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OF MEMORIESSABC ANNUAL REPORT 2019

Annual Report 2019

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List of Abbreviations 4

SABC at a Glance 7Showcasing our Platforms 8Organisational Structure 11Chairperson’s Overview 12Composition of the Board 14SABC Leadership 20Group Chief Executive Officer’s Overview 22Strategic Overview 23Legislative and Other Mandates 24

SABC Performance 27Highlights of 25 Years of Freedom 28Situational Analysis 30Strategic Outcome Oriented Goals 32Delivery on Predetermined Objectives 33Summary of Financial Information 35Revenue Collection 38Delivery on the Mandate: Compliance with Licence Conditions 40 SABC Radio 40 SABC Television 44 SABC News and Current Affairs 47 SABC Sport 48 Transformation 50SABC Technology 51Universal Access 53Marketing Initiatives: Building the SABC Brand 54Complaints 56Stakeholder Engagement 57Achievements and Awards 59

SABC Governance 63Portfolio Committees 64Executive Authority 64The Accounting Authority: The SABC Board 64 Report of the SABC Board for the Year Ended 31 March 2019 65 Attendance of Board Meetings 66 Directors’ Remuneration 72 Company Secretarial Function 72 Reporting to Stakeholders 72 Stakeholder Relations 72Risk Management 72Internal Control 72Internal Audit 73Compliance with Laws and Regulations 74Fraud and Corruption 76Minimising Conflict 76Health, Safety and Environmental Issues 76Certificate by the Company Secretary 76Social Responsibility 77Audit Committee Report 79

SABC Human Resources 81Human Resources Management 82

Annual Financial Statements 87Statement of Responsibility and Approval of the Board of Directors 88 Report of the Auditor-General to Parliament on the SABC (SOC) Ltd 89 Statement of Financial Position as at 31 March 2019 93 Statement of Financial Performance for the Year Ended 31 March 2019 94 Statement of Other Comprehensive Income for the Year Ended 31 March 2019 95Statement of Changes in Equity for the Year Ended 31 March 2019 96 Statement of Cash Flows for the Year Ended 31 March 2019 97 Notes to the Annual Financial Statements for the Year Ended 31 March 2019 98

Remembrance 150

This is the 82nd Annual Report of the South African Broadcasting Corporation (SOC) Limited, referred to as ‘SABC’, ‘the Corporation’ or ‘the Company’ (Registration Number: 2003/023915/30).

It is tabled in Parliament in terms of the Broadcasting Act No. 4 of 1999, as amended, and the Public Finance Management Act No. 1 of 1999, as amended.

REGISTERED OFFICE ADDRESS: Henley Road, Radio Park, Auckland Park, Gauteng, 2006

POSTAL ADDRESS: Private Bag X1, Auckland Park Johannesburg, Gauteng, 2006

CONTACT NUMBERS: Tel: +27 11 714 9111Fax: +27 11 714 3219

EMAIL-ADDRESS: [email protected]

WEBSITE ADDRESS: www.sabc.co.za

EXTERNAL AUDITORS INFORMATION: Auditor General SA, Lefika House, 300 Middel Street, Brooklyn Pretoria, 0001

BANKERS INFORMATION: ABSA Limited, Absa Towers East, 3rd Floor, 170 Main Street, Johannesburg

COMPANY SECRETARY: Ms Lindiwe Bayi, Group Company SecretaryTel: +27 11 714 2153Fax: +27 11 714 3219Mobile +27 83 303 5945E-mail: [email protected] Bag X1, Auckland Park, 2006, Gauteng, South Africa

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#SABC 25

RESPECT: Will be our currency in our engagements internally and externally.

TRUST: We will cultivate an environment of trust with each other.

INTEGRITY: We will always do what is right.QUALITY: The quality of our work will be of the highest standard.

A high-performing financially sustainable, digitised national public broadcaster that

provides compelling informative, educational and entertaining content via all platforms.

To become the leading, credible voice and face of the nation

and the continent.

South Africa’s first democratic elections

South Africa wins the Rugby World Cup

Truth and Reconcilliation Commission

Aids Activist Nkosi Johnson

South Africa hosts the 2010 FIFA Soccer World Cup

4

ABBREVIATIONS

LIST

DSB Digital Sound Broadcasting DSAT Digital SatelliteDStv Digital Satellite TelevisionDTH Direct-to-HomeDTI Department of Trade and IndustryDTPS Department of Telecommunications and Postal ServicesDTT Digital Terrestrial TelevisionEAP Employee Assistance ProgrammeECA Electronics Communications ActED Economic DevelopmentEE Employment EquityEFC Extreme Fighting Championship EMS Emergency Management ServicesEPG Electronic Programme GuideENPS Electronic News Production SystemESS Employee Self ServiceEVP Employee Value PropositionEXCO Executive CommitteeFAMSA Family and Marriage Society of South AfricaFCC Final Control CentreFIFA Fédération Internationale de Football Association FM Frequency ModulationFPB Film and Publication BoardFY Financial YearFTA free-to-airGCEO Group Chief Executive OfficerGE Group ExecutiveGIA Group Internal AuditGIBS Gordon Institute of Business ScienceHCT HIV Counselling and TestingHD High DefinitionHDTV High Definition TelevisionHR Human ResourcesIAAF International Association of Athletics FederationsIAJ Institute for the Advancement of JournalismIBA Independent Broadcasting AssociationICASA Independent Communications Authority of South AfricaICC International Cricket CouncilICMA Inkomati Catchment Management AgencyICT Information Communications and Technology IDZ Industrial Development ZoneIEC Independent Electoral CommissionIFRS International Financial Reporting StandardsIIA Institute of Internal AuditorsIMPRA Independent Music Performance Rights AssociationIKB Information Knowledge BuildingIOC International Olympic CommitteeIODSA Institute of DirectorsIOD Injury on DutyIP Internet ProtocolIRBA Independent Regulatory Board of AuditorsISO International Organization for StandardizationISP Internet Service ProviderIT Information TechnologyITIL Information Technology Infrastructure Library

4IR Fourth Industrial Revolution15+ Over 15 years of age

ACA Association for Communications and Advertisements

AFCON Africa Cup of NationsAFS Annual Financial Statements

AGM Annual General MeetingAGSA Auditor-General of South Africa

ALS African Language Stations AMPS All Media Products Survey

ANC African National CongressAR Audience Rating

ARA Association for Responsible Alcohol UseATKV Afrikaanse Taal en Kultuur Vereniging

ASA Athletics South AfricaASASA Advertising Standards of South Africa

AU African UnionBA Broadcasting Act

BAC Bid Adjudication Committee BATSAA British-American Tobacco Southern Africa

B-BBEE Broad-Based Black Economic EmpowermentBCCSA Broadcasting Complaints Commission of South AfricaBEE Black Economic EmpowermentBEN-AFRICA Business Ethics Network BRC Broadcast Research Council BRICS Brazil, Russia, India, China and South AfricaBYOD Bring Your Own DeviceCAATS Computer Aided Audit ToolsCAE Chief Audit ExecutiveCAF Confederation of African FootballCAGR Compound Average Growth RateCapex Capital ExpenditureCCC Complaints Compliance CommitteeCCMA Commission for Conciliation, Mediation and ArbitrationCEO Chief Executive OfficerCFO Chief Financial OfficerCI Corporate IdentityCoJ City of JohannesburgCOO Chief Operations Officer CPRP Chartered Public Relations PractitionerCRL The Commission for the Promotion and Protection of the

Rights of Cultural, Religious and Linguistic Communities CSA Cricket South AfricaCSI Corporate Social InvestmentCTV Cape Town TelevisionDA Democratic AllianceDAB Digital Audio Broadcasting

DAF Delegation of Authority FrameworkDEAFSA Deaf Federation of South Africa

DoA Delegation of AuthorityDoC Department of Communications

DoH Department of HealthDRC Democratic Republic of Congo

DRM Digital Radio Mondiale1

DRM Digital Rights Management2

ABBREVIATIONS South African Broadcasting Corporation [SOC] Ltd

SABC Annual Report 2018/19SABC Annual Report 2018/19 5

ITSM Information Technology Service ManagementITU International Telecommunication Union KPI Key Performance IndicatorKZN KwaZulu-Natal LAN Local Area Network LPT Low Power TransmittersLTD Limited LTO Linear Tape OpenLSM Living Standards MeasureMAM Media Asset ManagementMBA Master of Business AdministrationMCC Media Credit CoordinatorsMCR Main Control RoomMDM Mobile Device ManagementME Metro Ethernet MEC Member of Executive CouncilMEGA Mpumalanga Economic Growth AgencyMEX Music Exchange ConferenceMGP Mpumalanga Gambling BoardMHz MegahertzMICT SETA Media, Information and Communication Technologies Sector

Education and Training AuthorityMMA METRO FM Music AwardsMoI Memorandum of Incorporation MoU Memorandum of UnderstandingMSL Mzansi Super LeagueMTEF Medium-Term Expenditure FrameworkMTI Media, Technology and Infrastructure MTPA Mpumalanga Tourism and Parks AuthorityMWASA Media Workers’ Association of South AfricaNAB National Association of BroadcastersNBA National Basketball AssociationNCA National Credit ActNCC National Consumer CommissionNDP National Development PlanNEMISA National Electronic Media Institute of South Africa NSFAS National Student Financial Aid Scheme NFVF National Film and Video FoundationNKP National Key PointNQF National Qualifications FrameworkOB Outside BroadcastODA Optical Disk ArchivingODI One Day International OTT Over-The-TopOVP Online Video PlatformPAA Public Audit Act No. 25 of 2004PAC Pan Africanist CongressPanSALB Pan South African Language Board PBS Public Broadcasting ServicesPCC Portfolio Committee on CommunicationsPCS Public Commercial ServicesPEB Public Election Broadcast PFMA Public Finance Management Act No. 1 of 1999PGM Provincial General ManagerPIFSA Printing Industries of South AfricaPIC Public Investment Corporation POWA People Opposing Women AbusePPPF Preferential Procurement Policy FrameworkPR Public RelationsPRISA Public Relations Institute of South Africa PSA Public Service Announcement

PS Premier Soccer League PTY Propriety PWD People with DisabilitiesQoS Quality of ServiceQSE Qualifying Small EnterprisesRAMS Radio Audience Measurement SurveyRAU Rand Afrikaanse Univesiteit RBF Radio Broadcast FacilitiesRIA Regulatory Impact Assessment ROI Return-on-Investment RSG Radio Sonder GrenseSAARF South African Audience Research FoundationSAB South African Breweries SABC South African Broadcasting Corporation SOC LimitedSADC Southern African Development CommunitySAFA South African Football AssociationSAFTA South African Film and Television AwardsSAICA South African Institute of Chartered AccountantsSALGA South African Local Government AssociationSAMA’s South African Music Awards SAN Storage Area NetworkSANBS South African National Blood ServicesSANEF South African Editor’s Forum SANYO South African National Youth OrchestraSAP System Application and Products in Data ProcessingSATMA South African Traditional Music AwardsSCM Supply Chain ManagementSCOPA Standing Committee on Public AccountsSEM Socio-Economic MeasureSFN Single Frequency NetworkSITA State Information Technology AgencySIU Special Investigating UnitSLA Service Level AgreementSOC State Owned Company SOE State Owned Enterprise SONA State of the Nation AddressSOP’s Standard Operating ProceduresSOPA State of the Province AddressSRSA Sports and Recreation South AfricaSTB Set Top BoxTAMS Television Audience Measurement SurveyTGRP Total Guaranteed Remuneration PackageTOR Terms of ReferenceTV TelevisionTVBMS Television Broadcast Management SystemUL University of LimpopoUCT University of Cape TownUNISA University of South AfricaUNIN University of the NorthUK United KingdomUS United StatesUSA United States of AmericaUWC University of Western CapeVAT Value Added TaxVHF Very High FrequencyVOD Video on DemandWAN Wide Area NetworkWASPA Wireless Application Service Providers AssociationWIL Work Integrated LearningWITS University of WitwatersrandWSP Workplace Skills Plan

AT A GLANCE South African Broadcasting Corporation [SOC] Ltd6

AT A GLANCE

SABC Annual Report 2018/19

AT A GLANCE

“EncouragingLEARNING

THROUGH ENTERTAINMENT. ”

7

Since 2010Find out from the experts how things work and what opportunities are available to the young people of mzansi. Tomz mzansi’s number one science and technology edutainment show. Available on Monday and Tuesday at 16:00 on SABC2.

SABC Radio Stations18 Radio Stations and Channel Africa.

SABC Radio Stations have remained relevant, widely accessible and they are a core platform for the Public Broadcaster to deliver on its public service mandate. SABC Radio commands a healthy share of 72.6% audiences; the share increased by 1.5% year on

year. The all adult share target for the period under review is 71.5%.[Source: Broadcast Research Council (BRC) Radio Audience Measurement Survey (RAM) October 2018– March 2019].


AT A GLANCE

OUR PLATFORMS

Ikwekwezi FM is a traditional but modern station that provides for the diverse needs and tastes of the IsiNdebele speaking population. The station provides information, entertainment and news. It caters for the young and old. Ikwekwezi FM works with its communities to preserve and grow the IsiNdebele language and traditions.

Lesedi FM continues to deliver informative, educational and entertaining content to the majority of Sesotho speaking South Africans, in their own language. It is a participatory radio station that delves deep into issues that have a direct bearing on developmental needs of its listeners. The station broadcasts from Bloemfontein in the Free State Province, with a strong reach in Gauteng.

Ligwalagwala FM is an upbeat radio station that speaks to the youth and the young at heart, motivated and upwardly mobile siSwati speaking people. The station reflects an urban and aspirational lifestyle, whilst serving the diverse needs of its rural audiences.

Lotus FM’s target market is the South African Indian community catering for young and old, across three religious denominations (Hindu, Islam and Christianity) in six languages. Lotus FM offers an engaging mix of informative, educational and entertaining programmes, which reflect the value systems of its dynamic audience and promotes a proudly South African Indian radio brand.

Motsweding FM’s core philosophy is informed by the personal empowerment and development of its listeners. An aspirational station that strives to be worldly and cosmopolitan, the station has spill over listenership into Botswana. It broadcasts from Mahikeng in Setswana and its listeners, in the hinterlands of the North West Province, depend on the station as their source of education and entertainment.

Munghana Lonene FM broadcasts in XiTsonga and supports the aspirations of its listeners whilst ensuring promotion of traditional norms and values. The station emphasizes listener participation and actively seeks expert opinion, commentary and advice on various topical issues, to deliver true empowerment to its listeners. The station has played a key role in the development of traditional XiTsonga music genres.

Phalaphala FM’s programming inspires its listeners and gives them a platform to share knowledge and expertise across a range of subjects and issues. The station broadcasts from Polokwane and talks to young aspirant and upwardly mobile Tshivenda speaking people living in the Limpopo Province and surrounding areas.

Radio 2000 is a facility radio station that broadcasts nationwide in English. It reflects and unites South Africa’s diverse cultures through sport and events of national importance, thereby contributing towards the strengthening of democracy and nation-building. Its programming mix consists of adult crossover music, lifestyle and talk radio. Radio 2000 provides quality content and engages audiences in healthy discussions and debates on a wide range of subjects, thus empowering and uplifting citizens of South Africa.

Average weekly audience 1 029 000adults (15+)



Average weekly audience 181 000adults (15+)



Average weekly audience 778 000 adults (15+)


Public Broadcasting Services (PBS)

SABC Annual Report 2018/19SABC Annual Report 2018/19

Public Commercial Services (PCS)

Administered for Department of Communications (DoC)

9

RSG is a contemporary radio station that represents the modern all-inclusive Afrikaans audience. RSG provides for progressive, forward thinking, loyal and strong family orientated audiences that are proudly Afrikaans speaking South Africans.

SAfm aims to engage the nation in robust but progressive conversations about topical issues of the day, whilst delivering credible up-to-the-minute news coverage. In accordance with its PBS mandate, SAfm also explores broader themes and subjects relevant to its target market through a talk show format that appeals to all South Africans. The station targets discerning, mature and sophisticated listeners nationally. The focus is primarily on decision makers seeking insightful and enabling information to keep themselves educated and informed.

Thobela FM dedicates its programming to promoting the personal growth of its listeners, preservation of culture within a modern context, and enhancing individual economic development. Programme offering includes news, current affairs, drama, education, the latest music trends, religion and culture. The station broadcasts from Polokwane, Limpopo Province, in Northern Sotho and appeals to both young and old.

Tru FM views youth and youthfulness as an opportunity and young people as a resource. The station broadcasts in IsiXhosa and English and creates a platform for young people of the Eastern Cape Province to express themselves. Tru FM empowers its listeners to improve their quality of life as well as to focus on self-development.

Ukhozi FM is South Africa’s biggest radio station. It focuses on educational, informative and entertaining programming that prioritises personal development, economic growth and spiritual upliftment of its audiences. Broadcasting in IsiZulu, Ukhozi FM is a leading African Language Station (ALS) that stands for the preservation and development of South African indigenous languages and culture. Traditional, choral and spiritual music genres set this station apart from its competitors. The station has maintained audiences in excess of 6 million over the last decade.

Umhlobo Wenene FM broadcasts in IsiXhosa and seeks to serve its listeners with honour and integrity by continuously providing quality information, education and entertainment that inspires positive thinking and personal growth for its listeners. The station is widely known for its quality sports coverage, riveting dramas and enthralling traditional music genres, which inspire communities to excel. Broadcasting from Port Elizabeth in the Eastern Cape Province, the station also boasts a national reach that makes it the second biggest radio station in the country.

5FM is the entertainment powerhouse for South African youth, offering the most popular contemporary hit music and entertainment on radio. Daring to walk on the wild side, whilst inspiring personal development and encouraging freedom of expression of its listeners, is core to the station’s values. The station has the biggest social media following in South African media with more than a million Facebook and Twitter followers.

CHANNEL AFRICA is a radio station managed by the SABC on behalf of the DoC. The station broadcasts on shortwave spectrum to the Southern, Eastern and Western African audiences. The broadcasts are done in English, French, Chinyanja, Portuguese, Silozi and Swahili.

Good Hope FM encapsulates the fun, energy and funkiness of urban Cape Town in the Western Cape Province. It entertains and actively engages Capetonians through music, relevant lifestyle news and events. The station is well positioned to meet the lifestyle needs of its audience through showcasing high quality events and highlighting public concerns.

METRO FM is the most influential radio brand for youthful urban adults that embrace a pragmatic and successful lifestyle. It is the largest commercial radio station in South Africa with listeners in excess of four million. Though primarily a music station, METRO FM also delivers credible and impartial news reporting that keeps its listeners engaged and informed. Due to its reach, the station plays a critical role in the development of music talent in South Africa through its various initiatives.

XK FM targets the San people of Platfontein in the Northern Cape Province. The community, consists of the !Xu and the Khwe people. The station currently plays a critical role of preserving some of the oldest indigenous languages and cultures in Africa, by uplifting, developing and informing the community.

Average weekly audience 1 170 000 adults (15+)









No audience measurement available due to the small size of the community the station serves.

CHANNELAFRICATHE AFRICAN PERSPECTIVE

SABC Television ChannelsSABC TV consists of three free-to-air (FTA) channels and two other channels carried on a subscription digital satellite network. The channels deliver top-quality local and international content in all South Africa’s languages through-out the nation. SABC1, SABC2 and SABC3 attract on average 27.9 million South African viewers in a typical month. [Source: Broadcast Research Council (BRC) Television Audience Measurement Survey (TAMS) covering the period April 2018-March 2019: Viewers within a typical month]


AT A GLANCE

SABC1 is a full spectrum FTA channel that represents the youth, whether defined by age or attitude and their aspirations, reflecting a society that is in motion and progressive. The channel broadcasts in indigenous South African languages, primarily those within the Nguni language group and English. Its coverage is via analogue and Digital Terrestrial Transmitter (DTT) network, covering 91.2% of the population. It is also available in HD, via satellite on the DStv and Vivid Direct-to-Home (DTH) digital satellite platforms.

SABC3 is a full spectrum FTA channel, offering multicultural viewers content that uplifts, challenges and entertains, presenting a unique world view. It broadcasts primarily in English, and aims to carry 10% of its programmes in indigenous South African languages. The channel’s coverage is via analogue and DTT network, covering 82.1% of the population. It is also available in HD, via satellite on the DStv and Vivid Direct-to-Home (DTH) digital satellite platforms.

SABC ENCORE is a retro channel showcasing and celebrating SABC programming from the 1980s and 1990s. The channel, which forms an integral part of the SABC’s strategy moving into a multi-channel environment, is currently available in HD and carried on DStv channel 156, a subscription digital satellite network channel.

SABC News is available in HD and is broadcast on DStv channel 404 and offers breaking news and continuous news updates. The channel broadcasts in English and reaches 51 African countries as it aspires to be a Pan African channel. It has the second highest number of viewers on the DStv news block and continues to display impressive growth. It offers a seamless fusion of rolling news and current affairs programming, boasting 18 hours of live daily coverage.

SABC2 is a full spectrum FTA channel which places family, community and culture at the centre of its programming and activities. The channel broadcasts in indigenous South African languages, mainly Sesotho languages, Afrikaans, and English. The coverage is via analogue and DTT network, covering 92.5% of the population. It is also available in HD, via satellite on the DStv and Vivid Direct-to-Home (DTH) digital satellite platforms.

Adult (15+) audience:25.8 million





Public Broadcasting Services (PBS)

Public Commercial Service (PCS)

Digital satellite network channels

The stage is yours

The cast of SABC2’s drama ‘Uzalo’


STRUCTURE

The cast of SABC2’s drama ‘Uzalo’

SABC BOARD

CompanySecretary

GroupInternalAudit

ChiefOperating

Officer

Television RadioFinance

ChiefFinancialOfficer

News SportSupplyChain

Management

LogisticalServices

SABCFoundation

LegalServices

CorporateAffairs

HumanResources

Governanceand

AssuranceCommercial Enterprises

Media Technology

Infrastructure

TVLicenses

DoC

Group ChiefExecutive

Officer

The South African Broadcasting Corporation (‘SABC’) is one of the key institutional pillars of our democracy, delivering essential content to millions of South Africans on multiple platforms and in 14 different languages, on a daily basis.

The SABC remains one of South Africa’s national treasures. Like many of our state and public institutions that are the subject of the Commission of Inquiry into State Capture, the SABC has had a turbulent recent history and, at least from a financial point of view, the Corporation has been mortally damaged by the unlawful and irregular practices of a succession of boards and management. It is my belief and commitment, as shared by my fellow board members and our executive directors, that the Corporation must be properly managed and restored to ensure fulfilment of its unique public mandate and adherence to the values that underpin our Constitution.

Many people ask why we have chosen to put our hand up and serve on the SABC Board. In my view we do this not only because of our calling to public service and national duty. But also because the SABC is a truly special and unique organisation which touches over 30 million people every day. It is a privilege to serve on a board whose main obligation is to ensure that we look after this institution

and treat it as the national treasure it certainly is. In an increasingly cut-throat and competitive world of privately-owned media and global social media

platforms, South Africa should not underplay the importance of having a publicly-owned

institution that provides audio and television content across 5 TV channels and 19 radio

stations, across all our official languages

plus sign language, Khoisan language, across analogue and all digital platforms, including Digital Terrestrial Television (DTT), Digital satellite broadcasting (DTH), online and mobile.

As we face stiff competition from pay-tv, new free-to-air broadcasters and Over the Top (OTT) players, it is easy to forget that the SABC still has the potential to reach all South Africans on all devices with indigenous South African radio and television content that is completely free, as required by statute. The SABC is committed to expediting its migration from television analogue frequencies and ensuring the corporation is future-proofed on all digital platforms, taking into account the competition we are facing and the needs of the SABC going forward.

Highly damaging governance, maladministration and funding challenges faced by the SABC, on and off, over decades, have hollowed out this institution, making it tougher and tougher to play to our strengths. Much of the work since the appointment of the Interim Board in February 2017 and the permanent Board in October 2017 has necessitated dealing with legacy governance and corruption issues, first flagged by Parliament and the Public Protector, but also further uncovered by our internal audit after more comprehensive investigations.

It was disappointing that our work had to be halted in December 2018, as four Board members (from the previous


AT A GLANCE

OVERVIEW


Interim Board) resigned with immediate effect rendering the board inquorate and unable to continue its work as required by the law. These members were Ms Khanyisile Kweyama, Mr Mathatha Tsedu, Mr Krish Naidoo and Mr John Matisonn. Some of these board members cited lack of financial support from government, personal reasons, heavy workload while others had different views to the remaining board members as to what SABC independence and impartiality meant. With only four non-executive board members remaining as directors – myself, Mr Michael Markovitz, Mr DK Mohuba and Mr Jack Phalane - the board remained inquorate for five months until Parliament was able to fill the vacancies on 12 April 2019. This delay had a deleterious impact on the Corporation’s renewal and rehabilitation efforts.

In spite of this setback, when eight new board members were appointed, actions taken to stem chronic failures in governance and ethics in the organisation have subsequently continued. The Board is confident that, under the executive leadership of Mr Mxakwe, SABC management will successfully implement the turnaround strategy and ensure the financial sustainability of the Public Broadcaster.

The Board continues to support the implementation of measures to stabilise the Corporation at a governance level and has stepped up actions to address the endemic levels of corruption and maladministration that had been prevalent at the SABC for many years. I am pleased to report that we have made significant headway in this regard and we remain firmly committed to ensuring that the SABC roots out all forms of unethical and unlawful conduct. We continue to consistently drive to address all the governance and legacy issues facing the SABC, including the issues raised by the Public Protector’s remedial actions, Ad Hoc Committee Inquiry report, SIU reports, reports by the Auditor General of South Africa (AGSA) and the SABC’s own Internal forensic investigations.

The SABC’s financial position has remained under severe pressure, with the Corporation still paying the price for years of compromised leadership, failed governance and prejudicial decision-making.

Broadcasting is a cyclical business, requiring investment and strategic steps 24 to 36 months in advance, in order to ensure the broadcaster has quality content in order to attract the necessary audiences. Because of the unlawful and prejudicial actions during the period reviewed by Parliament and the Public Protector, the SABC continues to struggle financially and is unable to simply shake off the damage caused, without financial assistance by government.

The SABC’s dire financial situation worsened further during the 2018/19 financial year and the Corporation ended March 2019 with a cash balance of only R72 million. Its cash flow is depleted and consequently the SABC cannot honour

payments to service providers, adhere to its committed contracts, and commission local content productions.

The SABC ended 2018/19 financial year with an audited loss for the year of R482 million.

Losses have decreased over the past number of years from R1 billion in 2016/17, to R744 million in 2017/18, to an audited loss of R482 million in 2018/19 financial year – this is a 35% improvement. However, the SABC’s financial position remains severe.

The SABC first applied for a government guarantee was submitted in early 2017 during the Interim Board period. In November 2017 a further updated application was submitted. Subsequently, more than two years later SABC and after continued engagement with National Treasury, the SABC has not received funding from government. Discussions are ongoing and we remain hopeful that the necessary support will be given. If it was not for the calibre of the current executive team, the turnaround strategy and the support from our clients and the commitment of our employees, the SABC’s ability to continue broadcasting and paying its staff would be severely compromised.

The reconstitution of the Board on 12 April 2019 was hopefully a signpost in the journey towards sustainability and the goal of ensuring that the SABC becomes a strong and vibrant multiplatform public service content provider, serving all our people for decades to come.

Continuity and institutional memory is very important in an institution that has seen so much upheaval over the years. I’m therefore pleased that the four non-executives who remained, including myself, was able to provide this link with the previously quorate board and the work that has come before, thereby ensuring that momentum is not lost.

The success of this Board in fulfilling its fiduciary and legal duty will be rooted in our collaboration and the priority of serving the SABC and acting in its best interests – and not in our individual interests.

I’m confident that if we all work together- Board, Management and Staff - we can develop the SABC, improve the financial sustainability, improve governance and ultimately restore the public broadcasters’ reputation, lost credibility and the public’s trust in the SABC.

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…………………................................…………….Mr Bongumusa MakhathiniChairperson of the SABC Board

The SABC has a unitary Board structure, which in terms of the Broadcasting Act No. 4 of 1999, as amended, will comprise 12 Non-Executive Directors and three Executive Directors.

Telecommunications (Telecoms Academy- London United Kingdom); World Bank Training Program on Utility Regulation and Strategy (University of Florida Gainesville Campus Florida United States of America); Senior Executive Programme - Advanced Executive Management Programme (University of London- United Kingdom).Ms Mohlala-Mulaudzi currently serves as the CEO of the Estate Agency Affairs Board; director of Mohlala Attorneys; Independent Expert to the Supervisory committee of the Department of Correctional Services; Chairperson of the Gauteng Rental Housing Tribunal; Board member of the South African Diamond and Precious Metals Regulator Board; Audit Committee member of the Department of Transport; Chairperson Appeal Authority of the Emfuleni Municipality Land Planning and Chairperson of Tshwane Mental Health Review Board.She was Acting Judge of the Gauteng Local Division of the High Court, Johannesburg; Director General of the Department of Communication; Pension Fund Adjudicator (Chief Executive Officer/Specialist Judge) at the Office of the Pension Funds Adjudicator; National Consumer Commissioner of the Office of the National Consumer Commissioner; Councilor of the Independent Communications Authority of South Africa (ICASA) and Lecturer at the University of South Africa (UNISA).Ms Mohlala-Mulaudzi has written six articles, namely ‘Sequestration: is it a real solution’ – CODICILUS – June 2000-UNISA Publication; ‘Marriage and its consequences ‘– Tribute-August 1999; ‘Affirmative Action: is it a real contributor in the reconstruction and development process’ –unpublished; ‘Land redistribution –why?’ – unpublished; ‘Lessons to be learnt from the ethnic contact’ – unpublished; and ‘Sins of the Father visited upon the Daughter ‘– Black Lawyers Association Bulletin.

3. Prof Saths CooperAppointed to the Board on 11 April 2019Phd, MA (Boston University: Fulbright Scholar); BA Hons (University of Witwatersrand); BA (University of South Africa). A Fellow of the British, Indian, Irish, and South African Psychological Societies, he is Extraordinary Professor at the University of Pretoria and Visiting Professor at the University of Johannesburg. Having spent nine years in apartheid prisons - serving five years in the same Robben Island cell block as President Mandela - he was Vice Chancellor of the University of Durban-Westville. He is also President of the Pan-African Psychology Union, immediate Past President of the International Union of Psychological Science, and Governing Board Member of the International Science Council.

4. Adv Benjamin Motshedi LekalakalaAppointed to the Board on 11 April 2019BA (Law), LLB, HDIP (CO. Law) (Wits University); LLM (Tax) (RAU), Executive Development Programme (Wits Business School); Executive Development Programme (University of Reno, Nevada); Executive Development Programme (Stanford University, California) Post Graduate Certificate - Broadcasting (Wits Business School).Adv Lekalakala practiced both as an attorney and an advocate, worked for the public service as Director, Chief Director and Chief of Staff. He


AT A GLANCE

OF THE SABC BOARD

The Broadcasting Act No. 4 of 1999, as amended, provides that the SABC will be governed and controlled,

in accordance with this Act, by a Board of Directors. The Non-Executive Directors are appointed by the President

on the advice of the National Assembly and the Non-Executive Directors are required to appoint the Executive

Directors independently in consultation with the Minister of Communications.

On the approval of the President, a permanent Board was appointed on 16 October 2017. In terms of the Broadcasting Act,

the Non-Executive Directors appointed to the new Board must hold office for a period of five years. In the 2018/19 FY, one Non-

Executive Director resigned in September 2018 and four Members in December 2018 resulting in an Inquorate Board. Executive Directors have standard employee service contracts and are subject to the SABC’s conditions of service.

CHANGE IN DIRECTORS1. Mr Bongumusa Emmanuel Makhathini Chairperson Appointed to the Board on 16 October 2017MCom in Business Management and Economics (University of Johannesburg); Hon in Geography (University of Zululand); BEd (University of Zululand); Diploma in HR Management (University of Zululand); General Management Program (Harvard Business School); SABMiller Executive Development Programme (University of Cambridge). Mr Makhathini currently serves as the Chairperson of the SABC Board and is a Board member of the Ekurhuleni World Outreach Centre Advisory Board. Mr Bongumusa Makhathini has served and continues to serve on various bodies. These include being an Executive Board member of British American Tobacco Southern Africa (BATSAA); Executive Board member of the South African Breweries; member of the SAB Thrive Fund; Board member of The Sport Trust; Board member of the Industry Association for Responsible Alcohol Use (ARA) where he chaired the Board Committee on Responsible Drinking and Advocacy; the President of Convocation at the University of Zululand and a Member of the University of Zululand Council. Mr Makhathini held a senior management position at Accenture, where he spent eight years in business consulting and strategy, handling complex IT and business transformation projects.

2. Ms Mamodupi Mohlala-MulaudziDeputy Chairperson

Appointed to the Board from 11 April 2019B.A. (LAW) (University of Swaziland); L.L.B

(University of Witwatersrand); L.L.M (University of Witwatersrand); Mini–MBA

SABC Annual Report 2018/19 15

9. Ms Jasmina Patel

5. Mr David Maimela

1. Mr Bongumusa MakhathiniChairperson

10. Mr Jack Phalane

6. Mr Michael Markovitz

2. Ms Mamodupi Mohlala-Mulaudzi Deputy Chairperson

13. Mr Madoda Mxakwe Group Chief Executive Officer

11. Ms Mary Papayya

7. Mr Dinkwanyane Mohuba

3. Prof Sathasivan Cooper

14. Ms Yolande van Biljon Chief Financial Officer

12. Dr Marcia Socikwa

8. Ms Bernedette Muthien

4. Adv Benjamin Motshedi Lekalakala

15. Ms Sylvia Tladi Chief Operations Officer (Acting)

previously worked for Telkom as an Executive responsible for Public Policy and Legislation. He was also appointed as Chief Executive Officer – Gauteng Gambling Board and Secretary to Council, City of Johannesburg and City of Ekurhuleni.

5. Mr David MaimelaAppointed to the Board on 11 April 2019 BA. Hons (International Relations); B.PolSci (University of Pretoria).Mr Maimela currently works for the Competition Commission of South Africa as the Executive Head of the Office of the Commissioner. He also serves as a Member of the Council of the University of Limpopo (UL). His previous experience includes working for the Mapungubwe Institute as a Researcher for Political Economy. He also worked in the Office of the Premier in Gauteng as Deputy Director in the Policy and Governance Division.

6. Mr Michael Grant Markovitz Appointed to the Board on 16 October 2017LLB (Wits); MA in Southern African Studies (University of York); BA (Hons) in African Studies (Rhodes University); BA Journalism and Media Studies (Rhodes University).Mr Michael Markovitz has over two decades of experience as an executive and consultant in the media, technology and entertainment sectors. During this period, he headed up Primedia’s Digital Division, served on the company’s Group Executive Committee and chaired five Group Company Boards over a period of eight years.Mr Markovitz has expertise in regulation and participated in drafting South Africa’s new broadcasting legislation in 1993 at the Multi-Party Negotiation Process. He also served as the Special Adviser to the Independent Broadcasting Authority (IBA) and thereafter to ICASA’s Chairperson, Mr Mandla Langa from 1999 to 2005. In July 2018, Mr Markovitz was appointed by the Minister of Communications, to serve on the Digital Migration Advisory Council.As an active angel investor, Mr Markovitz has taken investment stakes in start-up digital businesses across South Africa. His other interests are in the hospitality industry where he is the Board Chairperson of independent hotel group, V&A Hotel (Pty) Ltd.

7. Mr Dinkwanyane Kgalema MohubaAppointed to the Board on 16 October 2017BA Paed, B.Ed (UNIN now UL); Management Development Programme (Unisa SBL); Higher Education and Leadership and Management (Wits School of Governance); Executive Management Programme (Turfloop Graduate School of Leadership, UL); Executive Development Programme (University of Stellenbosch Business School); Master of Business Administration (Regenesys Business School); Certificate in Theology and Diploma in Ministries (Teamwork Bible College International).Mr Mohuba is Chartered Public Relations Practitioner (CPRP) of Public Relations Institute of Southern Africa (PRISA) and also an Individual Member of both Institute of Directors South Africa (IODSA) and The Business Ethics Network of Africa (BEN-Africa).Mr Mohuba is currently Executive Director: Marketing and Communication and has been Acting Dean of Student Affairs at the University of Limpopo from February 2017 until November 2018. He served amongst others in the following governance and management structures, i.e. Council, Audit Committee of Council, Risk Management Committee, Senate, Executive Management Committee (EMC), Executive Committee Senate (ECS).He served as Director of Endecon Ubuntu (PTY) Ltd for ten years and also Chairperson: Board of Trustees for Mpumalanga Department of Agriculture, IDC, and UL Nguni Cattle Development Project. He has recently been appointed by the City of Johannesburg to serve as a Board Member of Johannesburg Social Housing Company (JOSHCO) Development Committee.

Mohuba has a passion for community development programmes, and has an excellent track record of serving for two terms (six years) as Chairperson of the School Governing Body at Pietersburg English Medium Primary School in Polokwane.

8. Ms Bernadette MuthienAppointed to the Board on 11 April 2019Postgraduate degrees in Political Science (University of Cape Town and Stellenbosch University) Fulbright-Amy Biehl fellow (Stanford University).

Ms Muthien serves on various international advisory boards, including the international journals Human Security Studies and Journal of Human Security the International Institute on Peace Education. She also serves on the Steering Committee of South African Women in Development (SAWID) in the Western Cape, and was recently appointed to the Board of the Pan South African Language Board (PanSALB). She also recently served part-time on South Africa’s Constitutional Commission for Cultural, Religious and Linguistic Rights (CRL). She was Deputy Director General: Social Transformation and Economic Empowerment in the Presidency and also served in the high level Economic Cluster. She also served on the Executive Council of the International Peace Research Association, was the convener of the Global Political Economy Commission and was Co-Founder of the African Peace Research and Education Association. Ms Muthien held various executive and senior management positions in academia, civil society and the public sector locally and abroad. She is an accomplished facilitator, researcher and poet who designs, implements and evaluates projects for diverse institutions locally and internationally. She has over 200 publications and conference presentations, some of which have been translated from English into at least 16 other languages.

9. Ms Jasmina PatelAppointed to the Board on 11 April 2019Diploma in Municipal Governance (Rand Afrikaans University); Bachelor of Accounting Science (University of South Africa); Certificate in Control Self-Assessment (Institute of Internal Auditors); Certification in Risk Management Assurance (Institute of Internal Auditors); Master of Business Leadership (UNISA - School of Business Leadership).

Ms Patel is currently the Chief Audit Executive at University of Limpopo responsible for performing advanced-level and/or managing assurance and consulting services for projects as per risk-based audit plan. She provides training, coaching and supervision to internal audit team members. She has been a member of the Institute of Internal Auditors South Africa (IIASA) since 2000. Ms Patel served as the Regional Governor at the IIASA Limpopo Region. She was a Senior Manager at PwC Risk Advisory Services. She gained extensive experience at PwC in internal controls and corporate governance through her involvement in internal audit assignments for both public and private sector clients, ranging from local government, parastatals, tertiary institutions and banks.

10. Mr Jack Howard Phalane Appointed to the Board on 16 October 2017BA, LLB, and LLM (Telecommunications Law) degrees and an MBA (Wits); MCom (SA and International Tax) (North West University); Certificate in Advanced Corporate Law and Securities (UNISA) and a Teachers Diploma (Dr CN Phatudi College of Education).

Mr Jack Phalane has been practising as a commercial attorney for over 14 years, specialising in Company Law. He is experienced in drafting and advising clients on various commercial transactions, including mergers and acquisitions, corporate governance, telecommunications and broadcasting law.


AT A GLANCE


11. Ms Mary Bernadette Papayya Appointed to the Board on 11 April 2019Master’s degree in Journalism (Stellenbosch University); Bachelor’s degree in Journalism; Post Graduate Management Diploma, and an advanced Diploma in Human Resources Management.

Ms Papayya is currently an Executive Director of Papayya Media, a social enterprise entity, dedicated to personal and economic growth of women, youth and previously disadvantaged communities across media, journalism and key sectors of the economy. She is a Ground Partner/Faculty Member for the University of Witwatersrand (WITS), which is ranked number one in SA. She also serves on a range of professional bodies and is Board member of the South African Press Council and also sits on the oversight committee of the environmental media entity, Roving Reporters. Ms Papayya is a trainer with the Institute for Advancement of Journalism (IAJ), a member of the Commonwealth Business Women’s Forum and the SA National Editor’s Forum (SANEF) to which she is the Founder Editor and former Secretary-General. She currently serves as a Council member and the Chairperson of the Media Freedom Sub-Committee.Ms Papayya is a media commentator, analyst, seminar speaker and dialogue convener. Ms Papayya has served in a range of decision-making positions in the broadcast and print media industry for three decades. She has worked in the media industry in SA and continent for nearly three decades in a range of leadership positions including Senior Journalist, Bureau Chief, Editor, News Manager, News Project Initiator and Regional Manager.Ms Papayya served as Convener of the Vodacom Journalist of the Year (for three years), Convener of the KZN Newsmaker of the Year Award, Convener of Nat Nakasa Bringing Home a Hero Project and Convener of the KZN Newsmaker of the Year Project.

12. Dr Marcia SocikwaAppointed to the Board on 11 April 2019Doctor of Philosophy (University of Stirling, UK); MA in International Communication (City University, UK); Bachelor of Arts and Honours (Wits); Certificate Program in Innovation for Economic Development (Harvard Kennedy School, US); Utility regulation and Strategy (University of Florida, US); Diploma in Applied Telecommunications Studies (Cable and Wireless College, UK).

Dr Socikwa is currently the Vice Principal: Operations and Facilities at Unisa.She previously served as a Board Member of the Printing Industries Federation of South Africa (PIFSA) till 29 August 2019, the Executive: Government Relations at Cell C and was an ICASA Councilor for two terms. She was the Acting Executive Director: Corporate Affairs at Unisa. She was appointed as a Senior Lecturer and later Deputy Head of Department in the Department of Communication Science at Unisa. She has also served as a Member of the ICT Policy Review Committee and Broadband Policy Review Committee.

EXECUTIVE MEMBERS OF THE BOARD13. Mr Madoda Mxakwe Group Chief Executive Officer (GCEO) Appointed on 1 July 2018MA (Global Political Economy) (Sussex University, UK); MA and BA (Hons) (University of Cape Town); Executive Leadership Development Certificates (London Business School); Post Graduate Diploma in Business Administration (Gordon Institute of Business Science); BA (Education) (Central University of Technology).

Mr Mxakwe is the Group Chief Executive Officer for the South African Broadcasting Corporation. His extensive experience emanates from a

broad combination of skills and expertise he derived from senior executive positions he held in business, communications and public affairs, both in the public service and the private sector, at national and global levels, with evidence of turning businesses around. Mr Mxakwe has successfully managed businesses and led diverse teams in Southern Africa, East Africa, West Africa and Europe within the fast moving consumer goods industry spanning more than 13 years. Prior to joining the SABC, he was Nestle’s Country Head responsible for Mozambique, Namibia, Botswana, Swaziland and Lesotho. In this role he provided strategic, commercial and financial leadership in the five countries, with a focus on driving sustainable profitable growth. Between 2013 and 2015, Mr Mxakwe’s strong leadership and results-oriented approach ensured solid growth under difficult economic conditions for Nestle Nigeria where he served as the Head of Sales in Lagos. In 2010, he was promoted to the position of Deputy Vice President of Corporate Affairs at Nestle’s headquarters in Switzerland, where he was responsible for strategically positioning Nestle, building global partnerships and reputation management. In 2005, he joined Nestle as Corporate Affairs Director for Southern and Eastern Africa, responsible for the company’s corporate communications and transformation programmes. He previously worked in the office of the Minister of Public Service and Administration, Mrs Geraldine Fraser-Moleketi, as a Director of Media Relations and Communications and was subsequently appointed the Chief of Staff in the Minister’s office.

14. Ms Yolande van Biljon Chief Financial Officer (CFO)Appointed on 25 June 2018MCom (Taxation); BCom (Hons) (University of Pretoria); BCompt (Hons) (University of South Africa); BCom (Accounting) (Rand Afrikaans University); CA (SA).

Ms van Biljon is the Chief Financial Officer of the South African Broadcasting Corporation. She gained in-depth and broad experience in Finance Departments of a number of small, medium and larger companies she served in previous years. Her career, which spans more than 20 years, depicts her skills and contribution to transformation, turnaround and growth strategies and implementation thereof. In 2014, Ms van Biljon was appointed as the Chief Financial Officer of the Road Accident Fund where she contributed to the successful turnaround of the organisation. This is evident in the institution’s achievement of four consecutive clean audits and the scores achieved against its Annual Performance Targets. Ms van Biljon’s career also includes seven years she spent in strategic positions at Denel Dynamics a division of Denel SOC Ltd. She joined this company as Manager: Finance Accounting in 2007 before being appointed Chief Financial Officer in 2008. As a member of the Executive team, she contributed to the transformation of Denel Dynamics from an organisation that was faced with insurmountable sustainability challenges, to being able to tick off all indicators of medium to long-term sustainability including, amongst others, industry acceptable financial results, strong internal controls, exceptional client relations and a healthy order book, in seven years. Following the completion of her articles, she had a brief stint at a Private Investment Bank in London.

15. Ms Sylvia TladiActing Chief Operations Officer (Acting COO) Appointed on 30 August 2019B.Proc: University of North West (Mahikeng), Certificate in Compliance Management (University of JHB), Management Advancement Programme (MAP) ( Wits Business School).Ms Sylvia Tladi’s career began in 1998 when she was appointed as Recoveries Negotiator by Mutual and Federal Insurance Company. Whilst

17

at Mutual and Federal, she assumed the roles of Section Head in 1999 and Assistant Manager in 2003. Ms. Sylvia Tladi joined the SABC in 2004 as Manager Business Accounts TV Licences and in 2011was appointed as Compliance Manager: Business and Retailer Accounts (TV Licences). In 2012, she was appointed in an acting capacity as Head: TV Licences and was formally appointed in the role on 1 May 2013. She has 21 years of experience in different business environments, 15 years of which were in management positions. Her experience includes overseeing collection litigation processes, management of operational processes, compliance management and customer services management.

PREVIOUS MEMBERS OF THE BOARD Ms Khanyisile Thandiwe Kweyama Appointed to the Board on 16 October 2017Resigned with effect from 6 December 2018Post Graduate Diploma in Management (Wits); Barloworld Executive Development Programme.Ms Khanyisile Kweyama’s wealth of experience and leadership is depicted in her current roles as the Chairperson of the Board for Brand South Africa; a Director at Telkom Ltd; the Chairperson of the SABC Interim Board; and Chairperson of Telkom’s Social and Ethics Committee. This is after she held Directorships in Boards of various companies which include BMW SA (Pty) Ltd; Barloworld Logistics Africa Ltd; Sovereign Foods Limited; Anglo American Platinum Ltd; Kumba Iron Ore; to mention but a few. Ms Kweyama served in various positions at various national statutory bodies such as the Employment Equity Commission and the National Planning Commission amongst others. In March 2016, she was appointed to Gauteng Eminent Persons Group.She has held senior positions at many companies in South Africa and abroad. She has received many accolades and awards including the Most Influential Woman in the Mining, Resources and Extractive Sector and one of the 100 Most Inspiring Women in Mining in the World.

Mr John Matisonn Appointed to the Board on 16 October 2017Resigned with effect from 6 December 2018BA (Wits); William F Benton Fellow in Broadcast Journalism, (University of Chicago); Fellow in Stellenbosch Institute for Advanced Studies; Broadcast training courses in Canada, Hong Kong and South Africa.Mr John Matisonn is a seasoned and senior newspaper, radio, television and online political journalist and foreign correspondent. He is a founder of the Public Broadcast Initiative, which prepared for the transformation of the SABC from a state broadcaster to a Public Broadcaster in 1994. He was a

Councillor on the first council of the Independent Broadcasting Authority and he chaired its Policy Committee.

He was appointed the United Nations’ Chairperson of the Electoral Media Commission in Afghanistan. Mr Matisonn returned from a second tour to Afghanistan to write the well-received book on South African media and politics; God, Spies and Lies: Finding South Africa’s future through its past. His work has been published in the New York Times, Financial Times, Washington Post and The Observer among many others, as well as in most South African newspapers and received a wide range of coverage on radio and TV channels.

He is the Executive Director of a publishing company, Ideas for Africa (Pty) Ltd. Before his appointment to the SABC Interim Board, he was the presenter and producer of a TV programme called BETWEEN THE LINES for Cape Town Television (CTV). He is a recipient of various awards including the National Association of Black Journalists’ Award (US) in 1992 for a four part radio documentary series comparing race relations in the US and South Africa.

Mr Krish Naidoo Appointed to the Board on 16 October 2017Resigned with effect from 6 December 2018

BProc (Law) (University of Durban Westville); MLitt (Strategic Studies) (University of Aberdeen, UK); Attendance Certificate in Banking Law and Financial Markets (Nelson Mandela School of Law and the University of the Witwatersrand).

Mr Naidoo has practiced as an attorney for 31 years and is currently on the non-practising roll. He has extensive experience in the fields of human rights, administrative law, mining and commercial law and conveyancing. Mr Naidoo provides legal advice to the ANC’s National Disciplinary Committee. He worked for Armscor as the Senior Manager of Corporate Communications and gained experience in liaising with the Diplomatic Corps and the Parliamentary Defence Committee. He participated in programmes relating to defence and has written articles for media and defence journals.

Mr Naidoo was a Non-Executive Director of Peregrine Treasury Solutions and the Managing Director of Public Sector Consultants where he developed risk and financial management strategies for municipalities. As the General Manager and Acting CEO of Boxing South Africa, he settled the Boxing Act and Regulations in consultation with the Chief State Law Advisor. He was a Founding Member of the National Association of Democratic Lawyers Steering Committee and a Founding Member of the National Sports Congress. He was part of the team that wrote the White Paper for the Department of Sport and Recreation.

Mr Victor Rambau Appointed to the Board on 16 October 2017Resigned with effect from 30 September 2018

MBA (Milpark Business School); BTech in Operations Management (University of Johannesburg); Diploma in Operations Management (Wits Technikon); Management Advancement Program (MAP) (Wits Business School); Six Sigma Black Belt (Vanguard Consulting UK).

Mr Victor Rambau, is an eminent strategist and former Partner of a Mining Consulting Firm and Technical Director of a Construction Company. He has vast experience and expertise in strategic planning, performance management, banking and corporate management.

From 2012 to 2016, Mr Rambau has been working for Standard Bank South Africa as Value Chain Lead responsible for various strategic projects. In 2016, Standard Bank seconded him to National Student Financial Aid Scheme (NSFAS) to assist the institution with improving its operations.

He also has extensive experience in infrastructural projects in mining and construction. In addition to his general corporate experience, he has vast experience in strategy and operations as well as a strong capability to drive innovation.


AT A GLANCE

SABC Board introduction to staff


Mr Mathatha Godfrey Tsedu Appointed to the Board on 16 October 2017Resigned with effect from 6 December 2018Honours degree in Journalism and Media Studies (Wits); attended Journalism courses in South Africa, Kenya, UK, Belgium, Zimbabwe and the USA.Mr Tsedu is a former Adjunct Professor in the Journalism Department at Wits. Mr Tsedu has conducted journalism training programmes both in South Africa and on the continent. He also started the Media24 Journalism Academy which provided work based experience and theory for journalism graduates. He started his career as a freelancer in rural Limpopo and rose up the ranks to edit several leading national newspapers. He was editor of the City Press and Sunday Times, as well as deputising for the Head of News at the SABC. His distinguished career includes being an Executive Director of SANEF; General Manager: Media24 News and Director of the Press Freedom Commission. Mr Tsedu has received a number of awards and accolades in recognition of his sterling work including an Honorary Doctorate by the University of the Western Cape for his work in the media; the Nieman Fellowship; the Nat Nakasa Award for Courageous Journalism; the Shanduka Lifetime Achiever Award as well as the Print and Digital Media Fellow for 2012/13.

15. Dr Craig van RooyenActing Chief Operations Officer (Acting COO) From 30 April 2019 to 29 August 2019PhD, (Management of Technology); MBA, (Milpark); MMP, (GIBS); National Technical Diploma (Telecommunications Technology); Senior Management Programme (University of Stellenbosch); Converged Network Strategy Program (University of the North West); Management of Innovation (University of the North West); Member of SA Institute of Electrical Engineers.Dr van Rooyen was responsible for the Technology operations management of the SABC, which included developing and executing key strategies to support the SABC’s corporate strategy, which included the Enterprise Broadcast Architecture, driving the Digital Strategy and the Information Technology and Systems, till his resignation on 6 September 2019.During his career, he held several Senior Management and Executive positions in Telkom and Vodacom, across various functions which include Operations Management, Credit Management, Marketing and Sales, Wholesale and Technology, over a career of more than 28 years. During his tenure at Vodacom, he held the position of Executive for the Group’s Technology Efficiency and Transformation, establishing and driving Effectiveness Programs in South Africa, Mozambique, Democratic Republic of Congo, Lesotho, Kenya, Tanzania and most recently Ghana. He is a part time lecturer at the Wits Business School on Digital Business.

Mr Bandlalenkosi Chris Maroleni Chief Operations Officer (COO) Appointed on 1 February 2018 to 23 April 2019BA, (UCT); BA Hons (International and Comparative Politics), (UCT); Master of Arts (UCT).Mr Maroleni has extensive experience in strategic leadership and providing direction and leadership to multifunctional teams during times of crisis and in driving and coordination of engagements with stakeholders both locally and internationally.His success as the founding Africa Editor and Head of Department of the highly successful eNews Africa Service serves as a testimony to this. Mr Maroleni also has extensive experience in recruiting and training competent technical and editorial teams, establishment of content channels and development of comprehensive broadcast scheduling and distribution plans. He has an in-depth knowledge of change management, strategy, sound operational performance and pragmatic financial planning and execution.

His work in broadcasting, telecommunications and public affairs, have led to an appreciation for nuance and the sensitivities of the South African political discourse and regional dynamics. In addition, his media experience as Head of Department and Africa Editor of eNCA and Executive Producer and Anchor of the current affairs show Africa 360 has given him a unique experience and insight into running the workings of an active broadcasting operation.

