table of contents - provincial government...msicc mittah seperepere international convention centre...

TABLE OF CONTENTSSubmission of Annual Report ...............................................................2

Part A: General Information1. General Information ..................................................................42. List Of Abbreviations.................................................................53. Strategic Overview .....................................................................6

3.1 Nceda’s Profile..................................................................63.2 Vision .....................................................................................63.3 Mission .................................................................................63.4 Values ....................................................................................73.5 Strategic Direction ........................................................7

4. Legislative And Other Mandates .......................................85. Board Of Directors ......................................................................9 Foreword By The Accounting Authority ....................106. Management Team ................................................................ 11 Chief Executive Officer’s Overview ............................... 127. Organizational Structure: Nceda ....................................14

Part B: Governance8. Governance .................................................................................16 8.1 Introduction .........................................................................16 8.2 Parliamentary Oversight .............................................16 8.3 Submission Of Quarterly Reports ..........................16 8.4 The Executive .....................................................................16 8.5 Composition Of The Board ........................................ 17

Part C: Performance Information9. Performance Information For Nceda ...........................20

9.1 Executive Management..........................................209.2. Human Resource Management And

Administration Support ..........................................209.3. Financial Managment Unit ...................................219.4 Economic Development Unit .............................229.5 Trade And Investment Promotion Unit .........239.6 Witsand Nature Reserve .........................................24

9.7 Special Economic Zone (Sez) Project Management Unit .....................................25

10. Risk Management And Internal Control .....................2611. Internal Audit And Audit Committees. .......................2612. Compliance With Laws And Regulations ..................2713. Fraud And Corruption ...........................................................2714. Minimising Conflict Of Interest ........................................2715. Code Of Conduct .....................................................................2716. Supply Chain Management ...............................................27

Part D: Human Resource Management17. Human Resource Oversight Statistics..........................29

17.1 Compensation By Sub Programme ...............2917.2 Compensation By Salary Band ...........................3017.3 Performance Rewards ..............................................3117.4 Cost Of Skills Development ..................................3117.5 Employment And Vacancies ................................3217.6 Employment Changes .............................................3317.7 Labour Relations: Misconduct And

Disciplinary Action .....................................................3317.8 Employment Equity Status At

Financial Year End .......................................................3417.9 Employed Staff .............................................................35

Part E: Project InformationTourism Projects .........................................................................................37Agricultural Projects .................................................................................38Renewable Energy Projects .................................................................38Special Economic Zone .........................................................................39Crafts Development.................................................................................41

Part F: Financial Information18. Statement Of Responsibility ..............................................4319. Report Of The Auditor General .......................................4420. Financial Statements ..............................................................50

1NORTHERN CAPE ECONOMIC DEVELOPMENT, TRADE AND INVESTMENT PROMOTION AGENCY ANNUAL REPORT 2014/15

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NORTHERN CAPE ECONOMIC DEVELOPMENT, TRADE AND INVESTMENT PROMOTION AGENCY ANNUAL REPORT FOR THE YEAR ENDED 31 MARCH 2015

To the Member of the Executive Council, Mr. J.F. Block, MPL

We hereby submit our Annual Report for the period April 2014 to March 2015 to comply with the relevant requirement in the PFMA, Act 1 of 1999.

______________________Accounting Authority

NORTHERN CAPE ECONOMIC DEVELOPMENT, TRADE AND INVESTMENT PROMOTION AGENCY2 ANNUAL REPORT 2014/15

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PART A: GENERAL INFORMATION


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GENERAL INFORMATION1.1 rEgiStErED nAME oF PuBLic Entity The Northern Cape Economic Development, Trade and Investment Promotion Agency. As such it is a public entity incorporated in terms of the Northern Cape Economic Development, Trade

and Investment Promotion Agency Act, Act 4 of 2008.

1.2 rEgiStErED oFFicE AnD PoStAL ADDrESS Office 6 Monridge Park C/O Kekewich & Monument Road Kimberley 8301

1.3 contAct tELEPhonE nuMBErS Telephone : 053-833-1503 Facsimile : 053-833-1390 www.nceda.co.za

1.4 EXtErnAL AuDitorS inForMAtion Audit Team leader: Mr. S Mthembu Physical Address: Block 1, Montrio Corporate Park, 10 Olivier Road, Monument Heights, Kimberley 8300 Postal Address: Private Bag X 5013, Kimberley, 8300 contact information: 053 836 8800

1.5 BAnKErS inForMAtion First National Bank New Park Branch - 231002 Physical Address: Corner of Long & Bultfontein Street Kimberley 8301 Postal Address: Private Bag X6054 Kimberley 8300 contact information: Telephone : 053-832-1644 Facsimile : 053-832-4142

1.


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LIST OF ABBREVIATIONScEo Chief Executive Officer

cFo Chief Financial Officer

DEDAt Northern Cape Department of Economic Development and Tourism.

ED Economic Development

iDc Industrial Development Corporation.

MSicc Mittah Seperepere International Convention Centre

ncEDA Northern Cape Economic Development, Trade and Investment Promotion Agency

PFMA Public Finance Management Act, Act 1 of 1999.

tiP Trade and Investment Promotion.

WPnr Witsand Provincial Nature Reserve

SEZ Special Economic Zone

2.


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STRATEGIC OVERVIEW3.1 ncEDA’S ProFiLE

NCEDA draws its mandate directly from the Northern Cape Economic Development, Trade and Investment Promotion Act (Act no 4 of 2008) and is striving towards the economic development and trade and investments priorities of the Northern Cape Province as outlined in the Provincial Growth and Development Strategy (PGDS). It also take into cognisance the policy statements and Budget speech of the Member of the Executive Council for Economic Development and Tourism (DEDaT).

NCEDA is a Schedule 3C public entity in terms of the PFMA, Act 1 of 1999.

The legislated mandate of NCEDA is captured in Section 3(1)(a) of the Northern Cape Economic Development, Trade and Investment promotion Agency, Act 4 of 2008: Plan and assist with business enterprise and rural development. Provide funding in respect of approved enterprise development. Engage in project management. Engage in the development and management of immovable property. Promote foreign trade and investment.

NCEDA is also permitted in Section 3(2) of the Northern Cape Economic Development, Trade and Investment promotion Agency, Act 4 of 2008 to progressively increase its own revenue generation and collections.

NCEDA has been entrusted with further mandates and they are the management of tourism operations in the Witsand Provincial Nature Reserve (WPNR), the Mittah Seperepere International Convention Centre (MSICC), establishing the special economic zone (SEZ) in Upington and Craft CSP initiative.

3.2 ViSion

Promoting the Northern Cape as a sustainable business and investment friendly province.

3.3 MiSSion

To be true to ourselves and to our purpose, our mission is to achieve the promotion of the Northern Cape as a business friendly province through: Seeking sustainable growth at all times. Facilitating the creation of a conducive environment for trade and investment within the Province. Increased focus on attracting investment. The promotion of trade. In pursuit of economic development. And this constantly in striving for sustainable and quality job creation at all times.

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3.4 VALuES

NCEDA is anchored in the following fundamental values:

transparency: We will communicate realness in our dealings with colleagues and clients at all times.

Openness: We shall at all times be open to new ideas, thus reflecting the character of our clients at all times.

honesty: We will always be sincere and be truthful to ourselves and our clients.

integrity: Our organisation will be viewed by those, both within and without, as honest and upstanding.

Professionalism: We will continuously build on previous performance by active, positive and constructive criticism of past actions and as such strive for professional action at all times.

Leadership: We will be exemplary at all times and strive to be good ambassadors of the organisation.

Accountability: We will be accountable for all our actions, good or bad and deal with the consequences thereof.

Motivation: We shall at all times approach our work with enthusiasm and at the same time give every assignment our best effort.

resourcefulness: We shall use all our resources to demonstrate our capabilities and service excellence in order to stay relevant in our market place.

Efficiency: We will at all times strive to achieve our goals with limited resources in good quality.

communication: We will ensure that all our clients and stakeholders are always informed about what we are doing.

relevance: We will always seek to create an environment where others may learn, grow and be fulfilled and reach their full potential.

3.5 StrAtEgic DirEction

The NCEDA strategic direction is as follows:

3.5.1 Economic Development The key sectors for support and intervention is tourism and agriculture. As such a number of approved

projects will be supported in the form of contributing to pre-feasibility studies, environmental impact assessments, business plan development and facilitation of funding applications.

3.5.2 trade and investment Promotion The key focus areas are exporter development and providing an information service to traders and

investors with specific reference to the available incentives and market access opportunities.

3.5.3 Special Economic Zone The responsibility for the establishment of a SEZ in Upington has been transferred from the Office of the

Premier to NCEDA in November 2014. This is the first step to affect a policy change in the strategic role and function of NCEDA which will be transformed to eventually only focus on the SEZ.”


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LEGISLATIVE AND OTHER MANDATESThe legislative mandates guiding and affecting NCEDA are:

Public Finance Management Act (Act 1 of 1999).

Treasury Regulations.

Standards of Generally Recognised Accounting Practices.

International Standards on Auditing.

Labour relations Act (Act 66 of 1995).

Constitution of South Africa (Act 108 of 1996).

Borrowing Powers of Provincial Government Act (Act 48 of 1996).

Basic Conditions of Employment Act (Act 75 of 1997).

Employment Equity Act (Act 55 of 1998).

Skills Development Act (Act 97 of 1998).

Occupational Health and Safety Act (Act 85 of 1993).

Unemployment Insurance Fund Act (Act 63 of 2011).

Tourism Act (Act No 72 of 1993).

Public Service Act (Act 103 of 1994).

National Small Enterprise Act (Act No. 102 of 1996).

Northern Cape Tourism Act (Act 5 of 1998).

State Information Technology Agency (SITA) Act ( Act 88 of 1998);

Competition Act (CA) 1998 (Act 89 of 1998);

National Environmental Management Act (NEMA) 1998 (Act 107 of 1998);

Construction Industry Development Board Act (Act 38 of 2000);

Public Audit Act (Act 25 of 2004).

Prevention and Combating of Corrupt Activities Act (PCCAA) 2004 (Act 12 of 2004);

Foreign Corrupt Practices Act, (Act 2012 of 2004).

Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005).

Preferential Procurement Policy Framework Act (PPPFA) 2000 (Act 5 of 2000)

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BOARD OF DIRECTORS

In terms of the Act NCEDA has to have five (5) to eight (8) members of the Board. During the current year under reporting NCEDA had only three (3) board members thus not being compliant with its Act.

Mr TU Dikeni (Chairperson of the Board) Ms R Madjiet (Deputy Chairperson of the Board) MR O Fielding (Board Member)

MR O Fielding (Board Member), Ms R Madjiet (Deputy Chairperson of the Board), Mr TU Dikeni (Chairperson of the Board)

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FOREWORD BY THE ACCOUNTING AUTHORITYNCEDA has been thrown a lifeline in its continued existence as a public entity as it will in future focus on establishing and operating the special economic zone in Upington. This has realised in the form of a significant policy shift related to reasons for the entity’s existence that came into effect late in 2014.

Having said this it does not by any means hold that the challenges faced by NCEDA since coming to existence as a Schedule 3C public entity in the “stall” of the department of economic development and tourism is no longer present. It still has the proverbial mountain to climb.

Change is always difficult for any organization more so for organizations that is challenged at the core of its viability. In this regard it is important that staff is rallied to fully support the processes to designate the special economic zone in Upington, approach the fundamental changes to is corporate structures with a high degree of cooperation and professionalism and to secure a more favourable funding model to sustain its operations. The latter will require a new and dynamic approach to the management of its relationship with the department of economic development and tourism.

NCEDA is still faced with a corporate environment that is less than favourable. The number of labour cases faced in the entity and the less than favourable pace of delivering on its roles and functions are two pertinent issues that must be addressed. We are nonetheless encouraged that appointing a new and functional board of directors for NCEDA is receiving high priority attention by our Responsible Member.

However, there are a number of positives to be excited about, one being that we continue to improve in the outcomes of the annual audit done by the Auditor-General. This in itself will motivate staff to improve compliance and achieving its goals as we work towards a clean audit.

Key to its future success NCEDA will have to refine its strategy and corporate structuring, improve its human resource capacity, develop partnerships that will speed up delivery on its objectives and complete its organizational restructuring by end of March 2016. It is also important that NCEDA conducts its work in an ever more cost effective manner. In this regard a new and functional board of directors will also have to play a high-level strategic role to guide NCEDA in achieving its objectives.

The Northern Cape is still faced with the aftermath of the world economic recession which is impacting severely on our traditional high achieving economic sectors most notably mining. Significant job losses are almost unavoidable in such circumstances. It is therefore critical that NCEDA play its full role in developing alternative economic sectors such as renewable energy in an effort to substitute the vacuum left by the underperformance of mining and to some extent agriculture, as well as to create new job opportunities. It is for this reason that the entity cannot fail in its endeavour to have the special economic zone in Upington designated.

The NCEDA board under leadership of Mr. Thobela Dikeni, acting chief executive officer Mr. Teboho Luse, the senior management team and all staff members of the entity is thanked for their dedication under rather difficult circumstances. However, change is also attractive and having been given the opportunity to establish a new special economic zone in the province will no doubt be the catalyst of a revitalisation of NCEDA and re-energising of its staff.

______________________Accounting Authority


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MANAGEMENT TEAMNCEDA consist of seven (7) business units. The Special Economic Zone has been added as a new business unit in the financial year under reporting. The management team consist of:

Vacant (Manager Trade and Investment Promotion)Vacant (Manager Communication and Marketing)

Mr. t.L Luse Acting Chief Executive Officer

Ms t MangojaneChief Financial Officer

Mr. Willem Engelbrecht Project Executive Special Economic Zone

Ms. Jeanene Jessnitz Acting Manager Witsand Tourism Resort

Mr. E groeners Manager Economic Development

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CHIEF EXECUTIVE OFFICER’S OVERVIEW

The year 2014/2015 has been a challenging year for Northern Cape Economic Development, Trade and Investment Promotion Agency. NCEDA received a Qualified Audit Opinion for the year under review. The basis of qualification are emanating from NCEDA not collecting revenue at Mittah Seperepere Convention Centre for the year under review. This creates an unfavourable condition as it stands and the matter is being resolved through legal alternative in ensuring NCEDA controls the Convention Centre as it is required to.

During the year under review, NCEDA has been entrusted to manage the Special Economic Zone in Upington as one the high impact project for the Northern Cape Province. This project is managed in collaboration with Department of Trade and Industry, Office the Premier and the Department of Economic Development and Tourism. The project seeks to ensure that Renewable Energy Sector is optimised in order to reduce the burden of electricity in the country and the province. The project value is R 28m over the MTEF period. The project has a potential of creating 3 000 decent Jobs.

