normal Taxation
        Current year                                                          3,153,588
        Deferred tax                                                         13,945,495     823,806
        Net temporary differences                                            13,973,902     823,806
        Change in tax rate                                                      -28,407            -



        Total income tax expense in the Statement of Financial Performance   17,099,083     823,806


        Tax as per above                                                     17,099,083     823,806
        Surplus before tax                                                   69,769,956   15,141,272
        Effective tax rate                                                      24.51%        5.44%


        Reconciliation of effective tax rate


        Normal tax rate                                                         29.00%       29.00%
        Income tax using the Company’s normal tax rate
        Prior year adjustment – deferred tax                                          -       0.29%
        Permanent differences                                                   -5.78%       -0.18%
        Fair value adjustment                                                    1.33%      -23.67%
        Change in tax rate (29% to 28%)                                         -0.04%             -
                                                                                24.51%        5.44%




64
                                                                                                                                     SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008



     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008


     9.    Property, plant and equipment                                                        Furniture                   Office
                                                                                 Motor            and          Computer    Furniture                      Buildings
                                                        1
                                                 Land           Infrastructure   Vehicles       Fittings       Equipment      and          Telephone        Under
                                                  R                   R             R              R              R        Equipment        System       Construction        Total
                                                                                                                              R                R              R                R
     Cost
     Balance at 1 April 2006 - restated       4,485,884           31,176,808     148,000        241,882        4,848,129   1,158,311       1,778,089       4,061,881      47,898,984
     Acquisitions                                           -                -              -   263,173          958,419     136,542          45,716      45,937,005      47,340,855
     Transfers to investment property                       -                -              -              -           -               -             -   -49,998,886      -49,998,886
     Balance at 31 March 2007                  4,485,884           31,176,808    148,000         505,055       5,806,548   1,294,853       1,823,805                  -    45,240,953


     Acquisitions                                           -      1,461,222                -              -     469,183      56,970          89,536      34,008,918      36,085,829
     Disposals/ Derecognition of assets                     -                -              -              -      -4,200               -             -                -         -4,200
     Balance at 31 March 2008                  4,485,884           32,638,030    148,000         505,055       6,271,531   1,351,823       1,913,341       34,008,918      81,322,582


     1
         The register of Land is maintained at the Company premises.




65
                                                                                                                      SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008
Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008
       9.   Property, plant and equipment (continued)                                    Furniture                  Office
                                                                             Motor         and       Computer      Furniture                     Buildings
                                                Land        Infrastructure   Vehicles    Fittings    Equipment        and        Telephone         Under
                                                  R               R             R           R           R          Equipment       System       Construction       Total
                                                                                                                      R              R               R               R
       Depreciation and impairment losses
       Balance at 1 April 2006                          -     -3,479,198      -47,765     -64,389     -2,380,053     -791,046       -515,068                 -    -7,277,519
       Depreciation charge for the year                 -     -1,409,622      -29,843    -136,877     -1,789,772     -135,427       -330,624                 -    -3,832,165
       Balance at 31 March 2007                         -      -4,888,820      -77,608    -201,266    -4,169,825      -926,473       -845,692                -    -11,109,684
       Depreciation charge for the year                 -     -1,558,952      -29,438     -93,312     -1,004,179        -7,694      -353,063                 -    -3,046,638
       Balance at 31 March 2008                         -      -6,447,772    -107,046     -294,578    -5,174,004      -934,167     -1,198,755                -    -14,156,322
       Carrying amount
       At 31 March 2007                       4,485,884       26,287,988       70,392     303,789     1,636,723       368,380        978,113                 -    34,131,269
       At 31 March 2008                        4,485,884      26,190,258       40,954     210,477      1,097,527      417,656        714,586     34,008,918       67,166,260




                                                                                                                                                                                       66
                                                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

10.   Investment property
                                                                  Note                  2008                         2007
                                                                                          R                            R


      Opening Balance at 1 March                                                    221,998,463                  222,656,702


      Transfer from buildings under construction at fair value       9                            -                49,998,886
      Additional expenses capitalised                                                  1,685,504                    1,628,443
      Fair value adjustment                                                          44,100,303                  -52, 285,568


      Closing Balance at 31 March                                                   267,784,270                  221,998,463



      The carrying amount of investment property is the fair value of the property as determined by Valquest Property Valuers and
      Consultants.


