C-BRTA Annual Report 2018-19 v12 WEB · 2019-10-07 · acant THE CEO acant CHIEF FINANCIAL OFFICER...
Transcript of C-BRTA Annual Report 2018-19 v12 WEB · 2019-10-07 · acant THE CEO acant CHIEF FINANCIAL OFFICER...
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2018-19
Annual R
ep rt
Annual Report 2018/19 Cross-Border Road Transport Agencyiii
Part B
P
erformance Inform
ation ........................19
1. A
uditor-General’s R
eport: Pre-D
etermined O
bjectives ............................................................20
2. S
ituational Analysis ...................................................................................................................20
3. S
trategic Outcom
e Oriented G
oals ...........................................................................................22
4. Perform
ance Information by P
rogramm
e .................................................................................24
4.1 P
RO
GR
AM
ME 1: A
DM
INIS
TRATIO
N ................................................................................25
4.2 P
RO
GR
AM
ME 2: R
EGU
LATOR
Y S
ERVIC
ES ....................................................................29
4.3 P
RO
GR
AM
ME 3: P
RO
FILING
SER
VICES
.........................................................................32
4.4 P
RO
GR
AM
ME 4: S
TAK
EHO
LDER
MA
NA
GEM
ENT ..........................................................34
4.5 P
RO
GR
AM
ME 5: R
ESEA
RC
H A
ND
AD
VISO
RY
SER
VICES
.............................................37
C ntents
Part A
G
eneral Information ..................................vi
1. G
eneral Information of the C
ross-Border R
oad Transport Agency ...........................................1
2. List of A
bbreviations/Acronym
s ..................................................................................................2
3. Forew
ord by the Chairperson of the B
oard ................................................................................3
4. C
hief Executive O
fficer’s Overview
.............................................................................................7
5. S
tatement of R
esponsibility and Confirm
ation of Accuracy for the A
nnual Report ...............11
6. S
trategic Overview
....................................................................................................................12
7. Legislative and other M
andates ................................................................................................13
8. O
rganisational Structure ...........................................................................................................16
9. B
oard Mem
bers .........................................................................................................................17
Annual Report 2018/19Cross-Border Road Transport Agency
iv
Part C
G
overnance ..............................................40
1. Introduction ................................................................................................................................42
2. P
ortfolio Com
mittees M
eetings ................................................................................................42
3. The E
xecutive Authority ............................................................................................................43
4. The B
oard ...................................................................................................................................47
5. R
isk Managem
ent ......................................................................................................................48
6. Internal C
ontrol ..........................................................................................................................48
7. Internal A
udit And A
udit Com
mittees .......................................................................................48
8. C
ompliance W
ith Laws A
nd Regulations .................................................................................49
9. Fraud A
nd Corruption ................................................................................................................50
10. M
inimising C
onflict Of Interest ..................................................................................................50
11. C
ode Of C
onduct .......................................................................................................................50
12. H
ealth Safety A
nd Environm
ental Issues..................................................................................50
13. C
ompany S
ecretary ...................................................................................................................51
14. S
ocial Responsibility .................................................................................................................51
15. A
udit And R
isk Com
mittee R
eport ............................................................................................52
Part D
H
uman R
esources Managem
ent .............54
1. Introduction ................................................................................................................................55
2. H
uman R
esources Oversight S
tatistics ....................................................................................56
Part E
Financial Inform
ation ...............................60
Index ..................................................................................................................................................61
Accounting A
uthority’s Responsibilities and A
pproval ....................................................................62
Report of the A
uditor-General ..........................................................................................................63
Statem
ent of Financial Position ........................................................................................................66
Statem
ent of Financial Perform
ance ................................................................................................66
Statem
ent of Changes in N
et Assets................................................................................................67
Cash Flow
Statem
ent ........................................................................................................................67
Statem
ent of Com
parison of Budget and A
ctual Am
ounts .............................................................68
Accounting P
olicies ...........................................................................................................................70
Notes to the A
nnual Financial Statem
ents .......................................................................................88
Detailed Incom
e Statem
ent ............................................................................................................103
Annual Report 2018/19 Cross-Border Road Transport Agencyv
GEN
ERAL
INFO
RMATIO
N
PART A
Nature of business and principal activities
Regulator of C
ross-Border R
oad Transport
Registered office
Business address
Glen M
anor Office P
ark
Building 3
138 Frikkie De B
eer Street
Menlyn
Pretoria
South A
frica
Postal addressP
O B
ox 560
Menlyn
0063
Pretoria
South A
frica
Telephone number
+27 12 471 2000
Fax number
+27 12 369 8485
Website address
ww
w.cbrta.co.za
Auditors
Auditor-G
eneral of South A
frica
Bankers
First National B
ank
5th Floor, FN
B M
enlyn Place
Cnr. Lois Avenue and A
tterbury
Menlyn, P
retoria, South A
frica
Com
pany/ Board Secretary
Vincent Mashale (A
CIS
)
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Annual Report 2018/19 Cross-Border Road Transport Agency1
PART A
: GEN
ERAL IN
FORM
ATION
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6
MA
RM
arket Access R
egulationsM
inME
CM
inisters and Mem
bers of Executive Councils M
eetingM
TEF
Medium
Term Expenditure Fram
ework
MTS
FM
edium Term
Strategic Fram
ework
ND
PN
ational Developm
ent Plan
NR
TAN
ational Road Traffic A
ctN
TBN
on-Tariff Barrier
OC
AS
Operator C
ompliance A
ccreditation Schem
eO
GE
FRE
MO
ffice of the Managem
ent of Multim
odal FreightP
CO
TP
ortfolio Com
mittee on Transport
PFM
AP
ublic Finance Managem
ent Act
RE
CR
egional Economic C
omm
unities
RE
MC
OR
emuneration C
omm
itteeR
SA
Republic of S
outh Africa
RTI
Road Transport Inspectorate
RTM
CR
oad Traffic Managem
ent Cooperation
SA
BO
AS
outh African B
us Operators A
ssociation S
AC
BO
AS
outh African C
ross Border O
perators Association
SA
CU
Southern A
frican Custom
s Union
SA
DC
Southern A
frican Developm
ent Com
munity
SA
IPFA
South A
frican International Passenger and Freight A
ssociationS
AN
RA
LS
outh African N
ational Roads A
gencyS
CM
Supply C
hain Managem
entS
MM
ES
mall M
edium and M
icro Enterprises
TKC
Trans Kalahari C
orridorTVE
TTechnical Vocational Education and Training
AG
MA
nnual General M
eetingA
GS
AA
uditor General of S
outh Africa
AP
PA
nnual Perform
ance Plan
AS
CB
OR
A
nnual State of C
ross Border O
perations Report
CB
MC
ollaborative Border M
anagerC
-BR
TAC
ross-Border R
oad Transport Agency
C-B
RTS
Cross-B
order Road Transport S
ystemC
EO
Chief Executive O
fficerC
FOC
hief Financial Officer
CIO
Chief Inform
ation Officer
CO
BIT
Control O
bjectives for Information and R
elated Technologies C
OO
Chief O
perations Officer
CO
TOC
omm
ittee of Transport Officials
CO
ME
SA
Com
mon M
arket for Eastern and Southern A
frica
CP
IXC
onsumer P
rice IndexD
oTD
epartment of Transport
DP
ME
Departm
ent of Planning, M
onitoring and EvaluationE
AC
East African C
omm
unityE
XC
OExecutive C
omm
itteeIC
TInform
ation Com
munication Technology
ITILInform
ation Technology Infrastructure Library JC
Joint Com
mittee
JRM
GJoint R
oute Managem
ent Group
LAP
Linking Africa P
lan
Annual Report 2018/19Cross-Border Road Transport Agency 2
Introduction
It is humbling and delightful having led the C
ross-Border R
oad Transport
Agency (C
-BR
TA) in a year in w
hich it celebrated twenty years (20) in
existence. The Agency has faced num
erous challenges throughout this
journey, many of w
hich tested its character and standing and in certain
instances threatening its survival and legitimacy. The m
ost prominent
of these challenges has been an unsustainable funding regime,
with perm
it revenue being the single source of income for the
Agency. It is a pleasant feeling that w
e can proclaim assuredly
that the Agency has been able to successfully navigate through
its challenges and implem
ent its bold mandate.
In its twenty years of existence, the A
gency has morphed
from only licensing com
mercial cross-border operators to
regulating the cross-border road transport industry with
a view of cham
pioning the seamless cross-border flow
of
comm
ercial freight and passenger transport between S
outh
Africa and the countries of the S
outhern African D
evelopment
Com
munity (S
AD
C) by road.
The Agency is w
ell poised to achieve its mandate of regulating
the passenger transport operators, liberalising market access
for freight transport operators, eliminating im
pediments that
constrain the flow of passengers and goods across the border,
reducing operational constraints that have a negative impact on
the cross-border road transport industry and building industry
partnerships to empow
er the industry.
The Agency’s m
andate has positioned it to be a key player necessary
for the
achievement
of an
efficient and
effective international
road
transport service in SA
DC
with the intention to enhance regional integration,
industrialisation and the economic grow
th of the region.
3. �25):
25(�&<�7,)��,%-53)5621
Annual Report 2018/19 Cross-Border Road Transport Agency3
PART A
: GEN
ERAL IN
FORM
ATION
High-level overview of the C-BRTA and
performance in the cross-border road
transport sector
Pursuant of its strategic goal to facilitate the unim
peded
flow
of cross-border
road transport,
the A
gency
implem
ented the
Market
Access
Regulatory
(MA
R)
tool. The tool is a scientific mechanism
that enables the
Agency to consider the dem
and and supply dynamics on
the routes and corridors in its decision making regarding
issuance of passenger transport permits. D
uring the
year under
review,
the R
egulatory C
omm
ittee, the
Agency’s quasi-judicial structure w
hich considers permit
applications made use of the tool in its decision m
aking to
ensure that the routes are not over-saturated.
The Agency prioritised efforts tow
ards the development of
the Operator C
ompliance A
ccreditation Scheme (O
CA
S).
The scheme is envisaged to be a useful resource to be
used as a predetermined risk profiling system
to separate
compliant from
non-compliant operators w
ith a view of
prioritising the seamless m
ovement of com
pliant operators.
This scheme also aim
s to ensure a high level of compliance
to regulatory requirements thereby contributing tow
ards
enhanced road safety and the reduction of accidents and
fatalities on the roads. In the year under review, the A
gency
engaged various stakeholders to obtain buy-in and support
of the scheme and a socio-econom
ic impact assessm
ent
was conducted w
ith respect to the implem
entation of
OC
AS
and the
OC
AS Im
plementation
Manuals
were
also developed. These efforts are building towards the
complete O
CAS that w
ill connect SAD
C countries through
a coherent and harmonised regulatory regim
e.
The A
gency continues
to strategically
position itself
to promote regional integration and that of the African
continent as a whole. To this end, w
e have developed the
Linking Africa P
lan, our trademark transport and trade plan
as a tangible means to m
obilise the relevant stakeholders
towards unlocking increased regional trade as w
ell as
increasing trade within the A
frican continent. The Plan
was review
ed and finalised during the year under review
and forms part of the w
ork plan of the Cross-B
order Road
Transport R
egulators Forum
(C
-BR
TRF).
The A
gency
currently chairs this forum w
hich is a body constituted of
road transport regulators from all S
AD
C m
ember states.
The Agency produced the A
nnual State of C
ross Border
Operations R
eport (AS
CB
OR
) which has been shared w
ith
various stakeholders in the cross-border road transport
environment.
This report
details current
information
and trends on the trade and transport value chains in
the SA
DC
region and is one of the value-add advisory
tools intended to benefit our stakeholders. The report for
2018/19 financial year articulated on the state of cross-
border road infrastructure (hard and soft infrastructure)
and constraints
facing cross-border
operations in
the Com
mon M
arket for Eastern and Southern A
frica
(CO
MES
A),
Eastern A
frican C
omm
unity (EA
C)
and
Southern
African
Developm
ent C
omm
unity (S
AD
C).
The report also covers the state of regional integration
and progress made tow
ard integrating transport in the
Tripartite (C
OM
ESA
-EAC
-SA
DC
) region,
progress on
implem
entation of continental and regional programm
es
with a bearing on cross-border road transport and offers
recomm
endations on reforms and action plans w
hich
may be useful in addressing the identified challenges.
The Agency also developed country profiles for N
amibia
and Zam
bia w
hich provide
relevant and
up-to-date
information
to cross-border
transport operators
and
the general domestic industry as they intend to pursue
various opportunities in these countries. These country
profiles focused on critical factors that have an impact
on cross-border road transportation such as the state
of cross-border trade and the transport industry in the
country profiled,
traffic volum
es and
the notew
orthy
features of
the cross-border
regulatory environm
ent.
The country
profile reports
also highlight
economic
opportunities and developments that m
ay affect cross-
border road transport operations and are therefore used
to empow
er Sm
all-Micro-M
edium-Enterprises (S
MM
Es)
entering the relevant cross-border market.
The year under review saw
the pilot of a “Cross-B
order Flow
Calculator” project w
ith the aim of calculating the econom
ic
impact of delays at various land ports of entry. The pilot
studies of
the project
were
conducted at
Beitbridge,
Lebombo and G
robler’s Bridge border posts and the transit
times w
ere determined for the said border posts. D
uring
these pilot studies, the Agency, as a part of its Border
Town’s initiative, trained 132 young people from
the Musina,
Nkom
azi and Lephalale municipalities as data capturers.
The overall performance level of the Agency against the
2018/19 Annual
Performance
Plan w
as at
92.31%,
representing achievem
ent of
twelve
out of
thirteen
performance targets.
3. �25):
25(�&<�7,)��,%-53)5621��'217��
Annual Report 2018/19Cross-Border Road Transport Agency 4
Strategic RelationshipsN
oting the transnational nature of cross-border road
transport, the
Agency
prioritised various
stakeholder
engagements in line w
ith its Stakeholder M
anagement
Plan. C
entral to these engagements w
as a view to deal
with constraints that im
pede the free flow of passengers
and goods between our borders and the rest of the
region. In the course of these engagements, the A
gency
maintained a register of constraints as raised by its
stakeholders, many of w
hich have been resolved.
The Agency’s m
andate requires that in the course of
facilitating the unimpeded flow
of passengers and goods
through road
transport in
the region
it collaborates
with various stakeholders w
ithin the cross-border road
transport space. We continue to collaborate w
ith both
domestic
stakeholders (national
departments,
fellow
regulatory agencies, provincial authorities, municipalities,
metros and transport operators) and regional counterparts
to address operational constraints that are a challenge to
efficient cross-border road transport operations.
Dom
estic stakeholders
were
engaged through
the
National S
takeholder Consultative Forum
, a statutory body
established in terms of the C
ross-Border R
oad Transport
Act (N
o 4 of 1998) which consists of relevant governm
ent
departments and entities w
ith an interest in the cross-
border space. Municipalities w
ere also engaged through
the municipal fora to discuss m
atters as they impact
the Agency’s m
andate. Various sessions of the operator
fora were convened for all operator categories and their
respective sector fora. The Agency also participated in
meetings of the B
order Managem
ent Agency (B
MA
) and the Inter-Agency
Clearing Forum
(IAC
F). There are on-going engagements w
ith the Road
Traffic Managem
ent Corporation (R
TMC
) as part of overseeing the
function of the cross-border law enforcem
ent function performed
under the principal/agency relationship.
At a regional level, the A
gency convened various Joint Route
Managem
ent G
roup m
eetings (m
eeting of
operators and
officials from
R
SA
and
other m
ember
state) and
Joint
Com
mittee (officials from
RS
A and other m
ember state)
meetings. The A
gency was also represented in the m
eetings
of the Trans Kalahari C
orridor (TKC
), Maputo D
evelopment
Corridor (M
DC
) Working G
roup and the Maputo C
orridor
Logistics Initiative (MC
LI).
The Agency continues to seek a lasting solution to the
RS
A/Lesotho im
passe. In the year under review, the
Agency
participated in
the N
ational M
inisterial Task
Team (N
MTT) w
hich consists of representatives from the
Departm
ent of Transport; the Free State D
epartment of
Police, R
oads and Transport and the Lesotho Ministry of
Public W
orks and Transport. The Provinces of K
waZulu-
Natal and the Eastern C
ape are also represented in the team.
A draft bilateral agreem
ent between the R
epublic of South
Africa and the K
ingdom of Lesotho has been drafted and is
under consideration.
Challenges faced by the Board
The non-promulgation of the 2018 Perm
it Tariff Regulations rem
ained
a threat to the Agency’s financial sustainability in the year under review.
Cost containm
ent measures w
ere instituted to afford the Agency a fighting
chance against an eminent financial disaster w
hich negatively affected
Annual Report 2018/19 Cross-Border Road Transport Agency5
PART A
: GEN
ERAL IN
FORM
ATION
Conclusion
The Agency is com
mitted to deliver on its core m
andate
and to maintain a high-perform
ance culture underpinned
by a
robust internal
control and
risk m
anagement
environment.
Acknowledgem
ents
The B
oard sincerely
thanks the
former
Minister
of
Transport, Dr B
onginkosi Blade N
zimande for his guidance
and direction, the former D
eputy Minister of Transport,
Ms S
indisiwe C
hikunga for her unwavering support, the
entire leadership of the Departm
ent of Transport and the
Portfolio C
omm
ittee of Transport which w
as led by Ms
Dikeledi M
agadzi.
We also w
elcome the new
Minister of Transport, M
r
Fikile Mbalula and the new
Deputy M
inister, Ms D
ikeledi
Magadzi and pledge our com
mitm
ent to working w
ith
both the Minister and D
eputy Minister in m
oving South
Africa and the rest of the S
AD
C region forw
ard.
I also wish to thank the collective of the B
oard and the
leadership of the Agency under the C
EO, M
r Sipho
Khum
alo as well as the entire staff of the C
-BR
TA.
Mr M
Ram
athe
Chairperson of the B
oard
Date: 30 July 2019
some of the planned organisational targets. The target for
the implem
entation of prioritised interventions as per the
Enterprise Architecture Roadm
ap was not achieved for the
year as projects had to be reprioritised.
There was also uncertainty in the Agency due to the litigation of
the 2014 Permit Tariff R
egulations which w
as pending for the
major part of the financial year. The m
atter was subsequently
concluded in favour of the Agency in February 2019.
On the regulatory side, the challenge on issuance of
passenger permits for R
SA
/Lesotho route remained a
challenge. The said impasse started in 1999 and has
since been a challenge that affects and impedes norm
al
passenger cross border movem
ents on the Lesotho/
RS
A
route. The
Minister
of Transport
established a
National M
inisterial Task Team (N
MTT) tasked w
ith the
responsibility of
developing a
lasting solution
to the
impasse and its w
ork is still in progress.
The Board rem
ains with four vacancies as at the end of
March 2019, as is thus not constituted in line w
ith the
provisions of the Cross-B
order Road Transport A
ct (No
4 of 1998). The vacancies on the Board negatively affect
the composition of the R
egulatory Com
mittee, w
hich is a
quasi-judicial structure established in terms of the C
ross-
Border R
oad Transport Act. The recruitm
ent of the Board
mem
bers is the purview of the M
inister of Transport and
the matter has been accordingly escalated to the M
inister
and the Departm
ent of Transport. The term of the current
Board ended at the end of A
pril 2019 and has been
extended for a period not exceeding six months.
Medium
to long-term goals of the C-BRTA /
The year ahead
Noting
that w
e have
come
to the
end of
the 5th
Adm
inistration, the Agency is gearing itself to develop a
new five-year strategic plan in line w
ith its mandate as
articulated in the Cross-B
order Road Transport A
ct, and
the policy direction and priorities of the ruling party.
In view of its m
andate, the Agency w
ill continue with the
following initiatives am
ong others: -
V D
evelopment
of the
Operator
Com
pliance
Accreditation S
cheme (O
CA
S);
V D
evelopment of the C
ross-Border Flow
Calculator;
V C
ompilation of the A
nnual State of C
ross Border
Operations R
eport (AS
CB
OR
);
V D
evelopment of country profiles;
V Im
plementation of the Industry D
evelopment S
trategy
enabling the
Agency
to m
eaningfully contribute
towards the transform
ation and development of the
cross-border industry;
V Engagem
ents w
ith various
stakeholders to
build
relations, resolve constraints and impedim
ents in the
cross-border road transport environment; and
V Im
plementation of the Linking A
frica Plan w
ith a view
of enhancing harmonization of road transport system
with the regions, prom
oting regional integration and
trade across the continent.
The Agency w
ill also continue with the developm
ent of an
Integrated Cross B
order Managem
ent System
to improve
efficiencies in its operations and to deliver an increased
value to cross-border operators and other stakeholders.
Identified revenue streams w
ill also be pursued to ensure
financial sustainability of the Agency.
3. �25):
25(�&<�7,)��,%-53)5621��'217��
Annual Report 2018/19Cross-Border Road Transport Agency 6
Introduction
It is a privilege to present this Annual R
eport on behalf of the Cross-B
order Road Transport A
gency (C-B
RTA
). We hereby
submit to the P
arliament in the R
epublic of South A
frica, through the Executive Authority, the M
inister of Transport: Mr
Fikile Mbalula, the A
nnual Report, associated w
ith performance inform
ation, and audited annual financial statements
of the Agency for the financial year ended 31 M
arch 2019.
The Annual R
eport has been prepared in line with the A
nnual Report G
uide for schedule 3A and 3C
public entities
as issued by the National Treasury and fairly represents the w
ork of the C-B
RTA
for the financial year ending March
2019. The outputs of the Annual R
eport are in accordance with the predeterm
ined objectives contained in the
Annual P
erformance P
lan for the financial year 2018/19 approved by the Board and tabled in P
arliament of S
outh
Africa by the M
inister of Transport.
This Annual R
eport is a reflection on the meaningful progress achieved by the A
gency in implem
enting its mandate
as conferred by the Cross-B
order Road Transport A
ct (No. 4 of 1998) for the 2018/19 financial year, a year
in which the A
gency celebrated its 20th year of existence. We have achieved considerable strides in
improving and m
aintaining high organisational performance, strengthening relations w
ith our
stakeholders through various stakeholder engagement fora, and ensuring the services
we provide add value to our custom
ers, the passenger and freight operators whom
we regulate through the issuance of cross-border perm
its.
The past year has been challenging for the Agency and S
outh Africa in general.
Despite the bleak econom
ic outlook, the C-B
RTA
was able to im
plement its
mandate and register m
eaningful gains toward the seam
less movem
ent of
people and goods between S
outh Africa and the rest of the S
outhern African
Developm
ent Com
munity (S
AD
C).
The Agency’s Linking A
frica Plan adopted in principle for im
plementation by
majority of m
ember states in S
AD
C at the O
R Tam
bo International Road
Transport Indaba in October 2017 continues to gain traction as a tangible
plan towards facilitating the seam
less movem
ent of people and goods
between the borders of the region’s countries, a necessary precursor for
the region’s industrialisation and socio-economic developm
ent.
4. �,-)*��;)'87-9)�
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Annual Report 2018/19 Cross-Border Road Transport Agency7
PART A
: GEN
ERAL IN
FORM
ATION
The Agency finalised the plan w
hich has been endorsed
by SA
DC
mem
ber states at an Executive Com
mittee
(EXCO
) meeting of the C
ross-Border R
oad Transport
Regulators
Forum
(C-B
RTR
F) w
hich took
place in
Maputo, M
ozambique on 25 M
arch 2019. The forum,
which
is a
collaborative effort
by all
regulators of
international road transport in the SA
DC
region under the
leadership of South A
frica’s chairpersonship, concretised
its operational and governance framew
ork at the same
meeting. The A
gency continues to provide leadership
through the C-B
RTR
F to advance the harmonisation of
the region’s road transport regulatory environment in line
with C
hapters 5 and 6 of the SA
DC
Protocol on Transport,
Com
munications and M
eteorology (SA
DC
Protocol).
The im
plementation
of the
Agency’s
stakeholder
managem
ent plan served as an integral vehicle through
which w
e were able to deliver value to our custom
ers,
specifically ow
ing to
the transnational
and cross-
cutting nature of cross-border road transport. During
the 2018/19 financial year, we strengthened relations
with
crucial dom
estic and
international stakeholders
through various fora and engagements, such as the
National S
takeholder Consultative Forum
, bilateral Joint
Com
mittee/ Joint R
oute Managem
ent Group m
eetings,
operator fora, various industry associations and individual
operator engagem
ents.
A
compliance
assessment
report to monitor the level of com
pliance by mem
ber
states to the SA
DC
Protocol w
as finalised and will ensure
that future stakeholder engagements centre on lobbying
for the implem
entation of this strategic instrument.
Efforts to resolve the ongoing impasse on the regulation
of passenger cross-border operations between S
outh
Africa and the K
ingdom of Lesotho rem
ained a focus
area in the year under review. The A
gency coordinated
engagements w
ith the key stakeholders to consolidate a
unified approach toward the resolution of the challenge,
these include the Departm
ent of Transport, the Free
State D
epartment of P
olice, Roads and Transport, the
Modiboho Taxi Forum
, Local Traffic Officers and B
order
Managem
ent C
omm
ittee.
A
Working
Group
was
established and will serve as a platform
for issues which
require engagement to be facilitated.
General financial review
The A
gency experienced
financial
constraints during the financial year, which
were brought about by perm
its tariffs which
were not increased as envisaged due to the litigation on
the 2014 Perm
it Tariff Regulations w
hich was pending
for the better part of the financial year. Consequently,
the Agency’s operations w
ere funded from 2014 perm
it
tariffs as their review rem
ained outstanding throughout
the financial year. In response to this reality, the Agency
implem
ented cost containment m
easures to enhance
its financial standing thereby supporting operational and
strategic service delivery. This judicious exercise enabled
the Agency to rem
ain as a going concern and meet its
legal and financial obligations.
A total revenue of R
399,163 million w
as recorded for the
period ending March 2019, of w
hich R194,801 m
illion is
permit revenue. The perm
it revenue was below
target by
13% (R
28,985 million), and dow
n by 9% (R
18,798 million)
on the same period last year. Included in the revenue
of R399,163 m
illion is an amount of R
162 million of
unclaimed refunds w
hich was w
ritten back as the claims
had prescribed during the year.
Penalty incom
e increased from R
29,974 million in the
previous financial
year to
R41,644
million.
Although
the penalty revenue has increased, revenue received is
utilised to service the agency principal relationship with
RTM
C and therefore does not relieve the financial burden
to the Agency.
The judgement handed dow
n by the Gauteng H
igh Court
on 28 February 2019 which dism
issed the application
by the Central A
frican Road S
ervices challenging the
authority of the Minister to prom
ulgate the 2014 Perm
it
Tariff Regulations w
as a positive development. The court
judgement upheld the validity of the regulations thus
enabling the Agency to review
tariffs on an annual basis.
Spending trends of the public entity
Total expenditure to end-March 2019 totalled R
224,047
million, consisting m
ainly of employee costs and general
expenditure of R126,314 m
illion and R93,726 m
illion
respectively. Employee costs w
as 9% or R
11,985 million
below
budget but
14%
or R
15,422 higher
year on
year as only critical position were filled during the year
under review. O
perational costs were R
17,077 million
higher year on year due to inflationary increases as well
4. �,-)*��;)'87-9)�
*=')5�6� 9)59-):
��'217��Annual Report 2018/19Cross-Border Road Transport Agency 8
as implem
entation of some critical projects during the
year. During the year, the entity recognised R
162,717
prescription revenue as a result of the application of
Prescription A
ct on the operator claims. C
onsequently,
the surplus therefore to end-April 2019 w
as R180,990
million. W
ith the exclusion of the prescription revenue,
surplus from norm
al operations was 40%
or R11,987
million below
budget and 65% or R
36,830 million less
than the same period in 2018. The surplus w
ill be retained
to fund integrated cross border system to im
prove the
efficiency of the Agency.
Capacity constraints and Challenges
The Agency regards its em
ployees as critical assets in
service delivery and thereby fulfilling its legislative mandate.
In the year under review, efforts w
ere made, despite the
Agency’s financial constraints, to prioritise the filling of
vacant positions
critical for
the A
gency’s operations.
The Agency continues to em
power em
ployees through
focussed training interventions.
Discontinued activities
There were no discontinued operations that took place
during the year under review.
SCM processes and system
s in place
The SC
M processes and system
s are in place and are
reviewed as and w
hen is necessary as per the PFM
A
and Treasury Regulations. The A
gency complies w
ith the
National Treasury instruction notes and regulations on
supply chain managem
ent as issued from tim
e to time.
The C-B
RTA
did not have unsolicited bid proposals for
the year under review.
Reflecting on past performance
In the year under review, the A
gency achieved 92% on
pre-determined objectives w
hich is the same as the
previous financial year.
I also wish to highlight the follow
ing achievem
ents:
V 90 217 cross-border perm
its were issued to facilitate
the m
ovement
of goods
and passengers
in the
region.
V A
s part of developing and implem
enting a new cross-
border m
anagement
system,
business case
on
phase one of the cross-border managem
ent system
was approved, w
hich is aimed at system
s integration
and accessibility for the cross-border operators.
Annual Report 2018/19 Cross-Border Road Transport Agency9
PART A
: GEN
ERAL IN
FORM
ATION
transport operators
and traders; as well
as to enhance the
competitiveness
of
the cross-border
road transport
environment.
V A
s an
initiative to
empow
er S
MM
Es,
the Agency profiled
Nam
ibia and
Zambia w
ith a view to support inform
ed decision
making relating to operations w
ithin the cross-border
road transport
environment.
The country
profile
reports further identify possible opportunities for the
SM
MEs.
Acknowledgem
ents
I would like to thank the form
er Minister of Transport,
Dr B
onginkosi Nzim
ande for his leadership in the year
under review. The support and guidance from
the former
Deputy M
inister of Transport, Ms S
indisiwe C
hikunga
and the Acting D
irector-General of Transport, M
r Chris
Hlabisa cam
e highly appreciated.
The Agency w
ishes to acknowledge and appreciate the
unwavering support of the S
outh African P
arliament,
through the Portfolio C
omm
ittee on Transport which w
as
led by Ms D
ikeledi Magadzi.
I would also like to w
elcome the new
Minister of Transport,
Mr Fikile M
balula, the new D
eputy Minister, M
s Dikeledi
Magadzi and the new
Portfolio C
omm
ittee of Transport
V The 2018 P
ermit Fee R
egulations were developed
and submitted to the D
epartment of Transport (D
oT).
V The
Agency
conducted a
post im
plementation
assessment of the M
arket Access R
egulation tool
with an intention to im
prove its effectiveness.
V The
implem
entation m
anuals for
the O
perator
Com
pliance A
ccreditation S
cheme
(OC
AS
)
were
developed and
a S
ocio-Economic
Impact
Assessm
ent was carried out for O
CA
S.
V A
stakeholder managem
ent plan was im
plemented to
support the effective engagement of stakeholders.
V The A
gency continues to have annual engagements
with
counterparts through
Joint C
omm
ittees as
prescribed in the bilateral Road Transport A
greements
that South A
frica has concluded with S
AD
C m
ember
states with a view
to implem
ent the SA
DC
Protocol
and address
challenges faced
by cross-border
operators. In the financial year under review, these
engagements
were
facilitated w
ith B
otswana,
Mozam
bique, Sw
aziland and Lesotho.
V The A
gency continued to implem
ent its Border Tow
ns
Initiatives. For the year under review, a total of hundred
and thirty-two (132) young people from
the Musina,
Nkom
azi, and
the Lephalale
Local M
unicipalities
were em
powered during the piloting of the m
odel to
calculate transit times at com
mercial border posts.
V The A
nnual State of C
ross Operations w
as conducted,
and the report thereto was shared w
ith the Minister
of Transport
and other
stakeholders. The
report
seeks to equip its users with valuable inform
ation
that will enable them
to address various transport
and trade
challenges, reduce
tariff and
non-tariff
barriers (NTB
s) and operational constraints faced by
under the leadership of Honourable M
sebenzi Zwane
to this vibrant sector and assure the Minister, D
eputy
Minister and the P
ortfolio Com
mittee of our support in
moving S
outh Africa forw
ard.
I am grateful to the m
anagement team
and the staff, who
have shown an enorm
ous amount of com
mitm
ent and
team spirit.
