PART A: GENE. l. IN ~O MATIO l. GENE . AL INFORMATION

1.1 REGISTERED NAME OF PUBLIC ENTITY

The Northern Cape Economic Development. Trade and Investment Promotion Agency.

As such it is a public entity incorporated in terms of the Northern Cape Economic Development. Trade and Investment Promotion Agency Act Act 4 of 2008.

1.2 REGISTERED OFFICE AND POSTAL ADDRESS Block 6. Monridge Office Park C/o Kekewich and Monument Roads Memorial Heights Kimberley 8301

1.4 EXTERNAL AUDITORS INFORMATION Audit Team Leader: Mr. Mafokotsa Khaile Physical Address: Block l. Montrio Office Park 10 Oliver Road Kimberley 8301 South Africa

Postal Address: Audi.tor-General of South Africa Private Bag X5013 Kimberley 8300 South Africa

Telephone: 053-836-8800 1.5 BANKERS INFORMATION First National Bank New Park Branch - 231002

Physical Address: ----- -----·-- - ---•--•-• ·-- -------------

South Africa

1.3 CONTACT TELEPHONE NUMBERS Telephone: 053-833-1503 Facsimile: 053-833-1390 i nfo@nc-eda.co.za www.nceda.co.za

Corner of Long & Bultfontein Street Kimberley 8301

Postal Address: Private Bag X6054 Kimberley 8300 South Africa

Contact Information: Telephone: 053-832-1644 Facsimile: 053-832-4142

2 L -TO ABBREVIATIO S

CEO Chief Executive Officer

CCSP Craft Customised sector Programme

CFO Chief Financial Officer

DEDAT Northern Cape Department of Economic Development and Tourism.

ED Economic Development

IDC Industrial Development Corporation.

MSICC Mittah Seperepere International Convention Centre

NCEDA Northern Cape Economic Development, Trade and Investment Agency

PFMA Public Finance Management Act. Act l of 1999.

TIP Trade and Investment Promotion.

WPNR. Witsana Provincial Nature Reserve ------- -·~--·---

SEZ Special Economic Zones.

Foreword by Chairpeson

A v cate. Lun ··e B me a.

The board of NCEDA was appointed by the MEC of Finance,

Economic Development and Tourism MEC MN Jack, starting 01

February 2018. According the Act of NCEDA. (Act 4 of 2008)

section 5 and 6. It is stipulated that:

"A board for the agency is hereby established-

to manage and control the affairs of tne Agency;

to be the accounting authority for the agency as contemplated

in section 49(2)(a) of the Public Finance Management Act. 199

(Act No.1 of 1999); and

to exercise the powers and perform the functions conferred or

imposed upon the agency by the act or any other law.

Section 6: Composition of the Board:

The board consists of at least 5 members, but no more than 8

members. eligible to vote at meetings of the Board, appointed

by the responsible Member by virtue of their proven acumen,

knowledge or experience of business or with related skills, having

due regard to the inclusion of previously disadvantaged person,

young persons. women, disabled persons and personas from the

various district municipalities of the Province.

The Chief Executive Officer and Head of

Department. or an officer designated by

the Head of Department. are entitled to

be present and take part in the

discussions at meetings of the board. but

are not members of the Board and may

not vote at such meetings."

A member contemplated in subsection

(1) may be appointed only after the

responsible Member has. by notice in the

Provincial Gazzette and in not less than

two newspapers circulating in the

Province. invited interested parties to

nominate persons suitable for

appointments as members of the Board.

Members appointed in terms of

subsection (1) are non-executive

members of the board.

The responsible Member appoints a

I he or she-

ls legible for such appointment; and

Is not disqualifies in terms of this Act from

such appointment.

The responsible Member is at any time

entitled to call for proof to his or her

satisfaction of the continued eligibility of any

member or prospective member of the

Board. or to undertake or cause to be

undertaken or cause to be undertaken any

investigation or enquiry in that regards.n

terms of the NC EDA Act the entity has to

have five (5) to eight (8) members of the

Board. During the year under review the

NCEDA Responsible Member appointed a

new Board as follows:

Adv. L Bomela (Chairperson).

Mr. T Makweya (Deputy Chairperson).

Ms. K Williams.

--member of-the-Board -as chairperson-and---Dr.-P Nonjola.~---- ------------

another as deputy chairperson.

The Chairperson presides at all meetings

of the Board and the deputy chairperson

presides at meetings in the absence of

the _chairperson.

Before being appointed a member of the

Board. the candidate must submit to the

responsible Member an affidavit in which

such candidates declares that

Dr. L Moremedi.

Ms. N Kga ntsi

Mr. F Witbooi

Mr. M Kies

As the board of NCEDA we are tasked to

normalise the activities of the entity and

make sure that the operates with

autonomy.

According to the NCEDA act. (Act 4 of

2008). NCEDA should be funded directly

from the Provincial Treasury. this is one of

the main tasks that the board is

undertaking to correct in their term in

office.

The Board is further engaging with

stakeholders in the Province. including

the provincial legislature for the proper

understanding of the challenges facing

the entity.

In reviewing the performance of the

Agency in the year under review. we are

proud of the achievements and the

commitment of the entity so far and are

honoured to be part of the Agency. We

will serve the community of the Northern

Cape diligently and make sure that we

fulfil the mandate as prescribed in the

---Northern Gape-Eeonomic- G>evelopment-.-------­

Trade and Investment Promotion Agency

Act (Act 4 of 2008) and related legislated

policies.

In closing. we would like to thank the

MEC of Finance. Economic

Development and Tourism.

Honourable MEC N MacCollen Jack for

his unwavering support and guidance.

the Portfolio Committee, the Acting

HOD of Treasury: Mr. T Mabija and

Acting HOD of the Department of

Economic Development and Tourism:

Mr. Mabilo (amongst others) for their

commitment to assisting the Agency

to achieving its goals.

Lastly. we would like to give thanks to

the community that trusts us to grow

the economy of the Northern Cape by

allowing us to operate freely within

their communities.

Re a leboga. Siyabonga, Dankie. Thank

you.

M L

The Chief Execut·:v-e Office~'s

Overview ea

The Northern Cape Economic Development Agency was established

through an act of law. Act 4 of 2008. The agency is financed from the

money appropriated by the provincial legislature; from any money

payable to the agency in terms of the act or income derived by the

-----------a§lenG-y-from its-investmeAt-and dep0sit-0f-surJ:>lus-money-and-lastly-all ­

money accruing to agency from any source.

The financial year of the agency runs from the l April to 31 March of every

year. We would like to reflect on the following:

NCEDA head office had an improved baseline for the year under review.

While the SEZ had a roll over from the previous year to the year under

review. Witsand Nature Reserve Revenue improved. this has been

influenced by the increase in the number of occupants of the facilities.

applying tighter financial controls and upgrading the facilities. We project

the income to increase to 3.7 million rands as most of the upgrades were

done in the year under review.

CRAFTS CSP: We would like to report grant funding for the Crafts Project

(-R 2.7 million - 2017/18) and that the funding was decreased for 2018/19

financial year from the requested R3 million to Rl.2 million.

MSICC: We are unfortunately not able to playgrounds and vast distances between

report on the convention centre as we were towns within the Province. In addressing

not privy to the financial records of the entity, these capacity constraint identified. NC EDA

despite having to disclose the financial had an intergovernmental agreement with

records of the entity, we are now happy to the COEGA development agency.

mention that the high court made a ruling in HIGH IMPACT PROJECTS

our favour whereby one of the orders is that We have submitted an application for

the respondents shall grant the applicants funding to the value of Rl23 million funding

access to information on the revenues for the upgrading of the access road to

generated and venue hire of the convention Witsand Nature Reserve, De Aar 3294 (18 Km)

centre and related expenses by the and De Aar 3300 (25km). the 43km road is

convention centre within 30 days of the unsafe and dangerous for vehicles and

granting of the order. therefore deters the number of tourists

The entity is still immensely under visiting the nature reserve. it is estimated

capacitated in terms of human and financial that the number of tourists will double from

capital. which makes it difficult for it to 384 per month to about 750 per month once

properly deliver on its mandate of this road is upgraded. This will further

championing enterprise development that stimulate economic growth in this area and

will significantly contribute to economic will lead to job creation.

--- - growth-a Ael develepment-withi n the -- --------'We-fu rther-su bmitteci -a nother -appliGatior:i-for---

Provi nce, and also operate a fully functional the multi-user facility warehouse in

economic development unit and a trade and Upington. The purpose of this multipurpose

investment promotion unit. coupled with warehouse is to accommodate and house

implementation of high impact projects. investors (especially- renewable energy) with

Failing infrastructure within the Province. space and infrastructure so that they can

the lack of amenities to attract investors. i.e. operate successfully.

english medium schools. shopping centres, - Space is for production, security, ICT.

offices, storage and parking. the investors

TIC da

will be in close proximity to Upington airport.

they will have road connection. a viability of

utilities such as water, electricity and ICT

connectivity. The multi-user facility will

ensure that the investors save on substantial

capital expenditure and initial infrastructure

layout. Funding application has been

submitted to the DTI for R79 million, which

we envisage to create 160 construction jobs.

there are also policies to address

Unauthorised, Irregular & Fruitless and

wasteful expenditure. NCEDA utilises the

Central Supplier Database of Treasury to

source suppliers.

RECOGNITION

We would like to the appreciate the full and

visible support from the MEC of Finance,

Economic Development and Tourism:MEC

In our attempt to reduce poverty, increase Ntsikelelo Jack. For his unfailing belief in the

employability of vulnerable group in our entity.

society especially the youth, we have the To the newly appointed board, under the

pleasure of announcing the driver leaver leadership of Advocate Lungile Bomela. for

program. giving us direction.

The driver trainer offering is targeted to To the Management and staff of NC EDA for

unemployed youth (18-35 years) who do not their support and dedication in spite of

possess a drivers licence. operating under very difficult situations and

The training incorporate passing code B/EB long hours with very limited resources. To the

(formallyJmown as code 8), with a m...,.,i=x__,oc.,_f_,_l ,__,__ife,,,___ __ c_o_m __ m_ u'--'---n"--'ity at large of the Northern Cape for

skills workshops such as preparation of your creating an environment for the Province to

CV. job interviews skills, communication skills be a homely place for our investors and

and personal finance. future investors.

INTERNAL CONTROLS

NC EDA has a supply chain policy which has

been updated with the new preferential

procurement regulations released by

Treasury,

We feel the entity has done a 360 degree

turn and the impact is being felt with in the

communities of the Province. We will strive

to improve and innovate as we go forward.

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT.

To the best of my knowledge and belief. I confirm the following:

All information and amounts disclosed in the annual report is consistent with the

annual financial statements audited by the Auditor General.

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

The annual report has been prepared in accordance with the guidelines on the

annual report as issued by National Treasury.

The Annual Financial Statements (Part E) have been prepared in accordance

with the Generally Recognised Accounting Practice (GRAP) standards applicable

to the public entity.

The accounting authority is responsible for the preparation of the annual

financial statements and for the judgements made in this information.

The accounting authority is responsible for establishing. and implementing a

system of internal control has been designed to provide reasonable assurance as

to the integrity and reliability of the performance information. the human

-------- resources information and the -annual -financial statements.---

The external auditors are engaged to express an independent opinion on the

annual financial statements.

In our opinion. the annual report fairly reflects the operations. the performance

information. the human resources information and the financial affairs of the

entity for the financial year ended 31 March 2018.