Ms Nomsa Priscilla PhilisoActing GCEO From 21 July 2017 to 30 June 2018National Diploma in Business Management (Cape Peninsula University of Technology); Leadership Development Programme (Gordon Institute of Business Sciences GIBS); Executive Development Programme (University of Stellenbosch).Ms Philiso was appointed Acting GCEO on 21 July 2017. She joined the SABC in 1994 in a management accounting role and has risen through the ranks. In 2005, she was appointed as Senior Manager: Technology Special Projects. In 2011, she became General Manager: Sales Operations. In April 2015, she joined Commercial Enterprises as a Group Executive responsible for advertising and sponsorship revenue for the SABC. In August 2016 she assumed the role of Group Executive: Television responsible for the management of four SABC TV channels. Ms Philiso has a wealth of experience, which spans over 22 years in the broadcast industry which she spent across a spectrum of fields such as finance, broadcast technology, project management and operations. Prior to joining the SABC, Ms Philiso acquired financial management experience in the retail industry.

Ms Thabile Sylvia Dlamini Acting CFO From 13 July 2017 to 24 June 2018BCom (Accounting) (RAU); BCompt (Hons)/CTA (UNISA); CA(SA); Executive Development Programme (University of Stellenbosch).Ms Dlamini joined the SABC in November 2005 as a Financial Manager and has held various positions, which include Financial Analyst in the Office of the Chief Financial Officer and General Manager: Finance in the Commercial Enterprises Division.Ms Dlamini completed her formal training with Anderson thereafter she joined Ngubane and Company as an Audit Manager. She has also served as a member and Chairperson of the Board of Media Credit Co-ordinators (MCC), which is a critical organisation in the Advertising industry. She served as a member of the Audit Committee for Kungwini Local Municipality. Ms Dlamini is registered as a Training Officer by the South African Institute of Chartered Accountants (SAICA).

19

SABC Board introduction to staff


AT A GLANCE

LEADERSHIP

Ms Nada WotshelaGE: Radio

Mr Madoda Mxakwe Group Chief Executive Officer

Ms Phathiswa MagopeniGE: News

Mr David MakubyaneGE: Television (Acting)

Ms Yolande van Biljon Chief Financial Officer

Mr Alan VisserGE: Commercial Enterprises (Acting)

Adv Ntuthuzelo VanaraHead: Legal and GE: Governance and Assurance (Acting)

Ms Sylvia Tladi Chief Operations Officer (Acting)

Mr Jerry MokgopoGM: Sport (Acting)

Mr Cosmas TshabalalaGE: Media Technology Infrastructure (Acting)

Mr Jonathan ThekisoGE: Human Resources

Ms Lindiwe BayiCompany Secretary

Ms Irene MarutlaHead: Supply Chain Management (Acting)

Ms Vuyo MthembuSABC Spokesperson

Mr Philly MoilwaGE: Corporate Affairs and Marketing (Acting)


OFFICE AND LEADERSHIP

Mr James ShikwambanaPGM: Western Cape

Mr Phumzile Mnci PGM: Eastern Cape (Acting)

Mr Raymond Makgopa PGM: North West (Acting)

Dr Vuyo Nyembezi PGM: Free State (Acting)

Mr Vusi Mabunda PGM: Mpumalanga (Acting)

Mr Busani Mthembu PGM: KwaZulu Natal (Acting)

Mr Hosea Jiyane PGM: Tshwane (Acting)

Mr Freddy Sadiki PGM: Limpopo (Acting)

Ms Mamontha MotaungPGM: Northern Cape

The SABC Provincial Offices represent the Corporation in all corners of the country and are managed by Provincial General Managers (PGM’s).

The Provincial Offices are a mirror of the Head Office, although on a much smaller scale and include staff from Radio Stations, Logistics, Finance, Sales, Technology and Human Resources.

These offices bring about provincial relevance in news and other programming, as well as playing the important role of reflecting the life and culture of people of different geographical areas.

During the 2018/19 financial year, the focus of the Provincial Offices centEred around monthly themes such as Human Rights Day in March, Youth Month in June, Heritage Month in September, World Aids Day and International Day of No Violence against Women and Children in December. January focused on matric results announcements and back to school campaigns.

Provincial Offices were actively involved in a range of developmental and social projects across the country, aligning the SABC Corporate Social Investment (CSI) activities with those of its core business. This allowed the Public Broadcaster to leverage its national footprint, resources and expertise, when partnering with NGO’s and other institutions.


AT A GLANCE

OFFICER’S OVERVIEW

GROUP CHIEF

“When you can’t change the direction of the wind, adjust your sails.”

- H Jackson Brown Jr

I want to assure South Africans that the SABC is undergoing a radical process of rehabilitation and renewal. During the course of 2018/19 financial year and under the leadership of the newly appointed Executive Directors, the SABC developed a Strategic Roadmap. The newly developed five-year Strategic Roadmap is aimed at guiding the Corporation’s turnaround to financial sustainability.

During the year under review, the SABC focussed on a number of Human Resources and Governance related strategies and initiatives. A major focus area was the review of the SABC’s operating model including the structure and good progress has been made in this regard. The SABC had to review its operating model to keep up with the shifting competitive landscape, customer needs, markets and competitive threats. This process is continuing into the new financial year.

Performance management has kicked off within the various management levels with contracting and reviews to be cascaded to the next levels of staff.

During the year under review, the SABC also made tremendous progress with clearing its external audit findings – more than 80% of the audit recommendations were implemented.

The year also saw the launch of two independent Commissions of Inquiry – one into Sexual Harassment and the other into interference in the News Room. The recommendations stemming from reports of these Commissions are being rolled-out throughout the organisation.

The implementation of our Strategic Roadmap by the SABC employees has guided the SABC throughout the past and current financial years, and has helped to keep the SABC afloat without any financial injection. This has helped the SABC to fulfil its public mandate, drive revenue growth, ensure organisation-wide cost cutting measures, launch OTT and develop a News app, drive operational and deal with the legacy governance matters.

As I indicated in the beginning, the SABC is on the edge of moving to a high performing, financial sustainable, digitised national public broadcaster. This will not be possible without the support and commitment from our employees and many business partners.

I wish to thank our committed staff members, stakeholders, the SABC Board and most importantly, our South African citizens.

…………………................................…………….Mr Madoda MxakweGroup Chief Executive Officer

When I accepted the appointment as Group Chief Executive Officer in July 2018, I found an

organisation that was technically insolvent, not only financially but also from a governance point of view.

The SABC had a huge trust deficit, lack of cohesion and no shared common value system. The maladministration of the previous administration has resulted in, amongst other things: a culture of impunity; a laissez-faire attitude to the work process; disregard of policies and procedures; no consequence management; the inability for people placed in senior positions to perform; lack of a high performance culture; and entrenched culture of unethical conduct. Upon accepting the appointment, I also knew that I was joining an organisation with great opportunities for change and recovery and ultimately sustainability. The broadcasting landscape is evolving at an exceptional pace; there is a plethora of new technologies in the market; opportunities to adapt to the constant changes in audience behaviour and the way they consume content; participate effectively in the complex competitive environment as well as take on the great challenges public-service broadcasting across the globe is facing. It is essential that the SABC transforms itself to meet its vision of becoming the leading, credible voice and face of the nation and the continent. The year under review was extremely challenging on many fronts. The SABC ended the 2018/19 financial year with a disappointing cash balance of R72 million. During the course of the year very little cash was available and as a result the SABC could not pay its many service providers, adhere to its committed contracts, or commission local content productions. The SABC’s loss for the year under review was R482 million. Although this was not the financial situation the Corporation wanted at year-end, the current loss is a 35% improvement on the prior year. Total Revenue of R6.45 billion was R1 billion (14%) below the budget of R7.48 billion. Expenses for the full year were R6.98 billion, which resulted in an

underspending of R784.2million (10%) against the budget of R7.76 billion. As seen from the above, the

SABC’s financial position remains serious. Because of the dire financial situation and its

going concern status, the SABC had applied for Government Funding. Immense effort went into

ensuring that the funding application meets all the necessary criteria and an outcome on

the same is expected soon.


As the only Public Service Broadcaster, the SABC must offer a range of informative, educational and entertainment programmes that showcase South African attitudes, opinions, ideas, values, talent and artistic creativity.

OVERVIEW

Programming must be in all the country’s official languages, offer a plurality of views and a variety of news, information and analyses from a South African perspective, and advance the national and public interest. As a custodian of the country’s diverse cultural heritage and expressions, the SABC is a platform for the expression of the hopes, dreams and aspirations of South Africans, be these past, present or in the future.

The SABC has been going through turbulent times in the past few years and yet it must deliver on its public service mandate while operating in a rapidly changing business environment. Factors, structural and symptomatic, have impacted on the SABC’s viability over the past years. These have led to the dire financial situation that the SABC is currently finding itself in. The following are some of the main contributors to the Corporation’s current status:

• Funding model of the SABC (over-reliance on commercial/advertising revenue);

• Regulatory/legislative framework not keeping pace with growth of digital technology, the convergence of media, technology and telecommunications;

• Changing media consumption and audience needs;

• Global slowdown in economic growth and related foreign exchange fluctuations significantly affecting the core business of the SABC, as it needs to acquire content, sports rights and technology;

• Multinational advertisers have reduced their industry-wide spending over the past 24 months;

• SABC’s operating environment having to compete with commercial broadcasters, while complying with public sector operating guidelines; and

• The cost of mandate compounded by higher costs related to delivery on the mandate, especially for events of national importance of which sports is a major contributor, both planned and unplanned.

The SABC has also faced many internal challenges, including a decline in audience and revenue, some decisions that were taken were detrimental to the SABC’s revenue and reputation, and leadership instability that prevented the timely implementation of policy and business decisions to stabilise the institution.

The SABC has been working hard during the past year to implement its Turnaround Strategies which are aimed at ensuring that the SABC is able to operate competitively in the evolving media and digital landscape while fulfilling its public mandate to provide informative, educational and entertaining content to all South Africans. Concerted efforts went into enhancing revenue generation from traditional and alternative revenue streams. The revenue initiatives started showing early signs of positive returns. Cash preservation measures were put in place during the period under review and at the end of March 2019 the SABC preserved close to R800 million which is attributable to these measures. This amount is unfortunately not enough to elevate the current and projected losses of the Corporation.

The SABC’s dire financial situation worsened during the fourth quarter and the Corporation ended the last Quarter with a cash balance of only R72 million. The Corporation’s cash flow was depleted and therefore could not fulfil its obligations including payments to service providers, adhere to its committed contracts, and commission local content productions.

At the end of the financial year, Trade and other Payables amounted to R1.6 billion. Several major content providers of key programming (e.g. ‘soapies’) ceased production and were retaining content until outstanding payments were processed. The Public Broadcaster relies heavily on these programmes to generate advertising revenue and the inability to invest in content negatively affects the financial sustainability of the SABC and the local production industry.

Furthermore, service providers that successfully tendered for the upgrading or implementation of broadcast critical equipment were declining tenders or demanding upfront payment. Many service providers stopped bidding for tenders in totality. Maintenance on the SABC’s infrastructure and buildings could not be performed placing the Corporation in an extremely risky position in terms of health and safety. Sports Rights could not be acquired and the SABC faced increased public pressure and outcry for the non-broadcasting of Sports of National Interest. The offers that the SABC made to acquire Sports Rights were rejected. The SABC has not been receiving any funding for the broadcasting of Events of National Interest and therefore some of these productions had to be ceased during the period under review.

During the financial year under review and under the newly appointed executive directors, the SABC developed the Strategic Roadmap aimed at turning the Corporation around and return it to a path of financial sustainability.

In order to properly transition the SABC into the Fourth Industrial Revolution (4IR), the Corporation has also commenced development of a comprehensive digital strategy which will ensure that, over time, all SABC radio and television services are affordable and available everywhere on all devices and platforms.

The SABC’s strategy for the forthcoming three year period is based on the newly developed Pillars and as depicted in its 2019/20 financial year Corporate Plan. This strategic direction requires the leadership of the Corporation to commit to a significant transformation journey, which effectively fuses innovative technologies and a trained workforce to improve the performance of the SABC. The financial sustainability of the SABC is both a necessity for the success and an outcome of this approach.

Management and staff interactions

The South African Broadcasting Corporation (SOC) Limited (‘The SABC’) is a Schedule 2 (‘Major Public Entity’) entity in terms of the Public Finance Management Act No. 1 of 1999

(‘PFMA’), as amended.

• The Companies Act No. 71 of 2008, as amended.

In executing its mandate, the SABC is also guided, amongst others, by:

• The Public Finance Management Act (‘PFMA’) No.1 of, 1999, as amended;

• The King IV Report on Corporate Governance for South Africa™;

• South African National Treasury Regulations;

• The SABC’s Delegation of Authority Framework (DAF);

• Basic Conditions of Employment Act No. 75 of 1997, as amended;

• Labour Relations Act No. 66 of 1995, as amended;

• Employment Equity Act No. 55 of 1998, as amended;

• The Competition Act 89 of 1998, as amended;

• The Preferential Procurement Policy Framework Act No. 5 of 2000, as amended; and

• The Skills Development Act No. 97 of 1998, as amended.

The SABC CharterSection 6 of the Broadcasting Act outlines the Charter of the SABC. Subsection 6(3) provides that the Corporation, in pursuit of its objectives and in the exercise of its powers, enjoys freedom of expression and journalistic, creative and programming independence as enshrined in the Constitution.

Subsection 6(4) states that the Corporation must encourage the development of South African expression by providing, in South African official languages, a wide range of programming that:

(a) Reflects South African attitudes, opinions, ideas, values and artistic creativity;

(b) Displays South African talent in education and entertainment programmes;

(c) Offers a plurality of views and a variety of news, information and analysis from a South African point of view; and

(d) Advances the national and public interest.

In addition to its legislative and regulatory obligations, the SABC Board is responsible for the control and direction of the affairs of the Corporation as set out in the SABC’s Memorandum of Incorporation (‘MoI’), as approved by the Shareholder, represented by the Minister of Communications. The relationship between the SABC, its Board and the Shareholder is governed by a Shareholder Compact, reviewed and renewed on an annual basis. The MoI and the Shareholder Compact ensure that the Corporation complies with the essential pillars of a governance framework, which includes the Broadcasting Act, the Companies Act, the PFMA and the Constitution.


AT A GLANCE

AND OTHER MANDATES

Founding and Current LegislationThe SABC was established in terms of an Act of

Parliament, the Broadcasting Act No. 22 of 1936, which replaced the previous state-controlled African

Broadcasting Corporation, formed in 1927 and included the South West African Broadcasting Corporation, which later

became the Namibia Broadcasting Corporation. The 1936 Act was subsequently replaced by the Broadcasting Act No. 73 of

1976, as amended, that was repealed by the Broadcasting Act No. 4 of 1999 (‘the Broadcasting Act’), as amended.

The Broadcasting Amendment Act No. 64 of 2002 later provided for the conversion of the old Corporation established in 1927 into

a public company and provided that the affairs of the SABC would be operated in accordance with the Companies Act of 1973, which has since been repealed by the Companies Act No. 71 of 2008, as amended.

The Broadcasting Act The Broadcasting Act remains the SABC’s core founding statute. The SABC’s obligations in terms of the Broadcasting Act are encapsulated in the Independent Communications Authority of South Africa (‘ICASA’) Regulations and licence conditions for the Corporation’s five television channels and 18 radio stations.

The business of the SABC is further defined by the Broadcasting Act into two distinct services namely the Public Broadcasting Services (‘PBS’) and Public Commercial Services (‘PCS’), which are to be administered separately. Each SABC radio service and television channel is licensed separately by ICASA and each is required to adhere to their respective licence conditions and the provisions of the Broadcasting Act, including the SABC Charter. Since 2014 to 2018, the SABC, in relation to the review of the Broadcasting Policy and Act, has been advancing the argument for the removal of the distinction as the SABC in practice has a unitary model that governs its services. In the meantime the Corporation is exploring the possibility of implementing the segregated reporting, as required by the Act.

Public and Commercial Broadcasting Service Mandate

The mandate of the SABC, as a Public Broadcaster, is embedded in a range of statutes, regulations, policies, codes of conduct and license conditions. The SABC’s statutory framework includes:

• The Constitution of the Republic of South Africa No. 108 of 1996, as amended;• Broadcasting Act No. 4 of 1999, as amended;

• Independent Communications Authority of South Africa Act No. 13 of 2000, as amended; • The Electronic Communications Act No. 36 of

2005, as amended; and


The Objectives of the SABCThe objectives of the Corporation, as set out in Section 8 of the Broadcasting Act are:

(a) To make its services available throughout the Republic;

(b) To provide sound and television broadcasting services, whether by analogue or digital means and to provide sound and television programmes of information, education and entertainment funded by advertisements, subscription, sponsorship, licence fees or any other means of finance;

(c) To acquire from time to time a licence or licences for such period and subject to such regulations, provisions and licence conditions as may be prescribed by the Authority;

(d) To provide, in its public broadcasting services, radio and television programming that informs, educates and entertains;

(e) To be responsive to audience needs, including the needs of the deaf and the blind and account on how to meet those needs;

(f) To provide other services, whether or not broadcasting or programme supply services, such services being ancillary services;

(g) To provide television and radio programmes and any other material to be transmitted or distributed by the common carrier for free-to-air reception by the public subject to section 33 of this Act;

(h) To provide to other bodies by such means and methods as may be convenient, services, programmes and materials to be transmitted or distributed by such bodies and to receive from such other bodies services, programmes and materials to be transmitted by stations of the Corporation for reception as above;

(i) To commission, compile, prepare, edit, make, print, publish, issue, circulate and distribute, with or without charge, such books, magazines, periodicals, journals, printed matter, records, cassettes, compact disks, video tapes, audio-visual and interactive material, whether analogue or digital and whether on media now known or hereafter invented, as may be conducive to any of the objects of the Corporation;

(j) To establish and maintain libraries and archives containing materials relevant to the objects of the Corporation and to make available to the public such libraries and archives with or without charge;

(k) To organise, present, produce, provide or subsidise concerts, shows, variety performances, revues, musical and other productions and performances and other entertainment whether live or recorded in connection with the broadcasting and programme supply services of the Corporation or for any purpose incidental thereto;

(l) To collect news and information in any part of the world and in any manner that may be thought fit and to establish and subscribe to news agencies;

(m) To carry out research and development work in relation to any technology relevant to the objects of the Corporation and to acquire by operation of law, registration, purchase, assignment, licence or otherwise copyright and designs, trademarks, trade names and any other intellectual, industrial and commercial property rights;

(n) To nurture South African talent and train people in production skills and carry out research and development for the benefit of audiences;

(o) To develop, produce, manufacture, purchase, acquire, use, display, sell, rent or dispose of sound recordings and films and materials and apparatus for use in connection with such sound recordings and films; and

(p) To develop and extend the services of the Corporation beyond the borders of South Africa.

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd26

performance


Since 2009Soccerzone is South Africa’s premium review Television show in which audiences get to relive the best moments accompanied by an in-depth analysis of matches. The show brings the who’s who of the football world, making them accessible via interviews conducted in the studio and online. Mondays live at 21:00 on SABC1.

27

PERFORMANCE

“Sport UNITES and teaches us to

NEVER give up.”

25 YEARS OF FREEDOMCOVERED BY THE SABC


PERFORMANCE

Nkosi sikeleli Afrika

1st DemocraticElections

President Nelson Mandela’s inauguration

27 April, SA Flag Adoption

Current SABC still represents all SA languages across TV and Radio

Current SABC still the largest media house in SA

Introduction of the Reconstruction and Development Programme (RDP)

SA Rugby World Cup Champions

Truth and Reconciliation Commission

Africa Cup of Nations Champions

The Olympics SA National Anthem Adopted

President Thabo Mbeki’s inauguration

Nkosi Johnson Makes an Iconic speech

Mark Shuttleworth goes to space

SA hosts Cricket World Cup

Charlize Theron wins an Oscar

“Tsotsi” winsan Oscar


President Kgalema Motlante’s inauguration

Grand Opening of World Class soccer Stadiums

1st World Cup goal on African soil

President Jacob Zuma steps down

President Cyril Ramaphosa’sinauguration


#SABCFREEDOM25

Nkosi sikeleli Afrika

1st DemocraticElections

President Nelson Mandela’s inauguration

27 April, SA Flag Adoption

Current SABC still represents all SA languages across TV and Radio

Current SABC still the largest media house in SA

Introduction of the Reconstruction and Development Programme (RDP)


Truth and Reconciliation Commission

Africa Cup of Nations Champions

The Olympics SA National Anthem Adopted

President Thabo Mbeki’s inauguration

Nkosi Johnson Makes an Iconic speech

Mark Shuttleworth goes to space

SA hosts Cricket World Cup

Charlize Theron wins an Oscar

“Tsotsi” winsan Oscar


President Kgalema Motlante’s inauguration

Grand Opening of World Class soccer Stadiums

1st World Cup goal on African soil

President Jacob Zuma steps down

President Cyril Ramaphosa’sinauguration


PERFORMANCE

ANALYSISService Delivery

EnvironmentThe Corporation operates television,

radio and online media services that are fundamental to the democracy and

development of South African citizens. At a time when the availability of foreign content is exploding

and with unprecedented changes in broadcasting technology, consumer expectations and industry

structure, public broadcasting continues to play a critical role in South Africa and around the world.

Television remains the medium of choice for most South Africans. The Public Broadcaster’s three terrestrial television

channels attract, on average, 27.9 million South Africans in a typical month. The SABC’s News channel and SABC Encore

channel are delivered through the satellite platform and reach 4.5 million and 4.4 million viewers respectively in a typical month.

Fifteen of the nation’s Top 20 television programmes are carried on the SABC.

A significant number of South Africans still depend solely on radio as a source of information. The SABC provides radio services to all South Africans in their preferred language through its 18 Radio Stations. The combined average number of 28.9 million SABC Radio listeners per week makes for an offering that no other broadcaster can equal. The SABC also has a growing digital media presence across the internet including, social media, online video, podcasts and streaming media. SABC television channels and shows, radio stations and other brands have some of the most popular and engaged audiences in the South African social media landscape.• InternetAll SABC radio stations and television channels, as well as SABC News, Sport and Education have dedicated websites, consolidated under the SABC Corporate portal. • Podcasts and streamingAll radio stations offer live audio streaming via their own dedicated websites as well as via the SABC portal. The radio stations also offer podcasts of their most popular shows and SABC News publish hourly news bulletin podcasts.• Online VideoThe SABC hosts YouTube channels for SABC1, SABC2 and SABC3, as well as for a number of its most popular television shows. The SABC News channel on YouTube has about 5 million views on average per month and is globally the 10th most popular South African YouTube channel and the leading news YouTube channel in the country.• Mobile

Mobile applications are being developed for SABC programming, with the SABC News App primed to drive traffic and uptake of the SABC’s content in this ecosystem. Annually SABC Education also hosts the National

Department of Basic Education’s matric results on its mobile App. Learners are able to register using SMS

or USSD to receive their results on their mobiles.• Social Media

All brands are active on social media, especially Facebook and Twitter, where they are amongst

the most popular social media platforms in the country.

Organisational EnvironmentThe SABC must deliver on its public service mandate while operating in a rapidly changing business environment. Factors such as the growth of digital technology; the convergence of media, technology and telecommunications; and changing media consumption are fundamentally altering the global media sector. In South Africa, the delayed implementation of digital terrestrial television (DTT) has been a limiting factor. Also, the global economic slowdown and related foreign exchange fluctuations significantly affect the core business of the SABC, as it needs to acquire content, sports rights and technologies.South Africa’s broadcasting legislation provides for a three-tier structure for broadcasting services: Public, Commercial and Community. The SABC is South Africa’s only Public Broadcaster, and for public accountability purposes consists of two separate divisions controlled by the Board – a Public Service division and a Commercial Service division, in each of which the SABC runs a number of radio stations and television channels. Each has a set of licence conditions that impose obligations, including quotas for local content and requirements for geographical coverage and language services. These are laid down by ICASA, which is responsible for monitoring compliance with the licence conditions and the objectives of the Charter. Like all the broadcasters, the SABC is required to adhere to the Code of Conduct for Broadcasters that is approved by ICASA. As a member of the National Association of Broadcasters (NAB), the SABC is subject to the rules of the Broadcasting Complaints Commission of South Africa, which ensures that broadcasters adhere to certain minimum standards of programme content. During the financial year under review, the SABC embarked on a review of its operating model and structure to ensure that the Corporation would be able to deliver on its revised strategic direction. The revised operating model will ensure an agile organisation, able to respond to challenges of the broadcasting environment. The organisational structure is being adapted to ensure alignment to the new operating model and will be implemented in alignment with the outcomes of the Skills Audit.Various Executive appointments were made during the year under review including that of the Group Chief Executive Officer, Chief Financial Officer, Group Executive: Media Technology Infrastructure, Group Executive: Corporate Affairs and Head of Legal. These appointments provided the SABC with the necessary stability from a leadership perspective. After a number of resignations of Non-Executive Directors during November and December 2018, the Board of the SABC became inquorate which impacted negatively on business operations in terms of approval processes. The process to fill the vacant positions on the Board started towards the end of the 2018/19 financial year.

Key Policy Developments and Legislative ChangesDuring the financial period under review, Parliament published a number of important Acts and Bills (if passed into law). The SABC was involved in various on-going policy and regulatory processes that are intended to culminate in new legislation which will have implications on the SABC’s revenue generation and business operations in future years• Local Content Regulations published by ICASAIncreased local content quotas for TV and Radio services. New conditions on the commissioning of content from independent production companies. 50% of annual independently produced programmes budget must be spent on previously marginalised local African languages and/or programmes from regions outside the Durban, Cape Town and Johannesburg Metropolitan cities with effect from 23 March 2018. New steep penalties with fines up to R5 million have been introduced for non-compliance. To this end, the SABC engaged ICASA on the challenges


presented by this new regulatory requirement and this was also done through the NAB. ICASA has since requested the TV industry to comply with the local content regulations. The SABC will continue to engage ICASA.• Electronic Communications Amendment BillOn 17 November 2017, the Department of Telecommunications and Postal Services (‘the DTPS’) published the Electronic Communications Amendment Bill (‘the Bill’) for public comment. In the main the Bill seeks to give effect to the National Integrated ICT Policy. The Bill empowers the Minister of DTPS to control the radio frequency spectrum of both the broadcasting sector and the telecommunication sector. It further emphasises ‘the use it or lose it’ principle that is applicable to radio frequency spectrum licensees. The SABC has submitted written and oral representations the DTPS. However, the DOC has since halted the process to accommodate the forth industrial revolution projects. • Review of Must Carry RegulationsThere is an obligation for Pay TV services to carry SABC channels free of charge in line with the regulations. This obligation disregards the value of SABC channels and gives Pay TV services undue leverage of growing their services through the SABC content. The SABC Board has engaged ICASA on the must carry challenges and as a result ICASA has agreed to the review. In the 2018/19 financial year ICASA instituted the Regulatory Impact Assessment (RIA) process on the must carry regulations to which the SABC responded to. The SABC will continue to participate in the review process. • Review of Sports Broadcasting Rights RegulationsThere is an obligation to broadcast listed sports events in line with these regulations. The SABC has submitted to ICASA the negative effects of the 2010 Sports Regulations which yielded unintended consequences of the commercialisation of sports rights, inaccessibility of premium sport content and unreasonable sub-licensing conditions of sports rights. The next step is to participate in oral hearing in the 2019/20 financial year. • Ban on Alcohol AdvertisingThe Department of Trade and Industry (DTI) has published the draft national liquor policy and the National Liquor Amendment Bill which propose advertising restrictions on both TV and Radio from 06:00 to 22:00 and the removal of content that glamorises liquor on the broadcasting platform. The legislation development process is underway and thereafter the DTI will issue the regulations for public comment. The SABC will participate in the regulation development process. The SABC stands to lose over R800m should the advertising restrictions be implemented. • Unhealthy Foods Advertising Regulations The Department of Health (DoH) has published the Unhealthy Foods Advertising Draft Regulations which prohibit advertising of unhealthy foods on TV or Radio from 06:00 to 21:00. The SABC has submitted its written representation to DoH. We are waiting the publication of final regulations. • Subscription Broadcasting Services Regulations The review of the current subscription broadcasting services regulatory framework, in order to remove barriers to entry in the Pay TV market and to assess the state of competition in this sector, is in process The regulation development process is underway and thus far the SABC has submitted written and oral representation to ICASA on the subject matter. ICASA has since published the Draft Findings Document for further comment, the SABC will respond to it.• Digital Terrestrial Television – Broadcasting Digital Migration Compliance with the digital migration regulations. The ‘use it or lose it’ principle implies that unused radio frequencies will be forfeited. The SABC continues to engage ICASA to preserve the spectrum until funding is secured to ensure that the SABC’s current and future services can reach the masses.

31

• Review of Public Broadcasting Policy The SABC has made a submission to call for the review of legislation and regulations that have led to both an exponential increase in the cost of public mandate programming, have reduced potential revenue and created unfair competitive conditions for the SABC (i.e. the Broadcasting Act, TV Licence Fee regulations, Sports Broadcasting Services Regulations, Must Carry Regulations and Digital Migration Regulations). The SABC is awaiting the publication of the revised policy.• Film and Publication Board (FPB) Online Content Regulation/

Policy All online content must be classified in line with the FPB regulations. The SABC has submitted its written and oral representations to Parliament on the FPB Amendment Bill and it further submitted its written representation to the FPB with regards to the FPB Online Content Regulations. However, the FPB Online Content Regulations have been halted until such time that the FPB Amendment Bill is approved by Parliament. Thereafter, the FPB will publish the FPB Online Content Regulations for further public comment.• Draft Code for Persons with Disabilities The Draft Code seeks to drive universal access of broadcasting services for Persons with Disabilities. The Draft Code prescribes minimum requirements for subtitling, audio captioning, audio description and closed captioning over a period of 10 years, for each tier of broadcasting. The regulations will come into effect post the analogue switch-off date. Penalties for contraventions will result in a fine not exceeding R5 million and the Code will come into effect 18 months after publication. The SABC has submitted its written representation to ICASA in January 2018 and will participate in the upcoming public hearings. • Digital Sound Broadcasting (DSB) Regulatory Framework InquiryICASA has instituted the inquiry into DSB regulatory framework. The SABC has submitted a written representation to ICASA to address the management of the dual illumination to influence the adoption of the DSB standard similar to the SADC standard and to ensure that DSB implementation doesn’t yield signal interference. The SABC will continue to participate in the regulation development process. • Digital Sound Broadcasting (DSB) Policy Directive The DoC published the Policy Directive for public comment. DSB has a potential to help achieve universal service access mandate and the signal distribution costs are much less with DSB. The SABC submitted written representation to the DoC so that the existing radio services can be incentivised during the dual illumination period. • The Copyright Amendment Bill 13B of 2017The Copyright Amendment Bill 13B of 2017 (‘Bill’) was deliberated on by both the National Assembly and the National Council of Provinces in March 2019. The Bill seeks to amend the Copyright Act No. 98 of 1978 that is 41 years old, by providing for measures that protect the economic interests of the authors and creators of work against infringement through the promotion of the progress of science and useful creative activities. The Bill also seeks to make copyright consistent with the digital era, developments at a multilateral level, international standards and introduce improved exceptions and limitations into Copyright Law. In consideration of the impact of the Bill on the SABC, some of the proposed provisions will result in the SABC not being able to recoup financial returns on commissioned work. The underlying fundamental proposal is that despite the assignment of copyright in literary, musical and audio-visual works, the author and performer of such will be entitled to receive royalties indefinitely. The implementation of the Bill may therefore force the SABC to decide not to repeat most of its commissioned programmes to avoid grave financial implications resulting in the indefinite payment of royalties to all performers in television or radio programmes owned by the SABC.


PERFORMANCE

OUTCOME ORIENTED GOALS

sure that content was commissioned from Provinces outside of Gauteng. Approximately 23 such programmes were broadcast during the year. An increase in the hours of content broadcast in marginalised languages was also noteworthy.

Human ResourcesGoal 3: To develop a dynamic and motivated fit-for-purpose workforce that embraces learning and is sufficiently adaptable to migrate into the digital age.Operating Model and Structure ReviewThe SABC embarked on a review of its Operating Model and structure to ensure that the Corporation would be able to deliver on its revised strategic direction. The revised Operating Model will ensure an agile organisation, able to respond to challenges of the dinamic media environment. The organisational structure is being adapted to ensure alignment to the new Operating Model and will be aligned with the outcomes of the Skills Audit.Performance ManagementThe Performance Management campaign was driven from the top and was well received at management level. Challenges were, however, experienced at bargaining unit level, with a dispute being lodged against the implementation of Performance Management by organised labour. This is currently being addressed to ensure an effective roll-out in the new financial year.Workplace Skills Plan – Digital TrainingIn order to prepare the Corporation for the digital era, training regarding the digitisation of the Corporation was prioritised. However, due to financial constraints the Corporation could not achieve its target of completing 80% of its identified digital training needs.

GovernanceGoal 4: To ensure compliant governance practices complemented by effective risk management and internal controls.Under the Governance pillar the SABC’s aim is to deliver on the highest standards of compliance with not only the letter, but also the spirit of relevant governance codes. To do this, processes and practices are reviewed on an on-going basis to ensure compliance with relevant legal requirements, the use of funds in an economic, efficient and effective manner, and adherence to good corporate governance practices that are continually benchmarked to be in line with the risk management framework issued by National Treasury. In an effort to strengthen the Corporation’s internal controls additional effort went into clearing previous internal and external audit findings. Significant progress was made on the clearing of external audit findings with 81% of finding being cleared by the end of the fiscal. It should be noted that this is an on-going process that will continue in the new financial year. All employees and members of the Board of Directors are required to disclose their business interests, affiliations to professional bodies, (board memberships), related party interests, additional work and gifts received, which is in line with the SABC’s Code of Business Conduct and Ethics, Conflicts of Interests Policy, SCM Policy and SABC Personnel Regulations. Awareness activities took place at various levels throughout the fiscal to encourage staff to disclose their interests and highlight what was required to be disclosed and what the disclosure process was. As at 31 March 2019, 98.3% of SABC employees had disclosed their interests. This is evidence that the efforts were productive as confirmed by the increased disclosure rate.There has not been a significant improvement in the number of policies that are being reviewed for the 2018/19 financial year. Unfortunately, the majority of policies remain out-dated, not meeting the requirement of being reviewed every two years as per the Policy Management Framework

Financial SustainabilityGoal 1: To be a financially sustainable

organisationThe SABC’s financial position remained

extremely fragile during the year under review. Total revenue for the full financial year was R6.46

billion representing an underperformance of R1 billion (13%) against the budget of R7.42 billion. The

performance also shows a decline of 2% against prior year revenue numbers. The SABC’s major revenue

streams (advertising revenue and TV licence fees) did not make target by the end of the financial year.

Expenses for the full year was R6.91 billion, which resulted in a saving of 10% against the budget of R7.76 billion.

Savings were yielded on amortisation of content, broadcast costs and collection costs.

The above performance yielded a total Net loss of R482 million for FY2018/19. The prior year’s restated net loss was R744 million.

This represents a 35% improvement on prior year reported losses.As at 31 March 2019, the SABC’s cash position was R72.6 million. Net cash outflow of R58 million since the beginning of the financial year. The Corporation was still not able to generate sufficient cash to meet all of its financial obligations.

At the end of the fiscal the SABC’s creditors’ payment days stood at 143 days compared to the 130 days of the previous year. The Corporation was unable to settle outstanding accounts within the prescribed period owing to insufficient funds. Debtors’ days of 53 days ensured that cash flow was improved during the year. However, it was not sufficient to service all outstanding debt. The reduction in collection days was mainly achieved through an early-settlement discount for advertising accounts.

Content and PlatformsGoal 2: To acquire and schedule compelling and quality programming, spanning a range of genres, in all official South African languages, across traditional and digital media platforms.The SABC performed very well in its key activity of contributing to nation-building by acquiring and scheduling content that reflects the South African story. Local content quotas on all three television channels were exceeded during the year under review. PBS radio stations also exceeded all their genre quotas in terms of News, Current Affairs, Informal Knowledge Building, Education, Children and Drama ensuring that the nation is informed, educated and entertained in the language of their choice. Radio stations complied with the ICASA Regulations on South African Music as per the Government Gazette, dated 23 March 2016 which ruled that from 26 September 2018 all PBS radio stations had to increase the local music quota played in a reporting period from the previous 60% to the revised 70% and PCS stations from 25% to 35%. SAfm was the only station that missed local music target for period under review. An

application to revise Lotus FM’s local music quota from 70% to 35% has been approved by ICASA. The Radio

Station was unable to meet the PBS quota due to non-availability of locally produced Indian music.

The SABC is committed to provide the South African public with a wide range of high quality local

programmes that reflect the diverse cultures, languages, life experiences, interests and

needs of its audiences. During the 2018/19 financial year the public broadcaster made


of the organisation. As at the end March 2019, only 19% of policies were up to date and 41 policies were under review, mostly belonging to Finance. No new risks assessments were conducted during the fourth quarter. However, the ERM department focused on the monitoring of mitigation plans, following up with management and risk champions and updating the Cura system with progress made. Statistics show that the implementation

33

ON THE PREDETERMINED OBJECTIVES

of tasks increased from 5% at the end of the second quarter to 11% at the end of the third quarter to 38% at the end of the fourth quarter. The financial challenges faced by the Corporation negatively affected the implementation of most strategic and operational mitigation plans such that the respective intended objectives were not achieved.

FY2018/19 PERFORMANCE AGAINST PREDETERMINED OBJECTIVESStrategic Objective

Key Activities Performance Indicator(s)

Measurement Tools/ Evidence

Targets Performance2018/19 Actual Performance Comments

FINANCIAL SUSTAINABILITYGoal: To be a financially sustainable organisation.ENSURE THAT THE SABC IS FINANCIALLY SUSTAINABLE THROUGH REVENUE AND COST MANAGEMENT

Manage revenue and expenditure in accordance with the approved budget.

Decrease net loss before interest and tax.

Annual financial statements.

Reduce net loss before interest and tax to R287.6 million.

R473.1 million

SABC’s major revenue streams (advertising and TV licence fees) did not make target resulting in underperformance in revenue (Actual revenue of R6,4 billion compared to budget of R6.6 billion). Savings of R784m were realised, however, the net result was a loss.

ENSURE THAT THE SABC IS ABLE TO MEET ITS FINANCIAL OBLIGATIONS THROUGH ADEQUATE CASH MANAGEMENT

Maintain a favourable cash position through working capital management (financial ratios).

Maintain favourable creditors’ payment average days’ ratio.

CFO Report, Quarterly Reports.

60 average creditors payment days. 143 days

The SABC’s cash crisis resulted in creditors not being paid at all or only partially.

Maintain favourable debtors’ collection average days’ ratio.

CFO Report, Quarterly Reports.

60 average debtors collection days. 53 days Achieved.

CONTENT AND PLATFORMSGoal: To acquire and schedule compelling and quality programming, spanning a range of genres, in all official South African languages, and exceeding mandate objectives across traditional and digital media platforms.

MEET ICASA LOCAL CONTENT REQUIREMENTS AS PER THE SABC’s BROADCAST LICENCE

Contribute to nation-building by acquiring and scheduling content that reflects the South African story.

Achieve ICASA PBS local content quotas as per SABC broadcast licence.

Broadcast Schedules. Quarterly ICASA licensing conditions report.

PBS • SABC1: 55%• SABC2: 55%

PBS • SABC1: 77.7%• SABC2: 2:80%

Achieved.In addition to achieving minimum percentage full day, the SABC also achieved minimum quotas during prime time as below:• SABC1 77.1%• SABC2 87.8%

Achieve ICASA PCS local content quotas as per SABC broadcast licence.

PCS• SABC3: 35%

PCS• SABC3: 62.5% Achieved.

Achieve ICASA PBS local music quotas as per SABC Broadcast licence.


PBS Stations: 70% 74.5% Achieved.

Achieve ICASA PCS local music quotas as per SABC Broadcast licence

PCS Stations: 35% 39.4% Achieved.

Achieve ICASA PBS Radio genre quotas as per SABC Broadcast licence excluding Radio 2000, XK FM, Lotus and Tru FM.


• News: 60 min/day;• Current Affairs: 60 min/

day;• Informal Knowledge build-

ing: 180 min/week; • Education: 300 min/week;• Children: 60 min/week• Drama: 150 min/week

• News :76 min/day:• Current Affairs: 99 min/day• Informal Knowledge build-

ing:1 498 min/week• Education:358 min/week• Children: 133 min/week• Drama:198 min/week

Achieved.

EMBRACE DIVERSITY IN TELEVISION BROADCASTING THROUGH THE PRODUCTION OF PROVINCIAL CONTENT AND MARGINALISED LANGUAGE PROGRAMMING.

Increase number of provincial programmes.

Number of provincial programmes broadcast across SABC TV channels.

Broadcasting schedule.

10 programmes• Limpopo – 2• Eastern cape – 1• Free State – 1• Mpumalanga – 1• KZN – 2• Western Cape - 3

14 programmes• Limpopo – 0• Eastern cape – 1• Free State – 1• Mpumalanga – 0• KZN – 2• Western Cape - 10

Achieved.

Meet ICASA marginalised lan-guage targets on PBS platforms.

Hours of marginalised language content broadcast on SABC’s TV channels in prime time.

Broadcast Schedules P&R ICASA Quarterly Report.

1 hour 48 minutes 1 hour 41 minutes

Not achieved. Cash challenges impacted on the production of programmes in marginalised languages.SABC1 achieved 1 hour 19mintues and SABC2 2 hours 3 minutes.


PERFORMANCE

FY2018/19 PERFORMANCE AGAINST PREDETERMINED OBJECTIVES (continues)Strategic Objective Key Activities Performance

Indicator(s)Measurement

Tools/ EvidenceTargets Performance2018/19 Actual Performance Comments

HUMAN RESOURCESGoal: to develop a dynamic and motivated fit-for-purpose workforce that embraces learning and is sufficiently adaptable to migrate into the digital age.

ATTRACTING AND RETAINING STAFF THROUGH EFFECTIVE TALENT MANAGEMENT

Develop and implement a Career Progression Framework to enhance employee development and improve employee retention.

An approved and piloted Career Progression Framework and Policy.

Approved Framework and Policy piloted in Human Resources.

Career Progression Framework piloted in Human Resources.

Not achieved. Career Progression Framework was approved by EXCO. Consultation sessions still to be held with Organised Labour on the Career Progression Policy prior to approval.

The policy will be submitted to EXCO and Board for approval once the consultation with organised labour has been completed.

Review the current Operating Model and Structure of the organisation.

Revised operating model and structure approved. Resolutions / minutes.

Overall SABC operating model and structure reviewed. Revised operating model and structure approved and implemented.

Operating models finalised and approved by EXCOStructures reviewed but not implemented.

The SABC is busy conducting a Skills Audit. Once the results have been received and processed the operating model and structures will be finalised and implemented.

EMBEDDING A HIGH PERFORMANCE CULTURE THROUGH PERFORMANCE MANAGEMENT

Institutionalise Performance Management policy with revised tool for top and senior management.

Signed-off performance contracts and reviews conducted.

Signed off performance contracts and performance review documentation

Final performance review of 2017/18 for top and senior management.Performance Management contracting with bargaining unit.

A total of 216 out of 454 performance contracts reviewed for Q3.

Organised Labour declared a dispute against the implementation of performance management and therefore not all staff members have contracted or performed performance reviews.

OPTIMISE LEARNING AND DEVELOPMENT TO ENSURE SUSTAINABILITY AND READINESS FOR THE DIGITAL AGE

Develop a Workplace Skills Plan (WSP) and operational training plan that is aligned to the digital migration requirements.

Digital migration training needs addressed through WSP.

Digital migration plan included in ATR and Seta report.

80% achievement of digital migration training needs as per the WSP.

46% of Workplace Skills Plan achieved.

Lack of funds prohibited the appointment of training service providers and subsequently the training target could not be achieved.

GOVERNANCEGoal: To ensure compliant governance practices complemented by effective risk management and internal control framework.

EFFECTIVE RISK MANAGEMENT AND SUFFICIENT INTERNAL CONTROL ENVIRONMENT TO ENSURE COMPLIANT GOVERNANCE PRACTICES

Strengthen Internal Control Environment.

Percentage of internal audit findings resolved.

Internal Audit reports. 80% 39% including

Provinces

Progress made on the implementation of internal audit finding is slower than anticipated owing to some dependencies in resolving the findings.

Percentage of previous financial years’ Auditor General findings resolved.

AG reports. 80% 81% Achieved.

Percentage completion of Disclosure of Interests for employees and Board.

SAP reports. 100% 98.3%A small number of staff members could not declared their interests owing to long absences or illness.

Percentage of policies that are reviewed and approved in accordance with two year requirement as per the Policy management framework.

Policy documents. 50% 19%

Focus on the review of policies will be increased in the new fiscal. Many of the HR policies need to be consulted with Organised Labour thereby protracting the process.

Implementation of Enterprise-wide risk management.

Percentage of risk treatment plans that have been implemented.

CURA reports. 60% 38%

Not achieved. Lack of funding and resources have impacted on the implementation of risk treatment plans.

Strengthen compliance with the National Key Point (NKP) Act.

Percentage decrease in the number of physical; security breaches at Auckland park Precinct in compliance with NKP Act.

Protection Services Reports. Decrease by 100%

Security breaches showed a decline from 109 to total 97 (3%).

Not achieved. Security breaches relates mostly to unlocked offices and Board Rooms. Security breaches are circulated to Divisions on a monthly basis for awareness and correction.


OF FINANCIAL INFORMATIONAs the only national public broadcaster, the SABC must offer a range of informative, educational and entertainment programmes that showcase South African attitudes, opinions, ideas, values, talent and artistic creativity.

Summary Income Statement• Revenue reduced to R6.4 billion by 3%• Net loss of R482 million (cost to income ratio of 107%);• Significant prior year adjustments relates to impairments of R149 million

of sport content not provided by supplier for which payment was made;• Cost containment initiatives yielded R112 million on opex;• Reduction of employee cost by 9%;• Trade and other payables increased by R502 million (with an average

creditors payments days of 143 days); and• R151 million invested in capex to support the migration to DTT.

Summary of Financial Information • Profitability

The SABC reported a net loss of R482 million. The biggest revenue generator (Advertising revenue) decreased from the prior year by R241 million (5%) which resulted in the major impact the public entity’s profitability. TV licence fees reported for the year amounted to R968 million, and this represents a fee evasion rate of 69% (2018: 72%) of the known TV licence holders not paying their licence fees.

The SABC derives its income mainly from Television, Radio and TV Licences divisions. The other divisions are support structures in generation of the core revenue. Below is the analysis of the funding model of the support divisions:

Group services

R605 million

TV AdvertisingRevenue:

R2.9 billionProfit Margin

(31%)

RadioAdvertising Revenue:


(29%)

TV LicencesRevenue:


(53%)

Corporate services

R163 million

NewsR685 million

Commercial Enterprise

R135 million

Net Loss from Core Business (excluding other revenue streams and finance charges)R944 MILLION

Total Cost of Support and Operational Units R2.7 Billion

Available Earnings from Core Revenue Streams R1.8 Billion

SportsR415 million

TechnologyR684 million

• Revenue

Advertising revenue at R4.5 billion (2018: R4.7 billion) make 70% of total revenue. Of the total advertising revenue, R2.9 billion (2018: R3.1 billion) is from television advertising. Advertising revenue declined by 6% under pressure from lower investment in content that is negatively affecting channel viewership, the general depressed media market and competition from digital platforms.

Radio Stations advertising revenue contributed R1.6 billion, a growth of R35 million from prior year. This was driven by growth in Fortune 4 with Radio 2000 advertising revenue improving by 143% during 2018/19 financial year and Africa Language Stations (ALS) improving by a total of R23 million.

Below is the further split of advertising revenue between different television and radio platforms:

Graph: Revenue 2019

Graph: Platform Advertising Revenue

Graph: Revenue 2018

Advertising

Licence fees*Business enterprise and facilities revenue

Programme rights exploitation revenueTrade exchange (non-monetary exchanges)SponsorshipsMobile and other revenueChannel carriage fees revenueRevenue recognised from Government Grants

Advertising

Licence feesBusiness enterprise and facilities revenue

Programme rights exploitation revenueTrade exchange (non-monetary exchanges)SponsorshipsMobile and other revenueChannel carriage fees revenueRevenue recognised from Government Grants

RadioTelevision

70%2%

6%

15%

3%3%

12%

2%

6%

1%

1%

14%

3%

72%1%

1 612 446

2 932 592

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd

• Lower content investment: Financial difficulties resulted in reduced investment in television programmes content. This negatively impacted the audience share and further put downward pressure on advertising and sponsorship revenue.

Advertising Revenue Performance 2019 2018 MovementAdvertising 4 471 268 4 711 772 Investment in content 1 364 838 1 913 166 Audience share Performance 38.60% 44.90% Prime Time 47.50% 54.30%

• Digital media advertisement: The advertising industry is moving towards digital media, which is impacting the conventional broadcasting advertising. This started to impact the commercial viability of the SABC during the financial year. • Economic tough conditionsThe South African economic growth was 0.8% during the 2018/19 financial year. This low growth affected all the sectors of the economy and resulted in advertisers reducing their investment in the SABC. The SABC saw improvement in the audience share in the last quarter of the financial year. A forward facing increasing trend is anticipated to show improvement in the commercial revenue. The required funding will assist with aggressive investment in the content inventory which will improve revenue generation.

• ExpenditureThe salary bill and amortisation of content account for most of the SABC’s total expenditure. The employee cost of 3167 permanent and 1500 independent contractors as at 31 March 2019 remained the highest expense. The 9% decrease in employee cost is as a result of reduction in the workforce through retirement, resignations and normal attrition by 243 employees.

The SABC broadcast a hign number of repeat programmes due to the financial liquidity challenges, which in turn then resulted in a decline in the amortisation of content. The content inventory decreased by approximately 14%, which emphasises the need for more investment in the following financial years.

• Implementation of Capital Expenditure (Capex) Plan

The SABC invested R151 million in the capital infrastructure during the financial year. Below are some of the material/ strategic projects which were executed during the 2018/19 financial year:

Project name Amount spent R’000

Henley Broadcast Automation Replacement 14 015Self - Deploying Satellite Terminals Replacement 15 392Replacement of Computer Equipment 11 405Henley Digital Media Integration 13 115Drama Studio D3 Upgrade 9 192UPS Dual Supply Solution (RP and TVC) 8 744

The maintenance of buildings cost the SABC R18 million.

Revenue Collection – TV LicenceLicence fee revenue decreased by 14% from the prior financial year.

2019 2018Total billed 3 137 336 3 378 175 Revenue recognised 968 168 941 395 Recognition rate 31% 28%Collection cost 116 904 118 213Collection cost rate 12% 13%

The SABC was able to realise only 31% of the total licence fees billed during the 2018/19 financial year, which was lower than the prior financial year. The absence of the bulk mailing services contributed to depressed collection rates. The collection cost was on par with the annual trend of 13%. 401 321 new television licence holders paid for their first licence during the period under review. Only 2.9 million licence holder made an effort to pay their television licence fees in full or in part against a known database of 9.4 million television licence holders.

Cost containment strategies implementedThese included but not limited to the following:• Effective monitoring of legal services and close scrutiny of legal invoices

(some are even sent for taxing by the Master);• Cost optimisation of travel and accommodation through negotiation with

travel agencies; and• Printing management (quota on pages being printed, print release, costing

per person).

36

PERFORMANCE

Graph: Expenditure

Other losses

Personnel costs other than employee compensationOperational

Other expensesProfessional and consulting feesDirect revenue collection costsMarketing costsChannel carriage fees revenueDepreciation and impairment of property, plant and equipment

890 938

1 867 966

566 198 752 122

155 310 312 504

ALSSABC1

Television Radio

MG5SABC2 Fortune 4SABC3

Graph: Advertising Revenue

538 031

572 467

2 823 465

740 207

414 153

1 752 107

2019

3 114 910

718 132

486 822

1 714 309

2018


Abridged Annual Financial Statements• Statement of Comprehensive Income

2019 2018 Movements % ReasonsRevenue and other income

6 465 620 6 627 199 (161 579) (2)

Commercial revenue decline is the main contributor of this 3% decrease.

Expenses

(6 909 389) (7 384 345) 474 956 (6)

This cost savings were yielded through cost containment initiatives and liquidity challenges.

EBIT

(443 769) (757 146) 313 378 (41)

Cost to income of 107% has resulted into this net loss.

Net financing costs

(38 602) 13 067 (51 669) (395)

Interest on late payments / overdue accounts has resulted in the increase in finance costs.

EBT (482 371) (744 079) 261 709 (35)Income tax 11 (11) 22 (200)Loss for the year (482 360) (744 090) 261 731 (35)OCI

1 259 271 (570 000) 1 829 271 (321)

This material gain is as a result of the favourable actuarial valuation gains on the defined benefit assets.

Total Comprehensive income 776 911 (1 314 090) 2 091 002 (159)

• Statement of Financial Position2019 2018 Movements % Reasons

Total non-current assets

3 719 559 2 590 188 1 129 371 44

The increase in the non-current assets base is due to the favourable actuarial valuation gains on the defined benefit assets.

Total current assets

1 573 214 1 626 578 (53 364) (3)

Content inventory and cash decreased due to liquidity challenges.

Total assets 5 292 773 4 216 766 1 076 007 26Total equity 1 455 567 678 790 776 777 114Total non-current liabilities

1 388 920 1 455 407 (66 487) (5)

This decrease is attributable to servicing of finance lease, utilisation of deferred grant and decrease in the employee obligations.

Total current liabilities 2 448 285 2 082 570 365 715 18Total liabilities 3 837 205 3 537 976 299 229 8Total equity and liabilities 5 292 773 4 216 765 1 076 007 26

• Statement of Cash Flow2019 2018 Movements % Reasons

Operating activities

(74 158) 43 190 (117 348) (272)

High cost to income ratio has directly resulted into cash outflow on operations.

Investing activities

(145 241) (148 642) 3 401 (2)

R151 million was invested into capex. There was R5 million proceeds generated from disposal of assets.

Financing activities

161 498 154 226 7 272 5

R180 million was generated from government grants. The SABC serviced the finance leases and perpetual debt.