DTI/IDC further mandated NCEDA in partnership with Department of Sports, Arts and Culture to manage the CRAFTS development programme for the Northern Cape. The project is funded by DTI/IDC to the value of R 2m for 2014/2015 financial year.

Guided by its strategic positioning, the organisation focused its energies on investing its resources in the vital sectors of the economy, which will give effect to it becoming a high performing trade and investment institution. Furthermore, the agency supported ten (10) SMME’s with total costs of R 931,684.05 in the year under review. This is in line with our mandate of SMME development and support as entrenched in NCEDA Act.

The true test of whether the agency lives by its ethos and its strategic thrust will be through the testimony of its clients to that lived experience. By virtue of its empowering and development role, the sight of the agency and its people should excite and entice its clients. This is only possible once we do what we are meant to do, thereby bringing strategy to life. Furthermore, to achieve its goals, the agency is required to use its resources economically and wisely to maximise and optimise them. This talks directly to the prudent and honest use of the agency’s resources. If we are not astute and the agency fails to act as trusted custodian of the public’s resources, the agency will be perceived as being complicit in eroding the economic base of the Northern Cape Province.

NCEDA is appropriated a budget by its parent department. However over the years the appropriated budget makes it difficult for NCEDA to perform its functions as


PROOF

mandated by the Act. The cost to implement the Act and the appropriated budget are too far fetch from each other. NCEDA requires a substantive budget in order to realise its objectives, and that can only be achieved when the treasury (being the responsible department for appropriation of NCEDA as per PFMA) realises the work NCEDA has to do and appropriate the correct budget for NCEDA’s operations.

oPErAtionAL PErForMAncE

Financial sustainability and efficiency in the year under review, NCEDA’s position remained unchanged. The appropriated fund to the value of R 5, 2million from the Department of Economic Development and Tourism (DEDaT) was the main driver for the operational capital. This was less as compared to the 2013/2014 financial year. Furthermore, other funding from DTI, IDC and Lotto were used to finalise the outstanding projects and new projects.

BuiLDing A cAPABLE orgAniSAtion

The Agency will focus on attracting quality talent, reversing the brain drain and enabling the building of human capital to support the key strategic direction and improve operational performance. The organisation continues to address the interests of its employees, but has also emphasised that it from external sources in order to meet its viability target.

NCEDA believes that human capital is our most valuable asset. The loyalty and commitment of our staff in all areas of the Agency continued to be the most critical element guaranteeing the ongoing successes of the Agency. As at the 31st March 2014, the staff complement at NCEDA was 23 employees and 2 interns. Staff turnover was relatively low at 1%.

LooKing AhEAD

In re-engineering the organisation, the agency will continue focusing on the following key aspects: Development of its people for a highly talented, disciplined and motivated workforce Improving operational efficiencies, increasing alternative sources of revenue streams and reducing waste Strengthening efforts to improve risk management, fraud prevention and anti-corruption measures Leveraging of key strategic partnerships Ensure capacitated leadership that responds to the mandate of the organisation

APPrEciAtion

Finally, I take this opportunity to thank the board for its inspired leadership under the leadership of Mr. Thobela Dikeni. I also wish to thank the management team, the motivated NCEDA family for the work done during the year under review.

_________________________Mr. t. LuSEActing chiEF EXEcutiVE oFFicEr


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ORGANIZATIONAL STRUCTURE: NCEDANCEDA reviewed its structure in 2012. The new structure took cognisance of NCEDA as growing organisation and had to align itself to its core business in order to respond to NCEDA’s mandate.

ncEDABoard of Directors

ncEDAoFFicE oF thE cEo

huMAn rESourcE AnD SuPPort

SErVicES

WitSAnD touriSM rESortriSK MAnAgEMEnt

MArKEting &coMMunicAtion

trADE & inVEStMEnt ProMotion

EconoMicDEVELoPMEnt

FinAnciALMAnAgEMEnt

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PART B: GOVERNANCE


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GOVERNANCE8.1. introDuction

Corporate governance refers to the system by which Public Entities are directed, controlled and held to account. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation such as the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders and specifies the rules and procedures for making decisions in corporate affairs. Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and operational environment. Governance is a mechanism for monitoring the actions, policies and decisions of Public Entities as well as the alignment of interests among the stakeholders. In this regard the PFMA (Act 1 of 1999), Companies Act (Act 71 of 2008) and the King III report are singled out as and how it relates to impact on corporate governance in NCEDA.

8.2. PArLiAMEntAry oVErSight

NCEDA presented its Annual Report to the Standing Committee of Public Accounts (SCOPA) and the Portfolio Committee for Finance, Economic Development and Tourism during February 2013.

8.3 SuBMiSSion oF QuArtErLy rEPortS

NCEDA submitted its Quarterly reports to its mother department, Department of Economic Development and Tourism for purposes of accountability as follows:Quarter 1: June 2014Quarter 2: September 2014Quarter 3: December 2014Quarter 4: March 2015

8.4 thE EXEcutiVE

8.4.1 thE BoArD8.4.2 introDuction

The NCEDA Board has the following mandate expressed in Section 5 of the NCEDA Act (Act 4 of 2008): To manage and control the affairs of the Agency. To be the accounting authority for the Agency as contemplated in Section 49(2)(a) of the

PFMA (Act 1 of 1999). To exercise powers and perform the functions conferred or imposed upon the Agency

by this Act or any other law.

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In addition, the NCEDA Board must lead and guide the Agency, in conjunction with DEDAT, to actively promote and market the Northern Cape as an investor-friendly destination to increase and retain investment in the Province while at the same time it endeavours to increase trade in commodities produced in the province.

The Board at all times must exercise and perform its powers and functions with due regard to Section 104, Section 125 and section 230 of the Constitution of South Africa (Act 108 of 1996), the PFMA (Act 1 of 1999) and provisions of national and provincial legislation and all national and provincial policies, regulations and directives referring to tourism, trade, industry, sector development and investment.

Section 6(1) of the NCEDA Act (Act 4 of 2008) compels NCEDA to have a minimum of five Board members and a maximum of eight.

The 2014/15 financial year end was closed with NCEDA not complying with its Act as only three Board members remained . Two Board members resigned during the financial year. Steps to regularise the situation have commenced but were not completed by end of March 2015.

8.5 coMPoSition oF thE BoArD

name Designation Date Appointed Date resigned

number of Meetings Attended

Mr. T. Dikeni Chairperson 01 FEBRUARY 2011 ACTIVE 3

Ms. R. Majiedt Deputy Chairperson 01 FEBRUARY 2011 RESIGNED 2

Mr. O. Fielding Non-Executive Member 01 JUNE 2012 ACTIVE 3

During the year under review the Deputy Chairperson (Ms Majiedt) resigned in the second quarter from the board. The board was then left with two board members. In December 2014 the term of Mr. O Fielding expired and was not renewed.

The NCEDA Board met on the following dates: June 2014 September 2014 December 2014 March 2015 (Did not sit)

The March 2015 meetings of the Board had to be postponed for later due to the unvailability of other board members.


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PART C: PERFORMANCE INFORMATION


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PERFORMANCE INFORMATION FOR NCEDA

9.1 EXEcutiVE MAnAgEMEnt

Performance indicator

target Actual PerformanceApr 2014 -March 2015

Deviations Proposed Adjustments

Board Secretariat Board documentation delivered on time one week before every Board meeting.

3 Board Meeting were held.

1 Board meeting could not be held.

In future a schedule of board meeting need to be adopted at the beginning of the financial year for implementation by the secretariat.

Board fully functioning

Increase capacity of board from 3 members to 5 members as per the Act

3 Vacancies in the board were not filled.

No appointments were made.

Discuss the matter with the MEC for Finance, Economic Development and Tourism on appointing of new members of the NCEDA Board.

Stakeholder Relations

Quarterly report delivered by 7th of April.

Quarterly report submitted.

None. None.

9.2. huMAn rESourcE MAnAgEMEnt AnD ADMiniStrAtion SuPPort


target Actual PerformanceApril 2014 -March 2015


Human Resource Administration

Filling 2 strategic vacancies

Strategic posts not filled 2 positions not filled. Budget constraints to fill the CEO and PA post.

Request funding of the posts from Treasury and Department.

Ensure all leave files are correct and leave audit is done quarterly.

Leave Audit conducted and files are updated.

NONE NONE

10 employees have entered into Performance Agreements and are assessed

10 Performance Agreements were signed and 10 employees were assessed

NONE NONE

9.


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Labour Relations and Discipline

Ensure a 100% discipline work force

1 case of dismissal was handled.1 case on contract dispute was handled

None compliance with policies and legislation by employees.

Induct all employees on policies and legislation governing NCEDA.

Human Resources Management Development

Training of 9 staff members

1 training course was conducted.

8 employees were not trained due to budget constraints

Budget for Skills Development should be ring fenced from the Grant Allocation.

Document and Archive Management

Registry in full operation and documents are traced and marked.

Register for all documentation is in place and implemented.

None None.

Infrastructure and Systems

Location of NCEDA is identified and building is maintained

Lease agreement was signed. NCEDA is paying the monthly rental of the building.

None. None.

IT system is in place and working

IT is in full operation and improved.

None. None.

9.3. FinAnciAL MAnAgMEnt unit


target Actual Performance April 2014 to March 2015

Deviations Proposed Adjustment

Ensure that financial policies are in place

Approve all financial policies

Policies are still relevant for the financial year

Updated S & T Policy with new rates

NONE NONE

The rendering of Financial Services

Sound financial accounting services

Annual Financial Statements 2014/2015 submitted to Provincial Treasury and the office of the Auditor General

Quarterly Financial reports submitted to the Board and the Department of Economic Development and Tourism

Review of Budget for 2014/2015

Implementation and submission of audit action plan to Treasury on 30 April 2014, September 2014 and January 2015

NONE NONE


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target Actual Performance April 2014 to March 2015

Deviations Proposed Adjustment

The Management of supply chain management (SCM) services

Proper supply chain management

Advertisement of Tenders for SEZ & MSICC

Appointment of Service Providers for Infrastructure Master Plan, Skills Audit Plan, Office Space, Office Furniture for SEZ Upington

Assets verification conducted for NCEDA, WITSAND and SEZ Upington Offices

NONE NONE

9.4 EconoMic DEVELoPMEnt unit


target Actual PerformanceApr 2014 –March 2015


1 x revised every 2 year comprehensive database on economic activities within the province

1 x comprehensive up to date database of economic activity within the province

Not achieved. Could not perform the activity due to budget constraints.

Source funding for the implementation of the comprehensive database on economic activities within the NC Province.

1 x factsheets on economic opportunities developed and published on NCEDA Website

Production of trade fact sheets once per year

Not achieved. Could not perform the activity due to budget constraints.

Source funding for the development of fact sheets on economic opportunities in the Northern Cape and publish on NCEDA’s website.

Number of existing and new projects support

Projects Support as per sectorAgricultural – 6Tourism – 6Mining – 3ICT - 2

Agricultural – 3. Two existing and one new project were supported.

Tourism – 3. Two existing and one new project were supported

Mining None

ICTNone

3 projects were not supported, due to budget constraints.3 projects were not supported due to budget constraints. 3 projects were not supported. 2 projects were not supported.

Request funding to support additional projectsRequest funding to support additional projectsProjects on Mining and ICT should be referred to DEDaT as there is no budget to implement these projects.


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9.5 trADE AnD inVEStMEnt ProMotion unit




Number of investment projects realised

Three (3) projects to be realized Harbour in NamaquaUpington Cargo harbourSolar energy SEZ

1 Investment project realised

2 investment projects not realised

The 2 projects are in the DEDaT APP. NCEDA will have to realign its APP for 2015/2016 and exclude these projects

Number of businesses assisted with export

Thirty (30) business assisted with export by the end March 2015.

Export Readiness assessment completed on 40 companies.

NONE NONE

Fifteen (15) businesses and exporters assisted to participate in 3 local exhibitions:-Brics Expo

15 Companies businesses participated at Northern Cape province BRICS Expo and international Trade and Tourism Conference 2014

NONE NONE

1 x factsheets per year developed and published on NCEDA Website

1 x factsheets developed and publish on NCEDA website

Profile Northern Cape Province investment Opportunities in three leading Trade and Investment Journals/Publications

Target not achieved due to budget constrains

Target to be achieved by June 2015

Number of potential export companies completed the EDP Programme

15 export potential companies completed EDP programme level 115 export potential companies completed EDP programme level 2

NONE No training was conducted. The MoU with SEDA has been signed for the training of companies for EDP.

Trainings to be completed in July 2015

1 x profiling per year of NC trade opportunities in selected publications

1 x profile of NC trade opportunities in selected publication

NONE The publication of NC trade opportunities was not done due to budgetary constraints

The budget for 2015/2016 should accommodate this area.


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9.6 WitSAnD nAturE rESErVE




Ensure that annual significant events are hosted

6 annual events hosted 6 annual events were hosted

NONE NONE

The rendering of Financial Accounting Services and budgeting

Sound financial accounting services.

Revenue increased by 2% Budget efficiently managed.

NONE NONE

Marketing and promotional activities

Register on 16 Tourism Marketing media data baseDistribute brochures to the number of brochure distribution

Registered on the 16 data base of tourism marketing mediaBrochures were distributed to local routes and local tourism centres

NONE NONE

Ensure attraction Groups & tour operator visits

Attract groups and tour operators to the resort and increase the no of PAX to 400 per annum

Group tours and operators were increased to 404 per annum

NONE NONE

Ensure advertising and advertorials

Advertise and advertorials increased by 3% from the baseline

Advert and advertorials were increased by 2%

1% of international adverts and advertorials was not reached

Develop a strategy to maintain the international media on adverts and advertorials

Ensure support to community through empowerment of SMME’s

Support SMME business 2 SMME’s were supported LaundryCatering

NONE NONE

Ensure that occupancy rate is sustained

Increase occupancy rate by 5% per annum

Occupancy rate increased

NONE NONE


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9.7 SPEciAL EconoMic ZonE (SEZ) ProJEct MAnAgEMEnt unit




Project Management for the proposed Zone

1 SEZ office Procured in Upington

The SEZ office was procured and the tools of trade for the office.

NONE NONE

Engineer, Support Staff and Investment Promoter Appointed

Appointments of the Investor Promotor was.

Appointment of the Support Staff and Engineer was not finalised.

Finalise the recruitment process for the appointment of the Support Staff and Engineer.

Designation Application Submitted

No application was submitted.

Application for Designation not Submitted to DTI

Fast track the appointment of a service provider to compile the documentation for Application of Designation by May 2015.

Acquisition 116 hectares of Land from DPW finalised.