A w
ord of gratitude is extended to the C-B
RTA
Board of
Directors and the leadership of M
r Mos R
amathe.
I conclude by thanking our cross-border operators for
the feedback and support, particularly as expressed by
their attendance to our various stakeholder forums. W
e
remain resolute in our quest to serve w
ith humbleness,
integrity and excellence.
Mr C
ollin
s Letso
alo
Chief E
xecutive Officer (A
cting)
Date: 30 July 2019
4. �,-)*��;)'87-9)�
*=')5�6� 9)59-):
��'217��Annual Report 2018/19Cross-Border Road Transport Agency
10
To the best of my know
ledge and belief, I confirm the follow
ing:
All inform
ation and amounts disclosed in the annual report is consistent w
ith the Annual Financial S
tatements audited by the A
uditor General of S
outh Africa (A
GS
A).
The Annual R
eport is complete, accurate and is free from
any omissions.
The Annual R
eport has been prepared in accordance with the guidelines on the annual report as issued by the N
ational Treasury.
The Annual Financial S
tatements (P
art E) have been prepared in accordance with the S
tandards of Generally R
ecognised Accounting P
ractise (GR
AP
), including any interpretations,
guidelines and directions issued by the Accounting S
tandards Board.
The accounting authority is responsible for the preparation of the annual financial statements and for the judgem
ents made in this inform
ation.
The accounting authority is responsible for establishing and implem
enting a system of internal control w
hich has been designed to provide reasonable assurance as to the
integrity and reliability of the performance inform
ation, the human resources inform
ation and the annual financial statements.
The AG
SA
is engaged to express an independent opinion on the Annual Financial S
tatements.
In our opinion, the annual report fairly reflects the operations, the performance inform
ation, the human resources inform
ation and the financial affairs of the C-B
RTA
for the
financial year ended 31 March 2019.
Yours faithfully
Mr C
ollin
s Letso
alo
Mr M
os R
amath
e
Chief E
xecutive Officer (A
cting)
C
hairperson of the Board
Date: 30 July 2019
Date: 30 July 2019
5. #7%7)0
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21=50%7-21�2*��
''85%'<�*25�7,)��118%/�"
)3257Annual Report 2018/19 Cross-Border Road Transport Agency11
PART A
: GEN
ERAL IN
FORM
ATION
6. S
trategic Overview
The Cross-B
order Road Transport A
gency’s (C-B
RTA
) exists to improve the flow
of passengers and freight by road transport in the region; introduce regulated competition in passenger
cross-border road transport; liberalise market access progressively in respect of the cross-border freight road transport; reduce operational constraints for the cross-border road
transport industry; enhance transport trade facilitation; provide oversight and monitoring functions and build industry partnerships to strategically reposition the C
-BR
TA.
Below
is a snapshot of the Agency’s Vision, M
ission, Core Values, S
trategic Goals and O
bjectives:
Diagram
1: C-B
RTA’s V
ision, Mission, C
ore Values, Strategic G
oals and ObjectivesM
ISS
ION
W
e spearhead the unim
peded flow
of Inter-State operations
thereby facilitating sustainable social and econom
ic developm
ent
GO
AL 1 Facilitate unim
peded flow of cross-border transport
GO
AL 2 S
trategic positioning to promote integration of the A
frican continent
GO
AL 3 P
romote safe and reliable cross-border transport
GO
AL 4 Enhance organisational perform
ance in order to improve sustainability
STR
ATEG
IC O
BJE
CTIVE
S1. To introduce and im
plement regulated com
petition of cross border movem
ents
as pertaining to cross border movem
ents
2. To improve com
pliance with road transport legislation
3. To establish and sustain strategic partnerships with stakeholders so as to
enable the Agency to achieve its objectives
4. To proactively provide value added advisory services to the Minister of
Transport and other relevant stakeholders on cross border matters in the
transport sector
5. To proactively promote transform
ation and development of the cross-border
industry
6. To ensure the financial viability and sustainability of the C-B
RTA
7. To improve efficiencies in business operations
CO
RE
VALU
ES
- “ITRE
ES
” Integrity, Transparency, R
eliability, Efficiency, Effectiveness and Social responsibility
VISION The cham
pion of
free-flowing Inter-State
operations
Annual Report 2018/19Cross-Border Road Transport Agency
12
7. Legislative and P
olicy M
andatesThe C
-BR
TA is a national public entity listed in accordance
with S
chedule 3A of the P
ublic Finance Managem
ent Act,
No 1 of 1999 (P
FMA
).
7.1. Consitutional M
andate
In execution of the Agency’s m
andate, the C-B
RTA
shall
comply w
ith the Constitution of the R
epublic of South
Africa as the suprem
e law of this country w
ith specific
reference to the following sections:
V S
ection 9: Bill of R
ights
V S
ection 41: Co-operative governance values;
V S
ection 195: Basic values and principles governing
public administration; and
V S
ections 231: International agreements.
7.2. Cross-Border Road Transport Act
The Cross-B
order Road Transport A
gency (C-B
RTA
) was
established in terms of the C
ross-Border R
oad Transport
Act, A
ct 4 of 1998, as amended and places the follow
ing
key responsibilities on the Agency:
V im
prove the unimpeded transport flow
by road of
freight and passengers in the region;
V liberalise m
arket access progressively in respect of
the cross-border freight road transport;
V introduce regulated com
petition in respect of cross-
border passenger road transport;
V reduce operational constraints for the cross-border
road transport industry as a whole;
V enhance and strengthen the capacity of the public
sector in support of its strategic planning, enabling
and monitoring functions; and
V to em
power the cross-border road transport industry
to maxim
ise business opportunities and to regulate
themselves increm
entally to improve safety, security,
reliability, quality and efficiency of services.
7.3. National Land Transport Act (NLTA), 5 OF 2009
The N
LTA
provides for
the process
of transform
ing
and restructuring the national land transport system. It
provides for the mandate of the three spheres of authority
in the transport sector and confers mandate to these
authorities to perform certain functions that includes
regulation.
7.4. National Road Traffic Act (NRTA), 93 of 1996 as Am
ended
This Act provides for road traffic m
atters which shall
apply uniformly throughout the R
epublic of South A
frica.
The NR
TA, provides for traffic regulations that govern
licensing of motor vehicles, operation of m
otor vehicles,
vehicle road worthiness, driver licensing and fitness of
drivers.
7.5. Tourism
Act, 3, Of 2014
The Tourism
A
ct provides
for the
development
and
promotion of sustainable tourism
for the benefit of the
republic, its residents and its visitors. The Agency has
the m
andate to
conduct law
enforcem
ent regarding
compliance to road traffic regulations in the tourism
sector.
7.6. Policy M
andate
Below
is a table indicating additional policy mandates
that the Agency is envisaged to contribute tow
ards:
Annual Report 2018/19 Cross-Border Road Transport Agency13
PART A
: GEN
ERAL IN
FORM
ATION
Table 1: Policy M
andatesN
ATION
AL D
EVE
LOP
ME
NT P
LAN
(ND
P)
CH
AP
TER
7
PO
SITIO
NIN
G S
OU
TH
AFR
ICA
IN TH
E W
OR
LD
Objectives
V Intra-regional trade in S
outhern Africa should increase from
7 percent of trade to 25 percent of trade by 2030.
V S
outh Africa’s trade w
ith regional neighbours should increase from 5 percent of our trade to 30 percent.
Action
V Im
plement a focused regional integration strategy w
ith emphasis on road, rail and port infrastructure in the region.
V R
educe red tape, corruption and delays at border posts.C
HA
PTE
R 13:
BU
ILDIN
G A
CA
PAB
LE
STATE
Objectives
V S
taff at all levels has the authority, experience, competence and support they need to do their jobs.
V R
elations between national, provincial and local governm
ent are improved through a m
ore proactive approach to managing the intergovernm
ental system
.V
Clear governance structures and stable leadership enable state-ow
ned enterprises (SO
Es) to achieve their developmental potential.
Action
V U
se assessment m
echanisms such as exam
s, group exercises and competency tests to build confidence in recruitm
ent systems.
V U
se placements and secondm
ents to enable staff to develop experience of working in other spheres of governm
ent.V
Take a more proactive approach to resolving coordination problem
s and a more long-term
approach to building capacity.V
Adopt a less hierarchical approach to coordination so that routine issues can be dealt w
ith on a day-to-day basis between m
id-level officials. Use the
cluster system to focus on strategic cross-cutting issues and the P
residency to bring different parties together when coordination breaks dow
n. V
Develop public interest m
andates for SO
Es. Improve coordination betw
een policy and shareholder ministries by m
aking them jointly responsible for
appointing the board. Ensure appointment processes are credible and that there is greater stability in appointm
ents.C
HA
PTE
R 14:
FIGH
TING
CO
RR
UP
TION
Objective
A corruption-free society, a high adherence to ethics throughout society and a governm
ent that is accountable to its people.
Action
V A
n accountability framew
ork should be developed, linking the liability of individual public servants to their responsibilities in proportion to their seniority.
V C
lear rules restricting business interests of public servants should be developed.
V C
orruption in the private sector is reported on and monitored by an agency like the P
ublic Protector.
V R
estraint-of-trade agreements for senior civil servants and politicians at all levels of governm
ent.
AII corrupt officials should be m
ade individually liable for all losses incurred because of their corrupt actions.
Annual Report 2018/19Cross-Border Road Transport Agency
14
SA
DC
PR
OTO
CO
L ON
TRA
NS
PO
RT, C
OM
MU
NIC
ATION
S A
ND
ME
TEO
RO
LOG
Y
V D
evelop harmonised road transport policy providing for equal treatm
ent, non-discrimination and reciprocity.
V Liberalise m
arket access for road freight operators.
BILATE
RA
L AG
RE
EM
EN
TS betw
een South A
frica and Malaw
i, Mozam
bique, Zam
bia and Zim
babwe
V P
romote and facilitate cross-border road freight and passenger.
V S
implify existing adm
inistrative requirements - H
armonisation.
V Ensure com
pliance to regulations.1996 W
HITE
PAP
ER
ON
TRA
NS
PO
RT
Identifies the broad goal of transport, being to achieve smooth and efficient interaction that allow
s society and the economy to assum
e their preferred form and play a leadership role
as a catalyst for development. The P
aper also sets out the transport vision of the Republic to provide safe, reliable, effective, efficient, and fully integrated transport operations and
infrastructure which w
ill best meet the needs of freight and passenger custom
ers amongst others.
SA
CU
MoU
Provides for facilitation and m
aintenance of effective road transport arrangements, and equitable shares in road transportation w
ith a view to supporting trade in the C
ustoms U
nion. TR
AN
S K
ALA
HA
RI C
OR
RID
OR
(TKC
) MO
U
Provides for prom
otion of effective and integrated managem
ent of the TKC
. The TKC
was established w
ith a view to im
prove regional trade and economic developm
ent through efficient
transport. Improving the efficiency of transportation is brought about by reduction of constraints and bottlenecks w
hilst at the same tim
e reducing externalities, improving m
arket access
and improving productivity.
International convention on the harmonisation of frontier controls of goods, of 1982,
Designed to enhance the harm
onisation and facilitation of efficient road transport movem
ents.C
ON
VEN
TION
ON
RO
AD
TRA
FFIC, O
F 1968
Provides for facilitation of road traffic and increasing road safety through the adoption of uniform
road traffic rules.
Annual Report 2018/19 Cross-Border Road Transport Agency15
PART A
: GEN
ERAL IN
FORM
ATION
8. 5+%1-6%7-21%/�#
758'785)
CHIEF OPERATIONS OFFICERNchaupe M
aepa
EXECUTIVE MANAGER:
RESEARCH AND DEVELOPMENT
Samson Koloi
CHIEF INFORMATION OFFICER
Tintswalo Shilow
aEXECUTIVE M
ANAGER: CORPORATE SERVICES
Kethabile Mabe COM
PANY SECRETARY Vincent M
ashale
EXECUTIVE MANAGER:
REGULATORY SERVICESVacant
EXECUTIVE MANAGER:
OFFICE OF THE CEOVacant
CHIEF FINANCIAL OFFICER (ACTING) Silence M
motong
CHIEF EXECUTIVE OFFICER (ACTING)
Collins Letsoalo
BO
AR
D O
F D
IREC
TOR
S
MIN
ISTER O
F TR
AN
SPOR
T
EXECUTIVE MANAGER:
STAKEHOLDER RELATIONS Sibulele Dyodo
Annual Report 2018/19Cross-Border Road Transport Agency
16
9. �2%5(��
)0&)56
Mr M
osoeunyane Ramathe
Chairperson of the Board
Formal Q
ualificationsV
B C
om, W
itsV
B C
om A
cc, Wits
V C
hartered Accountant (S
A)
V D
iploma in P
roject Managem
ent (RA
U)
Prof Jan Havenga Deputy Chairperson of the Board
Formal Q
ualificationsV
Doctorate of P
hilosophy in Logistics M
anagement, U
niversity of Stellenbosch
V M
BL (U
NIS
A)
V B
A H
ons, (UO
FS)
Ms Ignatia Sekonyela
Board mem
ber
Formal Q
ualificationsV
Advanced Labour Law
, UN
ISA
V S
enior Managem
ent Developm
ent
Program
me, U
P B
usiness School
V D
iploma H
R, D
amelin
V B
A H
onneurs Sielkunde, R
AU
V B
Cur D
egree: Medunsa
Ms Keitum
etse Mahlangu
Board mem
ber
Formal Q
ualificationsV
B.P
RO
C, U
niversity of Zululand V
LLB, U
niversity of Natal
V M
AP, W
its Business S
choolV
Certificate in Fraud Exam
ination , UP
V Legislative D
tafting, Institute of Adavanced
Legal Studies, U
niv. of London
Mr Dennis Baloyi
Board mem
ber
Formal Q
ualificationsV
M S
c (Town and Transport P
lanning)V
M P
hil (Urban S
tudies)V
BA
(Developm
ent Studies)
Mr Lucky Thekisho
Board mem
ber
Formal Q
ualificationsV
BLC
, LLB, LLM
(Labour Law) (U
P)
V A
dvanced Labour Law (C
E@U
P)
V Legislative D
rafting (CE@
UP
)V
Environmental Law
and Com
pliance (UJ)
Annual Report 2018/19 Cross-Border Road Transport Agency17
PART A
: GEN
ERAL IN
FORM
ATION
9. �2%5(��
)0&)56��'217��
Mr M
sondezi FutshaneDepartm
ent of Transport Representative
Formal Q
ualificationsV
B Tech in Transportation Engineering (TU
T)V
Transportation Managem
ent Diplom
a (RA
U)
V D
iploma in A
dvanced Project M
anagement,
Executive Education V
S4 in C
ivil Engineering (ND
), Eastern Cape
Technikon
Mr Collins Letsoalo
Chief Executive Officer (Acting)
Formal Q
ualificationsV
BC
om (Econom
ics and Finance) – University
of Natal
V D
iploma in C
entral Banking – Institute O
f B
ankers South A
frica (IOB
SA
)V
Advanced D
iploma in C
entral Banking –
Institute Of B
ankers South A
frica (IOB
SA
)V
Diplom
a in Treasury Managem
ent and Trade Finance - Institute O
f Bankers S
outh Africa
(IOB
SA
)V
International Capital M
arkets Qualification –
London Securities Institute
V C
ertified Associate of the Institute for B
ankers in S
outh Africa (C
AIB
(SA
))
Annual Report 2018/19Cross-Border Road Transport Agency
18
PART B
Perform
anceInform
antion
PART B: PERFO
RMA
NC
E INFO
RMATIO
N
1. A
uditor-General’s R
eport: Pre-D
etermined
Objectives
The AG
SA
performs the necessary audit procedures on the perform
ance information to
provide reasonable assurance in the form of an audit conclusion. The audit conclusion
on the performance against predeterm
ined objectives is included in the report to
managem
ent.
Refer to page 63 of the A
uditors Report that is published as P
art E: Financial Information.
2. S
ituational Analysis
Implem
entation of the 2018/19 AP
P coincided w
ith the Agency’s celebrations of its
twentieth years in existence. In celebrating this m
ilestone, the Agency com
mitted
to continue striving to position itself as a value-adding entity in the cross-border
transportation sector and to contribute to the growth of the regional econom
y. In line with
this comm
itment, the Linking A
frica Plan (LA
P) initiative w
as introduced. LAP
is a transport
and trade plan with the aim
of improving free flow
of goods and people across the region
through harmonized standards and system
s. The AP
P w
as based on the reviewed 2015-
2020 Strategic P
lan focusing on the Linking Africa them
e. The theme necessitated a
thorough assessment of various aspects of the service delivery environm
ent that would
enhance service delivery, improve regional integration and harm
onization.
The Agency rem
ained focused on the need to continuously enhance its stakeholder
collaboration efforts with a view
to facilitating unimpeded flow
of goods and people.
To that extent, the stakeholder managem
ent role was enhanced to ensure coordinated
stakeholder collaboration efforts on areas of harmonization and inform
ation sharing
while responding to the daily needs of cross-border operators. The 2018/19 A
nnual
Perform
ance Plan w
as geared to meet stakeholders’ expectations in relation to m
aking
contribution to transportation and trade value chain, to enable the Agency to m
ake the
anticipated impact on econom
ic development.
2.1. Service Delivery Environment
The year under review w
as the second year since the migration of the law
enforcement
function to the Road Traffic M
anagement C
orporation (RTM
C) based on the principal-agent
relationship. This relationship was form
ed with the understanding that w
hilst the Agency
provides intelligence that assists in focused deployments of law
enforcement, the R
TMC
will
perform cross border law
enforcement function.
During 2018/19, the Agency continued to m
onitor efforts in relation to enforcing compliance
with the C
ross-Border R
oad Transport Act and conditions of issued permits through the
function of the Profiling unit. The Profiling unit is further undergoing efforts to provide
intelligence to the Road Transport Inspectorate and to collaborate w
ith the RTM
C and other
law enforcem
ent agencies with a view
of ensuring that the cross-border law enforcem
ent
mandate is carried out.
The Agency’s focus also stretches on to the aspects of industry developm
ent through
the capacitation of the SMM
E’s in border towns as w
ell as career development for young
people in schools and institutions of higher learning. This is part of the efforts to strategically
position the Agency and contribute tow
ards local economic developm
ent, particularly to
comm
unities along the cross-border corridors and those closer to the borders. Through the
border towns initiative, hundred and thirty-tw
o young people from M
usina and Lephalale in
Limpopo as w
ell as Naas, K
omatiepoort and H
ectorspruit in Mpum
alanga were trained and
gained knowledge on cross-border road transportation m
atters and skills in data collection
and capturing.
Annual Report 2018/19Cross-Border Road Transport Agency
20
2.2. Organisational environment
The C-B
RTA
found itself in a stable yet dynamic situation as it celebrated 20 years
of existence. The dynamic nature of the organisational environm
ent resulted from the
Agency’s efforts to adapt and respond to the needs of the surrounding environm
ent as
informed by global m
arket demands. The A
gency found itself pressing harder to attain
high performance culture as w
ell as to transform and be an em
ployer of choice. The
rationale underlying the Agency’s efforts is to ultim
ately improve its overall perform
ance
and spearhead social and economic developm
ent within the S
AD
C region through
facilitating unimpeded cross-border road transport m
ovements.
Som
e of the initiatives undertaken focused on business improvem
ent, policy reviews
and enterprise architecture. These initiatives will assist w
ith regards to the appropriate
configuration as well as alignm
ent of the strategy, structure, systems and processes to
deliver on the mandates of the A
gency.
The C-B
RTA
staff mem
bers are vibrant and always poised on the delivery of good and
quality services to our clients (mainly operators). The A
gency has a diverse team of
different skills and competencies that enables professional service delivery in an effective
and efficient manner.
The Agency’s value system
is used as a point of reference and staff mem
bers show
comm
itment to living the values. S
ince the Agency’s business dem
ands a level of
integrity; there are strides taken to promote the values.
There was uncertainty in the organisation resulting from
the pending litigation of the 2014
Perm
it Tariff Regulation. Furtherm
ore, the litigation of 2014 permit tariff regulations led to
delays in the promulgation of new
tariff regulations. With the non-prom
ulgation of tariffs,
the Agency could not generate adequate revenue to fund its operations. C
ost containment
measures w
ere put in place leading to a situation where som
e critical positions could not
be filled.
2.3. Key policy development and legislative changes
There have been no major changes to relevant policies and legislation during the year
under review.
Annual Report 2018/19 Cross-Border Road Transport Agency21
PART B: PERFO
RMA
NC
E INFO
RMATIO
N
3. S
trategic Outcom
e Oriented G
oalsThe table below
provides a summ
ary of progress made tow
ards the achievement of the strategic goals of the A
gency.
Table 2: Progress m
ade towards the achievem
ent of Strategic G
oals
V The M
arket Access Regulation (M
AR) tool w
as developed and implem
ented to provide statistics in relation
to supply and demand of passenger transport based on the route’s carrying capacity. The tool enables the
Regulatory C
omm
ittee to take informed decisions w
hen considering passenger permits applications.
V� B
alancing supply and demand of passenger transport on cross border corridors contribute tow
ards
achieving free flow as it curbs consequences of oversaturation of routes.
V The A
gency developed and implem
ented the Stakeholder M
anagement P
lan – an initiative which is
intended to boost transport and trade as stakeholders engage to jointly deal with constraints that
impedes m
ovements w
hen trading across the region.
V The A
gency, as part of implem
enting the Stakeholder M
anagement P
lan, engaged with various
stakeholders as part of its efforts to add value to the integration of the continent. This takes the form
of engagements w
ith mem
ber states in various platforms on the im
plementation of the S
AD
C P
rotocol
on Transport, Com
munication and M
eteorology as well as regional agreem
ents. This include Joint
Com
mittee m
eetings with various m
ember states to deal w
ith constraints faced by the operators as
well as participation in regional initiatives w
hich seeks to reduce delays at the border amongst others
and enhance regional integration.
V The C
ross-Border R
oad Transport Regulators’ Forum
, which is constituted of regulators from
various
mem
bers states, was established by S
AD
C M
inisters of Transport to pursue regional harmonization
agenda and implem
entation of the protocol.
V The A
nnual State of C
ross-Border R
eport (AS
CB
OR
) is produced with a view
of advising and
influencing stakeholders to implem
ent initiatives to improve corridor efficiencies.
V A
Cross-B
order Flow calculator w
as primarily pursued to determ
ine transit times and calculate the
cost of delays at the borders with a view
of influencing decision making on border m
odernization.
01
STRATEGIC GOALPROGRESS M
ADE TOWARDS THE ACHIEVEM
ENT OF GOALS
02
FAC
ILITATE
UN
IMP
ED
ED
FLOW
O
F CR
OS
S-B
OR
DE
R
TRA
NS
PO
RT
OUR VISION The C
hampion
of free-flowing
interstate operations
OUR MISSION
We spearhead the
unimpeded flow
of interstate operations thereby facilitating sustainable social
and economic
development
STR
ATEG
IC P
OS
ITION
ING
TO
PR
OM
OTE
IN
TEG
RATIO
N O
F THE
A
FRIC
AN
CO
NTIN
EN
T
Annual Report 2018/19Cross-Border Road Transport Agency
22
V The A
gency has conceptualized, and it is developing an Operator C
ompliance A
ccreditation Schem
e
(OC
AS
), which seeks to transform
how cross-border road transport is regulated. O
CA
S w
ill once
implem
ented, connect SA
DC
countries through a coherent and harmonised regulatory regim
e
separating compliant from
non-compliant operators based on a predeterm
ined risk profiling system
thereby promoting safe and reliable transport.
V The S
ection 39 report is compiled quarterly w
ith a purpose of profiling operators. The profiling of
operators assists with determ
ining the compliance status of the operators w
hich is useful as a point of
reference when R
egulatory Com
mittee m
ake decisions on permit applications.
V The A
gency is pursuing the levying of “cross-border charges on foreign vehicles” as an alternative
revenue stream w
hile also ensuring equal treatment of the S
outh African C
ross-Border
Operators. To that extent, the A
gency undertook a comprehensive study of the cross-
border charges applicable in all countries in SA
DC
and developed a business case on the
introduction of cross border charges. The introduction of cross border charges will also level
the playing field for South A
frican operators as the charges will be harm
onized with those of
other mem
ber states. This proposed revenue stream is still a w
ork-in-progress and therefore
has not contributed to the achievement of the goal.
The A
gency is also pursuing ‘sale of information’ as an additional revenue stream
and the
‘business case has been developed.
03
04
STRATEGIC GOALPROGRESS M
ADE TOWARDS THE ACHIEVEM
ENT OF GOALS
OUR VISION The C
hampion
of free-flowing
interstate operations
OUR MISSION
We spearhead the
unimpeded flow
of interstate operations thereby facilitating sustainable social
and economic
development
PR
OM
OTE
SA
FE
AN
D R
ELIA
BLE
C
RO
SS
-BO
RD
ER
TR
AN
SP
OR
T
EN
HA
NC
E
OR
GA
NIS
ATION
AL
PE
RFO
RM
AN
CE
TO
IMP
RO
VE S
US
TAIN
AB
ILITY
Annual Report 2018/19 Cross-Border Road Transport Agency23
PART B: PERFO
RMA
NC
E INFO
RMATIO
N
4. P
erformance Inform
ation by Program
me
The Agency achieved tw
elve (12) out of thirteen (13) targets that were set for 2018/19 financial year, constituting a perform
ance level of 92, 31%. The figure below
depicts the Agency’s
performance in 2018/19 financial year.
Diagram
: 2 Annual O
rganisational performance
7,69%
92,31%
�',-)9)(
�27��
',-)9)(
The targets were achieved through the follow
ing programm
es of the Agency:
The overall purpose of this
programm
e is to ensure
effective leadership and
administrative support to the
C-B
RTA
on the delivery of its
set objectives.
The purpose of this programm
e
is to regulate access to the
cross-border road transport
market by freight and
passengers operators, through
a permit adm
inistration regime.
This programm
e seeks to
ensure that consultations and
partnerships with key role
players within S
outh Africa
and SA
DC
are developed
to enhance regional social
integration and economic
development.
The purpose of this programm
e
is to ensure compliance by
operators with relevant road
transport legislation and
relevant provisions of the
bilateral agreements.
The purpose of this programm
e
is to provide advisory and
strategic support to key
industry stakeholders through
the application of technical
expertise and managem
ent
of key projects and research
initiatives.
PR
OG
RA
MM
E
4STA
KE
HO
LD
ER
M
AN
AG
EM
EN
T
PR
OG
RA
MM
E
3P
RO
FIL
ING
SE
RVIC
ES
PR
OG
RA
MM
E
5R
ESE
AR
CH
AN
D
AD
VIS
OR
Y S
ER
VIC
ES
PR
OG
RA
MM
E
2R
EG
ULAT
OR
Y
SE
RVIC
ES
PR
OG
RA
MM
E
1A
DM
INIS
TR
AT
ION
7,69%
Annual Report 2018/19Cross-Border Road Transport Agency
24
4.1 PROGRAM
ME 1
ADMINISTRATION
4.1.1 Introduction
The main objective of this program
me is to provide
administrative support to the core function and it consists
of three divisions, namely; C
orporate Services, Inform
ation
and Com
munication Technology, as w
ell as Finance and
Supply C
hain Managem
ent. The three divisions play the
following roles in the A
gency:
V Finance and S
CM
offers professional services in
relation to financial and supply chain managem
ent
while ensuring com
pliance with statutory requirem
ents
and best practice models.
V Inform
ation and Com
munication Technology (IC
T)
renders information and com
munication technology
services while ensuring com
pliance with statutory
requirements and best practice m
odels.
V C
orporate Services exists to provide expertise and
support in relation to human resources, legal services
and facilities managem
ent that make business delivery
possible. These
services include
developing and
adopting strategies that are responsive to the business
strategy and strategic tasks confronting the Agency.
The programm
e drives the following strategic objectives:
V To ensure the financial viability and sustainability of
the C-B
RTA
V To im
prove efficiency in business operations
V To introduce and im
plement regulated com
petition of
cross border movem
ents
4.1.2 Strategic
Objectives, Perform
ance Indicators,
Planned Targets
and Actual
Achievement
The table below presents the strategic objectives, key
performance
indicators, planned
annual targets
and
actual performance of A
dministration P
rogramm
e as well
as deviation thereof:
Table 3: Adm
inistration performance against pre-determ
ined objectivesSTRATEGIC OBJECTIVE: TO ENSURE THE FINANCIAL VIABILITY AND SUSTAINABILITY OF THE C-BRTA TO IM
PROVE EFFICIENCY IN BUSINESS OPERATIONS TO INTRODUCE AN IM
PLEMENT REGULATED COM
PETITION OF CROSS BORDER MOVEM
ENTS
KPI NO.
KEY PERFORMANCE
INDICATORACTUAL ACHIEVEM
ENT 2017/18PLANNED TARGET
2018/19ACTUAL ACHIEVEM
ENT
DEVIATION FROM PLANNED
TARGET TO ACTUAL ACHIEVEM
ENT FOR 2018/19COM
MENT ON DEVIATION
1.1.D
eveloped and im
plemented new
revenue stream
s
Target not achieved.
The business case for Cross-B
order charges w
as reviewed by the Task
Team w
ith officials from D
oT, SA
NR
AL
and RA
F. A presentation on the
levying of cross border charges on foreign vehicles at the R
oad Funding W
orkshop was shared to be
considered as a funding option for road infrastructure. The final business case is aw
aiting endorsem
ent by the DoT Executive
Com
mittee
Developed B
usiness C
ase on the ‘Sale of
Information’ revenue
stream
Target Achieved.
Business case w
as developed and approved by the Executive C
omm
ittee
None as target w
as achievedN
one as target was
achieved
Annual Report 2018/19 Cross-Border Road Transport Agency25
PART B: PERFO
RMA
NC
E INFO
RMATIO
N
STRATEGIC OBJECTIVE: TO ENSURE THE FINANCIAL VIABILITY AND SUSTAINABILITY OF THE C-BRTA TO IM
PROVE EFFICIENCY IN BUSINESS OPERATIONS TO INTRODUCE AN IM
PLEMENT REGULATED COM
PETITION OF CROSS BORDER MOVEM
ENTS
KPI NO.
KEY PERFORMANCE
INDICATORACTUAL ACHIEVEM
ENT 2017/18PLANNED TARGET
2018/19ACTUAL ACHIEVEM
ENT
DEVIATION FROM PLANNED
TARGET TO ACTUAL ACHIEVEM
ENT FOR 2018/19COM
MENT ON DEVIATION
1.2.D
eveloped and im
plemented
new cross-border
managem
ent system
Target achieved.
The Enterprise Architecture and
the Roadm
ap were com
pleted and approved.
The business case for the Integrated C
ross Border M
anagement S
ystem
was also subm
itted and approved by Executive C
omm
ittee.
Implem
ented prioritised interventions as per the approved EA
Roadm
ap
Target not achieved.
The specifications and terms of
references for the iCB
MS
were
reviewed and the tender w
as re-advertised in N
ovember and
adjudicated in March 2019.
Som
e projects in the EA R
oad M
ap were deferred due to
budget constraints. The prioritized project w
as the developm
ent of the ICM
BS
. A
lthough a tender was re-
advertised, and all necessary processes done during the year, reprioritisation had to be done to enable the project to re-scope and consider budget lim
itations.
The reprioritisation was
done due to budget constraints and therefore deferred projects w
ill be considered based on availability of funds. W
ith respect to the prioritized project of the IC
MB
S, the
process of appointing a service provider w
as in progress as the year cam
e to end.
1.3.D
eveloped permit
fee regulationsTarget achieved.
Perm
it tariff determination m
odel was
developed and informed the am
ended tariff regulations that w
ere submitted
to DoT for further publishing.
Subm
itted Draft P
ermit
Fee Regulations to
DoT
Target Achieved.
The draft permit fee tariff regulations
were subm
itted to DO
T.
None, target achieved
None, target achieved
4.1.2.1 Narrative sum
mary on program
me
performance inform
ation
M D
eveloped and
implem
ented new
revenue
streams as per financial sustainability strategy:
O
ne of the strategic objectives of the Agency w
as
to ensure financial viability and sustainability of the
organisation. The key performance indicator for the
development and im
plementation of a new
revenue
stream w
as identified as key to the achievement of
this strategic objective. The initial target that was
set against the key performance indicator w
as the
implem
entation of cross-border charges which w
as
subsequently amended to ‘sale of inform
ation’ during
the mid-term
review.
