2007 / 2008 Annual Report - Eastern Cape Development Corporation

EASTERN CAPE DEVELOPMENT CORPORATION 2007/08NOTES TO THECONSOLIDATED ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 20082 Investment Property (CONTINUED)Freehold title is held as follows:Corporation - 2008 Percentage ValueR’000CorporationGovernmentTribal landMunicipalityCorporation - 2007 Percentage ValueR’000CorporationGovernmentTribal landMunicipalityPrivately ownedOther/Unknown80974384,94744,10131,69520,646Number ofproperties1,7291312449100 481,389 1,93380875--357,95335,92231,57520,8172,6701,025Number ofproperties1,77213024516823100 449,962 2,068The categories of freehold title are further described as follows:• CorporationFreehold title is registered to the Corporation or one of the former corporations consolidated under the Corporationin terms of the Eastern Cape Development Corporation Act, No 2 of 1997, read with Proclamation 1 of 2001.• GovernmentThe title over land is registered to government. The Corporation is in the process of analysing the properties withinthis group, which comprise mainly entitlement in terms of Proclamation 1 of 2001 by the Premier of the EasternCape.• Tribal landThis group comprises mainly of properties where the Corporation has assumed “Permission to Occupy”. Themajority of these properties are situated on forestry estates and hotels on the Wild Coast.• MunicipalityThe title is registered to different municipalities within the Eastern Cape, but improvements have been made by theCorporation.• Privately ownedThe corporation derives economic benefits and rewards from these properties and incur the risks incidental toownership.• Other / unknownUncertainty exists regarding the ownership of these properties, however the Corporation derives economic benefitsand rewards from them.The Corporation’s right to occupy properties to the value of R 83.3 million (2007: R 78.8 million) included in the above,has not been reduced to writing. However, the Corporation has occupied these properties for a number of years andderives economic benefits from their use and carries the risks that are incidental to ownership.The valuation method used to value these properties assumes that the Corporation has the right to occupy theseproperties and will receive economic benefits in perpetuity. In the unlikely event that the right of occupation is disputedor expires, the valuation of these properties may be overstated. In terms of the accounting policy these rights areassessed on an annual basis and adjustments may be effected to the valuation of these properties if necessary.84