Movement (57 901) 48 774 (106 675) (219)Beginning of the year 130 516 81 742 48 774 60End of the year 72 615 130 516 (57 901) (44)

37

Report of the Auditor General2018/19 2017/18 2016/17

Overall audit opinion Qualified Disclaimer AdverseFinancial statementsGoing concern X XProperty, plant and equipment X X XProgramme, film and sports rights XTrade and other payables X XIrregular expenditure X X XTaxation XDeferred government grants XExpenditure XPerformance informationUsefulness X XReliability X X XComplianceAnnual financial statements, performance report and annual report X X XProcurement and contract management X X XExpenditure management X XStrategic planning XConsequence management X XRevenue management X

The SABC received a qualified audit opinion. Though not ideal, it is an improvement from the disclaimer of audit opinion issued in the last year. The basis of qualification was on the SABC not maintaining asset registers for asset under construction with adequate detail to provide sufficient audit assurance on the absence of material misstatements. In addition, the SABC did not include complete particulars of all irregular expenditure in the notes to the consolidated and separate financial statements. Internal control systems were not operating adequately to identify and record all instances of irregular expenditure in both the current and prior years. In the 2017/18 external audit (previous financial year audit process), there were 218 findings issued by the Auditor General. Out of 218 prior year findings, 81% (177) were resolved during the reporting period.

Going concernOn 5 September 2019, the SABC received funding allocation letters from the Ministry of Communications and the Minister of Finance confirming a funding allocation of R3.2 billion from the Contingency Reserve. This amount will be released by National Treasury to the SABC in tranches. The release of funding is sub-ject to the SABC meeting performance pre-conditions. Manage-ment believes that they will be able to meet all the preconditions to access the full funding available. This announcement ensures the going concern risk is adequately mitigated.


PERFORMANCE

COLLECTION: COMMERCIAL REVENUE

Furthermore, the quality and quantity of the SABC audience cannot be ignored and a dramatic shift of advertising spend to digital which may initially prove to be cost-effective against television, may be counter-productive for many clients who require the reach of SABC channels to promote their brands, products and services.

Digital remains a critical growth area and robust plans are being put in place to accelerate growth on this platform. Consolidation of audience, interrogation of market needs and closer relationship with internal stakeholders will unlock value in the market.

Commercial Enterprises actively engaged its trading partners to restore confidence in the market and ensure improved performance in the 2019/20 financial year. Of primary importance is a consistent quality service delivery to the market which brought improvement in some areas, but requires further adjustment and refinement to excel. High level engagements have been implemented to ensure that the SABC retains a strong presence at executive level and new trading models have the potential to shift the market.

Significant business risks for Commercial Enterprises in the forthcoming fiscal include:

• The need for improvement of audience on all Television Channels, growth will be difficult to achieve in an increasingly competitive space;

• Any legislative bans on advertising alcohol or regulation of fast foods during peak audience times will reduce revenue from these key categories; and

Revenue GenerationThe SABC mandate to deliver extensive public value is funded primarily by commercial revenue. The purpose of Commercial Enterprises is to maximise commercial airtime revenue by delivering business opportunities to clients in an increasingly competitive media advertising market. The revenue is generated through the sale of classic advertising, programme and sport sponsorships across SABC Television, Radio and online platforms.

The combination of depressed economy, declining audiences, aggressive competitors and the rise of new media pose huge immediate and long-term threats to the SABC. However only television did not improve on previous fiscal performance due to declining audiences on all channels. Radio saw slight year on year improvement with Digital and Adventure showing good growth off small bases. Sports Sponsorship saw positive returns driven by the FIFA World Cup, English Premier League and Mzansi Super League on SABC3.

It is vital however that the division continue to maximise the sale of classic advertising on both television and radio as these are the dominant revenue streams that drive the entire organisation. Revenue growth is inherently linked to audience and hence the reliance on the operational strategies to attract and retain audiences on both mediums.

Introduction of new trading models to make buying SABC space easier and more attractive remains a key focus area with commercialisation of Digital Media a major project across the business. Revenue potential will be realised once all the envisaged digital platforms are operational and achieving critical mass.

Business EnvironmentThe 2018/19 fiscal proved a challenging year for

Commercial Enterprises with a number of macro and micro factors affecting performance. A severely

depressed economy impacted advertising spend across the industry with traditional media taking the biggest

losses. SABC Television in particular was deeply affected by the compounding effect of soft trading conditions and

declining audiences making year on year growth very difficult to achieve. All channels experienced audience losses with

SABC2 and SABC3 in particular seeing significant declines. Schedule Displacement on SABC1 due to the FIFA World

Cup affected audiences during the tournament with flagship programmes ‘Uzalo’, ‘Generations’ and ‘Skeem Saam’ being moved to SABC2 and SABC3 over the duration of the tournament.

Normal programming resumed after the tournament, however audiences did not recover quickly enough. Other than in August, the channel did not exceed year on year performance in any month until the end of the fiscal. On a positive note the SABC News Channel 404 continues to grow from both an audience and revenue perspective.

SABC Radio improved year on year however third and fourth quarters poor performance removed any chance of achieving annual budget (R1.725 billion) It is evident that the powerful ALS and especially Fortune 4 clusters continue to drive radio progress but MG5 remains an area of concern as its direct competitors implemented aggressive sales and trading tactics to attract revenue. Growth in this cluster remains a focus area for the business.

Large multinationals continue to follow international trends by moving money to new media which has undoubtedly impacted television revenue. This poses both an opportunity and threat to the SABC as the business moves aggressively into the digital arena.

Mr Warren Bedil interacting with the industry during a workshop


Industry developmentWith the rise of digital media, a large part of the market has shifted from platform buys to the consumer journey. The SABC remains the market leader across both television and radio. With its powerful digital assets, the SABC has the potential to create an unrivalled cross-platform solution. Deeper consumer insights combined with innovative solution will become the standard for advertisers looking for breakthrough campaigns on SABC platforms.

Another key focus area remains to embed the Commercial Enterprises business ethos and values in the minds of all staff. The objective is to cultivate a shared divisional understanding of ‘delivering business opportunities to clients’ while entrenching accountability and sales disciplines. The business ethos is aligned with the broader SABC Vision, Mission and Values.

TV Licences The core business of the TV Licences Division is to optimise funding to the SABC’s Public Broadcasting Service through the collection and management of television licence fees in order to enable the Corporation to fulfil its mandate as the Public Service Broadcaster. Income from TV licence fees currently contributes about 14% to the SABC’s total annual operating revenue.

The collection of TV licence fees is governed by Section 27 of the Broadcasting Act, no 4 of 1999, as amended. The Act stipulates that television licence revenue may be used only to fund the SABC’s Public Service mandate. Television licence fees are collected from all persons, households, institutions and businesses within South Africa’s borders that use and/or have television sets in their possession. Licence fee collection takes place directly or jointly with other service providers, within or external to the SABC.

For the period under review, the SABC collected cash revenue of R1 billion which is R16.3 million (1.6%) below budget and a decrease of R0.7 thousand (0.1%) compared to the previous fiscal.

TV licence fees are collected via three revenue streams; Renewals (current accounts), New Licences and Debt Collection (through external partners). During the fiscal, Renewals contributed 51.1% to the overall cash revenue, New Licences 10.7% and Debt Collection 38.2%. The underperformance during the fiscal was as a result of Renewals which failed to achieve cash budgets and were R90.9 million below budget whilst New Licences and Debt Collection exceeded budgets.

Consumer campaigns for the period were intently directed to support revenue initiatives in order to achieve collections budgets over a traditionally challenging period. The Division aligned its collection methods and communication messages to external circumstances such as the economic climate, increased consumer costs and competition among creditors for revenue. The benefits of all these modifications were realised through the achievements and improved cash revenues on Debt Collection and New Licences. It is evident that continued improvements on strategic and operational plans to boost collections are crucial. There were continuous efforts by the department to resuscitate renewals through increased SMS communications and repeated marketing messages.

A number of improvements on the collection process from renewals are being implemented. These include; increased capacity on outbound calls, reviewed SMS messages and schedules aligned to general South African pay-dates, reviews on written communication, increased e-mail campaigns and cleansing contact details through a Credit Bureau etc.

The SABC’s plans to improve licence fees collections in the future are customer-focused. The SABC needs to implement solutions that resonate with licence holders in response to the changing environment in the collections industry. These initiatives will transform operations in digital and value based collections to generate positive returns.

SABC inks deal with OTT platform, Viu


PERFORMANCE

ON MANDATE

5FM’s Cassim’s Kitchen

ICASA Local Content ObligationsThe 2016 ICASA Regulations on South African Music (Government Gazette No. 39844) came into effect on 23 September 2018.

Public Broadcasting Service Licensees had an increased local South African music quota obligation. The 15 Public Sound Licensees of the SABC as of the effective date of the new regulations, are obligated to meet a minimum of 70% South African Music quota within the broadcast performance period, the repealed regulations (the 2006 ICASA Regulations) had the minimum obligation of 60%.

Public Broadcasting Commercial Licensees; with an identical mandate to that of Commercial Broadcasting Service Licensees had an increased local South African music quota obligation introduced by the regulations. The three Commercial Sound Licensees of the SABC as of the effective date of the new regulations are obligated to meet a minimum of 35% South African Music within the broadcast performance period, up from 25% local South African music.

Public Service MandateThe SABC, as the only Public Service Broadcaster within the Republic of South Africa, is charged with a Public Service mandate to inform, educate and entertain all citizens through sound and television broadcasting services. Currently, the SABC has 18 Radio Stations, five Television Channels with which it provides Public Broadcasting Services.

The SABC’s Public Service mandate emanates from the Charter, which defines its objectives. The Charter is laid down in Chapter IV of the Broadcasting Act of 1999 (as amended) and requires the SABC to encourage the development of South African expression by providing, in all eleven official languages, a wide range of programming that:

• Reflects South African attitudes, opinions, ideas, values and artistic creativity;

• Displays South African talent in educational, informative and entertainment programmes;

• Offers a plurality of views and a variety of news, information and analysis from a South African point of view; and

• Advances the national and public interest.

SABC RADIOOn average all adults 15+ years spend

three hours and 36 minutes listening to radio across all Radio Stations, which gives radio a

weekly reach of 72.6% (28.9 million) and a 54% daily reach of 21.6 million. At 65.4%, PBS Radio

contributed the lion’s share towards the overall SABC radio share performance and has increased

by 0.9% year on year. Ukhozi FM has the biggest share within the SABC and across all Radio Stations.

The Top 5 PBS radio share is as follows:

PCS Radio commands 7.2% of all adult share. The share is stable year on year with an upward trend.

Radio Station Oct 18 - Mar 19METRO FM 5.6%Good Hope FM 0.8% 5FM 0.8%

Source: Broadcast Research Council (BRC) Radio Audience Measurement Data (Jul-Dec 2018)

Compliance with Licence ConditionsCommercial

Broadcasting Service

Language and News Format

5FM

• Broadcast predominantly in English

• Provide 30 minutes of news programming each day

Contemporary Hit Radio

METRO FM

• Broadcast predominantly in English


Urban Contemporary

Good Hope FM

• Broadcast predominantly in English and Afrikaans


Contemporary Hit Radio Rhythmic

Radio Station Oct 18 - Mar 19Ukhozi FM 19.3% Umhlobo Wenene FM 13.4% Thobela FM 7.3% Lesedi FM 7.2% Motsweding FM 5.3%


* In period between April and September 2018 the SABC Public Radio was required to deliver 60% of local music and this percentage increased to 70% from October 2018 to date.

* These figures exclude the format factor points which are acquired through promotion of new artists, interviews and coverage of live music. However, Lotus FM’s data includes format factors points due to the shortage of South Indian Music. Lotus FM has applied to ICASA for reduction of the local music quota. In quarter4 SAfm had special elections broadcasts which slightly disturbed the local music delivery.

ICASA Genre License Conditions

StationNews (Daily) Current Affairs (Daily) IKB Education Children Drama

Mon-Fri Sat Sun Mon-Fri Sat Sun Weekly Weekly Weekly Weekly

ICASA Quota 60 60 60 60 60 60 180 300 60 150

Ikwekwezi FM 120 60 60 147 60 60 1322 330 114 269Munghana Lonene FM 83 75 75 110 60 60 1307 349 129 229Thobela FM 136 96 96 178 91 91 1591 435 120 207Phalaphala FM 71 73 73 118 60 60 2345 345 135 188Ukhozi FM 96 65 65 176 60 60 2193 298 80 175Lesedi FM 89 64 64 161 71 71 502 313 100 173Umhlobo Wenene FM 84 77 77 168 60 60 891 380 310 172Ligwalagwala FM 99 60 60 123 60 60 1627 371 245 202Motsweding FM 82 64 64 104 62 62 3996 307 80 172

ICASA Quota 60 60 60 60 180 240 60 150

SAfm 91 80 80 126 1292 300 64 161

ICASA Quota 60 60 60 60 60 60 180 300 420 150

RSG 106 60 60 165 60 60 1211 332 70 272

ICASA Quota 60 60 60 60 60 60 180 - - 150

Lotus FM 109 60 60 92 61 61 603 - - 150

ICASA Quota 30 30 30 30 30 30 180 300 15 -

XK FM 68 49 49 107 55 55 190 612 570 -

ICASA Quota 60 60 60 30 30 30 60 120 30 -

Tru FM 65 65 65 80 45 45 2803 366 60 -

Stations Q1 and Q2Average %

ICASA Quota *

Q3 and Q4Average %

ICASA Quota * Broadcast Language

PBS RadioSAfm 68 60 68 70 Principal language EnglishTru FM 76 60 73 70 Principal languages English (60%) and isiXhosa (40%)Lotus FM 61 60 61 70 Principal languages English with specialist programmes in Hindi, Tamil,

Urdu, Gujurati and TeleguRSG 68 60 70 70 Principal language AfrikaansMunghana Lonene FM 76 60 74 70 Principal language XiTsongaLesedi FM 78 60 77 70 Principal language SesothoRadio 2000 70 60 71 70 Principal language EnglishXK FM 89 60 89 70 Principal languages !Xintali and KhwedamUmhlobo Wenene FM 76 60 79 70 Principal language isiXhosaLigwalagwala FM 79 60 82 70 Principal language isiSwaziMotsweding FM 68 60 73 70 Principal language SetswanaPhalaphala FM 63 60 71 70 Principal language tshiVendaThobela FM 78 60 71 70 Principal language SepediUkhozi FM 81 60 82 70 Principal language isiZuluIkwekwezi FM 88 60 84 70 Principal language isiNdebele

PCS Radio5FM 35 35 35 35 Principal language EnglishGood Hope FM 37 35 37 35 Principal language EnglishMETRO FM 47 35 38 35 Principal languages English and Afrikaans

PBS and PCS performance on local music and ICASA quotas


PERFORMANCE

During the 2018/19 financial year, PBS radio stations delivered well above the minimum requirements as stated in the ICASA license conditions. On the news front, PBS radio delivered well against ICASA license conditions with the majority of the radio stations exceeding weekly targets of news and current affairs, drama, children’s programming, education as well as Information Knowledge Building (IKB).

Delivery on Public Value by SABC Radio SABC Radio Stations delivered public value by broadcasting innovative programming that advocates for social cohesion, nation building, and promotion of democracy and empowerment of South African citizens. To observe these themes, stations utilised a variety of public service programming genres that incorporated drama, talk-back show format, pre-recorded inserts, interviews and magazine shows as well as highly entertaining but informative commercial programming and content.

In line with the SABC’s mandate to educate, entertain and inform, SABC Radio Stations emphasise its role through the balanced, thematic content that it delivers in shows across its platforms.

During the period under review, radio broadcast were based on programming of monthly themes that focused on days of national importance. These included:

Radio celebrated Freedom Month, reflecting on the heroes and heroine who sacrificed their lives in order to ensure that South Africa is set free from the chords of oppression. SABC radio stations programming worked tirelessly to make listeners aware of the strides made so far, and how this achievement translates on the ground for ordinary citizens.

The plight of all workers received special attention when Worker’s Day was commemorated. SABC Radio also celebrates the continent of Africa on an annual basis. The essence of Africa month is mainly to celebrate the achievements made in the development of Africa. The events culminate in Africa Day on 25 May, which is a day declared by the African Union and celebrated in Africa. Centenary celebrations continued to dominate radio programming content.

The month of June is known as Youth month in South Africa due to the aftermath of 1976 youth riots. South African Youth today are faced with a different challenge of chronic unemployment, the temptation of drug abuse and find themselves being swept into the dark world of criminal activities.

Various projects and empowerment sessions aimed at encouraging the youth to carve a new path in the economic stream, were supported by SABC Radio.

Commerce and finance content keeps listeners vigilant on matters relating to savings, investments and the trap of escalating debt. Topics including the cash flow statements, livestock investment and a subject on economics received more attention.

July is a significant month in the broadcasting calendar because it forms part of activities that celebrate Nelson Mandela. The entire nation embarked on initiatives to remember this universal icon through deeds reminiscent of his love for humanity, education and children.

On Women’s month Stations’ themes explored critical areas and through its programming brought this serious discourse to the attention of decision makers. Education-related content specifically addressed the caveat of entrepreneurship and success in business that the women have attained so far.

South Africans celebrate their heritage and as a country tourism is amplified to attract visitors to our country during the first month of Spring. The Stations encourage pride in cultural attire, understanding the richness of our language, finding identity in clans and children being taught the value of indigenous games. Tips on tourism dominated content that was broadcast on SABC Radio during September 2018.

The month of October has a number of health dates which are observed locally and internationally. The main focus was Attention Deficit Hyperactivity Disorder (ADHD); Bone Marrow Stem Cell Donation and Leukaemia Awareness; Eye Care Awareness; Breast Cancer Awareness; and Mental Health Awareness Month. Other important days and/or week observances for October included: • International Day of Older Persons; • National Nutrition Week; Global Handwashing Day; • School Health Week; • National Obesity Week; • World Food Day; • International Day for the Eradication of Poverty; • National Down Syndrome Day; • World Polio Day; and • National Stroke Week.

Movember is an annual event involving the growing of moustaches during the month of November to raise awareness of men’s health issues, such as prostate cancer, testicular cancer and men’s suicide.

Kagiso Rabada at METRO FM during the MZANSI super league


SABC Radio carried 16 Days of Activism of No Violence against Women and Children which is an annual campaign that runs from 25 November until 10 December. Various shows provided professional counselling and offer assistance to centres of shelter.

World Aids day is recognised throughout the world and during shows listeners were encouraged to know their status by testing and receiving on site counselling. On 1 December, radio stations ran mini-documentaries from those living with HIV and AIDS and general opinions from young people and HIV and AIDS organisations. Safety on the roads and beaches were highlighted during the Festive Season.

The core theme of the month was ‘Christmas, the spirit of Giving and prevention of Injuries’, and all shows covered content in that regard. SunSmart Skin Cancer Awareness was also one of the key themes of the Month.

Other key days that were observed included:• The International Day of Persons with Disabilities; • International Volunteer Day; • World Patient Safety Day; • International Human Rights Day; and • Universal Health Coverage Day.The stations’ delivery on the core themes for December 2018 are as follows:• 18 hours of disability matters;• 10 hours of the Mandela and MaSisulu centenaries• 14 hours of health content; • 4 hours of global issues, commonwealth, NEPAD and African Renaissance;• 10 hours of human rights and equality issues; and • 20 hours unemployment, poverty matters, labour issues and Job creation.

Ukhozi FM on air personalities

For the back-to-school campaigns radio stations launched various on-air and marketing campaigns to provide assistance to less fortunate learners and schools. The annual School Shoe collection and distribution

campaigns were prioritised during this period. SABC platforms also broadcast live the January 8 address by the President of the ANC.

World Radio Day is a day to commemorate radio as a medium and is celebrated annually on 13 February. SABC Radio Stations supported the initiative by discussing various topics including the UNESCO theme of sports commentary in radio and its relevance today. Stations also covered the resignation of former President Jacob Zuma, the swearing in of the new President Cyril Ramaphosa, the State of Nation Address by President Ramaphosa, the cabinet reshuffle and the budget speech by the Minister of Finance.

Radio programming supported International Women’s Month and also acknowledged Human Rights Month in South Africa. Human Rights Day is commemorated on 21 March every year. Radio content featured the meaning of this day, including a commemoration of the Sharpeville massacre as a key event in the history of our country.

Forward lookingThe majority of South Africans from diverse backgrounds rely on at least one of the SABC’s radio stations as their primary source of news, information, entertainment and inspiration. In the next financial year 2019/20, SABC Radio will focus its energy and resources to continue serving the nation, and to defend the 71% audience share. A special focus will be given to talent attraction and retention, as well as audience research to ensure that all radio stations deliver content that is aligned with audience needs. Radio stations will continue to explore new digital media platforms, for audience engagement and growth purposes.

The cast of SABC1’s drama ‘Skeem Saam’


PERFORMANCE

for full-day coverage and 86.31% on prime time. SABC3, as the PCS channel has a local content quota of 45%. The platform delivered 60.39% for full-day and 61.35% for prime time. The graphs below illustrate SABC’s compliance per genre.

Genre

In terms of the SABC’s genre quotas, SABC2 fell short on its children and educational genre mandates. These shortfalls were primarily as a result of schedule disruptions to accommodate events of national importance and sports coverage. Due to the time at which these events take place the impact was greatest on children and educational programmes. SABC1 and SABC2 also fell marginally short in terms of documentary delivery, while SABC3 exceeded all its genre quotas for the period under review.

The graph below depicts the SABC’s performance on genre:

SABC TelevisionUnder extremely difficult operating conditions, SABC Television continued to deliver on the mandate of the SABC through the management of the acquisition of Video Content for the SABC, and the aggregation and distribution of this content. The acquisition of content encompasses the following:

• Commissioning programmes and managing delivery from production companies;

• Licensing ready-made local and international content;

• The reversioning of content; and

• Content outputs do not include Sport and News and Current Affairs

While aggregation and distribution of content is primarily located within the management of three licensed FTA channels, SABC1, SABC2 and SABC3, it also includes:

• Managing additional channels, such as Encore;

• Managing DTT channels; and

• Managing video non-broadcast digital platforms.

SABC Television delivered award-winning content that appeal to South African audiences. The Top 5 most watched programmes in South Africa were all SABC TV properties, as well as 19 of the Top 20.

Through partnerships with the local content production industry, SABC Television is the biggest driver of growth and transformation in the creative sector in South Africa.

Compliance with license conditionsLocal Content

ICASA regulates local content quotas for all the SABC TV channels. The primary differentiation of these quotas is between the PBS channels, SABC1 and SABC2 and the PCS, SABC3. The PBS portfolio had to meet a 55% target and the PCS 35%. Within these overarching targets, the regulatory authority also stipulates quotas against different broadcast genres.

The measurement of local content carried on SABC platforms is as per ICASA defined methodologies. Sport is excluded from local content calculations and only the first play-out of a local programme is fully accounted for. First repeats are counted as half and thereafter no recognition is given to local content repeats.

For the period under review, all three channels exceeded the local content requirements, even when measured using the ICASA prescribed methodology. SABC1, in terms of full-day coverage, exceeded the target at 72.92%. About 75.52% of content broadcast during SABC1’s prime time was local. SABC2, which shares SABC1’s 65% target, delivered 75.61%

GRAPH: SABC Local content

SABC177.7

75.52

SABC2

SABC3

ICASA’s overall quotas:65% for PBS and 45% for PCS

Source: Broadcast schedules 2 April 2018 - 31 March 2019

Full dayPrime Time

8086.31

62.561.35

GRAPH: SABC1 as PBS channel% local content per genre

Children

Drama

64.40

56.25

55.00

35.00

Current Affairs

Education

Documentary

Information knowledge

building


Full dayICASA’s quota

57.51

76.53

80.00

60.00

47.19

53.37

50.00

50.00

GRAPH: SABC2 as PBS channel% local content per genre

Children

Drama

44.83

45.63

55.00

35.00

Current Affairs

Education

Documentary


building



99.51

64.31

80.00

60.00

48.35

81.20

50.00

50.00


Language

SABC Television delivery on the language mandate is measured as follows:

• A minimum number of hours of programming in languages other than English, excluding marginalised languages, in prime time;

• A minimum number of hours of programming in marginalised languages in prime time;

• A minimum number of hours of programming in languages other than English, including marginalised languages, in prime time; and

• A minimum number of hours of programming in languages other than English, including marginalised languages, in performance period.

SABC3 met its language deliverable requirements, which are less onerous than those for the two PBS channels, whose delivery is depicted in the graphs below.

Delivery on Public Value In addition to delivering public value through meeting license conditions as outlined above, SABC TV fulfilled its public service role through a number of initiatives and on-going programmes.

During the period under review, public value was also placed at the centre of the Division’s activities, with strategic objectives dealing specifically with delivery of content from companies owned by People with Disabilities (PWD), and content from the non-metropolitan provinces. With the broadcast of programmes that regularly include content from those provinces as well as the commissioning of content from provinces outside Gauteng, the network surpassed these targets. The Division also provided programming that met the needs of the deaf community through Deaf TV and sign language on four programmes, excluding News and Current Affairs offerings.

Nation building and social cohesion were put at the core of the Division’s activities, with significant time on the schedules being allocated to coverage of national days of importance. Additionally, plotlines were developed that incorporated these days and provided accessible and educational information about them.

In April channels focused on Freedom Month, as South Africans celebrated 24 years of democracy on 27 April. Other content highlights for the year under review was an Africa month theme for May, with content celebrating the continent being carried both in stand-alone programmes and integrated into other content. The month started off with Workers Day and live coverage of those events. June’s focus was Youth Month, which is particularly important for SABC1 in terms of its positioning. In addition to programming and content both celebrating young people and commemorating the sacrifices made by youth of previous generations, SABC1 hosted its second annual Youth Month Symposium at the Apartheid Museum – with the key message of ‘Take Care of You’. The build-up to Madiba month in July and celebrations of a century since the icon’s birth started at the end of the quarter. While most of the programming ran during July, TV marketing initiated promos to prepare audiences, which started running during June.

GRAPH: Language delivery during prime time

GRAPH: Language delivery during TV performance period

Other than English

Other than English (hours)

SABC

2

SABC

3

SABC

1

41:00

9:59:51

45:11:01

45:11:01

Other than English

Other than English (%)



Average hours/min per week ICASA’s quota

SABC3

Current Performance

ICASA’S quota

41:00

9.84%

52:37:31

10%

GRAPH: SABC3 as PCS channel% local content per genre

Children

Drama

43.12

28.63

25.00

20.00

Current Affairs

Documentary


building



84.30

65.45

50.00

30.00

33.7930.00

GRAPH: Language delivery during prime time

Total other than

English

Total other than

English

SABC

2SA

BC1

19:36

18:12

17:11

13:17

Marginalised

Marginalised

Other than English

(excluding marginalised)

Other than English

(excluding marginalised)

Source: Broadcast schedules 2 April 2018 - 31 March 2019Average hours/min per week ICASA’s quota

Current Performance

1:54

1:48

18:06

16:24

1:41

1:03

15:30

12:13

SABC3’s Expresso presenters


PERFORMANCE

In addition, key events, such as the 2018 FIFA Soccer World Cup were given extensive coverage, resulting in significant schedule disruptions.

Programming HighlightsDuring the period under review, the financial challenges facing the SABC had a serious impact on the management of productions and ensuring delivery to schedule. Despite this, SABC1 remained the most popular television channel in the country, averaging 31.4% prime time audience share and 22.7% across the performance period. SABC2 ended the financial year with a 12% share of prime time audiences, while SABC3 enjoyed 3.3% share.

In September 10.2 million South African’s tuned into SABC1 to watch the wedding episode of Uzalo, making it the most watched South African television programme ever. The year ended with 19 out of 20 of South Africa’s most watched television programmes being carried on SABC channels and the top five were SABC properties. ‘Uzalo’, a SABC1 flagship property, was 2018/19’s top show followed by, ‘Generations: The Legacy’ and ‘Uzalo’ on SABC2.

Key achievementsSABC TV remains the most popular television network in South Africa with more than half of all South Africans tuning into the SABC during prime time. This was achieved despite the SABC’s serious financial challenges and tightening cash flows.

Looking Forward Television looks forward to creating a portfolio of content that can live across platforms, accessible to all South Africans and creating a disruption in the market place as it seeks to remain audience-centric in an increasingly fragmented market. Its stable of brands will consciously connect with existing and lapsed viewers on their terms as we begin to transform into a content media hub and not just a broadcaster.

Key areas of focus will include:

• Continue to deliver against the competitive environment and retain its position as the broadcaster with the lion’s share of the market;

• Upgrade and innovate existing offerings to audiences;

• Ensure agnostic content to expand SABC’s digital offering;

• Increase funding partnerships to drive content innovation cost effectively;

• Development of SABC Education Virtual Academy with an aim of empowering high school learners with online support;

• Subtitling of wall to wall content on the minority and previously marginalized languages; and

• Retain editorial rigor as a DNA towards ensuring strong social impact.

As part of the celebrations of the life of Nelson Mandela, SABC Children hosted the Nelson Mandela Children’s Film Festival in June. The festival featured film screenings and an Acting and Animation Workshop for children aged 4 to 9 and 10 to 13. Popular Walk-about characters from ‘YoTV Land’ and ‘Inside the Baobab Tree’ and YoTV Live Presenters, Enhle and Thato, were present to entertain the participants. The festival also featured Writing and Editing Master Classes and a Media Literacy Workshop for Media professionals. A three minute insert was shot and broadcast on YoTV on 18 July in line with Mandela Month content planned for the month.

July’s focus was Mandela month; with programming across the network highlighting the role he played in the creation of a democratic country, and celebrating his life, wisdom and legacy.

The theme for August was Women’s month for the SABC TV Network; Content and On Air focus was on women’s issues with particular emphasis on women abuse and women empowerment as well as celebrating women in general. This culminated into the live broadcast of the official Women’s Celebrations on 9 August 2018, where the State President Cyril Ramaphosa delivered the key note address. The celebrations were held in Paarl in the Western Cape under the theme of ‘100 Years of Albertina Sisulu, Woman of Fortitude: Women United in Moving South Africa Forward’.

September’s theme was Heritage month with most of the existing live local programming on all channels dealing with issues of identity, culture and diversity. SABC1 kept the Sunday night slot competitive with the launch of new dramas; one in particular was that of South Africa’s marginalized language, IsiNdebele. Some of the new titles launched in September; Clover ASP on 28 September, ‘Ikani’ on 30 September, ‘Emjindini’ on 16 September. SABC2 celebrated Heritage month with a live celebration coordinated by the ruling party for the masses on the 24th of September.

SABC Television continued to deliver content that enhances nation-building. In addition to coverage around the Day of Reconciliation, ‘Geleza Nathi’ LIVE Finals Revision Series provided support to matriculants for their final exams. Expert ‘Geleza Nathi’ teachers tackled challenging exam questions from the 2017 NSC final exam papers. The show offered viewers various platforms to help them with their end of year final exams. Online tutors answered questions LIVE from the ‘Geleza Nathi’ Facebook page. SABC also provided an app for matriculants to download their results, this worked together with the SMS line that provided learners with their matric results using their Identity Numbers.

In addition to events of national importance, World AIDS Day and the International Day of People Living with Disabilities were celebrated by all three channels. Activities to honour these days included dedicated talk shows and other support programmes.

SABC provided live coverage of a range of events of national importance across the year included coverage of the State of the Nation Address (SONA) and the Budget Speech. March’s special focus was on human rights, with the 21st providing a focal point.

Performance Period SABC Network SABC1 SABC2 SABC3 Total e.tv (incl OVHD)

DStv / Other(05:00-23:00) Target Actual Target Actual Target Actual Target Actual

FY16/17 Av 51 46.7 23 27.0 17 13.2 11 6.2 17.6 35.6FY17/18 Q1 : FY17/18 46 46.7 27 28.7 13 12.3 6 5.2 18.0 35.3Q2 : FY17/18 46 45.0 27 27.6 13 11.9 6 5.1 19.0 36.1Q3 : FY17/18 46 44.1 27 27.2 13 11.4 6 4.9 18.3 37.7Q4 : FY17/18 46 43.7 27 25.8 13 11.6 6 5.5 18.1 38.2Annualised Av 46 44.9 27 27.4 13 11.8 6 5.2 18.3 36.8FY18/19 Q1 : FY18/19 46 41.2 27 23.9 13 11.8 6 4.8 17.3 41.5Q2 : FY18/19 46 38.4 27 22.5 13 10.7 6 4.6 17.8 43.9Q3 : FY18/19 46 37.6 27 22.7 13 9.8 6 4.4 18.1 44.3Q4 : FY18/19 46 35.9 27 21.6 13 9.1 6 4.5 19.2 44.9Annualised Av 46 38.3 27 22.7 13 10.4 6 4.6 18.1 43.6

TABLE: Performance Period TV performance FY17-18 by Quarter (Adults 15+)


period under review. The launch of these shows has strengthened SABC News as a brand and brought it a step closer to becoming South Africa and continent’s premium source of news content. Furthermore, the Division embarked on reviewing its Radio and TV current affairs offerings. These processes contributed to renewing public confidence in the SABC brand as it positions itself as trusted and independent.

The Division pursued a range of stories in keeping with its public mandate. There were significant highlights and the news agenda for the period under review featured a diverse set of stories dominated by the following:

• The Zimbabwe general elections in, post-election violence, inauguration of Emmerson Mnangagwa and Zimbabwe fuel price crisis;

• The much anticipated elections of the Democratic Republic of Congo (DRC);

• Commissions of Inquiry including the commencement of the State Capture Inquiry, the Commission of Inquiry into the Public Investment Corporation (PIC) and the Mokgoro Enquiry;

• Summits including the 10th BRICS Summit held in South Africa, Presidential Investment Summit, Presidential Job Summit and Africa Investment Forum;

• The visit by British Prime Minister, Theresa May;

• ANC’s 106th year celebrations in Durban;

• Special broadcasts of manifesto launches by various political parties;

• President Cyril Ramaphosa announcing 8 May 2019 as Election Day;

• The maiden Budget Speech delivered by Tito Mboweni as Finance Minister;

• The Kenya hotel attack;

• Tributes to late Oliver Mtukudzi;

• Stampede, deaths and protests by congregants against the arrest of Prophet Bushiri;

• Dam levels in the Western Cape and Cape Town rise to over 60 %, and Cape Town to revise its water restriction; and

• Former Mayor Patricia de Lille and the Democratic Alliance (DA) reached a deal to leave office at the end of October 2018.

Looking ForwardIn the coming financial year, the Division will focus on:

• Positioning SABC News as the leading source of news content supported by transformation of the business to achieve operational efficiencies; and

• Balancing mandate obligations with commercial viability through new revenue streams and innovative partnerships.

SABC NEWS AND CURRENT AFFAIRSSABC News and Current Affairs PerformanceDuring the 2018/19 financial year, SABC News broadcasting on terrestrial platforms contributed 60% of the top ten News broadcasts on FTA TV in South Africa. This was consistent with the previous year’s performance. SABC News bulletins on terrestrial channels SABC1, SABC2 and SABC3 and across the day commanded between 12% and 14% of all viewing by FTA audiences. Performance of Current Affairs programming was consistent at 8% of all television viewing. Ratings slightly declined during 2018 FIFA World Cup period. This was attributed to the impact of schedule changes.

Digital PlatformsThe sabcnews.com did not reach its 78% target for the period under review. However, in March 2019, page views for this website reached 1 146 290. The platform reached the 1 million page views threshold for the first time in January 2019, since its relaunch in December 2017. The main traffic drivers were stories about self-proclaimed Prophet Bushiri and the deaths at his church, matric results Credo Mutwa and the Elections coverage. With this performance the News website overtook the RSG website as the SABC’s most popular site and again moved into the top 20 SA news websites. The higher traffic average per story experienced on the News website during the period under review is a good basis for future growth The SABC News YouTube channel experienced its best ever monthly performance in July 2018, with more than 22 million views due to the live streaming of the 16th Nelson Mandela Lecture. The social media digital properties recorded growth in visits though these did not translate into revenue for the period. Facebook and Twitter accounts grew above expectation, both exceeding the 8% target for the period under review.

Views on the SABC News YouTube channel improved from 6 859 176 to 10 162 325 at the end of the period under review. The increase was due to high viewership of foreign stories: Zimbabwe fuel price increases, the Kenya hotel attack, tributes to Oliver Mtukudzi and also local protests by congregants at the church lead by Bushiri. During the period under review, SABC News maintained its position as the most viewed news offering on YouTube in SA.

Programming HighlightsDuring the year under review, SABC News and Current Affairs successfully rebranded and repositioned itself as ‘Independent and Impartial’ which yielded positive results. The successful implementation of a combined News Diary as well as introduction of planned diary meetings lead to operational efficiencies including optimal allocation of resources and improved news coverage.

The Division successfully launched three weekly current affairs programmes for TV, namely: Unfiltered, African Perspective and Economics Unbound, and one daily current affairs programme, the Democracy Gauge, during the

Behind the scenes at the SABC Elections coverage with SABC Board, management and the team


PERFORMANCE

Rugby Inbound international test matches played against New Zealand, Australia and Argentina currently ranked 1st, 4th and 9th, respectively in the world rugby rankings, were broadcast on both SABC Radio and Television platforms.

The 2018 inaugural Mzansi Super League T20 (MSL T20) which was broadcast between 16 November and 16 December 2018 was a mutually beneficial business relationship between the SABC and Cricket South Africa (CSA). As the exclusive Host Broadcaster for the Sub-Sahara region, the partnership between the SABC and CSA allowed the SABC to deliver on its objectives for this key strategic acquisition.

Following on from the MSL T20, were the Inbound Cricket matches against Zimbabwe, Sri Lanka and Pakistan that were broadcast on SABC3 and Radio 2000 with ball-by-ball commentary.

The monthly live broadcast of Extreme Fighting Championships (EFC) continued to enjoy popularity on SABC3. The SABC has extended its partnership with Extreme Fighting Championship for a further twelve months which commenced in March of 2019.

Numerous Sport Awards events were broadcast in 2018 including the PSL Awards, the SA Sports Awards, the SA Cricket Awards, Gauteng Sports Awards and the G-Sport Awards.

Sport on Radio

During the period under review, the SABC broadcast the 2018 FIFA World Cup in full commentary on XK FM for the first time since the inception of the station. Some key sport radio magazine shows were revamped on METRO FM and Radio 2000 following the return of Robert Marawa in August 2018. The show called Marawa Sport Worldwide is broadcast simulcast on Radio 2000 (18:00-20:00 and METRO FM (18:00 -19:00).

Due to financial challenges experienced by the SABC, all outbound Cricket and Rugby events could not be broadcast on SABC radio. However SABC Sport continued with the broadcast of inbound cricket matches, inbound Rugby matches, as well as Super Rugby matches on key radio stations.

Sport GenresWeekly magazine shows on television continued to meet their mandate obligations. These include Soccerzone, a popular soccer review show, Soccer 411, an informative preview soccer show and Beyond Boundaries, a weekly Sport magazine show focusing specifically on athletes with disabilities, amongst others.

This graph depicts the number of minutes afforded to each sport/genre and the high percentage of cricket is due to the time of play which is made up of nine tests, nine ODI’s and five T20’s, however football still dominates on all SABC platforms.

Minority and Developmental sports

The broadcast of minority and developmental sports included programmes such as Sportbuzz, Nedbank ‘ke yona’, Boxing Magazine, National Basketball, EFC Magazine, and Swimming Magazine programmes.

SABC SPORTCompliance with Licence ConditionsSport on TV

For the period under review, the SABC’s mandate to broadcast sports of national interest was realised with the FTA broadcast of SAFA matches which included home and away friendlies of the national teams as well as all home CAF, AFCON and FIFA World Cup qualifiers.

As a result of FIFA unbundling their rights packages, the SABC was able to broadcast 44 out of the 64 matches of the 2018 FIFA World Cup Russia.

Other matches covered during the period under review were:

• The inaugural Shell Helix Cup as the exclusive broadcaster and saw SABC Sport generate over R443 000 in revenue as result of the 15% gate takings from the event; and

• The Mandela Century Cup featuring Mamelodi Sundowns FC vs. Barcelona FC in celebration of the Nelson Mandela Centenary.

In the period under review, the SABC acquired FTA rights of the Premier League with a Saturday afternoon offering on SABC3. Prior to the launch of the Premier League, SABC3 had delivered an average audience of 275 897 at 3,6% share, year on year. The first match of the Premier League broadcast which featured Arsenal FC vs. West Ham United FC on SABC3, delivered 473 091 at 5,6% share, with a variance of 197 194 at 2.1% share in growth for the Saturday afternoon slot.

As the exclusive broadcaster of key Athletic SA events in South Africa, the SABC continued with extensive production and coverage of the five major marathons, that is the Comrades, the Two Oceans, Nelson Mandela Day, Cape Town City, and the Soweto Marathons. Coverage of the Comrades Marathon, which is widely regarded as the world’s premier ultra-marathon, was broadcast on SABC2 live for 13 hours. The Soweto Marathon has grown year on year and as host broadcaster, the SABC’s continued coverage, which saw President Cyril Ramaphosa grace the marathon as part of his ‘Thuma Mina’ campaign to encourage healthy living for all South Africans. It also showcased some of Soweto’s historic landmarks.

Complementing the production and broadcast of these marathons, the SABC produced a weekly magazine show that showcased a variety of athletic genres inclusive of national track and field events such as the Athletics South Africa (ASA) Senior and Junior Championship as well as the Grand Prix.

Cricket on SABC3

Graph: Sports Genres

Soccer

CricketRugby

Martial Arts (EFC Live Events)

MarathonsAwards67%

23%

2%

3%

4% 1%


Looking ForwardThe SABC successfully contracted the Rights from Lagarde for the 2019 Africa Cup of Nation, as well as the International Olympic Committee (IOC) for the 2018 and 2022 Youth Games, the 2018 and 2022 Winter Games and the 2020 and 2024 Summer Games. The acquisition of these long-term premier rights will ensure that South Africa’s athletes are showcased and celebrated. The SABC will endeavour to acquire rights to broadcast the listed events coming up in 2019/20 and 2020/21.

Collage of other Sports

Other sport programmes that were featured for the period under review included Playing for the Coach, Sport @ 10, Beyond Boundaries and The Ladies Club.

Sports of National Interest

Most of the programming on sports of national interest was carried on Soccerzone, Laduma, Soccer 411, and Athletics Alive

49

Two Oceans on SABC Sport

South Africa wins the Rugby World Cup

Representing South Africa at the African Cup of Nations

Kicking our first goal at the 2010 Fifa Soccer World Cup

#SABCFREEDOM25

Graph: Sport Magazines

Minority and Development (Sportsbuzz, Nedbank Ke Yona, Boxing, The Ladies Club and Beyond Boundaries.)

Collage of other Sport (Sport@10, Playing for the coach, EFC Premier League Pre-view Show, Premier League Review Show and Licensed Inverleigh Content.)

National Interest/Mandate (Swimming Mag-azine, Athletics Alive, Soccerzone, Soccer 411, FIFA Magazine and Road to Russia.)

30%

35%

35%

Graph: Sports of National Interest

National Interest (Cricket, Rugby, Soccer and Marathons.)

Other (Shell Helix Cup, Mandela Centenary Cup and Awards.)

Developmental and Minority (FIFA Development Matches and Boxing.)

77%

21%

2%


PERFORMANCE

SABC’s Broad-Based Black Economic Empowerment (B-BBEE) Compliance.The SABC is committed to Black Economic Empowerment (BEE) and all its business activities are aligned with the national transformation agenda and thus complying with the B-BBEE Act 2003 and the Information Communications Technology (ICT) sector B-BBEE Codes.For the period under review, the SABC’s performance against the set targets on the B-BBEE ICT sector Codes resulted in achieving B-BBEE status Level 2.Strategic initiatives across the Corporation were implemented for each element of the scorecard.All Supply Chain Management (SCM) activities are subjected to the Preferential Procurement Policy Framework (PPPF) Act No. 5 of 2000. The latest Preferential Procurement Regulation 2017 effective 1 April 2017, made it possible to pre-qualify for SCM opportunities where black owned, black women, exempted and qualifying small enterprises are earmarked.

SABC’s Preferential Procurement Performance v/s ICT Sector code targets The SABC was verified and audited against the following B-BBEE Indicators and compliant targets indicated on the tables:

TABLE: The SABC‘s Preferential Procurement Performance

Indicator Compliance Target Achievement

B-BBEE Procurement Spend from all Suppliers 80% 112%

B-BBEE Procurement Spend from all Qualifying Small Enterprises 15% 8.55%

B-BBEE Procurement Spend from all Exempted Micro-Enterprises 15% 11%

B-BBEE Procurement Spend from Suppliers that are at least 51% Black owned

40% 41%

B-BBEE Procurement Spend from Suppliers that are at least 30% Black Women owned

12% 7.55%

TABLE: SABC’s Scorecard against the ICT Sector B-BBEE Codes

B-BBEE Element Weighting Points

Company Score

Management Control 20 19.61Skills Development 25 15.30Enterprise and Supplier Development 50 50.22

Socio-Economic Development 12 12Overall Score 97.13B-BBEE Level 2

SABC achieved the overall score of 97.13 for the verification and audit for 2018.

SABC News campaign launching its App


The broadcasting industry is in the midst of the most dramatic change in its history as the migration from analogue to digital broadcasting gains momentum. The advancement of digital technology has led to change in audience behaviour who now expect to access content anywhere, anytime, and on any device.

MilestonesDuring the period under review, the following milestones were achieved: • Development of the SABC News App;• Development of the Elections Website;• Preparations for News Coverage of the 2019 Elections in Pretoria,

Provincial IEC Centres and other DSNG / DMNG / Live U contribution points;

• The successful installation of dira! a state of the art Radio Playout System at 5FM, METRO FM, Radio 2000 and Good Hope FM;

• The upgrades to radio production studios, drama production studio, and the RMC Router;

• SABC1 and SABC3 started broadcasting in High Definition (HD) on DStv and DTT in June 2018. The introduction of HD ensured that audiences enjoy a picture quality that is clearer and crispier than was the case with normal Standard Definition. The conversion of SABC1 was in time for the 2018 FIFA World Cup. SABC2 followed suit in early July 2018;

• The implementation of the Pebble Beach Automation Project, resulting in a centralised ingest, content management and multi-channel automation solution for SABC’ Television transmission systems, at FCC was completed by the middle of July 2018;

• The 36 MHz satellite lease is in place and has been in operation since 21 September 2018. This is used extensively for radio and television signal contribution from outside broadcast venues within Sub-Saharan Africa;

• The successful termination of the Asynchronous Transfer Mode (ATM) services on 30 April 2018. TV MCR and the Provinces are now connected via Metro Ethernet (ME). This is used primarily for video and audio contribution between SABC Auckland Park and the Provinces;

• The deployment of the Hybrid ENG vehicles to the Provinces was completed on 15 March 2019. These facilities are to enhance live broadcast from the Provinces and areas that lack connectivity;

• The Mzansi Super League T20 Cricket broadcast was a huge success. The Division facilitated 24 out 32 matches including the playoffs and the final. An external service provider facilitated the other 8 matches;

• The Division successfully provided host broadcasting services for the following events:

- the international friendly match between Mamelodi Sundowns FC and Barcelona FC at the FNB Stadium on 16 May 2018;

- the International Telecommunication Union (ITU) Summit at the Durban ICC from 10 to 14 September 2018; and

- the BRICS Summit.

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Media Technology Infrastructure (MTI) is the Division of the SABC whose strategic objective is to ensure that the SABC has appropriate and reliable technological infrastructure for the production and delivery of broadcast programming, digital media content whilst supporting revenue generation.

For the period under review, the Division focused on the SABC Information Technology (IT) Governance and how it could be aligned and embedded in the SABC Corporate Governance. Critical policies that were approved by the SABC and socialised to SABC employees include the following: • IT Governance Framework; • Software Asset Management Policy; • Automated Software Entitlements Certificate and Software

Retirement Certificate; and • IT Change Management Policy. The SABC successfully applied for digital audio broadcasting – plus (DAB+) trial licence and together with the industry body trialled the DAB+ radio system. A closed listenership group tested many radio sets for the different functionality as well as the various bit rates at 48kHz. The Corporation is waiting for the Department of Communications to finalise the policy directives on digital sound broadcasting as well as the regulations from the Regulator.

InnovationThe Division successfully facilitated off-tube commentary for regional radio stations to broadcast the 2018 FIFA World Cup from their studios in the Provinces. This enabled XK FM to broadcast World Cup matches live in !Xintali and Khwedam for the first time.The Division’s interns designed and delivered on an interactive touchscreen App for elections programmes.The SABC has also done research and tested Drone technology, the possibility and its use in live broadcasts for Sport and News.

Dira goes live at Good Hope FM with Leigh-Anne Williams Host of Lunch with Leigh-Anne

IP PortfolioDuring the period under review, the Division, through Radio Digital has provided XML ‘now playing’ data links for integration into the SABC website, and also provided live audio feeds for each radio station for the streaming audio services which are available on all SABC radio websites through a streaming audio player. All Radio Studios are equipped with Social Media systems which are integrated to services like WhatsApp, Skype, Facebook and the station’s websites. Web cameras were installed in studios to provide an external view of the in studio operations to the public via the radio station’s websites.The SABC used IP connectivity over microwave links and over satellite for a number of broadcasts during the 2018 Comrades Marathon. The SABC successfully facilitated the host broadcasting services for the Nelson Mandela Lecture which was delivered by the former US President Barack Obama at Wanderers Stadium on 17 July 2018. In addition to linear streaming, SABC Digital News, SABC OB and Google teams collaborated to have 360 Degrees Virtual Reality Camera live streaming the event on YouTube using IP over microwave links.

Digital Terrestrial Television/ Direct To Home (DTT/DTH)The SABC channels on the DTT/DTH platform is a strategically critical project as it not only announces that SABC is a multi-channel multi-platform content provider operating in the digital domain but, it also provides consumers with a broader choice and FTA services thus providing an opportunity to aggregate revenue through advertising and sponsorships.


PERFORMANCE

In preparation for the DTT/DTH migration, the following successes were achieved during the period under review:• Main and Backup Multiplex Head ends operationalised; • Main and Backup digital fibre connectivity to Sentech was installed;• A DTT laboratory consisting of standalone head end multiplexer and STB

evaluation systems; and • The construction of the Digital Operational Centre started in 2018 and is

earmarked for completion in 2019. This area will monitor and control the SABC head ends, as well as monitor DTT, DTH and analogue TV off air feeds.

All 18 SABC Radio Stations have live audio feeds to the DTT head-end for multiplexing into the DTT platform. Audio feeds for the radio stations are also provisioned via Henley Television MCR for multiplexing into the DStv platform.The Division also installed an HD facility for the Sport Channel. This facility includes a Control Room and a full HD Final Control Centre which runs on the new Pebble Beach Automation. Sport is expected to launch an HD Sport Channel on DTT and other platforms.Industry and SABC Service Level Agreement (SLA) for DTT was completed with the signal distributor. During the period under review, one analogue site was switched off in Senekal, Free State. The service availability level to the viewers at Senekal was monitored against the agreed service level. The average service level was found to be higher than the agreed level.

ACCESS

One of SABC’s Television Outside Broadcasting vehicles


The current analogue sound broadcasting platforms specifically, the FM network, has limitations on the availability of spectrum especially in the metropolitan areas. This is a stumbling block to the expansion of existing radio stations as well as the introduction of new services in the affected areas. Digital Sound Broadcasting, such as the DAB+ and Digital Radio Mondiale (DRM) on the other hand, makes efficient and optimum use of spectrum – the DAB+ and DRM for example can be rolled out on a Single Frequency Network (SFN) thereby extending the footprint to larger areas at much less transmission cost. With regards to access to communication services, about 70% of households have radios, and over 13 million vehicles sold in South Africa during the 2018/19 financial year have radio receivers. The DAB+ trials will assist towards increasing the availability spectrum for the provision of additional radio services to the public. The implementation of the Close Captioning project is on track now that the new automation system is in place. Integration and technical tests between Automation and Close Captioning were completed in March 2019. Tests will be conducted with content that has Close Caption timecode in the FCC in the next financial year.ICASA granted authorisation for two permanent channels, SABC Parliament and SABC Sport, which will be launched in November 2019. The SABC has already configured both channels on the DTT Head-End and are available to the public. SABC TV has access to up to three live feeds from Parliament.

Looking Forward For the next financial year, the SABC intends to continue rolling out the radio playout and production system to the remaining SABC Radio Stations. The planned installations prioritise SAfm; Channel Africa; Western Cape News; Parliamentary radio facilities; Ukhozi FM and Lotus FM.Other plans include the following projects;• Convert SABC News channel to HD;• Roll out the Dalet Galaxy Media Asset Management (MAM) to News, and

Sport, to address requirements for Sport and Parliament Channels;• Contribute to digital strategy by converting legacy content to digital

format, installation of Linear Tape Open (LTO) file storage, improvement of streaming facilities for Digital News and outside broadcast;

• Complete the acquisition and rollout of IP technology in outside broadcast facilities and studios. This should enable SABC to move away from renting telephone lines and be reliant on Telkom for communication during live broadcasts at venues;

• Upgrade of business continuity facilities, graphics, newsroom computer system, news production system, MCR Router, DTT Head-End, installation of Ad Insertion;

• Enhancement of Digital News production systems;• Extend the innovative technology in Hybrid ENG to Radio outside

broadcast vans;• Introduction of robotic cameras in order for SABC News and SABC Sport

to cut back on the number of operators used for studio productions;• Installation of IP PBX;

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The DTT and DTH television signal is 100% available throughout the country however, there is a challenge with availability of set top boxes and integrated television sets. SABC’s IP based delivery platforms (streaming) have also contributed to universal service obligations.

ACCESS

• Installation of Call Centre Solution including Telephone Management System;

• Installations Enterprise Collaboration solution;• Installations IT Service Management System;• Conversion from traditional Microsoft Office solution to

hosted Office 365 suite;• Implement Enterprise IT Software and computer hardware

inventory for the organisation;• Prioritisation of analogue switch off plans in order to meet the

newly set target deadline of June 2020;• Implementation of digital-to-digital migration project in order

to release the digital dividend bands for National interest and alignment of the radio frequency spectrum with International Telecommunication Union’s World Radio Communication Conference 2015 recommendations;

• Ensuring the stability of the transmission networks of digital broadcasting services on DTT, DTH, VOD as well as Streaming platforms;

• Facilitation of the Digital Audio Broadcasting (DAB+) trial with NAB, Sentech and broadcasting industry players;

• Facilitation of Channel Africa’s migration to DRM platform;• Development and implementation of a multiplatform infrastructure and

distribution platform monitoring; and• Development of Digital Sound broadcasting strategy in line with

industry developments.