For the year under review
, the AP
P target set in line
with this indicator w
as to develop a business case on
the “sale of information” revenue stream
. The target
was achieved as relevant inform
ation was gathered
and the business case was com
piled and approved.
Included in the business case is the outcome of the
internal and external environment analysis, as w
ell as
information w
ith the potential to be comm
ercialized.
The business case also identifies the potential users
of the information proposed for com
mercialization.
M D
eveloped and implem
ented new cross-border
managem
ent system
W
ith the objective to improve business efficiency,
the Agency developed an Enterprise A
rchitecture
and identified key information technology solutions
to be
pursued during
the financial
year. These
solutions were included in the IT R
oadmap, w
hich
was
a yardstick
against w
hich the
Agency
will
measure progress tow
ards the implem
entation of
interventions to improve business efficiencies. The
Annual Report 2018/19Cross-Border Road Transport Agency
26
Agency envisaged to m
atch and acquire modern
technologies that underpin key business operations.
H
owever, due to financial constraints arising for the
non-promulgation of the perm
it tariff for 2018/19
financial year, the Agency could not roll-out the IT
Roadm
ap as initially planned, and some interventions
had to be deferred.
D
espite the financial constraints encountered during the
year under review, there w
as significant progress made
in relation to the implem
entation of some projects in the
IT Roadm
ap. At least eight projects were successfully
implem
ented during the financial year.
The key priority project w
as the development of
the integrated Cross B
order Managem
ent System
(iCB
MS
). The milestone achieved on this project w
as
the evaluation and adjudication of a tender to appoint
the service provider to assist with the developm
ent of
the system.
M D
eveloped permit fee regulations
The A
gency drafted and submitted the P
ermit Tariff
Regulations to the D
epartment of Transport for further
processing. Engagements w
ere also held with officials
from the D
oT to address their concerns relating to the
promulgations of this regulations, m
ainly due to the
impact of the pending litigation on the 2014 perm
it
tariff regulations. The Agency’s view
was that there is
no legal impossibility that m
ay prevent publication of
the Regulations.
4.1.3. Other Programm
e Priorities
M Finance and S
upply Chain M
anagement unit
The Finance and S
upply Chain M
anagement unit
continued to
provide financial
and supply
chain
managem
ent support, ensuring that limited resources
allocated are utilised efficiently. The Agency implem
ented
cost containm
ent m
easures and
delayed certain
projects to improve w
orking capital and ensure financial
sustainability in the short term as the anticipated tariffs
increase did not materialise.
The w
orking capital, which is represented by the degree
to which the current assets of the agency exceeds
its current liabilities, improved during the year under
review. The current ratio of the Agency as at the end
of the financial year has improved and, consequently,
the Agency will be able to pay its suppliers as w
ell as
employees in the ordinary course of the business.
The
financial health
of the
Agency has
improved
significantly during the year under review. This w
as
mainly
due to
the reversal
of R
162 m
illion claim
s
provision following the application of the Prescription
Act. The financial position was further enhanced by R
18
million operating surplus generated for the year under
review. This im
provement in the net asset value m
eans
that the Agency can be able to finance such long-term
assets as the Integrated Cross B
order Managem
ent
System from
a combination of reserves surplus as w
ell
as the generation of future surplus.
Tow
ards the end of the financial year under review, the
litigation in relation to the permit tariffs w
as finalised in
favour of the Agency. Thus, the permit tariffs have been
increased by 4.7% for the follow
ing financial year which
is expected to provide some financial relief to current
fiscal constraints. This, however, is not sufficient to
ensure long-term sustainability and thus the Agency
will continue to im
plement cost containm
ent measures
for the foreseeable future while engaging the Executive
Authority in an attempt to review
the long-term funding
structure of the entity.
The SC
M unit continued to provide on-going support
to line functions to ensure that procurement of goods
and services
are done
in line
with
the relevant
prescripts. Various bids were evaluated, adjudicated
and awarded during 2018/19.
M Inform
ation and Technology (IT)
In pursuit of the objective to im
prove efficiencies in
business operations, the Agency focused on several
IT projects to enable and supports the Agency to run
its day to day operations. Som
e highlights of the
activities undertaken during the year under review
included the
development
and im
plementation
of M
arket A
ccess R
egulation (M
AR
) A
pplication,
HR
P
erformance
Managem
ent S
ystem,
Data
Analytics
Solution,
Data
Analytics
Solution,
Archiving S
olution, standardised Microsoft Endpoint
solutions as well as IT G
overnance, Com
pliance and
Information
Security
Managem
ent S
ystem
(ISM
S)
Roadm
aps. In addition, the Agency successfully
completed the w
ebsite revamp, autom
ated business
processes for permit m
anagement and introduced a
Annual Report 2018/19 Cross-Border Road Transport Agency27
PART B: PERFO
RMA
NC
E INFO
RMATIO
N
4.1.6. Linking performance to budgets
Table 4: Expenditure: A
dministration
2018/20192017/2018
PR
OG
RA
MM
EBUDGET
ACTUALEXPENDITURE
(OVER)/UNDEREXPENDITURE
BUDGETACTUAL
EXPENDITURE(OVER)/UNDEREXPENDITURE
R’000R’000
R’000R’000
R’000R’000
Adm
inistration128 306
127 3491 248
121 513132 794
(11 281)
The programm
e achieved its targets within the budgeted allocation and the underspending is m
ainly attributable to the implem
entation of cost containment m
easures due to non-
promulgation of perm
it tariffs regulations.
security solution, Business C
ontinuity and IT Disaster
Recovery,
standardised hardw
are, upgraded
the
Local Area N
etwork (LA
N) and perform
ed the CO
BIT
and ITIL assessments.
The
Agency
reviewed
and approved
several
procedures m
anuals relating
to A
nti-Virus &
Patch
Managem
ent, D
isaster R
ecovery, Incident
Managem
ent, Change M
anagement, N
etwork and
Firewall M
anagement, U
ser Access M
anagement and
Backup M
anagement.
M C
orporate Services
In a bid to enhance good governance, the A
gency put
in place training programm
es that afforded employees
an understanding of applicable various prescripts. In
this regard, officials within the R
egulatory Services
division were trained on P
OP
I Act and the C
ross-
Border R
oad Transport Act w
as also presented to
the students and lecturers at the Technical Vocational
Education and Training (TVET) college in Sow
eto.
Legal
Services
continued to
provide necessary
leadership and managem
ent with respect to litigation
matters and legislative proposal review
s.
M
eanwhile,
the H
uman
Resource
Managem
ent
initiatives were m
ainly geared to channel the Agency
towards corporate best practices. S
ome of the
highlights for the year included but not limited to
the review of significant H
R policies, the second
annual staff performance aw
ards ceremony and the
automation of the perform
ance managem
ent system.
There was also rem
arkable progress regarding the
enhancement of hum
an capital competencies.
4.1.4. Strategy to overcome areas of under
performance
Reprioritisation of the EA roadm
ap was done to ensure that
the plan is implem
ented within the constrained budget.
4.1.5. Changes to planned targets
There were no changes m
ade to the planned targets for
this programm
e.
Annual Report 2018/19Cross-Border Road Transport Agency
28
4.2 PROGRAM
ME 2
REGULATORY SERVICES
4.2.1. Introduction
This program
me
exists prim
arily for
the regulation
and
administration of perm
its. It is responsible for regulating
access to the cross-border road transport market, freight
and passengers, through a permit adm
inistration regime. The
programm
e is also tasked to ensure that operators comply
with cross border regulations, as w
ell as the provisions of the
bi- and multi-lateral road transport agreem
ents.
This programm
e has the following strategic objectives:
V To introduce and im
plement regulated com
petition of
cross-border movem
ents,
V To im
prove compliance w
ith road transport legislation,
V To im
prove efficiencies in business operations.
4.2.2. Strategic Objectives, Performance
Indicators, Planned Targets and Actual Achievem
ent
The table below presents the strategic objectives, key
performance
indicators, planned
annual targets
and
actual performance of R
egulatory Services P
rogramm
e
and deviation thereof:
Table 5: Regulatory S
ervices performance against pre-determ
ined objectivesSTRATEGIC OBJECTIVE: TO INTRODUCE AND IM
PLEMENT REGULATED COM
PETITION OF CROSS-BORDER MOVEM
ENTS; TO IM
PROVE COMPLIANCE W
ITH ROAD TRANSPORT LEGISLATION; TO IM
PROVE EFFICIENCIES IN BUSINESS OPERATIONS
KPI NO.
KEY PERFORMANCE
INDICATORACTUAL ACHIEVEM
ENT 2017/18PLANNED TARGET 2018/19
ACTUAL ACHIEVEMENT
DEVIATION FROM PLANNED TARGET TO
ACTUAL ACHIEVEMENT FOR 2018/19
COMM
ENT ON DEVIATION
2.1.Im
plemented
scientific tool used by the R
egulatory C
omm
ittee to m
anage supply and dem
and of cross-border passenger transport
Target achieved.
The Executive Com
mittee considered
and approved the refined model
parameters. The R
egulatory C
omm
ittee had since tested the tool by using it as reference during the regulatory hearings.
Post im
plementation
assessment
Target Achieved
Post im
plementation assessm
ent conducted.
None, target achieved.
None.
2.2.D
eveloped and Im
plemented
Operator C
ompliance
Accreditation S
cheme
(OC
AS
)
Target achieved.
The Board approved the draft
legislative proposal and it was
submitted to D
oT.
Executive Com
mittee approved
OC
AS
Implem
entation manuals
Target Achieved
OC
AS
Implem
entation Manuals
were approved by the Executive
Com
mittee.
None, target achieved.
None.
2.3.P
ercentage of tem
porary permits
issued within
pre-determined
turnaround times
Target achieved.
99.42% and 98.15%
of compliant
temporary perm
its were processed
and issued in front office within 1
day and remote office w
ithin 2 days respectively.
90% of com
pliant applications for tem
porary permits
processed and permits issued
in front office within 8 hours
90% of com
pliant applications for tem
porary permits
processed and permits issued
in back office within 1 day
Target Achieved
Achieved w
ith the percentage of 99.73%
at the front office and 98.96%
for the back office.
The over-achievement results from
m
echanisms that w
ere put in place to enhance efficiency in handling perm
its applications. Express lines are used for single applications w
hilst bulk applications are processed by the rem
ote office.
There were also no dow
ntimes on the
CB
RTS
permit system
.
Implem
ented im
provement
mechanism
w
ill be m
aintained.
Annual Report 2018/19 Cross-Border Road Transport Agency29
PART B: PERFO
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NC
E INFO
RMATIO
N
4.2.2.1 Narrative sum
mary of program
me
performance
M Im
plemented
scientific tool
used by
the
Regulatory
Com
mittee
to m
anage supply
and
demand of cross border passenger transport
The Market A
ccess Regulation (M
AR
) tool was introduced
to mainly aid the A
gency to achieve its objective of
introducing and
implem
enting regulated
competition
of cross-border movem
ents. The tool is useful to the
Regulatory C
omm
ittee in applying a more balanced and
independent assessment of the m
arket demand and
supply dynamics on the different corridors.
For the year under review, the A
gency aimed to im
plement
the Market A
ccess Regulation tool and com
pile a post
implem
entation assessment report and this target w
as
achieved. This followed previous years’ design of the
tool, piloting of the tool as well as som
e reviews that w
ere
conducted after piloting.
M D
eveloped and
implem
ented O
perator
Com
pliance Accreditation S
cheme (O
CA
S)
The conceptualisation of this initiative was done in line
with the A
gency’s objective to improve com
pliance with
road transport legislation. The Operator C
ompliance
Accreditation S
cheme (O
CA
S) w
as also initiated to boost
the im
provement
and prom
otion of
socio-economic
development and regional integration through progressive
market liberalisation.
OC
AS
is intended to improve com
pliance with road
transport legislation
and regulatory
efficiency in
the cross-border
road transport
environment.
It is
envisaged that OC
AS
implem
entation will enhance the
unimpeded flow
of cross-border road transport, reduce
operational constraints in the cross-border road transport
environment and enhance trade am
ongst others.
For 2018/19,
the target
was
to develop
OC
AS
Implem
entation M
anuals w
hich w
ere successfully
developed and approved, marking a significant m
ilestone
towards the developm
ent of the scheme. A
mongst the
significant milestones reached in relation to O
CA
S during
the year under review, w
ere the detailed study and
compilation of the S
ocio-Economic Im
pact Assessm
ent
(SEIA
) report
which
was
approved and
shared w
ith
the DoT, the developm
ent of the framew
ork for OC
AS
Implem
entation Manuals as w
ell as presentation of the
scheme at the m
eetings of ISO
TC241 C
omm
ittee which
were convened to discuss the accreditation schem
es.
M P
ercentage of temporary perm
its issued within
pre-determined turnaround tim
es
As part of the efforts that are geared tow
ards improvem
ent
of business
efficiencies, the
Agency
strives to
be
efficient in the administration of perm
its. This indicator
was identified to enhance the A
gency’s efficiency in
the processing of temporary perm
its applications. The
Agency had targeted to process and issue 90%
of
compliant tem
porary permit applications in front office
within 8 hours and the back office w
ithin 1 day. The
overall average percentages achieved for the year were
99.73% for front office and 98.96%
for back office.
4.2.3. Other Programm
e Priorities
A total of 90 217 perm
its were issued during the 2018/19
financial year, constituted a decrease of 1.54% com
pared
to the previous financial year. Below
is the statistics on
permits issued during 2018/19 per perm
it type and
countries:
M G
oods permits
Perm
its issued for goods operations decreased by 1.1%
during the year under review, dow
n from 63 695 to 62
995. Hereto follow
s a statistical overview of the goods
permits issued per country.
Table 6: Goods P
ermit S
tatisticsCOUNTRY
2018/192017/18
% M
OVEMENT
Angola
163167
(2.4)B
otswana
7 8868 080
(2.4)D
emocratic
Republic of
Congo
8 1705 528
47.8
Lesotho2 960
3 198(7.4)
Malaw
i2 843
2 6079.1
Mozam
bique8 843
9 230(4.2)
Nam
ibia4 931
5 630(12.4)
Sw
aziland4 978
5046(1.3)
Zambia
11 26812 616
(10.7)Zim
babwe
10 82211 539
(6.2)
Cabotage
13154
142.6
TOTA
L62 995
63 695(1.1)
Annual Report 2018/19Cross-Border Road Transport Agency
30
M Tourist P
ermits S
tatistics
Perm
its issued to tourist operations decreased by 4.3%
during the year under review, dow
n from 2 853 to 2 729.
Hereto follow
s a statistical overview of the tourist perm
its
issued for the region:
Table 9: Tourist Perm
it Statistics
COUNTRY2018/19
2017/18%
MOVEM
ENTR
egional2 676
2 793(4.2)
Cabotage
5360
(11.7)TO
TAL
2 7292 853
(4.3)
The Agency has noted the decline in the num
ber of
permits issued year on year and w
ill be comm
issioning a
research in the 2019/2020 financial year to determine the
macro-econom
ic factors which resulted in the decline.
4.2.4. Strategy to overcome areas of under
performance
The programm
e achieved all planned targets for the year.
M Taxi P
assenger Perm
it Statistics
Perm
its issued for taxi operations decreased by 0.03%
during the year under review, dow
n from 22 500 to 22
494. Hereto follow
s a statistical overview of the taxi
permits issued per country.
Table 7: Taxi Passenger P
ermit S
tatisticsCOUNTRY
2018/192017/18
% M
OVEMENT
Botsw
ana612
637(3.9)
Dem
ocratic R
epublic of C
ongo
0204
(50)
Lesotho1 105
1 258(12.2)
Malaw
i46
56(17.9)
Mozam
bique8 741
9 461(7.6)
Nam
ibia164
206(20.4)
Sw
aziland706
1 222(42.2)
Zambia
2683
(68.7)Zim
babwe
11 092 9 573
15.9TO
TAL
22 49422 500
(0.03)
M B
us Passengers P
ermit S
tatistics
Perm
its issued for bus operations decreased by 22.5%
during the year under review, dow
n from 2 581 to 1 999.
Hereto follow
s a statistical overview of the bus perm
its
issued per country.
Table 8: Bus P
assengers Perm
it Statisticss
COUNTRY2018/19
2017/18%
MOVEM
ENTB
otswana
98156
(37.2)D
emocratic
Republic of
Congo
0813
(38.5)
Lesotho125
251(50.2)
Malaw
i191
16813.7
Mozam
bique252
310(18.7)
Nam
ibia35
64(45.3)
Sw
aziland58
167(65.3)
Zambia
4955
(10.9)Zim
babwe
1 1831 397
(15.3)TO
TAL
1 9992 581
(22.5)
4.2.5. Changes to planned targets
There were no changes m
ade to the planned targets for this programm
e.
4.2.6. Linking performance to budgets
Table 10: Expenditure: R
egulatory Services
2018/20192017/2018
PR
OG
RA
MM
EBUDGET
ACTUALEXPENDITURE
(OVER)/UNDEREXPENDITURE
BUDGETACTUAL
EXPENDITURE(OVER)/UNDEREXPENDITURE
R’000R’000
R’000R’000
R’000R’000
Regulatory services
19 79818 337
1 461 23 901
16 086 7 815
The programm
e achieved its targets within the budgeted allocation and the underspending is m
ainly attributable to the implem
entation of cost containment m
easures due to non-
promulgation of perm
it tariffs regulations.
Annual Report 2018/19 Cross-Border Road Transport Agency31
PART B: PERFO
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NC
E INFO
RMATIO
N
4.3.2 Strategic Objectives, Perform
ance Indicators, Planned Targets and Actual Achievement
The table below presents the strategic objectives, key perform
ance indicators, planned annual targets and actual performance of P
rofiling Program
me and deviation thereof:
Table 11: Profiling S
ervices Perform
ance against Pre-determ
ined Objectives
STRATEGIC OBJECTIVE: TO IMPROVE COM
PLIANCE WITH ROAD TRANSPORT LEGISLATION
KPI NO.
KEY PERFORMANCE
INDICATORACTUAL ACHIEVEM
ENT 2017/18PLANNED TARGET 2018/19
ACTUAL ACHIEVEMENT
DEVIATION FROM PLANNED
TARGET TO ACTUAL ACHIEVEM
ENT FOR 2018/19COM
MENT ON DEVIATION
3.1.N
umber of
operator and corridor profiling reports for decision m
aking
Target achieved.
4 Section 39 reports subm
itted to the R
egulatory Com
mittee for decision
making
4 Operator and C
orridor P
rofiling (Section 39)
reports submitted to
Executive Com
mittee for
recomm
endation
Target Achieved
Four (4) Operator and C
orridor P
rofiling (Section 39) reports
were considered by the Executive
Com
mittee and recom
mended to
the Regulatory C
omm
ittee.
None as the target w
as achieved
None as there w
as no deviation
4.3 Program
me 3
Profiling Services
4.3.1. Introduction
This programm
e exists mainly to ensure com
pliance by
operators with road transport legislation and provisions of the
bilateral agreements. The m
ain aim is to enhance the safety
of freight and passengers in the Southern African Region
through compliance w
ith relevant laws and regulations.
The programm
e generates law enforcem
ent compliance
intelligence through profiling of operators. These profiles
are based on the operational conduct of operators against
regulatory requirements. Inform
ation is collected through
vehicle inspections and prosecutions conducted by the
Road Transport Inspectorate as w
ell as profiling of operators
with respect to the return of passenger lists, consignm
ent
notes and expired permits and other inform
ation gathering
approaches. The
information
gathered, and
profiles of
operators and routes are used by the Regulatory C
omm
ittee
to m
ake inform
ed decisions
in considering
permits
applications.
This programm
e has the following strategic objective:
V To im
prove compliance w
ith road transport legislation
Annual Report 2018/19Cross-Border Road Transport Agency
32
4.3.6 Linking perform
ance to budgetsTable 12: E
xpenditure: Profiling S
ervices
2018/20192017/2018
PR
OG
RA
MM
EBUDGET
ACTUALEXPENDITURE
(OVER)/UNDEREXPENDITURE
BUDGETACTUAL
EXPENDITURE(OVER)/UNDEREXPENDITURE
R’000R’000
R’000R’000
R’000R’000
Profiling S
ervices22 995
55 7403 836
30 986 23 503
7 483
The programm
e achieved its targets within the budgeted allocation. The overspending w
as due to the expenditure in relation to the Road Transport Inspectorate function w
hich was
transferred to Road Traffic M
anagement C
orporation and initially not budgeted for. How
ever, although this was not budgeted for, thus function w
as fully funded from the penalty incom
e
generated during the year.
4.3.2.1 Narrative sum
mary of program
me
performance inform
ation
M N
umber of operator and corridor profiling reports
for decision making
The Agency has successfully m
et the targets that was set
for the year as four (4) Section 39 R
eport were com
piled,
providing statistical information related to non-com
pliance
by operators. These reports were used by the R
egulatory
Com
mittee in m
aking informed decisions on the perm
it
applications. The report also includes the rate of return of
expired permits by the operators as w
ell as the return rate
of passenger lists and consignment notes.
4.3.3 Other program
me priorities
The Agency’s com
mitm
ent to improve com
pliance with
road transport legislation is further visible in the activities
that were conducted in relation to law
enforcement.
Som
e of the activities were conducted in partnership w
ith
the Road Traffic M
anagement C
orporation and other law
enforcement agencies. The follow
ing are some of the
activities relating to law enforcem
ent function:
V P
articipated in Joint Law Enforcem
ent operations,
V D
esktop analysis of vehicle Inspections – this analysis
enables the Agency to provide w
ell-informed data in
relation to non-compliance by operators. This include
those operating without perm
its, fraudulent permits,
expired permits and cancelled perm
its,
V Protect O
perator Markets – this entails referral of non-
compliant operators to the A
gency to acquire permits,
V D
eveloped law
enforcem
ent profile
– this
entails
compilation
of com
pliance checklists
for the
Regulatory
Com
mittee
to use
as reference
for
decision making during R
egulatory Hearings.
V P
rofiled cross-border road transport operations to
determine com
pliance and direct law enforcem
ent
operations.
4.3.4 Strategy to overcom
e areas of under perform
ance
The programm
e achieved the target set for 2018/19.
4.3.5 Changes to planned targets
There were no changes m
ade to the planned targets for
this programm
e.
Annual Report 2018/19 Cross-Border Road Transport Agency33
PART B: PERFO
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NC
E INFO
RMATIO
N
Table 13: Stakeholder M
anagement perform
ance against pre-determined objectives
STRATEGIC OBJECTIVE: TO ESTABLISH AND SUSTAIN STRATEGIC PARTNERSHIPS WITH STAKEHOLDERS TO ENABLE THE AGENCY TO ACHIEVE ITS OBJECTIVES;
TO PROACTIVELY PROMOTE TRANSFORM
ATION AND DEVELOPMENT OF THE CROSS - BORDER INDUSTRY
KPI NO.
KEY PERFORMANCE
INDICATORACTUAL ACHIEVEM
ENT 2017/18PLANNED TARGET 2018/19
ACTUAL ACHIEVEMENT
DEVIATION FROM PLANNED
TARGET TO ACTUAL ACHIEVEM
ENT FOR 2018/19COM
MENT ON DEVIATION
4.1.D
eveloped and im
plemented
stakeholder m
anagement plan
Target achieved.
The Stakeholder M
anagement P
lan w
as developed and approved by the B
oard. The Agency hosted an O
.R
Tambo International R
oad Transport Indaba as part of its O
ctober Transport M
onth activities. Inputs from
the indaba were considered in
the development of the Linking A
frica P
lan.
Implem
ented Stakeholder
Managem
ent Plan
Target Achieved.
The Stakeholder M
anagement P
lan w
as implem
ented during the year and the consolidated stakeholder engagem
ents outcomes report w
as approved by the B
oard.
None, target achieved
None
4.2.Facilitated the im
plementation of
the SA
DC
protocol and regional agreem
ents
Target achieved.
The SA
DC
workshop w
as held during the O
ctober Transport Month. A
Transport Forum
to fast track the im
plementation of the S
AD
C P
rotocol.
Monitored com
pliance by m
ember states to
the SA
DC
Protocol and
regional agreements
Target Achieved.
Assessm
ent report on the level of com
pliance with the S
AD
C
Protocol and regional agreem
ents w
as approved by the Executive C
omm
ittee.
None, target achieved
None
4.4.2. Strategic Objectives, Performance
Indicators, Planned Targets and Actual Achievem
ent
The table
below
presents the
strategic objectives,
key perform
ance indicators,
planned annual
targets
and actual performance of S
takeholder Managem
ent
Program
me and deviation thereof:
4.4 Program
me 4
Stakeholder M
anagement
4.4.1. Introduction
This programm
e ensures that partnerships with key role
players within S
outh Africa and S
AD
C are developed
to enhance regional social integration and economic
development. Its prim
ary aim is to ensure collaboration
with both the prim
ary and secondary stakeholders within
the industry with the objective of encouraging sectoral
transformation.
The Program
me facilitates regional integration through a
structured campaign that seeks to influence the A
frican
agenda for change.
This programm
e has the following strategic objective:
V To establish and sustain strategic partnerships w
ith
stakeholders to enable the Agency to achieve its
objectives
Annual Report 2018/19Cross-Border Road Transport Agency
34
4.4.2.1 Narrative sum
mary of program
me
performance inform
ation
M D
eveloped and
implem
ented S
takeholder
Managem
ent Plan
As part of its efforts tow
ards achieving the objective of
establishing and sustaining strategic partnerships with
stakeholders, the Agency continued w
ith the planned
stakeholder engagem
ents that
were
targeted in
line
with the approved S
takeholder Managem
ent Plan. The
outcomes of the efforts undertaken during 2018/19 w
ere
highlighted in the outcomes report. There is also a need
to reduce the number of operator forum
s engagements
to improve efficiency and to follow
-up on matters raised
by the operators.
The consolidated stakeholder engagements outcom
es
report covers
outcomes
of several
engagements,
including but not limited to the N
ational Stakeholder
Consultative
Forum,
Border
Managem
ent A
uthority
(BM
A) m
eetings, Operators’ Fora (freight, m
inibus, tourist
and bus operator’s), Corridor m
eetings (Trans-Kalahari
Corridor, M
aputo Corridor Logistics Initiative, M
aputo
Developm
ent Corridor W
orking Groups), the Joint R
oute
Managem
ent Group and R
oute Com
mittees. The report
also covers engagements outcom
es with the International
Cross-B
order Transport Organisation (IC
BTO
), Freight
Associations (i.e. S
outh African A
ssociation of Freight
Forwarders) and the B
us Associations A
malgam
ation
(SA
BO
A, S
AC
BO
A & S
AIP
FA).
M Facilitated
the im
plementation
of the
SA
DC
Protocol and regional agreem
ents
The Agency achieved the target set for the financial year
as the compliance assessm
ent report indicating the level
of compliance by m
ember states to the S
AD
C P
rotocol
was com
piled.
In line with the m
andate of the Agency to enhance and
strengthen the capacity of the public sector in support of
its strategic planning, enabling and monitoring functions,
the report that was com
piled will assist in term
s of
identifying areas that need improvem
ent as the level of
compliance by m
ember states is very poor. Further to
that, the Agency cham
pioned for the establishment of
the C
ross-Border
Road
Transport R
egulators Forum
,
which consist of regulators from
SA
DC
mem
ber states,
as a
platform
to pursue
harmonization
and regional
integration. A
s a
pioneer of
the forum
, the
Agency
developed the forum action plan and provided leadership
for the implem
entation of this action plan. The plan is
geared tow
ards m
onitoring com
pliance by
mem
ber
states, whereby the said m
ember states are tasked
with
key perform
ance areas
to m
onitor the
level of
compliance. A
lthough the year ended with very lim
ited
progress towards the im
plementation of the action plan,
the forum is resolute to address non-com
pliance to the
SA
DC
Protocol.
Annual Report 2018/19 Cross-Border Road Transport Agency35
PART B: PERFO
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NC
E INFO
RMATIO
N
4.4.6 Linking perform
ance to budgets
Table 14: Expenditure: S
takeholder Managem
ent
2018/20192017/2018
PR
OG
RA
MM
EBUDGET
ACTUALEXPENDITURE
(OVER)/UNDEREXPENDITURE
BUDGETACTUAL
EXPENDITURE(OVER)/UNDEREXPENDITURE
R’000R’000
R’000R’000
R’000R’000
Stakeholder M
anagement
15 68413 424
2 26023 879
12 744 11 135
The programm
e achieved its targets within the budgeted allocation and the underspending is m
ainly attributable to the implem
entation of cost containment m
easures.
4.4.3. Other Programm
e PrioritiesFurther to the targets outlined in the APP, the Agency conducted
additional activities
to ensure
delivery and
success in
terms
of
establishing and sustaining strategic partnerships with stakeholders to
enable the Agency to achieve its objectives. The activities include but
not limited to:
V C
onducted individual
consultations/engagements
with
government stakeholders;
V S
igned MO
U’s w
ith other institutions with shared interests;
V C
onvened bilateral meetings and drafted bilateral agreem
ents
with Lesotho, B
otswana, S
waziland, Tanzania, A
ngola and
Nam
ibia;
V R
esolved operator
constraints through
engagements
with
relevant authorities;
V Im
plemented the stakeholder engagem
ent plan of the Linking
Africa P
lan and positioned the third-party insurance with key
decision makers;
V Participated in the N
ational Ministerial Task Team
set to resolve the
RSA/Lesotho C
ross Border Passenger Im
passe
4.4.4 Strategy to overcom
e areas of under performance
There were no key challenges experienced in the execution of the
planned activities.
4.4.5 Changes to planned targets
There were no changes m
ade to the planned targets for this
programm
e.
Annual Report 2018/19Cross-Border Road Transport Agency
36
Table 15: Research and A
dvisory Services perform
ance against pre-determined objectives
STRATEGIC OBJECTIVE: TO PROACTIVELY PROVIDE VALUE-ADDED ADVISORY SERVICES TO THE MINISTER OF TRANSPORT AND OTHER STAKEHOLDERS ON CROSS-BORDER M
ATTERS IN THE TRANSPORT SECTOR
KPI NO.
KEY PERFORMANCE
INDICATORACTUAL ACHIEVEM
ENT 2017/18PLANNED TARGET 2018/19
ACTUAL ACHIEVEMENT
2018/19
DEVIATION FROM PLANNED
TARGET TO ACTUAL ACHIEVEM
ENT FOR 2018/19COM
MENT TO DEVIATION
4.1.N
umber of A
nnual S
tate of Cross-
border operations reports (A
SC
BO
R)
submitted to
the Minister and
other relevant stakeholders
Target achieved.
The Board approved the A
nnual State
of Cross B
order Report w
hich was
submitted to the D
oT and published on the C
-BR
TA w
ebsite for all other stakeholders.
1 AS
CB
OR
report to the M
inister and other stakeholders
Target Achieved.
The AS
CB
OR
was produced
and approved by the Board
and submitted to the M
inister of Transport, D
oT and shared with
relevant stakeholders.
None, target achieved.
None
4.2.N
umber of country
profiles developed or updated
Target achieved.
2 country profiles for Sw
aziland and B
otswana w
ere developed during the financial year.
2 country (Zambia
and Nam
ibia) profiles developed
Target Achieved.
Zambia and N
amibia country
profile reports were com
piled and approved by the Executive C
omm
ittee
None, target achieved.
None
4.3.D
eveloped model
to calculate transit and cost of delays at com
mercial
border posts
Target achieved.
The Cross-B
order Flow calculator
concept document w
as approved by the B
oard
Piloted C
ross-border Flow
calculator model at 3
border posts (Beitbridge,
Lebombo and M
artin D
rift)
Target achieved.
The pilot reports were subm
itted and approved by the Executive C
omm
ittee
None, target achieved.
None
4.5 PROGRAM
ME 5
RESEARCH AND ADVISORY SERVICES
4.5.1. Introduction
The purpose of this programm
e is to provide advisory and
strategic support to key industry stakeholders through
application of
technical expertise
and m
anagement
of key projects and research initiatives. The research-
based information that is generated by the program
me
serves as guidelines for policy development and decision
making across various functions w
ithin the Agency. The
programm
e plays a vital role of enhancing the visibility of
the organisation through pro-active sharing of information
at key strategic platforms across the region.
