CAV Annual Report 2021

CENTURION AEROSPACE VILLAGE NPC Registration Number: 2000/006996/08 ANNUAL FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2021

NOTES TO THE ANNUAL FINANCIAL STATEMENTS

2021

2020

R

R

16. Taxation Major components of the tax expenses

the 2019/20 financial year. The minimum work includes internal electrical, roads and storm water as well as water and sanitation work, which have been concluded by the appointed Contractor, Jodan Rekopane JV, and the internal utility services will be connected to the external utility services once the external services are installed, which is expected to be completed in the 2021/22 financial year in compliance with the approved township establishment for the PVR Ext 33 township. The construction of minimum internal work and the external work consist of a portion of the compliance for the issuing of Section 82 Certificate for the CAV Landside development and an occupation certificate for the ATC Building by the City of Tshwane. The balance of the work to the amount of ca. R27,780,790 (Excl VAT) plus any inflationary and construction industry increase is regarded as a contractual capital commitment 19. SURPLUS (DEFICIT) FOR THE YEAR The income generated from operations is utilised for operating expenses and related costs. The shortfall of the operating activities is covered by the grant income from the dtic. The remainder of the unutilised grant is then transferred to deferred income liability towards developmental commitments. 20. Government grants Deferred income relates to the grants received from the dtic to cover the shortfall of operational expenditure not covered by income generated, as well as furtherance of the capital project in order to achieve the objective for which the CAV was incorporated.The non-current portion relates to the capital project, whilst the current portion relates to the funds kept as day-to-day reserves to cover the necessary operational expenditure if needed.

No provision has been made for taxation as the company is exempt from income tax under section 10 (i) (f ) of the Income Tax Act. 17. Contingent liability In terms of a premature termination of the agreement relating to the delivering of bulk earthworks and infrastructure development, the company has a possible obligation to pay the counterparty for damages arising from such a termination of the agreement. The possible obligation will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events which is not wholly within the control of the company. The uncertain future events relate to the limitation to project funding restrictions presently in place and if a contract instruction can be given, with the view to re- establishing site and commencing with the work The possible liability would be calculated based on loss of income, loss of profits, direct cost incurred related to resources, plant and general expenses. There is no possibility of any reimbursement once the company has settled the obligation. For more information, refer note 18. 18. CAPITAL COMMITMENT A contract for the CAV landside Bulk Earth Works and Infrastructure (BEWI) Phase 1a was awarded to Jodan Rekopane JV in 2010/11 financial year for an original sum of R60,574,278 (Excl VAT). An amount of R10,453,398 (Excl VAT) was then disbursed in line with the contract. However, the contract was put on hold in 2011. An amount of R1, 950,459 was subsequently impaired. The construction work for minimum BEWI work portion of the original contract to the value of R22, 340, 091 (Excl VAT), includes the inflationary increase of R1, 282, 403 (Excl VAT) from the original contracted sum of R21, 057, 688 (Excl VAT) as the contract was resuscitated in the 2018/19 financial year. A variation order of R2, 213,443.09 was allowed for in

CENTURION AEROSPACE VILLAGE NPC I ANNUAL REPORT I 2020/21

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