      The fair values were determined having regard to the expected future cash flow from the property and recent market transactions
      for similar properties in the same location as the Company’s investment property.


      Investment property comprises of a number of commercial properties that are leased to third parties. Each of the leases contains
      an initial non-cancellable period which varies between 12 months to 10 years. Subsequent renewals are negotiated with the
      lessee. No contingent rent is charged.
      Investment Property is valued annually and the current methodology is consistent with that used in the previous financial period.
      The following amounts have been recognised in the Statement of Financial Performance:



                                                                                          2008                        2007
                                                                                              R                         R


      Rental Income                                                  2                31,674,933                   27,320,963




                                                                                                                                          67
           SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

                                                                                                                    1
     11.     Intangible assets                                  Note         Software            Development Cost               Total
                                                                                 R                       R                       R



     Cost


     Balance at 31March 2006                                                            -               12,725,185              12,725,185
     Balance at 31 March 2007                                                           -               12,725,185              12,725,185



     Acquisitions                                                              131,988                             -                 131,988
     Balance at 31 March 2008                                                  131,988                  12,725,185              12,857,173


     Amortisation and impairment losses
     Balance at 31March 2006                                                            -               -8,059,284              -8,059,284
     Amortisation charge for the year                             5                     -               -2,545,037              -2,545,037
     Balance at 31 March 2007                                                                           -10,604,321             -10,604,321
                                                                                        -
     Amortisation charge for the year                             5                     -               -2,120,861              -2,120,864
     Balance at 31 March 2008                                                           -               -12,725,185             -12,725,185


     Carrying Amount
     Balance at 31March 2006                                                            -                4,665,901               4,665,901
     Balance at 31 March 2007                                                           -                2,120,864               2,120,864
     Balance at 31 March 2008                                                  131,988                             -                 131,988


     1
       Development costs principally comprise expenditure incurred by the Company in establishing the concept and feasibility of the Supplier
     Park concept, where it is probable that the costs will be recovered through future commercial activity.




68
                                                                  SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

                                                                                   2008                          2007
                                                                                     R                            R
12.    Trade and other receivables


       Trade and other receivables                                                   5,248,973                   4,769,440
       Trade receivables                                                             3,214,433                   4,074,955
       Trade receivables from related parties                                                   -                  251,893
       VAT receivable                                                                1,509,714                     709,242
       Prepayments                                                                        533,291                  468,231
       Deposits                                                                           408,930                  408,930
       Less: Provision for impairment of trade and other receivables                  -417,395                  -1,143,811


                                                                                     5,248,973                   4,769,440


12.1   Operating lease
       The future minimum lease rentals receivable under non-cancellable
       operating leases in the aggregate and for each of the following periods
       are as follows:


       Not later than 1 year                                                        30,339,142                  23,934,122


       Later than 1 year and not later 5 years                                      80,689,573                  72,645,371


       Later than 5 years                                                           21,200,126                  38,265,049


       Total minimum lease rentals receivable                                     132,228,841                 134,844,542


The leases represent the lease rentals for operating leases of investment property which are amortised on a straightline basis over
the period of the lease.


Operating lease rentals straightlined


                                                                                    2008                          2007
                                                                                      R                             R


Non-current assets:                                                              10,083,567                      6,130,221




                                                                                                                                      69
           SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008


                                                                                             2008                         2007
                                                                                              R                            R



     13.     Cash and cash equivalents


             Bank balances                                                                  8,419,482                   2,197,115
             Call deposits                                                                 30,105,821                  20,732,886
             Fixed deposits                                                                           -                53,733,545
             Guarantee account                                                             10,295,398                     589,230


             Net cash and cash equivalents                                                 48,820,701                  77,252,776


     14.     Contributions from owners
             Authorised
             - 3 000 000 ordinary shares of R0.01 each                                         30,000                      30,000


             Issued
             - 2 650 629 ordinary shares of R0.01 each                                         26,506                      26,506


     15.     Unutilised government grants


             Opening balance                                                               71,797,550                  31,132,447
             Receipts                                                                                 -                92,290,939
             Recognised in acquisitions                                                   -36,217,815                  -49,998,886
             VAT Payable                                                                  -14,821,694
             Effect of prior year error                                                               -                 -1,626,950
             Closing balance                                                               20,758,041                  71,797,550




     Unutilised government grants represents the amount of grant funding that was received for specific projects and/or operational
     expenditure in relation to projects, which has not been utilised (i.e. transferred/deferred/expensed/committed) at year end.