This programm
e has the following strategic objectives:
V To proactively provide value-added advisory services to
the Minister of Transport and other relevant stakeholders
on cross-border matters in the transport sector.
V To proactively prom
ote transformation and develop-
ment of the cross-border industry.
4.5.2. Strategic Objectives, Performance
Indicators, Planned Targets and Actual Achievem
ent
The table below presents the strategic objectives, key
performance
indicators, planned
annual targets
and
actual perform
ance of
Research
and D
evelopment
Program
me and deviation thereof:
Annual Report 2018/19 Cross-Border Road Transport Agency37
PART B: PERFO
RMA
NC
E INFO
RMATIO
N
in the
cross-border environm
ent, particularly
cross-
border road transport operators, regulatory authorities
and trading parties with a view
to improve business
opportunities, operational
efficiency, productivity
and
sustainability. It is envisaged that the reports will go a
long way tow
ards providing information to cross border
operators, regulatory
authorities and
trading parties
conducting operations between S
outh Africa and the said
countries with invaluable inform
ation.
M C
ross-Border Flow
Calculator
The Agency has achieved the annual target of pilot studies
at three border posts namely: B
eitbridge, Lebombo and
Grobler’s B
ridge.
This project serves to provide validated data that enhance
information shared in the advisory services rendered by
the Agency. The m
ain aim of the project w
as to pilot
the Cross-B
order Flow C
alculator Model developed to
calculate transit times at the borders. The project also
intends calculating the economic im
pact of the delays at
border posts.
the Com
mon M
arket for Eastern and Southern A
frica
(CO
MES
A),
Eastern A
frican C
omm
unity (EA
C)
and
Southern
African
Developm
ent C
omm
unity (S
AD
C)
Tripartite (or CO
MES
A-EA
C-S
AD
C Tripartite), the state
of regional
integration and
progress m
ade tow
ards
integrating transport in the Tripartite regions, progress on
implem
entation of continental and regional programm
es
with a bearing on cross-border road transport, the state
of corridor
performance
monitoring
in the
Tripartite
region, recomm
ended reforms and action plans aim
ed
at addressing identified challenges and to improve trade
and transport in the region, amongst others.
M D
evelopment of C
ountry Profile reports
The Agency successfully com
piled country profiles for
both Zambia and N
amibia as planned for the year. These
reports were approved and subsequently published on
the website and shared w
ith relevant stakeholders.
The aim
of
country profile
reports is
to provide
a
consolidated platform for the dissem
ination of information
on a specific country that is useful to key stakeholders
STRATEGIC OBJECTIVE: TO PROACTIVELY PROVIDE VALUE-ADDED ADVISORY SERVICES TO THE MINISTER OF TRANSPORT AND OTHER STAKEHOLDERS ON CROSS-BORDER M
ATTERS IN THE TRANSPORT SECTOR
KPI NO.
KEY PERFORMANCE
INDICATORACTUAL ACHIEVEM
ENT 2017/18PLANNED TARGET 2018/19
ACTUAL ACHIEVEMENT
2018/19
DEVIATION FROM PLANNED
TARGET TO ACTUAL ACHIEVEM
ENT FOR 2018/19COM
MENT TO DEVIATION
4.4.D
eveloped and im
plemented
industry developm
ent strategy
Target achieved.
Board A
pproved Industry D
evelopment S
trategy submitted to
the Minister
Implem
ented Industry D
evelopment S
trategyTarget achieved. Interventions as per the ID
S
project plan were im
plemented
and the implem
entation report w
as approved by the Executive C
omm
ittee.
None, target achieved.
None
4.5.2.1 Narrative sum
mary of program
me
performance inform
ation
M A
nnual State of C
ross-Border O
perations Report
During the year under review
, the Agency com
piled the
Annual S
tate of Cross-B
order Road Transport R
eport
(AS
CB
OR
). The report was approved by the B
oard and
submitted to the M
inister of Transport, the DoT and
shared with relevant stakeholders. Further to that, the
Agency also conducted an A
SC
BO
R S
eminar to present
and discuss the 2017/18 AS
CB
OR
with key stakeholders
in the industry.
AS
CB
OR
is a tool to proactively provide value added
advisory services to the Minister of Transport and other
stakeholders as
it provides
advice and
consolidated
information to the M
inister of Transport, the Departm
ent
of Transport and other key stakeholders in the trade
and transport
value chains.
This
report articulates
the current
state of
cross-border road
transport
infrastructure (covering both hard and soft infrastructure
issues), constraints facing cross-border operations in
Annual Report 2018/19Cross-Border Road Transport Agency
38
Annual Report 2018/19 Cross-Border Road Transport Agency39
PART B: PERFO
RMA
NC
E INFO
RMATIO
N
4.5.6. Linking performance to budgets
Table 16: Expenditure: R
esearch and Advisory S
ervices
2018/20192017/2018
PR
OG
RA
MM
EBUDGET
ACTUALEXPENDITURE
(OVER)/UNDEREXPENDITURE
BUDGETACTUAL
EXPENDITURE(OVER)/UNDEREXPENDITURE
R’000R’000
R’000R’000
R’000R’000
Research and A
dvisory Services
11 0379 197
1 840 14 582
11 060 3 522
The programm
e achieved its targets within the budgeted allocation and the underspending is m
ainly attributable to the implem
entation of cost containment m
easures.
M D
eveloped and
implem
ented Industry
Developm
ent Strategy
The A
gency developed
the Industry
Developm
ent
Strategy in the previous financial year and im
plemented
the interventions as per the approved implem
entation plan
during 2018-2019 financial year. This initiative is useful
in enabling the Agency to m
ake meaningful contribution
towards
transformation
and the
development
of the
cross-border industry. Am
ong initiatives that were carried
out as per the implem
entation plan are:
V D
eveloped a database of over 390 clearing and
forwarding agents. These are strategic stakeholders
that will be engaged w
ith respect to reducing the
delays at the borders as well as inherent opportunities
for new entrants;
V A
ppointed 10 Road S
afety Am
bassadors. This is
a cross functional Road S
afety Team that consists
of mem
bers from various line functions w
ithin the
Agency to coordinate im
pactful operations relating to
road safety;
V Transferred invaluable skills to 132 young people in
specific border towns through training and fixed period
employm
ent. It is these effort that have created a very
good working relationship w
ith comm
unities along
the borders,
creating aw
areness of
opportunities
that exist within their com
munities because of their
geographical location and proximity to the borders;
V Increased
the A
gency’s visibility
to com
munities
around the country, particularly those comm
unities
that are
located along
regional road
transport
corridors leading to the borders and beyond;
V Through
partnership w
ith D
itshaba C
onsulting,
conducted training for participants of the Mentorship
Program
me
designed to
empow
er cross-border
operators with business m
anagement skills; and
V Enhanced collaboration and relations w
ith strategic
stakeholders including the Departm
ent of Transport
and other road transport entities in the country to
enable implem
entation of various programm
es.
4.5.3. Other Programm
e Priorities
Research and A
dvisory Program
me is key to the provision
of direct and indirect support to the achievement of
strategic objectives and mandate of the A
gency. Som
e
of the key priority initiatives that were undertaken by the
Agency during the financial year include but not lim
ited to:
V R
eviewed and finalized the Linking A
frica Plan;
V P
iloted a
model
to estim
ate the
cost of
doing
business on the North-S
outh Corridor and M
aputo
Developm
ent Corridor;
V R
esearch on
cross-border road
transport trade
volumes passing through 19 com
mercial border posts
between S
outh Africa and neighbouring countries;
V P
roduced H
armonisation
Audit
Report
on S
AD
C
Protocol and A
greements;
V C
onducted route assessments - assessing cross-
border passenger infrastructure facilities at origin and
destination points and key nodal points;
V D
eveloped a
concept docum
ent on
Corridor
Perform
ance Indicators
(CP
I) and
related
implem
entation plan;
V C
onducted research on Sale of Inform
ation as a
revenue stream;
V P
ublished relevant papers and presented papers at
relevant conferences/ summ
its/ workshops;
V Established a baseline on cross-border operators
demographics;
V B
enchmarked regulatory practices; and
V C
onducted Border Tow
ns Initiatives.
4.5.4. Strategy to overcome areas of under
performance
The programm
e achieved all targets that were set for the year.
4.5.5. Changes to planned targets
There were no changes m
ade to the planned targets for
this programm
e.
Annual Report 2018/19Cross-Border Road Transport Agency
40
PART C
PA
RT G
OVERN
AN
CE
PART C
: GO
VERNA
NC
E
1. Introduction
The Cross-B
order Road Transport A
gency is a statutory body established in terms of the C
ross-Border Transport A
ct, Act N
o. 4 of 1998, as amended (“C
-BR
T AC
T). As a P
ublic entity,
the C-B
RTA
is listed as a Schedule 3A
of the Public Finance M
anagement A
ct, Act N
o. 1 of 1999.
In terms of the C
-BR
T Act, the M
inister of Transport has appointed the Board of D
irectors to govern and represent the Agency. The B
oard as the Accounting A
uthority provides the
Agency w
ith strategic direction and monitors achievem
ent in terms of the goals and strategic objectives.
2. P
ortfolio Com
mittees M
eetingsTable 17: P
ortfolio Com
mittees
DATE
PARLIAMENTARY
STRUCTUREFOCUS
KEY ISSUES PROGRESS UPDATE
18 April 2018
Portfolio C
omm
ittee on Transport (PC
oT)Presentation of the C
-BRTA Strategic Plan 2015-2020 and Annual Perform
ance Plan 2018/19 to the Portfolio C
omm
ittee on Transport.
The C-BRTA w
as comm
ended for the com
prehensive presentation.The A
nnual Perform
ance Plan 2018/19 w
as implem
ented; and the B
oard provided oversight on the implem
entation of the plan. 92.31% of
the planned targets were achieved for the financial year.
16 October
2018Portfolio C
omm
ittee on Transport (P
CoT)
Presentation
of the
2017/18 A
nnual R
eport and
Financial S
tatements
briefings
The C-B
RTA
was com
mended for the
comprehensive presentation and the
following key areas w
ere raised:
V P
rogress on the RS
A/Lesotho
passenger transport impasse;
and
V B
oard vacancies and Board
constitution.
The Chairperson of the Board raised
Board challenges of the C-B
RTA
The Agency continues to cham
pion the resolution of the RS
A/Lesotho
impasse on cross-border road transport operations and the resultant
conflict that has created an incongruity with the provisions of the C
ross-B
order Road Transport A
ct (No 4 of 1998) on passenger operations
between Lesotho and S
outh Africa. The C
-BR
TA is part of the N
ational M
inisterial Task Team tasked w
ith the responsibility of finding a lasting solution to the im
passe.
The Board vacancies and constitution rem
ain unresolved as at year end. The A
gency engaged the Departm
ent of Transport (DoT) to appoint the
requisite technical expertise to the Board.
As at the reporting date, the D
oT placed adverts for the nomination of
Board m
embers of the C
-BR
TA.
4 Decem
ber 2018
Portfolio C
omm
ittee on Transport (P
CO
T)M
eeting on
governance challenges
at the
Cross-
Border
Road
Transport A
gency (C-B
RTA
)
The Com
mittee expressed a concern
about the
differences that
exist at
Board
level and
their im
pact on
the functioning of the Agency. The
Com
mittee
requested the
Board
to w
ork together
to resolve
the differences.
The Board continues to operate and provide oversight to the A
gency and the process of resolving the governance challenges is on-going.
Annual Report 2018/19Cross-Border Road Transport Agency
42
3. The E
xecutive Authority
In accordance with the P
FMA
reporting requirements, the
Board subm
itted quarterly financial reports, performance
reports and
compliance
checklist to
the M
inister of
Transport within 30 days of the end of each quarter. The
Annual R
eport of the previous financial year, including
audited annual financial statements, w
ere submitted to
the Minister and presented at the A
nnual General M
eeting
where the D
eputy Minister w
as in attendance as a proxy for
the Minister. The D
eputy Minister expressed appreciation
for the efforts that the Agency is putting tow
ards the
achievement
of its
mandate
and further
encouraged
the Board to focus on achieving its planned targets and
improve the level of organizational perform
ance.
The Minister w
as also sensitized on the need to fill
vacancies in the Board w
ith requisite skills as required by
the C-B
RT A
ct.
4. The B
oard 4.1.
Introduction
In accordance
with
the C
-BR
T A
ct, the
Agency
is
represented and governed by the Board of D
irectors,
which is responsible for providing oversight and strategic
direction to the Agency. The B
oard reports to the Minister
of Transport on a quarterly basis and annually on the
overall performance of the A
gency.
The Board is responsible for the follow
ing, amongst others:
V M
onitoring and
evaluate the
implem
entation of
strategies and the managem
ent of performance;
V Ensuring that appropriate policies are in place;
V Ensuring that the A
gency complies w
ith all relevant
laws, law
s and government policy;
V Ensuring that risks of the organisation are properly
managed and m
itigated;
V D
efining the levels of materiality;
V A
ssessing the
effectiveness of
internal control
environment;
V S
etting the corporate governance systems;
V Ensuring sound IC
T governance and effective and
efficient use of IT systems;
V R
ecomm
ending the appointment and review
ing the
performance of the C
EO; and
V D
ischarging legislative duties and exercise any power
conferred to it by the C-B
RT A
ct.
4.2 The role of the Board is as follow
s
The Board is prim
arily responsible for providing oversight
and strategic direction and approves the five (5) year
Strategic P
lan, Annual P
erformance P
lan and the related
budget, which are subm
itted to the Minister of Transport.
The Board further m
onitors the Agency’s financial and
non-financial performance on a quarterly basis. W
here
there is
non-achievement
of targets,
managem
ent
provides reasons for deviations and remedial actions to
ensure recovery of under-performance.
The Board further m
onitors compliance w
ith all laws
that are applicable that have an impact on the A
gency’s
business. W
here necessary,
policies are
developed
and reviewed to align w
ith the legislative requirements,
thereby improving com
pliance with law
s and regulations.
The Board m
eets four (4) times a year. S
pecial meetings
are convened as and when the need arises. B
oard
meetings are scheduled in advance and m
embers are
provided with the necessary inform
ation well in tim
e
to prepare for the meeting. The B
oard meets w
ith the
Minister on arrangem
ent. The Board presents the A
nnual
Report including the audited A
nnual Financial Statem
ents
for the Minister’s adoption at the A
nnual General M
eeting.
The B
oard and
the M
inister conclude
an annual
performance agreem
ent which sets out the roles and
responsibilities of both parties.
4.3 Board Charter
The B
oard operates
in accordance
with
the B
oard
Charter w
hich it reviews on an annual basis. The B
oard
Charter sets out the roles, structures and functions of the
Board and its various com
mittees as w
ell as procedures
for Board m
eetings. The Board C
harter further makes
provision for the evaluation of the Board’s perform
ance to
ensure that it remains effective and addresses challenges
that may be ham
pering its effectiveness.
An evaluation of the Board, its com
mittees and m
embers’
performance w
ere finalized in the financial year under review
and a report thereon was subm
itted to the Shareholder.
Annual Report 2018/19 Cross-Border Road Transport Agency43
PART C
: GO
VERNA
NC
E
4.4 Com
position of the Board
In accordance with the C
-BR
T Act, the B
oard should comprise of tw
elve (12) directors, of whom
eleven (11) are non-executive directors. As at 31 M
arch 2019, a total of four (4) vacancies
existed on the Board w
ith the CEO
being the only executive director.
There were no new
appointments and term
inations during the period under review.
The Chief Executive O
fficer is the only executive director on the Board. The M
inister appoints the non-executive directors for a term of three (3) years, as w
ell as a Chairperson and a
Deputy C
hairperson from the non-executive directors for a term
of office not exceeding three (3) years. Non-executive directors are eligible for re-appointm
ent but for not more than
three (3) consecutive terms of office. The M
inister, after consultation with the B
oard, appoints the Chief Executive O
fficer for a period of five (5) years. As per K
ing IV recomm
endation
and in line with the C
-BR
T Act, the positions of the C
hairperson and the Chief Executive O
fficer do not vest in one person.
The table below discloses relevant inform
ation on the Board m
embers:
BOARD MEM
BERS
Table 18: List of C-B
RTA
Board m
embers, qualifications and other directorships
MEM
BERDATE APPOINTED
DATE RESIGNED/RETIREDQUALIFICATIONS
NO. OF MEETINGS
ATTENDED
Mr M
osoeunyane Ram
atheChairperson of the BoardChairperson of Regulatory Com
mittee
1 May 2016
N/A
V B
Com
, Wits
V B
Com
Acc, W
its V
Chartered A
ccountant (SA
)V
Diplom
a in Project M
anagement(R
AU
)
8 out of 9
Prof Jan H
avengaDeputy Board Chairperson, Deputy Chair of Regulatory Com
mittee and Chairperson of
Procurement Com
mittee
1 May 2016
N/A
V D
octor of Philosophy in Logistics M
anagement,
University of S
tellenbosch V
Master of B
usiness Leadership (UN
ISA
)V
BA
Hons, (U
OFS
)
8 out of 9
Mr M
sondezi FutshaneShareholder representative and m
ember of Regulatory
Comm
ittee
07 March 2017
N/A
V B
Tech in Transportation Engineering (TUT)
V Transportation M
anagement D
iploma (R
AU
)V
Diplom
a in Advanced P
roject Managem
ent, Executive Education
V S
4 in Civil Engineering (N
D), Eastern C
ape Technicon
3 out of 9
Annual Report 2018/19Cross-Border Road Transport Agency
44
MEM
BERDATE APPOINTED
DATE RESIGNED/RETIREDQUALIFICATIONS
NO. OF MEETINGS
ATTENDED
Mr Ignatia S
ekonyelaChairperson of Hum
an Resources and Rem
uneration Com
mittee
1 May 2016
N/A
V C
orporate Governance and B
oard Effectiveness (IO
DS
A)
V A
dvanced Labour Law (U
NIS
A)
V G
eneral Strategy D
evelopment (G
IBS
)V
Project M
anagement C
ertificate (GIB
S)
V S
enior Managem
ent Program
(UP
Business
School)
V D
iploma H
R (D
amelin)
V B
A H
onneurs Sielkunde (R
AU
)V
B C
ur Degree (M
edunsa)
5 out of 9
Mr R
aymond B
aloyiM
ember of Hum
an Resources and Rem
uneration Comm
ittee, Regulatory Com
mittee and
Procurement Com
mittee
1 May 2016
N/A
V B
A D
evelopment S
tudies, University of East
Anglia, 1978, N
orwich, England
V M
Sc Tow
n and Transport Planning, U
niversity of C
ardiff, 1980, Cardiff, W
ales V
M P
hil Urban S
tudies, Aston, U
niversity, 1985, B
irmingham
, England
9 out of 9
Mr Lucky Thekisho
Mem
ber of Human Resources
and Remuneration Com
mittee
and Regulatory Comm
ittee
1 May 2016
N/A
V B
LC, LLB
, LLM (Labour Law
), UP
V A
dvanced Labour Law, C
E@U
PV
Legislative Drafting, C
E@U
PV
Environmental Law
and Com
pliance, UJ
6 out of 9
Keitum
etse Mahlangu
Mem
ber of Audit and Risk Com
mittee
1 May 2016
N/A
V B
Proc, U
niversity of ZululandV
LLB, U
niversity of Natal
V M
AP, W
its Business S
choolV
Certificate in Fraud Exam
ination, UP
V Legislative D
rafting, Institute of Advanced Legal
Studies, U
niv. of London
4 out of 9
Mr S
ipho Khum
alo M
ember of the Board and
Regulatory Comm
ittee 01 A
pril 2010N
/AV
Master’s in P
ublic and Developm
ent Managem
ent V
BA
(Hons)
V G
lobal Executive Developm
ent Program
me, G
IBS
9 out of 9
Annual Report 2018/19 Cross-Border Road Transport Agency45
PART C
: GO
VERNA
NC
E
4.5. Board Com
mittees
The Table below depicts a sum
mary of m
eeting held by the Board com
mittees during the financial year.
Diagram
3: Board C
omm
ittees meeting schedule
NUMBER OF M
EETINGS HELD
7NUM
BER OF MEM
BERS
3
Mr R
Baloyi
Mr L Thekisho
Ms I S
ekonyela
NUMBER OF M
EETINGS HELD
12NUM
BER OF MEM
BERS
4
Ms P
Mzizi
Mr P
FourieM
r A W
akabaM
s K M
ahlangu
NUMBER OF M
EETINGS HELD
2NUM
BER OF MEM
BERS
2
Prof J H
avengaM
r R B
aloyi
NUMBER OF M
EETINGS HELD
4NUM
BER OF MEM
BERS
6
Mr M
Ram
atheP
rof J Havenga
Mr R
Baloyi
Mr L Thekisho
Mr M
FutshaneM
r S K
humalo
Audit and R
isk Committee
Human Resource and Remuneration
Regulatory Committee
Procurem
en
t Co
mm
ittee
Annual Report 2018/19Cross-Border Road Transport Agency
46
4.6. Hum
an Resources and Remuneration Com
mittee (REM
CO)
The Com
mittee m
eets at least four (4) times in a year and operates in term
s of approved
Terms of R
eference. The Com
mittee is responsible for review
of human resources
managem
ent policies
and m
onitors em
ployees’ perform
ance and
rewards.
The
Com
mittee com
prises three (3) non-executive directors.
Table 19: RE
MC
O m
eetingsM
EMBER
NO. OF MEETINGS HELD
NO. OF MEETINGS ATTENDED
Ms I S
ekonyela 7
7 out of 7
Mr L Thekisho
76 out of 7
Mr R
Baloyi
77 out of 7
4.7. Procurem
ent Comm
ittee
The Com
mittee convenes its m
eetings when there are tenders to be adjudicated and
comprises of tw
o mem
bers. The Chief Financial O
fficer have a standing invitation to the
comm
ittee.
Table 20: Procurem
ent Com
mittee m
eetingsM
EMBER
NO. OF MEETINGS HELD
NO. OF MEETINGS ATTENDED
Prof H
avenga 2
2 out of 2
Mr R
Baloyi
22 out of 2
4.8. Regulatory Com
mittee
The Regulatory C
omm
ittee is a statutory comm
ittee established in terms of section 13 of
the C-B
RT A
ct. The mem
bership of the Com
mittee is prescribed by the A
ct.
The Com
mittee operates in accordance w
ith a Regulatory C
omm
ittee Practice M
anual,
which has been approved by the B
oard.
The Com
mittee holds its scheduled m
eetings every quarter. Special m
eetings may be
scheduled as and when required.
Table 21: Regulatory C
omm
ittee meetings
MEM
BER NO. OF M
EETINGS HELD NO. OF M
EETINGS ATTENDED
Mr M
Ram
athe4
4 out of 4
Prof H
avenga4
4 out of 4
Mr S
Khum
alo4
3 out of 4
Mr R
Baloyi
44 out of 4
Mr L Thekisho
41 out of 4
Mr M
Futshane 4
0 out of 4
Table 22: Regulatory hearings
MEM
BER NO. OF M
EETINGS HELD NO. OF M
EETINGS ATTENDED
Mr M
Ram
athe8
8 out of 8
Prof H
avenga8
8 out of 8
Mr S
Khum
alo8
5 out of 8
Mr R
Baloyi
88 out of 8
Mr L Thekisho
82 out of 8
Mr M
Futshane 8
1 out of 8
Annual Report 2018/19 Cross-Border Road Transport Agency47
PART C
: GO
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NC
E
5. R
isk Managem
ent The B
oard takes overall responsibility and accountability for risk managem
ent. The Board,
through the Audit and R
isk Com
mittee, has ensured that m
anagement review
ed key risks
and response strategies to manage the risks. The B
oard relied on the strategic risk register
to monitor the effectiveness of such strategies and received assurance that the identified
strategic risks are appropriately mitigated.
Furthermore, during the financial year under review
, the Board approved the revised
Enterprise-wide
Risk
Managem
ent Fram
ework
to set
the tone
for risk
managem
ent within the Agency and provide leadership and guidance to
enable managem
ent to properly perform their duties in respect of the
effective managem
ent of risks.
6. Internal C
ontrol Unit
Internal control operates as an integral part of the financial managem
ent
activities in the Agency. D
uring the year under review, internal controls
deficiencies and risks which m
ay hamper achievem
ent of the C-B
RTA’s objectives w
ere
identified and mitigated to ensure that the A
gency achieve its objectives and that its
resources are managed in an effective, efficient and econom
ic manner.
The focus of the internal control function has been to review progress m
ade by
managem
ent in addressing internal and external audit findings to prevent recurrence of
similar findings. The activities are in line w
ith the internal control framew
ork to provide the
Board and m
anagement w
ith reasonable assurance that C-B
RTA
has a sound system of
internal control.
For the period ending March 2019, 97%
(28) of the 29-external audit findings issued in
2017/2018 were resolved w
hereas 73% (41) of the 56 internal findings w
ere also resolved
and further mitigation controls are in progress in line w
ith the comm
itted timefram
es.
Managem
ent has also comm
itted to review the internal control fram
ework to ensure
alignment w
ith best practices and National Treasury directives.
7. Internal A
udit and Audit C
omm
ittees
7.1 Internal Audit
Internal A
udit function
is an
integral part
of the
Agency’s
corporate governance.
The Agency has established an internal audit function in line w
ith the Public Finance
Managem
ent Act (P
FMA
) and Treasury Regulations. The purpose of the function is to
evaluate the effectiveness of the internal control system to ensure:
V The achievem
ent of the Agency’s strategic objectives;
V The efficiency and effectiveness of the A
gency’s operations;
V S
afeguarding of the Agency’s assets;
V The reliability and integrity of financial and non-financial inform
ation; and
V C
ompliance w
ith laws and regulations.
The Internal Audit Function reports functionally to the A
udit and Risk C
omm
ittee
and administratively to the Executive: O
ffice of the CEO
.
7.2 Key objectives of the Internal Audit function
In line with the P
FMA and Treasury R
egulations, the Internal Audit Function provides
assurance to the Board, through the Audit and R
isk Com
mittee, that the system
of risk
managem
ent, governance and internal control is appropriate, adequate, and effective to
mitigate business risks. Furtherm
ore, the function ensures that there is improvem
ent in the
internal control system w
ithin the Agency, as well as com
pliance with applicable legislation.
7.3. Summ
ary of work done
Progress against the A
nnual Audit P
lan was reported on a quarterly basis. The Internal
Audit Function executed and com
pleted all the audits on the approved plan. Where
controls were found to be deficient or not operating as intended, recom
mendations for
enhancement or im
provement w
ere provided. Significant deficiencies w
ere reported to
the Audit and R
isk Com
mittee on a quarterly basis.
The Internal Audit Function prepared a three-year A
udit Coverage P
lan and Annual
Annual Report 2018/19Cross-Border Road Transport Agency
48
Operational A
udit Plan after consideration of m
ajor risks facing the Agency. The plans w
ere approved by the Audit and R
isk Com
mittee.
Internal Audit assisted m
anagement in identifying, evaluating and assessing significant organisational risks and provided reasonable assurance as to the adequacy and effectiveness of
related internal controls, i.e. whether controls are appropriate and functioning as intended.
7.4 Audit and Risk Com
mittee
Table 23: Audit and R
isk Com
mittee m
embers
NAME
QUALIFICATIONSINTERNAL/EXTERNAL
DATE APPOINTEDDATE RESIGNED
NO. OF MEETINGS ATTENDED
Ms P
Mzizi
V C
hartered Accountant (S
A)
V B
Com
Honours in Transport Econom
ics, UN
ISA
V B
Com
Honours – C
TA, U
NIS
A
V B
BusS
ci Finance Honours , U
CT
External 17 M
ay 2010N
/A12 out of 12
Mr P
FourieV
Chartered A
ccountant (SA
)
V B
Com
Honours, U
P
V C
ertificate in Theory in Accountancy, U
P
External1 M
arch 2016N
/A11 out of 12
Mr A
Wakaba
V M
aster in Business A
dministration, U
niv. of Stellenbosch
V B
Com
pt Honours, U
niv. of Transkei
V B
Com
(Accounting), U
niv. of Transkei
External1 M
arch 2016N
/A12 out of 12
Ms K
Mahlangu
V B
Proc, U
niversity of Zululand
V LLB
, University of N
atal
V M
AP, W
its Business S
chool
V C
ertificate in Fraud Examination, U
P
V Legislative D
rafting, Institute of Advanced Legal S
tudies, Univ. of London
External 1 A
pril 2016N
/A8 out of 12
8. C
ompliance w
ith Laws A
nd Regulations
The Agency has a long-standing principle of ensuring com
pliance with the law
s and
regulations governing its business activities. Adherence to this principle is the responsibility
of every employee and is critical to help protect and enhance the reputation of the A
gency.
The Board has affirm
ed the importance of these principle by approving the C
ompliance
Manual and Fram
ework. The A
gency has developed a compliance universe consisting
of all pieces of legislation applicable to the Agency w
hich it monitors on a quarterly
basis. A quarterly com
pliance report is provided to the Board, through the A
udit and
Risk C
omm
ittee. The compliance checklist is subm
itted to the Minister of Transport on a
quarterly basis. Rem
edial action is recomm
ended should incidence of non-compliance be
identified. In addition to the pieces of legislation, the Agency also tracks com
pliance with
the SA
DC
Protocol and bilateral agreem
ents.
Regulatory changes affecting the A
gency are comm
unicated to the relevant internal
stakeholders on an on-going basis. As and w
hen required, such changes are also
incorporated into the Agency’s risk m
anagement fram
ework. P
olicies are continuously
reviewed to align w
ith the legislative developments. C
ompliance aw
areness takes place
in the form of new
sletters, workshops and presentations and are designed to increase
awareness of and enhance com
pliance with applicable legislation.
Annual Report 2018/19 Cross-Border Road Transport Agency49
PART C
: GO
VERNA
NC
E
10. M
inimising C
onflict of InterestEm
ployees of the Agency including m
embers of the B
oard are required to make annual
financial disclosures through the prescribed manner. These are subm
itted to and reviewed
by Integrity Managem
ent Services. Inconsistencies from
what has been declared by
employees are follow
ed up with affected parties, w
here appropriate, disciplinary measures
can be initiated if there was under declaration or failure to declare.
All gifts received by em
ployees are declared in writing in the gift register and approved.
The gift registers are reviewed by officials from
the Integrity Managem
ent Services on a
quarterly basis.
Delegations of A
uthority are implem
ented for decision making in the procurem
ent of
goods and services and segregation of duties are also maintained w
ithin the supply chain
managem
ent environment.
11. C
ode of Conduct
C-B
RTA
employees continue to adhere to the approved C
ode of Conduct, w
hich outlines
the values and behavioural patterns required from the em
ployees of the Agency. A
ny
reported case of non-compliance w
ith the code will be investigated and appropriate
action taken.
12. H
ealth Safety and E
nvironmental Issues
The Occupational H
ealth and Safety (OH
S) Act requires that health and safety
in the workplace be m
onitored on a regular basis. The Agency revised
the Occupational H
ealth and Safety Framew
ork during the year and the
review of the fram
ework w
ill be finalized by the OH
S Com
mittee. The
framew
ork seeks to enhance compliance to the O
HS Act.
9. Fraud A
nd Corruption
The Agency has a zero-tolerance approach tow
ards fraud, corruption and unethical
conduct. Incidents of fraud are corruption are reported using the Public S
ervice Com
mission
hotline at 0800 701 701 or through internal mechanism
at [email protected]. All
reports received are treated with confidentiality and can be m
ade anonymously. A
ll reported
incidents are independently evaluated by officials within the Integrity M
anagement Services
and where appropriate, investigated internally and/ or referred to the appropriate external
party for investigation.
The Agency has approved anti-corruption policies that are regularly com
municated to staff
and stakeholders. These include amongst others the follow
ing; Whistle B
lowing Policy, Anti-
Corruption S
trategy, Gift P
olicy and Integrity Managem
ent Framew
ork.
During the last financial period, the A
gency embarked on a successful cam
paign to drive
awareness and m
itigate fraud and corruption on the N4 C
orridor.