MR THOBELA DIKENI CHIEF EXECUTIVE OFFICER

ADVOCATE LUNGILE BOMELA CHAIRPERSON NCEDA BOARD

- --- -- ---

6. STRATEGIC OVERVIEW

6.1 NCEDA'S PROFILE

NCEDA draws its mandate directly from the Northern Cape Economic

Development. Trade and Investment Promotion Act (Act no 4 of 2008) and is

striving towards the economic development and trade and investments priorities

of the Northern Cape Province as outlined in the Provincial Growth and

Development Strategy (PGDS). It also take into cognizance the national and

provincial policy statements and budget speech of the Member of the Executive

Council for Economic Development and Tourism.

NCEDA is a Schedule 3C public entity in terms of the PFMA. Act l ofl999.

The legislated mandate of NCEDA is captured in Section 3(l)(a) of the Northern

Cape Economic Development. Trade and Investment Promotion Agency, Act 4 of

2008:

Plan and assist with business enterprise and rural development.

Provide funding in respect of approved enterprise development.

___ Engft!g~ JOject_m anag~e_m_e_n_t. ________________ _

Engage in the development and management of immovable property.

Promote foreign trade and investment.

NC EDA is also permitted in Section 3(2) of the Northern Cape Economic

Development, Trade and Investment promotion Agency, Act 4 of 2008 to

progressively increase its own revenue generation and collections.

NCEDA has been entrusted with a further four mandates and they are the:

Special Economic Zone (SEZ).

Craft Customised Sector Programme (CCSP)

Tourism Services in Witsand Provincial Nature Reserve (WPNR)

Mittah Seperepere International Convention Centre (MSICC).

6.2 VISION

Promoting the Northern Cape as a sustainable business and investment friendly

province.

6.3 MISSION

To be true to ourselves and to our purpose. our mission is to achieve the promotion

of the Northern Cape as a business friendly province through:

Seeking sustainable growth at all times.

Facilitating the creation of a conducive environment for trade and investment

within the Province.

Increased focus on attracting investment.

The promotion of trade.

In pursuit of economic development.

And this constantly in striving for sustainable and quality job creation at all times.

6.4 VALUES

NCEDA is anchored in the following fundamental values:

Transparency: We will communicate realness in our dealings with colleagues and - ---·- . -- ----- ". - -- -- -

clients at all times.

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

of our clients at all times.

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

Integrity: Our organisation will be viewed by those. both within and without, as

honest and upstanding.

Professionalism: We will continuously build on previous performance by active,

positive and constructive criticism of past actions and as such strive for professional

action at all times.

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

the organisation.

Accountability: We will be accountable for all our actions, good or bad and deal

with the consequences thereof.

Motivation: We shall at all times approach our work with enthusiasm and at the

same time give every assignment our best effort.

Resourcefulness: We shall use all our resources to demonstrate our capabilities and

service excellence in order to stay relevant in our market place.

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

good quality.

Communication: We will ensure that all our clients and stakeholders are always

informed about what we are doing.

Relevance: We will always seek to create an environment where others may learn.

grow and be fulfilled and reach their full potential.

------- --------- ------- ---------

6.5 STRATEGIC DIRECTION

The NCEDA strategic direction is as follows:

6.5.l Economic Development

The key sector for support and intervention is leisure and business tourism and

certain skills and capacity development initiatives associated with operating a SEZ.

6.5.2 Trade and Investment Promotion

The key focus areas are the SEZ designation and related property development. as

well as supporting the provincial craft sector via the roll-out of the CCSP.

7. LEGISLATIVE AND OTH ER MANDATES

The legislative mandates guiding and affecting NCEDA are:

Public Finance Management Act (Act l of 1999).

Treasury Regulations.

Standards of Generally Recognised Accounting Practices.

International Standards on Auditing.

- - [aoour Relations Ad (Act 66 of 1995).

Constitution of South Africa (Act 108 of 1996).

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

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

Employment Equity Act (Act 55 of 1998).

Special Economic Zones Act (Act 16 of 2014).

Skills Development Act (Act 97 of 1998).

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

Unemployment Insurance Fund Act (Act 63 of 2011).

Tourism Act (Act No 72 of 1993).

Public Service Act (Act 103 of 1994).

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

• Northern Cape Tourism Act (Act 5 of 1998).

• State Information Technology Agency (SITA) Act ( Act 88 ofl998);

• Competition Act (CA) 1998 (Act 89 ofl998);

• National Environmental Management Act (NEMA) 1998 (Act 107 ofl998):

• Construction Industry Development Board Act (Act 38 of 2000):

• Public Audit Act (Act 25 of 2004).

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

2004);

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

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

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

8. ORGANISATIONAL STRUCTURE

NCEDA reviewed its structure in 2012. The new structure took cognisance of

NC EDA as a growing organisation and had to align itself to its core business in

order to respond to NCEDA's mandate.

NCEDf. flmdol Oi!K!~l'l

OFFICE OF TH: CEO

[ RJSKllJ.11/\GEMe/T ;--------<>-------< ________ .., I -;;'SA\ TOUinM P.£SORT

r AAOE ,l

IN'l'ESTLl!: WI p;C!,IOT-ON

--- -- --------+----

ECON0!,1 C OE~~LOPM: NT

The NCEDA management team is:

Mr. T Dikeni. Chief Executive Officer

MAA!lfl NG& COMMUNICATIO!,

Ms. T. Mangojane. Chief Financial Officer.

( 'I F-.AANC;AL COill'OAAl E

M.• AGt-1/ tNT SER~IC:S

Mr. T. Luse. Manager: Human Resources Management and Administrative Support.

Mr. 0 . Coetzee. Manager: Tourism Services. Witsand Provincial Nature Reserve.

Vacant: Manager: Trade and Investment Promotion.

Vacant: Manager: Marketing and Communication.

PARTB

9 . GOVERNANCE

9.1. INTRODUCTION

Corporate governance refers to the system by which Public Entities are directed,

controlled and held to account. The governance structure specifies the distribution

of rights and responsibilities among different participants in the corporation such

as the board of directors. managers. shareholders. creditors. auditors. regulators.

and other stakeholders and specifies the rules and procedures for making

decisions in corporate affairs. Governance provides the structure through which

corporations set and pursue their objectives, while reflecting the conte~t of the

social. regulatory and operational environment. Governance is a mechanism for

monitoring the actions, policies and decisions of Public Entities as well as the

alignment of interests among the stakeholders. In this regard the PFMA (Act l of

1999). Companies Act (Act 71

2008) and the King Ill report are singled out as and how it relates to impact on

corporate governance in NCEDA.

-- ·---------

9.2. PARLIAMENTARY OVERSIQHT

NCEDA last presented its Annual Report to the Standing Committee of Public

Accounts (SCOPA) and the Portfolio Committee for Finance. Economic

Development and Tourism during February 2013. Thereafter no presentations of

annual and quarterly reports could take place due to a decision to postpone until

the NCEDA Board is functional again.

9.3 SUBMISSION OF QUARTERLY REPORTS

NCEDA submitted its Quarterly reports to its mother department Department of

Economic Development and Tourism for purposes of accountability as follows:

Quarter l: June 2017

Quarter 2: September 2017

Quarter 3: December 2017

Quarter 4: March 2018

9.4 THE EXECUTIVE

9.4.1 THE BOARD

9.4.2 INTRODUCTION

The NC EDA Board has the following mandate expressed in Section 5 of the NC EDA

Act (Act 4 of 2008):

To manage and control the affairs of the Agency.

To be the accounting authority for the Agency as contemplated in Section 49(2)(a) -----

of the PFMA (Act 1 of1999).

To exercise powers and perform the functions conferred or imposed upon the

Agency by this Act or any other law.

In addition. the NCEDA Board must lead and guide the Agency, in conjunction

with DEDAT. to actively promote and market the Northern Cape as an investor­

friendly destination to increase and retain investment in the Province while at the

same time it endeavours to increase trade in commodities produced in the

province.

The Board at all times must exercise and perform its powers and functions with

due regard to Section 104, Section 125 and section 230 of the Constitution of South

Africa (Act 108 of 1996). the PFMA (Act l of 1999) and provisions of national and

provincial legislation and all national and provincial policies, regulations and

directives referring to tourism. trade, industry, sector development and investment.

Section 6(1) of the NC EDA Act (Act 4 of 2008) compels NC EDA to have a minimum

of five Board members and a maximum of eight.

The former Responsible Member for NCEDA appointed an acting CEO from March

2015 to assume the role of the Accounting Authority in terms of S49(2)(b) of the

PFMA (Act l ofl999). However. the former Responsible Member for NCEDA

appointed a new Board later in 2015 without withdrawing the powers of being the

entity's Accounting Authority. The new NCEDA Board however was never activated

due to a severe budget shortage which did not allow the entity to afford the costs

related to the induction of the new Board and Board sittings including the logistics

associated of accommodating such Board sittings (flights, accommodation. sitting

fees and transport). •----·- ---

9.5 COMPOSITION OF THE BOARD

Name Designation Date Appointed Date Resigned Number 01 1-- ··- l'Jeeungs Allen eel "

Adv. L Bomela Chairperson ··- 01 February 2018 .. , ---

- 2

MrT Makweya Deputy Chairperson 01 February 2018 - 2

Mr M Kies Member --~ - 01 February 2018 - 2

Mr F Witbooi Member 01 February 2018 - 2

Ms N Kgantsi Member 01 February 2018 - 2

Ms K Williams Member 01 February 2018 - 0

Dr P Nonjola Member 01 February 2018 - 2 ---·------ -

Dr L Moremedi Member 01 February 2018 - 2

PARTC

10. PEROFRMANCE INFORMATION FOR NCEDA

EXECUTIVE SUMMARY

During the 2017/18 financial year NCEDA achieved 80% of its planned targets. The

following programme structure was proposed for NCEDA to be implemented in

2017/2018 MTEF.

12. Corporate Services

I

!3. Economic Development

I

4. Trade and Investment Promotion

.5. Office of the CFO

Human Resource Management

2. Administrative Support Services 1. This business unit wound down its projects in the 2016/17 financial year.

Its staff and functions were transferred to DEDAT. This matter will be put into review during the 2017/18 financial year.

1. Witsand Nature Reserve;

2. Special Economic Zone - Upington;

3. Craft Customised Sector Prog,c...=ra=m=m=e _________ ............, 1. Financial Accounting

__________ _ _,;1_2._ S_u~ Chain Manag,_e_m_en_t ____________ ___, 16. Marketing and Communication

1

11. This business unit remains inactive as a result of a lack of human capital : and a dedicated bud et. I

PROGRAMME l: OFFICE OF THE CEO

This programme is responsible to manage and oversee all administrative

operations of NCEDA in accordance with the Northern Cape Economic

Development. Trade and Investment Promotion Agency Act and other NCEDA

strategic policies and directives.

Programme 1 Sub-programmes Off'ice of the CEO 1. ExeaJtive Management Unit -

I Strategic Goal To manage and oversee all administrative operations of the NC EDA in accordance with relevant I 1

leQislative prescripts and other the NC EDA strateQic policies and directives. i

!Goal 1 The provision of executive and strategic management services to the operations of the NC EDA,

statement I

throu h an effective, efficient and economic a roach. IJustification To ensure that the core functions deliver quality services to communities -------------------; Links 'The NCEDAAct 4 of 2008, Public Finance Management Act (Act 29 of 1999), Special

Economic Zones Act Act 16 of 2014

Performance Indicators:

Performance Reporting Indicator Period

1.1 Number of ' Quarterly

APPs

submitted to

1Accounting I

Authori .

