Boxing South Africa Annual Report - Parliamentary Monitoring Group

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009Annual Report 2008-09Boxing South AfricaR i n g o f C h a m p i o n s R e v i e w2Round

MissionTo enhance the capacity of all stakeholdersto improve the quality, passion andpopularity of professional boxing in SouthAfrica and internationallyVisionMission Vision ValuesTo create a world class regulatory body forboxing in a united and safe environmentValuesFairness, Respect, Honesty, Excellence,Accountability, Discipline, Ambition,Passion and Consistency.5Round

Mission Vision Values7Round

8RoundAnnual Report 2008-09Boxing South AfricaR i n g o f C h a m p i o n s R e v i e w

C O N T E N T SCONTENTS12 Chairperson’s Overview14 Introduction by the Chief Executive Officer16 Performance Overview28 BSA Board of Directors30 Human Resource Report32 Operations Report34 Highlights36 BSA Awards winners38 International Arena38 Baby ChampsTournaments39 Development Project48 Report of the Audit Committee53 Report of the Auditor-General59 Directors Report61 Statement of Financial Position62 Statement of Financial Performance63 Cash flow Statement64 Statement of Changes in Net Assets65 Notes to the Annual Financial Statements88 Detailed Statement of Financial Performance9Round

Section10Round

ONEAnnual Report 2008-09Boxing South AfricaR i n g o f C h a m p i o n s R e v i e wOperational Review11Round

The Babychamps development program has been boxing’s success story through which new talent was unearthedand a new boxing perspective is being achieved. This program catapulted the female participation to greaterheights from insignificant participation to national and international levels.One of the mandates from the Parliamentary Sports Portfolio Committee was to improve the participation ofminority groups i.e. Colourdes, Indians and Whites. The year 2008/09 has seen an immersed improvement of thevery same minority, groups in all spectra of professional boxing.Boxing in SA has seen a draught of heavyweight division participation. Heavyweight boxing has always been thehighlight and yardstick upon which boxing has been measured within the international and local arena. It has beenour objective as BSA to facilitate the revival of such a distinguished pinnacle of boxing within the SA arena.The Memorandum of understanding (MOU) with THETA worth R3 million has yielded positive results for boxingand all participants are due to graduate in September 2009.On the boxing front, the following achievements were realized:Tournaments increased from 88 to 101 per yearLicensees increased from 1046 to 1050• The quality of tournaments improved tremendously during the year under review. This despite a few minorunprofessional boxing practices such as the cement glove incident.• The death of Samora Msophi in the ring to the boxing fraternity. BSA jointly with City Press newspaperand Konki Investments undertook to realize the dream of the deceased boxer, Samora Msophi to havea house built for his family. That dream has been realized and the completion of the project will be byMission Vision ValuesSeptember 2009.BSA held a very successful boxing awards ceremony at Carnival City on 20 February 2009 sponsored by the SABC,Afrisun, Carnival City and Ekurhuleni Municipality. Due to financial constraints which BSA has been experiencing,it was subsequently impossible to host the BSA convention.In conclusion, I wish to express my sincere thanks and appreciation to my fellow Board Members who stood strongunder tremendous and trying circumstances, Sports and Recreation South Africa and the Parliamentary SportsPortfolio Committee who continue to be a pillar of strength the sustenance of boxing in our country. Specialthanks to my predecessor, Adv. Dali Mpofu for the well laid foundation and continued support of boxing evenafter his term of office. Special thanks to the office of BSA and its Provincial counterparts under and leadership ofMr Bongani Khumalo for making sure that there is boxing activities throughout South Africa and internationally attimes under trying circumstances.-----------------------------------------------------Dr Peter NgataneChairman of the board13Round

Mr Loyisi Mtiya - Acting Chief Executive OfficerIntroduction by the actingChief Executive OfficerIt gives me great pleasure to present the 2008 / 2009 Annual Report, inmy short but exciting and intellectually gainful space of time as the actingCEO of one of the most visible and productive sports entities in SouthAfrica as well as the whole world, on behalf of the Management andBoard of BSA.This report is a review of the challenges, constraints and achievements of Boxing SA (BSA) with regard to the targetson service delivery set out in the 2008/2009 business year. Huge strides have been taken to reshape the face andthe future of boxing within South Africa, but a good deal still lies ahead if we are to fulfill our vision and broadstrategic objectives going into the future.Boxing SA stakeholders can take pride in the achievements and gains made in the past year that included amongothers, the successful maintenance of a development and training program, champions and mandatory contendersin all five leading international sanctioning bodies, the unpredicted achievements of our female boxers on theinternational scene, the increased attendance of spectators of all racial groups in our tournaments as well as thereturn of the minority groups.14Round

Despite a number of challenges that included the resignation of the CEO, the absence of a CFO, and havingto work within a very constraint budget. It is my believe that we as BSA for the current year have been able toutilize this very constraint budget in a way that ensures that we are able to meet our delivery mandate, to takeboxing back to the people.Management of BSA for the current year has shown an improvement in its management of this institution,an improvement which is reflected within an Audit Report whose qualification could only be traced to a filingchallenge as well as the going concern status that urgently calls for a review of the South African Boxing Act,2001(Act No. 11 of 2001).Let me take this opportunity to pass a huge vote of thanks to the management and staff whose passion anddedication cannot be questioned, while they continue with their support for our boxers, managers, trainers, ringofficials as well as other stakeholders, their efforts have not gone unnoticed. Thank you.----------------------------------Mr. Loyiso MtiyaActing Chief Executive Officer15Round

Performance OverviewThe following is a summary of BSA’s Performance – Against strategic objectives during thefinancial year ending 31 March 2009No.GoalKey PerformanceIndicatorTarget1. To review existing BSA policies• Refined and updated policies• Updated delegation ofauthority framework2.3.4.5.To enhance the branding andmarketing of BSA.To ensure the financialsustainability of BSATo promote internal andexternal communicationTo ensure good corporategovernance, adherence torelevant legislation and riskmanagement and internalcontrols• Functional Board MarketingCommittee to meet regularly,develop and implement itsown plan of action.• Functional Board sponsorshipCommittee to devise variousfunding strategies• Sponsorship secured• Improved networks andpartnerships• Regular interaction withStakeholders and licensees• Established presence of BSA• Adopt a comprehensivecommunication policy• Acceptable governance• Compliance to relevantlegislative framework• Managed risks• Functional internal audit andAudit Committee6.7.To Implement effectivereporting mechanismTo address queries raised bythe AG• Zero based budget developedand approved• Regular variance reporting tomanagement and the Board• Regular and timely quarterlyreports• Emphasis of matter and auditqueries addressed16Round8. To achieve a clean audit report• Unqualified audit reportachieved

Performance ResultsReasons forVariancePartially achievedNew Board came in and it has to approve policies ifthere are changesNot achievedSome of the current board members resignedNot achievedSome of the current board members resigned beforetaking up the program conducted furtherPartially achievedCould not be due to BSA financial constrainsMission Vision ValuesPartially achievedNo internal audit function performed due to financialconstrainsPartially achievedBSA does not have a CFO to oversee this functionand take it further were and sorted. Howeverfinancial statements were not submitted in the correctformat and contained many discrepencies.AchievedAll queries addressed in timeNot achievedNo head of finance17Round

Performance Overview – ContinuedThe following is a summary of BSA’s Performance – Against strategic objectives during thefinancial year ending 31 March 2009No.GoalKey PerformanceIndicatorTargetTo submit Annual Financial• Complete, accurate and9.Statements within the statutoryauditable AFS timelytime framessubmitted• Budget for CFO and finance10.To employ a CFO andsupporting finance staffposts approved• Appointments made• CFO seconded by SRSA11.Timeous invoicing,reconciliation and collection ofsanctioning and licensing fees• Sanctioning and licensing feeslevied and collected12.To secure the rental or purchaseof suitable offices for BSA• Criteria agreed with theBoard or its designee• Offices secured and occupied• Adequate uniform stocks13.To keep sufficient stocks ofuniforms for officialsavailable• Well managed and controlleduniform stocks14. To develop BSA financial policy• Policy developed andadopted15.To review IT master systemsplan• Updated IT master systemsplan16.To install a data recovery andbackup system• Data recovery and backupsystem in place• Managed IT systems and17.To manage IT systems andnetworknetwork• Well controlled securitysystem18.To manage IT complaintshandling system• Managed IT complaints19.To Maintain hardware andsoftware• Managed hardware andsoftware20.To produce, publicize anddistribute the Annual Report• Annual Report produced anddistributed to Parliament andother recipients18Round

Partially achievedPerformance ResultsReasons forVarianceAFS were submitted in time. However financialstatements submitted were not in the prescribedformat and contained many discrepancies.Not achievedStill waiting for SRSA to second a CFO to BSAPartially achievedNo CFO to oversee the completionNot achievedNo fundsNot achievedNo fundsMission Vision ValuesAchievedHas policy in placeAchievedIT officer employedAchievedIT company engaged to assist IT officerPartially achievedDue to financial constrains BSA could not afford toupdate IT systemsPartially achievedOngoing processAchievedIT officer plus IT company in placeAchievedPreparations were done on time19Round

