You are required to: 1. In point form, list all the items in the above draft statement of financial position that do not comply with the minimum disclosure requirements of the Companies Act and IFRS. NB: provide full details of minimum disclosure requirements.

2. Prepare the Equity section of a statement of financial position as at 31 December 2018, after the implementation of the decisions taken by the directors on 03 October 2018. Do ignore the results of trading for the three months ended 31 December 2018. Calculations are mandatory and notes to the statement of financial position are not required

Question 3 ( 30 marks) You are a newly appointed auditor of Otjomuise Ltd and have been presented with this statement of financial position. Otjomuise Ltd Statement of financial position as at 30 September 2018 N$ 2018 ASSETS Non-current assets PPE 950,000.00 15,000.00 Long term loans to employees Investments/financial assets Total non-current assets 340,000.00 1,305,000.00 Current assets Inventory Trade receivables 320,000.00 260,000.00 55,000.00 Taxation 5,000.00 Cash and cash equivalents Sundry expenditure: Preliminary expenses Ordinary share issue expenses Preference share issue expenses Underwriters commission on preference shares Total current assets 12,000.00 10,000.00 9,000.00 14,000.00 685,000.00 TOTAL ASSETS 1,990,000.00 Otjomuise Ltd Notes to the financial statements of 30 September 2018 1. Accounting policies Property, plants and equipment Land and building are valued at cost and land is not depreciated. Buildings are depreciated over the useful life on the straight-line method. Plant and machinery and vehicles are valued at cost and are depreciated on the reducing balance method to their residual value over the expected useful lives of the assets. Inventory Inventory is valued at the lower of cost and net realisable value on FIFO basis. 2. Share capital 2018 Authorised 1 000 000 ordinary shares @ N$ 2 each 80 000 redeemable cumulative preference shares @N$ 3 each (fixed annual dividend of 12c/share) 50 000 redeemable preference shares @ N$ 2.50 each (fixed annual dividend of 14c/share) 1,000,000.00 Issued 500 000 ordinary shares @ N$ 2 each 80 000 redeemable cumulative preference shares @N$ 3 each (fixed annual dividend of 12c/share) 240,000.00 1,240,000.00 The redeemable cumulative preference shares are redeemable at the option of the company since 01 December 2018 as a premium of N$ 0.30c/share. 340,000.00 Additional information: The minutes of various directors' meeting revealed the following information: Otjomuise Ltd at the moment has a court case with a potential claim of N$ 250 000 against them. No provision has been made in the accounting records as the directors are hopeful that they with emerge victorious in the case. A contract was signed with a South African company to acquire Plant and machinery at a cost of N$ 320 000. A further acquisition of Plants valued at N$ 70 000 was approved by the directors. It was then decided at the board of directors meeting of Otjomuise Ltd held on 03 October 2018; To redeem the 12% cumulative preference shares of the company on 30 November 2018 To finance this redemption partly by the issue of the maximum number of 14% redeemable preference shares at a premium of 20% (The company will not be able to issue these shares at a higher premium). To pay the backlog in the cumulative preference dividends, last provided for on 30 September 2018 o To convert the authorized ordinary shares of par value into ordinary shares on no par value on 31 December 2018. To write off all deferred expenditure in the accounting records immediately before the conversion of par value to par value shares. Share issue expenses amounting to NS 5 000 have been incurred. Question 3 ( 30 marks) You are a newly appointed auditor of Otjomuise Ltd and have been presented with this statement of financial position. Otjomuise Ltd Statement of financial position as at 30 September 2018 N$ 2018 ASSETS Non-current assets PPE 950,000.00 Long term loans to employees 15,000.00 Investments/ financial assets 340,000.00 Total non-current assets 1,305,000.00 Current assets Inventory 320,000.00 Trade receivables 260,000.00 Taxation 55,000.00 