1

1.2 Number of Quarterly

IQuarterly I ! reports I submitted

- ----- -·· --------

Planned Target 2017/18

Actual Achievement 2017/18

Deviation from Comment on Strategy to address planned Target to deviations under performance actual achievement for 2017/18

1 APP 1 APP submitted 'None None None submitted to Ito Accounting Accounting Authority by Authority by September 2018 September

2018

4 Quarterly

1

4 Quarterly None reports reports

!None None

!submitted to submitted to

I Accounting I

Accounting

iAuthority and I Authority and

DEDAT -1 1DEDAT -1 I

er Quarter Qer Quarter I -------·

Performance Reporting Planned Actual Deviation from Comment on Strategy to address ndicator eriod i arget---•Achievement lanned Target to deviations under performance

··----2017/18 2017/18----actual achievement for 2017/18

1.3 Number of1 Annually 1 Annual Not Achieved 0 Annual Reports Printing of Appoint printers on

annual reports

submitted

1.4 Number of Annually

Board !Members :appointed 11.5 Number of

I Quarterly

jAudit

!committee I j meetings held

Report submitted to the Accounting 1

Aufhority and , DEDATby30 September 2017 8 Board !Members tappointed

I t4AC

8 Board Members appointed

l 14AC I

submitted to .DEDaTby September 2018.

fNone

I I

·None

meetings held 1meetings held

- 1 per Q j- 1 per Q

-- --- ·--- ---

----RROGRAMME 2:-CORRORATE SERVICES ____ _

I ,

annual report time and get all the secured late. information from

-1None

None

external parties on time.

None

None

--·--·- ------'

This programme is responsible to effectively manage corporate services within

the NCEDA.

Human Resource Management

Purpose: To implement. coordinate and manage all human resource matters

within the Northern Cape Economic Development Agency

Administrative Support Services

Purpose: To manage and effectively support the Chief Executive Officer in the

execution of duties

Sulrprogrammes j 1. Human Resource Management 2. Adminislralive Su SelVices

Strategic Goal To provide sound human resources management and administrative support to the 2 ,NCEDA. Goal statement Provide efficient and effective human resources and administrative support to the

NCEDA thereb ensurin the achievement of strate ic ob·ectives.

Justification To ensure that the core functions deliver quality services to communities, based on an

in~rated Rerformance management S}'§tem Links DPSA directives, Outcome4, supporting the 1 O Sub - -Outcomes, NCEDAAct 4 of

'2008, 1 Public Finance Management Act (Act 29 of 1999), and Special Economic Zones Act

Act 16 of 2014 .

Performance Indicators:

erformance Indicator

2.1 Number of Annually

annea 2017/18

6 financial

arge Achievement 2017/18

6 financial financial disclosure forms disclosure forms disclosure submitted / 1 submitted / 1

I forms per per - - ------- ·-! subm1ttec·~----"Respons101hty Respons101h

Deviation m planned Target to actual achievement for 2017/18

1None

Comment on deviations

None

Strategy to address under performance

None

! I

Manager ~ _anag~r

1 1 PA signed per 1 PA signed per staff member staff member

f-: -;-2.2 Number of Annually I performance

None None None --l I

~

greements . gned . . 3 Number of Annually

1HR Plans

I submitted. 12.4 Number of Annually !vacant and : funded posts jfilled.

1 HR Plan submitted by March 2018

'. Funded vacant !funded posts

1filled within 90 days of :becoming :vacant.

1 HR Plan submitted by March 2018 ,8 Funded vacant funded

'

posts filled within 90 days of becoming

1vacant and 2 !Promotions.

~

5 Number of Quarterly ; 4 HR sessions 4 HR sessions R sessions held by March held by March eld. 2018-1 er Q. 2018-1 er Q.

None

-------'---"----'----

None None

None

None None

I

I I

___ 1

I I

I I

2.6 Number of :Quarterly I

Labour sessions held.

2.7 Number of Quarterly leave reconciliation

completed.

I -----2.8 Number of Quarterly

·-office systems

maintained.

2.9 Number of Annually .HR policies reviewed.

j4 Labour sessions held

,

1

by March 2017 -1 perQ.

I

1 leave reconciliation per staff member completed per

Achievement "2017/18

'Not Achieved I i

I

1 leave reconciliation per staff member completed per

Quarter. _ guarter. 5 office systems 5 Office maintained systems ·(accommodatio maintained per 1

n, telephone, ·quarter. I Wi-Fi, copier, IT)

HR Manager did

1session not conduct attended in Q4 labour sessions

-1 CCMAcase during the year.

of Mr I Engelbrecht , (Resolved) and 11 CCMA case of

1MrTitus Unresolved

None None

I No_ne ___ ~j N_o_n_e ·- _____ _

! I I I

HR Manager to

plan Labour rights, awareness and updates session in advance and conduct them

I quarterly.

None

None

J)erQua~. 12 HR policies reviewed by March 2017

i --- - _f__ __j_ ---

Not Achieved. 0 HR policies Reviewing Review policies

reviewed by process started in quarterly and not I March 2017 October 2017 leave them for

with an external end of year. j service provider and ,

benchmarking

1

1

started in March

I J 2018, both

processes are still ______ _ underwa . _

PROGRAMME 3: ECONOMIC DEVELOPMENT

This programme is to support and develop business enterprises in the Northern

Cape Province.

The function is currently unfunded within the NCEDA Organisational and Staff

Establishment Structure. This matter will be put into review during the 2017/18

financial year.

P ramme 3 Sub- rammes Economic Development 1. Manufacturing

2. Business Planning

3. Research

Strategic Goal 3 i To support and develop business enterprises in the Northern Cape Province.

Goal statement Provision of high impact economic development services within the Northern Cape

Province.

I Justification

I Links

This strategic goal is to ignite the manufacturing sector, through business planning and

focused research activities. DPSAdirectives, Outcome 4, supporting the 10 Sub -Outcomes~ CEDAAct 4 of20~

I

Public Finance Management Act (Act 29 of 1999), and Special Economic Zones Act

---------, ------,-Ac-c-,-t 17-c6c-o-=-f 2=oc-c14-cc-_ --------------------------- ---·--------

3.1 SPECIAL ECONOMIC ZONE

Performance Indicators:

Performance Re rtin Indicator Period

3.1.1 SEZ designation 'application submitted and 'approved

Annually

3.1.2 Number IQuarterly 1of SEZ

1

milestone reports completed.

Annual Target 2017/18

Actual Performance

SEZ • Not Achieved j designation application

. submitted by Reason: June 2017

f

2SEZ milestone reports

Remedy:

Achieved

completed j 2 Milestone by October reports

Designation application submitted by June 2017.

Strate to address under performance

Not enough capacity Workshops on mock and understanding application held with 'of requirements. Dti, Coega SEZ

appointed to assist with application for designation and Application to be submitted in Quarter 1 of 2018/19

'financial ear. ----------None None 1 None

12017 com lated. -- -------'----+--'--------- ------ ~-----

-----s-:3:-:tNumber - eiuarterly- 40investors• Not·Achieved- '1·3·1nvestors- -SEZ·is-short-staffed-SEZ-PMl:J need·t'n------of . engaged in engaged in and not participating fill the vacant critical

investors

engaged in

promoting the

SEZ to the

investment

promoting promoting the in missions (Inward posts and attend the SEZ to SEZ and outward). more outward and the investment community by March 2018

missions with the DTI & DEDAT to

promote the SEZ & to attract FDl's and local investors.

community _____________ _

PROGRAMME 4: TRADE AND INVESTMENT PROMOTION

This programme is responsible to develop. facilitate. retain and expand trade and

attract and promote investment in the Northern Cape Province.

P ramme4---~-----~ u rc,grammes------...,.,.-----------~ Trade and Investment Promotion 1. Witsand Nature Reserve;

2. Special Economic Zone- Upington; 1

3. Craft Customised Sector Prog,_;ra=m=m"--'e'-----------------; Strategic Goal 4 Establish the SEZ in Upington, effective management of the Witsand Nature

I Reserve and the Craft Customised Sector Programme in order to create employment on a mass scale

i-----~ I and attract investment into the Northern Cap~ _ __ _ _ Goal statement Establish strategic business units (SBU's) to create employment on a mass scale

t-------Justification

Links

and attract investment to the Northern Ca e Province. C om p Ii an c e through the application of the relevant Acts, Regulations, governance

circulars and internal olicies. NCEDAAct 4 of 2008, Public Finance Management Act (Act 29 of 1999), Special 1

Economic Zones Act Act 16 of 2014 . L ____ _ ----------=-----=-----_-_-_-_-_-_-_-_-_-_-_-_~_~-=====-=--:'.:..=--=--=--=---·----------

4.1 CRAFTS CSP

Performance Indicators:

erfonnance ndicator

Reporting Period

Annual Target Actual '"2017/18 Perfonnance

Deviation Comment on Strategy to m'J)lanned lfeviations·--- ddress under

•--·---··---·-·-----------··----... argetto

<t.1.1 Number · Quarterly

of

crafters

trained in

product

· Support 40 Not Achieved

'

crafters with product development

;by March ,2018

_de_v_e_lo~m_e_n_t. ______ , ~ - _ 4.1.2 Number jQuarterly Support40

1

,NotAchieved of crafters crafters with trained in enterprise enterprise development development. by March

2018

actual achievement for20 7 8

29 Grafters Poor planning We have a new

officer appointed iin 03, she will !Prepare a training !year plan in Q1 of ,2018/19.

supported with product development

33 Crafters I Poorplanning We have a new supported officer appointed with j in Q3, she will I enterprise ! Prepare a training development. I year plan in Q1 of 1

I 2018119. i 4.1.3 Number Quarterly of Crafters

Support 20 craft enterprises to access markets by ,March 2018

Achieved I __ i __

·---3~3 ""'c-ra-c-fte-rs-~A-,--lo-t o""'f~our crafters !The target for

supported product quality has i market access will I supported to with market improved and I be increased to access access. more were accommodate markets. exposed to the 1more crafters.

market.

4.2 WITSAND NATURE RESERVE

Performance Indicators:

Perfo ce Indicator Period

4.2.1 Quarterly Percentage of Witsand chalets, ! bungalows and camping sttes readied for occupation through sound housekeeping. '

100% of Witsand chalets, bungalows and camping sites readied for occupation 1

Performance

Achieved

100 %of20 people sleeping bungalows,

through 10 camp sttes sound 'and 9 chalets

1 housekeeping prepared for

·a .

from planned Target to :actual

1None I

occupation through sound ) housekeepl_!!g_. _! ___ _ Achieved 17 groups

i of groups jhosted at hosted at Witsand.

deviations

None

fMr;I More awareness of WITSAND !created through

Y. address under performance

1None I I

None F-2 . .2Number ruarteiiy7i 2"gioui)s-

---~--

1

.~~~~ N~~~u_re _ ___ _ I hosted at -1Witsand ---+----~w- efisite an

Reserve Reserve by

J March 2018

I I ' i- I

t 4.2.3 Number Quarterly 4 service Achieved 1of service excellence /excellence ,surveys 1surveys completed at , completed at Witsand 1 Witsand Nature Nature ' 1Reserve. Reserve.

154 service 'excellence :surveys completed.

I market shows, Upgrade of facilities

1 attracted more groui:is. Clients filledin service excellence

Over-, performance

surveys 1 Target needs to be reviewed in

to help Witsand 2018/19 or the I I

I survey needs to I improve. I

be completed by , the tourism board {or

1

applicable body) I per quarter. I

Performance Reporting Indicator Period

4.2.4 Number of market access initiatives launched to promote

:~~:;: Nature i ! I

I

Annual Target Actual 2017/18 Performance

4 market access initiatives

launched to 4 Market access promote initiatives Witsand accessed by Nature WITSAND. Reserve by , March 2018

Deviation Comment on from planned deviations

achievement--·•-.c for2017/18 None

Prerogative

None

4.3 MITTAH SEPEREPERE INTERNATIONAL CONFERENCE CENTRE

Performance Indicators

Performance Reporting Annual Target Actual Indicator Period 2017/18 Performance

+-------- ----------

: 4.3.1 Number Quarterly i of legal reports 1 submitted on court

1 proceedings in the MSICC

,case.