The land is not acquired from DPW

The process to acquire land has not been fast tracked with DPW

Engage the Office of the Premier to negotiate with DPW on the 116 hectares of land to be availed for the SEZ.

Detailed environmental impact assessment (EIA)

1 EIA to be conducted for the entire SEZ

Tender advert for the appointment of the Service provider has been issued.

Appointment of the service provider to conduct EIA not completed

Appointment of the service provider to be fast track to conduct EIA

Detailed engineering and site assessment services

Service provider appointed to conduct engineer services.

NONE No appointment was done for the service provider

Fast track the appointment of the service provider to conduct engineer services

Project Management for the proposed Zone

1 SEZ office Procured in Upington

The SEZ office was procured and the tools of trade for the office.

NONE NONE

Detailed Engineer and site assessment services conducted

NONE No detailed engineer and site assessment services conducted

Fast track the process of compilation of detailed engineer and site assessment.


PROOF




Planning and development of strategic industrial cluster

1 Master Plan developed

1 Master plan has been developed

NONE NONE

Detailed skills assessment and plans

1 Skills assessment and the plans developed.

A service provider was appointed to conduct the Skills assessment

None None

investment facilitation and promotion

Investment profile compiled and Letter of Intent (LIO) with 6 Investors

Two Letter of intent were received.Investment profile still not compiled

4 Investment LIO not received.No investment profile

In the 2nd quarter of 2015/2016 strengthen the Investment profile and acquire 4 LIO’s.

2 Brochures developed for the promotion of the SEZ

NONE No brochures were compiled for the promotion of the SEZ

Fast track the process of developing the promotion brochures by 2nd quarter of 2015/2016

SEZ Marketing tools developed.

NONE No marketing tools developed

Develop marketing tools by 1st quarter of the 2015/2016

1 Investment Conference held

NONE No investment conference was held with investors

Fast track the process to hold an Investment Conference for the SEZ by 2nd Quarter of the 2015/2016 financial year.

10. RISK MANAGEMENT AND INTERNAL CONTROL

The NCEDA Board is ultimately responsible for the risk management systems and controls. In this regard the oversight and implementation of risk management is discharged by way of the following measures: Risk assessment drawing from information available in financial reports, performance reports and personal

interviews with risk owners. Implementing a risk management plan. Maintaining a risk register. Risk reporting.

The Risk management committee was not functional in the financial year under review. The committee was not capacitated due to budgetary constraints.

11. INTERNAL AUDIT AND AUDIT COMMITTEES.

NCEDA did not have an Internal Audit or Audit Committee in place during the period under review due to budget constraints.


PROOF

12. COMPLIANCE WITH LAWS AND REGULATIONS

NCEDA strives to comply with all relevant legislation and policies applicable to it as Schedule 3C public entity. However, during the period under review the Auditor-General reported on a number of non-compliance issues which resulted in an adverse Audit finding. This included non-compliance with the PFMA (Act 1 of 1999), Treasury Regulations, Preferential Procurement Policy Framework Act (Act 5 of 2000), Construction Industry Development Board Act (Act 38 of 2000); and the NCEDA Act (Act 4 of 2008).

13. FRAUD AND CORRUPTION

The policy on fraud and corruption was adopted by NCEDA board. The policy is implemented and monitored.

14. MINIMISING CONFLICT OF INTEREST

Employees are prohibited from engaging in any business activities that are actually or potentially adverse or detrimental to the best interest, mission and objectives of NCEDA. The policy on managing conflict of interest was adopted by the Board. The implementation and monitoring is in progress.

15. CODE OF CONDUCT

The code of conduct acts as guideline to all NCEDA employees as to what is expected of them. Employees signed the code of conduct. Human Resource monitors the implementation of the code of conduct.

16. SUPPLY CHAIN MANAGEMENT

NCEDA has a procurement policy which has been approved. The policy guides NCEDA in all procurement processes and is in line with treasury regulations on procurement. In the year under review, NCEDA in response to the Cabinet call to assist SMME’s/ BBEE companies procured from the following BBEE companies:

SMME/BEE coMPAniES 2014/15

Hamba Nathi Travel Agent R 32,579.12

Kator Travel R 63,186.99

Worldwide Travel R 178,866.40

Belrex/Unitech R 145,157.90

Aery Stationers R 35,590.68

Dooling IT Solutions R 68,847.25

ME Builders R 195,693.50

Lidino Trading R 3,300.00

Palethana Trading R 161,500.00

Mellenuim Office Equipment R 46,962.21

totAL AMount r 931,684.05


PROOF

PART D: HUMAN RESOURCE MANAGEMENT


PROOF

introDuction

NCEDA has a set approved policies directing Human Res ources Management. However, the challenge remains compliance with policies such as performance management.

Furthermore, developing the skills of staff at NCEDA is a critical need but is constrained by budget.

17. HUMAN RESOURCE OVERSIGHT STATISTICS17.1 coMPEnSAtion By SuB ProgrAMME

17.1.1 hEAD oFFicE

Sub Programme total Expenditure

per Sub Programme

compensation Expenditure

compensation Expenditure as % of total Sub

Programme Expenditure

number of Employees

Average compensation

cost per Employee

Executive R 64, 445.86 R 49, 285.00 76% 2 R 26, 642.50

Finance R 1, 475,271.83 R 1,475,271.83 100% 4 R 368,817.96

Human Resources and Administrative Support

R 1,338,610.42 R 1,323,449.56 99% 3 R 441,149.85

Economic Development R 1,958,427.72 R 1,936,331.36 99% 3 R 645,443.79

Trade and Investment promotion

R 90,287.94 R 90, 287.94 100% 1 R 90,287.94

Marketing and Communication

R 00,00 R 00,00 0% 0 R 00,00

totAL r 4, 927,043.77 r 4, 874,625.69 98.94% 13 r 374,971.21

17.1.2 WitSAnD

Sub Programme total Expenditure

per Sub Programme




number of Employees


cost per Employee

Executive R 00,00 R 00,00 0% 0 R 00,00

Finance R 00,00 R 00,00 0% 0 R 00,00


R 602,227.32 R 602,227.32 100% 3 R 200,742.44

Terrain Workers R 243,322.85 R 243,322.85 100% 3 R 81,107.62

General Workers R 130,311.44 R 130,311.44 100% 3 R 325,287.15

totAL r 975,861.61 r 975,861.61 100% 9 r 108,429.07


PROOF

17.1.3 SPEciAL EconoMic ZonE

Sub Programme total Expenditure per Sub

Programme




number of Employees


cost per Employee

Executive R 00,00 R 00,00 0% 0 R 00,00

Project Executive R 243,322.85 R 243,322.85 100% 1 R 243,322.85

Project Officer R 142,781.32 R 142,781.32 100% 1 R 142,781.32

Engineer R 00,00 R 00,00 0% 0 R 00,00

Project Specialist R 210,252.66 R 210,252.66 100% 1 R 210,252.66

Trade and Investment Promoter

R 206,902.66 R 206,902.66 100% 1 R 206,902.66

totAL r 803,259.49 r 803,259.49 100% 4 r 200,814.88

17.2 coMPEnSAtion By SALAry BAnD

17.2.1 hEAD oFFicE

Level compensation Expenditure

% of total compensation

Expenditure

number of Employees


cost per Employee

Executive Management R 49,285.00 1% 2 R 24,642.50

Senior Management R 2,380,752.15 49% 4 R 595,188.04

Middle management R 1,384,197.95 28% 3 R 461,399.32

Junior Management R 887,934.26 18% 3 R 295,978.09

Skilled R 00.00 0% 0 R 00.00

Semi-Skilled R 172,456.33 4% 1 R 172,456.33

Unskilled R 00.00 0% 0 R 00.00

totAL r 4,874,625.69 100% 13 r 374,971.21

17.2.2 WitSAnD



Expenditure

number of Employees

Average compensation cost

per Employee

Executive Management R 00,00 0% 0 R 00,00

Senior Management R 307,512.95 32% 1 R 307,512.95

Middle management R 00,00 0% 0 R 00,00

Junior Management R 294,714.37 30% 2 R 147,357.19

Skilled R 00,00 0% 0 R 00,00

Semi-Skilled R 373,634.29 38% 6 R 62,272.38

Unskilled R 00,00 0% 0 R 00,00

totAL r 975,861.61 100% 9 r 108,429.07


PROOF

17.2.3 SPEciAL EconoMic ZonE



Expenditure

number of Employees

Average compensation cost per Employee

Executive Management R 260,723.24 32% 1 R 260,723.24

Senior Management R 417,155.32 51% 2 R 208,577.66

Middle management R 142,781.32 17% 1 R 142,781.32

Junior Management R 00,00 0% 0 R 00,00

Skilled R 00,00 0% 0 R 00,00

Semi-Skilled R 00,00 0% 0 R 00,00

Unskilled R 00,00 0% 0 R 00,00

totAL r 820,659.88 100% 4 r 205,164.97

17.3 PErForMAncE rEWArDS

A total of 18 employees were assessed under the year review. All employees received a 1% Notch increase, no performance bonuses were paid.

17.4 coSt oF SKiLLS DEVELoPMEnt

17.4.1 hEAD

Sub Programme Expenditure on compensation

Expenditure on Skills

Development

Skills development Expenditure

as % of Expenditure on compensation

number of Employees

trained

Average cost of Skills development per Employee

Executive R 49, 285.00 R 15,160.86 31% 1 R 15,160.86

Finance R 1,475,271.83 R 00,00 0% 0 R 00,00


R 1,323,449.56 R 15,160.86 % 1 R 15,160.86

Economic Development R 1,936,331.36 R 22,096.36 % 1 R 22,096.36


R 90, 287.94 R 00,00 0% 0 R 00,00


R 00,00 R 00,00 0% 0 R 00,00

totAL r 4, 874,625.69 r 52,418.08 % 3 r 17,472.69


PROOF

17.4.2 WitSAnD



Development

Skills development

Expenditure as % of Expenditure on

compensation

number of Employees

trained


Executive R 00,00 R 00,00 0% 0 R 00,00

Finance R 00,00 R 00,00 0% 0 R 00,00


R 602,227.32 R 00,00 0% 0 R 00,00

Terrain Workers R 243,322.85 R 00,00 0% 0 R 00,00

General Workers R 130,311.44 R 00,00 0% 0 R 00,00

totAL r 975,861.61 r 00,00 0% 0 r 00,00

17.4.3 SEZ PMu



Development

Skills development

Expenditure as % of Expenditure on compensation

number of Employees

trained


Executive R 00,00 R 00,00 0% 0 R 00,00

Project Executive R 243,322.85 R 00,00 0% 0 R 00,00

Project Officer R 142,781.32 R 00,00 0% 0 R 00,00

Engineer R 00,00 R 00,00 0% 0 R 00,00

Project Specialist R 210,252.66 R 00,00 0% 0 R 00,00


R 206,902.66 R 00,00 0% 0 R 00,00

totAL r 803,259.49 r 00,00 0% 0 r 00,00

17.5 EMPLoyMEnt AnD VAcAnciES

17.5.1 hEAD oFFicE

Sub Programme number of Approved Posts

number of Employed Staff

number of Vacancies

%of Vacancies

Executive 3 0 3 100%

Finance 4 4 0 0%


4 3 1 25%

Economic Development 4 3 1 25%


4 0 4 100%


2 0 2 100%

totAL 21 10 11 55%


PROOF

17.5.2 WitSAnD



number of Vacancies

%of Vacancies

Executive 1 0 1 100%

Finance 0 0 0 100%


3 3 0 0%

Terrain Workers 4 3 1 25%

General Workers 5 1 4 80%

Marketing and Communication (Tourism)

1 0 1 100%

totAL 14 9 5 36%

17.5.3 SEZ PMu



number of Vacancies

%of Vacancies

Project Executive 1 1 0 0%

Project Officer e 1 1 0 0%

Project Specialist 1 1 0 0%

Engineer 1 0 1 100%


1 1 0 0%

totAL 5 4 1 10%

17.6 EMPLoyMEnt chAngES

Salary Band Employment at beginning of period

Appointments terminations Employment at end of the period

Top Management 0 0 0 0

Senior Management 4 1 0 1

Professional qualified 7 5 1 5

Skilled 0 0 0 0

Semi-skilled 10 0 0 0

Unskilled 0 0 0 0

total 20 6 1 6

The current vacancy rate at head office is standing at 55%, Witsand Nature Reserve at 36% and at SEZ 10%

17.7 LABour rELAtionS: MiSconDuct AnD DiSciPLinAry Action

One disciplinary hearing was held under the financial year of reporting. 1 dismissal has been effected in quarter 1 of the period under review.


PROOF

17.8 EMPLoyMEnt EQuity StAtuS At FinAnciAL yEAr EnD

17.8.1 hEAD oFFicE17.8.1.1 Female

Levels African coloured indian White

Executive Management 0 0 0 0


Middle Management 1 0 0 0

Junior Management 2 1 0 0

Skilled 0 0 0 0

Semi-Skilled 0 1 0 0

Unskilled 0 0 0 0

totAL 4 2 0 0

17.8.1.2 Male




Middle management 1 1 0 0


Skilled 0 0 0 0


Unskilled 0 0 0 0

totAL 2 2 0 0

17.8.2 WitSAnD17.8.2.1 FEMALE


Executive Management 0 0 0 0Senior Management 0 0 0 0Middle management 0 0 0 1Junior Management 0 0 0 0Skilled 0 0 0 0Semi-Skilled 0 0 0 0Unskilled 0 2 0 0totAL 0 2 0 1


PROOF

17.8.2.2 MALE






Skilled 0 0 0 0


Unskilled 0 0 0 0

totAL 3 3 0 0

17.8.3 SEZ PMu17.8.3.1 FEMALE






Skilled 0 0 0 0


Unskilled 0 0 0 0

totAL 1 0 0 0

17.8.3.2 MALE






Skilled 0 0 0 0


Unskilled 0 0 0 0

totAL 0 3 0 0

No disabled staff is employed at NCEDA. NCEDA is however an equal employment opportunity company and this is specifically mentioned in recruitment advertisements. Disabled staff is always welcome to apply for any position NCEDA advertises.

17.9 EMPLoyED StAFF

During the year of reporting, NCEDA had ten (10) permanent staff members employed at its Head Office (Kimberley) and nine (9) are employed at Witsand Nature Reserve and four (4) employed at SEZ PMU. This gives a total of 23 employees employed with 18 vacant posts to be filled in both establishments.


PROOF

PART E: PROJECT INFORMATION


PROOF

TOURISM PROJECTSriemvasmaak tourism Master Plan

The project is situated on the banks of Orange river, it borders Namibia in the West, and is flanked the Augrabies falls National Park in the South. Riemvasmaak is allocated 370 km North East km from the most famous Kgalagadi Transfrontier Park.