SABC staff working behind the scenes to providing audiences with access to current affairs programmes


PERFORMANCE

Mother BrandFor the year under review, the following partnerships

were strategically carried out:The SABC partnered with the South African Music Awards

(SAMAs) and SnapChat to create filters. The objective of the partnership between the SABC and SnapChat was the

creation of brand association between the SABC and the SAMAs.

Mandela CentenaryThe SABC partnered with the Nelson Mandela Foundation on the Nelson Mandela’s Centenary Celebrations.

Another highlight was the Is’thunzi Sabafazi Event at which Ms Oprah Winfrey delivered the keynote address. On-air and online competitions were run through the various channels, stations and digital platforms.Promax/DBA AfricaPromax/BDA is a global association for entertainment marketing which recognizes the creative talent required to produce on-air material to assist broadcasters to attract and retain audiences. The annual Promax/BDA Africa conference and awards underscore the importance of this industry to create awareness for broadcasters’ brands, channels or programming. The SABC Events and Brand Experience Manager was requested to represent the SABC on the panel of 200 international judges for the 2018 instalment of the Conference and Awards. The SABC’s involvement in the Promax/BDA Africa not only allows the SABC to unearth its own talent, but it provides a platform for the SABC to support the promo production industry as a whole to nurture and recognise creative excellence.

Radio SABC’s Radio Stations commemorated and celebrated national days of importance through on air and digital initiatives, while incorporating the corporate theme or #hashtags to their individual campaigns.Some of the campaign included the following:• SABC Radio maintained an audience share of over 70% with

exciting above the line campaigns and a media mix that included out of home branding on billboards, taxis and buses, supported by innovative digital campaigns. RSG and SAfm took the lead in this particularly area as they celebrating 80 years in existence;

• Transversal relations between TV and radio were strengthened during the period under review. Strategic partnerships like BuyeleKhaya Pan African Music Festival in East London, 5FM Mid-Year Break in Sun City and the Mozart Requiem with SAfm, were instrumental in bringing the radio brands closer to the listeners;

• Munghana Lonene FM hosted their #BackToSchool campaign from 21 to 29 February 2019, by visiting 14 schools in the Limpopo and Mpumalanga provinces. The station also hosted its 15th instalment of the Xitsonga Music Awards on 30 March 2019 at Giyani Stadium in Polokwane. This event is mainly to award artists who have done exceedingly well on their music offering;

• Motsweding FM launched their back to school campaign on the 25th of January that aimed to reach six Provinces namely; Gauteng, North West, Northern Cape, Free State and Limpopo in three months;

• Ukhozi FM kicked off 2019 with a massive Back-to-School campaign. The idea has had a massive impact across the country and has inspired other media houses to adopt the model; and

• Umhlobo Wenene FM and TruFM collaborated with SABC3’s Presenter Search Campaign as a strategy to position SABC’s competitive edge and ability to bring together its Western Cape audiences across radio, TV and digital platforms.

TelevisionSABC Television focused on brand-building initiatives at channel level, network level and across all platforms. The following brand activities by television network were implemented: which utilised a mix of on-air, radio, print, digital, out-of-home and public relations media:SABC1• Siphetzshisayo Campaign: SABC1 launched an exciting campaign

‘S’PHETHE IZISHISAYO’ to celebrate, promote and the launch of new season as well as the promotion of schedule changes that took place;

• Schools Outreach: In the spirit of giving back and building the brand, SABC1 conducted a successful schools outreach initiative in the Eastern Cape, Limpopo and North West;

• SABC1 Open Up the Industry: SABC1 held open auditions across the country to look for a brand new face to be the co-presenter of Mzansi Insider. During the auditions, the channel discovered three additional on-air talent who were then deployed to present Real Gobhoza, Mikasi Su Kasi and Verified;

INITIATIVES: BUILDING THE SABC BRAND

RSG hosts audiences with a classical concert at the RSG Arts Festival in the M1 Studios

For the year under review, the SABC brand was promoted through marketing campaigns and strong digital media space to position the Corporation internally and externally in order to restore

public confidence.


• June 16 Symposium: SABC1 held its second annual Youth Month Symposium in June at the apartheid museum. The Symposium was attended by Grade 10 and 11 learners from seven high schools. In addition, the channel utilized digital media to invite tertiary students as well as unemployed youth; and

• Coast to Coast : SABC1 had its first annual Coast to Coast campaign which had three live OB’s for Live Amp. The event brought the show closer to its fan base who experienced the show live for the first time.

SABC2

• SABC2 February Campaign: SABC2 launched its schedule in February, which was a combination of new shows and new seasons on the channel ;

• Evening of Love: SABC2 to expressed it’s own brand ethos through the Valentine platform, interacted with our viewers and had a brand presence in a fun and unexpected way;

• SAFTAS: SABC2 was the lead brand within the SABC TV network and carried the awards. SABC2 and other channels promoted public voted nominations, announced the winners, ran viewer competitions and gave these away on our digital platforms and on-air;

• Africa Day: ‘Africa beyond our borders’ aims to actively participate in educating South Africans about the continent, drawing on commonalities that build and unite for economic, social and political benefit. SABC2 takes the lead in the Africa month celebration; and

SABC3

• All you Need Campaign: The campaign is aimed at building the SABC pillars and brand affinity as well as introduce the new schedule;

• The Journey Cruise: This is an inspirational weekend away on the luxury MSC Sinfonia Cruise Ship which trended over the weekend and created engagement amongst audiences that were not on the cruise. Two episodes of Real Talk were recorded with a live audience on the cruise for post broadcast in March providing context and background to viewers who were not part of the brand experience; and

• Mrs SA: The pageant is about The Crown of Virtue and is open to married women to enter. The contestants should demonstrate how they live the values of Ubuntu and also should have a strong element of giving back which resonates with the SABC3 brand. Each contestant raisd funds for charity and the 2019 SABC3 viewers’ choice Award went to Mrs Charity who raised the most funds for cancer association affiliated to the channel

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CANSA. Nicole Capper is the 2018 Mrs SA candidate who will represent SA in the Mrs World competition.

SportDuring the period under review, the SABC Sport Marketing executed the following marketing and communication campaigns:• PSL Cup Matches; • Shell Helix Cup;• Nedbank Cup;• MTN 8 Cup;• 2018 FIFA World Cup; • FIFA partner Budweiser and• Premier League.

Events and PartnershipsUnder the period under review, the SABC platforms partnered with various organisations, institutions and government departments to deliver on salient and key events that were beyond the delivery of the Mandate and events of National Interest as required by the Broadcasting Act. These included the following:

Nelson Mandela Centenary

• The Centenary celebrations of Nelson Mandela who would have turned 100 in 2018, featured on SABC Radio content in various forms of relevance and activations under the overarching theme #LiveHisLegacy. This included leadership lessons, that the youth of today could glean and learn from Nelson Mandela was a priority on most SABC Radio Stations.

• SABC2 headlined the centenary campaign and activations that were aligned to Mandela Month. TV Content focused on the celebrations around the 100th anniversary, with one of the highlights was the live broadcast of the 16th Annual Nelson Mandela Centenary Lecture, with the keynote address delivered by former US President, Mr Barack Obama.

Global Citizen Festival

• The SABC partnered with the Global Citizen: Mandela 100 which was another event that celebrated Mandela’s Centenary during the 2018/19 financial year. The Global Citizen Concert saw billions of rands being pledged for various causes. The event took the format of a music concert and was a culmination of all the ‘do good’ community work done by Global Citizens globally to honour the life and legacy of Nelson Mandela. International musician participated in the concert, amongst them were

The Global Citizen campaign


PERFORMANCE

Complaints Management 2018/19During the period under review, the SABC continued to receive, respond and refer complaints from members of the public, Regulators, Chapter 9 institutions, etc. Complaints are classified into two main categories, namely; direct and indirect complaints. Direct complaints are those that are directly received by the SABC without the involvement of Regulators whereas indirect complaints are received from Regulators including ICASA, BCCSA and ARB.

Between April 2018 and March 2019, a total of 124 indirect complaints were finalised by the BCCSA.

BCCSA COMPLAINTS FINALISED: April 2018 to March 2019

Year Complaints Dismissed Upheld2018/19 124 116 8

The eight upheld cases are summarised as follows:

• Illegible advisories on SABC1’s drama series, ‘Tjovitjo’;

• The name of a night club featured prominently in a negative news story that had nothing to do with their activities;

• Four complaints were about violence on ‘7de Laan;’

• An interview on Morning Live about fake prophets demanded a right of reply from Prophet Shephered Bushiri, whose name had been mentioned in the interview; and

• A company in Kempton Park was featured on Leihlo la Sechaba and the BCCSA felt that they have not been afforded adequate right of reply.

During the period under review, the SABC received 785 direct complaints which were referred to platforms to respond. These included complaints on TV license, reception received, scheduling and competition prizes.

DIRECT COMPLAINTS REPORT: April 2018 – March 2019

Year TV License Reception Scheduling Prizes2018/19 403 30 392 4

ICASA finalised two complaints during the period under review. The first one relates to non-disclosure of sponsorship on SABC3. The SABC was reprimanded as a result. The second complaint relates to the contract between SABC and Multichoice. The case was dismissed.

Beyoncé, JAY-Z, Cassper Nyovest, D’banj, Ed Sheeran, Eddie Vedder, Femi Kuti, Kacey Musgraves, Pharrell Williams and Chris Martin, ShoB Madjozi, Tiwa Savage, Usher and Wizkid. The Global Citizen concert attracted an average viewership of 4.2 audience ratings (AR) and the post event publicity, social and digital media coverage and conversation was well received.

Albertina Sisulu Centenary• During the period under review, the Mama Albertina Sisulu’s centenary

under the #Masisulu100 was celebrated by all platforms to acknowledge the achievements of women and the role they play in our country. Different taglines such as #SheIsPower #AmandleMbokodo were promoted.

• SABC platforms played a significant role in the build-up and the culmination of Mrs Albertina Sisulu centenary in her birthday month, October. The centenary celebration in her honour continued on air through promos and an outside broadcast of SAfm Lifetime Live at the Sisulu home. SAfm held inspiring conversations about the roles played by Mrs Sisulu throughout her lifetime with close family and friends from their living room. On 21 October, Mrs Sisulu centenary birthday, SAfm carried the official proceedings from the Holy Cross Anglican Church in Soweto live.

• SABC Radio through SAfm produced a documentary ‘Albertina Sisulu: A Woman of Fortitude’ which was a finalist for the Best Radio Documentary for the 2019 Liberty Radio Awards. The SABC informed and educated the South African public about MaSisulu so that the nation and the world can draw inspiration from her story. SAfm also honoured MaSisulu by hosting the Sisulu family for a two hour hearty conversation on #LifeTimeLive with Criselda Dudumashe on the 18th of October. The show focused on the many inspiring roles played by MaSisulu throughout her lifetime. This was attended by family, close friends and high profile guests.

FuneralsThe 2018/19 financial year started on a tragic note with the passing of South African leader, Ms Winnie Mandela; the struggle stalwart Mr Zola Skweyiya; and the PAC stalwart Veronica Zondeni Sobukwe, the wife to the late Robert Sobukwe. In honour of these veterans significant parts of the schedules for SABC platforms were used to celebrate their lives and their contribution to a free South Africa. Their funerals and memorial services were also carried live across SABC Platforms. FIFA World Cup Russia 2018FIFA World Cup Russia 2018 saw some of SABC education’s shows like DST being put on hold until after the tournament. Learner support, Youth ke Yona, civic, commerce and finance, as well as science and technology were only broadcasted after 22:00 when the matches were over. Since June is the time for mid-year exams, educational content to help especially grade 12 learners, was broadcast on SABC Radio.

The live broadcast of the 16th Annual Nelson Mandela Centenary Lecture


The Division focuses on serving each identified stakeholder needs effectively by formalising relationships with individuals or groups who have a business interest in the SABC’s affairs, such as the Parliamentary Portfolio Committee, Department of Communications (DoC), Treasury, Industry Regulatory Bodies, commercial trade clients and partners, civic organisations and community groupings, academic associations, Lobby groups, consumers, SABC staff, unions and media. By doing so, the SABC is able to identify and eliminate its perceived risks effectively through a detailed stakeholder engagement, risk, and communication management plan.

People External Stakeholders

The SABC as a Public Broadcaster in partnership with public organisations and private entities undertook various social initiatives focused on a number of key national priorities which are shared by the government and a majority of South Africans. These focus areas include Education and form part of the overall SABC’s strategy of contributing to and being a catalyst for social cohesion through transformation of the South African society across all nine provinces.

To this end the Division formed partnerships with entities such as the Department of Basic Education to ensure that all Matriculants, through live broadcasts on SABC Radio and Television, have access to their matric results regardless of where they live.

It is envisaged that the digital migration of the country will happen in the near future. The SABC has been at the centre of an awareness and education drive under the auspices of the DoC, to inform the public of the impact and opportunities that digital migration presents. The Corporate Affairs and Marketing Division were assigned to lead the DoC’s DTT Working Group on Consumer Awareness, Education and Support.

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The Corporation was also responsible for Set-Top-Box displays during the public awareness campaigns, particularly in the Free State where the switch off of the analogue signal began.

SABC Employees

SABC employees remain the most crucial stakeholders to the SABC as they are responsible for the delivery and realisation of the organisation’s vision, mission and core values. Various divisions rallied behind the organisation’s Strategic Roadmap to ensure that its mandate to inform, educate and entertain is upheld at all times. SABC employees and management have regular engagements through various internal communication platforms which include electronic, face-to-face, internal print campaigns and activations.

During the 2018/19 financial year, management implemented weekly communication initiatives that promoted management visibility and accessibility.

Memorandum of Understanding (MoU’s)For the year under review, the Division facilitated the following MoU’s:

• Public Service Partnership for the promotion of Constitutional Values of Democracy;

• Mpumalanga Sports, Arts and Culture Department partnership;

• Partnership with the DoC for the digital migration process, including public awareness, education and supporting the campaign in future;

• Women InPowered partnered with SABC2 for the promotion of 16 Days of Activism of No Violence Against Women and Children; and

• Global Max Media Group based in Botswana partnered with Commercial Enterprises and SAfm on a programme called ‘South Africa meets China’.

ENGAGEMENTSThe Corporate Affairs and Marketing Division is charged with identifying and building key relationships with all SABC stakeholders. This is achieved through an integrated management plan focused on maximising strategic and commercial opportunities, monitoring relations and the environment within which the organisation operates internally and externally, and minimising SABC’s exposure to negative publicity and reputational damage.

Stakeholder engagement

Global Max Media Group will pay applicable fees to the SABC for the content.

People with DisabilitiesCorporate Affairs and Marketing facilitated engagements between SABC, DoC and Deaf Federation of South Africa (DEAFSA) for the period under review, where a decision was reached to develop SOPs for the use of sign language for major events of national importance such as the state of the nation address etc. The engagement with DEAFSA culminated in a tour of the SABC facilities by the former Minister of Communications Ms Nomvula Mokonyane and a delegation from DEAFSA.

A listener who has a son with a serious medical condition since birth, now 10 years old, sent a plea for assistance to Umhlobo Wenene FM. Dr Moshokoana – the Head of Urology at the Steve Biko Hospital graciously agreed to perform the operation pro-bono. The SABC staff, ranging from the GCEO to the security guards, participated in fund-raising for the family’s travel, accommodation and meals. Through everyone’s intervention, acts of kindness and giving, the family was able to travel to Gauteng for the procedure in December 2018.

Community and Civic Organisations Corporate Affairs and Marketing engaged the Ndzundza Mabhoko Traditional Authority, the IsiNdebele Concerned Group and the King’s delegation on their concern that IsiNdebele is not treated like one of the official languages in this country. They requested that the IsiNdebele News bulletin should be extended over the weekend.

Government RelationsParliamentary Liaison remains a key role in the organisation’s relationship building strategy that is closely managed by the Parliamentary Liaison Officer of the SABC based in Cape Town. This office engages in regular meetings and updates with various parliamentary representatives and through liaising with the relevant internal stakeholders, the SABC is able to anticipate and meticulously plan for relevant matters that affect the business. Government Relations ensures that the SABC’s presence and inputs are well represented in the relevant government platforms and participates effectively in key stakeholder events.


PERFORMANCE

International Relations During the period under review, in a quest to forge sound business relations while simultaneously bolstering existing associations, International Affairs organised interactions fundamentally premised on bilateral and multi – lateral strategic approach. This encompassed tactical engagement with fellow regional and international broadcasters, South African based foreign missions, business, academia as well as industry players.

The list below details stakeholders that were engaged during the 2018/19 financial year:• The Embassy of the Republic of Cuba;• Seychelles Broadcasting Corporation (SBC);• Penn State University (USA);• University of Switzerland;• Rwanda Broadcasting Agency ( RBA);• Southern African Broadcasting Association;• The Embassy of the Republic of Japan;• The High Commission of the Republic of South Africa, Kigali, Rwanda;• The Embassy of the Republic of Korea;• The Independent Broadcasting Authority of Zambia;• The Embassy of the Bolivarian Republic of Venezuela;• The High Commission of Botswana;• Zambia Ministry of Information and Broadcasting Services;• The Embassy of the Republic of Belarus;• The Embassy of the Russian Federation;• Botswana Investment and Trade Centre;• Ethiopian Broadcasting Corporation;• United Nations (South Africa);• Zimbabwe Broadcasting Corporation; and• Radiodiffusion Televisione Ivoirienne.

SABC Staff at the Sowetan Marathon


AND AWARDSThis section highlights achievements, awards and recognition bestowed upon the SABC, its platforms, programmes and employees.

Promax AwardsThe SABC won the following Promax awards:

• Gold – SABC Foundation won in the Category for Best Public Service Announcement for their collaboration with POWA; and

• Silver – SABC3 won in the Category for Best Weekly Wonder for ‘Meerkat’ Nature

SABC Television• In November an ‘Uzalo’ episode reached 10.2 million viewers. This

is largest viewership ever achieved for an episode of a television programme in South Africa. It is also the first time that the viewership of the programme exceeded the 10 million mark;

• Feather Awards: Ayanda Thabete (Top Billing Presenter) - won the Best Dressed category;

• ‘Khumbul’ekhaya’ won the CWU Award;

• ‘Raw Silk’ presenter, Pearl Modiade, won the Mzansi Viewer’s Choice;

• ‘Khumbul’ekhaya’ won the Sunday Times Next Generation Award for the Coolest brand in TV Community award category;

• The ‘Children of War’, a factual documentary, broadcast on SABC1 in 2017 was selected to be screened at the Encounters Film Festival 2018; and

SABC2 received the following nominations on ATKV Mediaveertjies Awards competition in the following categories:

• Best scriptwriter for a Drams Series: Henriëtta Gryffenberg from ‘Erfsondes’ on SABC2;

• Best Drama Series: Bobby Heaney from ‘Erfsondes’ on SABC2;

• Best Actor in a Drama Series: Kaz McFadden – ‘Erfsondes’ on SABC2; and

• Best Actress in a Drama: Antoinette Louw from ‘Swartwater’ on SABC2.

SAFTAs

SABC1

• ‘Uzalo’ won the Best TV Soap;

• The Best Actor for TV Drama was won by Mothusi Magano from ‘Emoyeni’;

• The Best Achievement in TV Directing for TV Drama was won by Vincent Moloi from ‘Tjovotjo’;

• The Best Supporting Actor for a TV Comedy was won by Warren Masemola from ‘Single Galz’;

• The Best Achievement in Scriptwritting for TV Comedy was won, by the team of Rethabile Ramaphakela, Mpho Osei, Karabo Lediga, Anne Davis, Julian Koboekae, Tshegofatso Monaisa, Meren Reddy, Bradley Katzen and Katleho Ramaphakela from ‘Thulani no Thulani’;

• The Best Achievement in Wardrobe for a TV Soap was won by Nokubonga Ngobeni from ‘Uzalo’;

• The Best Achievement in Make Up and Hair for a TV Soap was won by Stella Johnson from ‘Uzalo’ ;

• The Best Achievement in Scriptwriting for a TV Drama was won by Thishiwe Ziqubu, Karabo Lediga, Tshenolo Mabale, Nozipho Nkelemba and Mmabatho Montsho from ‘Emoyeni’;

• The Best Achievement in Editing for a TV Drama was won by Itumeleng Nkabinde from ‘Emoyeni’;

• The Best Achievement in Cinematography for TV Drama was won by Marc Rowlston from ‘Emoyeni’;

• The Best Reality Show was won by Mirror Effect Media for ‘My First’; and

• The Best Youth Programme was won by What Box for ‘Mi Kasi Su Kasi’.

SABC2

• The Best Supporting Actress for a TV Comedy was won by Nomsa Buthelezi for ‘Abo Mzala 3’;

• The Best Children’s Programme was won by Quizzical Pictures (PTY) Ltd for ‘Restyle My Style’;

• The Best Game Show was won by Stemmburg Television for ‘Noot vir Noot’;

• The Best Factual and Educational Programme was won by Engagement Media for ‘Kick It’;

• The Best Achievement in Art Direction for a TV Comedy was won by Lerato Pitso for ‘Abo Mzala 3’;

• The Best Achievement in Hair and Make Up for a TV Comedy won by Regentse Munyai for ‘Abo Mzala 3’; and

• The Best Achievement in Wardrobe for a TV Comedy won by Gisellah Mcleod for ‘Abo Mzala 3’.

‘Tjovitjo’ won the Golden Horn Award for Best TV Drama ©Saftas

SABC3

• The Best TV Presenter was won by Sivuyisile Ngesi for the ‘The Man Cave’ Season 6;

• The Best Achievement in Sound for a TV Comedy was won by Janno Muller for ‘Bedford Wives’; and

• The Best Achievement in Art Direction for a TV Drama was won by Ilze Van Den Berg, Richard Rehbock and Nazo Maloyi for ‘The Docket’.

SABC News• Umhlobo Wenene FM current affairs freelance Producer Malixole Gwatyu

was one of two Southern African Agricultural Journalists invited to attend a 5 day conference in the Netherlands;

• RSG current affairs freelance Producer Marlinée Fouché was selected as the 2018 Doctors without Borders Southern Africa Media Fellow to spend three weeks in India;

• Sibongile Mkani-Mpolweni received an award for Best Female Journalist at the Sunrise Women’s Awards where the women in Mpumalanga Province were awarded and honoured in different spheres;

• Mpumalanga Radio News Assignment Editor, Bobo Lukhele, received a Humanitarian Award at the 3rd Mpumalanga Sunshine Women Awards;

• Cleopatra Jones won the Best TV and Best Up and Coming Journalist at the 2018 Diageo SA Responsible Drinking Media Awards (RDMAs);

• Northern Cape Radio Journalist, Reginald Witbooi, was selected for the United Bank for Africa Journalism Fellowship to attend the Tony Elumelu Foundation Entrepreneurship Forum in Lagos, Nigeria in October 2018;

• Chriselda Lewis won an award by Communication Workers Union for her unending coverage of issues affecting the poor and working class in South Africa;

• Puleng Modupe (investigative), Ulrich Hendriks and Jabu oa Afrika (economic/financial), Reginald Witbooi and Sphiwe Hobasi (live reporting/breaking news) won Vodacom Northern Cape Regional Journalist of the Year Awards;

• Zimkitha Manqinana and Cwenga Mgubasi (lifestyle/feature), Jayed-Leigh


PERFORMANCE

Paulse (sport) and Makhaya Komisa (politics) won Vodacom Eastern Cape Regional Journalist of the Year Awards;

• The Vodacom Western Cape Regional Journalist of the Year Award judges commended Special Assignment Producer Hazel Friedman for her sterling investigative story on land reform;

• RSG Radio Current Affairs Presenter/Producer Suzanne Paxton won SANParks’ Kudu Award for her Media (Radio) Contribution to Eco-Tourism in Midrand;

• SAfm Radio Current Affairs co-Executive Producer Krivani Pillay and freelance Johannesburg Radio Journalist Jamaine Krige won two of the only three Media Monitoring Africa Isu Elihle Awards and they each received R10 000 for their children story ideas in Johannesburg;

• Freelance Johannesburg Radio Journalist Jamaine Krige also won the SAB Environment Audio Media Award in Johannesburg;

• Radio News and Current Affairs finalists in three categories of the Liberty Radio Awards;

• Mathumisa (News and Actuality Show / Lesedi FM / Bloemfontein);

• Monitor (News and Actuality Show / RSG / Johannesburg);

• Prabashini Moodley (Field News Reporter / Lotus FM / Durban);

• Tracy Valaydham (News Bulletin Reader / Lotus FM / Durban);

• Bongiswa Baliti Mantakana (News Bulletin Reader / Tru FM / Bhisho);

• Siseko Kondile (News Bulletin Reader / Tru FM / Bhisho); and

• Dimakatso Motaung (News Bulletin Reader / Motsweding / Mahikeng)

Finalists in six categories of the ATKV Mediaveertjies Awards from RSG Radio Current Affairs:

• Anna-Marie Jansen van Vuuren (Best Radio Item in a Magazine Programme);

• Heindrich Wyngaard (Best Radio Presenter or Interviewer of a News or Actuality Programme – Kommentaar);

• Izak du Plessis, Veronica Fourie and Hanri Wondergem (Best Radio Item in a News or Actuality Programme – Monitor);

SABC Liberty Radio Awards winners


• Heindrich Wyngaard (Best Radio News or Actuality Programme – Kommentaar);

• Marlinée Fouché (Best Radio Documentary Programme or Series); and

• Hanri Wondergem (Best Radio Item in an Educational Programme).

RadioLiberty Radio Awards

• Commercial Drive Time Show was won by METRO FM for ‘The Drive’, Documentary Combined won by RSG – Monitor for ‘Vroue Tronk’ by Anita Visser;

• Drama Programme Combined won by Motsweding FM and (Ogilvy Public Relations and Creatrix) for ‘Bua Le Mmino: Makarapa City’;

• Traffic Presenter won by Rendy S from Phalaphala FM;

• Commercial won by ‘Switshongo: Top 30’ from Munghana Lonene FM;

• Bright Stars - Inductees was Zukiswa Mqumbisa from Umhlobo Wenene FM;

• Hall of Fame – Inductees:-Dudu ‘Lady D’ Khoza, Ukhozi FM;- Phumzile Mnci, Umhlobo Wenene FM;- Thuso Motaung, Lesedi FM;- Wilson B Nkosi, METRO FM; and- Gahler, Tru FM.

Afrikaans Media Awards

RSG won in the following categories:

• Best insert in a journal programme won by Johan van Lill for his insert on ‘Oude Libertas 40 jaar’ in RSG’s arts programme; Best Presenter or Interviewer of a news or actuality programme won by Phil Loots for his programme ‘Fiks vir die lewe.;

• Best insert in a news or actuality programme won by Izak du Plessis for his insert on ‘Paternoster vissers’ in Monitor;

• Best journal programme won by Ilze Salzwedel for her program ‘Skrywers en Boeke’;

• Best news or actuality programme won by Melissa Tighy for ‘Landwye betogings teen Zuma’ in Spektrum;

• Best documentary or programme series won by Jamaine Krige for ‘Na die brande’ on RSG;

• Best text for a radio drama or theatre won by Marion Erskine for ‘Akwarius’ on RSG; and

• Best producer of a radio drama or theatre won by Bettie Kemp for ‘Akwarius’ on RSG.

SATMA

• Best Traditional Music Radio Programme of the Year won by Lavuth’iBhayi from Umhlobo Wenene FM.

Sport• Munghana Lonene FM Sport Producer, Robert Muthe won best

producer in the Limpopo Sports Awards;

• Lesedi FM Mr Thabo Kofa won Sports Commentator of the Year 2018 at 38th Annual SAB Sports Media Awards in the Audio Media category; and

• Thobela FM Commentator Dalton Motshwane was awarded the 2018 SAB Newcomer of the Year Award during the 2018 SAB Awards.

SABC Liberty Radio Awards winners SABC Liberty Radio Awards winners

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd62

GOVERNANCE

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GOVERNANCE

“The world is filled with ENDLESS

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Board and the Executive AuthorityThe Compact is not intended to interfere in any way with normal company law principles. The relationship between the Shareholder and the Board is preserved, as the Board is responsible for ensuring that proper internal controls are in place and that the SABC is effectively managed.The SABC Board attended three meetings with the Ministry of Communications during the 2018/19 financial year, as follows:• 19 June 2018;• 6 August 2018; and• 29 November 2018.

The Accounting Authority/SABC Board Role and Function of the BoardThe Board is the Accounting Authority of the SABC in terms of the PFMA and constitutes the fundamental base of corporate governance in the SABC. Accordingly, the SABC must be headed and controlled by an effective and efficient Board, comprising Executive and Non-Executive Directors, of whom the majority must be Non-Executive Directors in order to ensure independence and objectivity in decision-making. The Board of the SABC has absolute responsibility for the performance of the entity and is accountable for such performance.The Board Charter sets out the roles, duties and responsibilities of the Board as well as salient corporate governance principles.The role of the Board includes the following activities:• The appointment of the three executive directors of the Board namely

Group Chief Executive Officer (GCEO), Chief Operations Officer (COO) and Chief Financial Officer (CFO);

• Providing strategic direction and leadership;• Determining the goals and objectives of the company;• Approving key policies including investment and risk management;• Reviewing the company’s goals and strategies for achieving its

objectives;• Approving and monitoring compliance with corporate plans, financial

plans and budgets;• Reviewing and approving the company’s financial objectives, plans and

expenditure;• Considering and approving the annual financial statements and notices

to the shareholder;• Ensuring good corporate governance and ethics;• Ensuring that the Shareholder’s performance objectives are achieved

and that this can be measured in terms of the performance of the SABC;• Ensuring that the SABC complies with and is operating in accordance

with all applicable laws, regulations, government policies and codes of business practice, regulations and instructions prescribed in terms of legislation;

• Monitoring and reviewing performance and effectiveness of controls;• Ensuring effective, prompt and open communication with the Shareholder

and relevant stakeholders with substance prevailing over form;• Liaising with and reporting to the Shareholder;• Guiding key initiatives;

This commitment is embraced at all levels of the SABC. The SABC ensures that its processes and

practices are reviewed on an ongoing basis to ensure compliance with relevant legal requirements, the use

of funds in an economic, efficient and effective manner, and adherence to good corporate governance practices

that are continually benchmarked. Processes and practices are underpinned by the principles of openness, integrity, and

accountability and an inclusive approach that recognises the importance of all stakeholders with respect to the viability and

sustainability of the SABC.Compliance, with not only the letter, but also the spirit of relevant

governance codes remains a priority for the Corporation. As a state owned company, the SABC is guided by the principles of King IV Report on Corporate Governance for South Africa™ (King IV™), as well as the Protocol on Corporate Governance in the Public Sector 2002. In keeping with these principles, the SABC has implemented the requirements of King IV™, which came into effect on 1 April 2017. Furthermore, the statutory duties, responsibilities and liabilities imposed on the Directors of the SABC by the Companies Act No. 71 of 2008, as amended, are augmented by those contained in the Public Finance Management Act (PFMA), No. 1 of 1999, as amended.

Portfolio CommitteesPortfolio Committee on CommunicationsDuring the year under review, the SABC Board appeared eight times before the Portfolio Committee on Communications:• 19 April 2018;• 5 June 2018;• 25 September 2018;• 11 October 2018;• 13 November 2018; • 27 November 2018;• 11 March 2019; and• 19 March 2019.Standing Committee on Public Accounts (SCOPA)During the year under review, the SABC appeared twice before SCOPA on 7 November 2018 and 14 November 2018.

Executive AuthorityShareholdingThe Government of the Republic of South Africa is the sole shareholder of the SABC. The shareholder representative is the Minister of Communications.

Shareholder CompactIn terms of the Treasury Regulations issued in

accordance with the PFMA, the SABC must, in consultation with its Executive Authority (the

Minister of Communications), annually conclude a Shareholder Compact documenting the mandated

key performance measures and indicators to be attained by the SABC as agreed between the


GOVERNANCE

AND ACCOUNTABILITY The Directors of the South African Broadcasting Corporation SOC Limited (SABC) regard

corporate governance as fundamental to the success of the business and are fully committed to ensuring that good governance is practised in order that the SABC remains a sustainable and

viable business.


• Retaining full and effective control over the SABC and monitor management in implementing Board decisions, plans and strategies; and

• Approving transactions beyond the authority of management.

The President approved the appointment of the Board with effect from 16 October 2017 for a period of five years. Delegation of Authority (DoA)The Board has the authority to lead and control the business of the SABC including the authority to delegate its powers. The Board’s aim is to ensure that the SABC remains a sustainable and viable business.The Board’s responsibilities are supported by a well-developed governance structure of Board Committees and a clear and comprehensive Delegation of Authority Framework. The Board delegates the management of the day-to-day operations of the Corporation to the GCEO. The GCEO is assisted by the Group Executive Committee (Group EXCO). The Delegation of Authority Framework, which annually undergoes an extensive review, assists in the control of the decision-making process and does not dilute the duties and responsibilities of the Directors.Directors Induction and OrientationAll new Directors are taken through an induction programme that is designed to enhance their understanding of the SABC’s legislative framework, its governance processes and the nature and operations of its business.Continuous training is also provided on request to meet the needs of Directors. Directors are made aware of new laws and regulations on an ongoing basis.Board EvaluationThe performance of the Board and individual Directors will be evaluated annually. The performance of Board Committees will be evaluated against their Terms of Reference (TOR). During the period under review, the evaluation of the Board was not conducted and the process to appoint a service provider that will conduct an independent evaluation of the Board is underway. Performance Contracts were finalised with Executive and Senior Management. The Governance and Nomination Committee is responsible for the evaluation of Executive Management. Performance Contracting is being implemented throughout the SABC.

Report of the SABC Board for the Financial Year Ending on 31 March, 2019

The Board of Directors is pleased to present the 82nd Annual Report of the South African Broadcasting Corporation SOC Limited for the financial year ended 31 March, 2019.The Annual Financial Statements comprise the consolidated annual financial statements of the Corporation and its subsidiaries, (together referred to as the group), and of the Company for the year ended 31 March 2019.These Annual Financial Statements are presented in accordance with the Companies Act No. 71 of 2008 (as amended), the Broadcasting Act No. 4 of 1999 (as amended), the Public Finance Management Act. No. 1 of 1999 (as amended), and in accordance with International Financial Reporting Standards.It is important to register that during the 2018/19 year the following changes were made to the Board:• Mr M T Mxakwe was appointed as the GCEO from 1 July 2018;• Ms N P Philiso the Group Executive: Television who was appointed as the Acting

Group CEO from 20 July 2017 was released from the position effective from 30 June 2018;

• Ms Y van Biljon was appointed as the CFO from 25 June 2018;• Ms T S Dlamini, the General Manager Finance: Commercial Enterprises, was

appointed as the Acting Group CFO from 13 July 2017 until 24 June 2018;• Mr V Rambau, a Non-Executive Director resigned from 30 September 2018• Ms K T Kweyama, a Non-Executive Director resigned with effect from 6 December

2018;• Mr M G Tsedu, a Non-Executive Director resigned with effect from 6 December 2018;• Mr J Matisonn, a Non-Executive Director resigned with effect from 6 December 2018;

and• Mr K Naidoo, a Non-Executive Director resigned with effect from 6 December 2018.From 6 December 2018 to 10 April 2019 the Board was inquorate. However, the business of the company was conducted in line with the standing Board resolutions, the Delegation of Authority Framework (DAF) and the policies of the company. The contribution of acting Executives and the resigned Non-Executive Directors in bringing the SABC through a difficult time is acknowledged and we thank them for their accomplishments. During their tenure, they continued to eliminate those actions, which led to the financial crisis and ensuring that the lapses of the past do not recur. The Board will continue to ensure that the following, among other things, are achieved:• Corporate governance is maintained at the SABC;• Financial and internal controls and risk measures are entrenched and maintained;• The culture of fruitless and wasteful expenditure is totally eradicated within the

Corporation;• The cost-to-income ratio is reversed as cost growth has far outpaced revenue growth;

and• Content procurement practices are aligned to the attraction of advertising spend.

…………………................................…………….Mr Bongumusa MakhathiniChairperson of the SABC Board

Attendance at Board MeetingsBoard meetings are scheduled annually in advance. Special meetings are convened as necessary to address specific issues. Directors or external committee members who, on an exceptional basis, cannot physically attend meetings may communicate electronically. The record of attendance of the twelve (12) Board meetings during the reporting period is reflected below:

BOARD

Members AttendanceB E Makhathini (Chairperson) 12K T Kweyama1 11M G Tsedu1 12M G Markovitz 12J Matisonn1 12D K Mohuba 9K Naidoo1 11J H Phalane 12V Rambau2 7M T Mxakwe3 9Y van Biljon4 9C B Maroleni 12N P Philiso6 4T S Dlamini5 3

1. Resigned effective 6 December 20182. Resigned effective 30 September 20183. Appointed as GCEO effective 1 July 20184. Appointed as CFO effective 25 June 20185. Appointed as Acting CFO effective 31 July 2017 until 24 June 2018.6. Appointed as Acting GCEO effective 31 July 2017 until 30 June 2018.

Board CommitteesA number of Board Committees exist in order to assist the Board in discharging its responsibilities. This assistance is rendered in the form of recommendations, reports and minutes submitted to Board meetings whereby transparency and full disclosure of Committee activities are ensured. Each Committee operates within the ambit of its defined Terms of Reference that set out the composition, role, and responsibilities, delegated authority and meeting requirements of each Committee.

Audit and Risk CommitteeWith regard to the legislative and governance requirements for the compulsory establishment of Audit Committees for State Owned Entities, the responsibilities of the Audit Committee are briefly set out below. The SABC Board has elected to combine the roles of the Risk Committee with the Audit Committee. The Committee comprises of three independent Non-Executive Directors, who are appointed by the Shareholder in terms of the requirements of Section 94 of the Companies Act. The Committee is chaired by an independent Non-Executive Director. Members collectively have sufficient qualifications and experience to fulfil their duties and have sufficient understanding of financial reporting; internal financial controls; external audit process; internal audit process; corporate law and information technology governance.

The roles and responsibilities of the Committee include:

• Serving as the audit and risk committee for the SABC Group;

• Recommending the appointment of the External Auditors and overseeing the external audit process;

• Monitoring the internal control system to protect the SABC’s interests and assets;

• Reviewing the accuracy, reliability and credibility of financial reporting and recommends the annual financial statements and the Annual Report, as presented by management, together with the External Auditors’ report, for approval by the Board;

• Reviewing any accounting and auditing concerns raised by Internal and External Audit, the annual financial statements and the various reports to Shareholder;

• Ensuring that an effective Internal Audit function is in place and that the roles and functions of External Audit and Internal Audit are clear and co-ordinated to provide an objective overview of the operational effectiveness of the Corporation’s systems of internal control, risk management, governance and reporting;

• Reviewing the activities of the Internal Audit Department, the effectiveness thereof and the adequacy of available Internal Audit resources;

• Evaluating the independence, objectivity and effectiveness of the External Auditors;

• Ensuring that the Corporation has implemented an effective policy and plan for risk management that will protect the Corporation’s ability to achieve its strategic objectives;

• Ensuring that a combined assurance model is applied;

• Obtaining assurance for information technology (IT) as it relates to the management of IT assets, governance and controls, risks and disaster recovery;

• Monitoring the SABC’s compliance with statutory and legislative obligations and fiduciary responsibilities;

• Confirming that the SABC has appropriate controls in place to identify, and implement legislative and regulatory changes, which will affect its operations;

• Monitoring that management and administration of the products and services are conducted in accordance with relevant legislation, regulation, governing rules and within the terms of any delegation;

• Reviewing significant breaches, or potential breaches, of regulation and the steps taken to ensure that the underlying root causes of any regulatory control failures are being addressed;

• Assisting in identifying, evaluating, mitigating, and monitoring the business risks that the Group faces during the course of its operations, its exposure to significant risk, and the adequacy of the identification of risk;

• Reviewing the SABC’s risk appetite and future risk strategy, particularly for economic (i.e. risk-based) capital, liquidity and reputation, but also for operational risk, and to make recommendations on risk appetite to the Board; to review the principal risk policies for consistency with the Group’s risk appetite and to approve any material changes to these policies;

• Reviewing the risk profile against its risk appetite and strategy and review the drivers of the changes, if any, in the risk profile and their implications for liquidity and going concern status;

• With input from the Audit and Risk Committee, as appropriate, reviewing the adequacy of the Group’s processes and the effectiveness of controls over the determination of the compliance with the requirements of the Government Guarantee;

• Reviewing the design, completeness, and effectiveness of the risk management framework relative to the enterprise-wide risk management policy, and plans for management of the significant risks activities;

• Reviewing the adequacy and quality of the risk management function and the effectiveness of risk reporting (including timeliness and risk events);

• Evaluating the risk of exposure to fraud, review policies, and procedures in place to minimise, or detect fraud, and make recommendations to the Board to enhance such policies and procedures; and

• Developing and refining the SABC’s enterprise-wide appetite for risk, in conjunction with the full Board.

Refer to page 79 for the report of the Audit and Risk Committee detailing how it carried out its functions.


GOVERNANCE


Five Committee meetings were held during the financial year. These were attended by External Auditors, the GCEO, CFO, COO, Chief Audit Executive and other relevant corporate officials. The Chief Audit Executive and the External Auditors have unrestricted access to the Chairperson of the Committee and to the Chairperson of the Board. The attendance of Members at Committee meetings was as follows:

Members AttendanceV Rambau (Chairperson)1 4M Markovitz (Chairperson)2 1K T Kweyama3 5K Naidoo3 5M T Mxakwe4 3Y van Biljon4 3C B Maroleni4 5N P Philiso4.5 2T S Dlamini4,6 2J Malele4,7 (independent advisor) 2

1. Resigned effective from 30 September 20182. Effective from 16 October 20183. Resigned effective 6 December 20184. Attends by invitation5. Appointed as Acting GCEO effective 31 July 2017 until 30 June 2018.6. Appointed as Acting CFO effective 31 July 2017 until 24 June 2018.7. Appointed as Advisor effective 30 July 2018

Digital Technology CommitteeThe Digital Technology Committee comprises three independent Non-Executive Directors and is chaired by an independent Non-Executive Director. The Committee was to assist and advise the Board in fulfilling its obligations and, in certain instances, by acting on behalf of the Board through its mandate, on matters relating to digital technology. ‘Digital Technology’ is defined by the Committee to mean all known (and yet to be developed and commercialised) digital technology platforms, including but not limited to, Digital Terrestrial Television (DTT), direct to home digital satellite broadcasting (DTH) and mobile and web channels, with a strategic focus on the successful distribution of all SABC content over such platforms.

The Committee’s formation has been motivated by the massive impact of digital technology on all of the SABC’s core services and how the successful implementation of strategies in this regard will impact on the sustainability of the Corporation in the future.

The roles and responsibilities of the Committee are as follows:

• Ensuring that the Corporation employs innovative digital technology and information systems that enables the SABC to deliver on its statutory mandate;

• Assessing and evaluating the adequacy of the Corporation’s digital technology and related systems and make necessary recommendations to the Board to consider and resolve;

• The achievement of a successful migration from analogue terrestrial television broadcasting to DTT and DTH platforms, including oversight of the roll-out and distribution of STBs and associated viewer awareness campaigns, platform management and all related strategic and technology matters;

• The development of a multi-channel / multi-platform SABC content strategy across all digital technology platforms and oversight of the implementation of such strategy;

• The development of a technical infrastructure digitisation strategy;

• Ensuring that the Corporation liaises with all the relevant stakeholders and key industry bodies with respect to all SABC Digital Technology projects, where necessary, including but not limited ICASA, DoC, Sentech, USSASA, the SA Post Office and the NAB;

• Reporting to the Board on progress of all Digital Technology projects within the Corporation;

• Ensuring that the Corporation employs technology, which enables it to fulfil both its commercial and public mandates in line with its statutory mandate;

• Ensuring digital transformation in the SABC workplace so that SABC management and staff have access to innovative technology and an information systems platform that will enable the Corporation to deliver on its mandate and enable major business improvements such as enhancing audience experience, streamlining operations or creating new business models;

• Ensure that the technology employed by the Corporation is appropriate and able to support the strategic objectives of the Corporation; and

• Recommend to the Board the approval of policies, which fall within its mandate.

Three Committee meetings were held during the financial year. These were attended by the GCEO, CFO, COO and other relevant corporate officials. The attendance of Members at Committee meetings was as follows:

Members AttendanceM G Markovitz (Chairperson) 3J Matisonn1 3J Phalane 3M T Mxakwe2 2C B Maroleni2 3Y van Biljon2 3N P Philiso2.3 1T S Dlamini2,4 1

1. Resigned effective 6 December 20182. Attends by invitation3. Appointed as Acting GCEO effective 31 July 2017 until 30 June 2018.4. Appointed Acting CFO effective 31 July 2017 until 24 June 2018.

Finance, Investment and Procurement Committee (formerly the Finance, Investment, Procurement and Technology Committee)

The Finance, Investment and Procurement Committee comprises three independent Non-Executive Directors and is chaired by an independent Non-Executive Director.The roles and responsibilities of the Committee include:• Reviewing the long-term and short-term funding plan, for submission to

the Board;• Monitoring the current funding plan of the Corporation to enable it to fulfil

both its commercial and public mandates in line with the corporate goals;• Reviewing and recommending the annual capital and operating budget to

the Board for approval;• Recommending the limits applicable to counter-parties to the Board, and

monitoring and reviewing all borrowings made by the Corporation, and the guarantees and sureties issued on behalf of the Corporation;

• Reviewing funding and solvency implications of transactions and make recommendations to the Board;

• Reviewing the capital investment process, monitoring total Group capital expenditure;

• Reviewing and approving any capital project, or the procurement of any capital or the commencement of any capital project item included in the approved budget of the SABC, above R100 million up to R200 million;

• Reviewing and recommending to the Board the commencement of any capital project or the procurement of any capital item the cost of which exceeds R200 million;

• Reviewing the performance of all investments and acquisitions made;

• Reviewing and recommending to the Board the opening of new offices or new regional offices within the borders of the Republic of South Africa;

67

• Reviewing and making recommendations to the Board regarding the SABC’s investment strategy;

• Evaluating and making recommendations to the Board regarding business cases for new ventures or projects;

• Approving the criteria and guidelines for investments and approving investments within its delegated authority;

• Reviewing the budgetary processes adopted by management for effectiveness, integrity and adherence to the objectives of the Board and the Public Finance Management Act (PFMA);

• Ensuring that the reporting and budget submission deadlines set by the SABC are complied with;

• Reviewing the Group’s procurement policies for alignment with the B-BBEE Charter and procurement policy guidelines set by Government from time to time;

• Reviewing the Bid Adjudication Committee processes for effectiveness and integrity and ensuring group-wide adherence thereto having regard to the principles of the Group’s procurement policies;

• Reviewing the appropriateness of the Bid Adjudication Committee’s processes to the needs of the individual entities within the Group having due regard to the operational dynamics of each entity and to implement such measures as are deemed necessary to ensure the functional effectiveness of these processes;

• Reviewing the effectiveness of the Bid Adjudication Committee and implement such measures as are deemed necessary to ensure that this structure is functionally effective;

• Considering and approving the write-off resulting from the impairment of assets, up to an amount of R20 million, and recommending for approval by the Board of any amount over R20 million;

• Reviewing disposals made by EXCO in accordance with the authority granted to it by the Board;

• Reviewing and recommending to the Board for approval the writing off of assets above R15 million (at book value) to remove them from the asset register;

• Reviewing and recommending to the Board for approval the writing off of stock (at book value) above R15 million to remove them from the asset register;

• Reviewing and recommending to the Board for approval the sale of moveable assets at book value from R10 million to R16 million and for Board to recommend approval by the Shareholder for assets above R16 million;

• Subject to the provisions of the Public Finance Management Act (PMFA), reviewing and approving any sale or disposal of assets, the cost of which shall not exceed R50 million per item;

• Reviewing and recommending to the Board for approval the write-off resulting from the impairment of assets, up to an amount of R20 million;

• Reviewing and recommending to the Board for approval the entering into any agreement for the lease/hire/rental of property, where the cumulative value and the term are above R25 million per annum/5 years;

• Recommending to the Board the approval of policies, which fall within its mandate and identifying, evaluating and reporting to the Board on any risks associated with the technology of the Corporation;

• Overseeing the development of the disaster recovery plan put in place by the Corporation and advise the Board on the adequacy and suitability thereof;

• Advising the Board generally on purchasing decisions involving the acquisition of technology or systems;

• Determining whether the proposed transaction is in line with the strategic objectives approved by the Board for the Technology Division and the SABC generally;

• Determining whether the proposed transaction is in line with the public broadcasting mandate set out in Section 10 of the Broadcasting Act and the corporate goals;

• Determining whether the proposed transaction has been budgeted for and whether the business aspects of the decision are fundamentally sound;

• Determining whether the financial implications of the transaction will be and how much money will the Corporation make/stand to lose by supporting/rejecting the proposal; and

• Determining whether the proposal before the Committee contains all relevant information in sufficient detail and is the Committee satisfied that it has sufficient, appropriate information to enable it to thoroughly probe the decision and make a recommendation to the Board.

Three Committee meetings were held during the financial year. The GCEO, COO, CFO and other relevant corporate officials attended the meetings by invitation. The attendance of Members at the Committee meetings was as follows:

Members AttendanceJ H Phalane (Chairperson) 3B E Makhathini 3M G Markovitz 3M T Mxakwe1 1C B Maroleni1 2Y van Biljon1 2N P Philiso1,2 1T S Dlamini1,3 1

1. Attends by invitation2. Appointed as Acting GCEO effective 31 July 2017 until 30 June 2018.3. Appointed Acting CFO effective 31 July 2017 until 24 June 2018.

Governance and Nominations CommitteeThe Governance and Nominations Committee comprises three independent Non-Executive Directors and is chaired by an Independent Non-Executive Director (Chairperson of the Board).


• Regularly reviewing the size, structure and compositions of the Committees of the Board, with due regard to the legal requirements, skills and expertise required for effective performance of each Committee;

• Ensuring that appropriate succession planning is in place for both Executive and Non-Executive Directors of the Board;

• Evaluating succession-planning arrangements for Executive Directors to ensure that these are orderly and calculated to maintain an appropriate balance of diversity, skills, knowledge and experience;

• Annually reviewing the key data indicators of listed successors for direct reports of the Group Chief Executive Officer to determine their status on the succession plan and readiness to assume a role as the need arises. Such data should include the performance evaluation outcomes and outputs of management conversations;

• Supervising the administration of the Corporation’s policies relating to actual or potential conflicts of interest affecting Members of the Board;

• Responsible for preparing a description of the role and capabilities required for particular appointments of Executive Directors to the Board and for identifying and nominating candidates for the approval of the Board;

• Making recommendations to the Board for the continuation (or not) in service of any Director as an Executive or Non-Executive Director;


GOVERNANCE


• Reviewing and, where appropriate, making recommendations to the Board about proposed appointments to the Boards and Committees of Subsidiary Businesses including the exercise of rights as stipulated in the Broadcasting Act to remove a Director, the nomination of Board representatives to sit on the Boards of subsidiaries;

• Approving conditions of employment and all benefits applicable to the Group Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and the terms and conditions of the severance of employment of such individuals;

• Assisting the Group Chief Executive Officer in the selection of the Chief Financial Officer and Chief Operating Officer when vacancies occur provided that the appointment of such persons would remain the decision of the Board;

• In consultation with the Board, determine the remuneration for the Executive Directors, on appointment, having regard to the remuneration policy;

• The Committee shall make recommendations in respect of the fees and/or remuneration of the Non-Executive Directors to the Board from time to time, which Directors’ fees and/or remuneration shall be subject to the approval of the Minister;

• The Committee will recommend to the Board for its approval, appropriate Key Performance Indicators (KPIs) for the Executive Directors at the beginning of each Financial Year;

• The Committee will determine and agree with the Board the policy for the remuneration of the Executive Directors. No Director or Executive shall be involved in any decisions as to their own remuneration;

• When appropriate, the Committee shall request and consider reports and presentations by the Audit and Risk Committee; or the Social and Ethics Committee;

• Developing, evaluating and reviewing the corporate governance structures, policies, practices and procedures of the Corporation and implement such structures, policies, practices and procedures as the Committee deems to be in keeping with the trends of good corporate governance;

• Reviewing and evaluating regularly the balance of skills, knowledge and experience and performance and effectiveness of the Board and its Committees, make recommendations to the Board with regard to any adjustments that it considers appropriate, and approve the section in the Annual Report dealing with the performance of the Board;

• Establishing and ensuring the implementation of an induction programme for new appointees to the Board;

• Approving a performance and evaluation measurement framework to monitor the effectiveness of the Board, Board Committees, individual Directors, the GCEO, CFO and COO;

• Reviewing and, where appropriate, make recommendations to the Board about actual or potential conflicts of interest affecting any Member of the Board, carry out an annual review of declarations of conflicts of interest by the Board, and approve a report to the Shareholder on how the Corporation’s Policy on Conflicts of Interest has been applied during the year;

• Preventing any Human Capital practices that will result in unauthorised, irregular, fruitless and wasteful expenditure and losses from criminal conduct and expenditure not complying with legislation;

• Ensuring compliance with the relevant and applicable labour related legislation;

• Responsible for the oversight and monitoring of the Human Capital management strategies and implementation within SABC, and ensuring that these are beneficial to the Corporation and employees, the continued

existence of the Corporation, and to ensure a return on investment for the Shareholder;

• Ensuring that there is rigorous probing of strategic plans and investment proposals, by asking ‘what if’ and ‘why not’ questions, and by challenging the assumptions underlying strategy;

• Ensuring that a proper strategic planning process is implemented;

• In conjunction with the Board, setting parameters within which Management develops strategy, which may include ensuring that short-term and longer-term strategies are balanced and that it provides a platform for sustainability;

• Ensuring that the strategies are aligned with the purpose of the business, the prevailing culture and ethics and the interests of the SABC’s stakeholders; and

• Instituting regular and formal Board strategy reviews or strategy audits and examine progress towards the predetermined objectives and evaluate current performance in the light of these predetermined objectives.

Three Committee meetings were held during the financial year. The attendance of members at the Governance and Nominations Committee meetings was as follows:

Members AttendanceB E Makhathini (Chairperson) 3J H Phalane 3M G Tsedu1 3

1. Resigned effective 6 December 2018

Human Resources, Governance and Nominations CommitteeThe Committee comprised three independent Non-Executive Directors and was chaired by an independent Non-Executive Director.