3 legal Achieved reports submitted on court 3 legal reports proceedings submitted on in the MSICC MSICC case case -1 per proceedings.C Q. ase concluded

(in favour of

Deviation from planned Target to actual achievement for 2017/18 None

~ - - --~---~--- NCEDA) __ _

Comment on deviations

None

None

Strategy to address under performance

'None

PROGRAMME 5: OFFICE OF THE CFO

To ensure effective financial services to all business units in NCEDA

Financial Accounting - Provide efficient financial management to NCEDA

thereby ensuring the achievement of strategic objectives.

Supply Chain Management - Provide efficient and cost-effective procurement

support to NC EDA thereby ensuring the achievement of strategic objectives.

u rogrammes 1. Office of !he CFO

2. FmandatAccounmg

3. S Chain ment Strategic Goal To provide effective, efficient. and economic financial management services to the 5 NCEDA

- -Goal statement , Ensuring that the NCEDA reaches its financial obligations and receive clean audit reports

Justification This goal focuses mainly on budget execution. This involves monitoring and evaluating the

NCEDA's expenditure to assess its impact and to evaluate the efficiency and effectiveness

of the expenditure. Assist with building capacity for efficient and effective general financial

1--------lmanagement practices. ____ ___ _ _ _ Links · Outcome 4, supporting the 10 Sub- Outcomes, NCEDAAct 4 of 2008, Public Finance

---~ ~ ementAct (Act 29 of 1999), S ecial Economic Zones Act (Act 16 of 2014). ---------- - -•-•--- -•-- -

____ j

Perfomance Indicators:

5.1 NCEDA Budget

submitted to Accounting Authority and DEE>AT.

' Annually

5.2 Budget Annually I adjustment I estimate for in­. year submitted to Provincial Treasury.

I ----,--- --

NCEDA Budget

Actual

•Achieved

,Budget submitted with' ' APP

None

·submitted to 1Accounting Authority and DEB-AT by -September 2017

Budget !Achieved None adjustment estimate for in- 1

year submitted The submission I to Provincial made to DEDaT i Treasury by 30 gets transferred '1

September to Treasury , 2017 through the

Programme J NCEDA reports I ' ------1to-at-DE!JaT-:- -. -

,None

,None

None

,None I

I I I I

Performance Indicator

5.3 Number of

IYM reports submitted to Accounting Authority and Provincial Treasury.

5.4AFS submitted to I Provincial I Treasury and AG by 31 May.

,ouarterly 4 IYM reports

,submitted to Accounting Authority and Provincial Treasury-1 ,report per _quarter

Annually AFS submitted to Provincial Treasury and AG by 31 May.

Comment on

Achieved None None None

4 IYM reports

1 submitted to ffreasury.

-----Achieved ,None None ,None

I

AFS submitted to Provincial Treasury and

I AG by 31 M~y ~ _

5.5 Numberof 'i Annually 11 NCEDA !Achieved None NCEDA I performance

None None I

reports 2017/18 1 NCEDA j performance j report for

- -·-----··- .submittecLfo,1---;---_ __,submitted-for-' performanc·o-------~-external audit external audit report for !within specified within 2017/18 I timeframes. specified submitted for

:Report I produced before I 30 September. i I

I 15.7 Finance I related policies I updated.

timeframes. external audit

1within specified _ _ _ _ , timeframes

Annually Annual Report Not Achieved produced

Annually

jbefore 30 ! September. I

Finance I related policies updated by

1March 2018 I

I

Achieved

Finance related :policies reviewed

1 Annual report !Treasury Appoint !submitted on 13 jinsisted on I printers early October 2017 !Professionally 1and get all

printed booklet I information

None

- printing took (Audit report, long I AC report) on ___ ,_

None ·time. None

Performance lndicalor

15.8 Procurement Annually plan submitted.

5.9 Internal ,Annually Audit Plan

I completed.

Annual Targel -Oeviation from 1017/18 Performance "'planned Target

achievement for 2017/18

Procurement ·Achieved 1None Plan submitted to Treasury by 30 April 2017. Procurement

plan submitted t

to treasury by 30 I A ril 2017

Internal Audit 'Achieved t

Plan completed by , March 2018. Internal Audit

None

1None None

None None

I I pl~ _s:omple~d /5.10 Risk-- -i-Annually- - Risk Register Achieved [None I None - 1None !Register

1completed by I

[·competed. l'M-arch2-0-18_. ~----LIi ---~----''---~ Risk register u dated

PROGRAMME 6: MARKETING AND COMMUNICATION ------- ... - ~ -- ------

This business unit remains inactive as a result of a lack of human capital and a

dedicated budget.

11 . RISK MANAGEMENT AND INTERNAL CONTROL

The NCEDA Board is ultimately responsible for the risk management systems

and controls. In this regard the oversight and implementation of risk

management is discharged by way of the following measures:

• Risk assessment drawing from information available in financial reports.

performance reports and personal interviews with risk owners.

• Implementing a risk management plan.

• Maintaining a risk register.

• Risk reporting.

The Risk Management Committee was not functional in the financial year under

review. The committee was not capacitated due to budgetary constraints.

12. INTERNAL AUDIT AND AUDIT COMMITTEES.

Internal Audit Unit

Northern Cape Provincial Shared Internal Audit service provides internal audit

service which provides combined assurance to stakeholders on the integrity of

information provided. governance of the organisation and assurance of existing

internal control systems that are resilient to eminent change. The PFMA

prescribes the need for the establishment of this function and it is also

recommended by the King IV Report on Corporate Governance (King IV Report).

The Northern Cape Economic Development. Trade and Investment Promotion

Agency has an outsourced internal audit function which provides the internal

audit service.

The objective of the Internal Audit Function is to provide an assessment of the

effectiveness of the organisation's system of internal control and risk

management efforts. The Audit Committee is mandated to monitor the

performance of the internal auditors. including reports submitted. budget

----- -- ·- - - -_____ pJo~ed. and overall audit scop~ P!OROsed for the_year. In assisting the

Accounting Authority and the Accounting Officer. Internal Audit must evaluate

governance processes and provide adequate assurance on the effectiveness of

internal processes. These include:

incorporating a risk-based internal audit approach in the annual plan and

execute audits accordingly;

providing adequate assurance on effective governance. risk management and

internal control environment; and

providing written assessment of the effectiveness of the organisation's internal

control processes.

The outsourced Internal Audit service provider has completed the audit projects

as approved in their internal audit annual plan. Their audit approach was risk­

based. and they reported to the Audit Committee on a quarterly basis.

Audit Committee and Attendance

The Audit Committee consists of external members listed hereunder and is

required to meet at least two times per annum as per provisions of the Public

Finance Management Act {PFMA). In terms of the approved Terms of Reference

{NCPG Audit Committee Charter). five ordinary meetings and two joint meetings

were held during the current year to consider the Annual Financial Statements.

Quarterly Performance Reporting {financial and non-financial) and to discuss the

Auditor-General of South Africa's {AGSA) Audit and Management Reports.

Name Qualifications

Accountancy

B.Com Honours

Certificate in Risk Management and Certificate in Board Governance

Ms. A Mafuleka jCA(SA)

jB Com - Honours - . -

!Mr. VA Makaleni Master in Public Management

Bachelor of Commerce (Accounting)

Postgraduate

Diploma in Corporate Government

Management Advancement

L_ ____ ----1!._ogramme MAP)

Internal or External External

External

-External

If internal, position Date Date in the department appointed Resigned

No. of Meetings -attended

n/a 01 n/a

n/a -·· --~--

- -- -n/a

December ' 12017

101 I December : I 2Q_17 01 December 2014

nla --

n/a

•02

102 _T ____ 06

Name

Ms. S Vallabh

Qualifications

1 Bachelor of Arts I

t

I Post Graduate Diploma in library and Information Science

Certificate II Programme in Public Service

Management

Internal or External Internal

.Adv. DJ Block B.Luris, LLB, Higher External Diploma In Taxation

Mr. AL Kimmie7B.Compt (Hons); External RGA; SAIPA; MBA;

' Reg. Public Service Financial Officer

If internal, position Date Date No. of Meetings in the de!)artment appointed Resigned attended Chief Director: 01 n/a 02 Peliormance, December Monitoring and 2017 Evaluations

1n/a 01 30

December November 2014 2017

101 30 04 !December November ,2014 2017

The Audit Committee noted that the Chief Executive Officer (CEO) attended all

scheduled Audit Committee meetings. Therefore, the Audit Committee is

satisfied that the Entity adhered to the provisions of the NCPG Audit Committee

Charter. During the year under review the Committee consistently engaged with

the Senior Management of the Entity, Internal Audit and the Auditor-General.

individually and collectively, to address risks and challenges facing the Entity. A

number of in-committee meetings were held to address control weaknesses and

deviations within the Entity.

13. COMPLIANCE WITH LAWS AND REGULATIONS

NCEDA strives to comply with all relevant legislation and policies applicable to it

as Schedule 3C public entity. However, during the period under review the

Auditor-General reported on a number of non-compliance issues which resu lted

in an adverse Audit finding. This included non-compliance with the PFMA (Act 1

of 1999). Treasury Regulations. Preferential Procurement Policy Framework Act

(Act 5 of 2000) and the NCEDA Act (Act 4 of 2008).

14. FRAUD AND CORRUPTION

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

implemented and monitored.

15. MINIMISING CONFLICT OF INTEREST

Employees are prohibited from engaging in any business activities that are

actually or potentially adverse or detrimental to the best interest. mission and

objectives of NCEDA. The policy on managing conflict of interest was adopted by

______ the-8oard._:_Tbe implementation_aod monitoring _is_in_progress. _____ _

16. CODE OF CONDUCT

The code of conduct acts as guideline to all NCEDA employees as to what is

expected of them. Employees signed the code of conduct. Human Resource

monitors the implementation of the code of conduct.

PARTD

HUMAN RESOURCE MANAGEMENT

17. INTRODUCTION

NCEDA has a set approved policies directing Human Resources Management.

However. the challenge remains compliance with policies such as performance

management.

18. HUMAN RESOURCE OVERSIGHT STATISTICS

18.l COMPENSATION BY PROGRAMME

18.l.l NCEDA & CRAFTS CSP

SUBPROGRAMME TOTAL COMPENSATION COMPENSATION NUMBER OF

EXECUTIVE

EXPENDITURE EXPENDITURE EXPENDITURE AS EMPLOYEES % OF TOTAL SUB PROGRAMME EXPENDITURE

1,542,126.34 99.03675063 2

AVERAGE COMPENSATIO N COST PER EMPLOYEE

771 ,063.17

I 1,557,125.34 I - -- -: FINANG1-E ---j - ----2-;-700,008.76 r 100---- ,5_ --___ t~---'540,00-1.7-5---------

:_2,700,00_8._76 __ HUMAN RESOURCE AND

1

1,551,772.26 ADMINISTRATIVE SUPPORT ECONOMIC I DEVELOPMENT I-TRADE I

------1,551 ,772.26 100

10.00

0 INVESTMENT AND 51,253.00 PROMOTION-

51 ,253.00

CSP MARKETINGAND .0 COMMUNIATION l TOTAL I

_ _ ..§,860 159.36

0 '0--

- -5,845,160.36 99.74

3

0

2

0

12

I 1-

517,257.42 .