Performance Overview – ContinuedThe following is a summary of BSA’s Performance – Against strategic objectives during thefinancial year ending 31 March 2009No.GoalKey PerformanceIndicatorTargetTo liaise with and monitor21.media as well as to issue mediastatements and articles and• Improved media coverage ofBSAmedia monitoring22.To improve corporate PR andmarketing initiatives of BSA• Improved corporate, PR andmarketing• Improved internal and23.To develop promotionalmaterials, publications andwebsiteexternal communication• Distributed promotionalmaterials• Managed website• Distributed publications24.To develop a marketing andbranding strategy of BSA• Strategy developed, adoptedand implemented25.To enforce compliance andadherence to Boxing Act and itsregulations• Adherence enforced andmonitored• Timely applications to stagetournamentsTo improve standards of• Draft questionnaires in place26.Ring Officials in the different• Conduct examinationscompetencies• Officials graded• Good matching27.To improve the quality of BSAtournament• Well marketed events• Box ‘n dine encouraged• Good selection of venues• Strict time keeping• Tournaments checklist before,during and after fightsenforced28.To ensure safety and security ofboxers• High quality officiatingmaintained• Boxing specific traineddoctors used• Post tournament evaluationsconducted20Round

Performance ResultsReasons forVarianceAchievedConducted meetings and circulated informationto mediaPartially achievedLack of funds could not go full forcePartially achievedLack of funds could not go full forceNot achievedNo funds availableCould not conduct refresher courses andPartially achievedMission Vision Valuestraining programsCould not start any new training and developmentNot achieveddue to lack of fundsAchievedNo more funds were needed as we already havegood staff for this categoryAchievedReadily placed systems were pushed to higher limitsby more focus on compliance and mechanisms21Round

Performance Overview – ContinuedThe following is a summary of BSA’s Performance – Against strategic objectives during thefinancial year ending 31 March 2009No.GoalKey PerformanceIndicatorTarget• Female boxers turnedTo introduce, support andprofessional29.promote female boxing as• Female tournaments, both ascontemplated in the Boxing Actunder cards and fully fledgedtournaments promoted• Anchor sponsor and once offsponsors secured30.To promote boxingdevelopment programmes• Improved profile andopportunities of participants• Managed boxingdevelopment programmes• Rules reviewed and refined31.To strengthen the rulesregarding the boxers ratings• Functional RatingsCommittee• Results regularly communicated• Regular meetings heldTo facilitate the establishment• Functional Associations of32.and or the functionality ofFederationsAssociations of Federations• Regular elections conducted• Visible boxing improvements• Duplications and errors33.To update boxing statisticsdatabasecorrected• Statistics regularly updated• Database linked to website• Comprehensive performancemanagement system in place34.To introduce a performancemanagements system• Linkages between BSA goalsand individual• Linkages between rewardsand individual performance22Round

Performance ResultsReasons forVarianceAchievedThe Baby champs and Pro-am tournaments utilized topromote more female boutsAchievedThere were more tournaments promoted in rural andsuburban areasAchievedMore after tournament hearings and discussions wereconductedMission Vision ValuesAchievedMore meetings with both regional and nationalbodies of federations and associates were heldAchievedUsed the boxers themselves to update there recordsas well as consulting other records agenciesPartially achievedAll systems in place and continued but could notpursue to higher levels due to lack of funds23Round

Performance Overview – ContinuedThe following is a summary of BSA’s Performance – Against strategic objectives during thefinancial year ending 31 March 2009No.GoalKey PerformanceIndicatorTarget• Sound employee relations35.To improve employee relationsand participation in theworkplace• Improved communication/information exchange in theworkplace• Effective grievance anddisciplinary handling36. Enhance staff capacity building• Training and developmentpolicy in place• Compliance with therequirements of SkillsDevelopment Act37.38.39.Introduce transformationmanagement systemImplement leadershipdevelopment programmeTo develop HR systems andprocesses to support andachieve business objectives• Well defined values withspecific behaviouralcompetencies• Values and culture alignment• Individual values matcheswith BSA• Available internal pool ofsuccessors• Succession plan in place• Well managed competencyprofile of existing staff• Compliance with labourlegislation• Improved staff morale• Centralized staff trainingtargeting specificcompetencies• Holistically integrated HRprogrammes24Round

Performance ResultsReasons forVariancePartially achievedCould not conduct informal training and participationNot achievedNo funds to engage more professional andindependent agenciesNot achievedCould not engage professional agenciesMission Vision ValuesCould not attract more professional agencies norNot achievedindividuals for the taskPartially achievedCould only continue with what we already achievedin previous years25Round

Performance Overview – ContinuedThe following is a summary of BSA’s Performance – Against strategic objectives during thefinancial year ending 31 March 2009No.GoalKey PerformanceIndicatorTarget• Acquire right number ofemployees with right skills,40.To implement effective resourceplanningknowledge and experience• Plans in place to acquireHuman Resource to meetstated objectives41.To align BSA’s terms andconditions of employment tothose of public service• Remuneration aligned topublic service42.Effective and efficientcommunications methods in theworkplace• Well informed employees• Motivated employees• Clear lines of communications26Round

Performance ResultsReasons forVarianceNot achievedCould not attract the knowledgeable and skilledpeople because of lack of fundsNot achievedHave applied to the Board and the SRSA. Stillawaiting responsePartially achievedStill looking for funds to engage professionalsMission Vision Values27Round

Boxing SA Board Members asat 31 March 2009BSA board as at 31 March 2009 made up of the following board member from left to right:28RoundDr Peter NgataneMr Saklivo SodoAdvocate Vlulani BaloyiMr Mxolis TsikaMr Claude BassudayMr Archie Jonas (insert)Chairman of the boardNon-executive board memberNon-executive board memberNon-executive board memberNon-executive board member andNon-executive board member

Mission Vision ValuesCelebrating an era of new ring masterswithin the south african boxing world.2929Round

Human ResourcesSince our staff organogram was redesigned, all positions were filled in time with perhaps the exception of theposition of the CFO. A temporary arrangement was made but the incumbent could not finish the contracted periodbecause the board felt that he could not deliver on his mandate. The Assistant Financial Advisor and the Finance/Admin clerk have since resigned. Government then undertook to second an official to BSA.With the resignation of the CEO, Mr Bongani Khumalo on 8 May 2009 the BSA Board has appointed the Directorof Operations, Mr Loyiso Mtya to act as CEO until a suitable candidate has been found to fill in the position. Allinterested parties are expected to apply once the position has been officially advertised through the media.1. Policies and ProceduresTwenty one (21) Policies, the BSA Disciplinary Code as well as the Grievance Procedure have been adopted and arecurrently being familiarized with staff and all other concerned stake holders.They will therefore be scrutinized with the passage of time and the dynamics within the game itself and be smoothedand updated as per need.2. Job Evaluation SystemThe Equate System used in the public service has been implemented and all compliances thereof are being evaluatedby a Job Evaluation Committee made up of management and the board.30Round

3. Assessment And Quality AssuranceAnnual assessment of staff and evaluation of their performance has been timeously carried out according to theKPAs that were developed and implemented for such matters.4. Human Resource StrategyThe HR Committee has approved a three year human resource strategy that will, among other things, regulatecompliances according to the Employment Act, Occupational Safety and Health Act as well as Labour Relations.The planned training of staff in necessary courses like VIP payroll, switchboard, minutes taking as well as AnnualFinancial Statements templates, could not take place due to unavailability of funds.The terms and conditions of employment of BSA staff as set out in Section 14(2) of the South African Boxing Act11 of 2001 were aligned with those of the public service as at the financial year ending 31 March 2006. But dueto lack of funding, minimum salary scales were not adjusted and inflationary increases were given to BSA staffmembers since 2007 to date.MINISTER OF SPORT AND RECREATION SAREV. DR MAKHENKESI STOFILEMission Vision ValuesBOXING SA ORGANOGRAMDEPUTY MINISTER OF SPORT AND RECREATION HON.GERT OOSTHUIZENBSA BOARDCEO BONGANI KHUMALOPA TO THE CEOGUGU RADEBEDIRECTOR OPERATIONSLOYISO MTYADIRECTOR COMMUNICATIONS ANDMARKETING (VACANT)CFO VACANTSPECIAL PROJECTS MANAGERVUYOKAZI MALLIEBOXING TECHNICAL ASSISTANTNOMSA MDHLULIFINANCIAL OFFICERTUMELO KEKANAFINANCE & ADMIN CLERKHENRY MOTSEPEIT SPECIALISTSKHUMBUZO MOTHARECEPTIONISTVERQUELENE JACOBSADMIN OFFICE ASSISTANTABRAM KAMBULEGENERAL ADMINISTRATIVEASSISTNAT – MOJORIE THEBE31Round

Operations ReportBoxing SA’s endeavors to dedicate all efforts into implementing newdevelopment projects and solidify all those already in progress paidhefty dividends as all current projects yielded the desired outcomes asthe report will show.All social groups got heavily engaged in their places of abode and provinces, bringing boxing closer to theirhomes and conducting boxing events that talked to their way of life and culture, thus presenting boxing as avehicle for their own social interactions.People in rural areas witnessed live boxing for the first time as Baby Champs and development tournaments, proamevents as well as female boxing was brought right into their areas. Bus loads of children from neighboringschools and villages swelled the events.In the rural areas white, Indian and colored fans crammed the venues in box and dine tournaments, creatingopportunities for previously starved boxers in those areas to get much needed action. This phenomenon had theeffect of getting previously distant promoters coming together and, as a result, a good number of white boxersstarted to feature in tournaments held in the townships and rural areas.Perhaps the biggest winners of these projects were female boxers. The Baby Champs, pro–am developmenttournaments, and even international events saw the girls receive attention they never had before fromSouth Africa’s biggest promoters. This resulted in two women winning international titles, a first for SouthAfrican boxing32Round