5,000.00 Cash and cash equivalents Sundry expenditure: Preliminary expenses 12,000.00 Ordinary share issue expenses 10,000.00 Preference share issue expenses 9,000.00 Underwriters commission on preference shares 14,000.00 Total current assets 685,000.00 TOTAL ASSETS 1,990,000.00 EQUTY AND LIABILITIES Equity Question 3 ( 30 marks) You are a newly appointed auditor of Otjomuise Ltd and have been presented with this statement of financial position. Otjomuise Ltd Statement of financial position as at 30 September 2018 N$ 2018 ASSETS Non-current assets PPE 950,000.00 15,000.00 Long term loans to employees Investments/financial assets Total non-current assets 340,000.00 1,305,000.00 Current assets Inventory Trade receivables 320,000.00 260,000.00 55,000.00 Taxation 5,000.00 Cash and cash equivalents Sundry expenditure: Preliminary expenses Ordinary share issue expenses Preference share issue expenses Underwriters commission on preference shares Total current assets 12,000.00 10,000.00 9,000.00 14,000.00 685,000.00 TOTAL ASSETS 1,990,000.00 Otjomuise Ltd Notes to the financial statements of 30 September 2018 1. Accounting policies Property, plants and equipment Land and building are valued at cost and land is not depreciated. Buildings are depreciated over the useful life on the straight-line method. Plant and machinery and vehicles are valued at cost and are depreciated on the reducing balance method to their residual value over the expected useful lives of the assets. Inventory Inventory is valued at the lower of cost and net realisable value on FIFO basis. 2. Share capital 2018 Authorised 1 000 000 ordinary shares @ N$ 2 each 80 000 redeemable cumulative preference shares @N$ 3 each (fixed annual dividend of 12c/share) 50 000 redeemable preference shares @ N$ 2.50 each (fixed annual dividend of 14c/share) 1,000,000.00 Issued 500 000 ordinary shares @ N$ 2 each 80 000 redeemable cumulative preference shares @N$ 3 each (fixed annual dividend of 12c/share) 240,000.00 1,240,000.00 The redeemable cumulative preference shares are redeemable at the option of the company since 01 December 2018 as a premium of N$ 0.30c/share. 340,000.00 Additional information: The minutes of various directors' meeting revealed the following information: Otjomuise Ltd at the moment has a court case with a potential claim of N$ 250 000 against them. No provision has been made in the accounting records as the directors are hopeful that they with emerge victorious in the case. A contract was signed with a South African company to acquire Plant and machinery at a cost of N$ 320 000. A further acquisition of Plants valued at N$ 70 000 was approved by the directors. It was then decided at the board of directors meeting of Otjomuise Ltd held on 03 October 2018; To redeem the 12% cumulative preference shares of the company on 30 November 2018 To finance this redemption partly by the issue of the maximum number of 14% redeemable preference shares at a premium of 20% (The company will not be able to issue these shares at a higher premium). To pay the backlog in the cumulative preference dividends, last provided for on 30 September 2018 o To convert the authorized ordinary shares of par value into ordinary shares on no par value on 31 December 2018. To write off all deferred expenditure in the accounting records immediately before the conversion of par value to par value shares. Share issue expenses amounting to NS 5 000 have been incurred. Question 3 ( 30 marks) You are a newly appointed auditor of Otjomuise Ltd and have been presented with this statement of financial position. Otjomuise Ltd Statement of financial position as at 30 September 2018 N$ 2018 ASSETS Non-current assets PPE 950,000.00 Long term loans to employees 15,000.00 Investments/ financial assets 340,000.00 Total non-current assets 1,305,000.00 Current assets Inventory 320,000.00 Trade receivables 260,000.00 Taxation 55,000.00 5,000.00 Cash and cash equivalents Sundry expenditure: Preliminary expenses 12,000.00 Ordinary share issue expenses 10,000.00 Preference share issue expenses 9,000.00 Underwriters commission on preference shares 14,000.00 Total current assets 685,000.00 TOTAL ASSETS 1,990,000.00 EQUTY AND LIABILITIES Equity