Eco adventure and safaris are available where various opportunities for 4X4 enthusiasts Various opportunities for farm holidays in the area and the Kalahari raptor route.

The project is completed as per the financial planning.

Wildebeestkuil rock Art centre rejuvenation

Situated 16 Km from Kimberley; Wilderbeskuil farm. Wilderbeeskuil belongs to the NC Rock Art trust. The farm is known for its 400 rocks engraving made 2000 years ago. It focus of the project is to showcase History and culture, Art and life style of the San people. The project appeals to the Niche market

The project is 90% completed, due to the financial status of the agency.

heritage rail Steam train Experience

Steam train project involves reintroducing rail tourist steam train in the Northern Cape as a mean of tourist transport and attraction. Two lines was identified as phase1 for the project. The lines include the Kimberley-Beaconsfield and the Upington-Kakamas rail routes. The Kimberley line is located on the national rail connection to Rovos Rail, the Blue Train and Shosholoza. The Upington route offers a beautiful landscape, which mirror the Orange river along a number of places and cuts through the only wine route in the Northern Cape to Upington. The large number of historical and cultural attractions around Kimberley ranging from the Big Hole to the Anglo Boer War Battlefield Site and Upington is a gateway to the green Kalahari and the mayor attractions of Keimoes / Kakamas and the Augrabies falls. The main objective of the project is to make it easy to move around the province, strengthen product offering and to develop rural towns where the train will stop.

The agency has to date completed pre-feasibility and feasibility study is yet to be completed.

Adventure Sports resort

NCEDA completed a project pre-feasibility study on establishing an adventure sports resort in the Big Hole precinct in Kimberley and further development of adventure tourism activities in the Northern Cape. This study produced a positive result on pursuing a more refined feasibility study for the establishment of an adventure sports resort.sport and adventure events, e.g. Kalahari Desert Speedweek, Augrabies Extreme Marathon, Green Kalahari Canoe Marathon, Big Sky Extreme Paragliding event and many more.


PROOF

Pre-feasibility has been completed a feasibility study has been delayed due to a requirement that the land be bought from De Beers Kimberley Mines at a market relate price. NCEDA has insufficient funding for this purpose and could not raise investor funding to acquire the land.

AGRICULTURAL PROJECTSriemvasmaak table grapes

The project is situated within the municipal jurisdiction of Siyanda District Municipality. The project is situated in Vredesvallei (110km South West of Upington). Riemvasmaak is a CRDP Pilot project and NCEDA reports to CRDP committee on progress. The project is under master of the high court’s administration as a result of community in-fights. Riemvasmaak has a total of 600ha of land suitable for irrigation and about 100ha is already developed for irrigation. The 100ha of table grapes is leased to SAFE on a year to year basis. NCEDA has completed the feasibility study on 250ha portion of undeveloped land and the study revealed that the land is suitable for Citrus and table grapes.

IDC was approached to enter in to a joint venture with the community. IDC recommended Cape Span, SAFE and Afrifresh as the potential operating partners. The three operating partners have presented the proposals to the MEC for Agriculture, Rural Development and Land Reform. The MEC recommended SAFE as the operating partner due to the fact that they are already in partnership with the community on the other property.

R180 000.00

The Department of Agriculture, Rural Development and Land Reform is in the process of clearing the land. IDC is currently in the process of compiling the due diligence and also to determine the financial feasibility of the project.

RENEWABLE ENERGY PROJECTSDikgatlong Biomass renewable Energy Project.

NCEDA in partnership with Afrisam Cement Plant have completed the feasibility study and the development of a proposed project plan for the utilization of invasive species as alternative energy source at the Afrisam Cement Plant. This project is located in Ulco under the Municipal Jurisdiction of Dikgatlong Local Municipality.

The feasibility study concluded that Black-thorn Acacia is a technically feasible alternative fuel that can be used at the Ulco plant, and that sufficient raw material is available over the long term. Afrisam is currently utilizing approximately 400 – 500 tons of coal/day. To contribute towards a sustainable environment, Afrisam is committed to search for alternative energy source to decrease their dependence on coal. The project objective is to harvest the Acacia Mellifera (Swarthaak/black-thorn) which is an encroacher plant biomass as an alternative renewable energy source in order to gradually replace the use of coal and to reduce the carbon emission – responding to the green economy.


PROOF

According to the feasibility study, two different scenarios were analysed to determine the viability of replacing 10% of Ulco‘s pre-calciners coal utilization which is the equivalent of 100 tons Black-thorn Acasia chips per day (7 days per week). Scenario 1 is a more labour intensive model while Scenario 2 is more mechanized. Both scenarios involved primary coops and a secondary coop. In the labour intensive scenario a total of 96 people will be employed compared to only 13 in the mechanized model. It is in the best interest of all the participating stakeholders to recommend the labour model provided that it becomes financial viable. To operationalize the standalone business unit, the institutional structure proposed is broadly that of a cooperative which consist of primary coops (harvesting of biomass) and a secondary cooperative. The secondary coop will be responsible for the overall coordination of the project and act as marketing agent between the primary coops and Afrisam. The secondary coop will also be responsible for the collection, drying (raw biomass) and delivering of the final product to Afrisam and act as a central hub for administration issues of the primary coops. According to the feasibility study, a project of this magnitude will yield the following socio-economic benefits for the province:Job creation – over 100 jobs will be createdThe local community will benefit in terms of skills development on renewable energy.Reduction of carbon emission – promoting the green economyImprovement of the pasture condition in the participating farms.

The Department of Agriculture, Rural Development and Land Reform is in the process of clearing the land. IDC is currently in the process of compiling the due diligence and also to determine the financial feasibility of the project.

SPECIAL ECONOMIC ZONEThe Northern Cape Provincial Government applied for the SEZ in Upington for Solar Energy. The DTI earmarked the SEZ as one of the SEZ’s in the country for Solar Energy in addressing the energy problems in the province and the country as the whole. The Northern Cape SEZ is one of the SEZ’s that competes with the other eight (8) SEZ in the country in each province.

In September 2014, NCEDA was mandated to manage the processes of the SEZ as an entity and to that effect a Service Level Agreement was entered with the DTI. DTI allocated a budget of R28m to ensure that the SEZ operations are funded and also to ensure that other aspects for the realisation of the SEZ are implemented. The project plan and funding is over the MTF period which ends in 2018.

In light of the above, the Project Management Team was appointed in 2014 June with a clear mandate of management of the processes and realizing the designation for the SEZ.

ProgrESS on thE SEZ

FEASiBiLity StuDy

DTI appointed consultants to develop feasibility studies for all nine (9) provinces. The process was finalised in December 2014. The feasibility study has been submitted and approved by DTI. NCEDA and the SEZ team has to implement the roll out plan to realize the SEZ based on the outcome of the feasibility study.


PROOF

BuSinESS PLAnS

The business plans have been completed and are ready to be implemented for the SEZ.

DESignAtion

The SEZ is 80% ready to apply for the Designation License to DTI. The target is that by May 2015 an application to the Minister of Trade and Industry should be launched.

AcQuiSition oF LAnD

SEZ site has a total capacity of 476.4 hectares of land. The //Khara Hais Municipality has already availed a large portion of 313.4 of land for use by the SEZ. A total of 86 hectares is already earmarked as phase one of the SEZ for implementation. 160 hectares of land still belong to the Department of Public Works which negotiations with the department are to be engaged for the use of this portion. This portion is right at the centre of the land earmarked for the SEZ.

inFrAStructurE DEVELoPMEnt (BuLK inFrAStructurE)

We are in the process of applying for the Bulk Infrastructure funding to DTI. This process should be completed and submitted by March 2015. The plan is to service the land in order to attract the investors to the land. There is a great possibility that DTI will fund the infrastructure development. Discussions to this effect are underway. The current figures are totalling to +- R 350m for the SEZ.

//Khara Hais Municipality infrastructure also need to be upgraded in order to cater for the needs of the SEZ, e.g. water, electricity and sewerage. Meeting were held with the municipality to assess the status quo and it became evident that the current bulk infrastructure will not be able service the SEZ unless major upgrading is conducted. Furthermore, the municipality does not have funds to do the upgrading which then requires intervention of the Provincial Government to assist in this aspect. A process of costing for the upgrades will be conducted by the municipality.

PiPELinE inVEStorS

In order for the Upington SEZ to be granted the Designation License it is required that pipeline investors list is submitted to DTI. The rational for this is to ensure that the SEZ does not become the White Elephant, but and economic zone that is active. That can only be practical when investors have shown interest to invest in the Northern Cape and in particular the SEZ.

The Chinese government through the office of the Consulate – General have assisted us in attracting companies in China that are interested in manufacturing of the Solar PV’s. This process is still at the engagement stage.

rEnEWABLE EnErgy StrAtEgy For thE SEZ

Renewable Energy Strategy for the SEZ is one amongst the most strategies that the SEZ should have. The strategy is earmarked to be developed by May 2015. This will lead to the Renewable Energy Summit where all stakeholders will be invited to engage on the strategy.


PROOF

The SEZ renewable strategy will be aligned to the Provincial Renewable Energy strategy to ensure that there is coherence between the two strategies. However this will be more specific to the SEZ. The Summit is planned to take place in July 2015.

FunDing

DTI has funded for the operations of the SEZ to an amount of R28m for the MTEF period. The funding is ring fenced for the projects targeted at realizing the designation and operations of the SEZ.

The Provincial Government is required to budget for the SEZ infrastructure and other operational costs of the SEZ. It is therefore imperative that other stakeholders i.e. Provincial Treasury, Department of Cooperative Governance, Human Settlement and Traditional Affairs, Department of Public Works and Roads and //Khara Hais Municipality should be engaged to reprioritize their budgets in order to include the SEZ in their budget for the roles they need to play in this project.

StAKEhoLDEr MAnAgEMEnt

A provincial steering committee that is composed of all strategic departments was established to monitor the performance of the SEZ team and also to make decisions at strategic level. The committee sits on a quarterly basis and is co-chaired by Office of the Premier, DTI and NCEDA.

CRAFTS DEVELOPMENT Northern Cape Economic Development Trade and Investment Promotion Agency inconjuctions with the Northern Cape Department of Arts and Culture (DSAC) and Small Enterprise Development Agency submitted a joint application to the Department of Small business development for funding to facilitate the development and promotion of arts and crafts in the Northern Cape Province.

NCEDA, DSAC and SEDA will focus on promoting the development of the craft sector in the province; there will be product development and access to local markets. Research will assist in analytical solutions in Product development and design, skills development and empowering the craft sector with knowledge that will enable the crafter to strive to an energetic, successful businesses ensuring sustainability in the craft sector.

Our main focus would be accreditation within the sector and its operators: qualified product developers and designers crafters that have registered businesses that are functioning and that generate an income.

The Projects will focus on the four key priority areas, namely:Product Development Facilitation of access to raw material Enterprise development on areas such as skills development and business administration, costing, pricing, packaging

and quality control Access to local and national markets

A total budget of R 2, 000 000 was approved in the year 2014/2015.


PROOF

PART F: FINANCIAL INFORMATION


PROOF

STATEMENT OF RESPONSIBILITYTo the best of my knowledge and belief, I confirm the following:

All information and amounts disclosed in the annual report is consistent with the annual financial statements audited by the Auditor General.

The annual report is complete, accurate and is free from any omissions.

The annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury.

The Annual Financial Statements have been prepared in accordance with the Generally Recognised Accounting Standards applicable to the public entity.

The accounting authority is responsible for the preparation of the annual financial statements and for the judgements made in this information.

The accounting authority is responsible for establishing, and implementing a system of internal control has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the annual financial statements.

The external auditors are engaged to express an independent opinion on the annual financial statements.

In our opinion, the annual report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the entity for the financial year ended 31 March 2015.

Yours faithfully

_________________________________ _________________________________ Acting chief Executive officer Accounting AuthorityMr. teboho Luse Date: Date:

18.


PROOF

REPORT OF THE AUDITOR GENERALreport of the auditor-general to the northern cape Provincial Legislature on the northern cape Economic Development, trade and investments Promotions Agency

report on the financial statements

introduction1 . I have audited the financial statements of the Northern Cape Economic Development, Trade and

Investments Promotions Agency set out on pages 53 to 96, which comprise the statement of financial position as at 31 March 2015, the statement of financial performance, statement of changes in equity, and statement of cash flows for the year then ended, as well as the notes, comprising a summary of significant accounting policies and other explanatory information.

Accounting authority’s responsibility for the financial statements2. The accounting authority is responsible for the preparation and fair presentation of these financial

statements in accordance with South African Standards of Generally

Recognised Accounting Practice (SA Standards of GRAP) and the requirements and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor-general’s responsibility3. My responsibility is to express an opinion on these financial statements based on my audit. conducted my

audit in accordance with International Standards on Auditing. Those standards require that I comply with ethical requirements, and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit opinion.

19.


PROOF

Basis for qualified opinion

revenue from exchange transactions6. According to information obtained the entity was mandated to manage the Mittah Seperepere

Convention Centre MSCC on behalf of the Northern Cape Provincial Government. Apart from the expenses incurred on the maintenance of the convention centre and the transfer of the moveable assets to the public entity, none of the other transactions relating to the MSCC were accounted for by the entity. I was unable to obtain sufficient appropriate audit evidence to confirm the extent of transactions that were not accounted for by the entity. Consequently, I was unable to determine the adjustments relating to the MSCC required to the financial statements for the current and prior year.

7. I was unable to obtain sufficient appropriate audit evidence that revenue for the current year has not been properly accounted for, due to the status of the accounting records. I was unable to confirm the revenue by alternative means. Consequently, I was unable to determine whether any adjustment to revenue stated at R 2 742 432 in the financial statements were necessary. Additionally, there is a consequential impact on cash and cash equivalents, trade and other receivables, the surplus for the period and the accumulated surplus.

Qualified opinion8. In my opinion, except for the possible effects of the matters described in the basis for qualified opinion

paragraphs, the financial statements present fairly, in all material respects, the financial position of the Northern Cape Economic Development, Trade and Investments Promotions Agency as at 31 March 2015 and its financial performance and cash flows for the year then ended, in accordance with the (SA Standards of GRAP) and the requirements of the PFMA.

Emphasis of matter9. I draw attention to the matter below. My opinion is not modified in respect of this matter.

restatement of corresponding figures10. As disclosed in note 31 to the financial statements, the corresponding figures for 31 March 2014 have been

restated as a result of an error discovered during 31 March 2015 in the financial statements of the Northern Cape Economic Development, Trade and Investments Promotions Agency for the year ended 31 March 2014.

report on other legal and regulatory requirements11. 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 findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report, non-compliance with legislation and internal control. The objective of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these matters.