     Value Added Tax (VAT) Payable
     The Company has entered into discussions with the South African Revenue Services regarding the VAT treatment of government
     grants received by the Company, due to the change in the legislation effective 1 April 2005 which prescribes the VAT implications
     of the government grants. The total government grants received by the Company between 1 April 2005 and 31 December 2007 is
     R120,690,939. Total VAT to be charged thereon is R14,821,694. The potential interest and penalties related to the VAT liability
     payable amount to R3,453,088 and R1,482,169 respectively. A total liability of R19,756,952 has been recognised.




70
                                                    SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

                                                            Note
                                                                           2008                         2007
                                                                             R                            R


16.   Deferred government grants
Opening balance                                                         240,034,638                 257,108,405
Recognised in acquisitions                                   15          36,217,815                  49,998,886
Grants and transfers recognised                               3         -19,116,107                 -68,699,603
Closing balance originally stated                                       257,136,346                 238,407,688
Effects of prior year error                                  21                       -               1,626,950
Balance at end of period                                                257,136,346                 240,034,638



17. Deferred Tax Liability                                                 2008                         2007
                                                                             R                            R


Balance at beginning of year                                                -823,806                              -
Charge to Statement of Financial Performance                              -1,597,410                   -823,806
Charge to Statement of Financial Position                               -12,348,084                               -
Balance at end of year                                                  -14,769,300                    -823,806



Balance at beginning of year                                                -823,806                              -
Rate change (29% to 28%)                                                      28,407                              -


Restated balance (per above)                                                -795,399                              -


Current year movement (per above)
Provisions                                                                    69,586                    331,705
Provision for accounts receivable                                            -25,630                      43,110
Effect of increase in / (utilisation of) tax loss                           -557,212                    577,113
Smoothing of leases                                                       -1,106,937                 -1,777,764
Fair value adjustments on investment property                           -12,348,084                               -
Other                                                                            -5,624                       2,030


Net Deferred Tax Liability                                              -14,769,300                    -823,806




                                                                                                                      71
       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     18.   Trade and other payables                                           2008                     2007
                                                                                 R                       R


           Trade payables                                                 6,071,041                    890,890
           VAT payable – government grants                               14,821,694                             -
           Accruals restated                                              7,713,800                  11,690,012
           Accruals – originally stated                                   7,713,800                   9,866,183
           Effects of prior year error                                               -                1,823,829


                                                                         28,606,535                  12,580,902




     19.   Provisions
                                                                         Bonus           Leave Pay            Total
                                                                          R                 R                   R


           Balance at 1 March 2006                                               -         12,765              12,765
           Provision for the year                                                -        148,656             148,656
           Utilised during the year                                              -        -12,765             -12,765
           Balance at 31 March 2007                                              -        148,656            148, 656
           Provision for the year                                       942,490            86,557         1,029,047
           Utilised during the year                                              -        -54,109             -54,109

           Balance at 31 March 2008                                     942,490           181,104         1,123,594




72
                                                                   SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

20.   Notes to the cash flow statement


Cash generated from/ (utilised in) operations


20.1 Reconciliation of profit/ loss before tax and extraordinary items to cash utilised in operations


                                                                                            2008                    2007
                                                                                              R                       R


Surplus before tax                                                                         69,769,956             15,141,272
Non cash movements
Depreciation                                                                               3,046,638              3,832,165
Amortisation                                                                               2,120,861              2,545,037
Increase in provisions                                                                       974,938                135,890
Impairment of debtors                                                                        439,779                        -
Deferred grants recognised                                                               -19,116,107                        -
Surplus on disposal of property, plant and equipment                                              -4,200                    -
Straight lining of lease income                                                            -3,953,346                       -
Fair value adjustment                                                                    -44,100,303             50,657,125
Effects of prior year error                                                                             -         1,628,443