• Ensuring that the structure, size, composition, skill sets and performance of the Corporation is regularly reviewed and maintained at levels which are appropriate;

• Evaluating succession-planning arrangements for Group Executives, to ensure that these are orderly and calculated to maintain an appropriate balance of diversity, skills, knowledge and experience;

• Approving conditions of employment and all benefits applicable to the Group Executives of the Corporation; and the terms and conditions of the severance of employment of such individuals;

• Approving the general material terms and conditions of employment to be applied for all employees of the Group;

• Reviewing the specific application of the Remuneration Policy with regard to Group Executives and make a recommendation to the Board for approval;

• The remuneration of the General Managers and Heads of Business Units will be determined by the Group Chief Executive Officer, within the ranges laid down by the Committee and recommended to the Committee for approval;

• Assisting the Board in its oversight of the Remuneration Policy and its specific application to the Group Executives and its general application to all Group employees, the review of the remuneration philosophy of the Group, the adoption of annual and longer-term incentive plans, the determination and approval of levels of reward to the Group Executives;

• Approving general retirement policies of the Group and any changes in such policies or to the rules of the retirement funds; and

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• Considering and recommending the Human Capital Policies and reviewing the prevailing industrial relations policies and the Corporation’s strategies in respect thereof in order to ensure that the appropriate policies are applied.

Six Committee meetings were held during the financial year. The GCEO, COO, CFO and other relevant corporate officials attended the meetings by invitation. The attendance of Members at the Committee meetings was as follows:

Members AttendanceK T Kweyama1 (Chairperson) 6M G Tsedu1 5K Naidoo1 6D K Mohuba 5M T Mxakwe2 3C B Maroleni2 6Y van Biljon2 2N P Philiso2,3 3T S Dlamini2,4 3

1. Resigned Effective 6 December 20182. Attends by Invitation3. Appointed as Acting GCEO effective 31 July 2017 until 30 June 2018.4. Appointed Acting CFO effective 31 July 2017 until 24 June 2018.

Public Broadcasting Services CommitteeThe Public Broadcasting Services Committee comprises three independent Non-Executive Directors. The Committee is chaired by an independent Non-Executive Director.

The role of the Committee is to ensure that the SABC delivers on its obligations as provided for in the Public Broadcasting Service Charter of the Corporation. Public Services must:

• Be made available to South Africans in all the official languages;

• Reflect both the unity and diverse cultural and multilingual nature of South Africa and all of its cultures and regions to audiences;

• Strive to be of high quality in all of the languages served;

• Provide significant news and public affairs programming, which meets the highest standards of journalism, as well as fair and unbiased coverage, impartiality, balance and independence from government, commercial and other interests;

• Include significant amounts of educational programming, both curriculum-based and informal educative topics from a wide range of social, political and economic issues, including, but not limited to, human rights, health, science, early childhood development, agriculture, culture, technology, religion, justice and commerce and contributing to a shared South African consciousness and identity;

• Enrich the cultural heritage of South Africa by providing support for traditional and contemporary artistic expression;

• Strive to provide a broad range of services targeting, particularly, children, women, the youth and the disabled;

• Include programmes made by the Corporation as well as those commissioned from the independent production sector;

• Include national sports programming as well as developmental and minority sports;

• Review the Sports Broadcasting Rights;

• Report to the Board on the extent to which the News division has achieved its objectives during the relevant period;

• Develop proposed policies for consideration by the Board on news and current affairs programming, which ensure that SABC’s news and current affairs content is fair, balanced, accessible, accurate, compelling, professional, authoritative and in line with the Constitution of South Africa, the Broadcasting Act and other relevant legislation;

• Assist the Board to preserve the Corporation’s editorial independence and integrity and to ensure that the Corporation does not allow commercial, political or personal considerations to influence its editorial decisions; and

• Review the editorial policies of the Corporation from time to time to ensure that they remain appropriate to the operational needs of the corporation and the fulfilment of the statutory and regulatory obligations and mandates of the corporation.

Four Committee meetings were held during the financial year. The GCEO, COO, CFO and other relevant corporate officials attended the meetings by invitation. The attendance of Members at these meetings is reflected below:

Members AttendanceD K Mohuba (Chairperson) 4J Matisonn1 4M G Markovitz 4M T Mxakwe2 3C B Maroleni2 4Y van Biljon2 3N P Philiso2,3 1T S Dlamini2,4 1


Public Commercial Services CommitteeThe Public Commercial Services Committee comprises three independent Non-Executive Directors. The Committee is chaired by an independent Non-Executive Director.

The role of the Committee is to ensure that the SABC delivers on its obligations as provided for in the Public Commercial Service Charter of the Corporation. Commercial Services must:

• Be subject to the same policy and regulatory structures as outlined in the Act for commercial broadcasting services;

• Comply with the values of public broadcasting service in the provision of programmes and service;

• Commission a significant amount of their programming from the independent sector;

• Subsidise the public services to the extent recommended by the Board and approved by the Minister;

• Be operated in an efficient manner to maximise the revenues provided to the Shareholder;

• Report to the Board on the extent to which the News division has achieved its objectives during the relevant period;

• Develop proposed policies for consideration by the Board on news and current affairs programming, which ensure that SABC’s news and current affairs content is fair, balanced, accessible, accurate, compelling, professional, authoritative and in line with the Constitution of South Africa, the Broadcasting Act and other relevant legislation;

• Assist the Board to preserve the Corporation’s editorial independence and integrity and to ensure that the Corporation does not allow commercial, political or personal considerations to influence its editorial decisions; and

• Review the editorial policies of the Corporation from time to time to ensure that they remain appropriate to the operational needs of the corporation and the fulfilment of the statutory and regulatory obligations and mandates of the corporation.

Four Committee meetings were held during the financial year. The GCEO, COO, CFO and other relevant corporate officials attended the meetings by invitation. The attendance of Members at these meetings is reflected below:


GOVERNANCE


Members AttendanceJ Matisonn1 (Chairperson) 4D K Mohuba 4M G Markovitz 4M T Mxakwe2 3C B Maroleni2 4Y van Biljon2 3N P Philiso2,3 1T S Dlamini2,4 1


News and Editorial CommitteeThe News and Editorial Committee comprises four independent Non-Executive Directors and is chaired by an Independent Non-Executive Director.The primary role of the Committee is to assist the Board in setting the editorial policies of the Corporation, having regard to the need to ensure the editorial integrity of news and current affairs programming presented by the Corporation. The Committee must ensure that the SABC produces accessible, accurate, compelling, professional and authoritative news, current affairs and other programming that is fair, balanced and in line with its editorial policies and regulations. Defend the editorial independence of the News Division and encourage the pursuit of excellence of the highest professional standards.The duties and responsibilities of the Committee are:• Reporting to the Board on the extent to which the News Division has

achieved its objectives during the relevant period;• Overseeing a consultative process to develop policies for consideration

by the Board on news and current affairs, programming, which aim to ensure that the news and current affairs programming, presented in all official languages, promotes the values of democracy, non-racialism, nation building, and empowerment, for approval by the Board;

• Assisting the Board to guide the editorial direction of the Corporation and to set editorial policies in line with the corporate goals;

• Assisting the Board to preserve the Corporation’s editorial independence and integrity and ensure that the Corporation does not allow advertising, commercial, political or personal considerations to influence its editorial decisions; and

• Overseeing the review of editorial policies of the Corporation from time to time to ensure that they remain appropriate to the operational needs of the Corporation and fulfilment of the statutory and regulatory obligations and mandates of the Corporation; and whether the business aspects of the decision are aligned with the Corporation’s operational plan.

Three Committee meetings were held during the financial year. The GCEO, COO, CFO and other relevant corporate officials attended the meetings by invitation. The attendance of Members at these meetings is reflected below:

Members AttendanceM G Tsedu1 (Chairperson) 3K T Kweyama1 3J Matisonn1 3D K Mohuba 3M T Mxakwe2 2C B Maroleni2 2Y van Biljon2 2N P Philiso2,3 1T S Dlamini2,4 1


Social and Ethics CommitteeThe Social and Ethics Committee comprises three independent Non-Executive Directors and is chaired by an independent Non-Executive Director.

The role and function of the Committee is to monitor/oversee the Corporation’s activities, having regard to any relevant legislation, other legal requirements, or prevailing codes of best practice, with regard to matters relating to the following functions:

• The Social and Economic Development goals of the Corporation, including the Corporation’s standing in terms of the goals and purposes of the ten principles set out in the United Nations Global Compact Principles are an integral part of the business strategy, day-to-day operations, and organisational culture;

• The United Nations Global Compact Principles are incorporated in the decision-making processes of the Board;

• The Corporation advances the United Nations Global Compact Principles and the case for responsible business practices through advocacy and outreach to peers, partners, clients, consumers, and the public at large;

• Reviewing and making recommendations to the Board with respect to the Corporation’s Social Economic Development;

• Monitoring Social Economic Development Initiatives;

• The Committee has the mandate to assist the Board in discharging its responsibility to ensure that Broad-Based Black Economic Empowerment (B-BBEE) is pursued and implemented throughout the SABC;

• The Committee shall review the Corporation’s standing in terms of the goals and purposes of the promotion of equality and the prevention of unfair discrimination;

• The Committee will review the SABC’s standing in terms of its support of the four strategic objectives in respect of the International Labour Organization Protocol on decent work and working conditions;

• Monitoring the SABC’s employment relationships, and its contribution toward the educational development of its employees;

• Reviewing recommendations on ethical matters made by Management or other external sources and to make recommendations to the Board whether, and if so, to what extent, these should be applied to the SABC;

• In conjunction with the Audit and Risk Committee, the Committee oversees and reviews the anti-corruption and bribery practices;

• Reviewing the policies and processes for managing non-financial risks affecting the business, including relationships with stakeholders (principally colleagues, partners, customers, local communities, non-governmental organisations, regulators, shareholders and suppliers), and the impact of the SABC’s activities on its general business reputation;

• The Committee shall promote environmental policies that relate to the activities where the SABC has its most significant environmental impacts in respect of energy management and climate change, water quality, resource productivity (including leakage and waste); and

• In conjunction with the Audit and Risk Committee review and make recommendations to the Board with respect to the SABC’s Health and Safety Policies and review the procedure for reporting and investigating accidents, incidents and accidents at work.

Three Committee meetings were held during the financial year. The GCEO, COO, CFO and other relevant corporate officials attended the meetings by invitation. The attendance of Members at these meetings is reflected on the following page:

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Members AttendanceK Naidoo1 (Chairperson) 3J Phalane 3V Rambau2 2J Matisonn1 1M T Mxakwe3 2C B Maroleni3 3Y van Biljon3 1N P Philiso4 1T S Dlamini5 1

1. Resigned Effective 6 December 20182. Resigned Effective 30 September 20183. Attends by Invitation4. Appointed as Acting GCEO effective 31 July 2017 until 30 June 2018.5. Appointed Acting CFO effective 31 July 2017 until 24 June 2018.

Directors’ RemunerationNon-Executive Directors receive fees for their contribution to the Board and the Committees on which they serve. The Shareholder determines the rate. Non-Executive Directors are also reimbursed for out-of-pocket expenses incurred on the Corporation’s behalf.

Further information on Directors’ remuneration appears on pages 146 to 147.

Company Secretarial FunctionDirectors have unrestricted access to the advice and services of the Company Secretary as well as the Secretariat Department. The Directors are entitled to obtain independent professional advice at the SABC’s expense should they deem this necessary.

The Company Secretary together with other assurance functions monitors the SABC’s compliance with the requirements of the PFMA, Companies Act and other relevant legislations.

Reporting to StakeholdersIn order to present a balanced and understandable assessment of its position, the SABC continuously strives to ensure that reporting and disclosure to stakeholders are relevant, clear and effective. It places great emphasis on addressing both positive and negative aspects in order to demonstrate the long-term sustainability of the organisation. The King IV™, Report is used in compiling the annual report.

Stakeholder RelationsIn addition to the interests of the government as shareholder, the SABC recognises the legitimate interest of specific government departments, employees, consumers, suppliers, the media, policy and regulatory bodies, trade unions, non-governmental groups and local communities in its affairs. Communication and interaction with stakeholders are ongoing during the year and are addressed through various channels depending on the different needs of the various stakeholders.

In a continuing effort to attain a fully compliant status, amongst other initiatives, the SABC has implemented a risk management methodology that is based on best business practice and in line with the risk management framework issued by National Treasury.

The Public Finance Management Act (PFMA) was enacted in 1999 with the primary purpose of securing sound and sustainable management of the financial affairs of government bodies. Responsibilities of the SABC’s Group Chief Executive Officer, as the Accounting Officer specifies, that he/she is responsible for managing the financial administration of the SABC. Included in this duty is the maintenance of an effective, efficient and transparent system of risk management.

Furthermore, the King IV Code of Corporate Governance for South Africa™ (King IV™) states that risk management should be practised throughout the organisation by all staff in their day-to-day activities.

Risk Management is about identifying and assessing key risks, designing and implementing strategies and processes by which those risks can be managed, and finally, continual review of processes to ensure that risks identified have been mitigated to a level acceptable to the relevant stakeholders.

In accordance with the above, the methodology of the SABC employs an eight-phased approach, which incorporates the principles as mentioned in the previous paragraph.

By establishing and working from a set process, the SABC has ensured a consistent and logical approach to risk management.

Risks have been assessed in context with the achievement of the SABC objectives, as contained in the Strategic Imperatives.

Strategic risks and their mitigation strategies are evaluated and monitored at both Board and Executive level. Where applicable, strategic risks have been rolled down to an operational level, and collectively each Business Unit throughout the SABC has a role to play in managing and mitigating these risks.

The Board has the ultimate responsibility for establishing a framework for internal control, including an appropriate procurement and provisioning system.

The Board has the ultimate responsibility for establishing a framework for internal control, including an appropriate procurement and provisioning system.

The controls throughout the SABC focus on those critical risk areas identified by operational risk management, confirmed by executive management and endorsed by the internal auditors. The controls are designed to provide cost-effective assurance that assets are safeguarded and that liabilities and working capital are efficiently managed.

Organisational policies, procedures, structure and approval frameworks provide direction, accountability and segregation of responsibilities and contain self-monitoring mechanisms. Management with the assistance of the Internal Audit Department closely monitor the controls and actions that are taken to correct deficiencies as they are identified.


GOVERNANCE

MANAGEMENT

CONTROL

Board interaction with staff


In line with the PFMA and the King IV™ requirements, the Internal Audit Department provides the Audit and Risk Committee and management with assurance that internal controls are adequate and effective.

This is achieved by means of an independent objective appraisal and evaluation of the risk management processes, internal controls and governance processes as well as by recommending corrective actions and suggested enhancements to the controls and processes. The risk based Annual Internal Audit Plan is based on the major risks emanating from the SABC’s internal risk management process. The Internal Audit Plan is responsive to changes in the SABC’s business, risks, operations, programs, systems, and controls.

The Group Internal Audit Department/Division is fully supported by the Board and the Audit and Risk Committee and has full and unrestricted access to all Corporation activities, records, property and personnel.

Activities of Group Internal AuditMandate and Purpose of Internal Audit

The mandate of the SABC Group Internal Audit Department /Division is determined in terms of Section 51(1)(ii) of the PFMA which requires the SABC Board of Directors (Accounting Authority) to ensure that the SABC has and maintains ‘a system of internal audit under the control and direction of an Audit Committee complying with and operating in accordance with regulations and instructions prescribed in terms of sections 76 and 77’ of the Act. Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve on organisational operations, in order to ensure that the organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

The Internal Audit Charter which was approved by the SABC Audit and Risk Committee informs the purpose, scope of work, responsibility, accountability, independence and authority conferred by the SABC Board on SABC Group Internal Audit unit in terms of the PFMA as well as the International Standards for Professional Practice of Internal Auditing (Standards).

In line with the approved SABC Internal Audit Charter, the PFMA, the Internal Auditing Standards and King IV™, the following are incorporated in the activities of Group Internal Audit:

• Provide assurance, by bringing a systematic and disciplined approach, to evaluate the adequacy and effectiveness of risk management processes, system of internal controls and governance processes;

• Structured investigations of possible misconduct/irregularities; and

• Provide specialised consulting services on corporate governance matters and elements impacting on the control environment.

Internal Audit Performance

During the 2018/19 financial year, Group Internal Audit (GIA) recorded key accomplishments towards improving how the SABC manages its financial resources and added value in a number of ways. Of note during the year under review, is how GIA was instrumental in deterring costly activities such as fraud, waste recovery, non-compliance etc. which could have cost the SABC millions of rands. GIA played a pivotal role in the governance pillar by executing audit projects against the Risk Based Annual Audit Plan approved by the Audit and Risk Committee and reporting the findings to management. GIA facilitated positive and efficient changes, while difficult at times to measure intangible value GIA’s work produced real savings that are measurable. GIA also executed continuous business monitoring projects to provide management with an alternative view on business risks and controls thereby assisting in proactively monitoring key risk areas within the

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INTERNAL AUDIT (GIA) organisation to ensure the achievement of the business objectives. Data analysis through Computer Aided Audit Tools (CAATS) was conducted on critical transactions within Human Resource, Procurement and Payroll.

The following table presents the summary of performance for the 2018/19 financial year:

Details 2015/16 2016/17 2017/18 2018/19Internal Audit Report Issued as per audit plan 41 (91%) 41 (91%) 32 (58%) 39 (93%)Planned Audits (Deferred) 4 (9%) 4 (9%) 23 (8%) 3 (7%)Management requests 60 (100%) 8 (100%)

Forensic investigations for the year ended 31 March 2019

A total of 84 matters were received for investigation during the period under review, and this was in addition to 38 cases carried over from the previous financial year. A total of 50 matters were completed and 34 of the matters received were still not allocated at year end.

The table below provides a breakdown 50 matters which were completed during the period under review:

Details Q1 Q2 Q3 Q4 Forensic audit reports Issued 12 5 10 5Matters closed off 7 7 4 2Matters referred to management 2 6 3 1

As the SABC is faced with challenges on issues of non-compliance in the supply chain management processes and striving to minimise irregular expenditure reported in the 2017/18 Annual Financial Statements, GIA evolved to provide management with meaningful information timeously. The year ahead will see the modernisation of the approach to internal auditing. To assist management in resolving the legacy issues of non-compliance and breakdown in internal controls, GIA implemented performance audits to review the supply chain management processes based on the principle of economy, efficiency and effective (3E’s) on ethical usage of resources. The unit leveraged on the refocused audit approach and enhanced CAATS to assist management in providing assurance at the SABC provincial audits.

Internal Audit Overall Assessment of the Internal Control Environment

GIA prioritises work by developing a risk based annual audit plan and executed audit projects based on the audit coverage as per the approved plan. These audits were performed to provide objective information on the SABC system of internal controls to management and the Board so that they could make informed decisions and protect the interest of the Corporation. See the status of performance against the approved plan contained in the Internal Audit Performance above.

In our opinion, we found that internal controls over the most focus areas were inadequate and ineffective and required significant improvements. Internal Audit completed 47 audit reports of which 8 related to unplanned projects requested by management.

The results and the audit opinions are reflected in the table below:

Year 2015/16 2016/17 2017/18 2018/19No. of report issued 41 41 92 47Rating 3 and 4 Audit Opinions (Negative Opinions) 90% 81% 91% 100%1 and 2 Audit Opinions (Positive Opinions) 10% 19% 9% 0%No. of Significant Findings 204 140 171 285Follow Up Reviews (Unresolved and Repeat Internal Audit Findings) 261 66

Public Finance Management Act (PFMA)The PFMA focuses on financial management with related outputs and responsibilities. The Directors, as the Accounting Authority,

comply with their fiduciary duties as set out in the PFMA. In terms of the PFMA, the responsibilities of the Board include taking appropriate action to ensure that:

• Economic, efficient, effective and transparent systems of financial and risk management and internal controls are in place;• A system is maintained for properly evaluating all major capital projects prior to a final decision on each project;

• The implementation of appropriate and effective measures to prevent unauthorised, irregular or fruitless and wasteful expenditure, expenditure not complying with legislation, or losses from criminal conduct;

• All revenues due to the SABC are collected;• The economic and efficient management of available working capital; and

• The definition of objectives and the allocation of resources in an economic, efficient, effective and transparent manner.In terms of the Treasury Regulations, the SABC’s Accounting Authority must, for purposes of ‘material’ and ‘significant’ in terms of sections 54(2)

and 55(2) of the PFMA, develop and agree a framework of acceptable levels of materiality and significance with the relevant Executive Authority.In terms of Section 52 of the PFMA the Accounting Authority for a public entity must submit to the Accounting Officer for a Department designated by the Executive Authority for that public entity, and to the relevant treasury, at least one month, or another period agreed with the National

Treasury, before the start of its financial year, a corporate plan in the prescribed format covering the affairs of the public entity for the following three financial years. In terms of TR 29.1.1 (f) such a corporate plan must include a Materiality and Significance Framework.The principles of the King IV™, requires that disclosure be made on matters of significance, interest and relevance to shareholders and a wide range of stakeholders. The Accounting Authority should establish guidelines of materiality for disclosure by the Corporation.This framework will be reviewed and updated annually.The Materiality and Significance Framework for the financial year under review, which is determined and annually reviewed by management, is as follows:No Section Nature of Transaction Qualitative guidelines Quantitative guidelines1 Section

50(1) the accounting authority for a public entity must – (c) on request, disclose to the executive authority responsible for that public entity or the legislature to which the public entity is accountable, all material facts, including those reasonably discoverable, which in any way may influence the decisions or actions of the executive authority.

The SABC submits quarterly reports to the Executive Authority, which includes all relevant information, which may influence the decisions or actions of the Executive Authority. These reports cover all information that is considered relevant to the Executive Authority.

2 54(2)(a) Establishment or participation in the establishment of a company.

• Participation as a founding shareholder; or• Having a right to acquire shares; or• Having a right to nominate a director; or• Where SABC commits to enter into a management

contract in respect of the company

• Any level of shareholding; or• Any level of loan or quasi-equity

finance obligation by SABC arises; or

• SABC commits to guarantee any obligations of the company (including financial performance guarantee) at any level.

3 54(2)(b) Participation in a significant partnership, trust, unincorporated joint venture or similar arrangement.

• Partnership, trust, unincorporated joint venture or similar arrangements that is established, located or intended to operate outside the Republic of South Africa; or

• SABC’s contribution in a partnership, trust, unincorporated joint venture or similar arrangements includes SABC’s proprietary intellectual property; or

• Participation in a partnership, trust, unincorporated joint venture or similar arrangement that may result in anti-competition behaviour and /or is subject to competition commission regulations.

• SABC’s contribution results in disposal / disbursement of assets in excess of 1% of the total assets; or

• SABC enters into a long-term contract with the partnership, trust, unincorporated joint venture or similar arrangement in excess of 0.5% of the total revenue


GOVERNANCE

WITH LAWS AND REGULATIONSAs a public entity, adherence to sound governance principles is of utmost importance. To

this effect, regular measurement against the Public Finance Management Act and King IV™ is carried out to ensure that deficiencies are identified and corrective measures are

implemented.


4 54(2)(c) Acquisition or disposal of significant shareholding in a company

• Acquisition of any level or shareholding in a company where such acquisition is not in pursuit of SABC’s core business; or

• Acquisition or disposal where SABC’ s ownership control and right to pass or block a special resolution is affected; or

• Acquisition or disposal of any level of shareholding in a company domiciled outside of the Republic of South Africa

• Acquisition or disposal of more than 20% of the issued shares in a company; or

• Where SABC already owns shares in the company, and acquisition or disposal of the number of shares will give rise to a shareholding more or less than 20% of the issued shares in a company.

5 54(2)(d) Acquisition or disposal of a significant asset.( NB: for the purpose of this subsection, assets include both current and non-current)

• Acquisition or disposal of assets which are located in a foreign jurisdiction, however excludes office equipment and motor vehicles necessary to conduct business in a foreign jurisdiction; or

• Disposal of assets that has a potential impact on the continued ability of SABC to do business or provide its core service; or

• Disposal of non-core assets in line with SABC’ strategy; or

• Commercial agreements which allow for the right of use of a third party of SABC’s brand, logo, licences and similar rights, intellectual property; trademark and patents.

Significance level is R90 million

6 54(2) (e) Commencement or cessation of a significant business activity; and

• Commencement or cessation of a business activity outside of the republic; or

• Cessation of a business activity where such cessation has or may have an adverse impact on its key stakeholders.

Significance level is set at R90 million

7 54(2)(f) A significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint venture or similar arrangement

• Changes that affect SABC’s ownership control type reserved through the Trust deed, the partnership or joint venture agreement; or

• Change that involves the partnership, trust, unincorporated joint venture or similar arrangement commencing or ceasing to do business outside South Africa.

Significance level is set at R90 million

KING IV™The SABC has applied the King IV™ principles and practices. As a state owned company, some of these cannot be applied. In other instances, the SABC has adopted alternative practices to those recommended by King IV™. Explanations are presented in the table below. Where there are not approved policies, processes or procedures yet, these are reflected as areas for improvement. Draft documents do exist, and these will be approved by the relevant governance structures in the next reporting cycle.Applying the King IV™ principles and practices:

Number and description of King IV™ principle or practice not in place Explanation2.16.1 Board should elect a Chairperson on an annual basis Determined by the President2.17.1 Board should appoint a Chief Executive Officer Determined by the Board and informs the Minister2.18.10 Board should be able to remove any director without shareholder

approvalDetermined by the President in conjunction with the National Assembly

2.8 The Board should be responsible for information technology (IT) governance

The Audit and Risk Committee is tasked with overseeing IT Governance and is awaiting the IT Governance Framework

2.27 Remuneration policy Policy in place2.24 Subsidiary governance framework Draft Framework in place3.5.1 Combined assurance model Practice being updated5.1.2 IT Charter Charter in the process of being finalised5.3 IT Governance Framework Framework in the process of being finalised6.1.1 Compliance register Register in the process of being finalised3.8.2.2 Internal financial control policy Policy will be developed5.3 Internal control framework Framework was approved by the Board on 30 May 20172.1 The Board should report on the effectiveness of the company’s

system of internal controlsThe internal controls are continuously reviewed in line with the Audit findings to ensure their effectiveness

3.4 The audit committee should oversee integrated reporting Consideration is being given to the preparation of the integrated report9.1 The Board should ensure the integrity of the company’s integrated

reportConsideration is being given to the preparation of the integrated report

9.2 Sustainability reporting and disclosure should be integrated with the company’s financial reporting

Consideration is being given to the preparation of the integrated report

9.3 Sustainability reporting and disclosure should be independently assured

Consideration is being given to the preparation of the integrated report


GOVERNANCE

Forensic InvestigationsThe Board is responsible for ensuring that an integrated crime prevention plan is implemented in order to minimise the risk and opportunity for crime and irregularities, in particular, fraud.

In order to support the strategic intent and business objectives of the SABC, the Board or its Committees, at its discretion, may, request a forensic audit where there is prima facie evidence that this is justified.

A revised Conflicts of Interest Policy was approved by the Board on 30 June 2017 for immediate implementation. Board members are required declare their interests prior to the commencement of each meeting, on an annual basis and as and when there is a change in their status of interests. All employees are required to complete their declarations of interest on line, which is forwarded to their line manager for approval. Quarterly reports on the status of declarations are submitted to the Shareholder.

The SABC Board approved a revised Code of Business Conduct and Ethics on 26 April 2018. The aim thereof is to ensure that every employee of the Corporation shares in the same values and levels of accountability. This policy is in the process of being rolled out throughout the Corporation.

In my opinion, as Company Secretary, I hereby confirm that, in terms of the Companies Act No. 71 of 2008, for the year ended 31 March 2019, the South African Broadcasting Corporation (SOC) Ltd, has lodged with the Registrar of Companies all such returns as required of a public company in terms of the Companies Act, and all such returns are true, correct and up to date.

…………………................................…………….Ms Lindiwe BayiGroup Company SecretaryJohannesburg17 September 2019

AND CORRUPTION

CONFLICT OF INTEREST

OF CONDUCT

BY THE COMPANY SECRETARY

SAFETY AND ENVIRONMENTAL ISSUES

As part of its obligation, the SABC is also compelled by the law to comply with the Occupational Health and Safety Act of 1993. SABC has demonstrated significant improvement in the manner in which it takes care of the employees and visitors throughout all its structures. This was demonstrated by level of low incidents reported over the period under review. There are a number of areas that need improvement especially the condition of building structures and other infrastructure. Key would be to improve on the maintenance of the facilities, do more job risk assessments to ensure that every employee is afforded a good work area.

Great improvement on the establishment of Health and Safety Committees, appointing, issuing and signing of the letters of appointments was visible. Health and Safety Committees in most SABC regions hold their quarterly meetings where important issues that affect workplace safety are discussed and solutions are sought. Monthly safety inspections are conducted by most of the regions. Emergency evacuation drills were conducted although the outcomes were not properly documented and records not properly kept. Maintenance and servicing of fire fighting equipment and fire detections systems were impressive in most of the regions. Although there are some challenges due to lack of dedicated safety personnel in the regions, this is where the committee’s role become invaluable and support from the local structures would be essential.

Some deficiencies into the Safety Policy were identified and would be proposed for improvement and be approved into amended policy in the coming financial year. This is a continuous drive and whenever a deficiency is identified an amendment to the policy is proposed.

Improvement of compliance in safety hazard elimination would be looked at. Great effort to eliminate potential cause of injuries to and by contractors would be taken by offering safety induction before every contractor resume work on our premises. More safety awareness and emergency preparedness must be encouraged and supported across the SABC. In our quest to become a hazard free environment these are some of the commitments that SABC is promising to do across all the buildings.

Most of the provincial management team, even though do not have detailed safety know-how, have shown willingness to assist and ensure that compliance is maintained and employees are safe.

Health expo


TelevisionSABC1

SABC1 collaborated with Lesedi FM for the youth day activations at the Apartheid Museum under the theme ‘Own Your Space’. The dialogue was to inspire the youth to take care of themselves and how to deal with challenges such as anxiety, depression, suicide, pressure, financial struggles and mental health.

SABC2

Fluor, a global engineering and construction company, partnered with SABC2 and SABC Foundation to hand over an IT LAB to Diepsdale Secondary School to promote Science, Technology, Engineering and Mathematics (STEM).

Radio5FM

67 Handbags for Nelson Mandela Day is a Fashion Outreach Programme that collects handbags filled with Female necessities for 120 victims of Domestic Violence abuse living at Ikhaya Lethemba in Braamfontein. 5FM is also raising funds by selling limited edition merchandise called - Ladies First. The funds will progress a sewing project for the shelter.

Channel Africa

In May, the station hosted a dinner with Ambassadors of Tanzania and Senegal in celebration of Africa month; issues of social cohesion within the continent were discussed live on air.

Good Hope FM

• In partnership with Markhams the station launched the Teen Dream campaign. 30 high school boys were dressed by the store’s stylists for their Matric dance event. Kyeezi of the Encore show, interviewed the boys during the styling session on their style choices and aspirations.

• On Mandela day the station joined forces with Water4CapeTown and its listeners who donated clothing, perishable goods and 12 060 litres of water to 67 charity organisations in celebration of his Centenary. These charities included women and children shelters, orphanages, early childhood development centres, old age homes, disabled facilities and night shelters.

Ikwekwezi FM

• On 4 July the station launched an online pop radio ‘centenary radio’ in celebration of the Mandela Centenary. Centenary radio broadcasts every Wednesday and Thursday from 15:00 to 17:00 from July to December. The station also donated 10 Computers to Phaphamani Secondary School in partnership with Africa Teen Geeks on Mandela day.

• Ikwekwezi FM and SABC Foundation partnered with the NGO Africa Teen Geeks, to launch the Girl Geek campaign and host coding classes at UNISA outlets for primary schools girls from underprivileged communities. During the first term school holidays, the United Nations Office on Drugs and Crime hosted the hackathon under the theme #Hack4Justice where 35 children who are part of our Saturday classes gathered to solve issues of the rule of law.

As a result six children from South Africa joined children from Austria, Indonesia and Bolivia in the Silicon Valley in July, to participate in a

RESPONSIBILITY SAFETY AND ENVIRONMENTAL ISSUES

During the period under review, SABC platforms in partnership with the SABC Foundation participated in various nation building initiatives.

global hackathon to solve issues around internet security and cyber security.

Team South Africa ‘Wakanda Vibes’ won first place. Their App focused on human trafficking, highlighting the importance in the minds of young people of tackling this crime.

Lesedi FM

The Miya Family from QwaQwa has been staying in a shack for over 19 years. The SABC Foundation in partnership with Habitat for Humanity built a fully furnished house for the Family which was handed over in partnership with Lesedi FM.

Lotus FM

In November, the station commemorated 158 years of the arrival of Indian Indentured Labourers in South Africa. Listeners were encouraged to wear their traditional outfits to remember the struggles of their forefathers.

Motsweding FM

The station launched the 100 Aspiring Presenters campaign in celebration of Tata Nelson Mandela’s Centenary through radio skills development. The aspiring radio presenters got an opportunity to co-host a show with the station’s presenters.

Munghana Lonene FM

• Munghana Lonene FM featured the former Speaker to Parliament, Mr Max Sisulu and SA Ambassador to Australia, Beryl Sisulu to reflect on the life and times of the late struggle icon.

• Four activities were implemented by the station in celebration of Mandela Month:

- Donated a 4 roomed, fully furnished house to the Baloyi family at N’wa Matatana village in the Collins Chabane Municipality;

- Renovated Ninakhulu Primary School at Humulani outside Lulekani Township;

- Donated food parcels to Ambassador of God’s Calvary Foundation at Thulamahashe in partnership with the National Heritage Council; and

- Donated Uniform and Sanitary Towels to four schools in partnership with Hlanganani Heritage Foundation and National Heritage Council.

SAfm

• The station’s Christmas CSI initiative took them to Mogale City in Krugersdorp where they visited an elderly headed family of 13 (Grandmother) on 13 December. Groceries which would last them for two months were handed over

SABC2 and ‘7 de Laan’ cast at Diepsdale Secondary School

• The 100years of the birthday celebrations for Nelson Mandela was implemented

by all platforms who participated in different activations under the #LiveHisLegacy.


GOVERNANCE

including school uniforms and books, in partnership with Gift of the Givers.

• SABC Foundation partnered with SAfm by hosting a Youth Day event at AB Xuma Primary School in Soweto. Fly SA Wise conducted career guidance in Aviation as well as taking learners on a helicopter ride. Books, sanitary towels and 10 computers were donated to the schools including an introductory training in Coding.

Tru FM

On-air personalities embarked on a motivational roadshow for matriculants in preparation for their final examinations. They visited different high schools around the province including Colosa High School – Ditywa; Vulamazibuko High School- Mdantsane; Kusile Comprehensive school – Duncan Village; Nkwanca High School, Kwakomani High School – Queenstown and Bhisho High School – Bhisho.

Highlights• The SABC Foundation, Ikwekwezi FM, YoTV and the SABC Funding

Unit hosted the Inaugural Nelson Mandela Film Festival in honour of the centenary celebrations. The partnership was with the Children’s Broadcasting Foundation for Africa (CBFA) and the Nelson Mandela Children’s Fund supported by the Nelson Mandela Foundation. We invited learners from Adelaide Tambo special school to participate in the campaign.

• The SABC Foundation and SABC1 partnered with Tru FM, Umhlobo Wenene FM, Motsweding FM and Munghana Lonene FM to implement the Back to School campaign in these provinces. The beneficiaries came from the schools of learners with Disability, Efata School for the Blind in the Eastern Cape, Rivoni School for the Blind in Limpopo and Itshokeng early learning centre and EH Mogase school from North West. Bag packs, hygiene packs, school shoes and sanitary towels were handed to the learners. The platform personalities also gave motivational talks.

• The SABC Foundation partnered with the Nelson Mandela Foundation and the KZN Province to implement its official Mandela activations in Howick alongside SAfm, Ukhozi FM and Lotus FM. A series of activations were held:

- Manaye Hall in Imbali Township, where in 1961 Mandela made his last speech as a free man during the All-In-Africa Conference;

- Ekujabuleni children’s home - Edendale Township-PMB, a home for abandoned children and youth;

- Esther House a safety house, shelter for abused women and children; - Khazimula Child and Youth Centre a children’s shelter; and - Mandela capture site.

Disability360 Program• SAfm - The highlight on the station’s disability360 show was their feature

on profiling the documentary of Ontlametse the first black girl diagnosed with Progeria – a rare genetic condition as well as the announcement of the renaming of Hebron Primary School in North West in her honour. The school is now called ‘Ontlametse Phalatse Primary School’.

• Ukhozi FM - On International Day of Persons with Disabilities, the station hosted a Grade 10 scholar, Aphelele Tshapa, from Mason Lincoln School for the Disabled whose dream was to visit the station and co-host the daytime Vezo Ntuli who educated the listeners about the Tumani Organization, an organization for disabled broadcasters.

• SABC Radio, SABC Foundation, SABC Education and Employment Equity collaborated to host the inaugural Disability Summit in partnership with Hope - Mandeville Disability Careers Expo in April in Auckland Park. Over 500 learners with disabilities who are in grade 9-12, attended the event. We also brought together over 40 companies, Government and career providers was showcased the various career, bursary and learnerships opportunities available country-wide. There were also 100 entrepreneurs with disabilities, who had an opportunity to engage with some of South Africa’s leading corporates. Disability practitioners, Recruiters, Training Institutions, the Department of Education, various disability-focused NGOs/NPOs and industry suppliers were in attendance. The event was covered by SABC News and Radio Stations.

• METRO FM teamed up with Soul Africa and visited an orphanage, Ntshabelleng Le Banana Care Centre of Children with Disabilities, in Rustenburg. They donated food parcels to see them through the Festive Season.

SAfm in Mogale City

• The 100years of the birthday celebrations for Nelson Mandela was implemented

by all platforms who participated in different activations under the #LiveHisLegacy.


AND RISK COMMITTEE REPORT

We present our report for the financial year ended 31 March 2019.Audit and Risk Committee MembersSection 94 of the Companies Act No. 71 of 2008 (as amended), requires that the Members of the Audit Committee must be appointed by the Shareholder at every AGM. During the year under review, the Shareholder confirmed the appointment of the Members of the Audit and Risk Committee at the AGM held on 27 August 2018. Subsequently, the SABC Board was inquorate, which rendered the Audit and Risk Committee inquorate and therefore could not meet to consider the third quarter reports.

Audit and Risk Committee ResponsibilityThe Audit and Risk Committee reports that it has complied with its responsibilities arising from Section 51 (a) (ii) of the PFMA, the requirements of Treasury Regulation 27.1 and Section 94 of the Companies Act No. 71 of 2008. The Audit and Risk Committee has adopted an appropriate formal Terms of Reference and has attempted to discharge its responsibilities as contained therein.

The Audit and Risk Committee assists the Board in fulfilling its oversight responsibilities regarding in particular SABC’s financial reporting, risk management and internal controls, and the independence and effectiveness of the external auditors.

Accounting Policies The Committee assessed whether suitable accounting policies had been adopted and whether management had made appropriate estimates and judgements. The Committee also reviewed reports from the external auditor on the half year and full year results, which provided an overview of the audit work undertaken and highlighted any issues for discussion.

The Effectiveness of Internal ControlsThe various reports of the Internal Auditors and the Audit Reports on the Annual Financial Statements and Management Letter of the Auditor-General indicate that the system of internal control has shortcomings that need to be addressed. Emphasis was placed by the Committee to improve controls surrounding supply chain management and property, plant and equipment.

Internal AuditInternal audit reviews, which are risk-based and include provision of assurance over financial and operational activities, are performed by teams of appropriately qualified and experienced employees. The Group Chief Audit Executive has direct right of access to, and regular meetings with, the Audit and Risk Committee and prepares formal reports for each audit committee meeting on the consolidated activities and key findings of the internal audit function.

Risk ManagementThe implementation of appropriate risk management activities to ensure that regular risk assessments, including consideration of IT risks and fraud prevention, are conducted. A risk strategy is developed and monitored. It includes areas of improvement with a roadmap in place to address shortcomings. The processes to ensure that the Audit and Risk Committee promotes accountability and service delivery through evaluating and monitoring responses to risks and providing oversight over the effectiveness of the internal control environment, including financial and performance reporting and compliance with laws and regulations had shortcomings, due to overwhelming pressure to redress previous years organisational challenges.

Evaluation of Financial StatementsThe Committee oversaw and supported the process used by the executive team to assess going concern and the viability of the Group, the stress testing of key trading assumptions and the preparation of the viability statement. The Committee acknowledges that the executive team has made an immense effort to enhance the quality of financial information and improve the financial situation of the SABC. The executive team have committed to further enhancing the quality of financial information.

The Committee also satisfied itself that the disclosures in relation to accounting approach and key sources of estimation uncertainty were appropriately made.

Management present reports to the Committee setting out the basis for the assumptions used and these reports are then discussed and challenged by the Committee. All the issues were also discussed with the external auditor and their views considered. The Committee is satisfied that assumptions made are reasonable and appropriate disclosures have been included in the accounts.

The Audit and Risk Committee accepts the conclusions of the Auditor-General on the Annual Financial Statements and believes the audited annual financial statements should be accepted and read together with the report of the Auditor-General.

…………………................................…………….Ms Jasmina PatelChairperson of the Audit and Risk Committee

HUMAN RESOURCES South African Broadcasting Corporation [SOC] Ltd80

HUMAN RESOURCES

HUMAN RESOURCES


2018Global Citizen called South African Citizens to action, to give of themselves along with the people from across the globe in honour of Mandela’s 100 year celebrations. The concert was broadcast live on SABC1.

81

“GIVE OF YOURSELF OFTEN AND YOU WILL

NOT ONLY UPLIFT OTHERS BUT YOURSELF

AS WELL.”

Performance ManagementThe Performance Management campaign was driven from the top and was well received at management level. Challenges were, however, experienced at bargaining unit level, with a dispute being lodged against the implementation of Performance Management by organised labour. This is currently being addressed to ensure an effective roll-out in the new financial year.Workplace Skills Plan – Digital TrainingIn order to prepare the Corporation for the digital era, training regarding the digitisation of the Corporation was prioritised. However, due to financial constraints the Corporation could not achieve its target of completing 80% of its identified digital training needs.Framework and Strategy to Attract and Retain the Desired WorkforceThe SABC’s headcount has been on a downward trend over the past year. It is, however, important to retain core skills and talent. Initiatives such as the implementation of Talent Boards, Career Progression and Succession Planning are currently underway within the organisation. These programmes will provide an environment within which employees can grow and realise their potential within a nurturing work environment.Wellness ProgrammesA wide range of wellness services are provided to SABC employees. These include wellness counselling, in-office wellness services (such as health fairs and health screenings), Employee Assistance Programmes (EAP), mental health counselling, group wellness and fitness activities (on-site gym). Most of the wellness programmes are provided on a national basis and are well-supported by employees. Wellness initiatives, in line with the National Health Calendar, were presented throughout the year by HR.Policy DevelopmentTo ensure effective governance HR has endeavoured to conduct regular reviews of HR policies. During the past financial year, certain policies were found to be obsolete or contained within other HR policies. These policies are currently being removed from the SABC system. A number of HR policies, including the Independent Contractor policy, the Learning and development policy and the Recruitment and Selection policy, are currently under review to ensure alignment to the latest legislation and trends in the market and will be finalised in the next financial year.

AchievementsThe SABC performed well regarding the implementation of Employment Equity within the organisation. All Employment Equity targets were met or exceeded and the SABC was nominated for a Gauteng Disability Rights Excellence Award.Furthermore, to ensure technological advancement in its processes, Human Resources has rolled-out an e-recruitment system (Success Factors). This system ensures efficiency in our recruitment process and assists both internal and external job applicants in applying for positions within the organisation.

ChallengesDue to financial constraints challenges were experienced with regard to the delivery of training programmes. This was partially addressed through the entrenchment of in-house training programmes and technical training having been conducted with the assistance of internal Subject Matter Experts.

The SABC initiated two Commissions of Inquiry, one into Sexual Harassment and another into the

Editorial Independence of the organisation. Various investigations by the Special Investigative Unit (SIU)

were also conducted to root out wrong-doing within the organisation. This led to a number of disciplinary hearings

and the subsequent dismissal of employees who were found guilty of misconduct.

Furthermore, the Operating Model of the SABC was reviewed to ensure alignment between the new strategic direction of the

Corporation and the structure. For the period under review, the SABC commenced with a Skills Audit to ensure alignment

between its available and future skills requirements.The measurement of performance is important in any organisation

and the implementation of Performance Management was therefore a focus area from a HR perspective. Performance Management was rolled out across the organisation and the revised system was finalised to ensure automation of the process in the new financial year.The retention of skills remains a challenge within the Corporation and during the period under review various initiatives commenced to address this. Amongst these, are the implementation of Talent Boards and the development of a Career Progression Framework. Through these initiatives the SABC will be able to manage and retain its talent in a more productive manner.

Performance against Corporate Plan: HR Priorities for the Year under ReviewOperating Model and Structure ReviewThe SABC embarked on a review of its operating model and structure to ensure that the Corporation would be able to deliver on its revised strategic direction. The revised operating model ensures an agile organisation, able to respond to challenges of the broadcasting environment. The organisational structure is being adapted to ensure alignment to the new operating model and will be implemented in alignment with the outcomes of the Skills Audit.


HUMAN RESOURCES

During the 2018/19 financial year, the Corporation’s Human Resources (HR) Strategy focused on driving excellence and a high-performance culture to create an enabling and inclusive

environment throughout the Corporation.

Knowing our Vision

RESOURCES MANAGEMENT


A challenge was also experienced regarding the roll-out of Performance Management at bargaining unit level due to a dispute having been lodged by organised labour. This is being addressed through ongoing negotiations with relevant stakeholders.

Looking ForwardGoing forward HR will endeavour to implement initiatives that will assist with repositioning the SABC as the employer of choice. The focus will be to provide effective and efficient HR services to all internal clients. Retention and development of talent at all levels within the organisation will remain a priority. Human Resources will actively rebuild its brand as a one-stop HR shop within the organisation.

Human Resources Oversight StatisticsPersonnel Cost by Division

DivisionTotal

Expenditure (R'000)

Permanent Employee Compensation and Benefits

Expenditure (R'000)

Permanent Employee Compensation and Benefits Expenditure as a % of Total

Expenditure per Division

Number of Employees

Average Employee Compensation and Benefits Expenditure per Employee

(R’000)Commercial Enterprises 222 369 201 414 90,6% 230 876 Group Services 1 242 178 475 323 38,3% 679 700 MTI 825 168 478 495 58,0% 651 735 News 816 508 659 971 80,8% 842 784 Provincial Operations 192 897 100 630 52,2% 147 685 Radio 942 060 255 234 27,1% 322 793 SABC Sport 724 916 50 599 7,0% 53 955 Television 2 111 456 192 587 9,1% 243 793 Grand Total 7 077 551 2 414 252 34,1% 3 167 762

* Items like Leave and PRMA are reflected under Group Services for total company

Personnel Cost Level

LevelPermanent Employee

Compensation and Benefits Expenditure (R'000)

Permanent Employee Compensation and Benefits Expenditure as % of Total

Number of Employees

Average Employee Compensation and Benefits

per Employee (R’000)Top Management 38 130 1,6% 11 3 466 Senior Management 67 612 2,8% 34 1 989 Middle Management 484 751 20,1% 412 1 177 Junior Management 492 992 20,4% 522 944 Supervisory Levels 1 138 476 47,2% 1762 646 Rest of Staff 192 290 8,0% 426 451 Grand Total 2 414 252 100,0% 3167 762

Staff receiving training on the Hybrid system


HUMAN RESOURCES

Employment and Vacancies by Division

Division 2017/18 Number of Employees 2017/18 Vacancies 2018/19 Number of

Employees 2018/19 Vacancies % of Vacancies

Commercial Enterprises 221 12 230 15 6,1%Group Services 727 31 679 37 5,2%MTI 695 31 651 37 5,4%News 941 23 842 6 0,7%Provincial Operations 161 6 147 0 0,0%Radio 348 14 322 17 5,0%SABC Sport 67 1 53 0 0,0%Television 254 9 243 8 3,2%Grand Total 3414 127 3167 120 3,7%

Employment and Vacancies by Level

Division 2017/18 Number of Employees 2017/18 Vacancies 2018/19 Number of

Employees 2018/19 Vacancies % of Vacancies

Top Management 9 3 11 2 15,4%Senior Management 48 18 34 5 12,8%Middle Management 443 55 412 43 9,5%Junior Management 571 21 522 23 4,2%Supervisory Levels 1872 25 1762 34 1,9%Rest of Staff 471 5 426 13 3,0%Grand Total 3414 127 3167 120 3,7%

Training Costs by Division

Division

Permanent Employee Compensation and

Benefits Expenditure (R'000)

Training Expenditure (R'000)

Training Expenditure as % of Permanent Employee

Compensation and Benefits Expenses

Number ofEmployees Trained

Average Training Cost per Employee (R’000)

Commercial Enterprises 201 414 1 595 0,8% 182 8,76Group Services 475 323 3 084 0,6% 352 8,76News 478 495 2 462 0,5% 281 8,76Provincial Operations 659 971 1 165 0,2% 133 8,76Radio 100 630 1 358 1,3% 155 8,76SABC Sport 255 234 105 0,0% 12 8,76MTI 50 599 2 962 5,9% 338 8,76Television 192 587 999 0,5% 114 8,76Grand Total 2 414 252 13 730 0,6% 1 567 8,76

Performance Rewards

Level Performance Rewards Employee Compensation and Benefits Expenditure (R'000)

% of Performance Rewards vs Total Employee Compensation

and benefits expensesTop Management - 38 130 0,0%Senior Management - 67 612 0,0%Middle Management - 484 751 0,0%Junior Management - 492 992 0,0%Supervisory Levels - 1 138 476 0,0%Rest of Staff - 192 290 0,0%Grand Total - 2 414 252 0,0%

Quick coffee with the Group CEO and staff


Reasons for Staff Leaving

Reason Number of Employees % of Total number of staff leaving

Death 7 2,4%Resignation 118 40,7%Dismissal 18 6,2%Retirement (Including Early Retirements) 78 26,9%Ill Health 6 2,1%Expiry of Contract 63 21,7%Other 0 0,0%Grand Total 290 100,0%

Employment Equity Targets and Status

LevelAfrican Coloured Indian White Disabled Staff

Current Target Current Target Current Target Current Target Current TargetMALE

Top Management 1 1 - - - - - - - - Senior Management 4 4 1 - - - - - - - Professional Qualified 184 200 18 26 17 18 39 65 5 11 Skilled 979 970 100 108 50 53 151 173 28 40 Semi-Skilled 31 32 2 3 - 1 - 7 1 4 Unskilled - - - - - - - - - - Grand Total 1 199 1 207 121 137 67 72 190 245

FEMALETop Management - - - - - - - - - - Senior Management 4 5 - 1 - 1 1 1 - - Professional Qualified 116 140 16 18 16 22 40 58 4 11 Skilled 1 001 1 032 141 147 66 67 169 185 47 60 Semi-Skilled 17 21 2 2 - - 1 1 1 8 Unskilled - - - - - - - - - - Grand Total 1 138 1 198 159 168 82 90 211 245

Employment Changes

Division Employment at Beginning of Period Appointments Terminations Employment at

Beginning of Period Level Movements

Top Management 10 4 3 11 1Senior Management 48 1 16 33 -15Middle Management 443 3 40 406 -37Junior Management 571 3 58 516 -55Supervisory Levels 1871 25 133 1763 -108Rest of Staff 471 7 40 438 -33Grand Total 3414 43 290 3167 -247

16 Days of Activism for No Violence Against Women and Children staff activation

FINANCIALS South African Broadcasting Corporation [SOC] Ltd86

FINANCIALS


Since 2019Economics Unbound equips South Africans with infor-mation that will help them make better economic and financial decisions. Joined by ordinary South Africans in well-informed and purposeful conversations about the South African economy. Thursdays at 21:30 on SABC News Channel on DStv channel 404.

87

FINANCIAL STATEMENTS

“TRANSFER SKILLS THAT WILL ENCOURAGE

INDEPENDENCE FOR A LIFETIME.”

R


FINANCIALS

OF RESPONSIBILITY OF THE BOARD OF DIRECTORS

The Directors of the South African Broadcasting Corporation SOC Limited (SABC) are responsible for the preparation and presentation of the annual financial statements of the Corporation, to maintain a sound system of internal control and to safeguard the shareholder’s investment and the SABC’s assets.The annual financial statements presented for the year ended 31 March 2019 have been prepared in terms of International Financial Reporting Statements as issued by the International Accounting Standards Board (IASB), the Financial Reporting Guides as issued by the South African Institute of Chartered Accountants (SAICA) Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council, Public Finance Management Act of 1999 (PFMA), as amended and the requirements of the Companies Act of 2008, as amended. In preparing the financial statements, management has made appropriate accounting policy choices which are consistently applied and are supported by reasonable and prudent judgements including estimates. The annual financial statements have been prepared on a going concern basis. The Directors believe that the SABC will be in existence for the foreseeable future based on forecasts and interventions being pursued. The Directors have further made appropriate disclosures (refer to note 1(B) on pages 98 to 99) on why the SABC will be a going concern and that there is neither an intention to liquidate the group nor to cease operations.

The consolidated annual financial statements presented on pages 93 to 149 have been audited by the Auditor General South Africa. The Auditor General South Africa was given unrestricted access to all financial records and related data, including minutes of meetings of shareholders, the Board and committees of the Board. The Directors believe that all representations made to the independent auditors during their audit were valid and appropriate. The report of the auditors is presented on pages 89 to 92.

The Directors are also responsible for the SABC’s system of internal controls. Such systems can provide reasonable, but not absolute, assurance against material misstatement or loss. The Directors meet periodically, primarily through the Audit and Risk Committee, with the external and internal auditors and executive management to evaluate matters concerning accounting policies, internal controls, auditing and financial reporting.

The SABC’s internal auditors independently evaluate the internal controls and coordinate their audit coverage with the external auditors. Both external and internal auditors have unrestricted access to all records, property, personnel and systems as well as to the Audit and Risk Committee. Based on the information and explanations given by management and the internal auditors, and on comment by the external auditors on the results of their audit conducted for expressing their opinion, the Directors are of the opinion that the internal accounting controls have improved but still require further enhancement. Major Improvements are required in supply chain management and monitor and curb irregular, fruitless and wasteful expenditure.