PROOF

Predetermined objectives12. I performed procedures to obtain evidence about the usefulness and reliability of the reported

performance information for the following selected programmes presented in the annual performance report of the public entity for the year ended 31 March 2015:• Programme4:EconomicDevelopmentUnitResearchprogrammeonpage22• Programme5:TradeandInvestmentUnitonpage23• Programme7:SpecialEconomicZoneProjectManagementUnitpages25to26

13. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

14. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance was consistent with the planned programmes. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury’s Framework for managing programme performance information (FMppl).

15. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

16. The material findings in respect of the selected objectives are as follows:

Programme 5: trade and investment unit

usefulness of reported performance information17. No reasons for variances between planned and actual achievements reported in the annual performance

report were given for 22% of the targets, as required by the National Treasury’s Guide for the preparation of the annual report. This was due to a lack of documented and approved internal policies and procedures to address reporting requirements a lack of consistent reporting and review of the presentation of the annual performance report by management.

18. Performance targets should be specific in clearly identifying the nature and required level of performance as required by the FMPPI. A total of 73% of the targets were not specific.

19. Performance indicators should be well defined by having clear definitions so that data can be collected consistently and is easy to understand and use, as required by the FMPPI. A total of 55% of the indicators were not well defined.

20. No reasons for variances between planned and actual achievements reported in the annual performance report were given for 78% of the targets, as required by the National Treasury’s Guide for the preparation of the annual report. This was due to a lack of documented and approved internal policies and procedures to address reporting requirements a lack of consistent reporting and review of the presentation of the annual performance report by management.


PROOF

21. Section 55(2)(a) of the PFMA requires actual achievements against all planned indicators and targets to be reported annually. The annual performance report submitted for audit purposes did not include the actual performance of 55% of all planned objectives and targets and 45% of all indicators specified in the strategic plan for the year under review. This was due to a tack of budget.

Programme 8: Special Economic Zone Project Management unit

usefulness of reported performance information22. Performance indicators/measures should be well defined by having clear definitions so that data can be

collected consistently and is easy to understand and use, as required by the FMPPI. A total of 69% of the indicators were not well defined.

23. I did not identify any material findings on the usefulness and reliability of the reported performance information for the following objectives:• Programme4:EconomicDevelopmentUnitResearchprogrammeonpage22

Achievement of planned targets24. Refer to the annual performance report for information on the achievement of the planned targets for the

year. This information should be considered in the context of the material findings on the usefulness and reliability of the reported performance information for the selected objectives reported in 20 to 26 of this report.

compliance with legislation25. I performed procedures to obtain evidence that the public entity had complied with applicable legislation

regarding financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows:

Strategic planning and performance management26. The proposed strategic plan for 2012-2015 was not submitted to the Department of Economic

Development and Tourism for approval as required by Treasury Regulation (TR) 30.1.1.

Financial statements, performance and annual reports27. The financial statements submitted for auditing were not prepared in accordance with the prescribed

financial reporting framework as required by section 55(1) (a) of the PFMA.

28. Material misstatements of expenditure and revenue identified by the auditors in the submitted financial statements were subsequently corrected, but the uncorrected material misstatements resulted in the financial statements receiving a qualified audit opinion.

Audit committee29. An audit committee was not in place as required by section 77(c) of the PFMA.


PROOF

internal Audit30. The accounting authority did not ensure that the internal audit function was established, as required by

section 51 (l)(a)(ii) of the PFMA.

Expenditure Management31. The accounting authority did not take effective steps to prevent irregular expenditure, fruitless and

wasteful expenditure, as required by section 51(1 of the PFMA.

revenue Management32. Effective and appropriate steps were not taken to collect all money due, as required by section 51 (1 of the

PFMA and TR 31.1.2(a) and 31.1.2(e).

Asset and liability management33. Proper control systems to safeguard and maintain assets were not implemented, as required by sections

50(1 and 51(1 of the PFMA.

consequence Management34. Sufficient appropriate audit evidence could not be obtained that effective and appropriate disciplinary

steps were taken against officials who incurred and/or permitted irregular expenditure, fruitless and wasteful expenditure, as required by section 51 (1 of the PFMA.

internal control35. I considered internal control relevant to my audit of the financial statements, annual performance report

and compliance with legislation. The matters reported below are limited to the significant internal control deficiencies that resulted in the basis for qualified opinion, the findings on the annual performance report and the findings on noncompliance with legislation included in this report.

Leadership36. The accounting authority did not exercise adequate oversight responsibility over financial and performance

reporting, compliance with laws and regulations as well as internal control. The lack of controls resulted in non-compliance with applicable legislation.

37. There were deficiencies in the design and implementation of internal control in respect of compliance with applicable laws and regulations.

Financial and performance management38. The accounting authority did not implement proper record keeping in a timely manner to ensure that

complete, relevant and accurate information was accessible and available to support financial and performance reporting.


PROOF

39. Manual and automated controls were not designed, implemented and reviewed to ensure that the transactions had occurred, were authorised, and were completely and accurately processed

40. Management did not effectively document and approve internal policies and procedures to address the process of collecting, recording, processing, monitoring and reporting on predetermined objectives and revenue. This was due to a lack of understanding of the processes that should be performed to account for all transactions.

governance41. The accounting authority did not ensure that there is an adequately resourced and functioning internal

audit unit and audit committee that identifies internal control deficiencies and recommends corrective action effectively.

42. The entity did not conduct a risk assessment for the year. There are deficiencies in the design and implementation of internal control in respect of risk management.

Kimberley31 July 2015


PROOF

FINANCIAL STATEMENTS The reports and statements set out below comprise the annual financial statements

presented to the provincial legislature:

index Page

Accounting Officer’s Responsibilities and Approval ____________________________ 51

Accounting Authority’s Report ____________________________________________ 52

Statement of Financial Position ___________________________________________ 53

Statement of Financial Performance________________________________________ 54

Statement of Changes in Net Assets _______________________________________ 55

Cash Flow Statement ___________________________________________________ 56

Accounting Policies _________________________________________________57 - 75

Notes to the Annual Financial Statements ________________________________76 - 96

20.


PROOF

The accounting officer is required by the Public Finance Management Act (Act 1 of 1999), to maintain adequate accounting records and is responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is the responsibility of the member to ensure that the annual financial statements fairly present the state of affairs of the entity as at the end of the financial year and the results of its operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on the annual financial statements and were given unrestricted access to all financial records and related data.

The annual financial statements have been prepared in accordance with Standards of Generally Recognised AccountingPractice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.

The annual financial statements are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The accounting officer acknowledges that he is ultimately responsible for the system of internal financial control established by the entity and place considerable importance on maintaining a strong control environment. To enable the member to meet these responsibilities, the accounting officer sets standards for internal control aimed at reducing the risk of error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards in ensuring the entity’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the entity is on identifying, assessing, managing and monitoring all known forms of risk across the entity. While operating risk cannot be fully eliminated, the entity endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The accounting officer is of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or deficit.

The accounting officer has reviewed the entity’s cash flow forecast for the year to 31 March 2016 and, in the light of this review and the current financial position, he is satisfied that the entity has or has access to adequate resources to continue in operational existence for the foreseeable future.

The entity is wholly dependent on the Department of Economic Development and Tourism for continued funding of operations. The annual financial statements are prepared on the basis that the entity is a going concern and that the Department of Economic Development and Tourism has neither the intention nor the need to liquidate or curtail materially the scale of the entity.

Although the accounting officer is primarily responsible for the financial affairs of the entity, they are supported by the entity’s external auditors.

The external auditors are responsible for independently reviewing and reporting on the entity’s annual financial statements. The annual financial statements have been examined by the entity’s external auditors and their report is presented on page 44.

The annual financial statements set out on pages 52 to 96, which have been prepared on the going concern basis, were approved by the accounting officer on 31 May 2015 by:

t LuseAccounting officer

Accounting officer's responsibilities and Approval


PROOF

The member submits his report for the year ended 31 March 2015.

1. incorporation

The entity was incorporated on 25 October 2010 and obtained its certificate to commence business on the same day.

2. review of activities

Main business and operations

The entity is engaged in the entity is a non-profit entity and is focused on the service delivery with in the Northern Cape in terms of the Northern Cape Economic Development, Trade and Investment Promotions Agency act and operates principally in South Africa.

The operating results and state of affairs of the entity are fully set out in the attached annual financial statements and do not in our opinion require any further comment.

Net deficit of the entity was R 1 315 946 (2014: deficit R 189 380).

3. going concern

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

4. Subsequent events

The member is not aware of any matter or circumstance arising since the end of the financial year.

5. Accounting policies

The annual financial statements prepared in accordance with the South African Statements of Generally Accepted Accounting Practice (GAAP), including any interpretations of such Statements issued by the Accounting Practices Board, and in accordance with the prescribed Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board as the prescribed framework by National Treasury.

6. Accounting Authority

The member of the entity during the year and to the date of this report is as follows: Name ChangesOH Fielding Resigned 31 December 2014R Majiedt Resigned 19 May 2014UT Dikeni Resigned 31 March 2015

7. Bankers

The enitity makes use of First National Bank as the preferred banker.

8. Auditors

Auditor General of South Africa will continue in office for the next financial period.

Accounting Authority’s report


PROOF

Statement of Financial Position as at 31 March 2015

note(s) 2015 2014

Assets

Current Assets

Inventories 3 52 011 47 707

Receivables from exchange transactions 4 178 789 213 396

Receivables from non-exchange transactions 5 8 593 -

Cash and cash equivalents 6 12 225 096 3 202 435

12 464 489 3 463 538

Non-Current AssetsProperty, plant and equipment 7 3 259 734 1 581 643

Intangible assets 8 97 624 8 313

3 357 358 1 589 956

total Assets 15 821 847 5 053 494

Liabilities

Current LiabilitiesFinance lease obligation 9 85 673 132 873

Payables from exchange transactions 10 1 252 748 947 824

Unspent conditional grants and receipts 11 9 771 156 400 626

11 109 577 1 481 323

Non-Current LiabilitiesFinance lease obligation 9 14 397 76 927

total Liabilities 11 123 974 1 558 250

net Assets 4 697 873 3 495 244

Accumulated surplus 4 697 873 3 495 244


PROOF

note(s) 2015 2014

revenue

revenue from exchange transactions

Sale of goods 12 852 217 788 107

Rendering of services 12 1 890 214 1 626 124

Other income 13 50 053 9 402

Investment revenue 14 118 452 92 965

total revenue from exchange transactions 2 910 936 2 516 598

revenue from non-exchange transactions

transfer revenueGovernment grants & subsidies 15 11 778 571 9 903 400

total revenue 12 14 689 507 12 419 998

ExpenditureEmployee related costs 16 (7 949 136) (6 650 815)

Depreciation and amortisation (1 025 820) (346 664)

Finance costs 17 (15 363) (39 479)

Lease rentals on operating lease (1 245 478) (1 068 278)

Debt Impairment 18 20 221 (56 430)

Repairs and maintenance (80 218) (1 002 596)

Cost of sales 19 (161 616) (188 206)

General Expenses 20 (5 548 044) (3 256 911)

total expenditure (16 005 454) (12 609 379)

operating deficit 22 (1 315 947) (189 381)

Deficit for the year (1 315 947) (189 381)

Statement of Financial Performance


PROOF

Statement of changes in net Assets

Accumulated surplus

total net assets

Balance at 01 April 2013 3 684 624 3 684 624

Changes in net assets

Deficit for the year (189 380) (189 380)

total changes (189 380) (189 380)

restated balance at 01 April 2014 3 495 244 3 495 244

Changes in net assets

Deficit for the year (1 315 946) (1 315 946)

Transfer of assets 2 518 575 2 518 575

Total changes 1 202 629 1 202 629

Balance at 31 March 2015 4 697 873 4 697 873


PROOF

note(s) 2015 2014

cash flows from operating activities

receipts

Sale of goods and services 2 838 719 2 360 210

Grants 21 149 101 9 572 000

Interest income 118 452 92 965

24 106 272 12 025 175

Payments

Employee costs (7 933 492) (6 729 720)

Suppliers (6 750 378) (5 759 276)

Finance costs (1) (5 504)

Fines and penalties - (20 228)

(14 683 871) (12 514 728)

net cash flows from operating activities 23 9 422 401 (489 553)

cash flows from investing activities

Purchase of property, plant and equipment 7 (166 665) (447 040)

Purchase of other intangible assets 8 (107 974) (7 048)

net cash flows from investing activities (274 639) (454 088)

cash flows from financing activities

Repayment of other financial liabilities - (112 500)

Finance lease payments (125 101) (171 246)

net cash flows from financing activities (125 101) (283 746)

net increase/(decrease) in cash and cash equivalents 9 022 661 (1 227 387)

Cash and cash equivalents at the beginning of the year 3 202 435 4 429 822

cash and cash equivalents at the end of the year 6 12 225 096 3 202 435

cash Flow Statement


PROOF

Accounting Policies

1. Presentation of Annual Financial Statements

The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act (Act 1 of 1999).

These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention as the basis of measurement, unless specified otherwise. They are presented in South African Rand.

In the absence of an issued and effective Standard of GRAP, accounting policies for material transactions, events or conditions were developed in accordance with paragraphs 8, 10 and 11 of GRAP 3 as read with Directive 5.

Assets, liabilities, revenues and expenses were not offset, except where offsetting is either required or permitted by a Standard of GRAP.

A summary of the significant accounting policies, which have been consistently applied in the preparation of these annual financial statements are disclosed below.

These accounting policies are consistent with the previous period.

1.1 Presentation currency

These annual financial statements are presented in South African Rand, which is the functional currency of the entity.

1.2 going concern assumption

These annual financial statements have been prepared based on the expectation that the entity will continue to operate as a going concern for at least the next 12 months.

1.3 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include:

trade receivables / held to maturity investments and/or loans and receivables

The entity assesses its trade receivables and loans and receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the surplus makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.


PROOF

Allowance for slow moving, damaged and obsolete stock

An allowance for stock to write stock down to the lower of cost or net realisable value. Management have made estimates of the selling price and direct cost to sell on certain inventory items. The write down is included in the operation surplus note.

impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value- in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the [name a key assumption] assumption may change which may then impact our estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets.

The entity reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets.

On debtors an impairment loss is recognised in surplus and deficit when there is objective evidence that it is impaired. The impairment is measured as the difference between the debtors carrying amount and the present value of estimated future cash flows discounted at the effective interest rate, computed at initial recognition.

1.4 Property, plant and equipment

Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.

The cost of an item of property, plant and equipment is recognised as an asset when:• itisprobablethatfutureeconomicbenefitsorservicepotentialassociatedwiththeitemwillflowtotheentity;

and• thecostoftheitemcanbemeasuredreliably.

Property, plant and equipment is initially measured at cost.

The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.

Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition.

Accounting Policies

1.3 Significant judgements and sources of estimation uncertainty (continued)


PROOF

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, it’s deemed cost is the carrying amount of the asset(s) given up.

When significant components 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.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories.

Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management.

Major spare parts and stand by equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment.

Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised.

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. The useful lives of items of property, plant and equipment have been assessed as follows:

item Depreciation method Average useful life

Furniture and fixtures Straight line 6 Years

Motor vehicles Straight line 8 years

Office equipment Straight line 6 Years

IT equipment Straight line 2 - 5 Years

Photography equipment Straight line 2 - 5 Years

Other office equipment Straight line 3 - 8 Years

The residual value, and the useful life and depreciation method of each asset are reviewed at the end of each reporting date. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

Accounting Policies

1.4 Property, plant and equipment (continued)


PROOF

Reviewing the useful life of an asset on an annual basis does not require the entity to amend the previous estimate unless expectations differ from the previous estimate.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset.

Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use of the asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.5 intangible assets

An asset is identifiable if it either:• isseparable,i.e.iscapableofbeingseparatedordividedfromanentityandsold,transferred,licensed,rented

or exchanged, either individually or together with a related contract, identifiable assets or liability, regardless of whether the entity intends to do so; or

• arises from binding arrangements (including rights from contracts), regardless of whether those rights aretransferable or separable from the entity or from other rights and obligations.

A binding arrangement describes an arrangement that confers similar rights and obligations on the parties to it as if it were in the form of a contract.

An intangible asset is recognised when:• itisprobablethattheexpectedfutureeconomicbenefitsorservicepotentialthatareattributabletotheasset

will flow to the entity; and• thecostorfairvalueoftheassetcanbemeasuredreliably.

The entity assesses the probability of expected future economic benefits or service potential using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.

Where an intangible asset is acquired through a non-exchange transaction, its initial cost at the date of acquisition is measured at its fair value as at that date.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

Accounting Policies

1.4 Property, plant and equipment (continued)


PROOF

An intangible asset arising from development (or from the development phase of an internal project) is recognised when:• itistechnicallyfeasibletocompletetheassetsothatitwillbeavailableforuseorsale.• thereisanintentiontocompleteanduseorsellit.• thereisanabilitytouseorsellit.• itwillgenerateprobablefutureeconomicbenefitsorservicepotential.• thereareavailabletechnical,financialandotherresourcestocompletethedevelopmentandtouseorsellthe

asset.• theexpenditureattributabletotheassetduringitsdevelopmentcanbemeasuredreliably.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows or service potential. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life.

The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.

Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

Internally generated goodwill is not recognised as an intangible asset.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

item useful lifeComputer software, other 3 years

1.6 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity.

The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility.

A concessionary loan is a loan granted to or received by an entity on terms that are not market related.

Accounting Policies

1.5 intangible assets (continued)


PROOF

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Derecognition is the removal of a previously recognised financial asset or financial liability from an entity’s statement of financial position.

A derivative is a financial instrument or other contract with all three of the following characteristics:• Itsvaluechangesinresponsetothechangeinaspecifiedinterestrate,financialinstrumentprice,commodity

price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the ‘underlying’).

• Itrequiresnoinitialnetinvestmentoraninitialnetinvestmentthatissmallerthanwouldberequiredforothertypes of contracts that would be expected to have a similar response to changes in market factors.

• Itissettledatafuturedate.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm’s length transaction.

A financial asset is:• cash;• aresidualinterestofanotherentity;or• acontractualrightto:

- receive cash or another financial asset from another entity; or- exchange financial assets or financial liabilities with another entity under conditions that are potentially

favourable to the entity.

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

A financial liability is any liability that is a contractual obligation to:• delivercashoranotherfinancialassettoanotherentity;or• exchangefinancialassetsorfinancialliabilitiesunderconditionsthatarepotentiallyunfavourabletotheentity.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Liquidity risk is the risk encountered by an entity in the event of difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Loan commitment is a firm commitment to provide credit under pre-specified terms and conditions. Loans payable are financial liabilities, other than short-term payables on normal credit terms.

Accounting Policies

1.6 Financial instruments (continued)


PROOF

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.

A financial asset is past due when a counterparty has failed to make a payment when contractually due.

A residual interest is any contract that manifests an interest in the assets of an entity after deducting all of its liabilities. A residual interest includes contributions from owners, which may be shown as:• equityinstrumentsorsimilarformsofunitisedcapital;• aformaldesignationofatransferofresources(oraclassofsuchtransfers)bythepartiestothetransactionas

forming part of an entity’s net assets, either before the contribution occurs or at the time of the contribution; or• aformalagreement,inrelationtothecontribution,establishingorincreasinganexistingfinancialinterestinthe

net assets of an entity.

Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument.

Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial liabilities that have fixed or determinable payments, excluding those instruments that:• theentitydesignatesatfairvalueatinitialrecognition;or• areheldfortrading.

Financial instruments at cost are investments in residual interests that do not have a quoted market price in an active market, and whose fair value cannot be reliably measured.

classification

The entity has the following types of financial assets (classes and category) as reflected on the face of the statement of financial position or in the notes thereto:

class category Receivable from exchange transactions Financial asset measured at amortised cost Receivable from non-exchange transactions Financial asset measured at amortised cost Cash and cash equivalents Financial asset measured at amortised cost

The entity has the following types of financial liabilities (classes and category) as reflected on the face of the statement of financial position or in the notes thereto:

Accounting Policies



PROOF

class category Finance leases Financial liability measured at amortised cost Payables from exchange transactions Financial liability measured at amortised cost

initial recognition

The entity recognises a financial asset or a financial liability in its statement of financial position when the entity becomes a party to the contractual provisions of the instrument.

The entity recognises financial assets using trade date accounting.

initial measurement of financial assets and financial liabilities

The entity measures a financial asset and financial liability initially at its fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

The entity measures a financial asset and financial liability initially at its fair value [if subsequently measured at fair value]. The entity first assesses whether the substance of a concessionary loan is in fact a loan. On initial recognition, the entity analyses a concessionary loan into its component parts and accounts for each component separately. The entity accounts for that part of a concessionary loan that is:• asocialbenefitinaccordancewiththeFrameworkforthePreparationandPresentationofFinancialStatements,

where it is the issuer of the loan; or• non-exchangerevenue,inaccordancewiththeStandardofGRAPonRevenuefromNon-exchangeTransactions

(Taxes and Transfers), where it is the recipient of the loan.

Subsequent measurement of financial assets and financial liabilities

The entity measures all financial assets and financial liabilities after initial recognition using the following categories:• Financialinstrumentsatfairvalue.• Financialinstrumentsatamortisedcost.• Financialinstrumentsatcost.

All financial assets measured at amortised cost, or cost, are subject to an impairment review.

reclassification

The entity does not reclassify a financial instrument while it is issued or held unless it is:• combinedinstrumentthatisrequiredtobemeasuredatfairvalue;or• aninvestmentinaresidualinterestthatmeetstherequirementsforreclassification.

Where the entity cannot reliably measure the fair value of an embedded derivative that has been separated from a host contract that is a financial instrument at a subsequent reporting date, it measures the combined instrument at fair value. This requires a reclassification of the instrument from amortised cost or cost to fair value.

Accounting Policies



PROOF

If fair value can no longer be measured reliably for an investment in a residual interest measured at fair value, the entity reclassifies the investment from fair value to cost. The carrying amount at the date that fair value is no longer available becomes the cost.

If a reliable measure becomes available for an investment in a residual interest for which a measure was previously not available, and the instrument would have been required to be measured at fair value, the entity reclassifies the instrument from cost to fair value.

gains and losses

A gain or loss arising from a change in the fair value of a financial asset or financial liability measured at fair value is recognised in surplus or deficit.

For financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired, or through the amortisation process.

Derecognition

Financial assets

The entity derecognises financial assets using trade date accounting. The entity derecognises a financial asset only when:• thecontractualrightstothecashflowsfromthefinancialassetexpire,aresettledorwaived;• theentitytransferstoanotherpartysubstantiallyalloftherisksandrewardsofownershipofthefinancialasset;

or• theentity,despitehavingretainedsomesignificantrisksandrewardsofownershipofthefinancialasset,has

transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party, and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. In this case, the entity :- derecognise the asset; and- recognise separately any rights and obligations created or retained in the transfer.

The carrying amounts of the transferred asset are allocated between the rights or obligations retained and those transferred on the basis of their relative fair values at the transfer date. Newly created rights and obligations are measured at their fair values at that date. Any difference between the consideration received and the amounts recognised and derecognised is recognised in surplus or deficit in the period of the transfer.

If the entity transfers a financial asset in a transfer that qualifies for derecognition in its entirety and retains the right to service the financial asset for a fee, it recognise either a servicing asset or a servicing liability for that servicing contract. If the fee to be received is not expected to compensate the entity adequately for performing the servicing, a servicing liability for the servicing obligation is recognised at its fair value. If the fee to be received is expected to be more than adequate compensation for the servicing, a servicing asset is recognised for the servicing right at an amount determined on the basis of an allocation of the carrying amount of the larger financial asset.

Accounting Policies



PROOF

If, as a result of a transfer, a financial asset is derecognised in its entirety but the transfer results in the entity obtaining a new financial asset or assuming a new financial liability, or a servicing liability, the entity recognise the new financial asset, financial liability or servicing liability at fair value.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit.

If the transferred asset is part of a larger financial asset and the part transferred qualifies for derecognition in its entirety, the previous carrying amount of the larger financial asset is allocated between the part that continues to be recognised and the part that is derecognised, based on the relative fair values of those parts, on the date of the transfer. For this purpose, a retained servicing asset is treated as a part that continues to be recognised. The difference between the carrying amount allocated to the part derecognised and the sum of the consideration received for the part derecognised is recognised in surplus or deficit.

If a transfer does not result in derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset, the entity continue to recognise the transferred asset in its entirety and recognise a financial liability for the consideration received. In subsequent periods, the entity recognises any revenue on the transferred asset and any expense incurred on the financial liability. Neither the asset, and the associated liability nor the revenue, and the associated expenses are offset.

Financial liabilities

The entity removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished — i.e. when the obligation specified in the contract is discharged, cancelled, expires or waived.

An exchange between an existing borrower and lender of debt instruments with substantially different terms is accounted for as having extinguished the original financial liability and a new financial liability is recognised. Similarly, a substantial modification of the terms of an existing financial liability or a part of it is accounted for as having extinguished the original financial liability and having recognised a new financial liability.

The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in surplus or deficit. Any liabilities that are waived, forgiven or assumed by another entity by way of a non-exchange transaction are accounted for in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers).

Presentation

Interest relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.

Dividends or similar distributions relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.

Losses and gains relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.

Accounting Policies



PROOF

Distributions to holders of residual interests are debited by the entity directly to net assets, net of any related income tax benefit [where applicable]. Transaction costs incurred on residual interests is accounted for as a deduction from net assets, net of any related income tax benefit [where applicable].

A financial asset and a financial liability are only offset and the net amount presented in the statement of financial position when the entity currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

In accounting for a transfer of a financial asset that does not qualify for derecognition, the entity does not offset the transferred asset and the associated liability.

1.7 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

When a lease includes both land and buildings elements, the entity assesses the classification of each element separately.

Finance leases - lessee

Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease.

Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of on the remaining balance of the liability.

Any contingent rents are expensed in the period in which they are incurred.

operating leases - lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.

1.8 inventories

Inventories are initially measured at cost except where inventories are acquired through a non-exchange transaction, then their costs are their fair value as at the date of acquisition.

Accounting Policies



PROOF

Subsequently inventories are measured at the lower of cost and net realisable value.

Inventories are measured at the lower of cost and current replacement cost where they are held for;• distributionatnochargeorforanominalcharge;or• consumptionintheproductionprocessofgoodstobedistributedatnochargeorforanominalcharge.

Net realisable value is the estimated selling price in the ordinary course of operations less the estimated costs of completion and the estimated costs necessary to make the sale, exchange or distribution.

Current replacement cost is the cost the entity incurs to acquire the asset on the reporting date.

The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs.

The cost of inventories is assigned using the first-in, first-out (FIFO) formula. The same cost formula is used for all inventories having a similar nature and use to the entity.

When inventories are sold, the carrying amounts of those inventories are recognised as an expense in the period in which the related revenue is recognised. If there is no related revenue, the expenses are recognised when the goods are distributed, or related services are rendered. The amount of any write-down of inventories to net realisable value or current replacement cost and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value or current replacement cost, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

1.9 impairment of cash-generating assets

Cash-generating assets are those assets held by the entity with the primary objective of generating a commercial return. When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercial return.

Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).

Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated depreciation and accumulated impairment losses thereon.

A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

Accounting Policies

1.8 inventories (continued)


PROOF

Accounting Policies

Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.

Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.

Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

Recoverable amount of an asset or a cash-generating unit is the higher its fair value less costs to sell and its value in

use. Useful life is either:(a) the period of time over which an asset is expected to be used by the entity; or(b) the number of production or similar units expected to be obtained from the asset by the entity.

Criteria developed by the entity to distinguish cash-generating assets from non-cash-generating assets are as follow:

identification

When the carrying amount of a cash-generating asset exceeds its recoverable amount, it is impaired.

The entity assesses at each reporting date whether there is any indication that a cash-generating asset may be impaired. If any such indication exists, the entity estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the entity also test a cash-generating intangible asset with an indefinite useful life or a cash-generating intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed at the same time every year. If an intangible asset was initially recognised during the current reporting period, that intangible asset was tested for impairment before the end of the current reporting period.

1.10 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of surplus sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

1.9 impairment of cash-generating assets (continued)


PROOF

Accounting Policies

1.11 commitments

Items are classified as commitments when an entity has committed itself to future transactions that will normally result in the outflow of cash.

Disclosures are required in respect of unrecognised contractual commitments.

Commitments for which disclosure is necessary to achieve a fair presentation should be disclosed in a note to the financial statements, if both the following criteria are met:• Contractsshouldbenon-cancellableoronlycancellableatsignificantcost(forexample,contractsforcomputer

or building maintenance services); and• Contractsshouldrelatetosomethingotherthantheroutine,steady,statebusinessof theentity–therefore

salary commitments relating to employment contracts or social security benefit commitments are excluded.

1.12 revenue from exchange transactions

Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.

An exchange transaction is one in which the municipality receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Measurement

Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.

Sale of goods

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:• theentityhastransferredtothepurchaserthesignificantrisksandrewardsofownershipofthegoods;• theentityretainsneithercontinuingmanagerialinvolvementtothedegreeusuallyassociatedwithownership

nor effective control over the goods sold;• theamountofrevenuecanbemeasuredreliably;• itisprobablethattheeconomicbenefitsorservicepotentialassociatedwiththetransactionwillflowtothe

entity; and• thecostsincurredortobeincurredinrespectofthetransactioncanbemeasuredreliably.