Operating profit before working capital changes                                             9,178,216             73,939,932


Working capital changes
Increase in accounts receivable                                                            -4,432,879             -3,814,188
Increase in accounts payable                                                               3,036,202              1,312,331



Net cash flows from operating activities                                                    7,781,539             71,438,075




                                                                                                                                    73
       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     21.   Effects of Prior Year Error


             21.1      The changes in prior year error came as a result of additions to investment property, which were incurred in
                       the prior years but recorded in the current year. The investment property was subsequently restated to its fair
                       value at the balance sheet dates. The effect of these changes have been set out below:



           Change in Statement of Financial Performance                                                     2007
                                                                                                              R


                       Increase in fair value adjustment                                                 1,628,443
                       Decrease in surplus for the period                                               -1,628,443


           Changes in Statement of Financial Position


                       Increase in trade and other payables                                             -1,628,443
                       Decrease in accumulated surplus                                                   1,628,443



             21.2      An omission was noted in the prior year in the calculation of the utilised portion of the unutilised government
                       grants line item. Acquisitions of property, plant and equipment were not included in the calculation to reduce
                       the balance. The effect of these changes have been set out below:



     Changes in Statement of Financial Position
           Non-current liabilities


             Decrease in unutilised government grants                                                   1,626,950
             Increase in deferred government grants                                                     -1,626,950




74
                                                                    SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

22.   Financial instruments and financial risk management

      The Company is exposed to financial risk through its financial assets and financial liabilities.
      The Company enters into lease agreements with reputable and credit worthy tenants with the view to reducing the incidence
      of bad debts and maximizing profits.

      The Company’s exposure to risk, its objectives, policies and processes for managing the risk arising from its financial instruments
      and methods used to measure the Company’s exposure to these risks, have not changed significantly from the prior year.

      The Company has exposure to credit, liquidity and market risk, which is described in more detail below.

22.1 Credit risk

      Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to meet
      an obligation. Credit risk arises in the ordinary course of business, mainly through the rendering of services to external
      customers.

      Trade and other receivables

      The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

      The following procedures are followed in the credit granting process: investigation, evaluation and approval. During the
      investigation procedure the creditworthiness of the potential tenant is evaluated. The evaluation procedure includes considering
      the character, capacity of the business and the capital structure thereof. Collateral should be provided as guarantee and a
      deposit amount of not less than two months’ rental and other utility charges is payable upon signature of the lease. The
      credit and/or trading history is requested and applied for during this phase and is analysed during the evaluation of the
      potential client. All factors analysed during the evaluation process are taken into account when a decision is taken as to the
      approval of a potential tenant. Long outstanding accounts are handed over to attorneys for collections. A debtors’ age
      analysis is included in the Board reports.

      The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and
      other receivables. The main components of this allowance are a specific loss component that relates to individually significant
      exposures, and a collective loss component established for companies of similar assets in respect of losses that have been
      incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for
      similar financial assets.

      Credit risk exposure

      The carrying amount of financial assets represents the maximum credit exposure at the reporting date. The following table
      analysis the quality of financial assets in respect of credit risk:


       31 March 2008            Trade and other receivables

       High Risk
       Moderate Risk
       Low Risk                         5,248,973
                                        5,248,973
       31 March 2007
                                Trade and other receivables
       High Risk
       Moderate Risk
       Low Risk                         4,769,440
                                        4,769,440
                                                                                                                                            75
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     The concentrations of credit risk for trade and other receivables are as follows:



                                                                                         31 March 2008             31 March 2007


     Tenants                                                                                3,739,259                   3,808,305
     SARS                                                                                   1,509,714                     709,242
     Related parties                                                                                                      251,893
                                                                                             5,248,973                   4,769,440



     The sensitivity analysis:


                                                                                                Impact of 1% change in
                                                                                               interest rates/capitalisation
                                                                                                           rate
                                                                                                            R
     Finance income
     Increase/ Decrease of 1% in rates would result in a movement of                                     488,207