Annual Report 2018/19Cross-Border Road Transport Agency
50
13. C
ompany S
ecretaryThe C
ompany S
ecretary assists the Board C
hairperson in determining the annual B
oard
Plan as w
ell as raise matters that m
ay warrant the attention of the B
oard. One of the
roles is ensuring the Board is aw
are always of their legislative duties and responsibilities,
that minutes of all shareholders m
eetings, board meetings and the m
eetings of any
comm
ittees of the directors are properly recorded. Furthermore, liaise w
ith the Minister’s
office regarding Board activities and provides adm
inistrative support to the Board and its
Com
mittees.
14. S
ocial Responsibility
The C-B
RTA
has conducted career exhibitions in a joint venture with the N
ational
Departm
ent of Transport and other sister entities for grade 10-12 learners in Limpopo,
North W
est and Mpum
alanga Province. A
Know
ledge Sem
inar was also conducted for
the University of Johannesburg students.
A Youth Em
powerm
ent Workshop w
as organised in collaboration with M
usina Municipality
to empow
er young people and educate them on opportunities available w
ithin the cross-
border space.
A W
omen and Youth Inform
ation Sharing S
eminar targeting com
munities around O
shoek
border post was hosted in collaboration w
ith Chief A
lbert Luthuli Local Municipality.
The seminar w
as aimed at providing relevant inform
ation to comm
unities about existing
opportunities and funding.
A R
oad Safety Education session supported by sister agencies w
as held with tw
o Prim
ary
Schools in H
artebeeskop. A cam
paign to attract new entrants into the cross-border
market w
as held in Makgobistad in the N
orth West P
rovince.
Annual Report 2018/19 Cross-Border Road Transport Agency51
PART C
: GO
VERNA
NC
E
15. A
udit and Risk C
omm
ittee Report
We are pleased to present the report of the A
udit and Risk C
omm
ittee (“the Com
mittee”) for the financial year ended 31 M
arch 2018.
Mem
bership and Attendance
The Com
mittee com
prises of 3 independent non-executive mem
bers and one non-executive director. The mem
bers of the Com
mittee and the record of their m
eeting attendance are
listed hereunder. The Com
mittee has adopted form
al terms of reference w
hich set out its responsibilities. During the year under review
, eleven (11) meetings w
ere held, of which seven (7)
were special m
eetings. The attendance record of different mem
bers is as detailed below. Except w
here otherwise indicated, apologies w
ere tendered and absences noted for meetings
not attended.
Table 24: Sum
mary of C
omm
ittee Meeting held
ME
MB
ER
DATETOTAL OF ATTENDANCE
17/4/201822/5/2018
26/05/201813/07/2018
17/07/201803/08/2018
07/08/201820/08/2018
22/10/201821/11/2018
29/01/2019M
s P M
zizi9
99
99
99
99
99
11 out of 11M
r PS
Fourie9
99
99
99
99
99
10 out of 11M
r A W
akaba9
99
99
99
99
99
11 out of 11M
s K M
ahlangu9
A9
98
88
99
99
7 out of 119
Present 8
Apology A
Absent
Comm
ittee Responsibility The C
omm
ittee reports that it has complied w
ith its responsibilities arising from section
51(1)(a)(ii) of the PFM
A and Treasury R
egulation 27.1. The Com
mittee also reports that it
has adopted appropriate formal term
s of reference and regulated its affairs in compliance
with the term
s of reference.
The Com
mittee is satisfied that it has discharged it responsibilities as set out in its term
s
of reference.
The Effectiveness of Internal Control In carrying out its responsibilities, the C
omm
ittee confirms that the system
of internal
control applied by the Agency over financial and risk m
anagement is effective, efficient
and transparent. In line with the P
FMA
and King IV, Internal A
udit provides the Com
mittee
and managem
ent with assurance that the internal controls are appropriate and effective.
This is achieved by risk managem
ent processes, as well as the identification of corrective
actions and suggested enhancements to controls and processes. From
the various
reports of the Internal Auditors and the A
uditor-General S
outh Africa, it w
as noted that
no matters w
ere reported that indicate any material deficiencies in the system
of internal
control or any deviations. Accordingly, w
e can report that the system of internal control
over financial reporting, performance reporting and com
pliance with law
s and regulations,
for the period under review, w
as efficient and effective.
The Com
mittee is also satisfied w
ith the content and the quality of quarterly reports
prepared and issued by the managem
ent of the Agency during the year under review
.
Annual Report 2018/19Cross-Border Road Transport Agency
52
Evaluation of Financial Statements
The Com
mittee has:
V review
ed and
discussed the
audited financial
statements to be included in the annual report, w
ith
Managem
ent and the Chief Executive O
fficer which
was thereafter reported to the A
ccounting Authority;
V review
ed the
Auditor-G
eneral S
outh A
frica’s
managem
ent report
and m
anagement’s
response
thereto;
V review
ed changes
in accounting
policies and
practices;
V review
ed the Agency’s com
pliance with legal and
regulatory provisions; and
V review
ed the information on predeterm
ined objectives
to be included in the annual report.
Risk Managem
ent The C
omm
ittee has concluded that the Agency is at a
Level 3 Maturity rating: D
efined as there is an indication
that a comm
on risk assessment/response fram
ework is in
place which is based on IS
O 31000, A
gency-wide view
of
risk is provided to executive managem
ent and there are
adequate action plans implem
ented in response to high
priority risks. The Com
mittee is, therefore, satisfied w
ith the
effectiveness of the Agency’s risk m
anagement process.
Internal Audit The C
omm
ittee is satisfied that the internal audit function
is operating effectively and that it has addressed the risks
pertinent to the Agency and its audits. The follow
ing
internal audit work w
as completed during the year under
review:
V Legislative com
pliance review;
V Inform
ation technology general controls review;
V S
upply chain managem
ent review;
V C
ontract managem
ent review;
V Financial discipline review
;
V Fixed assets m
anagement and m
aintenance review;
V H
uman resources and payroll review
;
V International relations review
;
V R
egulatory/Perm
it follow up review
;
V R
isk Managem
ent and governance review;
V Travel and subsistence review
; and
V P
erformance inform
ation.
The following w
ere reported as areas of concern:
V M
aturity assessm
ent of
the com
pliance function
against the generally accepted compliance practice
framew
ork;
V W
eaknesses in processes and procedures in terms of
procurement planning;
V C
ontract managem
ent specifically non-compliance
with S
CM
policy, inadequate monitoring of contracts
and inaccurate contract register;
V S
AG
E system error for creditors/accounts payable;
and
V R
isk appetite framew
ork that is not yet approved.
Auditor’s Report The A
udit Com
mittee has m
et with the A
uditor-General
South A
frica to ensure that there are no unresolved issues.
The Com
mittee has also review
ed the implem
entation
plan for audit issues reported in the prior year and is
satisfied that the matters have been adequately resolved.
The Com
mittee concurs and accepts the conclusions of
the Auditor-G
eneral South A
frica on the annual financial
statements and is of the opinion that the audited financial
statements be accepted and read together w
ith the
report of the Auditor-G
eneral South A
frica.
Ms. P
Mzizi C
A (S
A)
Chairperson: C
-BR
TA A
udit and Risk C
omm
ittee
Date: 14 A
ugust 2019
Annual Report 2018/19 Cross-Border Road Transport Agency53
PART D
H
UM
AN
RESOU
RCE
MA
NA
GEM
ENT
1. Introduction
Hum
an Resource M
anagement (H
RM
) is simply the process of em
ploying people, training
them, com
pensating them, developing policies relating to them
, and developing strategies
to retain them. A
s a field, HR
M has undergone m
any changes over the last twenty years,
giving it an even more strategic role in today’s organisations.
In the year under review, the A
gency adopted a robust approach in the implem
entation of
the approved Hum
an Resources P
lan for 2017/2020. The implem
entation of the above
was based on the objectives and targets of the Training P
lan, Employm
ent Equity Plan,
Employee H
ealth and Wellness S
trategy and Organisational C
ulture Change program
mes.
Overview of HR m
atters at the C-BRTA
The Hum
an Resources function as the anchor of the organisation is a critical driver of
organisational change and leadership development. The culture of the C
-BR
TA is shaped
into a service excellent organisation that appreciates and care for its people and clients. The
Agency hosted its second Annual Performance Aw
ards for the 2017/18 financial year in
August 2018 which w
as followed by the divisional Perform
ance Awards for 2018/19 in M
arch
2019.
Employee perform
ance managem
ent framew
ork
The Perform
ance Managem
ent Policy w
as successfully reviewed and approved by the
Board in the year under review
. Perform
ance managem
ent automation project w
as
successful and finalised during 2018/19 financial year. The Perform
ance Recognition
and Rew
ards Framew
ork was review
ed and approved, which resulted in the successful
hosting of the improved divisional perform
ance awards.
Employee w
ellness programm
es
Wellness program
s are good at helping employees adopt and m
aintain healthy behaviours
and lifestyles. Healthy behaviours lead to low
er health risks, and lower health risks lead
to less chronic disease. With less chronic disease em
ployees have fewer health care
costs. In a quest to maintain a healthy w
orkforce, the C-B
RTA
participated in different
programm
es including those on the National H
ealth Calendar. The follow
ing programm
es
and health related initiatives were undertaken: -
V M
TN – W
alk the Talk Event;
V O
rganised a Talk on Wom
en Issues – Wom
en’s Day;
V C
elebrated different Indigenous Traditional Cuisines – H
eritage Day;
V O
rganised a Wellness D
ay which started w
ith a 4km w
alk and culminated into H
ealth
Risk A
ssessment; and
V A
ssessment including H
IV/AID
S check-ups – W
orld AID
S D
ay.
Policy development and review
s
Several policies w
ere reviewed during 2018/19 financial year, these include R
ecruitment
and Selection; R
eward and R
emuneration; P
erformance M
anagement; D
isciplinary Code
and Procedures; Leave; B
ereavement; H
ours of Work; G
rievance; Probation P
olicy;
Employee A
ssistance Program
me; S
exual Harassm
ent; Learning and Developm
ent and
Cell P
hone Policy.
Annual Report 2018/19 Cross-Border Road Transport Agency55
PART D
: HU
MA
N RESO
URC
E MA
NA
GEM
ENT
2. H
uman R
esource Oversight S
tatistics Table 25: P
ersonnel cost by programm
e
PROGRAMM
ETOTAL EXPENDITURE PER
PROGRAMM
E (R’000)PERSONNEL EXPENDITURE
(R’000)PERSONNEL EXP. AS A %
OF EXP. (R’000)
NO. OF EMPLOYEES
AVERAGE PERSONNEL COST PER EM
PLOYEE (R’000)
Adm
inistration 127 349
75 043 58.92%
82 915
Profiling
55 740 16 583
29.75%24
691
Regulatory S
ervices 18 337
15 877 86.61%
34 467
Stakeholder M
anagement
13 424 11 190
83.36% 13
861
Research and D
evelopment
9 196 7 621
82.87% 11
693
Total 224 047
126 314 56.38%
164
* Adm
inistration (CE
O’s O
ffice, CO
O’s O
ffice, Corporate S
ervices, Finance and ICT)
Table 26: Personnel cost by salary band
LEVELPERSONNEL EXPENDITURE
(R’000)%
OF PERSONNEL EXP. TO TOTAL PERSONNEL COST
NO. OF EMPLOYEES
AVERAGE PERSONNEL COST PER EM
PLOYEE (R’000)
Top Managem
ent 19 532
15.46%9
2 170
Senior M
anagement
25 955 11.13%
18 1 442
Professional qualified
35 543 17.16%
35 1 016
Skilled
28 163 16.41%
58 486
Sem
i-skilled 16 097
11.22%38
424
Unskilled
1 024 0.80%
6 171
Total 126 314
100.00%164
Table 27: Perform
ance Rew
ards
PROGRAMM
EPERFORM
ANCE REWARDS
PERSONNEL EXPENDITURE(R’000)
% OF PERFORM
ANCE REW
ARDS TO TOTAL PERSONNEL COST (R’000)
Top Managem
ent 292
19 532 1.49%
Senior M
anagement
743 25 955
2.86%
Professional qualified
1 722 35 543
4.84%
Skilled
1 173 28 163
4.17%
Sem
i-skilled 1 017
16 097 6.32%
Unskilled
46 1 024
4.49%
Total 4 993
126 314 3.95%
Annual Report 2018/19Cross-Border Road Transport Agency
56
Table 28: Training costs programm
e
DIRECTORATE/BUSINESS UNITPERSONNEL EXPENDITURE
(R’000)TRAINING EXPENDITURE
(R’000)TRAINING EXPENDITURE AS A
% OF PERSONNEL COST
NO. OF EMPLOYEES TRAINED
AVERAGE TRAINING COST PER EM
PLOYEE
Adm
inistration 75 042
1 541 2.05%
72 21.11
Regulatory S
ervices 16 583
28 0.17%
32 0.88
Profiling
15 877 691
4.35% 22
31.41
Stakeholder M
anagement
11 190 10
0.09% 12
0.83
Research and D
evelopment
7 621 18
0.24% 11
1.64
Total 126 314
2 289 150
*Adm
inistration (CE
O’s O
ffice, CO
O’s O
ffice, Corporate S
ervices, Finance and ICT)
Table 29: Em
ployment and vacancies per program
me
PROGRAMM
E2017/18 NO. OF EM
PLOYEESAPPROVED POSTS
2018/19 NO. OF EMPLOYEES
2018/19 VACANCIES%
OF VACANCIES
Adm
inistration 78
121 80
3932.23%
Regulatory S
ervices 36
48 34
1429.17%
Profiling
24 40
24 16
40.00%
Stakeholder R
elations 13
18 13
527.78%
Research and D
evelopment
13 21
11 10
47.62%
Total 164
248 162
8433.87%
Table 30: Em
ployment and vacancies per salary band
LEVEL2017/18 NO. OF EM
PLOYEESAPPROVED POSTS
2018/19 NO. OF EMPLOYEES
2017/18 VACANCIES%
OF VACANCIES
Top Managem
ent8
108
110.00%
Senior M
anagement
1720
182
10.00%
Professional qualified
3659
3224
40.68%
Skilled
57107
5849
45.79%
Sem
i-skilled40
4640
817.39%
Unskilled
66
60
0.00%
Total164
248162
8433.87%
* The recruitment for the vacancies have been prioritised and spaced over a period of three years.
Annual Report 2018/19 Cross-Border Road Transport Agency57
PART D
: HU
MA
N RESO
URC
E MA
NA
GEM
ENT
Table 31: Em
ployment changes per salary band
SALARY BANDEM
PLOYMENT AT BEGINNING
OF PERIODAPPOINTM
ENTSTERM
INATIONSEM
PLOYMENT AT END OF THE
PERIOD
Top Managem
ent8
10
9
Senior M
anagement
171
018
Professional qualified
362
335
Skilled
576
558
Sem
i-skilled40
13
38
Unskilled
60
06
Total164
1111
164
Table 32: Reasons for staff leaving
REASONNUM
BER%
OF TOTAL NO. OF STAFF LEAVING
Death
19%
Resignation
545%
Dism
issal1
9%
Retirem
ent1
9%
Ill-health0
0%
Expiry of contract3
27%
Total11
Annual Report 2018/19Cross-Border Road Transport Agency
58
Table 33: Equity target and em
ployment equity status (M
ale)
LEVELS
MALE
AFRICANCOLOURED
INDIANW
HITECURRENT
TARGETCURRENT
TARGETCURRENT
TARGETCURRENT
TARGET
Top Managem
ent4
01
00
00
0
Senior M
anagement
80
00
00
20
Professional qualified
94
10
10
20
Skilled
140
00
10
00
Sem
i-skilled7
02
00
00
0
Unskilled
20
00
00
00
Total51
44
02
04
0
Table 34: Equity target and em
ployment equity status (Fem
ale)
LEVELS
FEMALE
AFRICANCOLOURED
INDIANW
HITECURRENT
TARGETCURRENT
TARGETCURRENT
TARGETCURRENT
TARGET
Top Managem
ent4
00
00
00
0
Senior M
anagement
6 0
00
20
00
Professional qualified
125
12
01
20
Skilled
397
22
12
40
Sem
i-skilled24
02
00
00
0
Unskilled
40
00
00
00
Total89
125
43
36
0
Table 35: People leaving w
ith disabilities
LEVELS
DISABLED STAFFM
ALEFEM
ALECURRENT
TARGETCURRENT
TARGET
Senior M
anagement
00
00
Professional qualified
00
00
Skilled
00
00
Sem
i-skilled0
00
0
Unskilled
00
00
Total0
00
0
Annual Report 2018/19 Cross-Border Road Transport Agency59
PART FINANCIAL INFORM
ATIONE
C-B
RTA
Cross-B
order Road Transport A
gency (the Agency)
RTM
CR
oad Traffic Managem
ent Corporation
FNB
First National B
ank (South A
frica)S
A G
AA
PS
outh African S
tatements of G
enerally Accepted A
ccounting Practice
GR
AP
Generally R
ecognised Accounting P
racticeP
FMA
Public Finance M
anagement A
ct (Num
ber 1 of 1999)IFR
SInternational Financial R
eporting Standards
IAS
International Accounting S
tandardsTR
Treasury Regulations (of the P
FMA
)IP
SA
SInternational P
ublic Sector A
ccounting Standards
AG
SA
Auditor-G
eneral of South A
fricaA
FSA
nnual Financial Statem
ents
AR
CA
udit and Risk C
omm
ittee (of the board)C
EO
Chief Executive O
fficerC
FOC
hief Financial Officer
SA
RS
South A
frican Revenue S
ervices
Accounting A
uthority’s Responsibilities and A
pproval ...................................................................62
Report to the A
uditor-General ..........................................................................................................63
Statem
ent of Financial Position .......................................................................................................66
Statem
ent of Financial Perform
ance ................................................................................................66
Statem
ent of Changes in N
et Assets................................................................................................67
Cash Flow
Statem
ent ........................................................................................................................67
Statem
ent of Com
parison of Budget and A
ctual Am
ounts .............................................................68
Accounting P
olicies ...........................................................................................................................70
Notes to the A
nnual Financial Statem
ents ......................................................................................88
Detailed Incom
e statement .............................................................................................................103
�1();�&&5)9-%7-216
Cross-Border Road Transport Agency61Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
��''2817-1+��
87,25-7<�6�5)63216-&-/-7-)6�%1(��33529%/
The Accounting A
uthority is required by the Public Finance M
anagement A
ct (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 inform
ation included in this report. It is the responsibility of the A
ccounting Authority to ensure that the annual financial statem
ents fairly present the state of affairs of the C
ross-Border R
oad Transport Agency (“A
gency”) as at the end of the financial year and the results of its operations and cash flow
s for the period then ended. The A
uditor General of S
outh Africa is engaged to express an independent opinion on
the annual financial statements and w
as given unrestricted access to all financial records and related data.
The annual financial statements have been prepared in accordance w
ith Standards of G
enerally R
ecognised Accounting P
ractice (GR
AP
) including any interpretations, guidelines and directives issued by the A
ccounting Standards B
oard.
The annual financial statements are based upon appropriate accounting policies consistently
applied and supported by reasonable and prudent judgements and estim
ates.
The Accounting A
uthority acknowledges that it is ultim
ately responsible for the system of
internal financial control established by the Agency and place considerable im
portance on m
aintaining a strong control environment. To enable the A
ccounting Authority to m
eet these responsibilities, it sets standards for internal control aim
ed at reducing the risk of error or deficit in a cost-effective m
anner. The standards include the proper delegation of responsibilities w
ithin a clearly defined framew
ork, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are m
onitored throughout the A
gency and all employees are required to m
aintain the highest ethical standards in ensuring the A
gency’s business is conducted in a manner that in all reasonable circum
stances is above reproach. The focus of risk m
anagement in the A
gency is on identifying, assessing, managing
and monitoring all know
n forms of risk across the A
gency. While operating risk cannot be
fully eliminated, the A
gency endeavours to minim
ise it by ensuring that appropriate controls, system
s and ethical behaviour are applied and managed w
ithin predetermined procedures and
constraints.
The Accounting A
uthority is of the opinion, based on the information and explanations given
by managem
ent, that the system of internal control provides reasonable assurance that the
financial records may be relied on for the preparation of the annual financial statem
ents. H
owever, any system
of internal financial control can provide only reasonable, and not absolute, assurance against m
aterial misstatem
ent or deficiencies.
The Accounting A
uthority have reviewed the A
gency’s cash flow forecast for the year to
31 March 2020 and, considering this review
and the current financial position, it is satisfied that the A
gency has or has access to adequate resources to continue in operational existence for the foreseeable future.
The annual financial statements are prepared on the basis that the A
gency is a going concern. The external auditors are responsible for independently review
ing and reporting on the A
gency’s annual financial statements. The annual financial statem
ents have been examined by
the Auditor G
eneral of South A
frica and their report is presented on page 63.
The annual financial statements set out on page 66 to 103 , w
hich have been prepared on the going concern basis, w
ere approved by the Accounting A
uthority on 29 July 2019 and were
signed on its behalf by:
Mr M
Ram
athe
Mr C
Letso
alo
Chairperson of the B
oard
C
hief Executive O
fficer (Acting)
Pretoria
29 July 2019
Annual Report 2018/19
62Cross-Border Road Transport Agency
")3257�21�7,)�%8(-7�2*�7,)�=1%1'-%/�67%7)0
)176
Opinion
1. I have audited the financial statem
ents of the Cross B
order Road Transport A
gency set
out on pages 66 to 103, which com
prise the statement of financial position as at 31
March 2019, the statem
ent of financial performance, statem
ent of changes in net assets,
cash flow statem
ent and statement of com
parison of budget and actual amounts for the
year then ended, as well as the notes to the financial statem
ents, including a summ
ary of
significant accounting policies.
2. In m
y opinion, the financial statements present fairly, in all m
aterial respects, the
financial position of the Cross B
order Road Transport A
gency as at 31 March 2019,
and its financial performance and cash flow
s for the year then ended in accordance with
Generally R
ecognised Accounting P
ractice (GR
AP
) and the requirements of the P
ublic
Finance Managem
ent Act (P
FMA
) of South A
frica, 1999 (Act no. 1 of 1999).
Basis for opinion
3. I conducted m
y audit in accordance with the International S
tandards on Auditing (IS
As).
My responsibilities under those standards are further described in the auditor-general’s
responsibilities for the audit of the financial statements section of this auditor’s report.
4. I am
independent of the public entity in accordance with sections 290 and 291 of the
International Ethics Standards B
oard for Accountants’ C
ode of ethics for professional
accountants (IESB
A code), parts 1 and 3 of the International Ethics S
tandards Board
for Accountants’ International C
ode of Ethics for Professional A
ccountants (including
International Independence Standards) and the ethical requirem
ents that are relevant to
my audit in S
outh Africa. I have fulfilled m
y other ethical responsibilities in accordance with
these requirements and the IES
BA
codes.
5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a
basis for my opinion.
Responsibilities of the A
ccounting Authority for the financial statem
ents
6. The board of directors, w
hich constitutes the accounting authority is responsible for the
preparation and fair presentation of the financial statements in accordance w
ith GR
AP
and the requirements of the P
FMA
, and for such internal control as the accounting
authority determines is necessary to enable the preparation of financial statem
ents that
are free from m
aterial misstatem
ent, whether due to fraud or error.
7. In preparing the financial statem
ents, the accounting authority is responsible for assessing the
Cross B
order Road Transport Agency’s ability to continue as a going concern, disclosing, as
applicable, matters relating to going concern and using the going concern basis of accounting
unless the appropriate governance structure either intends to liquidate the public entity
or to cease operations, or has no realistic alternative but to do so.
Auditor-general’s responsibilities for the audit of the financial
statements
8. M
y objectives are to obtain reasonable assurance about whether the financial
statements as a w
hole are free from m
aterial misstatem
ent, whether due to fraud
or error, and to issue an auditor’s report that includes my opinion. R
easonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the IS
As w
ill always detect a m
aterial misstatem
ent when it
exists. Misstatem
ents can arise from fraud or error and are considered m
aterial
if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statem
ents.
9. A
further description of my responsibilities for the audit of the financial statem
ents is
included in the annexure to this auditor’s report.
")3257�21�7,)�%8(-7�2*�7,)�%118%/�3)5*250
%1')�5)3257
Introduction and scope
10. In accordance w
ith 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 m
aterial
findings on the reported performance inform
ation against predetermined objectives
for selected programm
es presented in the annual performance report. I perform
ed
procedures to identify findings but not to gather evidence to express assurance.
11. M
y procedures address the reported performance inform
ation, which m
ust be based
on the approved performance planning docum
ents of the public entity. I have not
evaluated the completeness and appropriateness of the perform
ance indicators/
measures included in the planning docum
ents. My procedures also did not extend
to any disclosures or assertions relating to planned performance strategies and
information in respect of future periods that m
ay be included as part of the reported
performance inform
ation. Accordingly, m
y findings do not extend to these matters.
12. I evaluated the usefulness and reliability of the reported perform
ance information
in accordance with the criteria developed from
the performance m
anagement and
reporting framew
ork, as defined in the general notice, for the following selected
programm
es presented in the annual performance report of the public entity for the
year ended 31 March 2019:
Program
mes
Pages in the annual perform
ance reportP
rogramm
e 2 – Regulatory S
ervices29 – 31
")3257�2*�7,)��
8(-725��)1)5%/�72�!%5/-%0
)17�21��5266��
25()5�"2%(�$5%163257��
+)1'<Cross-Border Road Transport Agency63Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
13. I perform
ed procedures to determine w
hether the reported performance inform
ation
was properly presented and w
hether performance w
as consistent with the approved
performance planning docum
ents. I performed further procedures to determ
ine whether
the indicators and related targets were m
easurable and relevant, and assessed the
reliability of the reported performance inform
ation to determine w
hether it was valid,
accurate and complete.
14. I did not raise any m
aterial findings on the usefulness and reliability of the reported
performance inform
ation for this programm
e:
V
Program
me 2 - R
egulatory Services
Other m
atter
15. I draw
attention to the matter below
.
�',-)9)0
)17�2*�3/%11)(�7%5+)7616.
Refer to the annual perform
ance report on pages 19 to 40 for information on the
achievement of planned targets for the year and explanations provided for the under/
over achievement of a significant num
ber of targets.
")3257�21�7,)�%8(-7�2*�'20
3/-%1')�:-7,�/)+-6/%7-21
Introduction and scope
17. In accordance w
ith the PAA
and the general notice issued in terms thereof, I have a
responsibility to report material findings on the com
pliance of the public entity with
specific matters in key legislation. I perform
ed procedures to identify findings but not to
gather evidence to express assurance.
18. I did not raise m
aterial findings on compliance w
ith the specific matters in key legislation
set out in the general notice issued in terms of the PA
A.
Other inform
ation
19. The accounting authority is responsible for the other inform
ation. The other information
comprises the inform
ation included in the annual report which includes the forew
ord by
the chairperson of the Board, the acting C
EO’s overview
, the audit comm
ittee’s report.
The other information does not include the financial statem
ents, the auditor’s report and
those selected programm
es presented in the annual performance report that have been
specifically reported in this auditor’s report.
20. M
y opinion on the financial statements and findings on the reported perform
ance
information and com
pliance with legislation do not cover the other inform
ation and I do
not express an audit opinion or any form of assurance conclusion thereon.
21. In connection w
ith my audit, m
y responsibility is to read the other information and, in
doing so, consider whether the other inform
ation is materially inconsistent w
ith the
financial statements and the selected program
mes presented in the annual perform
ance
report, or my know
ledge obtained in the audit, or otherwise appears to be m
aterially
misstated.
22. If, based on the w
ork I have performed on the other inform
ation obtained prior to the
date of this auditor’s report, I conclude that there is a material m
isstatement of this other
information, I am
required to report that fact. I have nothing to report in this regard.
Internal control deficiencies
23. I considered internal control relevant to m
y audit of the financial statements, reported
performance
information
and com
pliance w
ith applicable
legislation; how
ever, m
y
objective was not to express any form
of assurance on it. I did not identify any significant
deficiencies in internal control.
Other reports
24. I draw
attention to the following engagem
ents conducted by various parties that had,
or could have, an impact on the m
atters reported in the public’s financial statements,
reported performance inform
ation, compliance w
ith applicable legislation and other
related matters. These reports did not form
part of my opinion on the financial statem
ents
or my findings on the reported perform
ance information or com
pliance with legislation.
25. A
t the date of this report investigations are being carried out by the Accounting A
uthority.
The investigations are related to the alleged conduct of the Chief Executive O
fficer. The
impact, if any, on the financial statem
ents of the Cross B
order Road Transport A
gency
can only be determined once the investigations have been concluded.
Pretoria
31 July 2019
Annual Report 2018/19
64Cross-Border Road Transport Agency
�11);85)�– A
uditor-general’s responsibility for the audit
1. A
s part of an audit in accordance with the IS
As, I exercise professional judgem
ent and
maintain professional scepticism
throughout my audit of the financial statem
ents, and the
procedures performed on reported perform
ance information for selected program
mes
and on the public entity’s compliance w
ith respect to the selected subject matters.
Financial statements
2. In addition to m
y responsibility for the audit of the financial statements as described in this
auditor’s report, I also:
V identify and assess the risks of m
aterial misstatem
ent of the financial statements w
hether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion.
The risk of not detecting a material m
isstatement resulting from
fraud is higher than for
one resulting from error, as fraud m
ay involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control
V obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the public entity’s internal control
V evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures m
ade by the [board of directors, which
constitutes the accounting authority
V conclude on the appropriateness of the board of directors, w
hich constitutes the
accounting authority’s use of the going concern basis of accounting in the preparation of
the financial statements. I also conclude, based on the audit evidence obtained, w
hether
a material uncertainty exists related to events or conditions that m
ay cast significant
doubt on the Cross B
order Road Transport A
gency’s ability to continue as a going
concern. If I conclude that a material uncertainty exists, I am
required to draw attention
in my auditor’s report to the related disclosures in the financial statem
ents about the
material uncertainty or, if such disclosures are inadequate, to m
odify the opinion on the
financial statements. M
y conclusions are based on the information available to m
e at the
date of this auditor’s report. How
ever, future events or conditions may cause a public
entity to cease continuing as a going concern
V evaluate the overall presentation, structure and content of the financial statem
ents,
including the disclosures, and whether the financial statem
ents represent the underlying
transactions and events in a manner that achieves fair presentation
Com
munication w
ith those charged with governance
3. I com
municate w
ith the accounting authority regarding, among other m
atters, the planned
scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that I identify during my audit.
4. I also confirm
to the accounting authority that I have complied w
ith relevant ethical
requirements regarding independence, and com
municate all relationships and other
matters that m
ay reasonably be thought to have a bearing on my independence and,
where applicable, related safeguards.