Mission Vision ValuesUnathi Myekeni the first South African Femaleboxer to win an International Championship33Round

HighlightsAlthough BSA could not organize a convention due to financial constraints,a lot of one on one meetings with stakeholder yielded good andimplementable results.1. Purse monies paid to boxers defending their titles rose to no less than R60 000 per champion in a title contest;2. An International affairs committee was formed with the aim of encouraging joint discussions and agreementsbetween BSA and the international organizations before, during and after international and world tournaments;3. The turnaround time for the payment of boxers after tournaments was vastly improved;4. Two South African super fights were held in the North West province with great success. That was whenCassius Baloyi contested against Mzonke Fana and Malcolm Klassen respectively. The prestigious IBF worldtitle was at stake for both contests. This was also a first for South African boxing;5. Brian Michell, a former South African and world champion was inducted into the International Hall of Fame inCanastotta, New York. Another first for a South African boxer;6. South African promoter Branco Sports Productions was crowned Promoter of the Year by the prestigious WBCsanctioning body;7. South African ring official Andrew Smale was appointed the WBO representative for Africa;8. Six South African boxers won the rights to be mandatory challengers in prestigious world title fights abroad;9. Two female boxers Noni Tenge and Unathi Myekeni won WBF International championships34Round10. Boxing SA staged a highly successful Annual Awards ceremony on 20 February 2009 at Carnival City, Brakpan,Johannesburg;

Mission Vision ValuesNumber one promoter in our countryBranco Sports Production showcasing one ofhis fighter at the recent BSA AWARDS for 200835Round

The Award Winnersfor 2008/09 are as follows:• Boxer of the Year ---------------------------------------------- Cassius Baloyi• Prospect of the year ------------------------------------------- Jarret Lovett• Manager of the year ------------------------------------------ Nick Durandt• Trainer of the year --------------------------------------------- Lennox Mpulampula• Fight of the year ----------------------------------------------- William Gare & Jindrich Velecky• Promoter of the year ------------------------------------------ Robs Promotions & Rainbow Promotions• Ring Official of the year --------------------------------------- Jaap van Nieuwenhuizen• Most promising ring of the year ------------------------------ Tony Nyangiwe• Most promising promoter of the year ------------------------ Isizwe Promotions• Knock out of the year ----------------------------------------- Ali Funeka• Print Media ---------------------------------------------------- Bongani Magasela of Sowetan Newspaper• Radio ----------------------------------------------------------- Mr T of Phalapala FM• TV-------------------------------------------------------------- Strydom Sigila of SABC Sport• Lifetime achievement ----------------------------------------- Brian Mitchell and Branco Milenkovic• Special achievement ------------------------------------------- Vusi Malinga• Chairperson award -------------------------------------------- Stanley Sono of Gauteng• Golden Vest award -------------------------------------------- Thembisile Gacula of Eastern Cape• Fan of the year ------------------------------------------------ Richard Kwetse of Gauteng• Norman Sikgapane -------------------------------------------- Limpopo• Eric Gabelana -------------------------------------------------- Eastern Cape• Ezekiel Mtshali ------------------------------------------------- Gauteng36Round

South African Boxer of the year for2008/09 Cassius Baloyi37Round

International ArenaSouth African boxers, promoters’ ad ring officials made their mark again in the internationalarena, pitting their skills against the best both at home and abroad.Boxers – Ali Funeka and Moruti Mthalane made their mark when they challenged and put up excellent performancesin title challenges in the mecca of world boxing - Las Vegas.Promoters – Branco Sports Productions, of which boxing legend Baby Jake Matlala is a partner, was crownedPromoter of the Year by the WBC, beating world renowned promoters like Don King, Bob Arum, Oscar De La Hoyaetc. in the process.Ring Officials - Again our officials participated in international and world title contest conducted by the WBA, WBC,WBO, IBF and WBF sanctioning bodies at home and abroad. Andrew Smale was appointed WBO representativein Africa.Baby ChampsThis program continued to grow as a brand and produced more stars of the future, including female prospects.Rural areas and shopping malls in all provinces were the main venues, attracting people from all walks of life andcreating a visibility for boxing seldom seen in this country.TournamentsThe mechanisms put in place for the betterment of tournaments were fully engaged with excellent outcomesin all provinces. This concentrated effort has resulted in promoters successfully managing high quality events inJohannesburg, Mafikeng, East London, Bloemfontein, Parys etc.Prior to this effort, significant international and world events of this nature were never heard of in some of theseplaces. It has really taken boxing promotions to a higher level, while creating opportunities and advantages forboxers to challenge the whole world within the comforts of their own venues and strong support of their own fans.38Round

In a bid to attract the white, Indian and coloured minorities who had abandoned the game, box and dinetournaments were reintroduced in the urban venues. These tournaments were big successes and resulted in a lotof white and coloured youngsters coming back to the game with large numbers of supporters. The next move is topromote them nationally in the casinos.Statistics Of Boxing Tournaments From 1 April 2008 To 31 March 2009Province Development Sa Title International TotalsEasten Cape 21 8 8 37Gauteng 20 8 6 34Kwazulu Natal 5 - - 5Limpopo - - - -Mpumalanga - 1 1 2North West - 2 5 7Western Cape 6 - - 6Free State 4 2 10 16Northern Cape - - - -Totals 56 21 30 107Development ProjectsBoxing SA has always stood by its objective of implementing its determination to take boxing to the people andbringing people to boxing. In order to achieve that ambition, a number of projects have been conducted and arecurrently growing in production, stature and visibility.Female Boxing ProgramThe female amateur boxers who were promoted within the Baby Champs program performed well beyondexpectations and matched the male boxers punch for punch in terms of delivery in the ring as well as an entertainingspectacle to the crowds. Sixteen girls representing all the racial groups in the country were adjudged good enoughto turn professional.Of the group who turned professional in the 2007 BSA Pilot Project, Unathi Myekeni and Noni Tenge became thefirst South African female boxers to win International titles when they won the WBF Junior Featherweight and39Round

Welterweight titles respectively. This year was dedicated to steering them to fully fledged world title fights beforeDecember 2009. Those plans are working out perfectly and we are confident of announcing our firstfemale world champion in the next ten months. They are now scheduled to defend their titles on 28August in a Mamali promoted fight in East London.Meantime prospects Julie Tshabalala, Sandra Almeida and Bomkazi Klaas continued to make waves,winning their fights against imported opposition in tournaments promoted by Mamali Productions, Fezile MabuyaPromotions, Branco Sports Productions and African Ring Promotions. We now have enough numbers in someweight divisions to start preparing for our first South African female championship challenges.Statistics of females in boxing within South AfricaCarecogy Race TotalProfessional Ring Officials 10 Black 10Professional Boxers 9 Black 0 1 White 10Promoters 6 Black 0 3 White 9Match Maker 1 White 0 0 1Manager 1 Black 0 0 1Seconds 1 Black 0 0 1Totals 17 1 4 32Correctional Services ProgramBSA’s working relationship with the department of correctional services has grown by leaps and bounds. Beneficiariesof this program are inmates who are gaining the opportunity to expose their skills inside and even outside the jails,as well as veteran boxers who are paid by the department to hone the skills of those boxers in prison.The national prisons championship that was mooted last year will take place in Mdantsane in the month of October.It will cater for boxers from all prisons in the country in a two day knockout championship. A special applicationwill be made to the government to create an opportunity for those who qualify, according to correctional servicesspecifications and the acceptable boxing standards, to represent the country in the Olympics.40Round

Mission Vision ValuesNoni Tenge won the wbf International FemaleChampionship in 2008/0941 41Round

Training and DevelopmentBackground & introductionIn 2007 BSA and the Tourism, Hospitality and Sport Education & Training Authority (THETA) signed a memorandumof understanding for the implementation of a joint Boxing Skills Development Project that would start in Limpopoand the Eastern Cape Provinces and later be rolled out to the rest of South Africa. The initial pilot project wouldinclude 160 beneficiaries from the two provinces and would include training interventions that are both NQFaligned as well as training interventions for which there are yet no unit standards in place, but which were regardedas necessary for the boxing fraternity.Identified Training InterventionsFor the purposes of the pilot project, specific training interventions for the 160 beneficiaries have been clustered forease of implementation. The project management has specifically been designed for effective and efficient deliveryof the training programmes, whilst large impact is achieved with maximum exposure to learning areas.Matrix of BSA Candidates108 learners have participated in the programmes from Eastern Cape and Limpopo provided for 39.Out of the original anticipated target group of 160 BSA licensees, only 147 participated. The project is now in itsfinal stages. All the courses on the project plan have been implemented. The last phase now is the graduation.Learners will receive their certificates according to the courses they completed.42Round

Statistics of Trained Candidates: Mdantsane and ThohoyandouProgrammeNumber ofLearnersNumber ofLearnersAssessedCompetentNot YetCompetentApply Admin Skills in sport 51 51 51 0Event Planning and Implementation 56 50 50 6IdentifyMissionand DemonstrateVision ValuesEntrepreneurial Ideas26 26 26 0Apply health and safety to a work area 44 44 44 0Manage Personal Finances 55 54 54 1Apply Basic Written and OralCommunication Skills89 37 37 52Manage Finances of a New Venture 30 10 10 20Maintain Oral/ signed Communication 14 2 2 12Demonstrate an Understanding of factorsthat contribute towards healthy livingDemonstrate an Understanding of HIV/AIDSand its implicationsApply knowledge of self in order to make apersonal decision37 25 25 1238 25 25 1333 18 18 15Wrapping of Hands 48 48 48 0BSA Rules and Regulations 17 17 17 0First Aid 31 31 31 0Grand Total 569 438 438 13143Round