     Fair value adjustments


     The effect that a change in capitalisation rate would have on
     the market value of the investment property based on the
     figures provided by an independent valuer:


     Increase of 1%                                                                                   30,000,000
     Decrease of 1%                                                                                   -24,000,000




76
                                                                                                                                  SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008



     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008


     Ageing of financial assets
     The following table provides information regarding the credit quality of assets which expose the Company to credit risk:



        2008                                     Current               >30 Days           >60 Days              >90 Days            Impaired              Total
                                                                                                                                 Financial Asset


        Trade and other receivables               3,366,334            158,668            967,899               1,173,467             -417,395        5,248,973
        Cash and cash equivalents                48,820,701                                                                                           48,820,701
        Totals                                   52,187,035            158,668            967,899               1,173,467             -417,395        54,069,674




        2007                                     Current               >30 Days           >60 Days              >90 Days          Impaired                Total
                                                                                                                                Financial Asset


        Trade and other receivables               3,804,518            530,989                131,359           1,446,389          -1,143,811         4,769,439
        Cash and cash equivalents                23,519,231                               53,733,545                                                  77 252 776
        Totals                                   27,323,748            530,987            53,864,904            1,446,387          -1,143,811         82,022,215




77
       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

          There are no financial assets that would have been past due or impaired had the terms not been renegotiated for the current
          or prior year.


          Impairment losses


          The movement in the allowance for impairment in respect of trade and other receivables was as follows:




                                                                                               2008                        2007
                                                                                                 R                           R


          Balance at 1 April                                                                1,143,811                      393,301
          Write (back)/ off                                                                   -726,415                     750,510
          Balance at 31 March 2008                                                             417,396                  1,143,811


          Security and collateral

          The security and collateral related to trade and other receivables are:

                                                                                                 2008                       2007
                                                                                                   R                          R


            Deposits from tenants                                                              147,780                     147,780
                                                                                               147,780                     147,780



          The Company does have collateral or other credit enhancements for its credit risk exposure for financial assets and insurance
          contract assets during the current or prior year. In addition, there were no instances during the current or prior year where
          the Company has taken possession of collateral it holds as security.


     22.2 Liquidity risk


          Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s
          approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
          when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
          Company’s reputation.


          The company is currently classified as a schedule 3C entity according to Public Finance Management Act.
          The Company receives government grants for capital projects. Operationally the Company generates enough cash to meet
          its obligations.




78
                                                                SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

    Maturity analysis


    The following are the contractual maturities of financial liabilities, including interest payments and excluding the impact of
    netting agreements:



    Trade and other payables                                                         2008                2007
                                                                                       R                   R


    Total carrying amount                                                         28,606,535          12,580,902


    Within 1 year                                                                 28,606,535          12,580,902




                                                                                                                                     79
                                                                                                                                                               SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008
Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008
22.3   Accounting classifications and fair values
       The table analyses each class of financial assets and liabilities per category as well as providing their fair values, if applicable.
                                                                                                                  Financial                    Not within
                                                                                     Loans and                  liabilities at                  scope of               Total carrying         Fair value
                                                                     Note            receivables              amortised cost                     IAS 39                   amount
       31 March 2008
       Trade and other receivables, comprising of:                                    5,248,973                                                (533,291)                  4,715,682            4,715,682
            Trade receivables                                                         2,797,038                                  -                         -              2,797,038            2,797,038
            Other receivables                                                                                                    -                         -                        -                      -
            Prepayments                                                                 533,291                                  -             (533,291)                            -                      -
            Deposits                                                                    408,930                                  -                         -                408,930              408,930
            Trade receivables from related parties                                                                               -                         -                        -                      -
            VAT receivable                                                            1,509,714                                  -                         -              1,509,714            1,509,714
            Lease receivables                                                                                                    -                         -
       Cash and cash equivalents                                                    48,820,701                                                                           48,820,701           48,820,701
       Total financial assets                                                        54,069,674                                  -             (533,291)                 53,536,383            53,536,383
       Trade and other payables comprising of:
            Trade and other payables                                                              -                6,071,041                               -              6,071,041            6,071,041
            Accruals                                                                              -                7,713,800                               -              7,713,800            7,713,800
            VAT Output – Government grants                                                        -               14,821,694                                             14,821,694           14,821,694
       Total financial liabilities                                                                -               28,606,535                               -             28,606,535           28,606,535