--1

25,626.50 I

1,082,885.67

18.1.2 WITSAND NATURE RESERVE

SUBPROGRAMME TOTAL COMPENSATION COMPENSATION NUMBER OF EXPENDITURE EXPENDITURE EXPENDITURE EMPLOYEES

FINANCE 0

3 255,354.78 766,064.33

3 105,613.86 :316,841 .57

100 10 60,093.15 600,931.48

1-0

100 I 16 421 ,061.78 1,683,837.38 1,683,837.38

18.l.3 SPECIAL ECONOMIC ZONE

SUBPROGRAMME TOTAL COMPENSATION COMPENSATION NUMBER OF AVERAGE EXPENDITURE EXPENDITURE EXPENDITURE EMPLOYEES COMPENSATION

S-%-GF T0lA ees-T·PE ·- ·------

SUB EMPLOYEE PROGRAMME EXPENDITURE

EXECUTIVE 289,848.91 289,8__18.91 289,848.91 100.00

PROJECT 0 EXECUTIVE

- I -PROJECT 579,404.13 OFFICER 579,4.Q4.: 13 579,404.13 100.00 SUPPORT r 106,313.91 ' SERVICES 106,313.91 106,313.~ I 100.00 ENGINEER 0 - I

PROJECT 962,409.00 , SPECIALIST 962,409.00 962,40!1_.00 100.00

EAND

----4 484,493.99

1,937 ,9.I5.9L , 1 9_37,975.95 ~

100.00 . ~-

18.2 COMPENSATION BY SALARY BAND

18.2.l NCEDA HEAD OFFICE & CRAFTS CSP

LEVEL COMPENSATION 0 oOFTOTAL NUMBER OF AVERAGE EXPENDITURE COMPENSATION EMPLOYEES COMPENSATION

-.-exf>ENDITURE COSTPER EMPLOYEE

20.37 1,198,381 .33 1,198,381.33

31 .62 2 r-930,237.48 -1,860,474.96

27.28 13 535,000.73 1,605 002.20

7 13.73 3 269,259.36 l

807,778.08 !

- 0

SEMI SKILLED 137,258.93 411,776.79

,o UNSKILLED

TOTAL ·+ 490,284.45 ---7 -- 100.60.-.__112 --_____ -.:,JS 883,413.36 _______ _

18.2.2 WITSAND NATURE RESERVE

LEVEL

EXECUTIVE MANAGEMENT SENIOR MANAGEMENT MIDDLE MANAGEMENT JUNIOR MANAGEMENT SKILLED

SEMI SKILLED

UNSKILLED

TOTAL

COMPENSATION EXPENDITURE

411 ,967.08

354,0~7.~ _

I

%0FTOTAL COMPENSATION EXPENDITURE

NUMBER OF EMPLOYEES

- 0

[_ 24.47

- 0

1 21 .03 12- ---[ _______ _

- 0 ,___ _________ ___, -

54.50 j 13 917,773.05

100.00 116 1,683,837.38

AVERAGE COMPENSATION COST PER EMPLOYEE 0

- -- ----;

411 ,967.08 -~

177,048.63

----------j

--+-70,597.93 I

___ __j

659,613.63 I

18.2.3 SPECIAL ECONOMIC ZONE

O~UON 0 JJ 0 EXPENDITURE COMPENSATION COMPENSATION

EXPENDITURE COST PER E

14.96 1 289,848.91 289,848.91

49.66 1 962,409.00

29.90 1 579,404.13 579404.13

SEMI SKILLED

UNSKILLED 0.05 1 106,313.91 106,313.91

TOTAL 94.57 4 1,937,975.95 _____ __,1=,9=37..c=,9c.:...:75=.9:.::...5 ________ 1 ----------~

···-·---··-----·----------- --

18.3 COST OF SKILLS DEVELOPMENT

18.3.l NCEDA HEAD OFFICE & CRAFTS CSP

•--•-wLJ~iu : RAGE COST OF SKILLS

=-_-.... ----J~~liEVELOPMENT ..---------------As-~-oi:--------PER-EMPLOYEE lt'M~~,....-l!!!ll!!!IMll!!-..-!iiM!ll!----~!ENDITUR.t:.--~~lflll!!!'.-.-----i

ON r----,.._,,::ic=~==~~~r·-.COMP-ENSATION

2,700,008.76 HUMAN .,..,.,.,"'"""M"'' RESOURCE AND 1,551 ,772.26

14,999.00 .o.oo

0 I ,0.00

,o

ADMINISTRATIVE SUPPORT ECONOMIC DEVELOPMENT -TRADE

__ ___, ____ Lo_o __ -i=_-_____ _, 0 0

INVESTMENT AND 51 ,253.00 PROMOTION MARKETING AND O O 0 0 0

------ --- COMMUNIATIOl'L..--::-- --=- ==----~ _ _ __ .. _ ----------:... __ ____,___ ________________ _ TOTAL 1.00 _____ 5=,845 160.36 14 999.00

18.3.2 WITSAND NATURE RESERVE

SUBPROGRAMME EXPENDITURE EXPENDITURE SKILLS AVERAGE COST ON ON SKILLS DEVELOPMENT

._._~,_,..._ _ _ "'MPENSATION DEVELOPMENT EXPENDITURE- .-0 " 1'

OFS I LS --~-DEVELOPMENT

t--------------- ~%0F.------~- PER.EMP.LOYEE

UMAN---RESOURCEAND 766,064.33 ADMINISTRATIVE SUPPORT IE N

EXPENDITURE ON

0

WORKERS --=3--'--'16"""84-'-1=.5'-'--7--+-----+--------,------+----............... GENERAL 0 WORKERS 1-6_00~,9_31_.4_8 _--+--____ __,_ ________ __,_ ___ _

MARKETING AND O I 0 COMMUNIATION TOTAL

_ -_-_-_-_----=-1=68==3,837 J§_ -------- --- -----

18.3.3 SPECIAL ECONOMIC ZONE

Kil± UMBER-0 EMPLOYEES TRAINED

~ill!i!!i.---... ..,.~.-....----~...,..,._-•ON-------,_,...,._.._._..-1 COMPENSATION

289,848.91

I

---'--'-I-- - ------1: - -

579,404.13

SERVICES 106,313.91 NGINEER.__,_.

PROJECT SPECIALIST TRADEAND INVESTMENT TOTAL

962,409.00

----i I

--fa====-~1~3WI5.95_1=::-.:..-=:- --=- _____ _

0

I 4.00 -i I ----------~- - -

I

18.4 PERFORMANCE REWARDS

A total of 18 employees were assessed during the year under review and all

employees received a notch increase. no performance bonuses were paid.

18.5 EMPLOYMENT AND VACANCIES

18.5.l NCEDA HEAD OFFICE & CRAFTS CSP

-----•

NUMBER OF NUMBER OF NUMBER OF SUBPROGRAMME APPROVED POSTS EMPLOYED STAFF VACANCIES % OF VACANCIES

!

=BERS ----------:->------: ,-------·-_--·_- -_-_-_-_-_tr-'e-------3-:_ HUMANRESOURCE ~-------+--1 -----ii--------~,-------------l

AND ADMINISTRATIVE SUPPORT

ECONOMIC DEVELOPMENT

TRADE INVESTMENT AND PROMOTION ( CSP)

MARKETING AND COMMUNIATION

4 3 25%

4 0 4 100% 1------+---------+---------+--1· ----·--·-

I

4

! I

1 3 1 I 75%

i ! 2 o 2 I 100%

TOTAL --~---------- ~9~---------~~-------------11~1---------~ -~

18.5.2 WITSAND NATURE RESERVE

NUMBER OF NUMBER OF NUMBER OF SUBPROGRAMME APPROVED POSTS EMPLOYED STAFF VACANCIES % OF VACANCIES

EXECUTIVE 1 1 o' 0 -----=" ---- .•. ·--··- ------·

FINANCE 1 0 1

HUMAN RESOURCE AND

l ADMINISTRATIVE SUPPORT 3 3 0

---TERRAIN .,.._,

WORKERS 4 4 0

GENERAL ! WORKERS ·- 5 5 oi

I

MARKETING AND I i COMMUNIATION 1 Oj 1 i TOTAL 15 13 1 21 0

·~

18.5.3 SPECIAL ECONOMIC ZONE

NUMBER OF NUMBER OF NUMBER OF SUBPROGRAMME APPROVED POSTS EMPLOYED STAFF VACANCIES % OF VACANCIES

I PROJECT ----~ ·xEeur1v- ----,---

PROJECT OFFICER 1 · - . ----~-1-=. ·- 0 j_ -.. - ----· ... " ·-- ·t---

- - _1 ! ____ ,.. _______ 0_ ~I

PROJECT SPECIALIST

ENGINEER 1 .

TRADE INVESTMENT AND PROMOTION

TOTAL 5

I 1 l o o' I

I

I I

O! i

2

!

I I

··--------l o!

i

18.6 EMPLOYMENT CHANGES

TOP MANAGEMENT

SENIOR

EMPLOYMENT AT THE BEGINNING OF PERIOD APPOINTMENTS TERMINATIONS

I

1 I

MANAGEMENT 5 0

2

2 3

~O~SSIONAL I QUALIFIED 4 0 0 , 4

_____ __ _____________ _,___ _______ ----- ---------;' - --------------- ___ ...J ________________ ------1

SKlLLED 3 0 0 j 3

SEM~LED 2 0 I 3 ----+-------+------ f-------+' - --------1

UNSKILLED 5 2 0 7 TOTAL 20 --- 4 l -------- 2 22

------ ----- ---·--·-·--·--· --- .. - ---------···--•-·· ---··----·-- ·-- ·-- -···· --- -----·----------· - ------· ----- -·-••---· -~

18.7. EMPLOYMENT EQUITY STATISTICS AT FINANCIAL YEAR END

18.7.l NCEDA HEAD OFFICE & CRAFTS CSP

18.7.l.l FEMALES

LEVELS AFRICAN COLOURED INDIAN WHITE

EXECUTIVE I 1' I MANAGEMENT O i O , 0 i O !

-+---------+------_-_-_-_-_ -_-_ -_ -_ ~_,_''::::..-=---=----=---_-_-_-_-_-_ ~-+--' ====-=---=---=---- . !SENIOR I i , 1 MANAGEMENT 1 I O i O : 0 l MIDDLE ------ ------ - 1 - ---·r·. ------ --- ----· -·--·--·--·-·- ----·---·: MANAGEMENT 2 l O I O , 0 ! -~ I I MANAGEMENT 1 ! 1 i O .

] I

SEMI SKILLED 1 l O j O · 0 1

~:~:tLE-D--~---:-~----:-_~--~---•------~-,i-======--·_----_·_·-·-_-_-·-_-_·_----=·: ~·~ri= ... -._·-·-_--·--_·_-----_·_-_--·-__ --__ ~~~~~! ====------~-_.:.~_-------:1

18.7.1.2 MALES

LEVELS AFRICAN COLOURED INDIAN WHITE I ' EXECUTIVE i

ol MANAGEMENT ol 0 I

SENIOR MANAGEMENT 0 0

MIDDLE MANAGEMENT 0 0 0 0

JUNIOR MANAGEMENT 0 0 0 0

SEMI SKILLED 0 I

0 1 0 0

UNSKILLED 0 oj 0 O! TOTAL 21 1 I

I 0 o!