The Directors of the Corporation accept responsibility for the annual financial statements, which were approved by the Board of Directors on 17 September 2019 and are signed on its behalf by:

…………………............................. …………………............................. …………………............................. Mr Bongumusa Makhathini Mr Madoda Mxakwe Ms Yolande van BiljonChairperson of the SABC Board Group Chief Executive Officer Chief Financial Officer


TO PARLIAMENT ON THE SOUTH AFRICAN BROADCASTING CORPORATION SOC Ltd (SOC)

REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS Qualified opinion1. I have audited the consolidated and separate financial statements of the SABC (SOC) Ltd and its subsidiaries (the group) set out on pages 93 to 149 which

comprise the consolidated and separate statement of financial position as at 31 March 2019, the consolidated and separate statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies.

2. In my opinion, except for the effects of the matters described in the basis for qualified opinion section of this auditor’s report, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of the SABC and its subsidiaries (the group) as at 31 March 2019, and the group’s financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards (IFRS), the requirements of the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and the Companies Act of South Africa, 2008 (Act No. 71 of 2008) (the Companies Act).

Basis for qualified opinionProperty, plant and equipment3. I was unable to obtain sufficient appropriate audit evidence for capital work in progress for the current and previous year as the entity did not maintain an accurate

and complete register of assets that could be reconciled to the annual financial statements. I was unable to confirm capital work in progress by alternative means. Consequently, I was unable to determine whether any adjustments were necessary to capital work in progress stated at R263 608 000 (2018: R216 304 000) in note 5 to the consolidated and separate financial statements.

Irregular expenditure4. The SABC did not include particulars of all irregular expenditure in the notes to the consolidated and separate financial statements, as required by section 55(2)

(b)(i) of the Public Financial Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA). The entity did not implement adequate internal control systems to identify and record all instances of irregular expenditure in both the current and prior years. This resulted in the irregular expenditure disclosure being understated. The full extent of the misstatement identified could not be quantified and I was unable to confirm the amount of irregular expenditure to be disclosed by alternative means. Consequently, I was unable to determine whether any further adjustments were necessary to the irregular expenditure disclosure stated at R5 220 726 000 (2018: R4 977 300 000) in note 42 to the consolidated and separate financial statements.

Context for the opinion5. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities under those standards are further described in the

auditor-general’s responsibilities for the audit of the consolidated and separate financial statements section of this auditor’s report. 6. I am independent of the group in accordance with sections 290 and 291 of the International Ethics Standards Board for Accountants’ Code of ethics for profession-

al accountants (IESBA code), parts 1 and 3 of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) and the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical respon-sibilities in accordance with these requirements and the IESBA codes.

7. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion.Material uncertainty relating to going concern 8. I draw attention to the matter below. My opinion is not modified in respect of this matter.9. I draw attention to note 1(b) to the consolidated and separate financial statements, which indicate that the SABC Group incurred a loss of R482 million (2018: R744

million) during the year ended 31 March 2019 and as on that date, the entity’s current liabilities exceeded its current assets by R875 million (2018: R456 million). As stated in note 1(b), these conditions, along with other matters set forth in note 1(b), indicate that a material uncertainty exists that may cast significant doubt on the entity’s ability to continue as a going concern.

Emphasis of matters10. I draw attention to the matters below. My opinion is not modified in respect of these matters.Significant judgement 11. As disclosed in note 25 to the consolidated and separate financial statements, the entity has not recognised licence fees to the amount of R2 169 168 000 (2018:

R2 436 780 000). In management’s judgement it is not probable that the economic benefits associated with these transactions will flow to the entity in order to meet the recognition criteria.

Significant uncertainties12. As disclosed in note 39 to the consolidated and separate financial statements, the SABC is a defendant in a number of lawsuits. The ultimate outcome of these

matters cannot be determined currently. These have been disclosed as contingent liabilities. No provision for any liability that may result was provided for in the financial statements.

Material impairment – Trade and other receivables13. As disclosed in the statement of profit and loss, material impairment of R96 805 000 was incurred as a result of irrecoverable long outstanding trade and other

receivables, R69 163 221 of which related to TV licence debtors.Responsibilities of the board of directors for the consolidated and separate financial statements14. The board of directors, which constitutes the accounting authority, is responsible for the preparation and fair presentation of the consolidated and separate finan-

cial statements in accordance with the International Financial Reporting Standards (IFRS) and the requirements of the PFMA and the Companies Act of South Africa, 2008 (Act No. 71 of 2008) (Companies Act), and for such internal control as the accounting authority determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.


FINANCIALS

REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE SOUTH AFRICAN BROADCASTING CORPORATION SOC Ltd (SABC) continued...

15. In preparing the consolidated and separate financial statements, the accounting authority is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the accounting authority either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so.

Auditor-general’s responsibilities for the audit of the consolidated and separate financial statements16. My objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstate-

ment, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

17. A further description of my responsibilities for the audit of the consolidated and separate financial statements is included in the annexure to this auditor’s report.REPORT ON THE AUDIT OF THE ANNUAL PERFORMANCE REPORTIntroduction and scope18. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof, I have a responsibility to

report material findings on the reported performance information against predetermined objectives for selected objectives presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance.

19. My procedures address the reported performance information, which must be based on the approved performance planning documents of the public entity. I have not evaluated the completeness and appropriateness of the performance indicators/measures included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, my findings do not extend to these matters.

20. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected objectives presented in the annual performance report of the public entity for the year ended 31 March 2019:

Objectives Pages in annual performance reportStrategic goal 1 – financial sustainability 33Strategic goal 2 – content and platforms 33

21. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and rele-vant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

22. The material findings in respect of the usefulness and reliability of the selected objectives are as follows:Strategic goal 2 – content and platform Various indicators23. The achievement in the annual performance report did not agree to the supporting evidence provided for the indicators listed below. The supporting evidence

provided indicated that the achievement of these indicators were as follows:

Indicator description Reported achievement Audited valueAchieve ICASA PCS local content quotas as per SABC broadcast licence 62.5% 52%Hours of marginalised language content broadcast on SABC’s TV channels in prime time 1 hour 41 minutes 1 hour 30 minutes

Various indicators24. I was unable to obtain sufficient appropriate audit evidence for the reported achievements of two of the seven indicators relating to this programme. This was due

to limitations placed on the scope of my work. I was unable to confirm the reported achievements by alternative means. Consequently, I was unable to determine whether any adjustments were required to the reported achievements in the annual performance report of the indicators listed below:

Indicator description Target Actual achievementAchieve ICASA PBS radio genre quotas as per SABC broadcast licence

News: 60 min per dayCurrent affairs: 60 Min per dayInformation knowledge building: 180 min per weekEducation: 300 Min per weekChildren: 60 min per weekDrama: 150 min per week

News: 76 min/dayCurrent Affairs: 99 min/dayInformal knowledge building: 1498 min/weekEducation: 358 min/weekChildren: 133 min/weekDrama: 198 min/week

Achieve ICASA PBS local music quotas as per SABC Broadcast licence.

70% 74,50%

Strategic goal 1 – financial sustainability25. I did not raise any material findings on the usefulness and reliability of the reported performance information for this objective.



Other matters26. I draw attention to the matters below. Achievement of planned targets27. Refer to the annual performance report on pages 33 to 34 for information on the achievement of planned targets for the year. This information should be considered in the context of the material findings on the reliability of the reported performance information in paragraph(s) 23 and 24 of this report.Adjustment of material misstatements28. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance

information of content and platform strategic objective. As management subsequently corrected only some of the misstatements, I raised material findings on reliability of the reported performance information. Those that were not corrected are reported above.

REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATIONIntroduction and scope29. In accordance with the PAA and the general notice issued in terms thereof, I have a responsibility to report material findings on the compliance of the public entity

with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance. 30. The material findings on compliance with specific matters in key legislation are as follows: Annual financial statements, performance report and annual report31. The consolidated and separate financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and

were not supported by full and proper records, as required by section 55(1)(a) and (b) of the PFMA and section 29(1)(a) of the Companies Act. Procurement and contract management32. Some of the goods, works or service were not procured through a procurement process which is fair, equitable, transparent and competitive, as required by

section 51(1)(a)(iii) of the PFMA. Similar non-compliance was also reported in the prior year.33. Some of contracts were awarded to bidders who did not meet the pre-qualification criteria as indicated in the original invitation for bidding in contravention of the

2017 preferential procurement regulation 4(1) and 4(2). Expenditure management34. Effective and appropriate steps were not taken to prevent irregular expenditure, as required by section 51(1)(b)(ii) of the PFMA. As reported in the basis for the

qualified opinion, the full extent of the irregular expenditure could not be quantified. Most of the irregular expenditure disclosed in the financial statements was caused by competitive bidding process not having been followed.

35. Effective steps were not taken to prevent fruitless and wasteful expenditure amounting to approximately R50 000 000, as required by section 51(1)(b)(ii) of the PFMA. The fruitless and wasteful expenditure was caused by programme, film and sports rights acquired and not utilised by the entity.

Consequence management36. Disciplinary steps were not taken against the officials who had incurred and/or permitted irregular, fruitless and wasteful expenditure, as required by section 51(1)

(e)(iii) of the PFMA.Revenue management37. Effective and appropriate steps were not taken to collect all TV licence revenue due, as required by section 51(1)(b)(i) of the PFMA.OTHER INFORMATION38. The accounting authority is responsible for the other information. The other information comprises the information included in the annual report, which includes

the directors’ report, the audit committee’s report and the company secretary’s certificate, as required by the Companies Act. The other information does not include the consolidated and separate financial statements, the auditor’s report and those selected objectives presented in the annual performance report that have been specifically reported in this auditor’s report.

39. My opinion on the consolidated and separate financial statements and findings on the reported performance information and compliance with legislation do not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon.

40. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements and the selected objectives presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

41. I have no matters to report in this respect.INTERNAL CONTROL DEFICIENCIES42. I considered internal control relevant to my audit of the consolidated and separate financial statements, reported performance information and compliance with

applicable legislation; however, my objective was not to express any form of assurance on it. The matters reported below are limited to the significant internal control deficiencies that resulted in the basis for the qualified opinion, the findings on the annual performance report and the findings on compliance with legis-lation included in this report.

43. Actions plans to effectively address prior year audit findings on the reporting of predetermined objectives, the prevention, detecting and reporting on irregular expenditure, as well as the maintenance of an appropriate register for capital work in progress, were not effectively monitored and implemented during the year.

44. The entity did not implement adequate consequence management processes for transgressions against applicable policies, laws and regulations.45. Management did not implement adequate review procedures to ensure that information reported in the annual performance report was adequately supported

with appropriate evidence.46. Management did not adequately implement review and monitoring controls to prevent non-compliance with applicable laws and regulations relating to supply

chain management.


FINANCIALS


47. In addition, where controls did not prevent non-compliance with supply chain management legislation, detection controls were also deficient as not all irregular expenditure was disclosed.

48. The board was not quorate for a portion of the year, impacting on their ability to effectively oversee audit action plans and address key business risks affecting the entity

OTHER REPORTS49. I draw attention to the following engagements conducted by various parties that had, or could have, an impact on the matters reported in the public entity’s con-

solidated and separate financial statements, reported performance information, compliance with applicable legislation and other related matters. These reports did not form part of my opinion on these financial statements or my findings on the reported performance information or compliance with legislation.

Investigations 50. The special investigations unit and the forensic unit of the SABC were in the process of conducting several investigations related to various instances and

allegations of financial misconduct and possible fraud. The investigations were ongoing at the date of this report and may result in disciplinary and/or criminal proceedings against the parties concerned.

Pretoria13 September 2019

ANNEXURE – AUDITOR-GENERAL’S RESPONSIBILITY FOR THE AUDIT1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my audit of the consolidated

and separate financial statements, and the procedures performed on reported performance information for selected objectives and on the entity’s compliance with respect to the selected subject matters.

Financial statements2. In addition to my responsibility for the audit of the consolidated and separate financial statements as described in this auditor’s report, I also: • identify and assess the risks of material misstatement of the consolidated and separate financial statements whether due to fraud or error, design and perform

audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrep-resentations, or the override of internal control

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the pur-pose of expressing an opinion on the effectiveness of the groups internal control

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors, which constitutes the accounting authority.

• conclude on the appropriateness of the board of directors, which constitutes the accounting authority use of the going concern basis of accounting in the prepa-ration of the consolidated and separate financial statements. I also conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the consolidated and separate financial statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the consolidated and separate financial statements. My conclusions are based on the information available to me at the date of this auditor’s report. However, future events or conditions may cause a public entity to cease continuing as a going concern

• evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consol-idated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation

• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion

Communication with those charged with governance3. I communicate with the accounting authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including

any significant deficiencies in internal control that I identify during my audit. 4. I also confirm to the accounting authority that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and

other matters that may reasonably be thought to have a bearing on my independence and, where applicable, related safeguards.


GROUP COMPANY 31-Mar-19 31-Mar-18 31-Mar-17 31-Mar-19 31-Mar-18 31-Mar-17

*Restated *Restated *Restated *Restated Note R’000 R’000 R’000 R’000 R’000 R’000

ASSETSProperty, plant and equipment 5 1 543 199 1 582 476 1 615 102 1 543 199 1 582 476 1 615 102 Investment property 6 9 648 9 648 8 938 9 648 9 648 8 938 Computer software 7 84 415 116 400 163 815 84 415 116 400 163 815 Defined benefit asset 8 2 049 940 852 872 1 333 672 2 049 940 852 872 1 333 672 Investment in subsidiaries 9 - - - 1 761 1 761 1 761 Other financial assets 10 10 567 12 220 9 652 10 567 12 220 9 652 Prepayments 11 21 730 16 512 4 661 21 730 16 512 4 661 Operating leases 60 60 115 60 60 115 Total non-current assets 3 719 559 2 590 188 3 135 955 3 721 320 2 591 949 3 137 716 Programme, film and sports rights 7 519 663 607 253 726 567 519 663 607 253 726 567 Consumables 12 4 160 5 362 5 301 4 160 5 362 5 301 Trade and other receivables 13 888 519 800 494 822 030 888 408 834 411 840 047 Prepayments 11 88 257 82 953 38 469 88 257 82 953 38 469 Cash and cash equivalents 14 72 615 130 516 81 742 69 362 127 068 77 760 Total current assets 1 573 214 1 626 578 1 674 109 1 569 850 1 657 047 1 688 144 Total assets 5 292 773 4 216 766 4 810 064 5 291 170 4 248 996 4 825 860 EQUITYShare capital 15 1 1 1 1 1 1 Fair value adjustment reserve 16 8 932 10 126 8 133 8 932 10 126 8 133 Retained earnings 1 446 634 668 663 1 984 747 1 445 162 700 999 2 002 358 Total equity 1 455 567 678 790 1 992 881 1 454 095 711 126 2 010 492 LIABILITIESGovernment debt instrument 17 14 913 17 401 20 798 14 913 17 401 20 798 Interest bearing loans and borrowings 18 16 188 31 416 43 288 16 188 31 416 43 288 Deferred government grant 19 189 940 241 783 281 576 189 940 241 783 281 576 Employee benefits obligation 21 1 132 130 1 164 807 1 055 316 1 132 130 1 164 807 1 055 316 Other non-current liabilities 22 35 749 - - 35 749 - - Total non-current liabilities 1 388 920 1 455 407 1 400 978 1 388 920 1 455 407 1 400 978 Trade and other payables 23 1 635 241 1 132 875 706 617 1 635 110 1 132 875 704 802 Contract liabilities 25 82 845 65 847 68 936 82 845 65 847 68 936 Employee benefits 21 232 762 218 821 218 644 232 762 218 821 218 644 Deferred income - - 15 396 - - 15 396 Current portion of government debt instrument 17 2 488 3 397 6 592 2 488 3 397 6 592 Current portion of loans and borrowings 18 13 231 13 231 13 231 13 231 13 231 13 231 Tax payable 35 96 936 96 975 19 836 96 936 96 965 19 836 Current portion of deferred government grant 19 128 466 110 852 85 199 128 466 110 852 85 199 Provisions 24 256 316 440 572 281 754 256 316 440 572 281 754 Total current liabilities 2 448 285 2 082 570 1 416 205 2 448 154 2 082 560 1 414 390 Total liabilities 3 837 205 3 537 977 2 817 183 3 837 074 3 537 967 2 815 368 Total equity and liabilities 5 292 773 4 216 766 4 810 064 5 291 170 4 248 996 4 825 860

AS AT 31 MARCH 2019


FINANCIALS

GROUP COMPANY 31-Mar-19 31-Mar-18 31-Mar-19 31-Mar-18

Note R’000 R’000 R’000 R’000 Revenue 25 6 412 017 6 578 454 6 412 017 6 578 454 Other income 26 53 604 48 744 69 315 47 243 Amortisation of programme, film and sports rights 7 (1 753 017) (1 741 309) (1 753 017) (1 741 309)Net impairment (raised)/reversed of programme, film and sports rights 7 (333) (141 762) (333) (141 762)Amortisation and impairment of computer software 7 (45 414) (46 647) (45 414) (46 647)Net impairment and reversed/(raised) of trade and other receivables (96 805) (94 589) (143 176) (94 589)Broadcast costs (414 153) (486 822) (414 153) (486 822)Signal distribution and linking costs (740 207) (718 132) (740 207) (718 132)Employee and director compensation and benefit expenses 27 (2 823 465) (3 114 910) (2 823 465) (3 114 910)Depreciation and impairment of property, plant and equipment 5 (168 143) (167 294) (168 143) (167 294)Marketing costs (26 561) (48 417) (26 561) (48 417)Direct revenue collection costs (116 904) (118 213) (116 904) (118 213)Professional and consulting fees 28 (86 202) (89 947) (89 466) (73 442)Other expenses- personnel costs other than employee compensation (63 227) (67 093) (63 227) (67 093)- operational (572 267) (538 031) (567 649) (538 264)Other losses 30 (2 691) (11 180) (2 691) (11 180)Operating loss before finance costs and tax (443 768) (757 147) (473 074) (742 376)Net financing income/(expenses) 31 (38 602) 13 067 (38 429) 13 011 Finance income 11 162 46 219 11 098 46 163 Finance expenses (49 764) (33 152) (49 527) (33 152)

Loss before income tax (482 370) (744 080) (511 503) (729 365)Income tax 32 11 (11) - - Loss for the year (482 359) (744 091) (511 503) (729 365)

FOR THE YEAR ENDED 31 MARCH 2019



Note R’000 R’000 R’000 R’000 Loss for the year (482 359) (744 091) (511 503) (729 365)

1 258 901 (569 425) 1 258 901 (569 425)Items that will never be reclassified to profit and lossPension fundActuarial gain/(loss) 8 1 751 107 (449 914) 1 751 107 (449 914)Expected return on plan assets 8 (589 113) (84 369) (589 113) (84 369)Post -employment medical benefitsActuarial gain/ (loss) 21 92 048 (41 520) 92 048 (41 520)Long service awardsActuarial gain/ (loss) 21 6 512 3 810 6 512 3 810 Items that may be reclassified to profit and loss(Loss)/ gain in changes in fair value of available-for-sale financial assets 10 (1 653) 2 568 (1 653) 2 568 Income tax relating to the above items 32 370 (575) 370 (575)Income tax relating to gain/ (loss) on other financial assets 32 370 (575) 370 (575)Other comprehensive income/(loss) for the year net of tax 1 259 271 (570 000) 1 259 271 (570 000)Total comprehensive income/(loss) for the year 776 912 (1 314 091) 747 768 (1 299 365)



FINANCIALS

Share capital

Fair value adjustment

reserve Retained earnings Total

Note R’000 R’000 R’000 R’000 GROUP

Balance at 31 March 2017 - restated 4,4 1 8 133 1 984 747 1 992 881 Total comprehensive (loss)/income for the year - 1 993 (1 316 084) (1 314 091) - Loss for the year (744 091) (744 091) - Reassessments of employee benefits (571 993) (571 993) - Fair value adjustments on other financial assets 2 568 2 568 - Income tax implications (575) - (575)Balance at 31 March 2018 4,4 1 10 126 668 663 678 790 Total comprehensive (loss)/income for the year - (1 194) 778 105 776 911 - Loss for the year (482 359) (482 359) - Reassessments of employee benefits 1 260 464 1 260 464 - Fair value adjustments on other financial assets (1 564) (1 564) - Income tax implications 370 - 370

Balance at 31 March 2019 1 8 932 1 446 634 1 455 567

COMPANYBalance at 31 March 2017 - restated 4,4 1 8 133 2 002 359 2 010 492 Total comprehensive (loss)/income for the year - 1 993 (1 301 358) (1 299 365) - Loss for the year (729 365) (729 365) - Reassessments of employee benefits (571 993) (571 993) - Fair value adjustments on other financial assets 2 568 2 568 - Income tax implications (575) - (575)Balance at 31 March 2018 4,4 1 10 126 701 001 711 127 Total comprehensive (loss)/income for the year - (1 194) 748 962 747 768 - Loss for the year (511 503) (511 503) - Reassessments of employee benefits 1 260 465 1 260 465 - Fair value adjustments on other financial assets (1 564) (1 564) - Income tax implications 370 - 370 Transfer of subsisiary net assets (4 801) (4 801)Balance at 31 March 2019 1 8 932 1 445 162 1 454 095




Note R’000 R’000 R’000 R’000 Cash flows from operating activities

Cash receipts from customers 6 394 594 6 645 645 6 444 333 6 628 244 Cash paid to suppliers and employees (6 455 567) (6 593 138) (6 505 047) (6 575 147)

Cash generated / (utilised) by operations (60 973) 52 507 (60 714) 53 097 Interest received 33 14 492 22 366 14 428 22 310 Dividends received 455 423 455 423 Interest paid (28 132) (32 106) (28 132) (32 106)Net cash inflows/(outflows) from operating activities (74 158) 43 190 (73 963) 43 724 Cash flows from investing activitiesProceeds from disposal of property, plant and equipment 35 5 333 66 5 333 66 Acquisition of property, plant and equipment 5 (138 678) (147 009) (138 678) (147 009)Acquisition of computer software 7 (11 896) (1 699) (11 896) (1 699)Net cash outflows from investing activities (145 241) (148 642) (145 241) (148 642)Cash flows from financing activitiesInstalment sale and finance leases advanced/(paid) during the year 18 (15 228) (11 872) (15 228) (11 872)Repayment of government debt 17 (3 397) (6 592) (3 397) (6 592)Proceeds from government grant 19 180 123 172 690 180 123 172 690 Net cash inflows from financing activities 161 498 154 226 161 498 154 226 Net decrease in cash and cash equivalents (57 901) 48 774 (57 706) 49 308 Cash and cash equivalents at beginning of the year 130 516 81 742 127 068 77 760 Cash and cash equivalents at end of the year 14 72 615 130 516 69 362 127 068



FINANCIALS

1(A) CORPORATE INFORMATION The South African Broadcasting Corporation SOC Limited is a state-owned company, and holding company of the Group. It is incorporated and domiciled in South Africa. The consolidated financial statements of the Company as at, and for the year ended 31 March 2019 comprise the Company and its subsidiaries (together referred to as the ‘Group’ and individually as ‘Group entities’). The Group is South Africa’s national public broadcaster providing a free-to-air service. Information on group entities of the Group is provided in note 9.

1(B) GOING CONCERNIn determining the appropriate basis of preparation of the financial statements, the Accounting Authority considered whether the Corporation can continue operating for the foreseeable future. The Corporation, in the current year and previous years, has been faced with recurring net losses and liquidity challenges as characterised by the inability to settle short-term obligations. The net loss for the 2018/19 financial year amounts to R482 million, whilst the Trade and Other Payables amounted to R1.635 billion. The following are significant items included in the loss for the year:• Employee and director compensation and benefit expense of R2.823 billion;• Amortisation of programme, film and sports rights of R1.753 billion; and• Reversal of a provision for employee costs compensation of R125 million.The Group’s financial position has been negatively impacted by the loss realised from operations. At year-end, the Group’s current liabilities (R2.448 billion) exceeded current assets (R1.573 billion) by R875 million. For the period under review, the cash was as low as R73 million. Total assets of R5.293 billion still exceed total liabilities at R3.837 billion by R1.456 billion.The Corporation continued to face tough economic conditions and saw a further reduction in commercial revenue and license fees from that reported in the 2017/18 financial year. Though instability within the governance structures and negative perception of the organisation contributed in previous financial years, the efforts in recent months, under the leadership of the new Executive, has been focused to turning these around. Unfortunately, as a result of cash flow constraints, the inability to provide exciting and fresh content coupled with unstable program schedules, became key risk factors in the revenue performance in the reporting period. These negated efforts made in restoring the credibility of the Corporation.The above events, coupled with the increasing cost of the SABC’s public mandate, continued to stifle growth and thus resulting in the SABC’s net losses and liquidity constraints. The Corporation continued to struggle to meet short-term obligations as they fall due. Governance bottlenecks from the non-quorate Board impacted on initiatives to secure support from financial institutions. It must further be noted that during the period under review, the Corporation was still unable to implement an Asset Management Plan (long-term capital expenditure plan), which further negatively impacted on the operations. The limitations in resources to meet short-term obligations and general uncertainties saw some of the creditors requiring upfront payments, instead of 30 days payment term as well as a general unwillingness to accommodate the Corporation’s payment requirements. Content providers specifically, are no longer able to financially support the Corporation through extended credit terms. This materially worsened the situation.On 5 September 2019, the SABC received funding allocation letters from the Minister of Communications and the Minister of Finance confirming a funding allocation of R3.2billion from the Contingency Reserve. This amount is the interim funding request by the SABC. The funding will be released by National Treasury to the SABC in tranches. The release of funding is subject to the SABC meeting performance pre-conditions. Initiatives to Mitigate the Going Concern RiskIn order to ensure the future sustainability of the Corporation, the following initiatives have been identified and are being implemented:• The governance structures are properly constituted (Board of Directors and top executives). This ensures accountability and ownership.• The Early Settlement Discount Program was put in place and it yielded significant successes in ensuring effective working capital management (and allevi-

ating short-term liquidity challenges). This is about 2% of the collected revenue.• Operational expenditure is being closely monitored and managed. Cost savings initiatives were identified and were at various stages of implementation and

realisation by the end of the financial year.• The Cash Management Plan developed and implemented in 2017/18 continued to be practiced during the 2018/19 financial year to ensure that the available

funding is prudently spent in a manner that ensures that the Corporation remains operational in the short-term while the medium to longer term initiatives, referred to later, remain ongoing. The execution of the Cash Management Plan is overseen by Senior Management daily, led by the GCEO and the CFO.

• The Corporation continued to conclude and execute payments arrangements or revised payment arrangements with key suppliers to defer the outstanding amounts to be within available resources. This ensured that the Corporation could honour commitments.

• Cash flow forecasts are done on a daily, weekly and monthly basis and available funding is matched to requirements in terms of the priorities per the busi-ness plans.

• The Accounting Authority and Executive closely monitor the expenditure and payment status of the Corporation through various reporting and oversight mechanisms, including reporting to relevant sub-committees of the Board.

• Capital investment into the capital expenditure projects is being delayed with the focus being on key broadcast critical projects and occupational health and safety.

• Service providers and suppliers have been supportive, though they are subjected to growing pressure as a result of the delays in payment by the SABC.• Business cases, for commercial and mandate acquisitions, are expected to achieve profitable and net cash positive or cash neutral positions.• A letter of support from the Ministers of Finance and Communications was provided for purposes of the finalisation of the 2018/19 year-end audit and Annual

Financial Statements.• Various initiatives are ongoing in TV Licenses (Audience Services Division) to increase collection both in the short and medium-term.• Various revenue claw-back initiatives were designed and implemented in the 4th Quarter of the 2018/19 financial year and the expectation is that these

efforts will yield discernable results in 2019/20.• Supply Chain Management is practicing rigorous negotiation in contract conclusion to maximise benefit for the Corporation while minimising financial

implications.• The Corporation is actively pursuing consequence management to recover where possible Fruitless, Wasteful and Irregular Expenditure.• The Corporation developed and started with the implementation of a Strategic Roadmap towards financial sustainability, healthy governance and relevance

as a Public Broadcaster. The Turnaround Strategy has further taken an aggressive view on the activities to generate revenue in the course of the next two

TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019


years. Unfortunately, some of these initiatives are already delayed or otherwise impacted as a result of lack of content investment and marketing. While the Corporation wait for funds from the Contingency Reserve, these critical investments continue to be delayed. Cost reduction initiatives have started to show results but unfortunately the biggest cost driver, the payroll, has not yet been sustainably reduced.

• The review and enhancement of a Turnaround Strategy will most likely be concluded by the end of September 2019. In this regard the Corporation is working closely with a team from National Treasury to review and refine its Turnaround Strategy with clearly identified roles and target dates. The review of the operating model in order to identify cost efficiencies and ensure a fit for purpose staff complement will commence in the next nine months once the Skills Audit has been concluded. It is expected that the savings anticipated will be realised from the 2020/21 financial year onwards.

• Commercial banks remain interested in financing the production houses and allowing the production houses to service the debt once their content has been flighted by the Corporation. This will then allow the Corporation to better match revenue collection and costs settlement. The discussions are still ongoing.

• Consideration is still being given to the factoring of long outstanding TV license debt (of three years and more) to a third party.• A property expert was appointed to assess the property portfolio of the Corporation. The scope of the appointment entailed doing property valuation, the

development of a property management strategy and to determine whether properties must be disposed, leased or retained. The report on the residential properties was issued and it was presented to the governance structures for noting. A Property Strategy is being developed and it will provide a recom-mendation on the way forward per property for consideration by the governance structures. The finalisation of this exercise will positively contribute to the liquidity of the Corporation (either through rental income or proceeds from sale).

• Management continues with its effort in seeking holistic and principled initiatives related to its Public Broadcasting mandate, duties and responsibilities: - Seeking alternative funding models for Sports Rights; - Revenue related initiatives that will include review of the Must Carry Regulations by ICASA; and - Exploring strategic partnerships.Success of these initiatives will be:• A Supplier finance facility will establish a direct relationship between a production house and the bank thus relieving the requirement for prepayments by the

SABC. The estimated investment from the banks for this initiative is R800 million.• A return to financial sustainability for the Corporation in the medium to long-term while managing the immediate future in line with the values of the Corpo-

ration and its stakeholders.• The establishment of the Debtors Financing Facility and the termination of the Early Settlement Discount program will result in additional cash in the form of

a saving in Early Settlement Discount currently budgeted at R100 million.According to a review undertaken by National Treasury on 30 August 2019, the SABC complied with three conditions and partially complied with four of the 11 set pre-conditions to access the funding allocation from the Contingency Reserve. Further noting that two of the unmet conditions are for implementation by the Department of Communications and Digital Technologies. Therefore, there is a material uncertainty as to the timing and quantum of funding tranches to be received from National Treasury. This will further impact on the pace at which the Turnaround Strategy can be implemented. The set pre-conditions yet to be fully complied with by the SABC are as follows;• To finalise the quantification of its immediate cash requirements;• To finalise investigations into the cause of its financial collapse; • To present separate financial statements for the public and commercial services; • The Identification of non-core assets for disposal;• The development of a private sector participation strategy; and • The development of a comprehensive capital and content investment plan. The Department of Communications and Digital Technologies will need to comply with the following;• Appointment of a Chief Restructuring Officer; and• Commit and start a full review of the policies, legislation and regulations affecting the broadcasting sector and the SABC within a digital environment.In addition, the Minister of Communications and Digital Technologies will jointly with the SABC deliver by 16 September 2019 a written commitment on when both the Department and the entity will be fully compliant with all the outstanding conditions. Management is already implementing processes to fully comply with the remaining pre-conditions working together with the Department of Communications and Digital Technologies and GTAC. Management believes that they will be able to meet all the pre-conditions to access the full funding. This ensures the going concern risk is adequately mitigated. There is however ongoing uncertainty on the timing of the financial support but based on forecast and management’s financial models, the funding allocated will be sufficient to allow the SABC to be a going concern for the foreseeable future. AssumptionsIn the context of the above and consistent with the reporting in previous financial years, Management takes the following assumptions into consideration in the assessment of the SABC’s going concern risk:• The Corporation, as the only Public Broadcaster, is a strategic asset of the public sector/ government;• There is no management’s intention to dissolve or liquidate the Corporation;• There is also no Parliamentary intention to dissolve or liquidate the Corporation as commitment to make interim funding to assist the SABC has been made;• The Corporation will continue to operate with the initiatives which have been mentioned above; and• The Corporation will continue to engage National Treasury and commercial funding institutions.Though the Corporation is facing material cash flow constraints and a going concern risk, management believes that, based on the initiatives implemented to date, the financial support made available by National Treasury and with the support from its stakeholders, the Corporation will be able to execute its mandate and meet its obligations over the next 12 months. Based on the above assessment, management concludes that the going concern assumption is the appropriate basis for the preparation of financial statements for the 2018/19 financial year.

NOTES TO THE ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2019 continued...


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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The consolidated and separate annual financial statements have been prepared in accordance with International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board, and in the manner required by the Companies Act of South Africa, 2008, the Public Finance Manage-ment Act, No. 1 of 1999, as amended, and the Broadcasting Act, No. 4 of 1999, as amended. The SABC adopted Directive 12-The Selection of an Appropriate Reporting Framework by Public Entities issued by the Accounting Standards Board in 2015. Management made the assessment that applying IFRS is the appropriate reporting framework as the group provides services on a commercial basis in a competitive market. The group also receives insignificant funding from the government and has limited dependence on government funding. The expected government funding is a once-off and does not create continued dependency on government funding. Reporting using IFRS framework is therefore is still appropriate.

The consolidated and separate annual financial statements are presented in South African Rands, rounded to the nearest thousand, and have been prepared on the historical cost basis, except for certain financial instruments and defined benefit asset and liability which are measured at fair value.

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies, reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be rea-sonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

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

Judgements made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment are discussed in note 3.

The financial statements have been prepared on a going concern basis that assumes the Group would be able to continue operating as a going concern for the foreseeable future. The accounting policies set out below have been applied consistently for all periods presented in the consolidated annual financial statements, except where an amendment was required as a result of a change in IFRS.

New and amended standards adopted by the company

The group has adopted IFRS 9 on Financial instruments as issued in May 2014.

2.2 Basis of consolidation

Subsidiaries

The consolidated financial statements consist of financial statements of the Group and its subsidiaries as at 31 March 2019. Subsidiaries are all entities over which the group has control. The Group controls an entity when the Group is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial results of subsidiaries are included in the consolidated annual financial statements of the Group from the date that it obtains control. They are deconsolidated from the date that the Group loses control of the investee. The Group owns 100% issued share capital of all its subsidiaries.

Transactions eliminated on consolidation

Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the an-nual financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

2.3 Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘functional currency’). The Annual Financial Statements are presented in South African Rands, which is the Company’s and Group’s functional and presentation currency.

Foreign currency transactions

Transactions in foreign currencies are translated into the functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the date the fair value was determined.

2.4 Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:

• Expected to be realised or intended to be sold or consumed in the normal operating cycle• Held primarily for the purpose of tradingExpected to be realised within twelve months after the reporting period



NOTES TO THE ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2019 continued...Or• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other

assets are classified as non-current.

A liability is current when:• It is expected to be settled in the normal operating cycle• It is held primarily for the purpose of trading• It is due to be settled within twelve months after the reporting periodOr• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Group classifies all other

liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

2.5 Property, plant and equipment

Owned assets

Items of property, plant and equipment are initially measured at cost. Subsequently, they are measured at cost less accumulated depreciation and accumu-lated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items. The cost of self-constructed assets includes the cost of materials, direct labour, and any other costs directly attributable to bringing the asset to a working condition in the manner intended by manage-ment.

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

Artwork

Office artwork represents assets that are held primarily for their decorative use in the business. Artwork is considered to have an infinite useful life and are held at cost less impairment costs.

Leased assets

Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. An asset acquired by way of a finance lease is recognised at an amount equal to the lower of its fair value and the present value of minimum lease payments at inception of the lease on initial recognition. The asset is accounted for in accordance with the accounting policy applicable to that asset. Lease payments are accounted for as described in accounting policy (2.23).

Capital work in progress

Capital work in progress includes cost of materials and direct labour and any other directly attributable costs incurred in bringing an item of property, plant and equipment to its present location and condition.

Subsequent costs

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future eco-nomic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other costs are charged to profit or loss during the financial period in which they are incurred.

Depreciation

Depreciation is calculated on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less residual value. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment, from the date that they are available for use. Leased assets are depreciated over the shorter of the lease term or their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. The average estimated useful lives for the current and comparative periods are as follows:• Buildings up to 65 years• Broadcast equipment 3 - 40 years• Furniture and fittings 3 - 20 years • Computer equipment 3 - 5 years • Musical equipment up to 30 years • Office equipment 5 - 15 years • Security equipment 5 - 10 years • Motor vehicles 5 - 20 years • Artwork Infinite useful life

The useful lives, depreciation methods and current residual values, if significant, are reassessed annually and adjusted if appropriate.

The depreciation charge which constitutes part of the cost of programme, film and sports rights is included in the carrying amount of the respective pro-gramme, film and sports rights assets.

Derecognition

Assets are derecognised when disposed of or scrapped, or when no future economic benefit is expected from the assets. The gain or loss on the disposal or scrapping of property, plant and equipment is recognised in profit or loss, (refer to note 35). Gains and losses on disposal of an item of property, plant and


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equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment.

2.6 Investment properties

2.6.1 Cost method

Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Investment properties are initially carried at cost or deemed cost including transaction costs. Subsequent to initial recognition, investments properties are measured at cost or deemed cost less accumulated depreciation and impairment.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from disposal. Any gains and losses arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) are included in the profit and loss in the period in which the property is derecognised.

2.6.2 Depreciation

Depreciation is charged to profit or loss on a straight line basis over the estimated useful lives of each of the investment properties. The estimated useful lives for the current and comparative periods are as follows:

• Investment properties Average of 50 to 65 years

The useful lives, depreciation methods and residual values, if significant are reassessed annually.

2.6.3 Fair value

An external, independent valuation company, having appropriate recognised professional qualification and recent experience in the location and category of property, has been involved in determining the fair value of the properties for disclosure purposes. The values are based on market values, being the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Valuations reflect, where appropriate, the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting of vacant accommodation and the market’s general perception of their credit worthiness; the allocation of maintenance and insurance responsi-bilities between the lessor and lessee; and the remaining economic life of the property. It has been assumed that whenever rent reviews or lease renewals are pending with anticipated revisionary increases, all notices and, where appropriate, counter notices have been served validly and within the appropriate time.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

Rental income from investment property is accounted for as described in accounting policy 2.22 on other revenue.

Where an item of property, plant and equipment is transferred to/from investment property following a change in its use, the cost and related accumulated depreciation (i.e. carrying value) at the date of reclassification becomes its cost for accounting purposes and subsequent recording.

2.7 Intangible assets

An intangible asset is recognised when: it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and the cost of the asset can be measured reliably.

2.7.1 Originated programme, film and sports rights

Originated programme, film and sports rights, including work commissioned from independent producers, are intangible assets with finite useful lives and are stated at cost less accumulated amortisation and accumulated impairment losses. Cost comprises direct costs, including cost of materials, artist fees and production overheads. The amount initially recognised for originated asset is recognised from the date when the intangible asset first meets the recognition criteria listed below.

Subsequent to initial recognition, originated assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An originated asset arising from the development phase of an internal project is recognised if, and only if, all the following have been demonstrated: a) the technical feasibility of completing the intangible asset so that it will be available for use or sale, b) the intention to complete the intangible asset and use or sell it, c) the ability to use or sell the intangible asset, d) how the intangible asset will generate probable future economic benefits e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, f) the ability to measure reliably the expenditure attributable to the intangible asset during its development.

2.7.2 Acquired programme, film and sports rights



Acquired programme, film and sports rights are intangible assets with finite useful lives and are stated at cost less accumulated amortisation (refer to note 7) and accumulated impairment losses. Cost comprises actual acquisition cost plus language dubbing, where applicable.

Acquired programme, film and sports rights are generally recognised when the license period begins, the cost of the right is known or reasonably determina-ble, the material has been accepted by the Group in accordance with conditions of the license agreement, and the material is available for its first transmis-sion. If at the date of signing, a substantial degree of uncertainty exists about the availability of the material, particularly if a license agreement is signed for programme material that does not yet exist, the asset is only recorded once the uncertainties are eliminated and the programme is received and available for broadcast. Payments made to negotiate and secure the broadcasting of sports events are expensed as incurred.

Commitments

Where arrangements have been executed for the future purchase of programme, film and sports rights, but the recognition criteria above have not been met or broadcasting commenced, the arrangements are disclosed as Commitments (refer to note 38). Where payments have already been made, these are disclosed as prepayments.

Classification

Programme, film and sports rights are classified as current assets as they are expected to be realised in the Group’s normal operating cycle.

Derecognition of programme, film and sports rights

Cost and accumulated amortisation of originated programme, film and sports rights are derecognised after the estimated number of showings. Cost and accumulated amortisation of acquired programme, film and sports rights are derecognised at the earlier of the expiry of the license period or allowed number of showings.

Other intangible assets

Other intangible assets, including computer software not considered an integral part of property, plant and equipment, are initially measured at cost and sub-sequently measured at cost less accumulated amortisation (refer to note 7) and impairment losses. Expenditure on internally generated brands is recognised in profit or loss as an expense as incurred.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expend-iture is expensed as incurred.

Derecognition

Other intangible assets are retired when no future economic benefits are expected from the assets. The gain or loss on retirement of other intangible assets is recognised in profit or loss, (refer to note 35). Gains and losses on the retirement of items of other intangible assets are determined by comparing the proceeds on retirement with the carrying amount of the other intangible assets retired.

Amortisation

Amortisation of programme, film and sports rights is charged to profit and loss on an accelerated basis where the first transmission is expected to be more valuable than subsequent transmissions and on a straight-line basis based on the estimated number of future showings if each showing is expected to gen-erate similar audiences.

Amortisation of other intangible assets is charged to profit and loss on a straight-line based on the estimated useful lives of such assets from the date that they are available for use. The estimated useful life of computer software for the current and comparative period is between 2 and 10 years.

Amortisation methods, useful lives and residual values reassessed annually, and adjusted if appropriate.

2.8 Investments in subsidiaries

Subsidiaries are all entities (including special-purpose entities) over which the group has the power to govern the financial and operating policies to obtain benefits from the activities of the entity. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the group. They are de-consolidated from the date that control ceases.

Investments in subsidiaries are accounted for at cost less impairment losses in the separate financial statements of the company.

2.9 Impairment of non-financial assets

The carrying amount of the Group’s assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impair-ment. If such indication exists, the asset’s recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or, its cash-generating unit, exceeds its recoverable amount. Impairment losses are recognised in profit or loss.

Calculation of impairment

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



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independent of the cash inflows of other assets or groups of assets. Impairment losses in respect of cash generating units are allocated first to reduce the carrying amount of goodwill allocated to the unit and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis.

Reversals of impairment

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

2.10 Financial assets

2.10.1 Classification

From 1 April 2018, the SABC classifies its financial assets in the following measurement categories:- those to be measured subsequently at fair value (either through OCI or through profit or loss), and- those to be measured at amortised cost.The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).The SABC reclassifies debt investments when and only when its business model for managing those assets changes.

2.10.2 Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the SABC commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

2.10.3 Measurement

At initial recognition, the SABC measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments:

Amortised cost:

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.

Fair Value through Other Comprehensive Income (OCI):

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss.

Fair Value through Profit / Loss (FVPL):

Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.

Equity instruments

The SABC subsequently measures all equity investments at fair value. Where the group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the group’s right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

2.11 Impairment of financial assets

From 1 April 2018, the SABC assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost . The impairment methodology applied depends on whether there has been a significant increase in credit risk.



For trade receivables, the SABC applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

The Group considers evidence of impairment for receivables and held-to-maturity investment securities at both a specific asset and collective level. All in-dividually significant receivables and held-to-maturity investment securities are assessed for specific impairment. All individually significant receivables and held-to-maturity investment securities found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables and held-to-maturity investment securities that are not individually significant are collectively assessed for impairment by grouping together receivables and held-to-maturity investment securities with similar risk characteristics.

In assessing collective impairment the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, ad-justed for management’s judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rates. Losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Impairment losses on other financial assets are recognised by transferring the cumulative loss that has been recognised in other comprehensive income, and presented in the fair value reserve in equity, to profit or loss. The cumulative loss that is removed from other comprehensive income and recognised in profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss previously recognised in profit or loss. Changes in impairment provision attributable to time value are reflected as a component of interest income.

If, in a subsequent period, the fair value of an impaired other financial asset (FVOCI) increases and the increase can be related objectively to an event oc-curring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired other financial assets classified as fair value through other comprehensive income is recognised in other comprehensive income.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position only when the Group has a legal right to offset the amount and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group’s investments are recognised at amortised cost which is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e. the effective interest computed at initial recognition of these financial assets). Receivables with a short duration are not discounted where the effect is not material.

Calculation of impairment

Impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the impairment is the difference between the asset’s carrying amount and its fair value, being the present value of estimated future cash flows, discounted at the original effective interest rate. The amount of the impairment is recognised in profit or loss.

Reversals of impairment

An impairment loss in respect of financial assets carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related objec-tively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and other financial assets that are debt securities, the reversal is recognised in profit or loss.An impairment loss in respect of an investment in an equity instrument classified as other financial assets is not reversed through profit or loss.

2.12 Financial liabilities

All financial liabilities are classified as “”amortised cost””, except for:- financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.- financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies- financial guarantee contracts- commitments to provide a loan at a below-market interest rate.- contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies. Such contingent consideration shall subsequently

be measured at fair value with changes recognised in profit or loss- Irrevocable designation was made to classify financial liabilities at fair value through profit or loss

Financial liabilities at ‘fair value through profit or loss’ are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item.

Other financial liabilities

Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

The effective interest rate method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments, through the life of the liability or a shorter period, to the net carrying amount on initial recognition.

Derecognition



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Financial liabilities are derecognised when the obligation is discharged, cancelled or expires.

2.13 Derivative financial instruments

The Group uses derivative financial instruments to economically hedge its exposure to foreign exchange risks arising from the purchase of foreign pro-gramme, film and sports rights, capital equipment and certain operational expenses. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. However, since the Group has elected not to apply hedge accounting, all derivative financial instruments are accounted for as trading instruments.

Derivative financial instruments are recognised initially at fair value and attributable transaction costs are recognised in profit or loss when incurred. Subse-quent to initial recognition, derivative financial instruments are measured at fair value. The gain or loss on remeasurement to fair value is recognised imme-diately in profit or loss.

2.14 Government debt instrument

Perpetual debt instrument relates to a loan from the shareholder. On 1 February 1972, the Company’s shareholder converted a long-term loan into permanent capital. The permanent capital is not repayable. In terms of the Exchequer Act, No. 66 of 1975, as amended, interest will be payable, in perpetuity, at a rate of 6.5% per annum on the capital outstanding amount. The instrument represents a financial liability (in the form of perpetual debt) and is measured at amortised cost.

2.15 Loans and borrowings

Loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, loans and borrowings are stated at amortised cost using the effective interest rate method.

2.16 Inventories

Merchandise and consumables are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses. Cost is determined on a weighted average basis and includes other costs incurred in bringing the consumables to their present location and condition. Any write-down and impairment of obsolete inventory to net realisable value are recognised as an expense in the period in which the write-down occurs. Any reversal are recognised in profit and loss in the period in which the reversal occurs.

2.17 Trade receivables

Trade receivables comprise receivables in respect of advertising, sponsorships and facilities are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less impairment losses. The fair value of trade receivables is net of agency commissions, and where applicable net of trade discounts, which are granted when payment is made in accordance with agreed payment terms. Trade receivables are initially meas-ured at transaction price as they do not have a significant financing component.

2.18 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the pro-ceeds, net of tax.

2.19 Employee benefit obligations

Defined benefit pension plans

The net obligation in respect of defined benefit pension plans is the present value of the defined benefit obligation (calculated by estimating the amount of fu-ture benefits that employees have earned in return for their service in the current and prior periods) at the end of the reporting period less the fair value on plan assets. The present value of the defined benefit obligation is determined by discounting the estimated future cash flows using an appropriate discount rate. The discount rates used are the following:- yield on Government Stock, the zero-coupon yield curve provided by the South African Bond Exchange (member of the Johannesburg Stock of Exchange) that have maturity dates approximating the terms of the Company’s obligations. The defined benefit obligation is calculated annually by independent actuaries. Refer to Note 8 on the defined benefit pension plan.

Past service costs are recognised immediately in profit and loss.

Other post-employment benefit obligations

The Group provides a subsidy for medical aid contributions payable by those employees who elect to remain on the medical aid scheme after retirement. The entitlement to these benefits is usually conditional on the employee remaining in service up to normal retirement age or the completion of a minimum service period in the event of early retirement. The expected costs of these benefits are accrued over the period of employment using an accounting methodology similar to that used for the defined benefit pension plan. This liability relating to post-employment medical benefits is valued annually by independent qualified actuaries. This practice of post-retirement medical aid contributions was discontinued for all new employees after 1 July 2002. Actuarial gains and losses arising from experience adjustments, and changes in actuarial assumptions, are recognised in other comprehensive income.

Short-term benefits

Short-term employee benefit obligations relating to leave pay are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Long-term benefits

The Group’s net obligation in respect of long-term employee benefits relating to old leave pay and bonuses other than pension plans is the amount of future



benefits that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value.

Long service awardsThe Group provides long service awards to its employees on 5 year continuous service intervals; it starts from 5 years of service to 45 years of service. The awards consists of a cash portion as well as a gift portion, where continuous service reaches 30 years then an additional 5 days of long service leave is also granted. To determine the present value of the obligation the Projected Unit Credit Method is used. The liability is valued annually by independent qualified actuaries.

ProvisionA provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be measured. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

2.20 Trade and other payablesTrade and other payables are initially recognised at fair value less any directly attributable transaction costs. Trade and other payables are subsequently measured at amortised cost, using the effective interest rate method.

2.21 Cash and cash equivalentsCash and cash equivalents includes cash on hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts shown within the loans and receivables category of financial instruments. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash man-agement are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Restricted cashCash which is subject to restrictions on its use is stated separately at carrying value in the statement of financial position. Government grants received for capital expenditure are restricted to capital projects relating to the migration of analogue infrastructure to digital. Given that the cash has specific conditions of use it has been separately disclosed in note 14.

2.22 RevenueRevenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The group recognises revenue when it satisfies its performance obligations and transfers control over services to a customer.

Nature of servicesi Advertising revenueAdvertising revenue is recognised at the time the related advertisement or commercial is broadcast on our television and/or radio platforms to the public. The amount recognised is net of Value-Added Tax and trade discounts.

ii Trade exchanges (non-monetary exchanges)When broadcasting airtime is exchanged for dissimilar goods or services, the exchange is regarded as a transaction which generates revenue. The revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred. When the fair value of the goods or services received cannot be measured reliably, the revenue is measured at the estimated stand-alone selling price of the services subject to the specific customer contract.

iii Sponsorship revenueSponsorship revenue is recognised at the time sponsored programmes are aired, net of Value-Added Tax and trade discounts. The consideration in spon-sorship agreements containing more than one identifiable component, such as promotional advertising time and sponsorships, is allocated to underlying components based on their stand-alone prices and accounted for in accordance with the substance of the underlying component.

iv Licence fee revenueManagement has developed its own accounting policy for TV licence fee revenue as there is no specific standard under IFRS dealing with specifically with this revenue transaction. TV licence fees revenue arises when television licence fees are due in accordance with legislation at each renewal date. Manage-ment recognises that the SABC has an obligation to provide a broadcasting service to the TV licence holder in exchange for the licence fee received. This is deemed as a performance contract and principles of IFRS requirements on similar transactions were applied. Management considered the principles of both IFRS 15 on Revenue from Contracts with Customers and IAS 20 on Government Grants. Under both accounting standards, the revenue recognition criteria would not be materially different.

As the SABC has no performance obligations remaining after renewal date, revenue is recognised when it is probable that the SABC will collect the licence fees to which it is entitled to. Where it is assessed that the collection of television licence fees will not be probable based on predefined criteria, such television licence fees are not recognised. Probability is assessed on a monthly basis for all active television licence holders user accounts registered on the SABC’s database.

v Government grants Government grants are recognised in the statement of financial position initially as deferred income (deferred government grant) when there is reasonable assurance that they will be received and that the Group will comply with the conditions attached to them. Grants that compensate the Group for expenses incurred are recognised as revenue in profit or loss on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate



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the Group for the cost of an asset are recognised in profit or loss as revenue on a systematic basis over the useful life of the asset.

vi Programme rights exploitation and channel carriage fees

The SABC obligation in terms of the contract is to provide a broadcasting licence on agreed conditions for the customer to access the content material in its current state. Revenue from commercial licences for specific rights associated with television programmes and licences is recognised when there has been technical acceptance of the content material by the customer and collection of the receivable is probable, and the revenue associated with delivered and undelivered elements can be reliably measured.

Channel carriage fees licence presents a performance obligation that is satisfied over time within the contracted licence period. Progress is measured based on time the SABC channels are carried on the contracted platforms and billed on a monthly basis on accrual basis.

vii Other revenue

Other revenue associated with the sale of goods, use of SABC media facilities and services such as mobile revenue is recognised in profit or loss when performance obligations are met and the goods or services are transferred to the buyer. Other revenue associated with the provision of services is recognised in profit or loss in proportion to the services performed to date as a percentage of total services to be performed. Other revenue/income also includes rental income, which is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

viii Other income

Other income includes rental income, which is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

2.23 Lease payments

i Operating lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. The difference between the amounts recognised as an expense and the contractual payments (due to straight-lining of lease payments), is recognised as an operating lease asset or liability.

ii Finance lease payments

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is also allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. The capital portion of future obligations under the leases is included as a liability in the statement of financial position.

Initial direct costs incurred in negotiating and securing lease arrangements are added to the amount recognised as an asset.

2.24 Net financing income

Financing income includes interest receivable on funds invested, dividend income and foreign exchange gains and losses.

Interest payable on borrowings is calculated using the effective interest rate method. Interest income is recognised in profit or loss as it accrues, using the effective interest rate method.

Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established, which in the case of quoted securities is usually the ex-dividend date

The interest expense component of finance lease payments is recognised in profit or loss using the effective interest rate method.

2.25 Income tax

Income tax expense comprises current and deferred tax. Income tax is recognised in profit or loss, except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised there.