The GraduationThe graduation is still on hold due to some technical problems with the final report that Maasdorpand Associates submitted.It does not have an accurate number of learners who are eligible for graduation. They have cited a problemwith moderators who refused to hand over the certificates for all the learners who have completed their trainingsuccessfully. The reason the moderators refuse to hand over certificates, is because of the non-payment byMaasdorp and Associates.To date Theta has made payments to BSA which BSA used to pay the service provider-Maasdorp and Associates.Invoices paid are as follows:Invoice Date & Number Details Of The Invoice Amount Paid/Not Paid129 — 10/10/2007 Project Management (20%) R50, 641.50 Paid130 — 22/10/2007 Project Management (30%) R79,962.25 Paid134 — 20/02/2008 Training R154,450.00 Paid136 — 20/02/2008 Project Management (20%) R50.641.50 Paid139 — 31/03/2008 Training R88.320.00 Paid140 — 22/09/2008 Training R808,182.46 Paid R800 000With a Short fall of R121,328.044Round

Mission Vision ValuesAli Funeka gave us a knockout match ofthe year for 2008/0945Round

Masters of the ring 2008/09Manager of the yearNick DurandtRing Official of the yearJaap van NieuwenhuizenChairperson awardStanley Sono of GautengPromoter of the yearRobs Promotions & Rainbow PromotionsLong and Meritorioua awardNorman Sikgapane (Blazer)Baby Champs 2008/09Lifetime achievementBranco MilenkovicShamilla Kortman - MiniflyCharles Oosthuizen - L/HeavyMatima Molefe - Feather46RoundRudy Bruwer - J/HeavyXabiso Gola - J/WelterMogezi Ndzamela - Heavy

Mission Vision ValuesBrothers Vusi and Patrick Malinga boxer’s of note within theSouth African boxing Arena47Round

Report of the Audit CommitteeFor the year ended 31 March 2009We are pleased to present our report for the financial year ended 31 March 2009.Audit Committee Members and AttendanceBoxing South Africa has an audit committee structure which operates in terms on the organization’sapproved Audit Committee Charter. The audit committee consists of the members listed hereunder andmeets at least two (2) times per annum as per the approved audit committee charter. During the currentyear (1) audit committee meetings was held and attended as follows:Name of MemberNumber of meetings attendedMr. T.D Ntuli (Chairperson) 2Ms. Tendeni Ndou 2Audit Committee ResponsibilityThe Audit Committee reports that it has not complied with its responsibilities arising from section 51 (1)(a) (ii), 76 (4) (d), and 77 of the PFMA and Treasury Regulation 27.1.8.The Audit Committee also reports that it has adopted appropriate formal terms of reference as its auditcommittee charter, has regulated its affairs in compliance with this charter and has not discharged all itsresponsibilities as contained therein.The effectiveness of internal controlFrom the audit report on the annual financial statements and management report of the Auditor-General,it was noted that there are material deficiencies in the system of internal control and deviations there from.Accordingly, we can report that the system of internal control was ineffective for the year under review.The major contributor of these deficiencies in the system of internal controls is lack of capacity due toinadequate funding of Boxing SA.48Round

TWOFinancial Management51Round

Qualified opinion8. In my opinion, except for the possible effects of the matter described in the Basis for qualified opinion paragraph,the financial statements present fairly, in all material respects, the financial position of Boxing South Africa asat 31 March 2009 and its financial performance and its cash flows for the year then ended, in accordance withthe basis of accounting determined by the National Treasury, as set out in note 1 to the financial statementsand in the manner required by the PFMA.Emphasis of mattersI draw attention to the following matters:Basis of accounting9. The public entity’s policy is to prepare financial statements on the basis of accounting determined by theNational Treasury, as set out in note 1 to the financial statements.Going concern10. Note 24 to the financial statements indicates that Boxing South Africa incurred a net loss of R 4 327 497 duringthe year ended 31 March 2009 and, as of that date, the entity’s total liabilities exceeded its total assets by R 5951 045. These conditions, along with other matters as set forth in note 24, indicate the existence of a materialuncertainty that may cast significant doubt on the entity’s ability to continue as a going concern.Fruitless and wasteful expenditure11. As disclosed in note 18 to the financial statements, fruitless and wasteful expenditure to the amount of R1 313226 was incurred as the entity failed to comply with its internal policies and procedures regarding dismissalsand did not pay its VAT and PAYE on time resulting in interest and penalties being levied.Other mattersI draw attention to the following matters that relate to my responsibilities in the audit of the financial statements:Unaudited supplementary schedules12. The supplementary information set out on page 88 does not form part of the financial statements and ispresented as additional information. I have not audited this schedule and accordingly I do not express anopinion thereon.Non-compliance with applicable legislationPublic Finance Management Act13. Quarterly reports to the executive authority were not submitted within 30 days of the end of each quarter asrequired by Treasury Regulation 26.1.1.14. Evidence that the budget and the strategic plan were submitted to the executive authority as required bysection 53(1) of the PFMA and Treasury Regulation 30.1.1 could not be provided for audit purposes.15. Boxing South Africa budgeted for a deficit without obtaining prior written approval from the National Treasuryas prescribed in section 53(3) of the PFMA.16. A framework of acceptable levels of materiality and significance, which must be agreed between the accountingauthority and the executive authority, could not be provided as required by Treasury Regulation 28.3.1.Governance framework17. The governance principles that impact the auditor’s opinion on the financial statements are related to theresponsibilities and practices exercised by the accounting authority and executive management and arereflected in the internal control deficiencies and key governance responsibilities addressed below:54Round

Internal control deficiencies18. Section 51(1)(a)(i) of the PFMA states that the accounting authority must ensure that the public entity has andmaintains effective, efficient and transparent systems of financial and risk management and internal control.The table below depicts the root causes that gave rise to the deficiencies in the system of internal control,which led to the qualified opinion. The root causes are categorised according to the five components of aneffective system of internal control. (The number listed per component can be followed with the legend belowthe table.) In some instances deficiencies exist in more than one internal control component.Par. No. Basis for qualified opinion CE RA CA IC M7 Operating expenditure 3 4 5 119. Boxing South Africa did not have sufficient internal controls in place to ensure that the transactionsrelating to paragraph 7 occurred and were accurately processed.LegendCE = Control environmentThe organisational structure does not address areas of responsibility and lines of reporting to supporteffective control over financial reporting.Management and staff are not assigned appropriate levels of authority and responsibility to facilitate controlover financial reporting.Human resource policies do not facilitate effective recruitment and training, disciplining and supervision ofpersonnel.Integrity and ethical values have not been developed and are not understood to set the standard forfinancial reporting.The accounting officer/accounting authority does not exercise oversight responsibility over financialreporting and internal control.12345Management’s philosophy and operating style do not promote effective control over financial reporting. 6The entity does not have individuals competent in financial reporting and related matters. 7RA = Risk assessmentManagement has not specified financial reporting objectives to enable the identification of risks to reliablefinancial reporting.1The entity does not identify risks to the achievement of financial reporting objectives. 2The entity does not analyse the likelihood and impact of the risks identified. 3The entity does not determine a risk strategy/action plan to manage identified risks. 4The potential for material misstatement due to fraud is not considered. 5CA = Control activitiesThere is inadequate segregation of duties to prevent fraudulent data and asset misappropriation. 1General information technology controls have not been designed to maintain the integrity of the informationsystem and the security of the data.Manual or automated controls are not designed to ensure that the transactions have occurred, areauthorised, and are completely and accurately processed.23Actions are not taken to address risks to the achievement of financial reporting objectives. 4Control activities are not selected and developed to mitigate risks over financial reporting. 5Policies and procedures related to financial reporting are not established and communicated. 655Round

LegendRealistic targets are not set for financial performance measures, which are in turn not linked to an effectivereward system.7IC = Information and communicationPertinent information is not identified and captured in a form and time frame to support financial reporting. 1Information required to implement internal control is not available to personnel to enable internal controlresponsibilities.Communications do not enable and support the understanding and execution of internal control processesand responsibilities by personnel.23M = MonitoringOngoing monitoring and supervision are not undertaken to enable an assessment of the effectiveness ofinternal control over financial reporting.1Neither reviews by internal audit or the audit committee nor self -assessments are evident. 2Internal control deficiencies are not identified and communicated in a timely manner to allow for correctiveaction to be taken.3Key governance responsibilities20. The PFMA tasks the accounting authority with a number of responsibilities concerning financial and riskmanagement and internal control. Fundamental to achieving this is the implementation of key governanceresponsibilities, which I have assessed as follows:No. Matter Y NClear trail of supporting documentation that is easily available and provided in a timelymanner1. No significant difficulties were experienced during the audit concerning delays or theavailability of requested information.Quality of financial statements and related management information2. The financial statements were not subject to any material amendments resulting fromthe audit.3. The annual report was submitted for consideration prior to the tabling of the auditor’s √report.Timeliness of financial statements and management information4. The annual financial statements were submitted for auditing as per the legislated √deadlines [section 55 of the PFMA].Availability of key officials during audit5. Key officials were available throughout the audit process. √Development and compliance with risk management, effective internal control and governance practices6. Audit committee• The public entity had an audit committee in operation throughout the financial year. √√√56Round