                                                                                                                                                                                                                                80
                                                                                                       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008



     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008




                                                                           Financial      Not within
                                                           Loans and     liabilities at    scope of       Total carrying          Fair value
                                                   Note   receivables   amortised cost      IAS 39           amount
     31 March 2007

     Trade and other receivables, comprising of:           4,769,440                      (468,231)          4,301,209             4,301,209
        Trade receivables                                  2,931,144                                         2,931,144             2,931,144
        Other receivables                                          -
        Prepayments                                          468,231                      (468,231)                  -                     -
        Deposits                                             408,930                                           408,930               408,930
        Trade receivables from related parties               251,893                                           251,893               251,893
        VAT receivable                                       709,242                                           709,242               709,242
        Lease receivables

     Cash and cash equivalents                            77,252,776                                        77,252,776            77,252,776

     Total financial assets                               82,022,216                       (468,231)        81,553,985            81,553,985

     Trade and other payables comprising of:                              12,580,636                        12 580 636            12,580,636

         Trade and other payables                                   -     11,689,746               -        11,689,746            11,689,746
         Accruals                                                   -        890,890               -           890,890               890,890

     Total financial liabilities                                           12 580 636                       12 580 636            12 580 636




81
       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes to the Annual Financial Statements (continued)
     For the year ended 31 March 2008

     22.4   Capital management


            The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
            future development of the business. The Board of Directors monitors the return on capital, which the Company defines as
            net operating income divided by total shareholders’ equity.


     23.    Operating leases
            Leases as lessee


            Non-cancellable operating lease rentals are payable as follows:

                                                                                                2008                        2007
                                                                                                  R                          R
            Equipment


            Less than one year                                                                 61,763                      1,710
            Between one and five years                                                        123,526                            -
            More than five year                                                                        -                         -
            Total operating leases                                                             185,289                     1,710

            Leases as lessor


            The Company leases out its investment property under operating leases. The future minimum lease payments under
            non-cancellable leases are as follows:

            Investment property


            Less than one year                                                             30,339,142                23,934,122
            Between one and five years                                                     80,689,573                72,645,371
            More than five year                                                            21,200,126                38,265,049
                                                                                          132,228,841               134,844,542


                                                                                                2008                        2007
                                                                                                  R                          R
     24.    Capital commitments
            Capital expenditure approved but not contracted at reporting date and not recognised in the Annual Financial Statements
            are as follows:




            Investment property                                                            49,000,000                60,000,000


            Total Capital Commitments                                                       49,000,000                60,000,000




82
                                                                  SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008

25.    Related parties


       Identity of related parties in the Company
       During the year, in ordinary course of business, certain entities within the Company entered into arms length transactions.


       The Company has related party relationships with its holding company and with its directors and executive officers.


25.1   Remuneration of members, directors and officers


                                                                   Basic      Employers      Any other      Total        Total
                                                      Services    salary     contributions    benefits    2007/08       2006/07
                                                          R         R             R              R            R            R
       Members of the Accounting Authority
       Non-executive directors
       P Fernandes                                                                                                        88,000


       Non-executive directors                                                                             160,000
       NMJ Canca
       HG Motau
       JB Phakathi                                                                                          60,000
       Y Waja                                                                                              100,000


       Executive


       JMP Mphahlele (Managing Director)                          800,000                      18,480      818,480      815,149
       MW Sebola (Chief Financial Officer - from                  195,000                       2,400      197,400                -
       01 January to 31 March 2008)
       D Kgoele (Former Chief Financial Officer -                 233,333                     402,103      635,436      357,600
       from 01 April 2007 to 31 July 2007)
       L van der Merwe                                            630,000                                  639,600      160,400
       (General Manager Operations)
       R Bruzzaniti                                               660,000                                  669,600      167,400
       (General Manager Business Development)


       Two of the four non-executive directors are employed by the Blue IQ group. The other two are employed outside the Blue
       IQ group.