PROOF

Accounting Policies

rendering of services

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:• theamountofrevenuecanbemeasuredreliably;• itisprobablethattheeconomicbenefitsorservicepotentialassociatedwiththetransactionwillflowtothe

entity;• thestageofcompletionofthetransactionatthereportingdatecanbemeasuredreliably;and• thecostsincurredforthetransactionandthecoststocompletethetransactioncanbemeasuredreliably.

When services are performed by an indeterminate number of acts over a specified time frame, revenue is recognised on a straight line basis over the specified time frame unless there is evidence that some other method better represents the stage of completion. When a specific act is much more significant than any other acts, the recognition of revenue is postponed until the significant act is executed.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. Stage of completion is determined by .

interest, royalties and dividends

Revenue arising from the use by others of entity assets yielding interest, royalties and dividends or similar distributions is recognised when:• Itisprobablethattheeconomicbenefitsorservicepotentialassociatedwiththetransactionwillflowtothe

entity, and• Theamountoftherevenuecanbemeasuredreliably.

Interest is recognised, in surplus or deficit, using the effective interest rate method.

Royalties are recognised as they are earned in accordance with the substance of the relevant agreements.

Dividends or similar distributions are recognised, in surplus or deficit, when the entity’s right to receive payment has been established.

Service fees included in the price of the product are recognised as revenue over the period during which the service is performed.

1.13 revenue from non-exchange transactions

Revenue comprises gross inflows of economic benefits or service potential received and receivable by an entity, which represents an increase in net assets, other than increases relating to contributions from owners.

1.12 revenue from exchange transactions (continued)


PROOF

Accounting Policies

Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be returned to the transferor.

Control of an asset arise when the entity can use or otherwise benefit from the asset in pursuit of its objectives and can exclude or otherwise regulate the access of others to that benefit.

Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange.

Expenses paid through the tax system are amounts that are available to beneficiaries regardless of whether or not they pay taxes.

Fines are economic benefits or service potential received or receivable by entities, as determined by a court or other law enforcement body, as a consequence of the breach of laws or regulations.

Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an entity either receives value from another entity without directly giving approximately equal value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange.

Restrictions on transferred assets are stipulations that limit or direct the purposes for which a transferred asset may be used, but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployed as specified.

Stipulations on transferred assets are terms in laws or regulation, or a binding arrangement, imposed upon the use of a transferred asset by entities external to the reporting entity.

Tax expenditures are preferential provisions of the tax law that provide certain taxpayers with concessions that are not available to others.

The taxable event is the event that the government, legislature or other authority has determined will be subject to taxation. Taxes are economic benefits or service potential compulsorily paid or payable to entities, in accordance with laws and or regulations, established to provide revenue to government. Taxes do not include fines or other penalties imposed for breaches of the law.

Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.

recognition

An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow.

1.13 revenue from non-exchange transactions (continued)


PROOF

Accounting Policies

As the entity satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.

Measurement

Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity. When, as a result of a non-exchange transaction, the entity recognises an asset, it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When a liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the liability is recognised as revenue.

transfers

Apart from Services in kind, which are not recognised, the entity recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset.

The entity recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset.

Transferred assets are measured at their fair value as at the date of acquisition.

1.14 cost of sales

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all deficits of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

The related cost of providing services recognised as revenue in the current period is included in cost of sales. Contract costs comprise:• coststhatrelatedirectlytothespecificcontract;• coststhatareattributabletocontractactivityingeneralandcanbeallocatedtothecontractonasystematic

and rational basis; and• suchothercostsasarespecificallychargeabletothecustomerunderthetermsofthecontract.

1.15 investment income

Investment income is recognised on a time-proportion basis using the effective interest method.

1.13 revenue from non-exchange transactions (continued)


PROOF

1.16 unauthorised expenditure

Unauthorised expenditure means:• overspendingofavoteoramaindivisionwithinavote;and• expenditurenotinaccordancewiththepurposeofavoteor,inthecaseofamaindivision,notinaccordance

with the purpose of the main division.

All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.17 Fruitless and wasteful expenditure

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.18 irregular expenditure

Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including -(a) this Act; or(b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or(c) any provincial legislation providing for procurement procedures in that provincial government.

National Treasury practice note no. 4 of 2008/2009 which was issued in terms of sections 76(1) to 76(4) of the PFMA requires the following (effective from 1 April 2008):

Irregular expenditure that was incurred and identified during the current financial and which was condoned before year end and/or before finalisation of the financial statements must also be recorded appropriately in the irregular expenditure register. In such an instance, no further action is also required with the exception of updating the note to the financial statements.

Irregular expenditure that was incurred and identified during the current financial year and for which condonement is being awaited at year end must be recorded in the irregular expenditure register. No further action is required with the exception of updating the note to the financial statements.

Where irregular expenditure was incurred in the previous financial year and is only condoned in the following financial year, the register and the disclosure note to the financial statements must be updated with the amount condoned.

Accounting Policies


PROOF

Accounting Policies

Irregular expenditure that was incurred and identified during the current financial year and which was not condoned by the National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accounting officer or accounting authority may write off the amount as debt impairment and disclose such in the relevant note to the financial statements. The irregular expenditure register must also be updated accordingly. If the irregular expenditure has not been condoned and no person is liable in law, the expenditure related thereto must remain against the relevant programme/expenditure item, be disclosed as such in the note to the financial statements and updated accordingly in the irregular expenditure register.

1.19 related parties

The entity operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the provincial sphere of government are considered to be related parties.

Management are those persons responsible for planning, directing and controlling the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions.

Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, that management in their dealings with the entity.

Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.

1.20 Events after reporting date

Events after reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Two types of events can be identified:• thosethatprovideevidenceofconditionsthatexistedatthereportingdate(adjustingeventsafterthereporting

date); and• those that are indicative of conditions that arose after the reporting date (non-adjusting events after the

reporting date).

The entity will adjust the amount recognised in the financial statements to reflect adjusting events after the reporting date once the event occurred.

The entity will disclose the nature of the event and an estimate of its financial effect or a statement that such estimate cannot be made in respect of all material non-adjusting events, where non-disclosure could influence the economic decisions of users taken on the basis of the financial statements.

1.18 irregular expenditure (continued)


PROOF

2. new standards and interpretations

2.1 Standards and interpretations issued, but not yet effective

The entity has not applied the following standards and interpretations, which have been published and are mandatory for the entity’s accounting periods beginning on or after 01 April 2015 or later periods:

Standard/ interpretation: Effective date: years beginning on or after

Expected impact:

• GRAP18:SegmentReporting 01 April 2015 The impact of the amendment is not material.

• GRAP105:Transfersoffunctionsbetweenentities under common control

01 April 2015 The impact of the amendment is not material.

• GRAP106:Transfersoffunctionsbetweenentities not under common control


• GRAP20:Relatedparties 01 April 2016 The impact of the amendment is not material.

• GRAP32:ServiceConcessionArrangements:Grantor


• GRAP108:StatutoryReceivables 01 April 2016 The impact of the amendment is not material.

•GRAP17:ServiceConcessionArrangementswhere a Grantor Controls a Significant Residual Interest in an Asset


• DIRECTIVE11:Changesinmeasurementbasesfollowing the initial adoption of Standards of GRAP


3. inventories

Consumable stores 52 011 47 707

inventory pledged as security

None of the above inventory are pledged as security.

notes to the Annual Financial Statements


PROOF


4. receivables from exchange transactions

Deposits 166 844 122 035

Other receivables - 1 168

Prepaid expenses Advance - Staff trip expenses

-11 945

90 193-

178 789 213 396

trade and other receivables pledged as security

None of the above receivables has been pledged as security.

credit quality of trade and other receivables

The credit quality of trade and other receivables that are neither past nor due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

trade receivables

counterparties without external credit rating

Group 1 56 754 1 168

Group 2 122 035 212 228

178 789 213 396

Group 1 – new customer (less 6 months). Group 2 – existing customer (more than 6 months) with no defaults in the past. Group 3 – existing customer (more than 6 months) with some defaults in the past. All defaults were fully recovered.

trade and other receivables past due but not impaired

None of the above receivable are past due and not impaired

trade and other receivables impaired

As of 31 March 2015, trade and other receivables of R - (2014: R -) were impaired and provided for. The amount of the provision was R - as of 31 March 2015 (2014: R -).

The carrying amount of trade and other receivables are denominated in the following currencies:

Rand 178 789 213 396

2015 2014


PROOF


5. receivables from non-exchange transactions

Sundry debtors 8 593 -

receivables from non-exchange transactions pledged as security

None of the above receivables were pledged as security.

credit quality of receivables from non-exchange transactions

The credit quality of other receivables from non-exchange transactions that are neither past nor due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

receivables from non-exchange transactions

counterparties without external credit rating

Group 3 8 593 -

Group 3 – existing customer (more than 6 months) with some defaults in the past. All defaults were fully recovered.

receivables from non-exchange transactions past due but not impaired

The ageing of amounts past due but not impaired is as follows:

3 months past due 8 593 -

receivables from non-exchange transactions impaired

As of 31 March 2015, other receivables from non-exchange transactions of R 36 208 (2014: R 56 430) were impaired and provided for.

The ageing of these loans is as follows:

Over 6 months 36 208 56 430

2015 2014


PROOF


The carrying amount of other receivables from non-exchange transactions are denominated in the following currencies:

Rand

reconciliation of provision for impairment of receivables from non-exchange transactions

8 593 -

Opening balance Provision for impairment Unused amounts reversed

56 430-

(20 222)

-56 430

-

36 208 56 430

6. cash and cash equivalents

Cash and cash equivalents consist of:

Cash on hand 10 444 8 971

Bank balances 12 200 220 2 497 980

Short-term deposits 14 431 695 484

12 225 095 3 202 435

credit quality of cash at bank and short term deposits, excluding cash on hand

The credit quality of cash at bank and short term deposits, excluding cash on hand that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or historical information about counterparty default rates:

credit rating

AA 12 214 651 3 193 464

cash and cash equivalents pledged as collateral

Total financial assets pledged as collateral - - None of the above accounts are provided as securities.

No restrictions have been placed on the use of cash and cash equivalents for the operations of the entity.

2015 2014


PROOF


7. Property, plant and equipment

2015 2014

cost / Valuation

Accumulated depreciation

and accumulated impairment

carrying value

cost / Valuation

Accumulated depreciation


carrying value

Furniture and fixtures 705 993 (294 564) 411 429 658 846 (201 546) 457 300

Motor vehicles 622 507 (279 233) 343 274 622 507 (163 675) 458 832

Office equipment 743 282 (423 341) 319 941 712 342 (319 674) 392 668

IT equipment 448 549 (192 725) 255 824 355 722 (118 737) 236 985

Other equipment 32 754 (4 519) 28 235 32 754 (2 882) 29 872

Photography equipment 6 884 (2 749) 4 135 8 908 (2 922) 5 986

MSICC Equipment 2 331 477 (574 979) 1 756 498 - - -

MSICC Furniture 186 698 (46 675) 140 023 - - -

MSICC Office equipment 500 (125) 375 - - -

total 5 078 644 (1 818 910) 3 259 734 2 391 079 (809 436) 1 581 643

reconciliation of property, plant and equipment - 2015

opening balance

Additions transfers received

Depreciation total

Furniture and fixtures 457 300 46 962 - (92 833) 411 429

Motor vehicles 458 832 - - (115 557) 343 275

Office equipment 392 668 32 514 - (105 241) 319 941

IT equipment 236 985 87 189 - (68 349) 255 825

Other equipment 29 872 - - (1 638) 28 234

Photography equipment 5 986 - - (1 851) 4 135

MSICC Equipment - - 2 331 477 (574 979) 1 756 498

MSICC Furniture - - 186 698 (46 674) 140 024

MSICC Office equipment - - 500 (125) 375

1 581 643 166 665 2 518 675 (1 007 247) 3 259 736


PROOF


reconciliation of property, plant and equipment - 2014

opening balance

Additions Depreciation total

Furniture and fixtures 504 482 42 725 (89 907) 457 300

Motor vehicles 178 879 354 189 (74 236) 458 832

Office equipment 475 900 21 118 (104 350) 392 668

IT equipment 284 179 21 535 (68 729) 236 985

Other equipment 31 510 - (1 638) 29 872

Photography equipment 434 7 473 (1 921) 5 986

1 475 384 447 040 (340 781) 1 581 643

Pledged as security

Finance lease assets with carrying value of R232 277 (2014: R358 488) have been pledged as security disclqwosed under office equipment. Refer to note 9 for more information on finance lease obligations.

8. intangible assets

2015 2014

cost / Valuation

Accumulated amortisation


carrying value

cost / Valuation

Accumulated amortisation and

accumulated impairment

carrying value

Computer software, other

132 961 (35 337) 97 624 24 987 (16 674) 8 313

reconciliation of intangible assets - 2015

opening balance

Additions Amortisation total

Computer software, other 8 313 107 974 (18 662) 97 625

reconciliation of intangible assets - 2014

opening balance

Additions Amortisation total

Computer software, other 7 148 7 048 (5 883) 8 313

Pledged as security

None of the above assest have been pledged as security.


PROOF

9. Finance lease obligation

Minimum lease payments due

- within one year 104 494 145 092

- in second to fifth year inclusive 20 450 79 955

124 944 225 047

less: future finance charges (24 874) (15 247)

Present value of minimum lease payments 100 070 209 800

Present value of minimum lease payments due

- within one year 85 672 132 873

- in second to fifth year inclusive 14 398 76 925

100 070 209 798

Non-current liabilities 14 397 76 927

Current liabilities 85 673 132 873

100 070 209 800

It is entity policy to lease certain office and IT equipment under finance leases.

The average lease term was 2 - 5 years and the average effective borrowing rate was 8% - 14% (2014:8% - 10%).

Interest rates are fixed at the contract date. All leases have fixed repayments and no arrangements have been entered into for contingent rent.

The entity’s obligations under finance leases are secured by the lessor’s charge over the leased assets. Refer note 7.

Defaults and breaches

There was no default during the period of principal, interest, sinking fund or redemption terms of loans payable. No terms were renegotiated before the financial statements were authorised for issue.

There is no contingent rent payable on finance lease agreements. There no restrictions placed on the finance lease agreements.

Market risk

The carrying amounts of finance lease liabilities are denominated in the following currencies:

Rand 100 070 209 800


2015 2014


PROOF


For details of sensitivity of exposures to market risk related to finance lease liabilities, as well as liquidity risk refer to note.

The fair value of finance lease liabilities approximates their carrying amounts.