Cross-Border Road Transport Agency65Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
NOTE(S)2019
R
2018RESTATED*
R
Revenue from
non-exchange transactions12
399,163,163
243,573,985
Other incom
e13
644,634
3,247,583
General expenses
18(77,625,090)
(60,548,020)
Employee costs
15(126,314,489)
(110,892,311)
Depreciation and am
ortisation21
(3,399,621)(2,210,600)
Assets w
ritten off and impaired
21(259,184)
(812,851)
Operating lease rental
20 & 21(11,002,525)
(10,917,652)
Provision for bad debt expense
17
(5,099,705)(4,070,924)
Operating surplus
21
176,107,183
57,369,210
Interest received14
5,230,054
4,560,825
Finance costs16
(347,000)
(287,676)
Surplus for the year
180,990,237
61,642,359
NOTE(S)2019
R
2018RESTATED*
R
Assets
Current A
ssets
Receivables from
exchange transactions 6
1,956,522
1,348,345
Receivables from
non-exchange transactions
7
5,064,326
6,130,443
Cash and cash equivalents
8
78,144,571
63,489,647
85,165,419
70,968,435
Non-C
urrent Assets
Property, plant and equipm
ent 3
7,759,035
7,489,083
Intangible assets4
1,237,382
1,314,402
8,996,417
8,803,485
Total assets
94,161,836
79,771,920
Liabilities
Current liabilities
Operating lease liability
20
804,134
114,896
Payables from
exchange transactions11
11,974,635
16,568,452
Provisions
9
7,879,239
170,300,466
Payables from
non exchange transactions10
6,666,035
6,044,416
27,324,043
193,028,230
Non-current liabilities
Operating lease liability
20-
804,134Em
ployee benefit obligation5
3,768,000
3,860,000
3,768,000
4,664,134
Total Liabilities
31,092,043
197,692,364
Net A
ssets
63,069,793(117,920,444)
Accum
ulated surplus
63,069,793(124,459,955)
#7%7)0
)17�2*��-1%1'-%/�!26-7-21�as at 31 March 2019
#7%7)0
)17�2*��-1%1'-%/�!)5*250%1')
Annual Report 2018/19
66Cross-Border Road Transport Agency
ACCUMULATED
SURPLUS(DEFICIT)R
TOTAL NET ASSETS
R
Balance at 01 A
pril 2017(178,207,405)
(178,207,405)
Transfer of assets
(1,355,398)
(1,355,398)
Net incom
e (losses) recognised directly in net assets
(1,355,398)(1,355,398)
Surplus for the year
55,102,848
55,102,848
Opening balance as previously reported
(124,459,955)
(124,459,955)
Prior-period error (N
ote 30)
6,539,511
6,539,511
Restated* B
alance at 01 April 2018 as restated*
(117,920,444)(117,920,444)
Surplus for the year
180,990,237
180,990,237
Balance at 31 M
arch 2019
63,069,793
63,069,793
NOTE(S)2019
R
2018RESTATED*
R
Cash flow
s from operating activities
Receipts
Sale of goods and services
237,549,170
245,258,527
Paym
ents
Employee costs
(124,676,280)
(110,129,597)
Suppliers
(98,290,915)(102,356,848)
Perm
it refunds(1,305,367)
(32,514,152)
(224,272,562)(245,000,597)
Net cash flow
s from operating activities
22
13,276,608
257,930
Cash flow
s from investing activities
Purchase of property, plant and equipm
ent3
(3,397,090)(3,916,547)
Purchase of other intangible assets
4(454,648)
(1,318,595)
Interest income
5,230,054
4,560,825
Net cash flow
s from investing activities
1,378,316
(674,317)
Net increase/(decrease) in cash and cash
equivalents
14,654,924(416,387)
Cash and cash equivalents at the beginning of
the year
63,489,647
63,906,034
Cash and cash equivalents at the end of
the year 8
78,144,571
63,489,647
#7%7)0
)17�2*��,%1+)6�-1��
)7��66)76
�%6,��/2:
�#7%7)0
)17Cross-Border Road Transport Agency67Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
#7%7)0
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8(+)7�%1(��'78%/��
028176
BUDGET ON ACCRUAL BASISAPPROVED BUDGET
RADJUSTM
ENTSR
FINAL BUDGETR
ACTUAL AMOUNTS ON
COMPARABLE BASIS
R
DIFFERENCE BETWEEN
FINAL BUDGET AND ACTUALR
REFERENCE
Statem
ent of Financial Perform
ance
Revenue
Revenue from
non-exchange transactions
Perm
it revenue
223,787,030 -
223,787,030
194,801,870
(28,985,160)
Com
ment (a)
Prescription of claim
s -
--
162,716,567
162,716,567
Com
ment (b)
Other incom
e -
--
644,634
644,634
Interest received - investment
4,292,610
-
4,292,610
5,230,054
937,444 C
omm
ent (c)
Total permit revenue and interest
228,079,640
-
228,079,640
363,393,125
135,313,485
Penalty incom
e
Fines-
--
41,644,726
41,644,726
Com
ment (d)
Total revenue
228,079,640 -
228,079,640
405,037,851
176,958,211
Expenditure
Employee costs
(138,300,287)
-
(138,300,287)
(126,314,488)
11,985,799 C
omm
ent (e)
Operating costs
(55,169,720)
-
(55,169,720)
(56,700,471)
(1,530,751) C
omm
ent (f)
Depreciation and am
ortisation
(4,349,569) -
(4,349,569)
(3,399,621)
949,948
Com
ment (g)
Finance costs and interest expense -
--
(347,000)
(347,000)
Adm
inistration fee - RTM
C
--
-
(37,026,850)
(37,026,850) C
omm
ent (h)
Total expenditure
(197,819,576) -
(197,819,576)
(223,788,430)
(25,968,854)
Operating surplus
30,260,064
-
30,260,064
181,249,421
150,989,357
Assets w
ritten-off and impaired
--
-
(259,184)
(259,184)
Surplus before taxation
30,260,064
-
30,260,064
180,990,237
150,730,173
Actual A
mount on C
omparable
30,260,064
-
30,260,064
180,990,237
150,730,173 B
asis as Presented in the B
udget and Actual
Com
parative Statem
ent
Annual Report 2018/19
68Cross-Border Road Transport Agency
�;3/%1%7-21�2*�9%5-%1')6
(a) P
ermit revenue
The budget was based on the perm
it tariff increase which did not m
aterialise as
anticipated. The permit tariffs w
ill be increased by 4.7% in the next financial year.
(b) Prescription of claim
s
During the year the A
gency applied Prescription A
ct on claims previously recognised as
provision, which resulted in recognition of revenue in term
s of GR
AP
23. This revenue was
not budgeted for as it was not anticipated.
(c) Interest received on investments
Interest income w
as 21% m
ore than budgeted, which w
as mainly due to m
ore cash
reserves being invested in call and fixed deposits due to cost cutting measures and
delays in projects.
(d) Fines
Fines were not budgeted for in respect of the financial year under review
. This was due to
the unanticipated reorganisation of law enforcem
ent function during the last financial year
after the budget has been finalised.
(e) E
mployee costs
Following the tarrif increase not published, only critical positions w
ere filled in the 2018/19
financial year.
(f) O
perating costs
This expenditure was m
ore than budgeted for. Although savings w
ere realised due to
cost saving measures that w
ere implem
ented during the year in light of the delays in
implem
enting the permit tariff increases, the im
pact of the provision for doubtful debts
resulted in operating costs more than budgeted for.
(g) D
epreciation and armotisation
The delay in implem
enting certain projects resulted in certain capital projects not
implem
ented timely resulting in low
er depreciable amount.
(h) Adm
inistration fee - RTM
C
Adm
inistration fee was not budgeted for in respect of the financial year under review
. This
was due to the unanticipated reorganisation of law
enforcement function during the last
financial year after the budget has been finalised.
Cross-Border Road Transport Agency69Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
1. �%6-6�2*�35)3%5%7-21�%1(�35)6)17%7-21�2*�7,)�%118%/�=1%1'-%/�67%7)0
)176The annual financial statem
ents have been prepared in accordance with the S
tandards of
Generally R
ecognised Accounting P
ractice (GR
AP
), issued by the Accounting S
tandards Board
in accordance with S
ection 91(1) of the Public Finance M
anagement A
ct (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 m
easurement, unless
specified otherwise. They are presented in S
outh African R
and.
In the absence of an issued and effective Standard of G
RA
P, accounting policies for material
transactions, events or conditions were developed in accordance w
ith paragraphs 8, 10 and
11 of GR
AP
3 as read with D
irective 5.
Assets, liabilities, revenues and expenses w
ere not offset, except where offsetting is either
required or permitted by a S
tandard of GR
AP.
Recognition of P
enalty Income
Perm
it income is recognised w
ith reference to the process of issuing permits. In line w
ith GR
AP
23, permit revenue is treated as revenue from
non-exchange transactions.
Recognition of P
enalty Income
The recognition of penalty income is based on all inform
ation available to managem
ent at the
reporting date. In line with G
RA
P 23, it is treated as revenue from
non-exchange transactions.
Defined benefit obligations
The value of benefit obligations is determined by actuaries and it is based on the m
arket
conditions as well as assum
ptions at the reporting date.
Fair value
The value for which an asset could be exchanged or a liability settled in a m
arket-related
transaction.
Use of estim
ates and judgements
The use of judgment, estim
ates and assumptions is inherent to the process of preparing
annual financial
statements.
These judgem
ents, estim
ates and
assumptions
affect the
amounts presented in the annual financial statem
ents. Uncertainties about these estim
ates
and assumptions could result in outcom
es that require a material adjustm
ent to the carrying
amount of the relevant asset or liability in future periods.
Judgements
In the process of applying these accounting policies, managem
ent has made judgem
ents as
outlined in note 1.4.
Estim
ates
Estimates are inform
ed by historical experience, information currently available to m
anagement,
assumptions and other factors that are believed to be reasonable under the circum
stances.
These estimates are review
ed on a regular basis. Changes in estim
ates that are not due to
errors are processed in the period of the review and applied prospectively.
A sum
mary of the significant accounting policies, w
hich have been consistently applied in the
preparation of these annual financial statements, are disclosed below
.
1.1 P
resentation currency
These annual financial statements are presented in S
outh African R
and, which is the functional
currency of the Agency.
1.2 G
oing concern assumption
These annual financial statements have been prepared based on the expectation that the
Agency w
ill continue to operate as a going concern for at least the next 12 months.
1.3 C
omparatives
Prior year
When the presentation or classification of item
s in the annual financial statements is am
ended,
prior period comparative am
ounts are also reclassified and restated, unless such comparative
reclassification and / or restatement is not required by a S
tandard of GR
AP. The nature and
reason for such reclassifications and restatements are also disclosed.
�''2817-1+�!2/-'-)6
Annual Report 2018/19
70Cross-Border Road Transport Agency
Where m
aterial accounting errors which relate to prior periods have been identified in the
current year, the correction is made retrospectively as far as is practicable and the prior year
comparatives are restated accordingly. W
here there has been a change in accounting policy in
the current year, the adjustment is m
ade retrospectively as far as is practicable and the prior
year comparatives are restated accordingly.
Budget com
paratives
Budget inform
ation in accordance with G
RA
P 1 and 24 has been provided in a separate
disclosure note to these annual financial statements.
1.4 S
ignificant judgements and sources of estim
ation uncertainty
In preparing the annual financial statements, m
anagement is required to m
ake estimates and
assumptions that affect the am
ounts represented in the annual financial statements and related
disclosures. Use of available inform
ation and the application of judgement is inherent in the
formation of estim
ates. Actual results in the future could differ from
these estimates w
hich may
be material to the annual financial statem
ents. Significant judgem
ents include:
Trade receivables and other receivables
The Agency assesses its trade receivables, held to m
aturity investments and loans and
receivables for impairm
ent at the end of each reporting period. In determining w
hether an
impairm
ent loss should be recorded in surplus or deficit, the managem
ent makes judgem
ents
as to whether there is observable data indicating a m
easurable decrease in the estimated future
cash flows from
a financial asset.
The impairm
ent for trade receivables, held to maturity investm
ents and loans and receivables
is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and
industry-specific economic conditions and other indicators present at the reporting date that
correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in
the portfolio and scaled to the estimated loss em
ergence period.
The measurem
ent of receivables is derived after consideration of the allowances for doubtful
debts. Am
ounts receivable outstanding for more than 12 m
onths are deemed to be im
paired
and a provision is made accordingly.
Fair value estimation
The fair value of financial instruments that are not traded in an active m
arket (for example, over-
the counter derivatives) is determined by using valuation techniques. The A
gency uses a variety
of methods and m
akes assumptions that are based on m
arket conditions existing at the end of
each reporting period. Quoted m
arket prices or dealer quotes for similar instrum
ents are used
for long-term debt. O
ther techniques, such as estimated discounted cash flow
s, are used to
determine fair value for the rem
aining financial instruments.
The carrying value less impairm
ent provision of trade receivables and payables are assumed
to approximate their fair values. The fair value of financial liabilities for disclosure purposes is
estimated by discounting the future contractual cash flow
s at the current market interest rate
that is available to the Agency for sim
ilar financial instruments.
Impairm
ent testing
The Agency review
s and tests the carrying value of assets when events or changes in
circumstances suggest that the carrying am
ount may not be recoverable.
Provisions
A provision is recognised w
hen the Agency has a legal or constructive obligation arising from
a past event that will probably be settled, and a reliable estim
ate of the amount can be m
ade.
Long-term provisions are determ
ined by discounting the expected future cash flows to their
present value. The increase in discounted long-term provisions as a result of the passage of
time is recognised as a finance expense in the statem
ent of financial performance. P
rovisions
were raised and m
anagement determ
ined an estimate based on the inform
ation available.
Additional disclosure of these estim
ates of provisions are included in note 9 - Provisions.
Depreciation and am
ortisation
Depreciation and am
ortisation recognised on property, plant and equipment and intangible
assets are determined w
ith reference to the useful lives and residual values of the underlying
items. The useful lives and residual values of assets are based on m
anagement’s estim
ation
of the asset’s condition, expected condition at the end of the period of use, its current use,
expected future use and the entity’s expectations about the availability of finance to replace the
asset at the end of its useful life.
Cross-Border Road Transport Agency71Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
�''2817-1+�!2/-'-)6��'217��
Trade and other payables
Trade payables are initially measured at fair value plus transaction costs that are directly
attributable to the acquisition and are subsequently measured at am
ortised cost using the
effective interest rate method.
Post retirem
ent benefits
The present value of the post retirement obligation depends on a few
factors that are determined
on an actuarial basis using a few assum
ptions. The assumptions used in determ
ining the net
cost (income) include the discount rate. A
ny changes in these assumptions w
ill impact on the
carrying amount of post retirem
ent obligations.
The Agency determ
ines the appropriate discount rate at the end of each year. This is the interest
rate that should be used to determine the present value of estim
ated future cash outflows
expected to be required to settle the medical aid obligations. In determ
ining the appropriate
discount rate, the Agency considers the interest rates of high-quality corporate bonds that are
denominated in the currency in w
hich the benefits will be paid, and that have term
s to maturity
approximating the term
s of the related post-employm
ent medical aid liability.
Other key assum
ptions for pension obligations are based on current market conditions.
Additional inform
ation is disclosed in Note 5.
Effective interest rate
The Agency used the average interest rate of 9%
- 11% to discount future cash flow
s. The
rate was influenced by the prevailing current prim
e rates as well as the yield of the governm
ent
bonds during the year.
Allow
ance for doubtful debts
On receivables an im
pairment loss is recognised in surplus and deficit w
hen there is objective
evidence that it is impaired. The im
pairment is m
easured as the difference between the debtors
carrying amount and the present value of estim
ated future cash flows discounted at the
effective interest rate, computed at initial recognition.
1.5 P
roperty, plant and equipment
Property, plant and equipm
ent 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 m
ore than one period.
The cost of an item of property, plant and equipm
ent is recognised as an asset when:
V it is probable that future econom
ic benefits or service potential associated with the item
will flow
to the Agency; and
V the cost of the item
can be measured reliably.
Property, plant and equipm
ent is initially measured at cost.
The cost of an item of property, plant and equipm
ent 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 m
anagement. 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.
Where an item
of property, plant and equipment is acquired in exchange for a non-m
onetary
asset or monetary assets, or a com
bination of monetary and non-m
onetary assets, the asset
acquired is initially measured at fair value (the cost). If the acquired item
’s fair value was not
determinable, it’s deem
ed cost is the carrying amount of the asset(s) given up.
When significant com
ponents of an item of property, plant and equipm
ent have different useful
lives, they are accounted for as separate items (m
ajor 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 am
ount of an item of property, plant and
equipment, the carrying am
ount of the replaced part is derecognised.
The initial estimate of the costs of dism
antling and removing the item
and restoring the site on
which it is located is also included in the cost of property, plant and equipm
ent, where the entity
Annual Report 2018/19
72Cross-Border Road Transport Agency
is obligated to incur such expenditure, and where the obligation arises because of acquiring the
asset or using it for purposes other than the production of inventories.
Recognition of costs in the carrying am
ount of an item of property, plant and equipm
ent ceases
when the item
is in the location and condition necessary for it to be capable of operating in the
manner intended by m
anagement.
Items such as spare parts, standby equipm
ent and servicing equipment are recognised w
hen
they meet the definition of property, plant and equipm
ent.
Property, plant and equipm
ent is carried at cost less accumulated depreciation and any
impairm
ent losses.
Property, plant and equipm
ent are depreciated on the straight-line basis over their expected
useful lives to their estimated residual value.
The useful lives of items of property, plant and equipm
ent have been assessed as follows:
Item
Depreciation m
ethod A
verage useful lifeFurniture and fixtures
Straight line
5 - 12 years
Motor vehicles
S
traight line
4 - 7 years
Office equipm
ent
Straight line
5 - 12 years
IT equipment
S
traight line
3 - 9 years
Leasehold improvem
ents S
traight line
lease period
Signage
Straight line
10 - 15 years
The depreciable amount of an asset is allocated on a system
atic basis over its useful life.
Each part of an item of property, plant and equipm
ent with a cost that is significant in relation
to the total cost of the item is depreciated separately.
The depreciation method used reflects the pattern in w
hich the asset’s future economic
benefits or service potential are expected to be consumed by the entity. The depreciation
method applied to an asset is review
ed at least at each reporting date and, if there has been a
significant change in the expected pattern of consumption of the future econom
ic benefits or
service potential embodied in the asset, the m
ethod is changed to reflect the changed pattern.
Such a change is accounted for as a change in an accounting estim
ate.
The Agency assesses the probability of expected future econom
ic benefits or service potential
using reasonable and supportable assumptions that represent m
anagement’s best estim
ate of
the set of economic conditions that w
ill 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.
V it is technically feasible to com
plete the asset so that it will be available for use or sale.
V there is an intention to com
plete and use or sell it.
V there is an ability to use or sell it.
V it w
ill generate probable future economic benefits or service potential.
V there are available technical, financial and other resources to com
plete the development
and to use or sell the asset.
V the expenditure attributable to the asset during its developm
ent can be measured reliably.
Intangible assets are carried at cost less any accumulated am
ortisation and any impairm
ent 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 w
hich the asset is expected to generate net cash
inflows or service potential. Am
ortisation is not provided for these intangible assets, but they are
tested for impairm
ent annually and whenever there is an indication that the asset m
ay be impaired.
For all other intangible assets amortisation is provided on a straight line basis over their useful life.
The amortisation period and the am
ortisation method for intangible assets are review
ed at each
reporting date.
Reassessing the useful life of an intangible asset w
ith a finite useful life after it was classified
as indefinite is an indicator that the asset may be im
paired. As a result the asset is tested for
impairm
ent and the remaining carrying am
ount is amortised over its useful life.
Internally generated brands, mastheads, publishing titles, custom
er lists and items sim
ilar in
substance are not recognised as intangible assets.
Internally generated goodwill is not recognised as an intangible asset.
Cross-Border Road Transport Agency73Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
�''2817-1+�!2/-'-)6��'217��
Am
ortisation is provided to write dow
n the intangible assets, on a straight line basis, to their
residual values as follows:
An intangible asset arising from
development (or from
the development phase of an internal
project) is recognised when:
V it is technically feasible to com
plete the asset so that it will be available for use or sale.
V there is an intention to com
plete and use or sell it.
V there is an ability to use or sell it.
V it w
ill generate probable future economic benefits or service potential.
V there are available technical, financial and other resources to com
plete the development
and to use or sell the asset.
V the expenditure attributable to the asset during its developm
ent can be measured reliably.
Intangible assets are carried at cost less any accumulated am
ortisation and any impairm
ent
losses.
An intangible asset is regarded as having an indefinite useful life w
hen, based on all relevant
factors, there is no foreseeable limit to the period over w
hich the asset is expected to generate
net cash inflows or service potential. A
mortisation is not provided for these intangible assets,
but they are tested for impairm
ent annually and whenever there is an indication that the asset
may be im
paired. For all other intangible assets amortisation is provided on a straight-line basis
over their useful life.
The amortisation period and the am
ortisation method for intangible assets are review
ed at each
reporting date.
Reassessing the useful life of an intangible asset w
ith a finite useful life after it was classified
as indefinite is an indicator that the asset may be im
paired. As a result, the asset is tested for
impairm
ent and the remaining carrying am
ount is amortised over its useful life.
Internally generated brands, mastheads, publishing titles, custom
er lists and items sim
ilar in
substance are not recognised as intangible assets.
Internally generated goodwill is not recognised as an intangible asset.
Am
ortisation is provided to write dow
n the intangible assets, on a straight-line basis, to their
residual values as follows:
Item
Depreciation m
ethod A
verage useful lifeC
omputer softw
are
Straight line
1 - 12 years
Intangible assets are derecognised:
V on disposal; or
V w
hen no future economic benefits or service potential are expected from
its use or disposal.
The gain or loss arising from the derecognition of intangible assets is included in m
anagement
or deficit when the asset is derecognised (unless the S
tandard of GR
AP
on leases requires
otherwise on a sale and leaseback).
1.7 Financial instrum
ents
A financial instrum
ent 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 am
ount at which the financial
asset or financial liability is measured at initial recognition m
inus principal repayments, plus or
minus the cum
ulative amortisation using the effective interest m
ethod of any difference between
that initial amount and the m
aturity amount, and m
inus any reduction (directly or through the
use of an allowance account) for im
pairment or uncollectible.
Credit risk is the risk that one party to a financial instrum
ent 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 flow
s of a financial instrument w
ill
fluctuate because of changes in foreign exchange rates.
Derecognition is the rem
oval of a previously recognised financial asset or financial liability from
an entity’s statement of financial position.
A derivative is a financial instrum
ent or other contract with all three of the follow
ing characteristics:
V Its value changes in response to the change in a specified interest rate, financial instrum
ent
price, comm
odity 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
Annual Report 2018/19
74Cross-Border Road Transport Agency
variable is not specific to a party to the contract (sometim
es called the ‘underlying’).
V It requires no initial net investm
ent or an initial net investment that is sm
aller than would be
required for other types of contracts that would be expected to have a sim
ilar response
to changes in market factors.
V It is settled at a future date.
The effective interest method is a m
ethod of calculating the amortised cost of a financial asset
or a financial liability (or group of financial assets or financial liabilities) and of allocating the
interest income or interest expense over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash paym
ents or receipts through the expected
life of the financial instrument or, w
hen appropriate, a shorter period to the net carrying amount
of the financial asset or financial liability. When calculating the effective interest rate, an entity
shall estimate cash flow
s considering all contractual terms of the financial instrum
ent (for
example, prepaym
ent, call and similar options) but shall not consider future credit losses. The
calculation includes all fees and points paid or received between parties to the contract that
are an integral part of the effective interest rate (see the Standard of G
RA
P on R
evenue from
Exchange Transactions), transaction costs, and all other premium
s or discounts. There is a
presumption that the cash flow
s and the expected life of a group of similar financial instrum
ents
can be estimated reliably. H
owever, in those rare cases w
hen it is not possible to reliably
estimate the cash flow
s or the expected life of a financial instrument (or group of financial
instruments), the entity shall use the contractual cash flow
s over the full contractual term of the
financial instrument (or group of financial instrum
ents).
Fair value is the amount for w
hich an asset could be exchanged, or a liability settled, between
knowledgeable w
illing parties in an arm’s length transaction.
A financial asset is:
V cash;
V a residual interest of another entity; or
V a contractual right to:
-
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 liability is any liability that is a contractual obligation to
V deliver cash or another financial asset to another entity; or
V exchange financial assets or financial liabilities under conditions that are potentially
unfavourable to the Agency.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrum
ent 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.
Market risk is the risk that the fair value or future cash flow
s of a financial instrument w
ill
fluctuate because of changes in market prices.
Market risk com
prises 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 flow
s of a financial instrument w
ill
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 sim
ilar financial instruments traded in the m
arket.
A financial asset is past due w
hen a counterparty has failed to make a paym
ent when
contractually due.
Financial instruments at am
ortised cost are non-derivative financial assets or non-derivative
financial liabilities that have fixed or determinable paym
ents, excluding those instruments that:
V the entity designates at fair value at initial recognition; or
V are held for trading.
Financial instruments at cost are investm
ents in residual interests that do not have a quoted
market price in an active m
arket, and whose fair value cannot be reliably m
easured.
Financial instruments at fair value com
prise financial assets or financial liabilities that are:
V derivatives;
V com
bined instruments that are designated at fair value;
V instrum
ents held for trading. A financial instrum
ent is held for trading if:
-
it is acquired or incurred principally for the purpose of selling or repurchasing it in
the near-term; or
-
on initial recognition it is part of a portfolio of identified financial instruments that
are managed together and for w
hich there is evidence of a recent actual pattern of
short term profit-taking;
Cross-Border Road Transport Agency75Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
�''2817-1+�!2/-'-)6��'217��
-
non-derivative financial assets or financial liabilities with fixed or determ
inable
payments that are designated at fair value at initial recognition; and
-
financial instruments that do not m
eet the definition of financial instruments at
amortised cost or financial instrum
ents at cost.
Classification
The Agency has the follow
ing 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
Receivables from
exchange transactions Financial asset m
easured at amortised cost
Receivables from
non-exchange transactions Financial asset m
easured at amortised cost
Employee related receivables
Financial asset measured at fair value
Cash and cash equivalents
Financial asset measured at am
ortised cost
The Agency has the follow
ing types of financial liabilities (classes and category) as reflected
on the face of the statement of financial position or in the notes thereto:
Class
Category
Operating Lease liability
Financial liability measured at am
ortised cost
Payables (exchange transactions)
Financial liability measured at am
ortised cost
Other payables (non-exchange transactions)
Financial liability measured at am
ortised cost
Retirem
ent benefit obligations Financial liability m
easured at amortised cost
Initial recognition
The Agency recognises a financial asset or a financial liability in its statem
ent of financial position
when the entity becom
es a party to the contractual provisions of the instrument.
The Agency recognises financial assets using trade date accounting.
Initial measurem
ent of financial assets and financial liabilities
The Agency m
easures 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 Agency m
easures a financial asset and financial liability initially at its fair value.
Subsequent m
easurement of financial assets and financial liabilities
The Agency m
easures all financial assets and financial liabilities after initial recognition using the
following categories:
V Financial instrum
ents at fair value.
V Financial instrum
ents at amortised cost.
V Financial instrum
ents at cost.
All financial assets m
easured at amortised cost, or cost, are subject to an im
pairment review
.
Fair value measurem
ent considerations
The best evidence of fair value is quoted prices in an active market. If the m
arket for a financial
instrument is not active, the A
gency establishes fair value by using a valuation technique. The
objective of using a valuation technique is to establish what the transaction price w
ould have
been on the measurem
ent date in an arm’s length exchange m
otivated by normal operating
considerations. Valuation techniques include using recent arm’s length m
arket transactions
between know
ledgeable, willing parties, if available, reference to the current fair value of
another instrument that is substantially the sam
e, discounted cash flow analysis and option
pricing models. If there is a valuation technique com
monly used by m
arket participants to
price the instrument and that technique has been dem
onstrated to provide reliable estimates
of prices obtained in actual market transactions, the entity uses that technique. The chosen
valuation technique makes m
aximum
use of market inputs and relies as little as possible on
entity-specific inputs. It incorporates all factors that market participants w
ould consider in
setting a price and is consistent with accepted econom
ic methodologies for pricing financial
instruments. P
eriodically, an Agency calibrates the valuation technique and tests it for validity
using prices from any observable current m
arket transactions in the same instrum
ent (i.e.
without m
odification or repackaging) or based on any available observable market data.
The fair value of a financial liability with a dem
and feature (e.g. a demand deposit) is not less
than the amount payable on dem
and, discounted from the first date that the am
ount could be
required to be paid.
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76Cross-Border Road Transport Agency
Reclassification
The Agency does not reclassify a financial instrum
ent while it is issued or held unless it is:
V com
bined instrument that is required to be m
easured at fair value; or
V an investm
ent in a residual interest that meets the requirem
ents for reclassification.
If fair value can no longer be measured reliably for an investm
ent 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.
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 m
anagement or deficit.
For financial assets and financial liabilities measured at am
ortised cost or cost, a gain or loss is
recognised in managem
ent or deficit when the financial asset or financial liability is derecognised
or impaired, or through the am
ortisation process.
Impairm
ent and uncollectibility of financial assets
The Agency assesses at the end of each reporting period w
hether there is any objective
evidence that a financial asset or group of financial assets is impaired.
Financial assets measured at am
ortised cost:
If there is objective evidence that an impairm
ent loss on financial assets measured at am
ortised
cost has been incurred, the amount of the loss is m
easured as the difference between the
asset’s carrying amount and the present value of estim
ated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset’s original effective
interest rate. The carrying amount of the asset is reduced directly O
R w
ith an allowance
account. The amount of the loss is recognised in m
anagement or deficit.
If, in a subsequent period, the amount of the im
pairment loss decreases, and the decrease can
be related objectively to an event occurring after the impairm
ent was recognised, the previously
recognised impairm
ent loss is reversed directly OR
by adjusting an allowance account. The
reversal does not result in a carrying amount of the financial asset that exceeds w
hat the
amortised cost w
ould have been had the impairm
ent not been recognised at the date the
impairm
ent is reversed. The amount of the reversal is recognised in m
anagement or deficit.
Financial assets measured at cost:
If there is objective evidence that an impairm
ent loss has been incurred on an investment in a
residual interest that is not measured at fair value because its fair value cannot be m
easured
reliably, the amount of the im
pairment loss is m
easured as the difference between the carrying
amount of the financial asset and the present value of estim
ated future cash flows discounted
at the current market rate of return for a sim
ilar financial asset. Such im
pairment losses are not
reversed.
Derecognition
Financial assets
The Agency derecognises financial assets using trade date accounting.
The Agency derecognises a financial asset only w
hen:
V the contractual rights to the cash flow
s from the financial asset expire, are settled or
waived;
V the A
gency transfers to another party substantially all the risks and rewards of ow
nership
of the financial asset; or
V the A
gency, despite having retained some significant risks and rew
ards of ownership of
the financial asset, 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 im
pose additional
restrictions on the transfer. In this case, the Agency:
-
derecognise the asset; and
-
recognise separately any rights and obligations created or retained in the transfer.
If, because of a transfer, a financial asset is derecognised in its entirety but the transfer results
in the entity obtaining a new financial asset or assum
ing a new financial liability, or a servicing
liability, the Agency recognise the new
financial asset, financial liability or servicing liability at
fair value.
On derecognition of a financial asset in its entirety, the difference betw
een the carrying amount
and the sum of the consideration received is recognised in surplus or deficit.
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Financial liabilities
The Agency rem
oves a financial liability (or a part of a financial liability) from its statem
ent of
financial position when it is extinguished —
i.e. when the obligation specified in the contract is
discharged, cancelled, expires or waived.
An exchange betw
een an existing borrower and lender of debt instrum
ents with substantially
different terms is accounted for as having extinguished the original financial liability and a new
financial liability is recognised. Sim
ilarly, a substantial modification of the term
s 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 am
ount 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 m
anagement or deficit.
Any liabilities that are w
aived, forgiven or assumed by another entity by w
ay of a non-exchange
transaction is accounted for in accordance with the S
tandard of GR
AP
on Revenue from
Non-
exchange Transactions (Taxes and Transfers).
Presentation
Interest relating to a financial instrument or a com
ponent that is a financial liability is recognised
as revenue or expense in managem
ent or deficit.
Dividends or sim
ilar distributions relating to a financial instrument or a com
ponent that is a
financial liability is recognised as revenue or expense in managem
ent or deficit.
Losses and gains relating to a financial instrument or a com
ponent that is a financial liability is
recognised as revenue or expense in managem
ent or deficit.
A financial asset and a financial liability are only offset, and the net am
ount presented in the
statement of financial position w
hen the Agency 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
Agency does not offset the transferred asset and the associated liability.
Receivables from
non exchange transactions
Trade receivables are measured at initial recognition at fair value, and are subsequently
measured at am
ortised cost using the effective interest rate method. A
ppropriate allowances
for estimated irrecoverable am
ounts are recognised in Surplus or deficit w
hen there is objective
evidence that the asset is impaired. S
ignificant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in
payments (m
ore than 12 months overdue) are considered indicators that the trade receivable is
impaired. The allow
ance recognised is measured as the difference betw
een the asset’s carrying
amount and the present value of estim
ated future cash flows discounted at the effective interest
rate computed at initial recognition.
The carrying amount of the asset is reduced using an allow
ance account, and the amount of the
deficit is recognised in Surplus or deficit w
ithin operating expenses. When a trade receivable is
uncollectable, it is written off against the allow
ance account for trade receivables. Subsequent
recoveries of amounts previously w
ritten off are credited against operating expenses in Surplus
or deficit.
Payables from
exchange transactions
Trade payables are initially measured at fair value, and are subsequently m
easured at amortised
cost, using the effective interest rate method.
Cash and cash equivalents
Cash and cash equivalents com
prise cash on hand and demand deposits, and other short-term
highly liquid investments that are readily convertible to a know
n amount of cash and are subject to
an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.