No. Matter Y N• The audit committee operates in accordance with approved, written terms of reference.• The audit committee substantially fulfilled its responsibilities for the year, as set out in√section 77 of the PFMA and Treasury Regulation 27.1.8.7. Internal audit• The public entity had an internal audit function in operation throughout the financial√year.• The internal audit function operates in terms of an approved internal audit plan.√• The internal audit function substantially fulfilled its responsibilities for the year, as set√out in Treasury Regulation 27.2.8. There are no significant deficiencies in the design and implementation of internal control√in respect of financial and risk management.9. There are no significant deficiencies in the design and implementation of internal control√in respect of compliance with applicable laws and regulations.10. The information systems were appropriate to facilitate the preparation of the financial √statements.11. A risk assessment was conducted on a regular basis and a risk management strategy,√which includes a fraud prevention plan, is documented and used as set out in TreasuryRegulation 27.2.12. Powers and duties have been assigned, as set out in section 56 of the PFMA. √Follow-up of audit findings13. The prior year audit findings have been substantially addressed. √14. SCOPA resolutions have been substantially implemented. n/a n/aIssues relating to the reporting of performance information15. The information systems were appropriate to facilitate the preparation of a performancereport that is accurate and complete.Mission Vision Values16. Adequate control processes and procedures are designed and implemented to ensurethe accuracy and completeness of reported performance information.17. A strategic plan was prepared and approved for the financial year under review forpurposes of monitoring the performance in relation to the budget and delivery byBoxing South Africa against its mandate, predetermined objectives, outputs, indicatorsand targets [Treasury Regulation 30.1].18. There is a functioning performance management system and performance bonuses areonly paid after proper assessment and approval by those charged with governance.√√√√√21. Boxing South Africa did not conduct a risk assessment and a risk management strategy was not implementedwhich resulted in deficiencies in other key governance requirements as indicated in the table above.REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSReport on performance information22. I have reviewed the performance information as set out on pages 16 to 27.The accounting authority’s responsibility for the performance information23. The accounting authority has additional responsibilities as required by section 55(2)(a) of the PFMA to ensurethat the annual report and audited financial statements fairly present the performance against predeterminedobjectives of the public entity.57Round

The Auditor-General’s responsibility24. I conducted my engagement in accordance with section 13 of the PAA read with General Notice 616 of 2008,issued in Government Gazette No. 31057 of 15 May 2008 .25. In terms of the foregoing my engagement included performing procedures of an audit nature to obtain sufficientappropriate evidence about the performance information and related systems, processes and procedures. Theprocedures selected depend on the auditor’s judgement.26. I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for thefindings reported below.Findings on performance informationNon-compliance with regulatory requirementsContent of strategic plan27. The strategic plan and the annual performance report of Boxing South Africa did not include specific indicatorsassessing the public entity’s performance in delivering the desired outcomes and objectives, as required byTreasury Regulation 30.1.3(d).Lack of effective, efficient and transparent systems and internal controls regarding performance management28. The accounting authority did not ensure that Boxing South Africa has and maintains an effective, efficient andtransparent system and internal controls regarding performance management, which describe and representhow the entity’s process of performance planning, monitoring, measurement, review and reporting will beconducted, organised and managed, as required in terms of section 51(1)(a)(i) of the PFMA.APPRECIATION29. The assistance rendered by the staff of Boxing South Africa during the audit is sincerely appreciated.Pretoria31 July 200958Round

Director’s ReportThe directors submit their report for the year ended 31 March 2009. This report forms part of the auditedfinancial statements.1. Legal form and jurisdictionBoxing South Africa is a public entity in terms of Schedule 3A of the Public Finance ManagementAct, 1999(Act No. 1 of 1999) and is governed by the Boxing Act,2001(Act No. 11 of 2001).2. Review of activitiesMain business and operationsBoxing South Africa is responsible for the administration of professional boxing in South Africa.The operation result and state of affairs of Boxing South Africa are fully set out in the attached annual financialstatements.Net deficit is R4, 327,497 (2008: R1, 787,470).This deficit is mainly due to the employee costs.Mission Vision ValuesTrade and other payables include Value Added Tax (VAT) payable to the South African Revenue Services followinga complete VAT audit after compulsory VAT deregistration with effect from 1 April 2005. Provision was also madefor interest and penalties imposed by the South African Revenue Services.A settlement was reached with Mr Krish Naidoo after the 2008 financial year-end for an amount of R 1,200,000.A payment plan has been agreed commencing 1 December 2008 and is estimated to be completed in July 2011.3. Subsequent eventsThe following directors resigned on 4 April 2009:• M Tsika• V BaloyiBoxing South Africa directors are not aware on any other matter or circumstance which may have arisen since theend of the financial year, not otherwise dealt with in the annual financial statements, which significantly affects theposition of the organization or the results of its operations.59Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 20094. Accounting policiesThe attached financial statements have been prepared in accordance with the PFMA. Accounting records, controland reporting conform to Generally Recognized Accounting Practice. The reporting requirements of the SouthAfrican Statements of Generally Accepted Accounting Practice are reflected in the financial statements.5. Property, plant and equipmentProperty, plant and equipment to the value of R228, 401 (2008: R102,116) have been acquired during theaccounting period under review.6. Director’s RemunerationIt is a requirement in terms of section 55 of the PFMA to disclose remuneration paid and accrued to Board membersas well as the Chief Executive Officer, General Manager and Chief Financial Officer. The honorariums of BoardMembers are shown in the notes to the Financial Statements.7. Board membersDr P Ngatane (Chairman) Appointed as Chairman on 25 May 2008Adv D Mpofu His term of office ended on 25 May 2008S Xulu Her term of office ended on 25 May 2008V Magwaca Her term of office ended on 25 May 2008S Sodo Reappointed as a Board member on 25 May 2008A Norman His term of office ended on 25 May 2008M Tsika Appointed on 25 May 2008A T Jonas Appointed on 25 May 2008V Baloyi Appointed on 25 May 2008C Bassuday Appointed on 25 May 200860Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009STATEMENT OF FINANCIAL POSITION2009 2008Notes R RASSETSNon Current AssetsProperty, Plant and Equipment 7 316 647 219 676Intangible assets 8 12 149 14 926Other financial assets 9 - 1 160 702Total non-current assets 328 796 1 395 304Current AssetsTrade and other receivables 10 382 668 409 485Cash and cash equivalents 11 1 700 437 644 588Total current assets 2 083 105 1 054 073Total assets 2 411 901 2 449 377EQUITY AND LIABILITIESEquityAccumulated (deficit) (5 951 045) (1 623 548)LiabilitiesNon-Current LiabilitiesFinance lease obligation 12 83 800 7 696Current LiabilitiesTrade and other payables 13 8 263 273 4 036 597Finance lease obligation 12 15 873 28 632Total current liabilities 8 279 146 4 065 229Total equity and liabilities 2 411 901 2 449 37761Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009STATEMENT OF FINANCIAL PERFORMANCE2009 2008Notes R RRevenue 3 7 416 444 8 537 792Other Income 4 269 526 16 8007 685 970 8 554 592Operating expenses (11 927 044) (10 647 564)Operating deficit 5 (4 241 074) (2 092 972)Interest income 111 493 316 225Finance cost 6 (197 916) (10 723)Deficit for the year (4 327 497) (1 787 470)62Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009CASH FLOW STATEMENTNotes 2009 2008RRCash flows from operating activitiesReceipts from customers 7 712 785 8 778 421Payments to suppliers and employees (7 620 209) (8 414 471)Cash generated from operations 15 92 575 363 950Finance cost 6 (197 915) (10 723)Finance income 111 493 316 225Cash generated from operations 6 153 669 452Purchase of property, plant and equipment (228 401) (102 116)Proceeds on sale of property, plant and equipment 54 050 -Decrease of investments 1 160 702 19 865Net cash generated by investing activities 986 351 (82 251)Cash flows from financing activitiesIncrease/(decrease) in finance lease liability 63 345 (202 621)Net cash generated/(used in) financing activities 63 345 (202 621)Net increase in cash and cash equivalents 1 055 849 384 580Cash and cash equivalents at the beginning of the year 644 588 260 008Cash and cash equivalents at the end of the year 11 1 700 437 644 58863Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009STATEMENT OF CHANGES IN NET ASSETSNotesAccumulatedSurplus/(Deficit)Total Net AssetsOpening balance 1 April 2007 163 922 163 922Loss for the period (1 787 470) (1 787 470)Balance at 31 March 2008 (1 623 548) (1 623 548)Deficit for the year (4 327 497) (4 327 497)Balance at 31 March 2009 (5 951 045) (5 951 045)64Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS1 PRESENTATION OF ANNUAL FINANCIAL STATEMENTSThe financial statements have been prepared in accordance with the South African Statements of GenerallyAccepted Accounting Practice (GAAP), including any interpretations of such Statements issued by the AccountingPractices Board, with the effective Standards of Generally Recognised Accounting Practices (GRAP) issued by theAccounting Standards Board replacing the equivalent GAAP Statements as follows:Standard of GRAPGRAP 1: Presentation of financial statementsGRAP 2: Cash flow statementsGRAP 3: Accounting policies, changes inaccounting estimates and errorsReplaced Statement of GAAPAC101: Presentation of financial statementsAC 118: Cash flow statementsAC 103: Accounting policies, changes inestimates and errorsCurrently the recognised measurement principles in the above Standards of GRAP and Statements of GAAPdo not differ or result in material differences in items presented and disclosed in the financial statements. Theimplementation of GRAP 1,2 & 3 has resulted in the following significant changes inthe presentation of the financial statements:Terminology differences:Standard of GRAPStatement of financial performanceStatement of financial positionStatement of changes in net assetsNet assetsReplaced Statement of GAAPIncome statementBalance sheetStatement of changes in equityEquitya) The cash flow statement can only be prepared in accordance with the direct method.b) Specific information has been presented separately on the statement of financial position such as:receivables from non-exchange transactions, including taxes and transfers; trade and other payables fromnon-exchange transactions.c) Amount and nature of any restrictions on cash balances is required to be disclosed.Paragraphs 11-15 of GRAP 1 have not been implemented due to the fact that the budget reporting standard hasnot been developed by the local standard setter and the international standard is not effective for this financialyear. Although the inclusion of budget information would enhance the usefulness of the financial statements,non-disclosure will not affect the objective of the financial statements.1.1 Adoption of new and revised StandardsStandards and Interpretations effective in the current periodIn the prior year, the entity adopted IFRS 7 Financial Instruments: Disclosures which is effective for annualreporting periods beginning on or after 1 January 2007, and the consequential amendments to IAS 1 Presentationof Financial Statements.65Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS (Continued)The impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand the disclosures provided inthese financial statements regarding the entity’s management of capital.1.2 Significant judgmentsIn preparing the annual financial statements, management is required to make estimates and assumptions thataffect the amounts represented in the financial statements and related disclosures. Use of available informationand the application of judgment is inherent in the formation of estimates. Actual results in the future coulddiffer from these estimates which may be material to the annual financial statements.Significant judgments include:Provision for doubtful debtsOn receivables an impairment loss is recognised in surplus/deficit when there is objective evidence that itisimpaired. The impairment is measured as the difference between the receivables’ carrying amount andthe present value estimated future cash flows discounted at the effective interest rate computed at initialrecognition.Impairment testingThe recoverable amounts of individual assets have been determined based on the higher of value in usecalculations and fair values. The entity reviews and tests the carrying value of assets when events or changein circumstances suggest that the carrying amount may not be recoverable. If there are any indications thatimpairment may have occurred, estimates of expected future cash flows from these assetsare prepared.ProvisionsProvisions were raised and management determined an estimate based on the information available.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2.1 Property, plant and equipmentThe cost of an item of property, plant and equipment is recognised as an asset when:• it is probable that future economic benefits associated with the item will flow to the entity; and• the cost of the item can be measured reliably.Costs include costs (cash or cash price equivalent) incurred initially to acquire an item of property, plant andand equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement costis recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of thereplaced part is derecognised.66RoundProperty, plant and equipment are stated at cost less accumulated depreciation and any recognised impairmentloss. The costs of self-constructed assets includes the cost of materials, direct labour and an appropriate