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

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on the net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits or reversing temporary differences will be available against which the asset can be utilised.



Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

2.26 Related parties

The Group operates in an environment currently dominated by entities directly or indirectly owned by the South African government. As a result of the con-stitutional independence of all the three spheres of government in South Africa, only parties within the national sphere of government will be considered to be related parties.

Key management is defined as individuals with the authority and responsibility for planning, directing and controlling the activities of the Company. All individ-uals from the level of Executive Management up to the Board of Directors are regarded as key management per the definition of IFRS.

Close family members of key management personnel are considered to be those family members who may be expected to influence, or be influenced by key management individuals in their dealings with the Group.

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

2.27 Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit and loss in the period in which they are incurred.

2.28 Irregular, Fruitless and Wasteful Expenditure

Irregular Expenditure

Irregular expenditure: means expenditure, incurred in contravention of or that is not in accordance with the requirement of any applicable legislation. Such expenditure is recorded in the notes to the annual financial statements. It is recorded at the value of the irregular expenditure incurred unless it is impracticable to determine the value thereof. Where such impracticality exists, the reasons therefore are provided in the notes. Irregular expenditure is removed from the notes when it is either (a) condoned by the National Treasury or the relevant authority; (b) it is transferred to receivables for recovery; or (c) it is not condoned and is irrecoverable. A receivable related to irregular expenditure is measured at the amount that is expected to be recovered and is de-recognised when the receivable is settled or subsequently written off as irrecoverable.

Fruitless and Wasteful Expenditure

Fruitless and wasteful expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised. When confirmed, fruitless and wasteful expenditure is recorded in the notes to the financial statements. This includes particulars of fruitless and wasteful expendi-ture that occurred during the financial year and any disciplinary steps taken as a consequence of such fruitless and wasteful expenditure.

2.29 Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability.

If the likelihood of an outflow of resources is remote, the possible obligation is neither a provision nor a contingent liability and no disclosure is made.

2.30 Expenses

Expenses are decreases in economic benefits during the financial year in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.

3 ACCOUNTING ESTIMATES AND JUDGEMENTS

Management discusses with the Audit Committee the development, selection and disclosure of the Group’s critical accounting policies and estimates and the application of these policies and estimates.

3.1 Critical accounting estimates and assumptions

The preparation of the annual financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in significant adjustments as accounting estimates will, by definition, seldom equal the actual results. The estimates and assump-tions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

i Useful lives and residual values of property, plant and equipment

Useful lives



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The Group calculates depreciation of property, plant and equipment on a straight-line basis so as to write off the cost of the assets over their expected useful lives. The useful life of an asset is determined on existing physical wear and tear, economic and technical ageing, legal or other limits on the use of the asset and obsolescence. If some of these factors were to deteriorate materially, impairing the ability of the asset to generate future cash flows, the Group may accelerate depreciation charges to reflect the remaining useful life of the asset or record an impairment loss.

The expected useful lives of assets is determined by considering the components identified in the asset hierarchy and by considering the inputs from knowl-edgeable representatives within the departments within the SABC per component identified based on their past experiences and knowledge.

In determining the expected useful lives of the assets, the current asset register was analysed to determine the average age of the assets per component where applicable.

The remaining useful life of assets is informed by two parameters, Age based remaining useful life and condition based remaining useful life. The final remain-ing useful life is determined with reference to an algorithm, which takes into account both parameters.

ii Residual Values

The residual value has in most cases been taken as zero, as the SABC has adopted the approach of utilising their assets beyond their economical useful live, considering the environment in which the SABC functions where technological advancements can render certain assets obsolete and also on the assertion that none of the assets have material residual values at the end of the expected useful life.

iii Amortisation and impairment of computer software

The Group believes that the accounting estimates relating to the amortisation and impairment of computer software are significant accounting estimates because they require management to make assumptions about the useful life of an asset. The useful life of an asset is determined on existing economic and technical ageing, legal or other limitations on the use of the asset and obsolescence. If some of these factors were to deteriorate materially, impairing the ability of the asset to generate future cash flows, the Group may accelerate the amortisation charge to reflect the remaining useful life of the asset or record an impairment loss. See accounting policy 2.7 and note 7.

iv Amortisation and impairment of programme, film and sports rights

The Group believes that the accounting estimates relating to the amortisation and impairment of programme, film and sports rights are significant accounting estimates because they require management to make assumptions about future audiences and revenues, and a change in the pattern of amortisation or potential impairment in programme, film and sports rights may have a material impact on the value of these assets reported in the Company’s statement of financial position. See accounting policies 2.7 and note 7. The recoverable amount of the rights is considered zero once the licence period is expired.

v Pension assumptions

The Group’s pension fund is a funded defined benefit pension fund that provides pension fund benefits for all of the Group’s permanent employees. The latest statutory valuation of the fund was performed at 31 December 2014, in which the valuator reported that the fund was in a sound financial position subject to the continuation of the current contribution rates, and its assets exceed its liabilities.

Annually the defined benefit pension plan is valued on 31 March using the Projected Unit Credit Method for the financial statements certified by the actuaries. The cost of the defined benefit pension plan as well as the present value of the pension obligation is determined using actuarial valuations. The actuarial valuations involve making assumptions about discount rates, expected rates of return of assets, future salary increases, mortality rates of in-service members and pensioner mortality rates and future pension increases, withdrawal of members in the service and family statistics. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of quality corporate bonds in the respective country, (i.e. yield on South African Government Bonds). The mortality rate is based on public available mortality tables for the specific country (i.e. PA (90) mortality table). Future salary increases and pension increases are based on expected future inflation rates. Further details about the assumptions used are given in note 8.

vi Post-employment medical aid assumptions

The Group provides a subsidy of medical aid contributions payable by those employees who elect to remain on the medical aid scheme after retirement. The Group provides for these post-employment medical aid benefits using the Projected Unit Credit method prescribed by IAS 19 - Employee Benefits. Future benefits valued are projected using specific actuarial assumptions and the liability for in-service members is accrued over their expected working lifetime. The liability is calculated by considering some key actuarial assumptions such as the rate of healthcare cost inflation, discount rate, percentage members continuing after retirement and average retirement age of members. The key actuarial assumptions made are disclosed in note 21.

Any change in these assumptions could result in a material adjustment to the post-employment medical liability stated on the Group’s statement of financial position as well as a material impact on the Group’s profit. A one percentage point change in the rate of health care cost inflation would have the following effects.

One percentage point increase One percentage point decrease

Effect on the post-employment medical aid liability: R1 190 million R965 million

vii Legal matters

The Group is involved in legal disputes through its normal course of business. The outcome of these legal claims may have a material impact on the Group’s financial position and results of operations. Management estimates the potential outcome of these legal claims based on the most objective evidence on hand from internal and external legal advisors until such time that ultimate legal resolution has been finalised. Due to the uncertain nature of these issues, any changes in these estimates based on additional information as it becomes available could result in material changes to the financial statements in subsequent periods. See note 24 and 39.



viii Determining the fair value of financial instruments

Where the fair value of the financial assets and liabilities recorded in the statement of financial position cannot be derived from the active markets, they are determined using valuation techniques including the discounted cash flow model (Level 2) The inputs of these models are taken from observable markets where possible, but where this is not possible, a degree of judgment is required in establishing fair values. The judgements include consideration of inputs such as liquidity risk, credit risk, and volatility. Changes in assumptions about the facts could affect the reported fair value of the affected financial instrument.

The different valuation levels are identified as follows by IFRS 13:

Level 1 - Quoted prices (unadjusted) in active ,markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within level 1 that observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)

Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

ix Impairment of trade and other receivables and credit notes

Doubtful accounts are reported at the amount likely to be recoverable based on the historical experience of customer default. As soon as it is learned that a particular account is subject to a risk over and above the normal credit risk (e.g. lower creditworthiness of customer, dispute as to the existence of the amount of the claim, no enforceability of the claim for legal reasons etc.), the account is analysed and written down if circumstances indicate the receivable is uncollectable.

x Probability of licence fee revenue

The Group believes the probability assessment used as a basis for estimating the licence fee revenue to be recognised is a significant judgement. It requires management to make professional judgements and assumptions about the probability of receiving licence fees from TV licence holders on renewal date. The probability of receiving licence fee revenue from licence holders is based on assessed ability to pay the TV licence fees and the assessed willingness of the licence holder to pay the statutory annual TV licence fee (refer to note 25). Where such a probability assessment cannot be reliably made, as in the case with the first anniversary renewal for new TV licence holders, the revenue is only recognised when the uncertainty is removed on receipt.

4 CHANGES IN ACCOUNTING POLICY AND DISCLOSURES

4.1 New and amended standards and interpretations

The Corporation has applied for the first time certain amendments to the standards which are effective for periods beginning 1 January 2018. The Corporation had also early adopted IFRS 15 on Revenue from Contracts with Customers in the previous financial year. The nature and impact of each of the amendment is described below;

i IFRS 9 Financial Instruments and associated amendments to various other standards

IFRS 9 replaces the multiple classification and measurement models in IAS 39 Financial instruments: Recognition and measurement with a single model that has initially only two classification categories: amortised cost and fair value.

Classification of debt assets will be driven by the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. A debt instrument is measured at amortised cost if:a) the objective of the business model is to hold the financial asset for the collection of the contractual cash flows, andb) the contractual cash flows under the instrument solely represent payments of principal and interest.

All other debt and equity instruments, including investments in complex debt instruments and equity investments, must be recognised at fair value.

All fair value movements on financial assets are taken through the statement of profit or loss, except for equity investments that are not held for trading, which may be recorded in the statement of profit or loss or in reserves (without subsequent recycling to profit or loss).

For financial liabilities that are measured under the fair value option entities will need to recognise the part of the fair value change that is due to changes in the their own credit risk in other comprehensive income rather than profit or loss.

In July 2014, the IASB made further changes to the classification and measurement rules and also introduced a new impairment model. With these amend-ments, IFRS 9 is now complete. The changes introduce: - a third measurement category (FVOCI) for certain financial assets that are debt instruments - a new expected credit loss (ECL) model which involves a three-stage approach whereby financial assets move through the three stages as their credit qual-

ity changes. The stage dictates how an entity measures impairment losses and applies the effective interest rate method. A simplified approach is permitted for financial assets that do not have a significant financing component (eg trade receivables). On initial recognition, entities will record a day-1 loss equal to the 12 month ECL (or lifetime ECL for trade receivables), unless the assets are considered credit impaired.

ii Amendments to IAS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact. These amendments are not expected to have any impact on the Group.



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4.2 New and revised IFRSs in issue but not yet effective

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.i) Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture indefinite ii) IFRS 16 - Leases 1-Jan-19 iii) IAS 1 - Presentation of financial statements (Disclosure initiative) 1-Jan-20 iv) IAS 8 - Accounting policies, change in estimates and errors (Disclosure initiative) 1-Jan-20 v) IAS 19 - Employee benefits (Plan Amendment, Curtailment or Settlement) 1-Jan-19 vi) IFRC 23 - Uncertainty over income tax treatments 1-Jan-19

i Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3, between an investor and its associate or joint venture, is recognised in full. Any gain or loss resulting from the sale or contribution of assets that do not constitute a business, however, is recognised only to the extent of unrelated investors’ interests in the associate or joint venture. The IASB has deferred the effective date of these amendments indefinitely, but an entity that early adopts the amendments must apply them prospectively.

ii IFRS 16: Leases

IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recog-nition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. The standard includes two recognition exemptions for lessees – leases of ’low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasure-ment of the lease liability as an adjustment to the right-of-use asset.

Lessor accounting under IFRS 16 is substantially unchanged from today’s accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. The Group plans to assess the potential effect of IFRS 16 on its consolidated financial statements

iii IAS 1 - Presentation of financial statements (Disclosure initiative)

Disclosure Initiative: The amendments clarify and align the definition of ‘material’ and provide guidance to help improve consistency in the application of that concept whenever it is used in IFRS Standards.

iv IAS 8 - Accounting policies, change in estimates and errors (Disclosure initiative)

Disclosure Initiative: The amendments clarify and align the definition of ‘material’ and provide guidance to help improve consistency in the application of that concept whenever it is used in IFRS Standards. and align the definition of ‘material’ and provide guidance to help improve consistency in the application of that concept whenever it is used in IFRS Standards.

v IAS 19 - Employee benefits (Plan Amendment, Curtailment or Settlement)

Plan Amendment, Curtailment or Settlement (Amendments to IAS 19): The amendments require an entity to use the updated assumptions from a remeasure-ment net defined benefit liability or asset resulting from

a plan amendment, curtailment or settlement to determine current service cost and net interest for the remainder of the reporting period after the change to the plan.

vi IFRC 23 - Uncertainty over income tax treatments

The Interpretation requires an entity to determine whether uncertain tax positions are assessed separately or as a group; and assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, by an entity in its income tax filings. If yes, the entity should determine its accounting tax position consistently with the tax treatment used or planned to be used in its income tax filings. If no, the entity should reflect the effect of uncertainty in determining its accounting tax position. The entity will elet to apply modified retrospective application without restatement of comparatives.

4.3 Changes in accounting policies

The SABC adopted IFRS 9 (Financial instruments) as at 1 April 2018, which resulted in the changes in the accounting policies. IFRS 9 has been applied retrospectively. This adoption is also impacted by IFRS 15 (Revenue from Contracts with Customers) which was already adopted in the previous financial year.



The adoption of IFRS 9 has resulted in changes in the classification of the financial instruments and the impairment methodology. However there is minimal impact on the initial measurement.

This change in the accounting policy and its impact has been described below:

i) IFRS 9 Financial instruments

Classification and measurement

On 31 March 2019 (the date of initial application of IFRS 9), the SABC’s management has assessed which business models apply to the financial assets held by the group and has classified its financial instruments into the appropriate IFRS 9 categories. The main effects resulting from this reclassification are as follows:

Financial assets - 1 April 2018 Notes Other financial assets FVOCI Amortised cost (Receivables)Closing balance - 31 March 2018 (IAS 39)Trade and other receivables (a) - 800 494Available for sale (Listed shares) (b) 12 220 -Opening balance - 1 April 2018 (IFRS 9) 12 220 800 494

There is no effect on the annual financial statements as a result of the adoption of IFRS 9 as the classification of these financial assets is similar on both standards.

(a) Trade and other receivables

The classification test on these financial assets satisfies Amortised cost category, as the business model is to collect outstanding debt at contractual terms. The trade receivables have initially been measured at the transaction price as they do not have any significant financing component (customers pay within an average of 60 days).

(b) Other financial assets (Listed shares)

This equity instruments is neither held for trading, nor there is any contingent consideration recognised against them through a business combination. In order to achieve consistent and prudent accounting treatment of these equity instruments, the SABC has made irrevocable election to classify these equity instruments as Fair Value through Other Comprehensive Income (FVOCI). The fair valuing is similar on both standards, hence no impact on the initial rec-ognition under IFRS 9.

All the financial liabilities have been classified as amortised cost, as neither of them meets requirements of Fair Value through Profit/ Loss

Below is the summary of classification of all financial instruments:

Measurement category Carrying amountIAS 39 IFRS 9 Original New Difference

Non current financial assetsOther financial assets Available for sale FVOCI 12 220 12 220 - Current financial assetsTrade and other receivables Amortised cost Amortised cost 800 494 800 494 - Cash and cash equivalents Amortised cost Amortised cost 130 516 130 516 - Current financial liabilitiesGovernment debt instrument Amortised cost Amortised cost 20 798 20 798 - Trade and other payables Amortised cost Amortised cost 1 132 875 1 132 875 - Contract liabilities Amortised cost Amortised cost 65 847 65 847 - Impairment of financial assets

The SABC has two types of financial assets that are subject to IFRS 9’s new expected credit loss model: - trade receivables (commercial revenue and TV licence) - equity instrument carried at FVOCI

The SABC was required to modify its impairment methodology under IFRS 9 for each of these classes of assets. The impact of the modification in impairment methodology did not materially differ from the methodology applied from IAS 39. The cash and cash equivalents did not require any impairment adjustment since its comprising of the cash reserves.

The SABC adopted the Simplified Approach for Trade Receivables in measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables.



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4.4 Restatements in respect of Prior Period Errors GROUP

2018 2017Statement of Financial Position Previously

Reported Adjustments Restated Previously

Reported Adjustments Restated R’000 R’000 R’000 R’000 R’000 R’000

Programme, film and sports rights (i) 756 473 (149 220) 607 253 768 500 (41 933) 726 567 Impact on current assets (149 220) (41 933)Trade and Other Payables (Bonus accrual) (ii) 1 117 746 15 129 1 132 875 - Total current liabilities 15 129 - Deferred Government Grants (iii) 203 575 38 208 241 783 243 368 38 208 281 576 Total current non - liabilities 38 208 38 208 Total impact on the Statement of Financial Position (172 299) (80 141)

Statement of Comprehensive Income

Items included in total comprehensive income As previous-ly reported

Adjustment Restated amount

Amortisation of programme, film and sports rights (i) (1 714 029) (27 280) (1 741 309)Net impairment (raised)/reversed of programme, film and sports rights

(i) (61 755) (80 007) (141 762)

Employee and director compensation and benefit expenses

(ii) (3 099 781) (15 129) (3 114 910)

Total comprehensive (loss)/income for the year (4 875 565) (122 415) (4 997 980)Impact on Opening retained earnings (80 141)Retained earnings restated* 871 219 (202 556) 668 663 2 064 888 (80 141) 1 984 747 (i) Restatements in respect of amortisation of programme, film and sports rights

The correction of prior period error relates to the following:- Amortisation of a sports rights contract was not in line with the contractual terms resulting in errors in the previous financial years of R27 million.- The supplier did not provide contractually agreed sports rights which were acquired in advance, therefore R122 million had to be impaired.

(ii) Restatement in respect of bonus accrual

There bonus accrual was under-provided in the previous years due to inaccurate in year movements.

(iiI) Restatement in respect of deferred government grant liability

Aligning the deferred government grant to government funded assets and restricted cash. The amortisation of deferred government grant income was mis-stated in the previous financial years. The correction of prior period has been processed in the opening balance retained earnings of 2016/17 financial year.



4.4 Restatements in respect of Prior Period Errors (continued)COMPANY

2018 2017Statement of Financial Position Previously

Reported Adjustments Restated Previously

Reported Adjustments Restated R’000 R’000 R’000 R’000 R’000 R’000

Programme, film and sports rights (i) 756 473 (149 220) 607 253 768 500 (41 933) 726 567 Impact on current assets (149 220) (41 933)Trade and Other Payables (Bonus accrual) (ii) 1 117 746 15 129 1 132 875 - Total current liabilities 15 129 - Deferred Government Grants (iii) 203 575 38 208 241 783 243 368 38 208 281 576 Total current non - liabilities 53 336 38 208 Total impact on the Statement of Financial Position (187 427) (80 141)

Statement of Comprehensive Income

Items included in total comprehensive income As previously reported

Adjustment Restated amount

Amortisation of programme, film and sports rights (i) (1 714 029) (27 280) (1 741 309)Net impairment (raised)/reversed of programme, film and sports rights

(i) (61 755) (80 007) (141 762)

Employee and director compensation and benefit expenses

(ii) (3 099 781) (15 129) (3 114 910)

Total comprehensive (loss)/income for the year (4 875 565) (122 415) (4 997 980)Impact on Opening retained earnings (80 141) - Retained earnings restated* 903 555 (202 556) 700 999 2 082 498 (80 141) 2 002 357 (i) Restatements in respect of amortisation of programme, film and sports rights

The correction of prior period error relates to the following:- Amortisation of a sports rights contract was not in line with the contractual terms resulting in errors in the previous financial years of R27 million.- The supplier did not provide contractually agreed sports rights which were acquired in advance, therefore R122 million had to be impaired.

(ii) Restatement in respect of bonus accrual

There bonus accrual was under-provided in the previous years due to inaccurate in year movements.

(iiI) Restatement in respect of deferred government grant liability

Aligning the deferred government grant to government funded assets and restricted cash. The amortisation of deferred government grant income was mis-stated in the previous financial years. The correction of prior period has been processed in the opening balance retained earnings of 2016/17 financial year.



FINANCIALS

GROUP AND COMPANY2018 2017

R’000 R’0004.5 Restatements in respect of prior period errors

a Programme, film and sports rights (PFSR)CostIncrease/(decrease) in cost of PFSR - (209 694)

- (209 694)Accumulated amortisation and impairmentDecrease/(increase) in accumulated amortisation (27 280) 195 027 Decrease/(increase) in accumulated impairment (80 007) (27 266)

(107 287) 167 761 Total impact of errors on programme, film and sports rights (107 287) (41 933)

b Property, Plant and EquipmentDecrease in carrying amount of Other Assets (32 266) (32 266)Increase in carrying amount of Assets Under Construction 32 266 32 266

- -

The entity had incorrectly classified Assets Under Construction as part of Property Plant and Equipment. These projects were yet to be completed as of the reporting date.The assets though incorrectly classified, were correctly not being depreciated. The correction of the prior period disclo-sure note therefore does not affect the previously reported total value of Property, Plant and Equipment and the related accumulated depreciation.

5 Property, plant and equipment GROUP AND COMPANY Land and buildings

Broadcasting equipment Other assets* Vehicles

Capital work-in-progress** Total

R’000 R’000 R’000 R’000 R’000 R’000 At 31 March 2019Cost 1 032 401 1 272 402 764 122 193 361 263 608 3 525 895 Accumulated depreciation and impairment losses

(455 134) (816 364) (579 392) (131 804) - (1 982 694)

Carrying amount 577 267 456 038 184 730 61 557 263 608 1 543 199

At 31 March 2018Cost 1 030 376 1 228 828 757 106 189 419 216 304 3 422 034 Accumulated depreciation and impairment losses (443 407) (745 492) (540 521) (110 136) - (1 839 556)Carrying amount 586 969 483 336 216 585 79 283 216 304 1 582 476

For the year ended 31 March 2019Carrying amount at 1 April 2018 - restated 586 969 483 336 216 585 79 283 216 304 1 582 476 Additions 696 27 042 19 091 - 91 848 138 678 Disposals (56) (764) (6 429) (775) - (8 024)Cost (2 588) (7 823) (24 482) (1 714) - (36 607)Accumulated depreciation and impairment losses

2 532 7 059 18 054 939 - 28 584

Impairment - - - - - - Transfers from/(to) computer software and other categories

3 575 23 031 10 494 5 656 (44 545) (1 789)

Cost 3 917 23 052 12 435 5 656 (44 545) 515 Accumulated depreciation and impairment losses

(342) (21) (1 942) - - (2 304)

Depreciation charge for the year (13 917) (76 607) (55 011) (22 607) - (168 143)Carrying amount at 31 March 2019 577 267 456 038 184 730 61 557 263 608 1 543 199

For the year ended 31 Mar 2018Carrying amount at 1 April 2017 - restated 591 852 538 756 259 485 93 829 131 180 1 615 102 Additions 2 636 7 800 5 218 2 653 128 702 147 009 Disposals - (11 196) (366) (247) - (11 809)Cost (24) (22 998) (38 589) (386) - (61 997)Accumulated depreciation and impairment losses 24 11 802 38 223 139 - 50 188 Transfers from/(to) computer software and other categories

6 330 22 839 7 888 5 989 (43 578) (532)

Depreciation charge for the year (13 850) (74 862) (55 641) (22 941) - (167 294)Carrying amount at 31 Mar 2018 586 969 483 336 216 585 79 283 216 304 1 582 476



5 Property, plant and equipment (Continued) GROUP AND COMPANY2019 2018

Carrying amount of property, plant and equipment ceded as security R’000 R’000Motor VehiclesMotor vehicles financed through ABSA instalment sale 32 736 51 140

32 736 51 140 Included in capital work-in-progress are the following major projects:Limpopo security system upgrade 4 690 4 451 KwaZulu Natal ablution facilities upgrade 731 692 Radio Digital production system 42 659 35 283 Western Cape studio refurbishment 172 172 Henley fire detection system replacement - part fire claim 20 747 18 839 Lotus FM and Ukhozi FM outside broadcast vans 3 828 3 615 H/O lifts and escalators replacement 3 517 3 517 SABC Access Control and CCTV Upgrade 19 221 18 568 TVOB provinces studio upgrade - 24hr news 4 562 2 895 TVOB installation and certification of aerial eq 1 945 1 811 Nelspruit broadcast centre phase II 4 173 4 173 Corporate storage area network 461 463 Motsweding studio upgrade 2 361 2 099 Banking host-to-host solution 1 262 727 TVOB office block upgrade 393 393 Polokwane parking space upgrade 33 18 Henley media integration 26 226 13 183 Henley multi purpose set and studio 38 630 38 630 Polokwane diesel tank replacement 600 380 Drama studio d3 upgrade 12 923 3 607 Mpumalanga drama studio & Edit facilities upgrade 9 972 1 103 UPS dual supply solution (rp and tvc) 21 700 10 433 Tshwane security upgrade - hatfield 4 089 496 Henley digital operations centre for DTT 6 424 695 Thohoyandou studios upgrade 1 277 1 010 Mpumalanga refurbishment of television studios 907 763 Henley studio 6 reinstatement - pre-implementation 1 702 1 702 Henley graphics playout machine upgrade 4 285 904 Upgrade of dtt laboratory 3 308 3 272 TV news weather system upgrade - 3 754 Western Cape Foyer upgrade to national key point requirements - 23 Henley broadcast automation inter - 919 Enterprise web security solution - 1 812 DTT awareness campaign - 389 Self deploying satellite terminals replacement - 26 545 KwaZulu Natal lifts upgrade - 3 446 Polokwane chiller coils replacement - 2 482 Western Cape power supply (UPS) upgrade - 623 Auckland Park M1 studio organ upgrade - 1 030 TVOB Multi Purpose Vehicle 3 562 81 Airtime digital HD OB van x4 6 254 83 RBF pro tools upgrade 4 640 - Replacement of computer equipment 5 - TVOB camera and camera transmission equipment 3 073 - TVOB Generator purchase X3 1 150 - Minor capital 532 38 TVOB Replacement Satellite H/P 1 432 - Video Conferencing Solution 151 - Other 11 1 184

263 608 216 303



FINANCIALS

6 Investment properties GROUP AND COMPANY

Total R’000

At 31 March 2019Cost 19 631 Accumulated depreciation (9 983)Carrying amount 9 648 At 31 March 2018Cost 19 631 Accumulated depreciation (9 983)Carrying amount 9 648

For the year ended 31 March 2019Carrying amount at 1 April 2018 9 648 Depreciation charge for the year - Carrying amount at 31 March 2019 9 648

For the year ended 31 March 2018Carrying amount at 1 April 2017 8 938 Depreciation charge for the year (94)Transfer from Assets Under Construction 804 Carrying amount at 31 March 2018 9 648

Fair value of investment propertiesThe fair values of investment properties are determined by a registered independent appraiser having an appropriate recog-nised professional qualification and recent experience in the location and category of the property being valued. These fair values are determined having regard to recent market transactions for similar properties in the same location as the Group’s investment properties.The fair values were determined by a professional valuator, Broll Valuation and Advisory Services (Pty) Ltd, in May 2018. The SABC’s accounting policy requires an independent valuation to be performed every three years. In the current, management has assessed the fair values as still reasonable and do not require material adjustments. Details of the Group’s investment properties and information about the hierarchy as at 31 March 2019 are as follows:

Fair value at 31 March 2019

Fair value of investment properties 68 150 These fair valuations are considered level 3 valuations in terms of the fair value hierarchyIn determining the appropriate classes of investment property the Company has considered the nature, characteristics and risks of its properties as well as the level of the fair value hierarchy within which the fair value measurements are categorised. Management have considered the real estate segment (land, residential, and office building) and the level of the fair value hierarchy. Information on investment propertiesInvestment properties comprise a commercial property leased to a third party, vacant buildings and vacant land. Informa-tion in respect of investment properties is contained in the register of fixed property which is available for inspection at the registered office of the Group.Rental income earned on investment property and direct operating expenses such as maintenance and repairs relating investment properties are disclosed under operating leases Note 37.Additional Disclosures 2019

R’000Direct operating expenses (including repairs and maintenance) arising from investment property that generated rental in-come during the period. 128



7 Intangible assets GROUP AND COMPANY Total

(i) Computer software R’000 At 31 March 2019Cost 432 025 Accumulated amortisation and impairment losses (347 611)Carrying amount 84 415 At 31 March 2018Cost 430 246 Accumulated amortisation and impairment losses (313 846)Carrying amount 116 400

For the year ended 31 March 2019Carrying amount at 1 April 2018 116 400 Additions 11 896 Transfers in 1 789 Retirements (256)Cost (9 686) Accumulated amortisation 9 430 Amortisation charge for the year (45 414)Carrying amount at 31 March 2019 84 415

For the year ended 31 March 2018Carrying amount at 1 April 2017 163 815 Additions 1 699 Transfers in (271)Retirements (2 196)Cost (26 772) Accumulated amortisation 24 576 Amortisation charge for the year (46 647)Impairment charge for the year - Carrying amount at 31 March 2018 116 400



FINANCIALS

7 Intangible assets (continued) GROUP AND COMPANY

(ii) Programme, film and sports rights

Acquired programme

and film rights

Acquired Sports Rights

Originated programme

and film rights

Work-in-pro-gress Total

R’000 R’000 R’000 R’000 R’000 At 31 March 2019Cost 506 251 1 278 689 4 266 247 304 407 6 355 593 Accumulated amortisation and impairment losses (359 691) (1 207 407) (4 251 005) (17 827) (5 835 930)Carrying amount 146 560 71 282 15 242 286 579 519 663 At 31 March 2018 - RestatedCost 727 255 1 519 891 3 206 602 412 239 5 865 986 Accumulated amortisation and impairment losses (581 965) (1 425 947) (3 203 965) (46 857) (5 258 734)Carrying amount 145 290 93 944 2 637 365 382 607 253

For the year ended 31 March 2019Carrying amount at 1 April 2018 145 290 93 944 2 637 365 382 607 253 Additions 234 385 479 563 - 954 512 1 668 460 Transfers - - 1 029 248 (1 029 248) - Cost adjustment relating to derecognised assets - - (2 699) - (2 699)Amortisation charge for the year (230 211) (502 226) (1 020 581) - (1 753 017)Net impairment (raised)/reversed of programme, film and sports rights

(2 904) - 6 637 (4 067) (333)

Derecognition - - - - - Cost (455 389) (720 765) - - (1 176 155)Accumulated amortisation and impairment 455 389 720 765 - - 1 176 155 Carrying amount at 31 March 2019 146 560 71 281 15 242 286 579 519 663 For the year ended 31 March 2018 - RestatedCarrying amount at 1 April 2017 147 524 82 871 39 949 456 223 726 567 Additions 215 232 522 901 - 1 036 170 1 774 303 Transfers - - 1 081 180 (1 081 180) - Cost adjustment relating to derecognised assets - - (10 549) - (10 549)Amortisation charge for the year (215 840) (431 822) (1 093 646) - (1 741 309)Impairment charge for the year (1 627) (80 007) (14 295) (45 834) (141 762)Derecognition - - - - - Cost (81 921) - (49 406) - (131 327)Accumulated amortisation and impairment 81 921 - 49 406 - 131 327 Carrying amount at 31 March 2018 145 290 93 944 2 639 365 379 607 253



8 Defined benefit asset

The Group’s Pension Fund is a funded defined benefit pension fund, that is registered and governed in terms of the Pension Funds Act, No. 24 of 1956 and Pension Funds Second Amendment Act, No. 39 of 2001. It provides pension fund benefits for all its members in the form of a guaranteed level of pension payable for life. The financial position of the fund is examined and reported upon by the Fund’s valuator at intervals not exceeding three years. The last stat-utory valuation of the Fund was performed at 31 December 2017, in which the valuator reported that the Fund was in a sound financial position subject to the continuation of the current contribution rates, and that its assets exceeded its liabilities.

The level of benefits provided depends on members’ length of service and their final salary in the final years leading up to retirement. Pension increases are defined in the rules of the fund where increases will be the lesser of 100% of Headline inflation to the preceding 31 March; or the percentage increase that can be afforded out of investment earnings. The Trustees may grant increases in excess of the above mentioned provided that the funding level in the Pensions Account does not reduce to below 114%. The governance of the Fund is a joint responsibility of the Board of Trustees and the Group. The Board of Trustees must be composed of representatives of the Group and Fund members in accordance with regulations and the rules of the Fund.

There were no amendments, curtailments or settlements on the Pension Fund

The defined benefit pension plan is actuarially valued annually at year end using the Projected Unit Credit Method for the financial statements. These valua-tions are performed by actuaries and the results are as follows:

GROUP AND COMPANY 2019 2018

R’000 R’000 Opening balance 852 872 1 333 672 Actuarial gain/(loss) recognised in other comprehensive income 1 161 995 (534 283)Amounts recognised in profit or loss (266 114) (226 561)Employer contributions 301 187 280 044

Closing balance 2 049 940 852 872

The amounts recognised in the statement of financial position are determined as follows:Present value of funded obligations (10 771 417) (11 608 061)Fair value of plan assets 12 821 357 12 460 933

Funded status of the plan 2 049 940 852 872

Asset recognised in the statement of financial position 2 049 940 852 872

Changes in the present value of the defined benefit obligation are as follows:Opening defined benefit obligation 11 608 061 10 952 377 Current service cost 326 987 340 349 Interest cost 1 119 853 1 121 309 Actuarial (gain)/loss (1 751 107) 449 914 Benefits paid (641 901) (1 357 723)Employee contributions 109 524 101 835 Closing defined benefit obligation 10 771 417 11 608 061

Changes in the fair value of plan assets are as follows:Fair value of plan assets at the beginning of the year 12 460 933 12 286 049 Employee contributions 109 524 101 835 Employer contributions 301 187 280 044 Benefit payments (641 901) (1 357 723)Expected return on plan assets (589 113) (84 369)Actuarial gain - - Interest income 1 180 727 1 235 097 Fair value of plan assets at the end of the year 12 821 357 12 460 933 The amounts recognised in profit or loss are determined as follows: (266 114) (226 561)

Current service cost (300 661) (307 718)Expenses (26 327) (32 631)Interest income / (cost) 60 874 113 788

Items recognised in a statement of other comprehensive income are determined as follows: 1 161 994 (534 283)Actuarial gain/ (loss) 1 751 107 (449 914)Expected return on plan assets (589 113) (84 369)Net periodic pension charge 895 880 (760 844)



FINANCIALS

8 Defined benefit asset (continued) GROUP AND COMPANYThe principal actuarial assumptions at the reporting date (expressed as weighted averages) are as fol-lows:

2019 2018 2017 % % %

Discount rate at 31 March 10,34 9,18 10,04Inflation 6,20 6,05 6,89Future salary increases 7,70 7,55 8,39Future pension increases 6,20 6,05 6,89

2019 2018 2017Plan assets comprise: R’000 % R’000 % R’000 %Domestic equity 6 628 642 51,7 6 554 451 52,6 7 285 627 59,3 Bonds 2 282 202 17,8 2 230 507 17,9 1 990 340 16,2 Cash 282 070 2,2 510 898 4,1 307 151 2,5 Property 435 926 3,4 436 133 3,5 - - Foreign assets 3 192 518 24,9 2 728 944 21,9 2 702 931 22,0

12 821 357 100,0 12 460 933 100,0 12 286 049 100,0

GROUP AND COMPANY2019 2018 2017 2016 2015 2014

R’000 R’000 R’000 R’000 R’000 R’000Defined benefit obligation (10 771 417) (11 608 061) (10 952 377) (11 345 970) (11 568 216) (9 881 401)Plan assets 12 821 357 12 460 933 12 286 049 12 151 390 11 643 651 10 037 058 Surplus 2 049 940 852 872 1 333 672 805 420 75 435 155 657

The defined benefit pension plan typically exposes the Group to actuarial risks such as: Market discount rate risk The risk that discount rates determined from the market is lower in the future and therefore a higher

pension benefit obligation impacts the balance.Inflation risk The risk that future CPI inflation is higher than assumed and that it is sporadic and uncontrolled.

Such increased uncertainties make the qualification of the inflation risk premium more difficult, leading to a greater uncertainty around the long-term value of the obligation

Longevity risk The risk that the pensioners live longer than expected exposing the Group to pay the obligation for longer than anticipated increasing the actual long-term cost of the obligation.

Risk on non-enforcement of eligibility criteria and rules

The risk that the eligibility criteria and benefit rules set out by the Group are not strictly adhered to, leading to a greater and wider contractual obligation, and cost than intended.

Risk of future changes in legislation and regula-tion

The risk that changes in legislation, regulations and generally accepted accounting practice (spe-cifically IAS 19R) and the methodology prescribed to value the benefit may lead to an increase in the value of the liability.

Industrial and labour relation risks from dissatis-fied non-eligible employees

The risk that ineligible employees perceive themselves to be excluded unfairly from the post-retire-ment defined benefits and demand to be inclusion in the benefit scheme.

Mismatch risk The risk that the growth and proceeds from plan assets do not match the nature and terms of the obligation payments required, and therefore that the Group will be required to fund shortfall, increasing overall costs.

Currency risk The risk that offshore assets being exposed to negative currency movements, and therefore in-creases the overall actuarial risk of the Group not being able to meet the liability.

Sensitivity AnalysisReasonable possible changes in one of the significant actuarial assumptions at the end of the reporting period, keeping all other assumptions constant, would have the following effect on the defined benefit obligation as displayed below:Inflation (pension and salary increase rates) 1% decrease Base (6.20%) 1% increase

(9 903 041) (10 771 417) (11 694 608)Discount rate 1% decrease Base (10.34%) 1% increase

(11 824 425) (10 771 417) (9 964 726)Post-retirement mortality improvements Base (-0.5%

improvement) no

improvement Base (0.5%

improvement) (10 523 674) (10 771 417) (10 911 445)



9 Investments in subsidiaries COMPANY 2019 2018

Shares at cost Nature of business

Issued share capital

(number) % Held R’000 R’000 SABC Airwave Travel (Proprietary) Limited * Travel agency 2 100 - * - * SABC Foundation (Non-profit organisation) Corporation

Social Investment

100 1 761 1 761

Shares at cost 1 761 1 761 *Shares at cost of R1.*SABC Airwave Travel (Pty) Limited is in the process of being liquidated. The regulatory approvals are being finalised by the National Treasury.

10 Other financial assets GROUP AND COMPANY 2019 2018

(a) Fair value hierarchy (refer to note 2.6.3) R’000 R’000

The available for sale assets listed below are analysed by hierarchy levels defined as follows:

Level 1: Quoted prices in active markets for identical assetsLevel 1

Listed sharesListed - 143 257 (2018 : 143 257)Balance on 1 April 12 220 9 652 Fair value adjustment recognised in the statement of other comprehensive income (1 653) 2 568

10 567 12 220 11 Prepayments

Programme, film and sports rights 94 140 79 444 Software licences 9 857 9 245 Other - commercial utilities 5 989 10 776

109 987 99 465 Less: Current portion (88 257) (82 953)Non-current portion 21 730 16 512



FINANCIALS

12 Consumables GROUP AND COMPANY 2019 2018

R’000 R’000 Merchandise and consumables 4 405 5 608 Provision for obsolescence (245) (246)

4 160 5 362 13 Trade and other receivables GROUP COMPANY

2019 2018 2019 2018 R’000 R’000 R’000 R’000

Trade receivables - gross 726 946 712 477 726 946 712 477 Less: allowance for doubtful debts (44 335) (30 532) (44 335) (30 532)Trade receivables - net 682 611 681 945 682 611 681 945 Other receivables 205 908 118 549 205 797 152 466

888 519 800 494 888 408 834 411 14 Cash and cash equivalents

Bank balances 37 581 32 075 34 328 28 627 Government Grant restricted cash (ii) 8 234 8 233 8 234 8 233 SABC Community Radio bank balances (iii) - 208 - 208 Short-term deposits 26 800 90 000 26 800 90 000

72 615 130 516 69 362 127 068 (i) The Government Grant is related to the technology plan for the migration of the SABC from analogue to digital technology (refer to note 19).(ii) The SABC Community Radio bank account relates to funds received from the Department of Communications for Community Radio stations.

15 Share capital GROUP AND COMPANY 2019 2018

Share capital - Authorised and issued R’000 R’000 1 000 ordinary shares of R 1 each 1 1

16 Fair value adjustment reserveOpening balance at 1 April 10 126 8 133 Gain / (Loss) on revaluation of other financial asset (1 194) 1 993 Closing balance at 31 March 8 932 10 126 The fair value adjustment reserve relates to fair value adjustments of other financial assets until the assets are derecognised.

17 Government debt instrumentNon-current portion 14 913 17 401 Perpetual debt 14 913 14 913 Redeemable long-term portion - 2 488 Current portion 2 488 3 397 Permanent capital non-redeemable debt 17 401 20 798 On 1 February 1972, the Company’s shareholder converted a long-term loan into non redeemable capital. The permanent capital was previously not re-payable. The National Treasury on 7 November 2016 provided the SABC with an approval to redeem a portion of the perpetual debt amounting to R12.477 million over three years. At the beginning of the 2017/18, R6.592 million was redeemed, R3.397 million will be redeemed in 2018/19 and a scheduled final instalment of R2.488 million in 2019/20 financial period.In terms of the Exchequer Act, No. 66 of 1975, as amended, interest is payable, at a rate of 6.5% per annum on the outstanding capital amount. The instru-ment represents a financial liability (in the form of perpetual debt) under IAS 32 - Financial Instruments: Presentation, because of the underlying obligation to deliver cash in the form of future interest payments to the Company’s shareholder.



GROUP AND COMPANY 18 Loans and borrowings 2019 2018

R’000 R’000 Secured*ABSA instalment sale facility for vehicles payable over five years bearing interest at 9.00% per annum. The con-tract was entered into on 20 October 2015. The instalment sale is repayable in monthly payments of R1,1million with a final balloon payment due in July 2021. Balance Cash flows Balance Lease liabilities 29 419 (15 228) 44 647 Less: Current portion transferred to current liabilities (13 231) - (13 231)

Non-current portion 16 188 (15 228) 31 416 *secured assets are reflected on note 5


Minimum lease

payments Interest Principal

Minimum lease

payments Interest Principal R’000 R’000 R’000 R’000 R’000 R’000

Finance lease liabilities:Instalment sale liabilities:Less than one year 15 287 2 056 13 231 16 473 3 242 13 231 Later than one year but not later than five years 17 167 979 16 188 34 521 3 105 31 416 Total 32 454 3 035 29 419 50 994 6 347 44 647

19 Deferred government grant GROUP AND COMPANY 2019 2018

R’000 R’000 Balance on 1 April 352 635 328 567 Amounts received during the year: 180 123 172 690 Amount received during the year for community radio stations - - Amounts received during the year for Education projects 115 878 110 064 Amounts received during the year for Channel Africa projects 50 494 48 145 Amounts received during the year for SETA Grants 13 751 14 481 Amount recognised in profit or loss (including amortisation and depreciation of assets acquired with the grant) (see note 26). (214 352) (186 830)Balance on 31 March 318 406 352 635 Less: Current portion (128 466) (110 852)

Non-current portion 189 940 241 783 In February 2005, the Department of Communications and National Treasury committed an amount of R700 million including VAT to the Company over a period of five years, in order to facilitate the Company’s migration from analogue to digital technical infrastructure. Additional amounts were contributed by the Depart-ments during 2010/11 (R150 million including VAT), 2013/14 (R76 million including VAT) and 2014/15 (R62 million including VAT). The total amount of grant funding for digital technical infrastructure received to date is R988 million since 2005. This grant is recognised to profit/ loss in line with the depreciation amount.



FINANCIALS

20 Deferred taxThe Group has not recognised a deferred tax asset as management considers that it is not probable that the Group will generate taxable income in the near future to utilise the deferred tax asset. In the event that the Group returns to profitability, it will have a deferred tax asset of R589 million available for future utilisation.Deferred tax not recognised is attributable to the following: GROUP COMPANY

2019 2018 2019 2018 Deferred tax liabilities R’000 R’000 R’000 R’000 Property, plant and equipment (63 537) (67 130) (63 537) (67 130)Defined benefit asset (573 983) (238 804) (573 983) (238 804)Programme, film and sports rights 8 223 - 8 223 - Other financial assets (2 043) (2 478) (2 043) (2 478)Doubtful debt allowance - non TV licences (2 856) (1 501) (2 856) (1 501)Doubtful debt allowance -TV licences (3 036 162) (2 125 989) (3 036 162) (2 125 989)Prepayments (280) (412) (280) (412)Operating lease receivable (298) (242) (298) (242)Section 24C (26 495) (23 066) (26 495) (23 066)Prior year - TV licences - - - -

Total liabilities (3 697 429) (2 459 622) (3 697 429) (2 459 622)Deferred tax assetsProgramme, film and sports rights - (2 424) - (2 424)Variable remuneration 62 241 61 148 62 241 61 148 Straight-lining of operating leases 447 338 447 338 PRMA 297 775 306 927 297 775 306 927 Deferred income 49 692 41 503 49 692 41 503 Other payables and provisions 110 684 153 692 110 684 153 692 Amounts accrued not received-TV licences 3 041 813 2 128 542 3 041 813 2 128 542 Donations deductible in future 12 351 9 712 12 351 9 712 Tax Loss 705 257 543 968 705 257 543 968 Prior year adjustment - DT opening balances - - - -

Total assets 4 280 260 3 243 405 4 280 260 3 243 405 Total deferred tax 582 830 783 784 582 830 783 784

Deferred tax attributable to:Cumulative tax loss not recognised (705 257) (543 968) (705 257) (543 968)Timing differences - profit or loss 122 427 (239 816) 122 427 (239 816)Timing differences - other comprehensive income - - Closing balance of deferred tax recognised - - - - All movements in the temporary differences described above, have been recognised in profit or loss and other comprehensive income, as follows:

Deferred tax liability on 1 April - - - -Prior year error adjustment - per the AFS 4 228 126 616 4 228 - Prior year adjustment -other timing differences - - - 126 616 Deferred tax recognised in profit and loss 28 380 6 526 28 380 6 526 Current year loss (147 387) 144 808 (147 387) 144 808 Deferred Tax loss not recognised 147 387 (144 808) 147 387 (144 808)Prior year error adjustment - per the AFS not recognised (4 228) (103 720) (4 228) (103 720)Prior year adjustment - DT relating to GFA (3 821) - (3 821) - Prior year adjustment - DT relating to GFA not recognised 3 821 - 3 821 - Deferred tax on prior year loss not recognised - 103 720 - 103 720 Timing differences not recognised - profit or loss (28 380) (133 143) (28 380) (133 143)Deferred tax on 31 March - - - - Opening tax loss 1 943 512 1 055 910 1 943 512 1 055 910

current year created (income)/loss 526 382 517 172 526 382 517 172 Over/under 15 102 370 430 15 102 370 430 Un-utilised from prior periods 33 779 - 33 779 - Available for utilisation in future years 2 518 774 1 943 512 2 518 774 1 943 512

The deferred tax asset in relation to TV licence gross income (section 1 of the Income Tax Act No. 58 of 1962) and the deferred tax liability in relation to the application of section 11(j) of the Income Tax Act No. 58 of 1962 ) is based on the best estimate as at 31 March 2019 and is subject to South African Revenue Service approval. The Group has not recognised a deferred tax asset in respect of assessed loss as management considers that it is no longer probable that the Group will generate taxable income to utilise the deferred tax asset. In the event that the Group returns to profitability, it will have a deferred tax asset of R 582 million available for future utilisation.



21 Employee benefits obligation GROUP AND COMPANY 2019 2018

R’000 R’000 Non-current statement of financial position obligations for:Post-employment medical benefits* 1 063 483 1 096 169 Leave pay 5 405 6 476 Long service awards 63 243 62 162

1 132 130 1 164 807 Current statement of financial position obligations for:Employee incentive 60 510 37 070 Leave pay 165 934 175 238 Long service award 6 317 6 512

232 762 218 821 Total Statement of Financial Position obligations for employee benefits 1 364 892 1 383 627 Statement of Profit and Loss (See also note 28):Post-employment medical benefits 114 835 115 238 Leave pay 29 030 83 847 Long service awards 10 400 10 869

154 265 209 954 Post-employment medical benefits* This balance includes an amount of R2.9 million, which arose as a result of an ex employee instituting a claim against the SABC for post employment medical benefits.The Group provides a varying subsidy towards medical aid contributions payable by employees who elect to remain on the medical aid scheme after retire-ment. This subsidy is unfunded and is provided for based on actuarial valuations performed annually. The valuation assumes a varying subsidy of 60%; 75% and 100% consistent with the 2016 valuation scenario. The plan is only open to employees who joined SABC before 1 June 2002. There are different levels of post-employment subsidy namely; staff who retired between 1979 and 31 March 1990 with past service greater than 5 years, receive a 100% medical aid subsidy from SABC; staff who retired between 1979 and 31 March 1990 with past service of less than 5 years receives a 75% medical aid subsidy from SABC; staff who retired from 1 April 1990 and thereafter receives a 60% subsidy. Not all in receipt of a post-employment subsidy are retired on SABC Pension Fund; there are a select group of Non-Pensioner Retirees whom qualified for post-employment subsidies. The method of accounting, significant assumptions and the frequency of the valuation are similar to those used for the defined benefit pension scheme as set out with the addition of the Healthcare cost inflation of 7,68%.The amount recognised in the Statement of Financial Position is determined as follows: GROUP AND COMPANY

2019 2018 R’000 R’000

Present value of unfunded obligationsPost-employment medical benefits 1 066 141 1 098 888 Changes in the present value of the defined benefit obligation are as follows:Opening defined benefit obligation 1 098 888 989 173 Current service cost 15 239 15 914 Interest cost 99 596 99 324 Subsidy payments (55 534) (47 043)Actuarial gain/loss (92 048) 41 520 Closing defined benefit obligation 1 066 141 1 098 888 The amount recognised in profit or loss is determined as follows: 114 835 115 238 Current service cost 15 239 15 914 Interest cost 99 596 99 324 The amount recognised in other comprehensive income is determined as follows:Actuarial gain/(loss) on post employment medical benefits (92 048) 41 520 Total, included in employee compensation and benefit expenses, including items recognised in other comprehensive income 22 787 156 758 The principal actuarial assumptions at the reporting date (expressed as weighted averages) are as follows:Discount rate at 31 March 10,39% 9,35%Medical inflation rate per annum 7,74% 7,68%Take-up rate by retired employees 30,00% 30,00%



FINANCIALS

21 Employee benefits (continued) GROUP AND COMPANYPost-employment medical benefits (continued) 2019 2018 2017 2016 2015

R’000 R’000 R’000 R’000 R’000Post employment medical benefits obligation (1 063 483) (1 096 169) (989 173) (1 016 088) (1 074 812)Sensitivity Analysis

Healthcare cost inflation 1% decrease (965 311)

Base (7.74%) (1 063 483)

1% increase (1 189 790)

Discount rate 1% decrease (1 188 056)

Base (10.39%) (1 063 483)

1% increase (968 215)

Post-retirement mortality improvements no age rating (1 052 610)

Base (1 year age rating) (1 063 483)

2 year age rating

(1 129 332)The above sensitivity analysis is based on a change in one of the significant actuarial assumptions at the end of the reporting date, keeping all other as-sumptions constant. When calculating the sensitivity of the employee benefits obligation to the significant actuarial assumptions the projected unit credit method has been applied.The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.Long service awardsThe Group provides long service awards to its employees on 5 year continuous service intervals; it starts from 5 years of service to 45 years of service. These awards are unfunded and are provided for based on actuarial valuations performed annually. These awards consists of a cash portion as well as a gift portion, where continuous service reach 30 years and more; 5 days of long service leave is also granted and for each subsequent 5 year interval. To determine the present value of the obligation the Projected Unit Credit Method is used. The amount recognised in the Statement of Financial Position is determined as follows: GROUP AND COMPANY

2019 2018 R’000 R’000

Present value of unfunded obligationsLong service awards 69 560 68 674

Changes in the present value of the defined benefit obligation are as follows:Opening defined benefit obligation 68 674 66 758 Current service cost 4 769 4 766 Interest cost 5 631 6 103 Benefit payments (3 002) (5 143)Actuarial (gain)/ loss (6 512) (3 810)Closing defined benefit obligation 69 560 68 674 The amount recognised in profit or loss is determined as follows: 10 400 10 869 Current service cost 4 769 4 766 Interest cost 5 631 6 103 The amount recognised in other comprehensive income is determined as follows:Actuarial gain (6 512) (3 810)Total, included in employee compensation and benefit expenses, including items recognised in other comprehensive income 3 888 7 059 The principal actuarial assumptions in respect of long service awards at the reporting date (expressed as weighted averages) are as follows:


% % Discount rate at 31 March 9,89% 8,90%Rate of salary increase 7,28% 7,35%



21 Employee benefits (continued) GROUP AND COMPANYLong service awards (continued) 2019 2018 2017

R’000 R’000 R’000Long service award obligation (69 560) (66 758) (67 874)Sensitivity Analysis

Salary Inflation 1% decreaseBase (CPI +

2%) 1% increase (66 496) (69 560) (73 067)

Discount rate 1% decreaseBase (CPI +

2%) 1% increase (75 389) (69 560) (64 474)

The above sensitivity analysis are based on a change in one of the significant actuarial assumptions at the end of the reporting date, showing how the defined benefit obligation would have been affected by changes in the relevant actuarial assumption at the valuation date.Employee long-term leave payCertain of the Group’s employee incentive programmes and employee leave arrangements provide for benefits not payable wholly within twelve months after the reporting date. These arrangements are therefore classified as ‘’other long-term employee benefits” and the liabilities in respect thereof are measured on the same basis as the Group’s obligations in respect of its post-employment benefit plans, with certain simplified as-sumptions. The liability in respect of employee incentives also requires certain assumptions regarding the Group’s future performance.

The principal actuarial assumptions in respect of long-term leave pay at the reporting date (expressed as weighted averages) are as follows:


% % Discount rate at 31 March 8,0% 8,9%Rate of salary increase 6,1% 7,4%

22 Other non current liabilities GROUP AND COMPANY 2019 2018

R’000 R’000 Competition Commission penalty - non current portion 35 749 - The SABC was fined by the Competition Commission for breach of competitive behaviour in the advertising industry.