1.8 Tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the
amount already paid in respect of current and prior periods exceeds the am
ount due for those
periods, the excess is recognised as an asset.
Annual Report 2018/19
78Cross-Border Road Transport Agency
The Agency is exem
pted from C
orporate Tax obligations in line with section 10 (1)(A
)(i) of the
Income Tax, 1962 (A
ct number 58 of 1962).
1.9 Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rew
ards
incidental to ownership. A
lease is classified as an operating lease if it does not transfer
substantially all the risks and rewards incidental to ow
nership.
When a lease includes both land and buildings elem
ents, the Agency 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 low
er, the present value of the
minim
um lease paym
ents. 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 minim
um lease paym
ents is the
interest rate implicit in the lease.
Minim
um lease paym
ents are apportioned between the finance charge and reduction of the
outstanding liability. The finance charge is allocated to each period during the lease term to
produce a constant periodic rate of on the remaining balance of the liability.
Any contingent rents are expensed in the period in w
hich they are incurred.
Operating leases - lessor
Operating lease revenue is recognised as revenue on a straight-line basis over the lease term
.
Initial direct costs incurred in negotiating and arranging operating leases are added to the
carrying amount of the leased asset and recognised as an expense over the lease term
on the
same basis as the lease revenue.
The aggregate cost of incentives is recognised as a reduction of rental revenue over the lease
term on a straight-line basis.
The aggregate benefit of incentives is recognised as a reduction of rental expense over the
lease term on a straight-line basis.
Income for leases is disclosed under revenue in statem
ent of financial performance.
Operating leases - lessee
Operating lease paym
ents are recognised as an expense on a straight-line basis over the lease
term. The difference betw
een the amounts recognised as an expense and the contractual
payments are recognised as an operating lease asset or liability.
1.10 Inventories
The Agency keeps no m
aterial inventories. The items of stationery and com
puter consumables
are expensed imm
ediately once purchased.
1.11 Segm
ent information
The Agency is organised and reports based on the basis of five programm
es namely: adm
inistration,
regulatory services, profiling services, stakeholder managem
ent as well as research and advisory
services. These programm
es are treated as cost centres for the purposes of cost control and
resource allocation, the existing set up and operations do not warrant segm
ental reporting.
1.12 Impairm
ent of non-cash-generating assets
Cash-generating assets are assets used w
ith the objective of generating a comm
ercial return.
Com
mercial return m
eans that positive cash flows are expected to be significantly higher than
the cost of the asset.
Non-cash-generating assets are assets other than cash-generating assets.
Impairm
ent 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 econom
ic benefits or service
potential through depreciation (amortisation).
Carrying am
ount is the amount at w
hich an asset is recognised in the statement of financial position
after deducting any accumulated depreciation and accum
ulated impairm
ent losses thereon.
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A cash-generating unit is the sm
allest identifiable group of assets managed w
ith the objective
of generating a comm
ercial return that generates cash inflows from
continuing use that are
largely independent of the cash inflows from
other assets or groups of assets.
Costs of disposal are increm
ental costs directly attributable to the disposal of an asset,
excluding finance costs and income tax expense.
Depreciation (A
mortisation) is the system
atic 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 know
ledgeable, willing parties, less the costs of disposal.
Recoverable service am
ount is the higher of a non-cash-generating asset’s fair value less costs
to sell and its value in use.
Useful life is either:
V the period of tim
e over which an asset is expected to be used by the entity; or
V the num
ber of production or similar units expected to be obtained from
the asset by the entity.
Identification
When the carrying am
ount of a non-cash-generating asset exceeds its recoverable service
amount, it is im
paired.
The Agency assesses at each reporting date w
hether there is any indication that a non-cash-
generating asset may be im
paired. If any such indication exists, the Agency estim
ates the
recoverable service amount of the asset.
Irrespective of whether there is any indication of im
pairment, the entity also tests a non-cash-
generating intangible asset with an indefinite useful life or a non-cash-generating intangible
asset not yet available for use for impairm
ent annually by comparing its carrying am
ount with
its recoverable service amount. This im
pairment test is perform
ed at the same tim
e every year.
If an intangible asset was initially recognise
Recognition and m
easurement
reduced to its recoverable service amount. This reduction is an im
pairment loss.
An im
pairment loss is recognised im
mediately in m
anagement or deficit.
Any im
pairment loss of a revalued non-cash-generating asset is treated as a revaluation
decrease.
When the am
ount estimated for an im
pairment loss is greater than the carrying am
ount of
the non-cash-generating asset to which it relates, the A
gency recognises a liability only to the
extent that is a requirement in the S
tandards of GR
AP.
After the recognition of an im
pairment loss, the depreciation (am
ortisation) charge for the non-
cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s
revised carrying amount, less its residual value (if any), on a system
atic basis over its remaining
useful life.
Reversal of an im
pairment loss
The Agency assesses at each reporting date w
hether there is any indication that an impairm
ent
loss recognised in prior periods for a noncash- generating asset may no longer exist or m
ay
have decreased. If any such indication exists, the Agency estim
ates the recoverable service
amount of that asset.
An im
pairment loss recognised in prior periods for a non-cash-generating asset is reversed if
there has been a change in the estimates used to determ
ine the asset’s recoverable service
amount since the last im
pairment loss w
as recognised. The carrying amount of the asset is
increased to its recoverable service amount. The increase is a reversal of an im
pairment loss.
The increased carrying amount of an asset attributable to a reversal of an im
pairment loss
does not exceed the carrying amount that w
ould have been determined (net of depreciation or
amortisation) had no im
pairment loss been recognised for the asset in prior periods.
A reversal of an im
pairment loss for a non-cash-generating asset is recognised im
mediately in
managem
ent or deficit.
Any reversal of an im
pairment loss of a revalued non-cash-generating asset is treated as a
revaluation increase.
Annual Report 2018/19
80Cross-Border Road Transport Agency
After a reversal of an im
pairment loss is recognised, the depreciation (am
ortisation) charge for
the non-cash-generating asset is adjusted in future periods to allocate the non-cash-generating
asset’s revised carrying amount, less its residual value (if any), on a system
atic basis over its
remaining useful life.
1.13 Em
ployee benefits
Short-term
employee benefits
Employee benefits are all form
s of consideration given by the Agency in exchange for service
rendered by employees. A
qualifying insurance policy is an insurance policy issued by an insurer
that is not a related party (as defined in the Standard of G
RA
P on R
elated Party D
isclosures) of
the reporting Agency, if the proceeds of the policy can be used only to pay or fund em
ployee
benefits under a defined benefit plan and are not available to the reporting Agency’s ow
n
creditors (even in liquidation) and cannot be paid to the reporting Agency, unless either:
The cost of short-term em
ployee benefits, (those payable within 12 m
onths 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 w
hich the service is rendered and are
not discounted.
V the proceeds represent surplus assets that are not needed for the policy to m
eet all the
related employee benefit obligations; or
V the proceeds are returned to the A
gency to reimburse it for em
ployee benefits already
paid.
Termination benefits are em
ployee benefits payable as a result of either:
V the A
gency’s decision to terminate an em
ployee’s employm
ent before the normal
retirement date; or
V� an em
ployee’s decision to accept voluntary redundancy in exchange for those benefits.
Other long-term
employee benefits are em
ployee benefits (other than post-employm
ent
benefits and termination benefits) that are not due to be settled w
ithin twelve m
onths after the
end of the period in which the em
ployees render the related service.
Vested employee benefits are em
ployee benefits that are not conditional on future employm
ent.
Short-term
employee benefits
Short-term
employee benefits are em
ployee benefits (other than termination benefits) that are
due to be settled within tw
elve months after the end of the period in w
hich the employees
render the related service.
Short-term
employee benefits include item
s such as:
V w
ages, salaries and social security contributions;
V short-term
compensated absences (such as paid annual leave and paid sick leave)
where the com
pensation for the absences is due to be settled within tw
elve months
after the end of the reporting period in which the em
ployees render the related employee
service;
V� bonus, incentive and perform
ance related payments payable w
ithin twelve m
onths after
the end of the reporting period in which the em
ployees render the related service; and
V� non-m
onetary benefits (for example, m
edical care, and free or subsidised goods or
services such as housing, cars and cell phones) for current employees.
The expected cost of compensated absences is recognised as an expense as the em
ployees
render services that increase their entitlement or, in the case of non-accum
ulating absences,
when
the absence
occurs. The
Agency
measures
the expected
cost of
accumulating
compensated absences as the additional am
ount that the entity expects to pay as a result of
the unused entitlement that has accum
ulated at the reporting date.
The Agency recognises the expected cost of bonus, incentive and perform
ance related
payments w
hen the Agency has a present legal or constructive obligation to m
ake such
payments as a result of past events and a reliable estim
ate of the obligation can be made. A
present obligation exists when the entity has no realistic alternative but to m
ake the payments.
Post-em
ployment benefits
Post-em
ployment benefits are em
ployee benefits (other than termination benefits) w
hich are
payable after the completion of em
ployment.
Post-em
ployment benefit plans are form
al or informal arrangem
ents under which the A
gency
provides post-employm
ent benefits for one or more em
ployees.
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ents for the year ended 31 March 2019
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Defined contribution plans
Defined contribution plans are post-em
ployment benefit plans under w
hich the Agency pays
fixed contributions into a separate Agency (a fund) and w
ill have no legal or constructive
obligation to pay further contributions if the fund does not hold sufficient assets to pay all
employee benefits relating to em
ployee service in the current and prior periods.
When an em
ployee has rendered service to the Agency during a reporting period, the A
gency
recognise the contribution payable to a defined contribution plan in exchange for that service:
V as a liability (accrued expense), after deducting any contribution already paid. If the
contribution already paid exceeds the contribution due for service before the reporting date,
the Agency recognises that excess as an asset (prepaid expense) to the extent that the
prepayment w
ill lead to, for example, a reduction in future paym
ents or a cash refund; and
V� as an expense, unless another Standard requires or perm
its the inclusion of the contribution
in the cost of an asset.
Where contributions to a defined contribution plan do not fall due w
holly within tw
elve months
after the end of the reporting period in which the em
ployees render the related service, they
are discounted. The rate used to discount reflects the time value of m
oney. The currency and
term of the financial instrum
ent selected to reflect the time value of m
oney is consistent with the
currency and estimated term
of the obligation.
Paym
ents to defined contribution retirement benefit plans are charged as an expense as they
fall due.
Paym
ents made to industry-m
anaged (or state plans) retirement benefit schem
es are dealt with
as defined contribution plans where the entity’s obligation under the schem
es is equivalent to
those arising in a defined contribution retirement benefit plan.
Defined benefit plans
For defined benefit plans the cost of providing the benefits is determined using the projected
credit method.
Actuarial valuations are conducted on an annual basis by independent actuaries separately for
each plan.
Consideration is given to any event that could im
pact the funds up to end of the reporting
period where the interim
valuation is performed at an earlier date.
Past service costs are recognised im
mediately to the extent that the benefits are already vested
and are otherwise am
ortised on a straightline basis over the average period until the amended
benefits become vested.
To the extent that, at the beginning of the financial period, any cumulative unrecognised
actuarial gain or loss exceeds ten percent of the greater of the present value of the projected
benefit obligation and the fair value of the plan assets (the corridor), that portion is recognised
in managem
ent or deficit over the expected average remaining service lives of participating
employees. A
ctuarial gains or losses within the corridor are not recognised.
Gains or losses on the curtailm
ent or settlement of a defined benefit plan is recognised w
hen
the Agency is dem
onstrably comm
itted to curtailment or settlem
ent.
When it is virtually certain that another party w
ill reimburse som
e or all the expenditure required
to settle a defined benefit obligation, the right to reimbursem
ent is recognised as a separate
asset. The asset is measured at fair value. In all other respects, the asset is treated in the sam
e
way as plan assets. In m
anagement or deficit, the expense relating to a defined benefit plan is
presented as the net of the amount recognised for a reim
bursement.
The amount recognised in the statem
ent of financial position represents the present value of
the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and
unrecognised past service costs and reduces by the fair value of plan assets.
Any asset is lim
ited to unrecognised actuarial losses and past service costs, plus the present
value of available refunds and reduction in future contributions to the plan.
Other post retirem
ent obligations
The Agency provides post-retirem
ent health care benefits, housing subsidies and gratuities
upon retirement to som
e retirees.
The entitlement to post-retirem
ent health care benefits is based on the employee rem
aining in
service up to retirement age and the com
pletion of a minim
um service period. The expected
costs of these benefits are accrued over the period of employm
ent. Independent qualified
actuaries carry out valuations of these obligations.
Annual Report 2018/19
82Cross-Border Road Transport Agency
1.14 Provisions and contingencies
Provisions are recognised w
hen:
V the entity has a present obligation because of a past event;
V it is probable that an outflow
of resources embodying econom
ic benefits or service
potential will be required to settle the obligation; and
V a reliable estim
ate can be made of the obligation.
The amount of a provision is the best estim
ate of the expenditure expected to be required to
settle the present obligation at the reporting date.
Where the effect of tim
e value of money is m
aterial, the amount of a provision is the present
value of the expenditures expected to be required to settle the obligation.
The discount rate is a pre-tax rate that reflects current market assessm
ents of the time value of
money and the risks specific to the liability.
Where som
e or all the expenditure required to settle a provision is expected to be reimbursed
by another party, the reimbursem
ent is recognised when, and only w
hen, it is virtually certain
that reimbursem
ent will be received if the entity settles the obligation. The reim
bursement is
treated as a separate asset. The amount recognised for the reim
bursement does not exceed
the amount of the provision.
Provisions are review
ed at each reporting date and adjusted to reflect the current best estimate.
Provisions are reversed if it is no longer probable that an outflow
of resources embodying
economic benefits or service potential w
ill be required, to settle the obligation.
Where discounting is used, the carrying am
ount of a provision increases in each period to
reflect the passage of time. This increase is recognised as an interest expense.
A provision is used only for expenditures for w
hich the provision was originally recognised.
Provisions are not recognised for future operating surplus (deficit).
If an entity has a contract that is onerous, the present obligation (net of recoveries) under the
contract is recognised and measured as a provision.
A constructive obligation to restructure arises only w
hen an entity:
V has a detailed form
al plan for the restructuring, identifying at least:
-
the activity/operating unit or part of an activity/operating unit concerned;
-
the principal locations affected;
-
the location,
function, and
approximate
number
of em
ployees w
ho w
ill be
compensated for services being term
inated;
-
the expenditures that will be undertaken; and
-
when the plan w
ill be implem
ented; and
V has raised a valid expectation in those affected that it w
ill carry out the restructuring by
starting to implem
ent that plan or announcing its main features to those affected by it.
No obligation arises as a consequence of the sale or transfer of an operation until the entity is
comm
itted to the sale or transfer, that is, there is a binding arrangement.
After their initial recognition contingent liabilities recognised in entity com
binations that are
recognised separately are subsequently measured at the higher of:
V the am
ount that would be recognised as a provision; and
V the am
ount initially recognised less cumulative am
ortisation.
Contingent assets and contingent liabilities are not recognised. C
ontingencies are disclosed
in note 24.
1.15 Com
mitm
ents
Items are classified as com
mitm
ents when an entity has com
mitted itself to future transactions
that will norm
ally result in the outflow of cash.
Disclosures are required in respect of unrecognised contractual com
mitm
ents.
Com
mitm
ents for which disclosure is necessary to achieve a fair presentation should be
disclosed in a note to the financial statements, if both the follow
ing criteria are met:
V C
ontracts should be non-cancellable or only cancellable at significant cost (for example,
contracts for computer or building m
aintenance services); and
V C
ontracts should relate to something other than the routine, steady, state business of the
entity – therefore salary comm
itments relating to em
ployment contracts or social security
benefit comm
itments are excluded.
Cross-Border Road Transport Agency83Annual Report 2018/19
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ents for the year ended 31 March 2019
�''2817-1+�!2/-'-)6��'217��
1.16 Revenue from
exchange transactions
Revenue is the gross inflow
of economic benefits or service potential during the reporting
period when those inflow
s result in an increase in net assets, other than increases relating to
contributions from ow
ners.
An exchange transaction is one in w
hich the entity receives assets or services, or has liabilities
extinguished, and directly gives approximately equal value (prim
arily in the form of goods,
services or use of assets) to the other party in exchange.
Fair value is the amount for w
hich an asset could be exchanged, or a liability settled, between
knowledgeable, w
illing parties in an arm’s length transaction.
Measurem
ent
Revenue is m
easured 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 follow
ing conditions have been
satisfied:
V the entity has transferred to the purchaser the significant risks and rew
ards of ownership
of the goods;
V the entity retains neither continuing m
anagerial involvement to the degree usually
associated with ow
nership nor effective control over the goods sold;
V the am
ount of revenue can be measured reliably;
V it is probable that the econom
ic benefits or service potential associated with the
transaction will flow
to the entity; and
V the costs incurred or to be incurred in respect of the transaction can be m
easured reliably.
Interest received
Revenue arising from
the use by others of entity assets yielding interest, royalties and dividends
or similar distributions is recognised w
hen:
V It is probable that the econom
ic benefits or service potential associated with the
transaction will flow
to the Agency, and
V The am
ount of the revenue can be measured reliably.
Interest is recognised, in managem
ent or deficit, using the effective interest rate method.
1.17 Revenue from
non-exchange transactions
Revenue com
prises gross inflows of econom
ic benefits or service potential received and
receivable by an Agency, w
hich represents an increase in net assets, other than increases
relating to contributions from ow
ners.
Conditions on transferred assets are stipulations that specify that the future econom
ic benefits
or service potential embodied in the asset is required to be consum
ed by the recipient as
specified or future economic benefits or service potential m
ust be returned to the transferor.
Control of an asset arise w
hen the Agency can use or otherw
ise 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 (prim
arily in the form of
cash, goods, services, or use of assets) to another entity in exchange.
Non-exchange transactions are transactions that are not exchange transactions. In a non-
exchange transaction, an entity either receives value from another entity w
ithout directly giving
approximately equal value in exchange or gives value to another entity w
ithout directly receiving
approximately equal value in exchange.
Perm
it issue fees
Revenue is recognised on the issuing of perm
its and measured based on regulated tariffs in
accordance with the C
ross-Border R
oad Transport Agency A
ct (Act N
o. 4 of 1998). Perm
it fees
are treated as revenue from non-exchange transactions in line w
ith GR
AP
23.
Application fees
Application fees are non-refundable and recognised on receipt of am
ounts.
Penalty revenue
Penalties are econom
ic benefits received by entities / agencies as determined by a court or
other law enforcem
ent body because of the breach of laws or regulations. R
evenue from
penalty income is recognised w
hen notices are issued. Assets arising from
issued fines are
measured at the best estim
ate of the inflow of resources to the A
gency.
Annual Report 2018/19
84Cross-Border Road Transport Agency
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
.
As the A
gency 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 am
ount of revenue equal to that reduction.
Measurem
ent
Revenue from
a non-exchange transaction is measured at the am
ount 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 m
easured 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 m
easured as the best estimate of the am
ount 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.
Gifts and donations, including goods in-kind
Gifts and donations, including goods in kind, are recognised as assets and revenue w
hen it is
probable that the future economic benefits or service potential w
ill flow to the entity and the fair
value of the assets can be measured reliably.
1.18 Borrow
ing costs
Borrow
ing costs are interest and other expenses incurred by an entity in connection with the
borrowing of funds.
Borrow
ing costs are recognised as an expense in the period in which they are incurred.
1.19 C
omparative figures
Where necessary, com
parative figures have been reclassified to conform to changes in
presentation in the current year.
1.20 Fruitless and wasteful expenditure
Fruitless expenditure means expenditure w
hich was m
ade in vain and would have been avoided
had reasonable care been exercised.
All expenditure relating to fruitless and w
asteful expenditure is recognised as an expense in
the statement of financial perform
ance in the year that the expenditure was incurred. The
expenditure is classified in accordance with the nature of the expense, and w
here recovered, it
is subsequently accounted for as revenue in the statement of financial perform
ance.
1.21 Irregular expenditure
Irregular expenditure as defined in section 1 of the PFM
A is expenditure other than unauthorised
expenditure, incurred in contravention of or that is not in accordance with a requirem
ent of any
applicable legislation, including -
(a) this A
ct; or
(b) the S
tate Tender Board A
ct, 1968 (Act N
o. 86 of 1968), or any regulations made in term
s
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 w
hich was issued in term
s of sections 76(1)
to 76(4) of the PFM
A requires the follow
ing (effective from 1 A
pril 2008):
Irregular expenditure that was incurred and identified during the current financial and w
hich
was condoned before year end and/or before finalisation of the financial statem
ents must also
be recorded appropriately in the irregular expenditure register. In such an instance, no further
action is also required except for updating the note to the financial statements.
Irregular expenditure that was incurred and identified during the current financial year and for
which condonem
ent is being awaited at year end m
ust be recorded in the irregular expenditure
register. No further action is required w
ith the exception of updating the note to the financial
statements.
Where irregular expenditure w
as incurred in the previous financial year and is only condoned in
the following financial year, the register and the disclosure note to the financial statem
ents must
be updated with the am
ount condoned.
Cross-Border Road Transport Agency85Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
�''2817-1+�!2/-'-)6��'217��
Irregular expenditure that was incurred and identified during the current financial year and
which w
as not condoned by the National Treasury or the relevant authority m
ust 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
.
Imm
ediate steps must thereafter be taken to recover the am
ount from the person concerned.
If recovery is not possible, the accounting officer or accounting authority may w
rite off the
amount as debt im
pairment and disclose such in the relevant note to the financial statem
ents.
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 m
ust
remain against the relevant program
me/expenditure item
, be disclosed as such in the note to
the financial statements and updated accordingly in the irregular expenditure register.
1.22 Research and developm
ent expenditure
Expenditure on research is recognised as an expense when it is incurred.
An asset arising from
development is recognised w
hen:
V it is technically feasible to com
plete the asset so that it will be available for use or sale.
V there is an intention to com
plete and use or sell it.
V there is an ability to use or sell it.
V it w
ill generate probable future economic benefits or service potential.
V there are available technical, financial and other resources to com
plete the development
and to use or sell the asset.
V the expenditure attributable to the asset during its developm
ent can be measured reliably.
1.23 Budget inform
ation
The Agency is typically subject to budgetary lim
its in the form of appropriations or budget
authorisations (or equivalent), which is given effect through authorising legislation, appropriation
or similar.
General purpose financial reporting by entity shall provide inform
ation on whether resources
were obtained and used in accordance w
ith the legally adopted budget.
The approved budget is prepared on an accrual basis and presented by functional classification
linked to performance outcom
e objectives.
The approved budget covers the fiscal period from 01/04/2018 to 31/03/2019.
The annual financial statements and the budget are on the sam
e basis of accounting therefore
a comparison w
ith the budgeted amounts for the reporting period have been included in the
Statem
ent of comparison of budget and actual am
ounts.
1.24 Related parties
The Agency operates in an econom
ic sector currently dominated by entities directly or indirectly
owned by the S
outh African G
overnment.
As a consequence of the constitutional independence of the three spheres of governm
ent in
South A
frica, only entities within the national sphere of governm
ent are considered to be related
parties.
Managem
ent are those persons responsible for planning, directing and controlling the activities
of the Agency, including those charged w
ith the governance of the Agency in accordance w
ith
legislation, in instances where they are required to perform
such functions.
Close m
embers of the fam
ily of a person are those family m
embers w
ho may be expected to
influence, or be influenced by, that managem
ent in their dealings with the A
gency.
Transactions with related parties are disclosed.
1.25 Events after the reporting date
Monetary and non-m
onetary transactions with a significant im
pact to the performance, position
or functioning of the Agency after the reporting date are brought to the attention of users of
financial statements.
Annual Report 2018/19
86Cross-Border Road Transport Agency
2. �):�67%1(%5(6�%1(�-17)535)7%7-216
2.1 Standards and Interpretations early adopted
The Agency has chosen to early adopt the follow
ing standards and interpretations:
GR
AP
109 - Accounting by P
rincipals and Agents, effective 01 A
pril 2019
2.2 S
tandards and interpretations issued, but not yet effective
The Agency has not applied the follow
ing standards and interpretations, which have been
published and are mandatory for the A
gency’s accounting periods beginning on or after 01
April 2019 or later periods:
GR
AP
108 - Statutory R
eceivables, effective 01 April 2019
GR
AP
20 - Related P
arties, effective 01 April 2019
Cross-Border Road Transport Agency87Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
3. Property, plant and equipm
ent
20192018
COST/VALUATIONR
ACCUMULATED
DEPRECIATION AND ACCUM
ULATED IM
PAIRMENT
RCARRYING VALUE
RCOST/VALUATION
R
ACCUMULATED
DEPRECIATION AND ACCUM
ULATED IM
PAIRMENT
RCARRYING VALUE
R
Furniture and fixtures
3,539,381
(2,259,595)
1,279,786
3,539,381
(1,914,750)
1,624,631
Office equipm
ent
3,239,575
(2,667,994)
571,581
3,006,201
(2,186,157)
820,044
Com
puter equipment
11,898,667
(6,370,943)
5,527,724
9,424,663
(4,549,589)
4,875,074
Leasehold improvem
ents
6,964,720
(6,716,118)
248,602
6,720,877
(6,628,185)
92,692
Motor Vehicles
479,846
(469,013)
10,833
479,846
(432,133)
47,713
Signage
153,933
(33,424)
120,509
56,075
(27,146)
28,929
Total
26,276,122
(18,517,087)
7,759,035
23,227,043
(15,737,960)
7,489,083
Reconciliation of property, plant and equipm
ent - 2019
OPENING BALANCER
ADDITIONSR
WRITTEN OFF
R DEPRECIATION
RIM
PAIRMENT LOSSR
TOTALR
Furniture and fixtures
1,624,631-
-
(317,567)
(27,278)
1,279,786
Office equipm
ent
820,044
233,373-
(471,137)
(10,699)
571,581
Com
puter equipment
4,875,074
2,822,016
(178,146)
(1,948,159)
(43,061)
5,527,724
Leasehold improvem
ents
92,692
243,843-
(87,933)
-
248,602
Motor Vehicles
47,713
--
(36,880)
-
10,833
Signage
28,929
97,858
-
(6,278)-
120,509
7,489,083
3,397,090
(178,146)
(2,867,954)
(81,038)
7,759,035
Reconciliation of property, plant and equipm
ent - 2018
OPENING BALANCER
ADDITIONSR
WRITTEN OFF
RTRANSFERS
R DEPRECIATION
RIM
PAIRMENT LOSSR
TOTALR
Furniture and fixtures2,668,249
--
(646,486)(317,394)
(79,738)1,624,631
Office equipm
ent1,496,103
262,655-
(275,809) (438,122)
(224,783)820,044
Com
puter equipment
3,034,7053,653,892
(73,854)(208,724)
(1,113,599)(417,346)
4,875,074
Leasehold improvem
ents143,251
--
-(50,559)
-92,692
Motor Vehicles
306,558-
-(224,379)
(34,466)-
47,713
Signage
49,797-
--
(3,738)(17,130)
28,929
7,698,6633,916,547
(73,854)(1,355,398)
(1,957,878)(738,997)
7,489,083
Notes to the A
nnual Financial Statem
entsAnnual Report 2018/19
88Cross-Border Road Transport Agency
����17%1+-&/)�%66)76
20192018
COST/VALUATIONR
ACCUMULATED
AMORTISATION
AND ACCUMULATED
IMPAIRM
ENTR
CARRYING VALUER
COST/VALUATIONR
ACCUMULATED
AMORTISATION
AND ACCUMULATED
IMPAIRM
ENTR
CARRYING VALUER
Com
puter software
5,820,603
(4,583,221)
1,237,382
5,365,956
(4,051,554)
1,314,402
Reconciliation of intangible assets - 2019
OPENING BALANCER
ADDITIONSR
AMORTISATION
RTOTAL
R
Com
puter software
1,314,402
454,648
(531,667)
1,237,383
Reconciliation of intangible assets - 2018
OPENING BALANCER
ADDITIONSR
AMORTISATION
RTOTAL
R
Com
puter software
248,529
1,318,595
(252,722)
1,314,402
Cross-Border Road Transport Agency89Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
5. �03/2<))�&)1)=7�2&/-+%7-216�
Defined benefit plan
The Agency has in place a post-em
ployment m
edical benefit plan to which 15 m
embers (2018:
15 mem
bers) belong. It is made up of m
embers of the G
overnment Em
ployee Medical S
cheme
as well as M
edihelp.
The most recent actuarial valuations of the post m
edical benefit obligation were carried out on
31 March 2019 by M
r. N. Fourie, a fellow
of the Actuarial S
ociety of South A
frica. The present
value of the post medical aid obligation, and the related current service costs, w
ere measured
using the projected unit credit method.
Post retirem
ent medical aid plan
The plan and liability is with respect to m
embers transferred to R
TMC
as well as existing
continuing mem
bers who are no longer in the em
ploy of the Agency w
ho qualify for continuation
health care costs. The employees received a fixed subsidy of R
2, 602 per month tow
ards
their medical aid subscriptions, regardless of the m
ember’s m
arital status, number of children
or the medical aid the m
ember belongs to. The subsidy am
ount will only increase w
hen the
government increases the capped am
ount. Medical inflation is expected to exceed general
inflation by 1% per annum
in the long term.
The liability as calculated by the actuaries is an estimate of the cost of these subsidies, based
on assumptions regarding the future experience, and does not influence the actual cost of the
subsidies. The actual cost will be determ
ined by the actual experience in the future.
The amounts recognised in the statem
ent of financial position are as follows:
2019R
2018R
Carrying value
Present value of the defined benefit obligation-w
holly unfunded
(3,768,000)
(3,860,000)
The valuation results show a liability in respect of accrued service equal to R
3,768,000 (2018: R
3,860,000). Total interest cost and service costs for the period from 1 A
pril 2018 to 31 M
arch 2019 were R
347,000 and R27,000 respectively. The liability is a long-term
estimation
of amounts due from
the Agency tow
ards its obligation (subsidy) to the affected mem
bers. There are no plan assets to m
eet the obligation. The contribution by the employer tow
ards the 15 em
ployees is limited to R
2,602 per retired employee per m
onth.
2019R
2018R
Changes in the present value of the defined benefit
obligation are as follows:
Opening balance
(3,860,000)
(2,612,000)
Benefits paid
226,054214,845
Net expense recognised in the statem
ent of financial perform
ance
(134,054)
(1,462,845)
(3,768,000)(3,860,000)
Net expense recognised in the statem
ent of financial perform
ance
Current service cost
(27,000)(10,980)
Interest cost(347,000)
(287,676)
Actuarial (gains) losses
239,946(1,164,189)
134,054)(1,462,845)
Key assum
ptions used
Assum
ptions used at the reporting date:
Discount rates used
Yield curveYield C
urve
Medical cost trend rates
CP
I + 1%C
PI + 1%
A nom
inal and real zero curve as at 22 March 2019 supplied by the JS
E was used to determ
ine
a discount rates and CP
I assumptions at each relevant tim
e period. In the event that the
valuation is performed prior to the effective valuation date, w
e use the prevailing yield at the
time of perform
ing our calculations.
The Medical A
id Contribution Inflation rate w
as set with reference to the past relationship
between the (yield curve based) D
iscount Rate for each relevant tim
e period and the (yield
curve based) Medical A
id Contribution Inflation for each relevant tim
e period.
South A
frica has experienced high health care cost inflation in recent years. The annualised
compound rates of increase for the last ten years show
that registered medical aid schem
es
contribution inflation outstripped general CP
I by almost 3%
year on year. These increases are
considered not to be sustainable and have assumed that m
edical aid contribution increases
would out-strip general inflation by 1%
per annum over the foreseeable future.
The Consum
er price index (CP
I) used is assumed to be the difference betw
een nominal and
yield curves
�27)6�72�7,)��
118%/��-1%1'-%/�#7%7)0
)176��'217��Annual Report 2018/19
90Cross-Border Road Transport Agency
Defined contribution plan
It is the policy of the Agency to provide retirem
ent benefits to all its permanent em
ployees.
A defined contribution provident fund, and a pension fund, all of w
hich are subject to the
Pensions Fund A
ct, 1956 (Act N
o. 24 of 1956) exist for this purpose. The Agency is under no
obligation to cover any unfunded benefits.