       Sub-total for entity                                      2,518,333                    442,983    2,960516     1,500,549




                                                                                                                                      83
                                                                                                                               SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008
Notes to the Annual Financial Statements (continued)
For the year ended 31 March 2008
25.    Related parties (continued)
25.2   Related party transactions
       All outstanding balances with related parties are priced on an arm’s length basis and are to be settled in cash within six months of the reporting date.
       None of these balances are secured.
                                                                                                              Grants and                               Outstanding balances
                                                                                        Grants and         transfers paid in
                                                                                         transfers          cash to related
                                                                                         received                party           Transactions             2008           2007
                                                       Nature of relationship                R                     R                  R                    R              R
       AIDC                                            Tenant                                                                      1,406,000             80,541       2,174,313
       City of Tshwane                                 Municipality Costs                                                          5,681,637                   -      4,380,762
                                                                                                                                   7,087,637             80,541       6,555,075
26.    Irregular, fruitless and wasteful expenditure
                                                                                                                   2008                 2008
       The following irregular, fruitless and wasteful expenditure was accounted for:                               R                    R
       Tax penalties                                                                                                  5              1,797,527
       Interest on late payments of VAT, submission of tax returns, capital expenditure and for services              7              3,718,802
       Value Added Tax (VAT) Payable
       The Company has entered into discussions with the South African Revenue Services regarding the VAT treatment of government grants received by the Company, due to the change
       in the legislation effective 1 April 2005 which prescribes the VAT implications of the government grants. The total government grants received by the Company between 1 April
       2005 and 31 December 2007 is R120,690,939. Total VAT to be charged thereon is R14,821,694.The potential interest and penalties related to the VAT liability payable amount to
       R3,453,088 and R1,482,169 respectively. A total liability of R19,756,952 has been recognised.
27.    Accounting Estimates and Judgements
       Management discussed with the Audit Committee the development, selection and disclosure of the Company's critical accounting policies and estimates and the application of
       these policies and estimates. Certain critical accounting judgments in applying the Company's accounting policies are described below.
       Finance and operating leases
       In determining lease classification the Company evaluated whether leases with tenants are clearly operating leases or finance leases. Firstly, land title does not pass. Secondly,
       because the rent paid to the Company for the building is increased to market rent at regular intervals and the tenant does not participate in the residual value of the building it is
       judged that substantially all the risks and rewards of the building are with the Company. Based on these qualitative factors it is concluded that the leases are operating leases.
       Fair Value of investment property
       The carrying amount of investment property is the fair value of the property as determined by Valquest Property Valuers and Consultants. The fair values were determined having
       regard to the expected future cash flow from the property and recent market transactions for similar properties in the same location as the Company’s investment property.




                                                                                                                                                                                                84
                                                       SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Supplementary Information
For the year ended 31 March 2008


 INDEX                                                                                               Page

 Company’s Actual Financial Performance with Budget Information                                      85- 88




                                                                                                                        85
          SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Company’s Actual Financial Performance with
     Budget Information
     For the year ended 31 March 2008


                                                                            2008            2007          2008
                                                                             R                R          Budget
     1.     REVENUE                                                                                        R


            Rental income                                                  31,674,933     27,320,963   30,335,799
            Service charge income                                          10,834,416     10,541,506    9,560,658
                                                                           42,509,349     37,862,469   39,896,457


     2.     NET FINANCE INCOME
            Interest on accounts receivable                                      89,018     127,204               -
            Interest income on bank balances                                5,567,343      2,915,840    4,414,472
            Finance income                                                  5,656,361      3,043,044    4,414,472


     3.     ADMINISTRATIVE AND PERSONNEL EXPENSES


            The following items have been charged in arriving at total
            expenditure:


            Communication and marketing costs                               1,217,256       718,904     1,888,480
                Communication and marketing contract                        1,081,395       629,919     1,738,480
                Advertising and promotions                                   135,861         88,985      150,000


            Consulting and professional fees                                2,460,431      9,368,844    1,405,000
                Consulting fees                                             1,852,671      5,866,280    1,010,000
                Legal fees                                                   374,294        163,115      310,000
                Logistics and facilities management                              31,816    1,952,288      85,000
                Financial management                                             13,250     661,376               -
                Recruitment fees                                             188,400        725,785               -