23 Trade and other payables GROUP COMPANY 2019 2018 2019 2018

R’000 R’000 R’000 R’000 Trade payables- local 903 590 388 048 903 609 388 048 - foreign 13 610 13 158 13 610 13 158 Other payables* 195 279 206 439 195 259 206 570 Accruals 309 891 416 055 309 760 415 924 Programme, film and sports rights related trade accruals 212 871 109 174 212 871 109 174

1 635 241 1 132 875 1 635 110 1 132 875 *included in other payables is VAT and payroll related payables.

24 ProvisionsLegal Claims*

Employee benefits Other** Total

Balance at 1 April 2018 216 127 125 830 98 615 440 572 Provisions reversed during the year (31 424) (125 830) (66 330) (223 584) Provisions utilised during the year - Provisions raised during the year 22 924 - 16 404 39 328 Balance at 31 March 2019 207 626 - 48 689 256 316 *Legal claims against the SABC were instituted by various individuals/institutions and a provision has been raised in that regard. Certain of these matters are before the courts and others the Group is attempting to settle out of court. Management estimates the potential outcome of these legal claims based on the most objective evidence on hand from internal and external legal advisors until such time that ultimate legal resolution has been finalised. Refer to note 3.1 for basis of estimates and assumptions in determining any provision raised. Management estimates of the provision amount was reduced from 4% to 3% which resulted into reduction of provision amount. **other provisions include provisions for royalties and operating expenditures that is expected to be incurred in the next 12 months.



FINANCIALS

GROUP AND COMPANY 25 Revenue 2019 2018

R’000 R’000 Total advertising revenue 4 583 713 4 780 876 Advertising 4 471 268 4 711 772 Trade exchanges (non-monetary exchanges) 112 444 69 103 Business enterprise and facilities revenue 30 737 27 570 Sponsorships 402 992 392 597 License fees* 968 168 941 395 Total licence fees billed during the year 3 137 336 3 378 175 Less fees that do not meet the recognition criteria (2 169 168) (2 436 780)Mobile and other revenue 14 225 6 757 Programme rights exploitation revenue 28 080 92 478 Channel carriage fees revenue 169 750 149 952 Revenue from contracts with customers 6 197 665 6 391 624 Revenue recognised from government grants 214 352 186 830 Total Revenue 6 412 017 6 578 454

25.1 Disaggregation of revenue from contracts with customersAll the revenue earned by the Group derives from the transfer of services at a point in time in the following major service lines:

2019 2018Revenue from external customers Total Total Advertising 4 583 713 4 780 876 Business enterprise and facilities revenue 30 737 27 570 Sponsorships 402 992 392 597 License fees* 968 168 941 395 Government grants - - Programme rights exploitation revenue 28 080 92 478 Channel carriage fees revenue 169 750 149 952 Other revenue including mobile platforms 14 225 6 757

6 197 665 6 391 624 *At each annual renewal date, a licence holder is billed their prescribed annual licence fee in terms of legislation. Due to the high levels of fee payment evasion by licence holders, the Group assesses the probability of receiving the licence fees on an individual account basis. Where the timing and amount of receipt cannot be reliably measured and receipt is not considered probable, the revenue is not recognised.

25.2 Contract liabilities 2019 2018 R’000 R’000

Contract liability - TV licences received in advance 48 606 26 340 Contract liability - Sponsorship revenue received in advance 34 239 16 318 Contract liability - advertising contracts in advance - 23 189 Total contract liabilities 82 845 65 847 Contract liability relates to payments received in advance of performance under a contract. Contract liabilities are recognised as revenue as (or when) the SABC fulfils performance obligations under the contract

(i) Significant change in contract assets and liabilities 2019 2018 R’000 R’000

Contract liabilities

Contract liabilities

Revenue recognised that was included in contract liability at beginning of period (65 847) (68 936)Increase due to cash received, excluding amounts recognised as revenue during the period 82 845 65 847

16 998 (3 089)All consideration from contracts with customers is included in the amounts of contract liabilities presented above. Contract liabilities are all expected to recognised in revenue in 12 months succeeding the financial year end.The group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about remaining performance obligations that have original expected durations of one year or lessThe group applies the practical expedient in paragraph C5 ( c) of IFRS 15 and does not disclose the amount of the transaction price allocated to the remain-ing performance obligations and when revenue is expected to be recognised as revenue in 2016 for initial IFRS 15 application.

(ii) Revenue recognised in relation to contract liabilities GROUP AND COMPANY The following table below shows how much of the revenue recognised in the current period relates to carried-forward contract liabilities and how much relates to performance obligations that were satisfied in the prior year.

2019 2018 R’000 R’000

Revenue recognised that was included in the contract liability balance at the beginning of the period:: Advertising revenue 26 340 25 458 : Licence fees 23 189 28 082 : Sponsorship revenue received in advance 16 318 15 396 No revenue was recognised from performance obligations satisfied in previous periods.

65 847 68 936



26 Other income GROUP COMPANY 2019 2018 2019 2018

R’000 R’000 R’000 R’000 Rental income 9 731 9 884 9 731 9 884 Travel commission 1 093 2 577 603 2 577 Event sponsorships and other 40 572 21 805 40 573 20 304 Management fees 2 208 14 478 18 409 14 478

53 604 48 744 69 315 47 243 27 Employee and directors compensation and benefit expense GROUP AND COMPANY

2019 2018 R’000 R’000

Cost of Employment 2 403 086 2 678 394 Long-service Awards 10 400 10 869 Defined benefit pension fund recognised in profit or loss 266 114 226 561 Post-employment medical benefits 114 835 115 238 Leave pay 29 030 83 847 Total amounts recognised in profit or loss 2 823 465 3 114 910 Items recognised in other comprehensive income: (1 260 554) 571 993 Actuarial (gain)/ loss- Post-retirement medical aid liability (92 048) 41 520 Actuarial (gain)/ loss - Pension fund defined benefit (1 751 107) 449 914 Actuarial(gain)/ loss - Long service awards (6 512) (3 810)Expected return on plan assets 589 113 84 369

1 562 911 3 686 903 GROUP COMPANY

28 Professional and consulting fees 2019 2018 2019 2018 R’000 R’000 R’000 R’000

Audit fees 24 134 24 323 24 134 24 322 Consulting fees 62 068 65 624 65 332 49 120

Managerial 20 486 33 509 23 749 17 004Technical 41 542 32 115 41 583 32 117

86 202 89 947 89 466 73 442



FINANCIALS

29 Other expenses GROUP COMPANY 2019 2018 2019 2018

R’000 R’000 R’000 R’000 Other expenses include the following charges:Operating lease charges 19 276 19 665 19 276 19 665

Buildings 16 795 17 277 16 795 17 277 Equipment 2 481 2 323 2 481 2 323 Vehicles - 65 - 65

Legal claim provision raised / (reversed) 39 328 163 924 39 328 163 924 Consumables - (reversal) / write down to net realisable value (1) (23) (1) (23)

30 Other lossesLoss on sale of property, plant and equipment (refer to note 36) (2 691) (11 180) (2 691) (11 180)

31 Net financing gain / (loss)Interest received from banking institutions 14 492 22 366 14 428 22 310 Net foreign exchange gain on monetary items (3 785) 23 430 (3 785) 23 430

Interest income 10 707 45 796 10 643 45 740 Dividend received 455 423 455 423

Finance income 11 162 46 219 11 098 46 163 Interest paid (28 132) (32 106) (28 132) (32 106)

Independent third parties (23 796) (24 946) (23 796) (24 946)Shareholder - permanent capital (1 131) (1 352) (1 131) (1 352)Finance leases (3 205) (5 808) (3 205) (5 808)

Foreign exchange gain/ (loss) (21 632) (1 046) (21 395) (1 046)Finance expenses (49 764) (33 152) (49 527) (33 152)Net financing gain / (loss) (38 602) 13 067 (38 429) 13 011



32 Income tax expense GROUP COMPANY 2019 2018 2019 2018

R’000 R’000 R’000 R’000 Income tax recognised in profit or lossCurrent tax expense - - - - Prior year adjustment - - - - Over (Under) -prior year - (10 899) - (10 899) Over (Under) derecognised - 10 899 - 10 899 Current year-temporary difference 28 380 11 274 28 380 6 527 Prior year adjustment - other - - Assessed loss current year 147 387 (144 809) 147 387 (144 808) Prior year adjustment - assessed loss (4 228) (103 720) (4 228) (103 720)Deferred tax asset not recognised - other temporary differences (28 380) (11 274) (28 380) (6 527)Deferred tax asset not recognised - assessed loss 4 228 144 809 4 228 144 808 Deferred tax asset not recognised - other comprehensive income - - - - Deferred tax asset not recognised - prior year assessed loss (147 387) 103 720 (147 387) 103 720 Rate change in AVFS - - - - Deferred tax changes due to restated balances

- - - - Reconciliation of effective tax expense:Profit/(loss) before income tax (482 370) (744 080) (511 503) (606 950)Income tax using the company tax rate (135 064) (208 342) (143 221) (169 946)Non-taxable income - (14 889) - (19 008)Non-deductible expenses 30 808 84 951 38 965 50 674 Prior year adjustment-tax expense (14 751) - (14 751) - Over (Under) -prior year (4 228) (10 899) (4 228) (10 899) Over (Under) derecognised 4 228 10 899 4 228 10 899 Prior year adjustment-deferred Tax 147 387 (126 616) 147 387 (126 616)Deferred tax asset not recognised - other temporary differences (28 380) (6 527) (28 380) (6 527)Deferred tax asset not recognised - assessed loss - 144 809 - 144 808 Deferred tax asset not recognised - other comprehensive income - 126 616 - 126 616 Deferred tax asset not recognised - prior year deferred tax - (103 720) - (103 720)Prior year-assessed loss - 103 720 - 103 720 Deferred tax asset not recognised - prior year assessed loss - - - - CGT tax rate change - - - - Effective tax expense - - - - Income tax recognised in other comprehensive income:Pension fund 325 359 (149 599) 325 359 (149 599)Post-employment medical benefits 25 773 (11 626) 25 773 (11 626)Other financial assets (463) 575 (463) 575 Long service awards 1 823 1 067 1 823 1 067 Deferred tax not recognised -OCI (352 493) 159 583 (352 493) 159 583

- - - - Comprehensive income/(loss) before income tax 1 258 901 (569 425) 1 258 901 (569 425)Income tax using the company tax rate 352 493 (159 439) 352 493 (159 439)Prior year adjustmentChange in Tax rate (CGT-rate) from 66% to 80% relating to current periodChange in Tax rate (CGT-rate) from 66% to 80% relating to prior periodsRate differences on available for sale assets - (144) - (144)Reduction in tax rateDeferred tax derecognised -OCI (352 493) 159 583 (352 493) 159 583 Effective tax expense - - - -



FINANCIALS

33 Cash generated from operations GROUP COMPANYReconciliation of profit/(loss) for the year to cash generated from/(utilised by) operations:

2019 2018 2019 2018 Note R’000 R’000 R’000 R’000

Loss for the year (482 359) (744 091) (511 503) (729 365)Adjustments for:

Amortisation and impairment of programme, film and sports rights 7 1 753 017 1 741 309 1 753 017 1 741 309 Impairment/Reversal of impairment of programme, film and sports rights 7 333 141 762 333 141 762 Amortisation of computer software 7 45 414 46 647 45 414 46 647 Amount of revenue recognised in profit or loss for government grant. 19 (214 352) (186 830) (214 352) (186 830)Depreciation and impairment of property, plant and equipment 5 168 143 167 200 168 143 167 200 Depreciation of Investment Property 6 - 94 - 94 (Reversal)/provision for consumables obsolescence 28 (1) (23) (1) (23)Impairment (reversed)/raised on trade receivables 96 805 94 589 143 176 94 589 Increase/(decrease) of provision on trade receivables 13 13 803 (33 585) 13 803 (33 585)Loss on disposal of property, plant and equipment 29 2 691 11 180 2 691 11 180 Interest received 32 (14 492) (22 366) (14 428) (22 310)Dividends received 32 (455) (423) (455) (423)Interest paid 32 28 132 32 106 28 132 32 106 Income tax raised/reversed 33 11 11 - 11 Transfers of subsidiary net assets 4 548 - - -

Operating cash inflow before payment for acquisition of programme, film and sports rights

1 401 239 1 247 579 1 413 971 1 262 361

Net acquisitions of programme, film and sports rights 7 (1 668 460) (1 774 303) (1 668 460) (1 774 303)

Operating cash outflow before changes in working capital, employee benefits (267 221) (526 724) (254 489) (511 942)

Provisions raised/ (reversed) 23 (184 256) 158 818 (184 256) 158 818 (Increase)/Decrease in prepayments 11 (10 522) (56 335) (10 522) (56 335)Decrease / (increase) in inventories 12 1 202 (61) 1 202 (61)Decrease/(Increase) in trade and other receivables 13 (101 828) 55 121 (114 171) 39 221 Decrease/(Increase) in contract liabilities 16 998 (3 089) 16 998 (3 089) (Decrease)/Increase in defined benefit asset (34 725) (95 808) (34 725) (95 915)(Decrease)/Increase in employee benefits obligation (18 736) 109 668 (18 736) 109 668 Increase /(Decrease)in trade and other payables 21 502 366 426 258 502 236 428 073 Increase/(Decrease) in deferred income 22 - (15 396) - (15 396)Increase/(Decrease) in other non-current liabilities 35 749 - 35 749 - Decrease/(Increase) in non-current operating leases - (55) - (55)

Cash generated from operations (60 973) 52 507 (60 714) 53 097

34 Income taxes refund/ (paid)

Balance at 1 April (96 975) (19 836) (96 965) (19 837)Tax refund (13 958) (13 958)Taxation - prior year tax adjustment 12 990 12 990 Balance at 31 March 96 936 96 975 96 936 96 965

Reduction in tax liability (39) 76 171 (29) 76 160 The closing tax liability is based on the best estimate as at 31 March 2019 and it is subject to SARS approval of the ruling on section 11 (j) allowances.The closing tax liability is management’s estimate as at 31 March 2019 and management believes that the amount will be further reduced (subject to SARS approval) by the allowances not claimed in prior year in respect of:Programmes and fixed assets amounting to R 171m and R 84m respectively.

35 Proceeds from disposal of property, plant and equipment

Net book value of disposals and asset verification adjustment 8 024 11 246 8 024 11 246 Loss on sale of property, plant and equipment (2 691) (11 180) (2 691) (11 180)

Proceeds 5 333 66 5 333 66



36 Financial instruments36.1 Overview

The Group has exposure to credit risk, liquidity risk and market risk, that consists of interest rate risk and currency risk that arise out of the normal course of business. This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. The Group Audit Committee is tasked with overseeing how management monitors compliance with the Group’s policies and procedures and the reviews of the adequacy of the internal audit function’s monitoring of these risks. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Group Audit Committee.

36.2 Credit risk Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at amortised cost, at fair value through other com-prehensive income (FVOCI) and at fair value through profit or loss (FVPL) and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables.

(i) Risk managementThe SABC applies Credit Policy in managing the credit management of customers. The credit management process entails assessessing the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance within set limits. The compliance with credit limits by wholesale customers is regularly monitored by line management. Each customer’s credit profile is determined and affects the allowable credit terms and credit limits.

(ii) Impairment of financial assetsThe SABC has two types of financial assets that are subject to IFRS 9’s new expected credit loss model: - trade receivables (commercial revenue and TV licence) - equity instrument carried at FVOCIThe SABC adopted the Simplified Approach for Trade Receivables in measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables.To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the same types of contracts. The group has therefore concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.The expected credit loss rates are based on the payment profiles of sales over a 12 month period and historical credit losses experienced within prior periods. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the cus-tomers to settle the receivables.The following qualitative factors have been incorporated into measurement of expected credit losses:- Any changes in the contractual/ credit terms- Declining profitability of the borrower based on the latest available financial statements- Any other legal/ operational information available to the SABC affecting the borrowerThe trade debtors with the significant risk (past 30 days due), with the following characteristics have been rebutted:- where there is a set-off agreement in place for the amount owed by the Corporation and amount owed to Corporation for the same trade debtor/ trade

creditor- amount is owed by the National/ Provincial department is deemed to be recoverableOn that basis, the loss allowance as at 31 March 2019 and 1 April 2018 (on adoption of IFRS 9) was determined as follows for both trade receivables and contract assets:

31-Mar-19 CurrentWithin 30

days past due"31 - 90 days

past due”More than 90

days past due TotalExpected loss rate 1% 2% 100% 100%Gross carrying amount - Trade receivables 571 115 12 600 30 311 78 666 692 692 Loss allowance

01-Apr-18 CurrentWithin 30

days past due"31 - 90 days

past due”More than 90

days past due TotalExpected loss rate 1% 2% 100% 100%Gross carrying amount - Trade receivables 694 715 (1 893) 1 189 6 803 700 814 Loss allowance



FINANCIALS

36 36.2 (ii)

Financial instruments (continued) Credit risk (continued)Impairment of financial assets (continued)

Trade and other receivables The closing loss allowances for trade receivables and contract assets as at 31 March 2019 reconcile to the opening loss allowances as follows:

Trade receivablesClosing balance - 31 March 2018 (Calculated under IAS 39) (30 532)Amounts restated through opening retained earnings - Opening loss allowance as at 1 April 2018 – calculated under IFRS 9 (30 532)Increase in loan loss allowance recognised in profit or loss during the year - Receivables written off during the year as uncollectible - Unused amount reversed - Closing loss allowance as at 31 March 2019 (30 532)Trade receivables and contract assets are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual payments for a period greater than 120 days past due.Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

In determining the measurement of the expected credit losses, the SABC will follow the following methodology:

Credit risk rating Description Explanation Impairment matrix (Bucket value)

1 Low Customer account balances which are only current and/or 30 days past due with a credit rating between A to B, these are deemed to have low risk 0%

2 Moderate

Customer account balances which are only current and/or 30 days past due with a credit rating between A to B, but have qualitative factors 1%Customer account balances which are current and/or 30 days past due (which are also included in the past 30 days) 2%Customer account balances which are current and/or 30 days past due with a credit rating of C are deemed to have moderate risk 3%

3 SignificantPast 30 days past due and there is no substantiating evidence to rebut Par. 5.5.11 (IFRS 9) rebuttable presumption. 100%Customer account balances which are current and/or 30 days past due with a credit rating of D and worse are deemed to have significant risk 20%

(ii) SecurityFor some trade receivables the group may obtain security in the form of guarantees, deeds of undertaking or letters of credit which can be called upon if the counterparty is in default under the terms of the agreement.GuaranteesThe Group’s policy is to provide financial guarantees on behalf of its wholly owned subsidiaries. The Company has issued a guarantee of R0.016 million on behalf of Airwave Travel (Pty) Ltd for the IATA travel agency licence. Other guarantees issued by the Company were R0.189 million relating to the employee housing scheme.


The Group holds collateral as security. R’000 R’000 The nature and fair value of this collateral is as follows:Coface 1 181 500 2 170 880 MCC Security - 1 473 450

1 181 500 3 644 330



36 Financial instruments (continued)36.3 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due or can only do so at excessive high costs. The Group’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient cash, marketable securities and credit facilities to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. Where internal funding is constrained, external sources of funding are explored.

The Group manages its cash flow requirements by forecasting for both the short-term (three months) and the long-term (one to 3 years) cash require-ments of the Company. The Group has borrowing facilities amounting to R95 million (2018: R95 million) which include short-term banking facilities as well as asset-based finance facilities.

The following analysis details the contractual maturity of the Group’s non-derivative financial liabilities. The analysis is based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to settle the liability. The analysis includes both interest and principal cash flows.

GROUP AND COMPANY“Carrying amount “

Contractual cash flow

Up to 6 months

6 months to 1 year

1 year to 3 years Thereafter

R’000 R’000 R’000 R’000 R’000 R’000 2019

Non-derivative financial liabilities Trade payables - Local 903 590 903 590 903 590 - - - Trade payables - Foreign 13 610 13 610 13 610 - - - Other payables* 195 279 195 279 195 279 - - - Accruals 309 891 309 891 309 891 - - - Programme, film and sports rights related trade and other payables 212 871 212 871 212 871 - - - Other non-current liabilities 35 749 35 749 - - 35 749 - Loans and borrowings 32 454 29 419 6 616 6 616 16 188 - Government debt instrument 17 401 17 401 2 488 - - 14 913

1 720 845 1 717 810 1 644 345 6 616 51 937 14 913 2018

Non-derivative financial liabilities Trade payables - Local 388 048 83 824 83 824 - - - Trade payables - Foreign 13 158 13 158 13 158 - - - Other payables* 206 439 206 439 206 439 - - - Accruals 416 055 416 055 416 055 - - - Programme, film and sports rights related trade and other payables 109 174 109 174 109 174 - - - Loan obtained with government guarantee - - - - - Loans and borrowings 50 994 44 647 9 042 8 732 45 879 3 971 Government debt instrument 20 798 20 798 890 890 3 560 15 458

1 204 666 894 095 838 582 9 622 49 439 19 429 * excludes statutory accruals and payables



FINANCIALS

36.4 Market riskMarket risk is the probable changes in market prices, such as foreign exchange rates and interest rates, that will affect the Group’s income or the value of its holdings of financial instruments. The objective of the Group’s market risk management framework is to protect and enhance the performance of the statement of financial position and profit or loss by managing and controlling market risk exposures and to optimise the funding of capital projects.

Currency riskForeign currency risk arises primarily from international programming rights that are procured in foreign currency and the procurement, implementation and maintenance of the broadcasting infrastructure. Foreign currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency. The Group uses forward contracts to manage foreign currency risk arising from future commercial transactions and recognised assets and liabilities and is responsible for managing the net position in each foreign currency.

The Group’s risk management policy is to economically hedge between 35% to 75% of firm commitments for a rolling 12 month period. The Group has not applied hedge accounting for these forward currency contracts. The Group only covers known commitments and does not speculate in foreign currency. The minimum percentage cover for less than one year is 35%.

Note: due to the significant cash flow constraints experienced by the Corporation, payment terms were renegotiated with some foreign suppliers. This alleviated the requirement to hedge as per the policy, thus, from the month of July 2017, foreign payments were made at the prevailing spot rate on the date of payment.The Group’s exposure to foreign currency risk based on notional amounts was as follows: GROUP AND COMPANY

US Dollar Rand ‘000 ‘000

2019 Trade payables (1 046) (13 610)Gross financial position exposure (1 046) (13 610)Net financial position exposure (1 046) (13 610)

2018 Trade payables (1 106) (13 158)Gross financial position exposure (1 106) (13 158)Net financial position exposure (1 106) (13 158)



36 Financial instruments (continued)36.4 Market risk (continued)

The following significant exchange rates applied during the year: GROUP AND COMPANY Average Rate Reporting date spot rate 2019 2018 2019 2018

USD 1 13,02 13,02 11,90 11,90 EUR 1 15,21 15,21 14,67 14,67 Sensitivity analysisA 10% strengthening of the Rand against the following currency at 31 March would have increased profit/decreased loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. This analysis is performed on the same basis for the 2017/18 financial reporting period. Due to the nature of the transactions, there is no effect on equity.

GROUP COMPANYProfit or (loss) 2019 2018 2019 2018

R’000 R’000 R’000 R’000 USD 1 316 1 316 1 316 1 316 A 10% weakening of the Rand against the above currency at 31 March would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. Interest rate riskThe Group’s income and operating cash flows are substantially dependent on changes in market interest rates. The interest rates of finance leases to which the Group is a lessee are fixed at inception of the lease or variable over the term of the lease, and therefore expose the Group to fair value interest rate risk.At reporting date the interest rate profile of the Group’s interest bearing financial in-struments was:

GROUP COMPANYCarrying amount 2019 2018 2019 2018

R’000 R’000 R’000 R’000 Fixed rate instruments Government debt instrument 17 401 20 798 17 401 20 798

17 401 20 798 17 401 20 798 Variable rate instrumentsInstalment sale liabilities 29 419 44 647 29 419 44 647 Cash and cash equivalents 72 615 130 516 69 362 127 068

102 034 175 163 98 781 171 715 Fair value sensitivity analysis for fixed rate instruments The Group does not account for any fixed rates financial assets and liabilities at fair value through profit or loss. Therefore a change in interest rates at reporting date would not affect profit or loss. Cash flow sensitivity analysis for variable rate instruments An increase of 100 basis points in interest rates at the reporting date would have increased profit or decreased loss by the amounts shown below. This anal-ysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis was performed on the same basis for the 2016/17 financial reporting period. Due to the nature of the transactions, there is no effect on equity.

GROUP COMPANY Profit/loss 100 bp increase 2019 2018 2019 2018

R’000 R’000 R’000 R’000 Variable rate instruments 1 386 5 048 1 352 4 995 A decrease of 100 basis points in interest rates at the reporting date would have had the equal but opposite effect on the above amounts, on the basis that all other variables remain constant.



FINANCIALS

36 Financial instruments (continued)Fair value of financial instrumentsThe table below analyses financial instruments carried at fair value, by valuation method. The different valuation levels are identified as follows by IFRS 13:Level 1 - Quoted prices (unadjusted) in active, markets for identical assets or liabilities.Level 2 - Inputs other than quoted prices included within level 1 that observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal market at the measurement date under current market conditions. The following methods and assumptions are used to estimate the fair value of each class of financial instruments:

(i) Loans and receivables, perpetual debt instrument and loans and borrowingsThe fair value of these financial instruments is determined by reference to market-related interest rates for financial instruments with similar maturities, and without deducting any transaction costs. (Level 2)

(ii) Trade and other receivables, cash and cash equivalents and trade and other payablesThe carrying amount of these financial assets and liabilities approximates fair value due to the relative short-term maturity of these financial instruments. (Level 2)

2019 2018 Carrying amount Fair value Carrying

amount Fair value Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

R’000 R000 R’000 R’ 000 R’000 R000 R’000 R’ 000 GROUP

Financial assetsOther financial assets

FVOCI 10 567 10 567 - - 12 220 12 220 - - Loans and receivables

Trade and other receivables 888 519 - 888 519 - 800 494 - 800 494 - Cash and cash equivalents 72 615 72 615 - - 130 516 130 516 - -

Total financial assets 971 701 83 182 888 519 - 943 230 142 736 800 494 - Financial liabilitiesFinancial liabilities measured at amortised costs

Government debt instrument (17 401) - (17 401) (20 798) - (20 798) - Loans and borrowings (29 419) - (29 419) - (44 647) - (44 647) - Trade and other payables* (1 635 241) - (1 635 241) - (1 132 875) - (1 132 875) - Total financial liabilities (1 682 061) - (1 682 061) - (1 198 320) - (1 198 320) - Net financial liabilities (710 360) 83 182 (793 542) - (255 090) 142 736 (397 826) -

COMPANYFinancial assetsOther financial assets

FVOCI 10 567 10 567 - - 12 220 12 220 - - Loans and receivables

Trade and other receivables 888 408 - 888 408 - 834 411 - 834 411 - Cash and cash equivalents 69 362 69 362 - - 127 068 127 068 - -

Total financial assets 968 337 79 929 888 408 - 973 699 139 288 834 411 -

Financial liabilitiesFinancial liabilities measured at amortised cost

Government debt instrument (17 401) - (17 401) - (20 798) - (20 798) - Loans and borrowings (29 419) - (29 419) - (44 647) - (44 647) - Trade and other payables* (1 635 110) - (1 635 110) - (1 132 875) - (1 132 875) -

Total financial liabilities (1 681 930) - (1 681 930) - (1 198 320) - (1 198 320) -

Net financial assets/(liabilities) (713 593) 79 929 (793 522) - (224 621) 139 288 (363 909) - The fair values of trade and other receivables and trade and other payables are determined with reference to their carrying amounts as the impact of discounting is not significant.* excludes statutory accruals and payables



36 Financial instruments (continued)Capital management The Group’s share capital is 100% owned by the Government. The Group does not hold any other form of share capital. There are no changes expected in the Group’s approach to capital management during the year. The Group is not subject to any externally imposed capital requirements. The Group manages its Capital to ensure that the entity is able to continue as a going concern by maintaining a minimum liquidity reserve. The minimum liquidity reserve is the specified minimum acceptable surplus of uncommitted facilities or cash holdings over projected net debt levels for the next 12 months. This level is currently set at R700 million. Borrowing facilitiesThe unutilised borrowing facilities include general short-term banking facilities, asset-based finance facilities as well as guarantee facilities.Included in normal guarantees, the Group has guarantees against the employee housing scheme to the value of R0.189 million, and a guarantee for Airwave Travel’s IATA travel agency licence.


R’000 R’000 General short-term banking facilities (available for future operating activities)

FNB/ Rand Merchant Bank - - Nedbank - - Absa Corporate and Merchant Bank 95 000 95 000 Total credit facilitiesTotal 95 000 95 000 Unutilised 64 240 51 928

Asset finance (available to settle capital commitments)Provided 74 000 164 983 Utilised (29 403) (43 072)Unutilised 44 597 121 911

GuaranteesProvided 131 000 131 000 Utilised (357) (27 046)Unutilised 130 643 103 954

37 Operating leasesLeases as lesseeNon-cancellable operating lease rentals are payable as follows:Less than one year 11 740 11 090 Between one and five years 18 045 20 006

29 785 31 096 The Group has various lease agreements for equipment and premises. Some of these lease agreements contain renewal and/or purchase options. None of the lease agreements include contingent rentals.

During the year ended 31 March 2019, R16.8 million was recognised as an expense in the Statement of Profit and Loss in respect of operating leases (2018: R17.3 million).Leases as lessorThe Group leases out certain of its property under operating leases. The future minimum lease receipts under non-can-cellable leases are as follows:

Less than one year 1 638 1 833 Between one and five years 1 260 1 609

2 898 3 442 During the year ended 31 March 2019, R9.7 million was recognised as rental income in the Statement of Profit and Loss (2018: R8.9 million) and R156,000 in respect of repairs and maintenance was recognised as an expense in the Statement of Profit and Loss (2018: R128,000).



FINANCIALS

38 Commitments GROUP AND COMPANY 2019 2018

R’000 R’000 Capital commitments - relating to property plant and equipment contracted for 90 524 126 578 Programme, film and sports rights 928 728 1 594 352 Foreign exchange contracts

Total purchase commitments 1 019 251 1 720 930 The capital commitment is to be financed as follows:Internally generated funds 90 524 126 578 Internally generated funds 928 728 1 594 352

1 019 251 1 720 930 Commitments for programme, film and sports rights will be funded internally. The local commitments and the currency exposure on foreign programme, film and sports rights at 31 March 2019 is as follows:

Local Commitments Foreign commitments Total

R’000 USD’000 R’000 R’000 Year ending 31 March 2020 571 074 6 282 91 291 662 365

Local currency 571 074 571 074 Foreign - US Dollar 6 282 91 291 91 291

Year ending 31 March 2021 131 479 1 853 26 919 158 398 Local 131 479 131 479 Foreign - US Dollar 1 853 26 919 26 919

Year ending 31 March 2022 253 1 725 25 066 25 319 Local 253 253 Foreign - US Dollar 1 725 25 066 25 066

From Year ending 31 March 2023 - 1 015 14 749 14 749 Local - - Foreign - US Dollar 1 015 14 749 14 749



Total commitments 702 805 15 547 225 922 928 728



39 Contingencies Unless the outflow of economic resources is considered remote, contingent liabilities are disclosed when there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. In some cases it may be a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.The disclosed contingent liabilities all arise from claims lodged by third parties against the Group and Company where judgement by a competent court of law is pending, and management has obtained legal advise that the SABC has a high probability of success in defending these legal claims. The claims active as at 31 March 2019 and giving rise to contingent liabilities are detailed as follows:

Possible Losses for the Group2019

R’000 (i) The Government Employee Pension Fund (‘GEPF’) represented by the Public Investment Corporation (‘PIC’) instituted a claim of approx-

imately R337 million including interest against the SABC for the cancellation of a purported lease agreement for certain assets previously leased by Bophuthatswana Broadcasting Corporation between 1997 till 2011. Accruing for the maximum interest that can be charged, the possible loss is R760m. Legal proceedings are on-going and the matter was set down for trial on 31 July 2019. The Group has been advised by its legal counsel that it is only possible, but not probable, that the action will succeed. Accordingly, no provi-sion for any liability has been made in the financial statements.

760 000

(ii) A third party instituted action against the SABC claiming payment of the amount of R92 865.54. The SABC filed a counter claim against the Plaintiff for the partial delivery of poor quality merchandise. The matter was ready for a pre-trial, however the court file went missing. The SABC is awaiting for the opening of the duplicate file for the matter to continue.

97

(iii) The SABC made an application to have the contract between as service provider and the SABC to be set aside for consulting work. The matter was heard on the 20 February 2019 and the SABC currently awaits the decision of the court. 9 816

(iv) An ex-employ of the former TBVC state Radio which was then absorbed by the SABC alleges that he was promised to be re- employed by the SABC which never transpired. He claims damages as a result. He has gone to every forum to claim such damages from the SABC. The SABC has launched an Application to declare the ex-employee a vexatious litigant which has been served on him. The ex-employee of TBVC state radio has not filed answering papers to the SABC’s application.The SABC awaits amended summons from the litigant.

25 000

(v) Summons was served on the SABC on the 26th November 2012. The Plaintiff in this acquired the right to claim against the SABC as a result of an alleged cession agreement between himself and a third party. 224

(vi) The plaintiff instituted legal action against the SABC for alleged breach of his employment contract, claiming recovery of mobile phone allowance. The SABC has good prospects to succeed this matter, however the plaintiff seems to have abandoned this claim. 29

(vii) This matter results from a security tender awarded at a total cost of R185 519 425.61. On 15 December 2017, the SABC was served with a Notice of Motion from a losing bidder requesting among others that the appointment of winning bidder be set aside and that the applicant be substituted as the bid winner. Should the applicant succeed in this litigation, the SABC will be liable for the full contract amount. If the applicant succeeds on the litigation, the winning bidder might also institute a claim for damages to the same value.The Special Investigations Unit has made a joinder application on the matter.

185 519

(viii) The SABC set aside the contract with the service provider for the construction of Multi-purpose studio. The SABC and Special Investiga-tions Unit is appealing the decision of the court in this matter. 5 936

(ix) There are seven cases of alleged unfair discrimination, unfair suspension, unfair dismissal, premature termination/ non-renewal of fixed term contracts and non payment of acting allowance. These cases are at various stages of conciliation or hearing at the courts. 42 796

(x) The SABC terminated an agreement with a certain broadcaster. The matter has been referred to arbitration and applicant is claiming payment for loss of income and damages. The SABC has resolved to approach the Courts to review and set aside the agreement. This broadcaster has proposed full and final settlement of R30 million

144 552

(xi) The Plaintiff claims damages from the SABC amounting for work done and damages thereof for termination of agreement wherein the Plaintiff was to develop and design competency based job profiles which would be conducted over a period of 4 (four) months commencing on 1 November 2015 to 30 March 2016. The SABC filed its Notice of Intention to Defend as well as a Rule 35 Notice requesting documents which will enable the SABC to file its Plea. The matter is pending is SABC awaits the plaintiff to file replication.

1 560

(xii) The Plaintiff is a former freelancer whose freelance agreement was terminated due to an audit finding that the plaintiff failed to disclose certain interests from which the plaintiff’s company benefited from doing business with the SABC. The plaintiff now claims payment of the balance of the freelance contract amounting and damages. The matter is at the pleading stage.

426

(xiii) The SABC dismissed employees due medical aid fraudulent misconduct (unauthorised medical claims). There was a settlement reinstate-ment offer previously made to these employees which has since lapsed. This was previously recongised as a provision due to constructive obligation which is no longer present and only a possible loss is now disclosed.

196 000

Total contingent liabilities 1 371 956



FINANCIALS

40 Related parties The Group is 100% controlled by its Shareholder, the Government, represented by the Department of Communications.The Group is a Schedule 2 public entity in terms of the Public Finance Management Act, no 1 of 1999 as amended. The related parties of the Group consist mainly of government departments, State-Owned Companies (SOC), other public entities in the national sphere of government and key management personnel of the Company or its shareholder and close family members of these related parties. The related parties of the Company also include its subsidiaries (see note 9). The list of public entities in the national sphere of government was provided by National Treasury on their website www.treasury.gov.za.The Group with regards to government related entities is required to disclose the nature and amount of each individually significant transaction and for other transactions that are collectively but not individually significant, a quantitative or qualitative indication of their extent. The SABC provides disclosures for transactions which are not at arms length.

(i) Transactions with subsidiaries COMPANY 2019 2018

Amount of transactions

Amounts owed (to)/by

subsidiary Amount of

transactions

Amounts owed (to)/by

subsidiary R’000 R’000 R’000 R’000

Receivables from/ (payables to) SABC Airwave Travel (Proprietary) Limited trading as Airwave Travel

(481) - (234) 481

Loan to Airwave Travel (Proprietary) Limited (3) - (5 211) 3 Receivables from SABC Foundation NPC 14 264 - (27 930) (14 264)

13 780 - (33 375) (13 780)Related party relationships exists between the Company and its wholly-owned subsidiaries, Airwave Travel and SABC Foundation NPC. The Company has entered into a number of transactions with Airwave Travel for bookings and accommodation for business trips. Transactions entered into are in the normal course of business and on an arm’s length basis. Amounts due and owing are settled accordingly.

(ii) Significant transactions with government related entities GROUP AND COMPANY 2019 2018

Included in Revenue are the following: R’000 R’000 Aggregate of all transactions that are collectively significantGovernment Communication and Information Services 95 898 25 800 Aggregate Sales to other government related entities not listed above 179 260 154 009

275 158 179 809 Goods and services are sold to related parties on an arm’s length basis at market related prices.Purchases of goods and servicesAggregate of all transactions that are collectively significantSentech (SOC) Limited 829 353 781 416 Aggregate Purchases from other government related entities 70 799 91 241

900 151 872 657 Goods and Services are purchases from related parties on an arm’s length basis at market related prices.

(iii) Grants and sponsorships 2019 2018 Amount of

transactions Outstanding

balance Amount of

transactions Outstanding

balance R’000 R’000 R’000 R’000

Government grants recognised in revenue 214 352 - 185 697 - Government grants received 180 123 - 210 898 - Deferred government grant - 318 406 - 316 636

394 475 318 406 396 595 316 636



40 Related parties (continued)Goods and services are purchased from related parties on an arms length basis at market related prices.



Outstanding balance


Outstanding balance

(iv) Interest payments R’000 R’000 R’000 R’000 Shareholder - permanent capital 3 397 17 401 1 352 20 798

(v) Employee benefit payments SABC Pension fund 301 187 852 872 280 044 852 872 SABC Medical aid scheme 3 002 - 5 143 -

304 189 852 872 285 187 852 872 (vi) Administered projects

GROUP AND COMPANY Opening

balance Funds

received Applied to

expenditure Applied to net assets

Interest accrued

Closing balance

R’000 R’000 R’000 R’000 R’000 R’000 For the year ended 31 March 2019Channel Africa - 54 885 (54 885) - - - Community Radio Project (17 194) - 17 194 -

(17 194) 54 885 (37 691) - - - For the year ended 31 March 2018Channel Africa (18 698) 54 885 (53 381) - - (17 194) Community Radio Project (10 159) - 10 367 208

(28 857) 54 885 (43 014) - - (16 986) 2 018 2 017 R’000 R’000

(vii) Administered fundsBank balances of Community Radio Project 208 207

(viii) Service contracts for permanent executive directors Mxakwe M van Biljon Y Maroleni BCService contract- start date 01 July 2018 25 June 2018 01 February

2018- end date 30 June 2023 24 June 2023 31 January

2023Service period 9 months 9 months 14 monthsRemaining 4 Years and 3

Months4 Years and 3

Months3 Years and 10

Months



FINANCIALS

40 Related parties (continued)(ix) Directors’ and key management personnel compensation

Remuneration paid to the person in any capacityYear ended 31 March 2019

Service period in

Basic salary

Bonuses and com-missions

13th Cheque,

Expenses and other

allowances

Employer’s contribution

to pension fund,

medical aid and other Total

Service as months R’000 R’000 R’000 R’000 R’000 Non-executive directorsKweyama Khayisile Thandiwe Board Deputy Chairperson 9 - - 380 - 380 Makhathini Bongumusa Emmanuel Board Chairperson 12 - - 825 - 825 Potgieter-Gqubule Febe Charlene Board Member 1 - - 13 - 13 Naidoo Krish Board Member 9 - - 374 - 374 Malele Jabu Adolf Independent Interim Board Advisor 2 - - 15 - 15 Matisonn Jonathan Board Member 9 - - 357 - 357 Tsedu Mathatha Godfrey Board Member 9 - - 430 - 430 Phalane Jack Howard Board Member 12 - - 393 - 393 Mohuba Dinkwanyane Kgalema Board Member 12 - - 434 - 434 Rambau Victor Board Member 6 - - 216 - 216 Markovitz Michael Grant Board Member 12 - - 434 - 434

Executive directorsPhiliso NP Group Executive (Acting Group Chief

Executive Officer for 3 months) 12 1 797 - 454 344 2 596 Mxakwe MT Group Chief Executive Officer 9 2 503 - 928 488 3 918 Dlamini TS Group Chief Financial Officer (Acting) 3 292 - 330 248 870 Van Biljon Y Group Chief Financial Officer 9 1 495 - 581 263 2 339 Maroleni BC Group Chief Operating Officer 12 2 623 - 950 529 4 102

Senior Management - Bayi LV Company Secretary 12 1 555 - 553 324 2 432 Motsweni SM Group Executive 8 428 - 312 89 828 Moilwa MP Group Executive (Acting) 4 367 - 214 78 659 Williams RV Group Executive (Acting) 3 273 - 129 65 466 Momodu NNB Group Executive 7 879 - 317 183 1 379 Jiyane HM Group Executive (Acting) 4 331 - 357 70 758 Mulaudzi T Group Executive 12 1 622 421 426 354 2 823 Thekiso J Group Executive 12 1 487 - 541 304 2 332 Wotshela NN Group Executive 12 1 758 - 551 344 2 652 Geldenhuys TV Group Executive 9 1 634 - 805 308 2 747 Zikode TP Group Executive 12 1 690 - 616 337 2 643 Magopeni PP Group Executive 12 1 453 - 565 255 2 273 Vanara NJ Group Executive (Acting) 4 650 - 252 114 1 017 Visser AL Group Executive (Acting) 6 369 - 126 97 592 Van Rooyen CR Group Executive 6 759 - 273 160 1 191

23 965 421 13 150 4 953 42 488 New members of the Accounting Authority were appointed on the 11 April 2019 and hence not disclosed above.



40 Related parties (continued)(ix) Directors’ and key management personnel compensation (continued)

Remuneration paid to the person in any capacityYear ended 31 March 2018

Service period

in Basic

salary*

Bonuses and com-missions

13th Cheque,

Expenses and other

allowances

Employer’s contribution

to pension fund, medi-cal aid and

other ~ Total Service as months R’000 R’000 R’000 R’000 R’000

Members of the Accounting Authority

Non-executive directorsKweyama Khayisile Thandiwe Board Member (Interim Board Chair-

person) 12 - - 1 343 - 1 343

Makhathini Bongumusa Emmanuel Board Chairperson 5 - - 447 - 447 Potgieter-Gqubule Febe Charlene Board Deputy Chairperson (Interim

Board Member)11 - - 928 - 928

Kalidass Rachel Board Member 1 - - 71 - 71 Naidoo Krish Board Member (Interim Board Member) 12 - - 1 039 - 1 039 Malele Jabu Adolf Independent Interim Board Advisor 5 - - 91 - 91 Matisonn Jonathan Board Member (Interim Board Member) 12 - - 1 030 - 1 030 Tsedu Mathatha Godfrey Board Member (Interim Board Member) 12 - - 1 265 - 1 265 Phalane Jack Howard Board Member 5 - - 294 - 294 Mohuba Dinkwanyane Kgalema Board Member 5 - - 230 - 230 Rambau Victor Board Member 5 - - 193 - 193 Markovitz Michael Grant Board Member 5 - - 279 - 279

Executive directorsAguma JR Group Chief Financial Officer (Acting

Group Chief Executive Officer) 4 701 - 461 123 1 285

Ralitabo TE Group Executive (Acting Group Chief Executive Officer)

1 1 560 - 620 327 2 507

Philiso NP Group Chief Financial Officer (Group Chief Executive Officer)

8 1 728 - 1 086 335 3 149

Raphela MA Acting Group Chief Financial Officer 4 417 - 225 95 737 Dlamini TS Acting Group Chief Financial Officer 8 750 - 652 131 1 533 Tugwana BL Group Executive (Acting Group Chief

Operating Officer)10 1 600 - 1 108 280 2 988

Maroleni BC Group Chief Operating Officer 2 437 - 158 94 689

Senior Management - Bayi LV Company Secretary 12 1 495 - 528 315 2 338 Makatees KJ Acting Group Executive 7 477 - 252 115 844 Maseko N Acting Group Executive 5 391 - 267 80 739 Motsweni SM Group Executive 12 1 577 - 663 320 2 560 Mathebula SJ Acting Group Executive 8 824 - 379 191 1 394 Ramakgolo LE Acting Group Executive 6 585 - 342 138 1 065 Moilwa MP Acting Group Executive 7 617 - 375 131 1 123 Kganyago MK Group Executive 12 1 223 - 459 275 1 957 Yunus Z Acting Group Executive 8 933 - 343 163 1 439 Jiyane HM Acting Group Executive 10 797 - 547 167 1 511 Williams RV Acting Group Executive 8 700 - 350 130 1 180 Mulaudzi T Group Executive 12 1 560 345 413 338 2 655 Ndlovu M Acting Group Executive 1 90 - 39 19 148 Mosweu KE Acting Group Executive 6 666 - 326 125 1 117 Sefolo L Acting Group Executive 1 89 - 63 21 172 Thekiso J Group Executive 1 38 - 13 8 59 Wotshela NN Group Executive 4 413 - 145 85 643 Geldenhuys TV Group Executive 12 1 885 - 700 351 2 936 Zikode TP Group Executive 4 542 - 197 112 851 Magopeni PP Group Executive 5 116 - 45 20 182 Lephaka M Group Executive 2 200 - 261 36 496

22 412 345 18 225 4 525 45 507~ - including contributions on employer variable pension contribution* - included in basic salary and expenses and other allowances is compensation paid in respect of loss of office.



FINANCIALS

41 Licence agreementsThe Group was granted the following Public Television Broadcasting Licences by the Independent Communications Authority of South Africa (‘ICASA’) for the period 18 December 2008 to 18 December 2023: SABC1 and SABC2.The Group was granted the following Commercial Television Broadcasting Licences by ICASA for the period 18 December 2008 to 18 December 2023: SABC3.The Group was granted the following Public Sound Broadcasting Licences by ICASA for the period 18 December 2018 to 18 December 2028: SAFM, RSG, UMHLOBO WENENE FM, UKHOZI FM, LESEDI FM, MOTSWEDING FM, THOBELA FM, LIGWALAGWALA FM, IKWEKWEZI FM, MUNGHANA LONENE FM, PHALAPHALA FM, LOTUS FM, RADIO 2000, XK FM and TRU FM.The Group was granted the following Commercial Sound Broadcasting Licences by ICASA for the period 18 December 2018 to 18 December 2028: 5FM, METRO FM and GOOD HOPE FM.The licence area for all of the licences above is the Republic of South Africa. The Licences were granted at no consideration and the Group is required to comply with the applicable regulations as amended from time to time. No subsequent expenditure has been incurred on these licences.

42 Expenditure and losses through criminal conduct, irregular, fruitless and wasteful expendituresIn trying to resolve the audit qualification, the SABC performed a detailed investigative process on 100% of payments or expenditure incurred since the 2012/13 financial period. This extensive exercise was aimed at identifying/ detecting an accurate and complete list of irregular expenditure for the current and prior financial years. The incidents/ instances of contraventions which resulted into the irregular expenditure have been categorized and disclosed below.

(i) All losses through any irregular expenditureSection 1 of the Public Finance Management Act, No. 1 of 1999, as amended, defines irregular expenditure as expenditure, other than unauthorised expend-iture, incurred in contravention of or that is not incurred in accordance with a requirement of any applicable legislation.The following amounts have been determined as being irregular expenditure, in terms of section 55(2)(b)(i) of the Public Finance Management Act, No. 1 of 1999, as amended:


Notes R’000 R’000 Opening balance 4 977 300 4 405 804 Less: Expenditure previously incorrectly disclosed as irregular (107 534) - Add: Irregular expenditure - identified in the current year relating to the prior years 14 675 - Balance as restated 4 884 441 4 405 804 Add: Irregular expenditure - identified in the current year 336 285 571 496 Irregular Expenditure awaiting condonation subject to further investigation 5 220 726 4 977 300 Current year 336 285 571 496 Payments without contracts k 88 743 121 504 Deviations c 19 311 34 789 Procurement policy/process not followed (As a result of prior disclosure) 176 548 146 135

Minimum number of quotations not obtained a 26 147 27 355 Bids advertised for less than minimum number of days f 85 378 8 649 Incorrect evaluation criteria applied to bids b 53 267 8 759 Irregular awards due to lack of planning m 11 756 101 372

Procurement through quotation process versus competitive h 6 087 7 405 Variation order in excess of 15% g 14 493 1 526 Irregular Expenditure Under Investigation - 25 364 Delegation of Authority Framework contravened d - 135 545 Procurement through operational advance n 17 - Awards made to suppliers without obtaining valid Tax Clearance Certificates e 2 810 5 531 Unfair Procurement Process b 61 - Schedule All i 28 215 35 968 Insufficient Documentation j - 55 898 Non Compliance to CIDB l - 1 831

336 285 571 496 Key

a The Corporation issued Purchase Orders without obtaining the minimum number of quotations as required by the SCM policyb The bid evaluation and/or adjudication processes did not follow the pre-approved evaluation criteria as set out in the policy and the PPPFA.c Payments that did not qualify as deviations which is defined as an emergency, sole source or where prior approval was requested from National Treasury.d Quotations were not awarded at appropriate management level as per DAF e The Corporation awarded contracts to suppliers without obtaining original tax clearance certificates or confirming the tax matters of the suppliers prior to

awardingf The Corporation awarded bids without advertising for the minimum number of days as required by the SCM policy.g Variation order in excess of 15% as prescribed by National Treasuryh The Corporation procured goods and services through the quotation process whereas the SCM policy requires goods and services above R2 mil should

follow the competitive bid process. i Goods and services relating to TVOB are procured through Schedule All system. These transactions are deemed irregular expenditure due to the imprac-

ticality of following SCM processes.j Insufficient Documentationk The Corporation made payment to suppliers without a valid contract. This could be as result of the procurement process not yet finalised or poor planning. l The Corporation awarded contracts without following Construction Industry Development Board processes.m Poor planning that leads to deviating from normal SCM process.n The Corporation procured goods and services through petty cash instead of RFQ.



42 Expenditure and losses through criminal conduct, irregular, fruitless and wasteful expenditures (continued)(ii) Material losses through fruitless and wasteful expenditures

Section 1 of the Public Finance Management Act, No. 1 of 1999, as amended, defines fruitless and wasteful expenditure as expenditure which were made in vain and could have been avoided had reasonable care been exercised.

The following material losses, through fruitless and wasteful expenditure have been identified as being reportable in terms of the materiality framework approved by the Minister of Communications for the year under review:


R’000 R’000 Opening balance 230 015 145 994 Less: Reversal of incorrectly disclosed prior year amount - - Restated opening balance 230 015 145 994 Current year movements 224 170 84 021 Add: Fruitless and wasteful expenditure - incurred in the current year 82 756 54 562 Add: Fruitless and wasteful expenditure - relating to prior years identified in the current year 141 414 29 459 Fruitless and wasteful expenditure not condoned 454 185 230 015 Less: Amounts recoverable - - Fruitless and wasteful expenditure awaiting condonation 454 185 230 015 Details of fruitless and wasteful expenditureIncident Remedial action implementedImpairment of foreign and sports content Reconciliation of broadcast schedule to reduce im-

pairments 136 173 1 677 Travel cancellation fees and penalties Reported to recover value 64 110 Interest, penalties and fines on late payments Timeous payments to avoid penalties or renegotiated

payment 80 607 14 235 SARS penalties Timeous payments to avoid penalties 20 577 Unauthorised payments on overtime Forensic investigations in progress 24 769 Settlements Management review in progress - Legal fees SIU Investigation 5 437 PAYE for employees fringe benefit not withheld Management review in progress 17 216 Fraudulent payments Amounts paid to incorrect supplier bank accounts

fraudulently 7 326 224 170 84 021

43 Subsequent EventsGoing concernOn 5 September 2019, the SABC received funding allocation letters from the Ministry of Communications and the Minister of Finance confirming a funding allocation of R3.2 billion from the Contingency Reserve. This amount will be released by National Treasury to the SABC in tranches. The release of funding is subject to the SABC meeting performance pre-conditions. Management believes that they will be able to meet all the preconditions to access the full funding available. This announcement ensures the going concern risk is adequately mitigated.


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This section features employees who passed on during the 2018/19 financial year.

21.04.2018 Ms Princess Dlungana Supervisor: Sound - Media Technology Infrastructure

03.06.2018Mr Ntokozo Khuzwayo Technical Producer - Media Technology Infrastructure

12.07.2018Ms Thabi Ziqubu Production Accountant - Group Services

19.12.2018Mr Mlungisi Daweti Programme Manager - Radio

22.12.2018Mr Mzukisi Somi Reporter - News

24.03.2019 Mr Philani Mkhize Specialist Video Editor - News

26.03.2019Mr Jacob Mokoma Senior Producer - News

SABC EMPLOYEES

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Publication detailThis publication is available from SABC Corporate PublicationsPrivate Bag X1, Auckland Park 2006Tel: +27 11 714 4117Fax: +27 11 714 3514Visit the SABC: www.sabc.co.za

Compiled and edited: Thokozani Zitha and Errol Motsoene.Concept, design and layout: Johanna Nieuwenhuys.Illustrations and design:Bruce NgobeniPhotography: Nolwazi Shange, Lungelo Mbulwana, SABC divisional submissions, Gallo/Getty Images and Clips from broadcast on SABC platforms.

SABC ANNUAL REPORT 2019

Nkosi sikelel ’ iAfrikaMaluphakanyisw’ uphondo lwayo,

Yizwa imithandazo yethu,Nkosi sikelela, thina lusapho lwayo.Morena boloka setjhaba sa heso,

O fedise di ntwa la matshwenyehoO se boloke (Ntate)

O se boloke setjhaba sa heso,Setjhaba sa South Afrika

of memories annual report 2019 · itil information technology infrastructure library 4ir fourth...

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