6. ")')-9%&/)6�*520
�);',%1+)�75%16%'7-216
2019R
2018R
Deposits and prepaym
ents
1,553,210
1,348,345
Receivable from
related party (Note 26)
403,312-
1,956,522
1,348,345
Deposits are am
ounts paid as surety to service providers as well as prepaym
ents and deferred
expenditure for services still to be received such as licence fees paid in advance. An analysis
of these financial assets has been performed individually to assess any levels of im
pairment.
The services from the service providers are on-going. The A
gency holds no collateral on the
financial assets.
7. ")')-9%&/)6�*520
�121�);',%1+)�75%16%'7-216�2019R
2018R
Penalty revenue
15,483,988
11,594,117
Other receivables
58,363
709
Staff debtors
152,396
66,333
Provision for im
pairment
(10,630,421)(5,530,716)
5,064,326
6,130,443
Penalty revenue receivables are fines due from
courts as well as notices issued but not yet
presented before courts, whilst staff debtors relate to salary advances taken in the last m
onth
of the financial year as well as fruitless and w
asteful expenditure recoverable from an em
ployee.
Other receivables are am
ounts due from staff in respect of petty cash transactions.
Credit quality of trade and other receivables
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. N
one of the financial assets that are fully
performing have been renegotiated during the year.
Receivables from
non-exchange transactions Im
pairments
As of 31 M
arch 2019, an additional trade and other receivables impairm
ent of R5,099,705
(2018: 2,568,212) was provided for im
pairment. The overall provision balance w
as therefore
increased from R
5, 530,716 to R10,630,421 for the year under review
. The impaired debtors
were outstanding for m
ore than 12 months. These outstanding debtors consist m
ainly of the
pending notices on trafic infringements that have either not gone through the courts or w
hich
have gone through the courts but not yet paid by the operators. The creation and release of
provision for impaired receivables have been included in operating expenses. A
mounts charged
to the allowance account are generally w
ritten off when there is no expectation of recovering
additional cash. The maxim
um exposure to credit risk at the reporting date is the fair value of
each class of loan mentioned above. The A
gency does not hold any collateral as security.
Reconciliation
of provision
for im
pairment
of receivables
from
non-exchange transactions
2019R
2018R
Opening balance
5,530,716
2,962,504
Provision for im
pairment
5,099,705
2,568,212
10,630,421
5,530,716
The creation and release of provision for impaired receivables have been included in operating
expenses. Am
ounts charged to the allowance account are generally w
ritten off when there
is no expectation of recovering additional cash. The maxim
um exposure to credit risk at the
reporting date is the fair value of each class of loan mentioned above. The A
gency does not
hold any collateral as security.
Cross-Border Road Transport Agency91Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
8. �%6,�%1(�'%6,�)48-9%/)176
Cash and cash equivalents consist of:
2019R
2018R
Cash on hand
3,271
8,000
Bank balances
4,401,174
16,513,596
Short-term
deposits
73,740,126
46,968,051
78,144,571
63,489,647
9. !529-6-216
Reconciliation of provisions - 2019
OPENING BALANCER
ADDITIONSR
UTILISED DURING THE YEAR
R
REVERSED DURING THE YEAR
RTOTAL
R
Provision for perfm
it fees claimable
164,021,935
-
(1,305,367)
(162,716,568)
-
Provision for staff perform
ance bonuses
6,108,431
6,723,341
(4,993,133)-
7,838,639
Other provisions
170,100
--
(129,500)
40,600
170,300,466
6,723,341
(6,298,500)
(162,846,068)
7,879,239
Reconciliation of provisions - 2018
OPENING BALANCER
ADDITIONSR
UTILISED DURING THE YEAR
R
REVERSED DURING THE YEAR
R
CHANGE IN DISCOUNT FACTOR
RTOTAL
R
Provision for perfm
it fees claimable
196,536,087-
(29,757,641)(3,019,960)
263,449164,021,935
Provision for staff perform
ance bonuses6,593,717
5,489,642(5,974,928)
--
6,108,431O
ther provisions170,100
--
--
170,100203,299,904
5,489,642(35,732,569)
(3,019,960)263,449
170,300,466
Provision for perm
it fees claimable
No provision w
as made at the end of the year w
ith regards to the provision for claims. The prior year provision w
as reversed during the year as a result of the application of Prescription A
ct. All claim
s
which have not been subm
itted by 12 May 2018 have now
prescribed and consequently, the provision reversed.
�27)6�72�7,)��
118%/��-1%1'-%/�#7%7)0
)176��'217��Annual Report 2018/19
92Cross-Border Road Transport Agency
Provision for staff perform
ance bonuses
The staff performance bonus provision w
as provided at a maxim
um of 6%
(2018: 6%) of gross
remuneration for the year ended M
arch 2019. Perform
ance bonus is payable to qualifying
employees.
Other provisions
Other provisions relates to provision for liability in respect of penalty incom
e raised in prior
periods which is refundable to operators.
���!%<%&/)6�*520�121�);',%1+)�75%16%'7-216
2019R
2018R
Perm
it and penalty fees refundable
6,666,035
6,044,416
Payables relate to paym
ents received in advance from operators.
��!%<%&/)6�*520�);',%1+)�75%16%'7-216
2019R
2018R
Trade payables
4,731,748
2,168,073
Accrued leave pay
4,758,991
4,266,397
Accrued bonus
777,905
824,687
Workm
an's compensation accrual
829,256
420,205
Related party accrual (N
ote 26)
-
8,495,277O
ther accrued expenses
876,735
390,136
Statutory deductions
-
3,677
11,974,635
16,568,452
������")9)18)�*520
�121�);',%1+)�75%16%'7-216
2019R
2018R
Perm
it issue fees154,805,849
172,151,604P
ermit application fees
39,996,02141,448,270
Revenue from
prescription of claims
162,716,567-
Penalty incom
e41,644,726
29,974,111
399,163,163243,573,985
������ 7,)5��1'20
)
2019R
2018R
Postage, adm
inistrative and general item charges
320,938148,095
Actuarial gains
239,946-
Insurance refunds83,750
79,528R
efundable claims (5 year perm
its)-
3,019,960
644,6343,247,583
14. ��17)5)67�5)')-9)(
2019R
2018R
Bank
5,230,0544,560,825
The Agency has cash investm
ents yielding an average of 7,8% (2018: 6,5%
) per annum.
Cross-Border Road Transport Agency93Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
15. �03/2<))�5)/%7)(�'2676
2019R
2018R
Basic salaries
97,235,01484,416,383
Perform
ance bonus (note 9)6,723,342
5,489,642M
edical aid - company contributions
3,291,0752,786,760
Unem
ployment Insurance Fund
294,872304,703
Workm
an's Com
pensation550,289
1,187,114A
ctuarial loss-
1,164,189Leave pay provision charge
880,878870,636
Pension and provident fund contribution
12,527,33910,158,610
Overtim
e payments
-9,924
Long-service awards
922,800663,462
13th cheques
3,551,8883,301,204
Car allow
ance336,992
539,496N
ight shift allowance
-188
126,314,489110,892,311
16. �-1%1')�'2676
2019R
2018R
Interest charges347,000
287,676
����)&7�-0
3%-50)17
2019R
2018R
Debt im
pairment
5,099,7054,070,924
Impairm
ent amount is m
ade up of provisions for long outstanding court remittences due to the
Agency as w
ell as notices issued and not yet finalised. The amount expensed is the increase
in the financial year under review.
�������)1)5%/�);3)16)6
2019R
2018R
Advertising, publicity, m
arketing and branding1,417,278
1,359,575A
udit fees (note 19)3,761,062
4,104,392B
ank charges1,629,777
1,627,543
Cleaning & O
ffice supplies531,067
556,357S
ervice fee (Note 25)
37,026,85023,434,600
Consulting and legal fees
5,720,8714,372,494
Discount allow
ed-
18,540C
atering and employee w
ellbeing935,455
1,010,482Fines and penalties
-212,153
Corporate gifts and donations
682,294331,348
Insurance306,257
201,023C
onferences and seminars
517,547914,800
IT expenses2,046,330
2,807,081R
esource materials, m
agazines, books and periodicals277
(23,229)M
otor vehicle expenses5,002
5,397P
lacement fees
499,042271,488
Printing and stationery
2,357,6962,057,579
Repairs and m
aintenance330,542
164,975S
ecurity654,446
314,615S
taff welfare
883,045481,020
Subscriptions, publications and m
embership fees
1,894,28138,295
Telephone, cellphones and fax2,405,911
2,831,029Training and developm
ent2,288,745
1,576,142Travel and accom
modation expenses
9,568,96710,290,335
Sm
all tools104,122
18,962Electricity and w
ater1,124,882
1,218,870S
ettlement costs and other
358,131-
Docum
ent storage expenses320,302
306,884R
elocation expenses254,911
45,270
77,625,09060,548,020
�27)6�72�7,)��
118%/��-1%1'-%/�#7%7)0
)176��'217��Annual Report 2018/19
94Cross-Border Road Transport Agency
�������8(-7256��5)0
81)5%7-21
2019R
2018R
External audit1,832,096
2,790,946
Internal audit1,928,966
1,313,446
3,761,0624,104,392
20. 3)5%7-1+�/)%6)�5)17%/
The Agency entered into a m
ajor operating lease agreement w
ith Erf 49 Menlyn (P
roprietary)
Limited for a period ranging from
one to five years comm
encing 01 February 2010 and
terminating on 31 January 2015. A
dditional office space was leased from
the same landlord for
periods ranging from 13 m
onths to 4 years but all ending 31 January 2015 again. On expiry,
the leases were extended for another tw
o years to expire on 31 January 2017, and a further
renewal has since been m
ade and now contracted to expire end of January 2020. The leases
are for buildings one, three, four and five at Glen M
anor Office P
ark, 138 Frikkie de Beer S
treet,
Menlyn, P
retoria.
The significant leasing arrangements include;
V The leases shall escalate annually on 1 February of each year by 9%
; and
V The A
gency has renewal options and there are no restrictions im
posed on the leases.
Further, the Agency has an operating lease for som
e photocopiers.2019R
2018R
Future minim
um lease paym
ents due
- within one year
9,463,13010,505,117
- in second to fifth year inclusive-
9,463,130
9,463,13019,968,247
Minim
um operating lease paym
ents represent rentals payable by the Agency for certain of its
office properties. Leases are negotiated for an average term of tw
o to three years and rentals
are escalate at an average of 9% per annum
. No contingent rent is payable.
21. 3)5%7-1+�6853/86
Operating surplus for the year is stated after accounting for the follow
ing:
2019R
2018R
Operating lease charges
Prem
ises
V C
ontractual amounts
11,002,52510,917,652
Assets w
ritten off and impaired assets
259,184812,851
Am
ortisation on intangible assets531,667
252,722D
epreciation on property, plant and equipment
2,867,9541,957,878
Employee costs
126,314,489110,892,311
23. �%6,��86)(�-1����+)1)5%7)(�*520
�23)5%7-216
2019R
2018R
Surplus
180,990,23761,642,359
Adjustm
ents for:D
epreciation and amortisation
3,399,6212,210,600
De-recognition of non-current assets
259,184812,851
Interest received(5,230,054)
(4,560,825)D
ebt impairm
ent5,099,705
4,070,924M
ovements in operating lease liability
(114,896)759,475
Movem
ents in retirement benefit assets and liabilities
(92,000)1,248,000
Movem
ents in provisions-
(485,286)C
hanges in working capital:
Receivables from
exchange transactions(608,177)
216,798
Increase in impairm
ents(5,099,705)
(4,070,924)O
ther receivables from non-exchange transactions
1,066,117(1,779,839)
Payables from
exchange transactions(4,593,817)
(6,796,658)P
rovisions (162,421,226)
(32,514,152)P
ayables (non-exchange transactions)621,619
(20,495,393)
13,276,608257,930
Cross-Border Road Transport Agency95Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
23. �200-70)176
Authorised capital expenditure
2019R
2018R
Already contracted for but not provided for
Property, plant and equipm
ent-
1,279,631
Not yet contracted for but authorised
Intangible assets26,382,356
-
Total capital comm
itments
Already contracted for but not provided for
-1,279,631
Not yet contracted for and authorised by m
embers
26,382,356-
26,382,3561,279,631
Authorised operating expenditure
Already contracted for but not provided for
- General expenses
28,233,3446,760,807
- Internal audit2,589,198
440,332
30,822,5427,201,139
Total operational comm
itments
Already contracted for but not provided for
30,822,5427,201,139
24. �217-1+)1'-)6
An em
ployee has filed a claim of defam
ation against the Agency and is claim
ing R800,000 (plus
legal costs). The matter is being opposed and the A
gency’s lawyers are confident the m
atter
will be dism
issed.
The is a litigation matter that is currently on-going against the Agency relating to som
e disputes
with O
perators emanating from
the impounding of their vehicles by the Agency. The litigants allege
that the Agency has acted unlaw
fully in impounding their vehicles and are seeking com
pensation
for the loss of income as w
ell as wrongful arrest. The litigants are seeking R
10,7 million (plus legal
costs) from the A
gency. The Agency’s law
yers and managem
ent consider the likelihood of the
action against the Agency being successsful as unlikely.
There is also a pending litigation against the Agency lodged by som
e Cross B
order Road
Transport Operators against the 2014 perm
it tariffs Regulations that becam
e effective on the
8th of May 2014. The operators allege that the R
egulations are invalid on procedural and
substantive grounds. They are seeking that the Regulations be set aside. A
similar m
atter has
recently been finalised in the High C
ourt in favour of the Agency and the A
gency is applying for
this matter to be struck off the roll.
A m
ember of the public (a C
ross Border R
oad Transport operator) has made a R
100,000 claim
against the Agency for unlaw
ful arrest. The Agency is defending itself against the claim
and
managem
ent is confident that the chances of the claim succeeding are rem
ote.
In another matter a m
ember of the public is claim
ing R3.8 m
illion in respect of injury and
damages to his m
otor vehicle having been involved in an accident with one of the A
gency’s
employees. The A
gency is again defending itself and believes the chances of the lawsuit
succeeding are remote.
An em
ployee has file an application relating to unfair discrimination based on race and gender
salary disparity. The Agency is preparing papers in response to this.
Contingent assets
Subsequent to the disciplinary proceedings having been initiated against a form
er employee,
civil proceedings have comm
enced against a supplier to recover an amount of R
251,392 (plus
legal costs). According to A
gency’s legal advisors, it is probable that the proceedings will result
in the recovery of the full amount.
�27)6�72�7,)��
118%/��-1%1'-%/�#7%7)0
)176��'217��Annual Report 2018/19
96Cross-Border Road Transport Agency
25. �%5/<�%(237-21�2*��"�!�����
''2817-1+�&<�!5-1'-3%/6�%1(��+)176
The Agency has applied G
RA
P 109, w
hich is an early adoption of standard which is only
effective from 01 A
pril 2019. This early adoption will result in m
ore reliable and relevant
information about the im
pact of transactions relating to the principal and agent and events on
the entitys financial statements.
At the beginning of the financial year ended 31 M
arch 2018, RTM
C w
as appointed to perform
the law enforcem
ent function (Road Transport Inspectorate (R
TI)) on behalf of the Agency. This
was also done in order to utilise existing and established resources (econom
y of scale) to run
the RTI law
enforcement function efficiently and effectively, pending the legislative review
.
Pursuant to this decision, a binding arrangem
ent was entered into betw
een the Agency and the
RTM
C in term
s of which the latter w
ill undertake the law enforcem
ent function (Road Transport
Inspectorate) on behalf of the former w
ith the following significant term
s agreed upon:
- The functions of the R
TI as provided for in Section 39 of the C
-BR
T Act, 1998 are now
performed by the R
TMC
- A
ll the employees of the R
TI and their employm
ent contracts were transferred to R
TMC
,
resulting in RTM
C being the new
employer for the em
ployees concerned.
- R
TMC
to operationalize the role and functions of the RTI as envisaged in the C
-BR
T Act,
1998 subject, inter-alia, to the following, at m
inimum
:
- The m
andate of the C-B
RTA
as contained in the C-B
RT A
ct, 1998, remains vested in the
C-B
RTA
- The C
hief Executive Officer of the C
-BR
TA rem
ains vested with the pow
ers as set forth in
Section 37 (1)(a) of the C
-BR
T Act, 1998, and only personnel appointed as the national
RTI by the C
hief Executive Officer of the C
-BR
TA m
ay exercise the powers and perform
the functions of the RTI in term
s of the C-B
RT A
ct, 1998.
- The pow
ers conferred upon the Board of the C
-BR
TA generally, and specifically in term
s
of Section 23 and 37 (2) of the C
-BR
T Act, 1998, rem
ain vested in the Board of the
C-B
RTA
, and the Board of the C
-BR
TA m
ay from tim
e to time issue directives to the
RTM
C in respect of the perform
ance of the RTI function in order to ensure that the B
oard
of the C-B
RTA
fulfills its mandate as required in term
s of the C-B
RT A
ct, 1998.
- The A
gency pays the RTM
C service fee not exceeding the am
ount of penalty income
collected.
Futher to the terms and conditions of the agreem
ent as indicated above, the C-B
RTA
incurred
certain expenses, including operating leases for the regional offices, on behalf of the RTM
C
as part of the transitional measures. The total am
ount of the expenses incurred is disclosed in
note 26.
In terms of the agreem
ent, the following transactions are undertaken by the R
TMC
with
transport operators on behalf of the C-B
RTA
:
- Inspection and enforcem
ent of road transport rules and regulations;
- Issue of fines and collection of penalty incom
e
The Agency is the P
rincipal in the arrangement and this assessm
ent was based on the fact
that the mandate and the responsibility for the function a contem
plated in section 39 of the
C-B
RT A
ct remains w
ith the Agency w
hile the RTM
C undertakes the function on its behalf.
Also significant is the fact that the A
gency directs the RTM
C how
it should carry this function.
Risks associated w
ith the execution of the function remains w
ith the Agency. There are no
assets and/or liabilities under custodianship of the RTM
C that belong to the A
gency. Should
the arrangement w
ith RTM
C be cancelled, the C
-BR
TA w
ill recource the RTI function and fund
the function from the penalty incom
e so generated.
Am
ount incurred incurred by the Agency consist of the follow
ing:2019R
2018R
Service fee
Adm
inistration fee 37,026,850
23,434,600
Cross-Border Road Transport Agency97Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
�������")/%7)(�3%57-)6
2019R
2018R
Related party balances
Am
ounts included in Trade receivable / (Trade P
ayable) regarding related parties
Departm
ent of Justice(2,844)
-D
epartment of Justice
(151,320)(24,000)
RTM
C403,312
(15,034,788)
Related party transactions
Services rendered by related parties
Governm
ent Printing W
orks706,160
468,249D
epartment of Justice
126,49456,255
RTM
C37,026,850
23,434,600E
xpenses incurred on behalf of related parties
RTM
C1,021,415
2,296,246
The Departm
ent of Justice provides legal services to the Agency w
hile Governm
ent Printing
Works supplies sensitive stationery and gazetting. The tw
o entities were set up to provide
services to government agencies and departm
ents like the Cross B
order Road Transport
Agency.
RTM
C provides law
enforcement function on behalf of the C
-BR
TA. Furtherm
ore, certain
contracts such as leasing of regional offices were honoured by the C
-BR
TA on behalf of the
RTM
C as part of the transition process.
�27)6�72�7,)��
118%/��-1%1'-%/�#7%7)0
)176��'217��Annual Report 2018/19
98Cross-Border Road Transport Agency
��������)<��
%1%+)0)17��1*250
%7-21���-5)'7256��)0
2/80)176�
Non-E
xecutive
EMOLUM
ENTSR
RE-IMBURSIVE
EXPENDITURER
TOTALR
2019
Mr. M
Ram
athe (Chairperson - appointed 01 M
ay 2016)216,435
8,611225,046
Mr. R
D B
aloyi (appointed 01 May 2016)
177,2006,163
183,363
Prof JH
Havenga (appointed 01 M
ay 2016)177,200
10,593187,793
Mr. LL Thekisho (appointed 01 M
ay 2016)177,200
2,185179,385
Ms. K
S M
ahlangu (appointed 01 May 2016)
177,2004,810
182,010
Ms. D
I Sekhonyela (appointed 01 M
ay 2016)177,200
-177,200
1,102,43532,362
1,134,797
EMOLUM
ENTSR
RE-IMBURSIVE
EXPENDITURER
TOTALR
2018
Mr. M
Ram
athe (Chairperson - appointed 01 M
ay 2016)205,152
15,432220,584
Mr. R
D B
aloyi (appointed 01 May 2016)
167,962962
168,924
Prof JH
Havenga (appointed 01 M
ay 2016)167,962
6,910174,872
Mr. M
CT S
cott (term ended 30 June 2017)
41,991610
42,601
Mr. LL Thekisho (appointed 01 M
ay 2016)167,962
610168,572
Ms. K
S M
ahlangu (appointed 01 May 2016)
167,962610
168,572
Ms. D
I Sekhonyela (appointed 01 M
ay 2016)167,962
122168,084
1,086,95325,256
1,112,209
Cross-Border Road Transport Agency99Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
Rem
uneration of Executive M
anagement
ANNUAL REMUNERATION
R
TRAVEL, CAR AND CELLPHONE ALLOW
ANCER
PERFORMANCE BONUS
AND VARIABLE PORTIONR
ACTING ALLOWANCES AND
OTHER PAYMENTS
RTOTAL
R
2019
Chief Executive O
fficer 2,994,425
181,845291,834
-3,468,104
Executive: Regulatory S
ervices2,119,784
91,567-
8,1342,219,485
Chief Financial O
fficer (appointed 01 January 2019) 466,621
6,366-
-472,987
Chief O
perating Officer
2,286,97430,362
-171,523
2,488,859
Executive: Corporate S
ervices 1,873,030
28,326-
22,8561,924,212
Executive: Research and D
evelopment
2,057,946107,062
-7,897
2,172,905
Executive: Stakeholder R
elations1,886,486
100,931
--
1,987,417
Executive: Office of the C
EO (resigned 31 M
arch 2019)1,886,486
32,267-
-1,918,753
Chief Inform
ation Officer
2,127,60035,184
--
2,162,784
Chief Financial O
fficer (resigned 31 July 2017)-
-144,776
-144,776
17,699,352613,910
436,610210,410
18,960,282
Rem
uneration of Executive M
anagement
ANNUAL REMUNERATION
R
TRAVEL, CAR AND CELLPHONE ALLOW
ANCER
PERFORMANCE BONUS
AND VARIABLE PORTIONR
ACTING ALLOWANCES AND
OTHER PAYMENTS
RTOTAL
R
2018
Chief Executive O
fficer2,719,296
170,345249,047
-3,138,688
Executive: Road Transport Inspectorate - (Transferred to
RTM
C 1 A
pril 2017)-
15,745-
-15,745
Executive: Regulatory S
ervices1,569,192
98,427196,854
-1,864,473
Chief Financial O
fficer (resigned 31 July 2017) 404,382
269,122156,586
-830,090
Chief O
perating Officer (appointed 01 February 2017)
1,761,086152,515
196,854141,171
2,251,626
Executive: Corporate S
ervices (appointed 1 April 2017)
1,699,09025,553
173,939158,122
2,056,704Executive: R
esearch and Developm
ent 1,448,741
80,644191,111
174,5231,895,019
Executive: Stakeholder R
elations (appointed 1 June 2017)1,197,042
100,514
--
1,297,556Executive: O
ffice of the CEO
(appointed 1 August 2017)
1,114,58428,308
--
1,142,892C
hief Information O
fficer (appointed 21 Novem
ber 2017)665,388
9,940-
-675,328
Chief Inform
ation Officer (resigned 31 July 2017)
487,29528,995
-68,539
584,82913,066,096
980,1081,164,391
542,35515,752,950
Notes to the A
nnual Financial Statem
ents (cont.)N
otes to the Annual Financial S
tatements (cont.)
Annual Report 2018/19
100Cross-Border Road Transport Agency
Service contracts
The Executive Managers are subject to w
ritten employm
ent agreements. The em
ployment
agreements regulate the duties, rem
uneration, allowances, restraints, leave and notice periods
of these executives. None of these service contracts exceed five years.
28. �,%1+)�-1�)67-0
%7)
Penalty incom
e
During the previous financial year, the A
gency had made an estim
ate of the amount of the
penalty notices issued which w
ere likely to be reduced by the courts when the trafic fines
are finalised by the courts. How
ever, the actual amount reduced by courts differed from
the
estimated am
ount. The effect of change in the current year is as follows:
2019R
2018R
Increase in penalty income
57,445-
Increase in receivables from
non-exchange transactions(57,445)
-Increase/(decrease) in surplus
--
The effect in future periods could not be reasonably determined.
29. �,%1+)�-1�%''2817-1+�32/-'<�
During the prior year the Agency changed its accounting policy in respect of the recognition of
revenue from penalty incom
e. The revenue from penalty incom
e is now recognised w
hen notices
are issued as per IGR
AP 1. Previously the penalty income w
as recognised when notices w
ere
finalised by the courts. This change was done in order to ensure m
ore reliable and relevant
information about the im
pact of transactions relating to the penalty income and events on the
entity’s financial statement. The effect revision has resulted in the follow
ing:
2019R
2018R
Statem
ent of financial performance
Increase in penalty income
-4,520,711
Increase in provision for debt impairm
ent -
(3,283,107)
30. !5-25�3)5-2(�)5525
Service fee
During the financial year under review
the Agency determ
ined that the service fee payable
to RTM
C in respect of the law
enforcement function perform
ed by the RTM
C on behalf of
the C_B
RTA
is due and payable upon collection and not when the penalty incom
e is accrued
to the C-B
RTA
as previously determined. The prior period w
as adjusted retrospectively and the
effect on the individual line items in the financial statem
ents is as follows:
2019R
2018R
Statem
ent of financial position
Decrease in trade payables from
exchange transactions -
6,539,511
Statem
ent of financial performance
Decrease in service fee
-6,539,511
31. "-6.�0
%1%+)0)17�
Financial risk managem
ent
The Agency’s activities expose it to a variety of financial risks: m
arket risk (including currency risk,
fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
The Agency’s overall risk m
anagement program
focuses on the unpredictability of financial
markets and seeks to m
inimise potential adverse effects on the Agency’s financial perform
ance.
The Agency does not use derivative financial instruments to hedge risk exposures.
Risk m
anagement is carried out by m
anagement under policies approved by the Accounting
Authority.
Liquidity risk
The Agency’s risk to liquidity is a result of the funds available to cover future comm
itments. The
Agency manages liquidity risk through an ongoing review
of future comm
itments and credit facilities.
Cross-Border Road Transport Agency
101Annual Report 2018/19
Annual Financial Statem
ents for the year ended 31 March 2019
Interest rate riskThe A
gency has some interest-bearing assets in the form
of investments in the m
oney market in
the form of fixed term
deposits. How
ever, its income and operating cash flow
s are substantially
independent of changes in market interest rates.
Capital risk m
anagement
The Agency’s objectives w
hen managing capital are to safeguard the A
gency’s ability to
continue as a going concern in order to provide services to the South A
frica public and benefits
for other stakeholders. The capital structure is currently free of any long term debt except for the
retirement benefit obligation relating to m
edical costs for some form
er and current employees.
As a state ow
ned entity, the Agency has no desire to m
aintain a highly geared capital structure.
Credit risk
Credit risk consists m
ainly of cash deposits, cash equivalents, derivative financial instruments
and trade debtors. The Agency only deposits cash w
ith major banks w
ith high quality credit
standing and limits exposure to any one counter-party.
Trade receivables comprise a w
idespread customer base. M
anagement evaluated credit risk
relating to customers on an ongoing basis. M
ost of the Agency’s debtors are M
agisterial Courts
within S
outh Africa.
�����2-1+�'21')51
The annual financial statements have been prepared on the basis of accounting policies
applicable to a going concern. This basis presumes that funds w
ill be available to finance future
operations and that the realisation of assets and settlement of liabilities, contingent obligations
and comm
itments w
ill occur in the ordinary course of business.
The ability of the Agency to continue as a going concern is dependent on the ability of the Agency
to meet these obligations as they are lodged. The going concern basis presum
es the funds will
be available to finance future operations and that the realisation of assets and liabilities and other
contingent obligations will occur in the ordinary course of business. The financial statem
ents were
prepared on the basis that the Departm
ent of Transport has neither the intention nor the need to
liquidate nor curtail materially, the scale of the Agency’s operations.
The year under review recorded a surplus of R
180,990,237 (2018: R55,102,840).
33. �58-7/)66�%1(�:%67)*8/�);3)1(-785)
2019R
2018R
Fruitless and wasteful expenditure
-28,326
Fruitless and wasteful expenditure w
as incurred as a result of interest changed on late payment
of a surplier and legal costs thereof. Disciplinary action has since been taken by the A
gency
and the full amount recoverable from
the official concerned. As at year end, R
22 000 was
recovered. The balance still due is included as part of staff debtors under note 7.
� ���55)+8/%5�);3)1(-785)
2019R
2018R
Add: Irregular Expenditure - current year
123,170-
Analysis of expenditure aw
aiting condonation per age classification
Current year
123,170-
Details of irregular expenditure – current year
Description
Disciplinary steps taken/
criminal proceedings
Written approval for
deviation in the procurement
of goods and services only after services w
ere rendered
Investigation to be conducted
62,173
Appointm
ent of a supplier w
ith an expired taxclearance certificate
Investigation to be conducted
60,997
Net surplus per approved budget
123,170
�27)6�72�7,)��
118%/��-1%1'-%/�#7%7)0
)176��'217��Annual Report 2018/19
102Cross-Border Road Transport Agency
����")'21'-/-%7-21�&)7:
))1�&8(+)7�%1(�67%7)0)17�2*�=1%1'-%/�
3)5*250%1')
Reconciliation of budget surplus/deficit w
ith the surplus/deficit in the statement of financial
performance:
2019R
2018R
Net surplus per the statem
ent of financial performance
180,990,23761,642,359
Adjusted for:
Assets w
ritten off and impairm
ents259,184
73,854
Finance charges and interest expense347,000
287,676C
onsulting and legal fees1,026,715
(4,116,724)O
ther operating and general expenses504,036
(25,292,596)D
epreciation and amortisation
(949,948)(2,511,146)
Employee costs
(11,985,799)(16,996,704)
Penalty incom
e(41,644,726)
(29,974,111)P
rescription of claims
(162,716,567)-
Adm
inistration fee - RTM
C37,026,850
23,434,600U
nder/over recovery of budgeted revenue28,985,160
(2,222,082)O
ther Income over-collected / (under-collected)
(644,634)(2,784,373)
Interest income over-collected / (under-collected)
(937,444)(1,540,753)
Net surplus per approved budget
30,260,064-
�)7%-/)(��1'20
)�#7%7)0
)17
NOTE(S)2019
R
2018RESTATED*
R
Revenue
Perm
it issue fees154,805,849
172,151,604
Perm
it application fees39,996,021
41,448,270
Prescription of claim
s162,716,567
-
Other incom
e644,634
3,247,583
Interest received 5,230,054
4,560,825
Total operating revenue363,393,125
221,408,282
Fines, Penalties and Forfeits
41,644,72629,974,111
Total revenue12
405,037,851251,382,393
Expenditure
Employee related costs
15(126,314,489)
(110,892,311)
Depreciation and am
ortisation(3,399,621)
(2,210,600)
Finance costs and interest16
(347,000)(287,676)
Lease rentals on operating lease(11,002,525)
(10,917,652)
Debt Im
pairment
17(5,099,705)
(4,070,924)
Assets w
ritenoff and impaired
(259,184)
(812,851)
General Expenses
18(77,625,090)
(60,548,020)
Total expenditure(224,047,614)
(189,740,034)
Surplus for the year
180,990,23761,642,359
* See N
ote 30 & 29
Cross-Border Road Transport Agency
103Annual Report 2018/19
Annual Report 2018/19
104Cross-Border Road Transport Agency
Glen M
anor Office P
arkB
uilding 3138 Frikkie de B
eer Street
Menlyn, P
retoriaS
outh Africa
PO
Box 560
Menlyn, 0063
Pretoria
South A
frica
Tel: +27 12 471 2000Fax: +27 12 369 8485
ww
w.cbrta.co.za
RP
301/2019IS
BN
: 978-0-621-47805-1