18.7.2 WITSAND NATURE RESERVE

18.7.2.l FEMALES

LEVELS

EXECUTIVE MANAGEMENT

SENIOR MANAGEMENT

MIDDLE MANAGEMENT

JUNIOR MANAGEMENT

SEMI SKILLED

UNSKILLED

TOTAL

AFRICAN _____ COLOURED INDIAN WHITE

I

i ,~-

0 ol oj o ----, ! j

O! Oj Oi ~·--~-:-----==r=-,.·.-.. ,. --·· -·r· .,._--.-.-- .. - i -~- ------- ,.~~------

0 1 o i o o ----··-·-·-· -----, ----------~----··-- -----····-- --------~

! I i I oi o/ o: ol

j-- ----1'-· - I _____ .;__f - ------,

______ a_;, ______________ 1 i ___ ------~ ! ____ ____ ___ o o i 3 I o! o

________ L ___________ --·----· -----------'-- -----1

O! 41 O! 0

0

18.7.2.2 MALES ~

LEVELS AFRICAN COLOURED

EXECUTIVE i MANAGEMENT o' -SENIOR MANAGEMENT - 0 -MmDLE MANAGEMENt- 0

JUNIOR = MANAGEMENr -- 0

SEMI SKILLED 1 -UNSKILLED 1

l

TOTAL ~

2 i I

18.7.3 SPECIAL ECONOMIC ZONE

18.7.3.l FEMALES

LEVELS AFRICAN COLOURED

INDIAN WHITE

I 0 al 0

~---·---- f-I i

0 0 1 1

i 0 oj 0

l i

0 0 1 0

1 ol 0

2 0 [ 0

3! I

·-· oi

I 1 I

INDIAN WHITE

~!~~~NT _____ -·-----o ~' ------~ -··-------o~l--·-----o---i ~M~ I l I

___ MANAGEMENT_~ _______ 1_!_ _____ 0_,_ _ ol ______ O~'---::EMENT -- ---- - : 1- ----·-- 0 I O i -- ·-----·--□-'

MANAGEMENT O ! 0 0 i 0 ........... ··••····J_. . ...... J .. ••·••··············-·-·· ..... I

SEMI SKILLED O ! 0 0 I 0 ' i

UNSKILLED O : 0 0 I 0 ·-----··--·•··-·--·--1 ·---- ------;-----------

TOTAL 1 , 0 0 I 0 -------'-------~----~-·--·---~----------·--

18.7.3.2 MALES

-

LEVELS AFRICAN COLOURED IN0IAN WHITE

EXECVJM I I

o! MANAGEMENT 0 1 i 0 = I ·-

SENIOR MANAGEMENT - 0 0 0 0 - ~-MIDDLE MANAGEMENT--:::;;iit;I 0 1 oi 0

JUNIOR I I

I i

MANAGEMENT .... 0 01 oj 0 I I

SEMI SKILLED - 0 Q , Qi 0 -·--· -· -------- .l -- -

UNSKILLED --= 0 oj oj 0 - -

TOTAL ~-- oi 2 i 0 1 0 .. --···-------------- -L --·--- - ------·-- I - . ·-· -· --·- ---------- I_ -··----· -·----- -

No disabled staff is employed at NCEDA. NCEDA is however an equal

employment opportunity company and this is specifically mentioned in

recruitment advertisements. Disabled staff is always welcome to apply for any

position NCEDA advertises

--------- - . ------- --

18.8 EMPLOYED STAFF

During the year of reporting, NCEDA had seven (7) permanent staff members

employed at its Head Office (Kimberley) and eight (8) are employed at Witsand

Nature Reserve and three (3) employed at SEZ PMU. This gives a total of 18

employees employed.

PART E: FINANCIAL INFORMATION

19. STATEMENT OF RESPONSIBILITY

To the best of my knowledge and belief. I confirm the following:

All information and amounts disclosed in the annual report is consistent with the annual

financial statements audited by the Auditor General.

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

The annual report has been prepared in accordance with the guidelines on the annual

report as issued by National Treasury.

The Annual Financial Statements have been prepared in accordance with the Generally

Recognised Accounting Standards applicable to the public entity.

The accounting authority is responsible for the preparation of the annual financial

statements and for the judgements made in this information.

---The accountir:ig -authority is responsible-for establishing,-and -implementingasystem of~-----­

internal control has been designed to provide reasonable assurance as to the integrity

and reliability of the performance information. the human resources information and the

annual financial statements.

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

financial statements.

In our opinion. the annual report fairly reflects the operations. the performance

information. the human resources information and the financial affairs of the entity for

the financial year ended 31 March 2018.

Yours faithfully

Chief Executive Officer

Mr. T Dikeni

Chairperson of the Board

Adv. L Bomela

20. AUDIT COMMITTEE REPORT

We are pleased to present our report for the financial year ended 31 March 2018.

Audit Committee Responsibility

The Audit Committee reports that it has complied with its responsibilities arising from

section Sl(l)(a)(ii) of the Public Finance Management Act and Treasury Regulation 3.1.13.

The Audit Committee also reports that it has adopted appropriate formal terms of

reference as its Audit Committee Charter. has regulated its affairs in compliance with this

charter and has discharged all its responsibilities as contained therein.

The Effectiveness of Internal Control

Our review of the findings of the Internal Audit work. which was based on the risk

assessments conducted in the entity revealed certain weaknesses. which were then

raised with the Entity.

The following internal audit work was completed during the year under review:

Asset Management

Internal Financial Review

Quarterly Follow up review

---Enterprise -Risk-Management

Performance Information

Human Resource and Payroll Management

Revenue Management

Supply Chain Management

Governance Review

Business Continuity and Disaster Recoverability Plans

The following were areas of concern:

Risk management

Supply Chain Management

Performance Information

Information Technology

Risk Management

The Entity's risk management was reported to the Audit Committee on a quarterly basis

and was seen as matter of concern which required management to focus on in terms of

King IV report. The Audit Committee is not satisfied that the actual management of risk is

receiving attention. However. the Committee together with the Board and Management

continue to refine a very dynamic risk profile of the organization.

The Board and Management has been advised to embed risk management throughout

the Entity; however. governance within the Entity still remains a concern. Management

should take full responsibility for the entire Enterprise Risk Management process and

continue to support the Chief Executive Officer to even further enhance the performance

of the Entity.

In-Year Management and Monthly/Quarterly Report

The Audit Committee has raised its dissatisfaction with the quality of the financial reports

submitted which were not in compliance with the statutory reporting framework and

which require significant improvement to improve the quality and integrity of the

information reported.

Evaluation of Financial Statements

The Audit Committee has:

Reviewed and discussed the audited Annual Financial Statements to be included in the

Annual Report, with the AGSA and the Accounting Officer;

Reviewed the Aud it Report of the AGSA;

Reviewed the AGSA's Management Report and Management's response thereto;

Reviewed the Entity's compliance with legal and regulatory provisions; and

Reviewed adjustments resulting from the audit.

One-on-One Meetings with the Executive Authority

The Audit Committee apprised the Executive Authority on the performance of the Entity

and intend to schedule a meeting in due course to address unresolved issues. The Audit

Committee also submits quarterly reports to the MEC to keep him informed on the

activities of the committee.

Auditor-General's Report

We have reviewed the entity's implementation plan for audit issues raised in the previous

year and we are satisfied that the matters have been adequately resolved except for the

following:

Disaster Recovery Plan

Supply Chain Management

Correcting on material adjustment raised by the AGSA

Performance information

The Audit Committee concurs and accepts the conclusions of the Auditor-General South

Africa on the annual financial statements and is of the opinion that the audited annual

financial statements be accepted and read together with the report of the Auditor-

- General South Africa.

Masaccha Mbonambi

Chairperson of the Audit Committee

Northern Cape Economic Development. Trade and Investment Promotion Agency

Date: 10 August 2018

21. REPORT OF THE AUDITOR GENERAL

Report of the auditor-general to the Northern Cape Provincial Legislature on the Northern

Cape Economic Development. Trade and Investment Promotion Agency

Report on the audit of the financial statements

Opinion

l. I have audited the financial statements of the Northern Cape Economic Development.

Trade and Investment Promotion Agency set out on pages X to X. which comprise the

statement of financial position as at 31 March 2018, statement of financial performance.

statement of changes in net assets and cash flow statement for the year then ended. as

well as the notes to the financial statements. including a summary of significant

accounting policies.

2. In my opinion. the financial statements present fairly, in all material respects. the

financial position of the Northern Cape Economic Development. Trade and Investment

Promotion Agency as at 31 March 2018. and its financial performance and cash flows for

the year then ended in accordance with Standards of Generally Recognised Accounting

Practice (Standards of GRAP) and the requirements of the Public Finance Management

- ~ Act of South-Africa.-1 999-(Act No.-Lof-1999) (RF-MA). --- --~- ___ ______ _

Basis for opinion

3. I conducted my audit in accordance with the International Standards on Auditing

(ISAs). My responsibilities under those standards are further described in the auditor­

general's responsibilities for the audit of the financial statements section of this auditor's

report.

4. I am independent of the public entity in accordance with the International Ethics

Standards Board for Accountants' Code of ethics for professional accountants (IESBA

code) and the ethical requirements that are relevant to my audit in South Africa. I have

fulfilled my other ethical responsibilities in accordance with these requirements and the

IESBA code.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide

a basis for my opinion.

Emphasis of matter

6. I draw attention to the matters below. My opinion is not modified in respect of these

matters

Restatement of corresponding figures

7. As disclosed in note 27 to the financial statements. the corresponding figures for 31

March 2017 have been restated as a result of an error in the financial statements of the

public entity at. and for the year ended. 31 March 2018.

Irregular expenditure

8. As disclosed in note 30 to the financial statements, the public entity incurred irregular

expenditure of Rl 384 346, as it did not follow a proper supply chain management

processes.

Responsibilities of accounting authority

__ g __ Tbe_accounting authorLty_is responsible_foLtbe preparation_aod_fair pres_e_ntati.oo_Qf__tbe __

financial statements in accordance with the Standards of GRAP and the requirements of

the PFMA. and for such internal control as the accounting authority determines is

necessary to enable the preparation of financial statements that are free from material

misstatement. whether due to fraud or error.

10. In preparing the financial statements. the accounting authority is responsible for

assessing the Northern Cape Economic Development. Trade and Investment Promotion

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 accounting

authority 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

11. My objectives are to obtain reasonable assurance about whether the financial

statements as a whole are free from material misstatement. whether due to fraud or

error. and to issue an auditor's report that includes my opinion. Reasonable assurance is a

high level of assurance. but is not a guarantee that an audit conducted in accordance

with the ISAs will always detect a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered material if. individually or in aggregate.

they could reasonably be expected to influence the economic decisions of users taken on

the basis of these financial statements.

12. A further description of my responsibilities for the audit of the financial statements is

included in the annexure to this auditor's report.

Report on the audit of the annual performance report

Introduction and scope

13. In accordance with the Public Audit Act of South Africa. 2004 (Act No. 25 of 2004)

(PAA) and the general notice issued in terms thereof. I have a responsibility to report

material findings on the reported performance information against predetermined

objectives for selected programmes presented in the annual performance report. I

____ perfotmed_prncedutes to_ide□tify_fiodiogs but not_to_gatber_evidence_to_exptess ________ _

assurance.

14. My procedures address the reported performance information. which must be based

on the approved performance planning documents of the public entity. I have not

evaluated the completeness and appropriateness of the performance indicators/

measures included in the planning documents. My procedures also did not extend to any

disclosures or assertions relating to planned performance strategies and information in

respect of future periods that may be included as part of the reported performance

information. Accordingly. my findings do not extend to these matters.

15.1 evaluated the usefulness and reliability of the reported performance information in

accordance with the criteria developed from the performance management and

reporting framework. as defined in the general notice. for the following selected

programmes presented in the annual performance report of the public entity for the year

ended 31 March 2018:

Programmes

Programme 3 - economic development

Programme 4 - trade and investment promotion

Pages in the annual performance report

X-X

X-X

16. I performed procedures to determine whether the reported performance information

was properly presented and whether performance was consistent with the approved

performance planning documents. I performed further procedures to determine whether

the indicators and related targets were measurable and relevant. and assessed the

reliability of the reported performance information to determine whether it was valid.

accurate and complete.