                Tax penalties                                               1,797,527                             -


            Depreciation and amortisation                                   5,167,499      6,377,202    7,197,127
                Depreciation                                                3,046,638      3,832,165    4,652,095
                Amortisation                                                2,120,861      2,545,037    2,545,032


          Administrative Expenses - carried forward                        10,642,713     16,464,950   10,490,607




86
                                                  SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Company’s Actual Financial Performance with
Budget Information (continued)
For the year ended 31 March 2008


3.     ADMINISTRATIVE EXPENSES - continued                  2008              2007                  2008
                                                             R                  R                  Budget
                                                                                                      R
Administrative Expenses - brought forward               10,642,713          16,464,950            10,490,607


       Total Travel Expenses                               409,810             389,861              731,500
       Travel - local                                       89,361             224,922              130,000
       Travel - overseas                                   320,449             164,939              601,500


       Total Audit Fees                                    910,310             125,625              610,000
       External audit fees                                 718,308                      -           150,000
       Other services - forensic audit                             -           115,125              250,000
       Internal audit fees                                 192,002              10,500              210,000


Repairs and maintenance                                  2,066,031             786,746            3,051,758


Leasing expenses                                         1,367,029                      -         1,900,000


     Total Consumables, Printing and Stationery            162,671             650,298              165,000
     Consumables                                                                47,654                29,500
     Printing and stationery                               162,671             602,644              135,500


Operating leases                                           185,289                  1,710                   -


Total Administrative Expenses                           15,743,853          18,419,190            16,948,865


Employee Costs                                           8,815,343           5,424,203            9,803,455
     Salaries and wages                                  7,109,604           4,789,266            8,982,975
     Bonus                                                 985,490             386,000              400,000
     Leave accrual                                          92,940             135,894
Termination Benefits                                       503,903                                  270,000
     Cellphone                                              40,280              13,386                47,280
     Staff training                                         83,126              99,657              103,200


Total Administrative and Personnel Expenses             24,559,196          23,843,393            26,752,320




                                                                                                                   87
          SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Company’s Actual Financial Performance with
     Budget Information (continued)
     For the year ended 31 March 2008


                                                                           2008              2007         2008
                                                                             R                R          Budget
                                                                                                           R
     4.     OPERATING EXPENSES


            Property operating expenses                                     3,604,429      3,268,396    3,663,544
                Security and access control                                2,063,695      1,794,127    2,097,600
                Cleaning costs                                               397,859        431,643      520,176
                Insurance                                                    709,091        572,496      600,768
                Waste management                                                 46,298      16,796       35,000
                Park landscaping and gardening                               387,486        453,334      410,000


            Service charge expenses                                         9,204,685     13,433,767   11,666,632
                ICT service management and computer expenses                 807,767      2,343,195    1,245,660
                Catering and conference centre costs                         692,744      2,157,259      871,700
                Telephone and fax                                          2,022,537      1,239,800    1,926,400
                Rates and taxes                                              314,015      4,828,091    3,133,735
                Electricity and water                                      5,367,622      2,865,422    4,489,137


            Credit losses incurred                                           439,779        974,794


            Other operating expenses                                         881,020        966,560      780,710
                Conference fees                                                  41,541      81,416      259,910
                Courier and postage                                              11,717      27,101
                Entertainment expenses                                           40,005     128,423      155,000
                Storage expenses                                                     0      179,808
                General expenses -gifts                                          78,930       8,960
                Other operating expenses                                     631,409        481,404      315,800
                Subscriptions                                                    77,418      59,448       50,000




            Total Operating Expenses                                       14,129,913     18,643,517   16,110,886




88
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes




                                                                         89
      SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes




90
        SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




Notes




                                                                         91
      SUPPLIER PARK DEVELOPMENT COMPANY (PTY) LTD ANNUAL REPORT 2008




     Notes




92
Contact Details


Tel: +27 (0) 12 564 5000
Fax: +27 (0) 12 564 5142
Emial: info@spdc.co.za
Web: www.supplierpark.co.za




Physical Address


Automotive Supplier Park
30 Helium Road
Rosslyn Ext.2
0200
South Afica

								
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