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009proportion of production overheads. Depreciation is charged so as to write off the cost or valuation of assets,over their estimated useful lives, using the straight-line method, on the following bases:ItemFurniture and fixturesMotor vehiclesOffice equipmentComputer equipmentComputer softwarePromoting equipmentAverage useful life8 years5 years5 years4 years3 years4 yearsResidual values, depreciation methods and useful lives are reviewed annually, or adjusted where necessaryduring the year. The residual value of an asset is the estimated amount that an entity would currently obtainfrom disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of theage and in the condition expected at the end of its useful life. Useful life is the period over which an asset isexpected to be available for use by an entity.Each part of an item of property, plant and equipment with a cost that is significant in relation to the total costof the item are depreciated separately.The depreciation charge for each period is recognised in surplus or deficit.The surplus or deficit arising from the derecognition of an item of property, plant and equipment is included insurplus or deficit for the year when the item is derecognised. The surplus or deficit arising from the derecognitionof an item of property, plant and equipment is determined as the difference between the net disposal proceeds,if any, and the carrying amount of the item.2.2 Intangible assetsAn intangible asset is recognised when:• it is probable that the expected future economic benefits that are attributable to the asset will flow to theentity;• and the cost of the asset can be measured reliably.Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,intangible assets are carried at cost less any accumulated amortisation and any accumulated impairmentlosses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets withindefinite useful lives are tested for impairment annually either individually or at the cash generating unit level.Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewedannually to determine whether indefinite life assessment continues to be supportable. If not, the change in theuseful life assessment from indefinite to finite is made on a prospective basis.Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment67Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009The determination of whether an arrangement is, or contains a lease is based on the substance of thearrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on theuse of a specific asset or assets and the arrangement conveys a right to use the asset.Finance leases - lesseeThe following situations would normally individually or in combination lead to a lease being classified as afinance lease and have been considered by the entity:• lease transfers ownership of the asset to the lessee by the end to the lease term;• the lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than thefair value at the date the option becomes exercisable for it to be reasonably certain, at the inception of thelease, that the option will be exercised;• the lease term is for the major part of the economic life of the asset even if title is not transferred;• at the inception of the lease the present value of the minimum lease payments amounts to at leastsubstantially all of the fair value of the leased asset;• the leased assets are of such a specialised nature that only the lessee can use them without majormodifications;• if the lessee can cancel the lease, the lessor’s losses associated with the cancellation are borne by the lessee;• gains or losses from the fluctuation in the fair value of the residual accrue to the lessee; and• the lessee has the ability to continue the lease for a secondary period at a rent that is substantially lowerthan market rent.Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equalto the fair value of the leased property or, if lower, at the present value of the minimum lease payments, eachdetermined at the inception of the lease. The corresponding liability to the lessor is included in the statementof financial position as a finance lease obligation.The discount rate used in calculating the present value of the minimum lease payments is the entity’sincremental borrowing rate.The lease payments are apportioned between the finance charge and reduction of the lease obligation. Thefinance charge is allocated to each period during the lease term so as to produce a constant periodic rate onthe remaining balance of the liability. Finance charges are charged directly against income.Assets held under finance lease are depreciated over their expected useful lives on the same basis as ownedassets, or where shorter, the term of the relevant lease.Operating leases - lesseeOperating lease payments are recognised as an expense on a straight - line basis over the lease term. Thedifference between the amounts recognised as an expense and the contractual payments are recognised as anoperating lease asset or liability. This liability is not discounted.69Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS (Continued)When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenueis recognised only to the extent of the expenses recognised that are recoverable.Revenue is measured at the fair value of the consideration received or receivable and represents the amountsreceivable for goods and services provided in the normal course of business, net of trade discounts and volumesrebates, and value added taxation.Revenue is recognised to the extent that it is probable that the economic benefits will flow to Boxing SouthAfrica and the amount can be reliably measured.License fees are recognised on cash receipt basis which aligns with the time of accrual of these fees.Interest is recognised on a time proportion basis which takes into account the principle investment and theeffective interest rate.2.9 Borrowing costsBorrowing costs are recognised as an expense in the period in which they are incurred.2.10 Irregular, fruitless and wasteful expenditureIrregular expenditure means expenditure incurred in contravention of, or not in accordance with, therequirements of any applicable legislation, including the PFMA.Fruitless and wasteful expenditure means expenditure that was made in vain and would have been avoidedhad reasonable care been exercised (Note 18).All irregular, fruitless and wasteful expenditure is charged against income in the period in which they areincurred.72Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS (Continued)3 REVENUE2009 2008RRTotal revenue comprises:Grant Income - Sports and Recreation South Africa 2 011 000 3 900 000Grant Income - Provinces 1 400 000 1 611 088Licence fees 564 243 318 295Sanctioning fees 2 251 202 1 858 409Sponsorships 1 190 000 850 0007 416 444 8 537 7924 OTHER INCOMEIncluded in other income- Forfeits and penalty revenue 86 105 16 800- Profit on sale of motor vehicle 165 -- Proceeds on termination of insurance policy 183 256 -269 526 16 8005 OPERATING DEFICITOperating deficit before finance cost and investment revenue is stated after taking into account thefollowing:Auditors’ remuneration- Audit fees 473 605 323 698Doubtful debts 442 224 200 000Depreciation and amortisation 67 628 242 151- Furniture and fittings 12 675 10 777- Promoting equipment 548 2 194- Office equipment - Owned 2 834 38 430- Leased - 154 363- Computer equipment 41 432 14 001- Motor vehicles - Leased 10 711 8 130- Computer software (571) 14 256Directors fees 117 397 61 196Operating lease charges 205 319 242 731- Building 106 335 209 392- Equipment 98 984 33 33973Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS (Continued)6 FINANCE COST 2009 2008RRInterest paid on:- Finance lease agreements 6 343 6 212- Bank overdraft - 862- Fair value adjustment interest portion on creditors 191 573 3 649197 915 10 7237 PROPERTY, PLANT AND EQUIPMENTOwned assets2009 2008Cost AccumulateddepreciationCarryingvalueCost AccumulateddepreciationCarryingvalueR R R R R RFurniture and fittings 100 203 (62 675) 37 528 100 869 (50 019) 50 851Office equipment 25 758 (15 775) 9 983 66 252 (48 090) 18 162Computer equipment 210 252 (83 552) 126 701 209 519 (122 461) 87 058Promoting equipment 13 264 (6 657) 6 606 9 234 (4 935) 4 299Capitalised leased assetsComputer equipment 1 - 1 1 - 1Motor vehicles 141 119 (5 291) 135 828 100 650 (41 345) 59 305490 597 (173 951) 316 647 486 526 (266 850) 219 67674Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 20097 PROPERTY, PLANT AND EQUIPMENT (Continued)The carrying amount of fixed assets can be reconciled as follows:Carryingvalue atbeginningof yearAdditions2009WriteOffsDisposals Transfers DepreciationCarryingvalue atend ofyearOwned assetsFurniture and fittings 50 851 - (649) - 1 (12 675) 37 528Office equipment 18 162 - (3 241) - (2 104) (2 834) 9 983Computer equipment 87 058 84 774 (3 700) - - (41 432) 126 701Promoting equipment 4 299 2 508 (1 755) - 2 103 (548) 6 606Capitalised leased assetsComputer equipment 1 - - - - 1Motor vehicles 59 305 141 119 - (53 886) - (10 711) 135 828219 676 228 401 (9 345) (53 886) - (68 200) 316 647Carryingvalue atbeginningof year2008Additions Disposals DepreciationCarryingvalue atend of yearOwned assetsFurniture and fittings 43 949 17 722 (43) (10 777) 50 851Office equipment 52 403 4 193 (4) (38 430) 18 162Computer equipment 20 860 80 201 (2) (14 001) 87 058Promoting equipment 6 493 - - (2 194) 4 299Capitalised leased assetsOffice equipment 154 363 - - (154 363) -Computer equipment 1 - - - 1Motor vehicles 67 435 - - (8 130) 59 305345 504 102 116 (49) (227 895) 219 67675Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS (Continued)8 INTANGIBLE ASSETS2009 2008Accumulated CarryingAccumulated CarryingCostCostdepreciation valuedepreciation valueR R R R R RComputer software 30 946 (18 797) 12 149 69 632 (54 706) 14 92630 946 (18 797) 12 149 69 632 (54 706) 14 926The carrying amount of intangible assets can be reconciled as follows:Carryingvalue atbeginningof year2009Additions Write-Offs Disposals AmortisationCarryingvalue atend ofyearComputer software 14 926 - (3 348) - 571 12 14914 926 - (3 348) - 571 12 149Carryingvalue atbeginningof year2008Additions Disposals AmortisationCarryingvalue at endof yearComputer software 29 182 - - (14 256) 14 92629 182 - - (14 256) 14 92676Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 20099 OTHER FINANCIAL LIABILITIES2009 2008RRAvailable for saleGuardrisk Contingent Plan Policy - 1 160 702Guardrisk Contingent Plan was an insurance policy to coverBoxing South Africa against claims resulting from injury toboxing participants or spectators. Boxing South Africa hadthe opportunity to participate in the underwriting profits ofthe programme based on a favourable claims history andsound risk management practices. The overall objectivewas to provide adequate cover for risk exposure and notto maximise investment returns. During the 2009 financialyear the insurance policy was cashed out.