___ 17 _The_materialfindings in_respect oLthe usefulness~and _reliability _of the_sele_c_ted .

programme is as follows:

Programme 4 - trade and investment promotion

Various indicators

18. The reported achievement in the annual performance report did not agree to the

supporting evidence provided for the indicators listed below. The supporting evidence

provided indicated that the achievements of these indicators were as follows:

Indicator description Reported achievement Audited value

Number of crafters I 33 i 28

~u~~~~ed to ac-ce_s_s __ L ______ I ____________ _ Number of groups hosted ! 17 at Witsand Nature Reserve i Number of market access ' 4 initiatives launched to I promote Witsand Nature Reserve

11 1 I ----~12 ------·-

-- - ---·--··· I ____________ __,

19. I did not raise any material findings on the usefulness and reliability of the reported

___ performanceJnformation.for_the following_programme: _____ _

Programme 3 - economic development

Other matter

20. I draw attention to the matter below.

Achievement of planned targets

21. Refer to the annual performance report for information on the achievement of

planned targets for the year and explanations provided for the under or over

achievement of a number of targets. This information should be considered in the

context of the material findings on the usefulness and reliability of the reported

performance information in paragraph 18 of this report.

Report on the audit of compliance with legislation

Introduction and scope

22. In accordance with the PAA and the general notice issued in terms thereof. I have a

responsibility to report material findings on the compliance of the public entity with

specific matters in key legislation. I performed procedures to identify findings but not to

gather evidence to express assurance.

23. The material findings on compliance with specific matters in key legislations are as

follows:

Annual Financial Statements. Performance and Annual Report

24. The financial statements submitted for auditing were not prepared in accordance

with the prescribed financial reporting framework as required by section 55(1) (a) and (b)

of the PFMA. Material misstatements of expenditure identified by the auditors in the

submitted financial statement were corrected, resulting in the financial statements

receiving an unqualified audit opinion.

Procurement and Contract Management

---25 .. Goods.and.services_of_a_transaction _value_above R500_000~wer_e_pr_ocured_witho_u__t~--­

inviting competitive bids as required by treasury regulations 16A6.

Expenditure Management

26. Effective steps were not taken to prevent fruitless and wasteful expenditure

amounting to R84 207. as d isclosed in note 29 to the annual financial statements. as

required by section 5l(l)(b)(ii) of the PFMA.

Consequence Management

27. I was unable to obtain sufficient appropriate aud it evidence that disciplinary steps

were taken against officials who had incurred irregular expenditure as required by section

5l(l)(e)(iii) of the PFMA. This was due to the auditee failing to institute investigations into

irregular expenditure to determine if disciplinary steps need to be taken against liable

officials.

Other information

28. The accounting authority is responsible for the other information. The other

information comprises the information included in the annual report. The other

information does not include the financial statements. the auditor's report and those

selected programmes presented in the annual performance report that have been

specifically reported in this auditor's report.

29. My opinion on the financia l statements and findings on the reported performance

information and compliance with legislation do not cover the other information and I do

not express an audit opinion or any form of assurance conclusion thereon.

30. In connection with my audit. my responsibility is to read the other information and. in

doing so. consider whether the other information is materially inconsistent with the

financial statements and the selected programmes presented in the annual performance

report. or my knowledge obtained in the audit. or otherwise appears to be materially

misstated.

31. I did not receive the other information prior to the date of this auditor's report. After I

--~ -eceive_and_read_tbis_informatioo,_andJLLconclude .thaUbereJs a_ materiaLmisstaterneot, _____ _

I am required to communicate the matter to those charged with governance and

request that the other information be corrected. If the other information is not corrected.

I may have to retract this auditor's report and re-issue an amended report as appropriate.

However. if it is corrected this will not be necessary.

Internal control deficiencies

32. I considered internal control relevant to my audit of the financial statements. reported

performance information and compliance with applicable legislation: however. my

objective was not to express any form of assurance on it. The matters reported l?elow are

limited to the significant internal control deficiencies that resulted in the findings on the

annual performance report and the findings on compliance with legislation included in

this report.

33. The accounting authority did not exercise adequate oversight responsibility over

performance reporting, compliance with laws and regulations. as well as internal control.

34. The action plans compiled to address the previous year's audit findings were not

adequately monitored and reviewed to determine if the reported progress on the plans

related was supported by credible information.

35. Information to be included in the annual performance report was not sufficiently

reviewed and this resulted in material findings. Pertinent information was not captured in

a time frame to support performance reporting.

-~---- -----

36. The accounting authority did not adequately review the financial statements resulting

in material amendments being made to the financial statements.

Kimberley

31 July 2018

AUDI T OR-GENERAL

S O UTH AFRI C A

Auditing lo bu:lc. oub/ic con fidence

Annexure -Auditor-general's responsibility for the audit

l. As part of an audit in accordance with the ISAs. 1 exercise professional judgement and

maintain professional scepticism throughout my audit of the financial statements, and

the procedures performed on reported performance information for selected

programmes and on the public entity's compliance with respect to the selected subject

matters.

Financial statements

2. In addition to my responsibility for the audit of the financial statements as described in

this auditor's report. 1 also:

- identify and assess the risks of material misstatement of the financial statements

whether due to fraud or error, design and perform audit procedures responsive to those

risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for

my opinion. The risk of not detecting a material misstatement resulting from fraud is

higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control.

___ -----=-obtain_an_understanding_ofjntemaLcontroLrelevanLto_tbe_a_udit_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,

- evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by the board of directors, which

constitutes accounting authority,

- conclude on the appropriateness of the board of directors. which constitutes the

accounting authority's use of the going concerns basis of accounting in the preparation of

the financial statements. I also conclude, based on the audit evidence obtained, whether

a material uncertainty exists related to events or conditions that may cast significant

doubt on the Northern Cape Economic Development. Trade and Investment Promotion

Agency'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 statements about the material uncertainty or, if such disclosures are

inadequate. to modify the opinion on the financial statements. My conclusions are based

on the information available to me at the date of this auditor's report. However. future

events or conditions may cause a public entity to cease continuing as a going concern

- evaluate the overall presentation. structure and content of the financial statements,

including the disclosures, and whether the financial statements represent the underlying

transactions and events in a manner that achieves fair presentation

Communication with those charged with governance

3. I communicate with the accounting authority regarding, among other matters. the

. __ planned_scope_and timing _oLtbe._audit and sigoific_an:t_a_udit firidio.gs. including ~.oy _____ _

significant deficiencies in internal control that I identify during my audit.

4. I also confirm to the accounting authority that I have complied with relevant ethical

requirements regarding independence, and communicate all relationships and other

matters that may reasonably be thought to have a bearing on my independence and.

where applicable, related safeguards.

- conclude on the appropriateness of the board of directors. which constitutes the

accounting authority's use of the going concerns basis of accounting in the preparation of

the financial statements. I also conclude. based on the audit evidence obtained, whether

a material uncertainty exists related to events or conditions that may cast significant

doubt on the Northern Cape Economic Development Trade and Investment Promotion

Agency'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 statements about the material uncertainty or, if such disclosures are

inadequate, to modify the opinion on the financial statements. My conclusions are based

on the information available to me at the date of this auditor's report. However. future

events or conditions may cause a public entity to cease continuing as a going concern

- evaluate the overall presentation, structure and content of the financial statements,

including the disclosures. and whether the financial statements represent the underlying