10. Payables from exchange transactions

Trade payables 990 446 654 405

Income received in advance 46 286 57 310

Accrued leave pay 168 352 145 329

Accrued bonus 42 844 50 223

Other payables - 537

Unknown deposits 4 820 40 020

1 252 748 947 824

The carrying amount of payables from exchange transactions are denominated in the following currencies:

Rand 1 252 747 947 824

11. unspent conditional grants and receipts

unspent conditional grants and receipts comprises of:

unspent conditional grants and receiptsNational Lottery Board 197 474 392 526

Unido Regional Office 8 100 8 100

Department of Trade and Industry - SEZ Upington 9 565 582 -

9 771 156 400 626

Movement during the year

Balance at the beginning of the year 400 626 732 026

Additions during the year 21 149 100 9 572 000

Income recognition during the year (11 778 570) (9 903 400)

9 771 156 400 626

The nature and extent of government grants recognised in the annual financial statements and an indication of other forms of government assistance from which the entity has directly benefited; and

See note 15 for reconciliation of grants from Government.

2015 2014


PROOF

12. revenue

Sale of goods 852 217 788 107

Rendering of services 1 890 214 1 626 124

Other income 50 053 9 402

Interest received - investment 118 452 92 965

Government grants & subsidies 11 778 571 9 903 400

14 689 507 12 419 998

the amount included in revenue arising from exchanges of goods or services are as follows:

Sale of goods 852 217 788 107

Rendering of services 1 890 214 1 626 124


Interest received - investment 118 452 92 965

2 910 936 2 516 598

the amount included in revenue arising from non-exchange transactions is as follows:

Taxation revenue Transfer revenue Government grants & subsidies 11 778 571 9 903 400

13. other income


Tender fees 48 070 -

Refunds 865 -

50 053 9 402

14. investment revenue

interest revenue Bank 118 452 92 965


2015 2014


PROOF


15. government grants and subsidies

operating grants

Francis Baard District Municipality Industrial Development Corporation - CSP Crafters

-600 000

100 000-

National Lottery Board 195 052 379 400

Northern Cape Department of Economic Development and Tourism 5 255 000 9 400 000

UNIDO Regional Office Industrial Development Corporation- SEZ Upington

-5 728 518

24 000-

11 778 570 9 903 400

Francis Baard District Municipality

Current-year receipts - 100 000

Conditions met - transferred to revenue - (100 000)

- -

Conditions still to be met - remain liabilities (see note 11).

This is an unconditional grant received from the Francis Baard District Municipality that will be applied for the Wildebeestkuil Tourism Projects.

industrial Development corporation - cSP crafters

Current-year receipts 600 000 -

Conditions met - transferred to revenue (600 000) -

- -


This is an unconditional grant received that will be applied for funding of the CSP Crafters operations.

national Lottery Board

Balance unspent at beginning of year 392 526 771 926

Conditions met - transferred to revenue (195 052) (379 400)

197 474 392 526


This is a conditional grant received from the National Lottery Board that will be applied for the Wildebeestkuil Tourism Projects.

2015 2014


PROOF

northern cape Department of Economic Development and tourism

Current-year receipts 5 255 000 9 400 000

Conditions met - transferred to revenue (5 255 000) (9 400 000)

- -


This is an unconditional grant received that will be applied for the operational activities of the entity and other related projects.

uniDo regional office

Balance unspent at beginning of year8 100 (39 900)

Current-year receipts - 72 000

Conditions met - transferred to revenue - (24 000)

8 100 8 100


This is an conditional grant received from the UNIDO Regional Office that will be applied for the benchmarking projects of the entity and other related projects.

industrial Development corporation - SEZ upington

Current-year receipts 5 728 518 -

Conditions met - transferred to revenue (5 728 518) -

- -


This is an unconditional grant received that will be applied for the operational activities of the entity and other related projects for the SEZ Upington office.

Department of trade and industry - SEZ upington

Current-year receipts 9 565 582 -



2015 2014


PROOF


This is a conditional grant received that will be applied for the operational activities of the entity and other related projects for the SEZ Upington office.

16. Employee related costs

Basic 4 065 726 3 595 844

UIF 52 423 60 034

PAYE 1 199 942 1 067 747

Defined contribution plans 999 898 1 173 597

Board members and key management remuneration 1 631 148 753 593

7 949 137 6 650 815

remuneration of the chief Finance officer - t Mangojane

Annual Remuneration 714 143 663 923

remuneration of the Acting chief Executive officer - t Luse

Annual Remuneration 795 967 55 458

T Luse has been acting in the chief executive officer position from 1 March 2014 to 28 February 2015.

remuneration of the Acting chief Finance officer - P Kamolane

Annual Remuneration 71 753 -

P Kamolane has been acting in the chief financial officer position from 8 January 2015 to 8 May 2015.

remuneration of chairperson - u t Dikeni

Honorarium 46 985 27 301

remuneration of Deputy chairperson - r Majiedt

Honoraruim 2 300 6 911

2015 2014


PROOF


17. Finance costs

Trade and other payables 1 5 503

Finance leases 15 362 33 976

15 363 39 479

18. Debt impairment

Contributions to debt impairment provision (20 221) 56 430

The movement in the debt impairment related to receivables from non-exchange transactions disclosed in note 5

19. cost of sales

Sale of goods

Cost of goods sold 161 616 188 206

20. general expenses

Accounting fees 271 548 180 310

Advertising 128 214 261 913

Auditors remuneration 622 920 631 831

Bank charges 26 167 23 238

Benchmarking expenditure - 24 000

Catering - 2 482

Cleaning 73 340 60 079

Commissioning of Studies - 279 415

Compensation Commissioner 5 661 3 029

Computer expenses 65 930 30 176

Consulting and professional fees 872 513 1 972

Consumables 1 241 2 637

Donations - 9 000

Electricity 17 101 24 639

Employee wellness - 11 840

Entertainment 67 778 64 789

Export orientation expense - 1 024

Fines and penalties 47 038 20 228

Fuel and oil 44 988 59 881

IT expenses 13 976 -

2015 2014


PROOF


Insurance 207 316 154 311

Laundry expense 91 171 66 707

Licence and registrations 5 026 4 542

Motor vehicle expenses 29 121 12 052

Office expenditure 408 2 069

Other expenses 1 538 392

Postage and courier 680 14 452

Printing and stationery 172 885 207 755

Project expenses 208 392 376 875

Staff welfare 6 712 10 698

Subscriptions and membership fees 8 948 14 930

Technical assistance - 288

Telephone and fax 171 608 156 995

Training 47 921 100 566

Travel - local 1 311 167 432 927

Travel - overseas 1 016 652 -

Uniforms 530 8 871

Utilities 3 284 -

Website Development 6 270 -

5 548 044 3 256 913

21. Auditors’ remuneration

Fees 622 920 631 831

22. operating deficit

Operating deficit for the year is stated after accounting for the following:

operating lease charges

Premises

•Contingentamounts 1 169 813 1 004 666

Equipment

•Contractualamounts 75 665 63 612

1 245 478 1 068 278

Depreciation on property, plant and equipment 1 025 820 346 664

Employee costs 7 949 136 6 650 815

2015 2014


PROOF


23. cash generated from (used in) operations

Deficit (1 315 946) (189 380)

Adjustments for:

Depreciation and amortisation 1 025 820 346 664

Finance costs - Finance leases 15 362 33 976

Debt impairment (20 221) 56 430

changes in working capital:

Inventories (4 304) 18 304

Receivables from exchange transactions 34 608 (212 667)

Other receivables from non-exchange transactions 11 627 149 244

Payables from exchange transactions 304 925 (360 724)

Unspent conditional grants and receipts 9 370 530 (331 400)

9 422 401 (489 553)

24. Financial instruments disclosure

Categories of financial instruments

2015 Financial assets

At amortised cost

total

Trade and other receivables from exchange transactions 178 789 178 789

Other receivables from non-exchange transactions 8 593 8 593

Cash and cash equivalents 12 225 096 12 225 096

12 412 478 12 412 478


At amortised cost

total

Finance lease 100 067 100 067

Trade and other payables from exchange transactions 1 252 747 1 252 747

1 352 814 1 352 814

2015 2014


PROOF


2014 Financial assets

At amortised cost

total

Trade and other receivables from exchange transactions 213 396 213 396

Cash and cash equivalents 3 202 435 3 202 435

3 415 831 3 415 831


At amortised cost

total

Finance leases 209 800 209 800

Trade and other payables from exchange transactions 947 824 947 824

1 157 624 1 157 624

Financial instruments in Statement of financial performance

2015

At amortised cost

total

Net gains on financial instruments 20 221 20 221

Interest income (calculated using effective interest method) for financial instruments at amortised cost

118 452 118 452

Interest expense (calculated using effective interest method) for financial instruments at amortised cost

(15 363) (15 363)

123 310 123 310

2014

At amortised cost

total

Net losses on financial instruments (56 430) (56 430)

Interest income (calculated using effective interest method) for financial instruments at amortised cost

92 965 92 965

Interest expense (calculated using effective interest method) for financial instruments at amortised cost

(39 479) (39 479)

(2 944) (2 944)

2015 2014


PROOF

25. commitments

Authorised capital expenditure

Already contracted for but not provided for

•Property,plantandequipment 443 008 96 210

total capital commitments

Already contracted for but not provided at 31 March 2015 443 008 96 210

Authorised operational expenditure

Already contracted for but not provided for

•Operatingexpenditure 1 082 263 2 126 784

total operational commitmentsAlready contracted for but not provided at 31 March 2015 1 082 263 2 126 784

Total commitments

total commitmentsAuthorised capital expenditure 443 008 96 210

Authorised operational expenditure 1 082 263 2 126 784

1 525 271 2 222 994

This committed expenditure relates to capital and operating activities and will be financed by available accumulated surpluses, existing cash resources, funds internally generated and government assistance.

26. related parties

relationships

Board members with Influence U T Dikeni (Chairperson)

R Majiedt (Deputy Chairperson)

O H Fielding

Controlling entity with significant influence Northern Cape Department of Economic Development and Tourism Department of Environmental Affairs Entities under control of controlling department Northern Cape Tourism Authority

Members of key management T Luse

T Mangojane


2015 2014


PROOF


related party balances

Amounts included in trade receivable (trade Payable) regarding related parties

O H Fielding 21 909 21 909

related party transactions

grants received from related partiesDepartment of Economic Development and Tourism (Operational) 5 255 000 9 400 000

Provision for doubtful debtO H Fielding 21 909 21 909

travel claims paid to related partiesD Kruger - 248

O H FieldingT Luse

-27 821

909-

The compensation for key management personnel is set out in note 16 to the financial statements.

The honoraruim to board members is set out in note 16 to the financial statements.

27. risk management

Financial risk management

The entity’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The entity’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the entity’s financial performance. Risk management is carried out by a central treasury department (entity treasury) under policies approved by the accounting authority. Entity treasury identifies, evaluates and hedges financial risks in close co-operation with the entity’s operating units. The accounting authority provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, entity treasury maintains flexibility in funding by maintaining availability under committed credit lines.

2015 2014


PROOF


The entity’s risk to liquidity is a result of the funds available to cover future commitments. The entity manages liquidity risk through an ongoing review of future commitments and credit facilities.

Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored.

The table below analyses the entity’s financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

At 31 March 2015 Less than 1 year Between 1 and 2 years

Between 2 and 5 years

over 5 years

Finance lease obligations 104 495 20 450 - -

Trade and other payables 1 252 747 - - -

At 31 March 2014 Less than 1 year Between 1 and 2 years

Between 2 and 5 years

over 5 years

Finance lease obligations 145 092 79 955 - -

Trade and other payables 661 711 - - -

credit risk

Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and trade debtors. The entity only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses 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 with limits set by the board. The utilisation of credit limits is regularly monitored.

Financial assets exposed to credit risk at year end were as follows:

`Financial instrument 2015 2014

First National Bank 12 214 651 3 193 464

Other debtors - deposits 166 844 213 396

Staff debtors 11 945 -

2015 2014


PROOF


Market risk interest rate risk

As the entity has no significant interest-bearing assets, the entity’s income and operating cash flows are substantially independent of changes in market interest rates.

The entity analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the entity calculates the impact on surplus and deficit of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies.

At 31 March 2015, if interest rates on Rand-denominated borrowings had been 0.1% higher/lower with all other variables held constant, post-tax surplus for the year would have been R 155 (2014: R 278) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings; other components of equity would have been R 7 713 (2014: R 3 816) lower/higher mainly as a result of a decrease/increase in the fair value of fixed rate financial assets.

28. unauthorised expenditure The enitity had no unauthorised expenditure for the current financial year.

29. Fruitless and wasteful expenditure

Opening balance at 1 March 247 752 215 663

Fruitless and wasteful expenditure current year 28 357 32 089

276 109 247 752

Interest and penalties on the late payment of the South African Revenue Services amounts to R23 828 (2014: R5 499) (2013: R30 527)

Interest levied on the late payment of suppliers amounts to R4 529 (2014: R3 645) (2013: R49) Fines and penalties on cancellation of bookings amounts to R0 (2014: R22 945)

Expenditure incurred for the recruitment of an CEO, the entity could not recruit a suitable CEO and did not have sufficient funds to appoint an CEO amounts to R80 620 for 2013.

30. irregular expenditure

Opening balance7 935 442 7 369 194

Add: Irregular Expenditure - current year 648 596 566 248

8 584 038 7 935 442

2015 2014


PROOF

Analysis of expenditure awaiting condonation per age classification

Current year Prior years

648 596-

-7 935 442

648 596 7 935 442

Details of irregular expenditure – current year

Three quotations were not obtained for procurement between R2 000 and R500 000 as required by the Practice Note 8 of 2008. Quotations were not evaluated in accordance with the preferention points system as required by the PPPF Act. No tender process followed for procurement more than R500 000. Certain suppliers were overpaid.

Disciplinary steps taken/criminal proceedings

No action taken 648 596

31. Prior period errors

Expenditure relating to the 2013/14 financial year was incorrectly recorded in the 2014/15 financial year.

The correction of the error(s) results in adjustments as follows:

Statement of financial position

Increase in Trade and other payablesOpening Accumulated Surplus or Deficit

-286 113

286 113-

Statement of Financial PerformanceRepairs and maintenance (195 694) 195 694

General expenses (90 419) 90 419

32. going concern

We draw attention to the fact that at 31 March 2015, the entity had accumulated deficits of R 4 697 873 and that the entity’s total liabilities exceed its assets by R 4 697 873.

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The ability of the entity to continue as a going concern is dependent on a number of factors. The most significant of these is that the member continue to procure funding for the ongoing operations for the entity and that regular and contious subsidies will be received by the entity from the Departments.


2015 2014


PROOF

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