- 1 160 70210 TRADE AND OTHER RECEIVABLESTrade receivables 1 031 170 588 324Provision for doubtful debts (642 224) (200 000)Prepayments 445 -Fair value adjustment debtors (53 954) (25 847)Other receivables 47 231 47 008382 668 409 48511 CASH AND CASH EQUIVALENTSCash and cash equivalents comprise:Cash on hand 21 681 2 000Bank balances 1 678 756 642 5881 700 438 644 588Included in bank balances is The Msopi Trust bank account. The trust represents donations received byBoxing SA on behalf of the boxers family. The corresponding creditor has been included in sundry payables(note 13).77Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS (Continued)12 FINANCE LEASE OBLIGATIONMinimum leasepaymentsPresent value of minimumlease payments2009 2008 2009 2008R R R RNo later than 1 year 28 901 31 387 15 874 28 632Later than 1 year and not later than 5 years 108 192 7 846 83 800 7 696137 093 39 233 99 674 36 328Less: future finance charges (37 420) (2 905) - -Present value of minimum lease payments 99 673 36 328 99 674 36 328Included in the financial statements as:Current liabilities 15 873 28 632Non-current liabilities 83 800 7 69699 673 36 328Finance leases relate to motor vehicles with lease terms of 5 years. The entity will take ownership of theasset at the conclusion of the lease agreement. The entities obligations under finance leases are secured bythe lessors’ title to the leased asset.13 TRADE AND OTHER PAYABLES2009 2008RRTrade payables 2 656 877 1 820 422VAT 927 723 828 986Accruals 1 283 800 537 473Fair value adjustment creditors (43 860) (22 381)Sundry payables 3 134 790 872 097Insurance received in advance 303 942 -8 263 273 4 036 597Included in sundry payables is an amount due to The Msopi Trust. This trust was created in June 2008when Mr Samora Msopi, a boxer, passed away after participating in a boxing match. The above creditorrepresents donations received by Boxing SA on behalf of the boxers family. A bank account representingthe corresponding debtor has been included in bank balances (note 11).78Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 200914 PROVISIONS2008OpeningbalanceMovement forthe yearClosingbalanceProvision: Leave pay 37 840 (37 840) -Provision: Honoraria 164 464 (164 464) -202 304 (202 304) -15 RECONCILIATION OF DEFICIT FOR THE PERIOD TO CASH GENERATED FROM OPERATIONS2009 2008RRDeficit for the period (4 327 498) (1 787 470)Adjusted for:Depreciation and amortisation 67 629 242 151Investment Income (111 493) (316 225)Finance cost 197 916 10 723Decrease in operating lease asset - 47 335Profit on disposal of property, plant(165) -and equipmentProperty, plant and equipment -9 344 49write offsIntangible assets - write offs 3 348 -Operating cash flows before(4 160 918) (1 803 437)movements in working capitalMovements in working capital:Decrease in trade and other26 818 423 829receivablesIncrease in trade and other payables 4 226 676 1 945 862Increase/(decrease) in provisions - (202 304)Cash generated from operations 92 575 363 95079Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS (Continued)16 DIRECTORS’ EMOLUMENTS2009 2008Executive DirectorsFeesAllowancesOtherAllowancesRRChief Executive Officer:B Khumalo 584 523 198 333 306 929 1 089 785 624 532Executive ManagementChief Finance Officer:J Steyn (Acting) - - - - 241 432C Wood (Acting) 312 510 70 028 - 382 538 -Director of Operations:L Mtya 254 871 84 957 66 246 406 074 -1 151 904 353 318 373 175 1 878 397 865 964Non Executive Directors2009 2008Fees R RAdv D Mpofu 6 720 6 720 11 204Dr P Ngatane 21 077 21 077 10 415S Xulu - - 10 415V Magwaca 6 720 6 720 12 498S Sodo 15 680 15 680 14 581A Norman - - 2 083M Tsika 13 440 13 440 -A T Jonas 15 680 15 680 -V Baloyi 17 920 17 920 -C Bassuday 20 160 20 160 -117 397 117 397 61 19680Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 200917 FINANCIAL AND RISK MANAGEMENTBSA is exposed to financial risk through its financial assets and financial liabilities.The Board of Directors has overall responsibility for the establishment and oversight of BSA’s riskmanagement framework. The Board has established the Risk Management Committee, which isresponsible for developing and monitoring BSAs’ risk management policies. The committee reportsregularly to the Board of Directors on its activities.BSA’s risk management policies are established to identify and analyse the risks faced by BSA, to setappropriate risk limits and controls, and to monitor risks and adherence to limits. Risk managementpolicies and systems are reviewed regularly to reflect changes in market conditions and BSA’s activities.BSA, through its training and management standards and procedures, aims to develop a disciplined andconstructive control environment in which all employees understand their roles and obligations.BSA’s Audit Committee oversees how management monitors compliance with BSA’s risk managementpolicies and procedures and reviews the adequacy of the risk management framework in relation to therisks faced by BSA. BSA’s Audit Committee is assisted in its oversight role by Internal Audit. Internal Auditundertakes both regular and ad hoc reviews of risk management controls and procedures, the results ofwhich are reported to the Audit Committee.BSA’s exposure to risk, its objectives, policies and processes for managing the risk arising from its financialinstruments and methods used to measure BSA’s exposure to these risks, have not changed significantlyfrom the prior year.BSA does not have major exposure to credit, liquidity and market risk, which is described in moredetail below.Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss for the other partyby failing to meet an obligation. Credit risk arises from cash and cash equivalents, deposits with banksand financial institutions, outstanding receivables and committed transactions. The entity only depositscash with major banks with high quality credit standing. BSA management evaluate credit risk relating tocustomers on an ongoing basis.Trade and other receivablesFinancial assets which potentially subject the company to concentrations of credit risk consist principallyof trade receivables from boxing promoters.Other ReceivablesBSA’s exposure to credit risk is influenced mainly by prepayments and advances to boxers. The credit riskwill increase should BSA not fulfil it’s obligations.81Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 200917 FINANCIAL AND RISK MANAGEMENT (Continued)Credit risk exposureThe carrying amount of financial assets represents the maximum credit exposure at the reporting date.The PFMA prohibits BSA to have any credit facility. The BSA has limited credit risk exposure as all its cash andcash equivalents are placed with highly reputable financial institutions.Ageing of Financial AssetsThe following table provides information regarding the credit quality of assets which expose BSA to creditrisk:2009 Financial assets that are past due and impairedNeitherImpaired Total0-2 3-5 More than 5past due norfinancial carryingmonths months monthsimpairedas sets amountTrade and otherreceivables 171,234 60,711 35,000 764,224 (642,224) 388,946Cash and cashequivalents 1,700,437 - - - - 1,700,4371,871,672 60,711 35,000 764,224 (642,224) 2,089,3832008 Financial assets that are past due and impairedNeitherImpaired Total0-2 3-5 More than 5past due norfinancial carryingmonths months monthsimpairedassets amountTrade and otherreceivables 148,494 62,698 42,086 335,046 (200,000) 388,324Cash and cashequivalents 644,588 - - - - 644,588793,082 62,698 42,086 335,046 (200,000) 1,032,912There are no financial assets that would have been past due or impaired had the terms not been renegotiatedfor the current or prior year. The trade debtors have been present valued to reflect their fair value.Impairment losses - Trade and other receivablesBSA had to provide for impairment of its Trade and other receivables due to non-payment of boxingpromoters in the current and prior year.82Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 200917 FINANCIAL AND RISK MANAGEMENT (Continued)Security and collateralBSA does not have collateral or other credit enhancements for its credit risk exposure from financial assetsduring the current or prior year.Liquidity riskLiquidity risk is the risk of not being able to meet commitments, repayments, withdrawals and insuranceclaims payable in full at any time. Liquidity risk in relation to Boxing SA is that the entity will not meet itsobligations as they become due because of inability to obtain adequate funding or liquidate assets.The entity manages liquidity risk through an ongoing review of future commitments and credit facilities.Cash flow forecasts are prepared and the adequacy of utilised borrowing facilities is monitored.Market riskMarket risk is the risk that changes in market prices, such as interest rate, foreign exchange rates and equityprices will affect the value of BSA’s financial assets and the amount of BSA’s financial liabilities.The objective of market risk management is to manage and control market risk exposures within acceptableparameters, while optimising the return on risk. The nature of BSA’s exposure to market risk and itsobjectives, policies and procedures for managing market risks have not changed significantly from the priorperiod. Refer below for more detail.Interest rate riskBSA has limited exposure to interest rate risk. Cash and cash equivalents carry interest at a variable rate. TheBSA is not permitted to have an overdraft facility, in terms of the PFMA.Equity price riskBSA has no exposure to equity price risk.Currency riskBSA has no exposure to currency risk as it operates in the ZAR environment only.Financial risk sensitivity analysis 2009 2008Interest rate sensitivityInterest received for the period 111,493 316,225A change of 100 basis points in the South African prime interest rate at the reporting date would haveincreased or decreased the surplus by the amounts shown below. The analysis assumes that all othervariables remain constant. The analysis is performed on the same basis for 2008.Increase of 100 basis points 17,004 6,446Decrease of 100 basis points (17,004) (6,446)83Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 200917 FINANCIAL AND RISK MANAGEMENT (Continued)Financial instruments by categoryThe accounting policies for financial instruments have been applied to the line items below:2009ValueAssets per StatementLoans and through Derivatives Availableof Financial Positionreceivables profit and for hedging for saleTotallossTrade and other receivables 382,668 - - - 382,668Cash and cash equivalents 1,700,437 - - - 1,700,4372,083,105 - - - 2,083,105Liabilities atOtherLiabilities per StatementFV through DerivativesPayablesfinancialof Financial Positionprofit and for hedgingliabilitieslossTotalTrade and other payables 8,263,273 - - - 8,263,273Finance lease obligation - - - 15,873 15,8738,263,273 - - 15,873.00 8,279,1462008ValueAssets per StatementLoans and through Derivatives Availableof Financial Positionreceivables profit and for hedging for saleTotallossTrade and other receivables 409,485 - - - 409,485Cash and cash equivalents 644,588 - - - 644,5881,054,074 - - - 1,054,074Liabilities atOtherLiabilities per Statement ofFV through DerivativesPayablesfinancialFinancial Positionprofit and for hedgingliabilitieslossTotalTrade and other payables 4,036,597 - - - 4,036,597Finance lease obligation - - 28,632 28,6324,036,597 - - - 4,065,229Based on the historical information and the nature of debtors, there is reason for limited concern regardingrecoverability.84Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 200918 FRUITLESS AND WASTEFUL EXPENDITURE2009 2008RRSuspended employee salary 425 991 512 432Court settlement costs for dismissed employee 400 000 -CCMA Settlement for unfair dismissal of employees 28 937 -Interest accrued on VAT liability 98 737 -Interest and Penalties accrued on PAYE liability 359 561 -1 313 226 512 43219 OPERATING LEASE ARRANGEMENTS2009 Not later than 1yearLater than 1 yearbut not laterthan 5 yearsLater than 5yearsBuildings - - -Office Equipment 107 897 278 735 -107 897 278 735 -2008Buildings 91 547 - -Office Equipment 107 897 386 632 -199 444 386 632 -Payments recognised as an expense2009 2008RRMinimum lease paymentsBuilding 106 336 209 392Equipment 98 985 33 339205 321 242 731Operating leases relate to office buildings with lease terms of 1 year, with an option to extend for 3 monthsand office equipment with lease terms of 5 years, with an option to extend for a further 1 year. All operatinglease contracts contain market review clauses in the event that the entity exercises its option to renew. Theentity does not have an option to purchase the leased asset at the expiry of the lease period.85Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009NOTES TO THE ANNUAL FINANCIAL STATEMENTS (Continued)20 CONTINGENT LIABILITY2009 2008RRCourt proceedings - 1 200 000Legal proceedings-Sponsorship 1 197 000 -Legal proceedings-Legal fees 519 976 -1 716 976 1 200 000During the prior year Boxing SA was a defendant in a legal action involving a dispute with an ex-employeeof the entity in accordance with the terms of a contract. In the current year a settlement was signed in whichBoxing SA will have to pay this employee a total of R1 200 000 over a set period of time. Payments havecommenced during the current year and the remaining liability has been recognised as an accrual.Boxing SA is a defendant in a legal action involving a dispute with a sponsorship company contracted tosecure sponsors on behalf of Boxing SA. The directors are of the opinion that it is improbable that the plaintiffwill be successful.Boxing SA is disputing legal fees charged by their former attorneys, as they consider the fees to be excessivein terms of the work performed.21 CONTINGENT ASSETS2009 2008RRBoxing SA has instituted the following legal proceedings:Over payment to former employee 10 403 -Duplicate payment made to a promoter 50 000 -60 403 -22 RELATED PARTIESRelationshipsSports and Recreation South Africa2009 2008RR86RoundRelated party transactionsGrant received from Sports and Recreation South Africa 2 011 000 3 900 000Payments made to SARS 120 723 99 4082 131 723 3 999 408

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 200923 EMPLOYEE COSTS2009 2008RRBasic 3 319 529 2 754 315UIF (Comp portion only) 16 486 14 994SDL 27 485 27 698Leave pay provision charge - 39 498Subsistence allowance 6 490 7 030Group Life Employees Benefit 38 101 -Total 3 408 090 2 843 533Included in the employee related costs are the following:Remuneration of suspended General Manager (K Naidoo) 2009 2008RRAnnual Remuneration - 415 000Car Allowance - 96 000Contributions to UIF, Medical and Pension Funds - 1 432Total - 512 43224 Going CONCERNIn the current year the entity has incurred a net deficit of R4 327 497 (2008: R1 787 470) and the totalliabilities exceed its total assets by R5 951 045 (2008: R1 623 548). Boxing SA receives financial support inthe form of a grant from Sports and Recreation South Africa. During the current year the entity’s operatingexpenses exceeded the grant received, which may indicate that the entity’s current business model is notsustainable on an ongoing basis. Additional funds will need to be secured in order for the entity to continueas a going concern.87Round

BOXING SOUTH AFRICA ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2009DETAILED STATEMENT OF FINANCIAL PERFORMANCE2009 2008RRAccounting fees 333 974 92 600Advertising - 50 873Audit committee fee 14 460 -Audit fees 473 605 323 698Bank charges 60 839 32 350Cleaning - 3 242Computer expenses 85 488 125 853Conference and workshops 106 225 212 029Consulting fees 545 961 12 000Depreciation and amortisation 67 629 242 151Donations 336 593 200 221Doubtful debts 442 224 200 000Electricity and water 15 536 5 472Employee costs 3 359 564 2 843 533Entertainment 79 774 408 898Fair value adjustment - Capital Portion 14 297 43 902General expenses - 98 397Hire 54 675 33 992Honorarium and directors fees 117 397 61 196Write off of fixed assets 12 692 49Insurance 266 413 145 166Lease rentals on operating lease 205 320 242 731Legal expenses 348 921 944 376Management fees - 122 018Motor vehicle expenses - 102 706Postage and couriers 401 16 427Printing and stationery 305 326 298 928Repairs and maintenance 4 746 23 250Settlement of employee costs 800 000 -Storage costs 9 743 11 508Subscriptions 6 192 9 018Telephone and fax 276 567 220 871Theta - Skills development 1 458 563 791 617Tournament expenses - Baby Champs 1 274 239 1 234 415Transport and freight 846 66 188Travel 848 833 1 427 889Operating expenses 11 927 044 10 647 56488Round

Notes89Round

90RoundNotes

Notes91Round

92RoundNotes

Notes93Round

Contact DetailsBoxing SA (Head Office)Gate 2, Block 3 Nasrec, Johannesburg, P.O. Box 1347, Southdale 2135Tel: +27 11 494 1373, Fax: +27 11 494 2058 or www.boxingsa.co.za

www.boxingsa.co.zaProvincial RepresentativesEastern CapeMr. Phakamile JacobsTel: 043 761 6666Fax: 043 761 1777Free StateMr. Dick NkunaTel: 082 990 7403Fax: 057 357 1731KwaZulu NatalMr. Les AndreasenTel: 031 702 7463Fax: 031 702 1771LimpopoMr. James MathonsiTel: 015 299 7868/9Fax: 015 295 2043MpumalangaMr. Solly MatsimelaTel: 017 819 1584Fax: 017 819 1867Port ElizabethMr. Mthunzi MapithizaTel: 041 390 4142Fax: 086 614 2935Western CapeMr. Mickey KlaasTel: 021 412 3575Fax: 021 412 5503