transactions and events in a manner that achieves fair presentation

Communication with those charged with governance

I communicate with the accounting authority regarding, among other matters. the

~~~--....,planned scope..and-timingnf_the_auditcand..significant auditJindings,jncluding_any __ _

significant deficiencies in internal control that I identify during my audit.

I also confirm to the accounting authority that I have complied with relevant ethical

requirements regarding independence, and communicate all relationships and other

matters that may reasonably be thought to have a bearing on my independence and.

where applicable, related safeguards.

/

,.,,,,., ,

<./ .;.:~ .-,

nceda ---=.L.=~----', .,"t"'l'fl\~~•Jl~¢t,;"',:t~ •f.._;r ·• f•~•-,..,-,,;• •' · t i ' -,_, •. ,./ ~~~ ,

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements

for the year ended 31 March 2018

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

General Information

Country of incorporation and domicile

Legal form of entity

Nature of business and principal activities

Members

Business address

Bankers

Auditors

Chief Executive Officer

Chief Financial Officer

Level of assurance

Reporting Framework

Relevant Legislation

South Africa

Public Entity incorporated in terms of Northern Cape Economic Development, Trade and investment Promotion Agency Act, Act 4 of 2008. The entity is a non - profit entity and is focused on service delivery in the Northern Cape Province. The entity is listed in the PFMA as a Schedule 3C - Public Entity.

Service delivery within the Northern Cape in terms of Northern Cape Economic Development, Trade and Investment Promotions Act.

L Bomela (Chairperson)

T Makweya (Deputy Chairperson)

P Nonjola

L Moremedi

M Kies

N Kgantsi

KWilliams

F Witbooi

L Bomela

Block 6, Monridge Office Park

Clo Memorial Raad and Kekewich Drive

Monument Heights

Kimberley

8301

First National Bank

Auditor General of South Africa

Registered Auditors

T Dikeni

T Mangojane

These annual financial statements have been audited in compliance with the applicable requirements of the Public Finance Management Act.

General Recognised Accounting Practise (GRAP), as issued by the accounting Standards Board (ASB)

Public Finance Management Act No. 1 of 1999

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Index

The reports and statements set out below comprise the annual financial statements presented to the provincial legislature:

Index

Accounting Authority's Responsibilities and Approval

Accounting Authority's Report

Statement of Financial Position

Statement of Financial Performance

Statement of Changes in Net Assets

Cash Flow Statement

Accounting Policies

Notes to the Annual Financial Statements

Abbreviations

COID

CRR

--1'.)BS;A;

Compensation for Occupational Injuries and Diseases

Capital Replacement Reserve

OeQelopment-Banlrot -so□th-Africa

Page

3

4

5

6

7

8

9 - 26

27 - 46

SA GAAP

GRAP

GAMAP

HOF

South African Statements of Generally Accepted Accounting Practice

Generally Recognised Accounting Practice

IAS

IMFO

IPSAS

ME's

MEG

MFMA

MIG

Generally Accepted Municipal Accounting Practice

Housing Development Fund

International Accounting Standards

Institute of Municipal Finance Officers

International Public Sector Accounting Standards

Municipal Entities

Member of the Executive Council

Municipal Finance Management Act

Municipal Infrastructure Grant {Previously CMIP)

2

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 201°8

Accounting Authority's Responsibilities and Approval

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

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

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

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

The members are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. - owever, any system of internal financial control can provide only reasonable, and not absolufec-----,=a=s=su'"""r=a=n=ce~ a=g=a"'1n=s.-t - ---­material misstatement or deficit.

The members have reviewed the entity's cash flow forecast for the year to 31 March 2019 and, in the light of this review and the current financial position, they are satisfied that the entity has or has access to adequate resources to continue in operational existence for the foreseeable future.

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

Although the accounting authority are primarily responsible for the financial affairs of the entity, they are supported by the entity's external auditors.

The external auditors are responsible for independently reviewing and reporting on the entity's annual financial statements. The annual financial statements have been examined by the entity's external auditors and their report is presented on page 4.

The annual financial statements set out on pages 4 to 46, which have been prepared on the going concern basis , were approved by ~/bers on 31 May 2018 and were signed on its behalf by:

1·,.,.·=-•·;:.,,/ · · ···· ·· -- ·- ·- - • •.

~ . ) L BopielaifSJ1~rperson) ChairperJ-Jn

3

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Authority's Report

The members submit their report for the year ended 31 March 2018.

1. Review of activities

Main business and operations

The entity is engaged in service delivery within the Northern Cape in terms of Northern Cape Economic Development, Trade and Investment Promotions act. and operates principally in South Africa.

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

Net deficit of the entity was R 1,752,368 (2017: surplus R 56,014).

2. Going concern

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

3. Subsequent events

The members are not aware of any matter or circumstance arising since the end of the financial year.

4. Accounting policies

The annual financial statements prepared in accordance with the Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board as the prescribed framework by National Treasury.

5. Accounting Authority

The members of the entity during the year and to the date of this report are as follows:

Name L Bomela (Chairperson) T Makweya (Deputy Chairperson) P Nonjola L Moremedi M Kies N Kgantsi KWilliams F Witbooi

Changes Appointed 01 February 2018 Appointed 01 February 2018 Appointed 01 February 2018 Appointed 01 February 2018 Appointed 01 February 2018 Appointed 01 February 2018 Appointed 01 February 2018 Appointed 01 February 2018

4

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Statement of Financial Position as at 31 March 2018 Figures in Rand Note(s) 2018 2017

Assets

Current Assets Inventories 3 20,164 57,510 Receivables from exchange transactions 4 126,837 157,673 Receivables from non-exchange transactions 5 3,177 Cash and cash equivalents 6 5,494,291 16,459,930

5,641,292 16,678,290

Non-Current Assets Property, plant and equipment 7 1,193,321 1,468,030 Intangible assets 8 20,917 32,578

1,214,238 1,500,608

Total Assets 6,855,530 18,178,898

Liabilities

Current Liabilities Finance lease obligation 9 35,245 14,863 Operating lease liability 10 38,274 47,604 Payables from exchange transactions 11 2,550,692 2,735,774 Unspent conditional grants and receipts 12 2,653,079 12,039,987

5,277,290 14,838,228

Non-Current Liabilities Finance lease obligation 9 29,009 39,077

Total Liabilities 5,306,299 14,877,305

Net Assets 1,549,231 3,301,593

Accumulated surplus 1,549,227 3,301,593

5

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Statement of Financial Performance Figures in Rand

Revenue

Revenue from exchange transactions Interest received - investment Other income Rendering of services Sale of goods

Total revenue from exchange transactions

Revenue from non-exchange transactions

Transfer revenue Government grants & subsidies Public contributions and donations

Total revenue from non-exchange transactions

Total revenue

Expenditure Employee related costs Consulting and professional fees Depreciation and amortisation Provision for impairment loss/ Reversal of provision for impairment Finance costs Lease rentals on operating lease Repairs and maintenance Sale of goods/Inventory Training Travel General Expenses

Total expenditure

Operating (deficit) surplus (Deficit) surplus for the year

6

Note(s)

14

15 16

13

17

18

19

20

2018 2017

468,219 736,761 15,496 70,852

2,313,136 2,121,177 273,435 86,411

3,070,286 3,015,201

21,331,224 19,814,608 395,978

21,331,224 20,210,586

24,401,510 23,225,787

(9,755,857) (8,750,666) (6,228,855) (5,652,847)

(638,023) (1,078,226) (49,208) (152,450) (54,194) (11,887)

(917,767) (798,461) (230,592) (118,185) (220,456) (207,166)

(1,228,329) (63,348) (3,201,204) (2,173,812) (3,629,393) (4,162,725)

(26,153,878) (23,169,773)

(1,752,368) 56,014 (1,752,368) 56,014

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Statement of Changes in Net Assets

Figures in Rand

Opening balance as previously reported Adjustments Correction of errors

Balance at 01 April 2016 as restated* Changes in net assets Surplus for the year

Total changes

Opening balance as previously reported Adjustments Correction of errors

Balance at 01 April 2017 as restated* Changes in net assets Surplus for the year

Total changes

Balance at 31 March 2018

Note(s)

7

Accumulated Total net surplus assets

3,271,236 3,271,236

(25,659) (25,659)

3,245,577 3,245,577

56,014 56,014

56,014 56,014

3,182,186 3,182,186

119,409 119,409

3,301,595 3,301,595

(1,752,368) (1,752,368)

(1,752,368) (1,752,368)

1,549,227 1,549,227

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Cash Flow Statement Figures in Rand

Cash flows from operating activities

Receipts Rendering of services Sale of goods and services Grants Interest income

Payments Employee costs Suppliers

Net cash flows from operating activities

Cash flows from investing activities

Purchase of property, plant and equipment Purchase of other intangible assets

Net cash flows from investing activities

Cash flows from financing activities

Finance lease payments

Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

8

Note(s)

22

7 8

6

2018

2,310,260 273,435

11,947,493 468,219

14,999,407

(9,784,641) (15,784,873}

(25,569,514)

(10,570,107)

(333,094) (18,560)

(351,654)

(43,879)

(10,965,640) 16,459,930

5,494,291

2017

3,047,966 86,411

16,110,361 736,761

19,981,499

(8,605,123) (13,029,306)

(21,634,429)

(1,652,930)

(165,508) (10,319)

(175,827)

16,730

(1,812,027) 18,271,955

16,459,930

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1. Presentation of Annual Financial Statements

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

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

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

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

These accounting policies are consistent with the previous period.

1.1 Presentation currency

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

1.2 Going concern assumption

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

1.3 Significant judgements and sources of estimation uncertainty

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

Trade receivables

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

Allowance for slow moving, damaged and obsolete stock

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

Impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value­in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions.

Allowance for doubtful debts

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

1.4 Property, plant and equipment

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

9

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.4 Property, plant and equipment (continued)

The cost of an item of property, plant and equipment is recognised as an asset when: • it is probable that future economic benefits or service potential associated with the item will flow to the entity; and • the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

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

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

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

When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

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

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

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item

Furniture and fixtures Motor vehicles Office equipment IT equipment Photography equipment Other office equipment

Depreciation method

Straight line Straight line Straight line Straight line Straight line Straight line

Useful life

3 - 20 Years 3 - 8 Years 5 - 25 Years 3 - 6 Years 2 - 7 Years 20 Years

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

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

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

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

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

10

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.5 Intangible assets

An asset is identifiable if it either: • is separable, i.e. is capable of being separated or divided from an entity and sold, transferred, licensed, rented or

exchanged, either individually or together with a related contract, identifiable assets or liability, regardless of whether the entity intends to do so; or arises from binding arrangements (including rights from contracts), regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

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

An intangible asset is recognised when: • it is probable that the expected future economic benefits or service potential that are attributable to the asset will

flow to the entity; and the cost or fair value of the asset can be measured reliably.

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

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

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

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

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

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

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

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

Internally generated goodwill is not recognised as an intangible asset.

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

Item Depreciation method Average useful life

Computer software Straight line 3 Years

1.6 Financial instruments

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

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

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

11

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.6 Financial instruments (continued)

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

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

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

A derivative is a financial instrument or other contract with all three of the following characteristics: • Its value changes in response to the change in a specified interest rate, financial instrument price, commodity price,

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

• It requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors.

• It is settled at a future date.

The effective interest method is a method 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 payments or receipts through the expected life of the financial instrument or, when 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 flows considering all contractual terms of the financial instrument (for example, prepayment, 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 GRAP on Revenue from Exchange Transactions), transaction costs, and all other premiums or discounts. There is a presumption that the cash flows and the expected life of a group of similar financial instruments can be estimated reliably. However, in those rare cases when it is not possible to reliably estimate the cash flows or the expected life of a financial instrument (or group of financial instruments), the entity shall use the contractual cash flows over the full contractual term of the financial instrument (or group of financial instruments).

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

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

A financial liability is any liability that is a contractual obligation to: • deliver cash or another financial asset to another entity; or • exchange financial assets or financial liabilities under conditions that are potentially unfavourable to the entity.

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

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

Loan commitment is a firm commitment to provide credit under pre-specified terms and conditions.

Loans payable are financial liabilities, other than short-term payables on normal credit terms.

12

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.6 Financial instruments (continued)

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

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

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

A residual interest is any contract that manifests an interest in the assets of an entity after deducting all of its liabilities. A residual interest includes contributions from owners, which may be shown as:

• equity instruments or similar forms of unitised capital; • a formal designation of a transfer of resources (or a class of such transfers) by the parties to the transaction as

forming part of an entity's net assets, either before the contribution occurs or at the time of the contribution; or • a formal agreement, in relation to the contribution, establishing or increasing an existing financial interest in the net

assets of an entity.

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

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

• the entity designates at fair value at initial recognition; or • are held for trading.

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

Financial instruments at fair value comprise financial assets or financial liabilities that are: • derivatives; • combined instruments that are designated at fair value; • instruments held for trading. A financial instrument 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

which there is evidence of a recent actual pattern of short term profit-taking; non-derivative financial assets or financial liabilities with fixed or determinable payments that are designated at

fair value at initial recognition; and financial instruments that do not meet the definition of financial instruments at amortised cost or financial

instruments at cost.

13

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.6 Financial instruments (continued)

Classification

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

Class Receivables from exchange transactions Receivables from non-exchange transactions Cash and cash equivalents

Category Financial asset measured at amortised cost Financial asset measured at amortised cost Financial asset measured at amortised cost

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

Class Fianance lease liabilities Payables from exchange transactions

Initial recognition

Category Financial liability measured at amortised cost Financial liability measured at amortised cost

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

The entity recognises financial assets using trade date accounting.

Initial measurement of financial assets and financial liabilities

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

The entity measures a financial asset and financial liability initially at its fair value [if subsequently measured at fair value].

The entity first assesses whether the substance of a concessionary loan is in fact a loan. On initial recognition, the entity analyses a concessionary loan into its component parts and accounts for each component separately. The entity accounts for that part of a concessionary loan that is :

• a social benefit in accordance with the Framework for the Preparation and Presentation of Financial Statements, where it is the issuer of the loan; or

• non-exchange revenue, in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers), where it is the recipient of the loan.

14

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.6 Financial instruments (continued)

Subsequent measurement of financial assets and financial liabilities

The entity measures all financial assets and financial liabilities after initial recognition using the following categories: • Financial instruments at fair value. • Financial instruments at amortised cost. • Financial instruments at cost.

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

Reclassification

The entity does not reclassify a financial instrument while it is issued or held unless it is: combined instrument that is required to be measured at fair value; or

• an investment in a residual interest that meets the requirements for reclassification.

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

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

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

Gains and losses

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

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

15

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.6 Financial instruments (continued)

Derecognition

Financial assets

The entity derecognises financial assets using trade date accounting.

The entity derecognises a financial asset only when : • the contractual rights to the cash flows from the financial asset expire, are settled or waived; • the entity transfers to another party substantially all of the risks and rewards of ownership of the financial asset; or • the entity, despite having retained some significant risks and rewards 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 impose additional restrictions on the transfer. In this case, the entity :

derecognise the asset; and recognise separately any rights and obligations created or retained in the transfer.

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

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

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

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

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

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

Financial liabilities

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

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

16

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.6 Financial instruments (continued)

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

Presentation

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

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

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

Distributions to holders of residual interests are recognised by the entity directly in net assets. Transaction costs incurred on residual interests are accounted for as a deduction from net assets. Income tax [where applicable] relating to distributions to holders of residual interests and to transaction costs incurred on residual interests are accounted for in accordance with the International Accounting Standard on Income Taxes.

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

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

1.7 Leases

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

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

Finance leases - lessee

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

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

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

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

17

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.7 Leases (continued)

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 statement of financial performance.

Operating leases - lessee

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

1.8 Inventories

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

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

Inventories are measured at the lower of cost and current replacement cost where they are held for; • distribution at no charge or for a nominal charge; or • consumption in the production process of goods to be distributed at no charge or for a nominal charge.

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

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

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

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

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

1.9 Impairment of cash-generating assets

Cash-generating assets are assets managed with the objective of generating a commercial return . An asset generates a commercial return when it is deployed in a manner consistent with that adopted by a profit-oriented entity.

Non-Cash generating assets are assets other than cash-generating assets.

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

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

18

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.9 Impairment of cash-generating assets (continued)

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

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

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

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

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

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

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

Identification

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

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

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

1.10 Share capital / contributed capital

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

1.11 Employee benefits

Short-term employee benefits

When an employee has rendered service to the entity during a reporting period, the entity recognise the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service:

• as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, the entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and

• as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.

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

1.12 Provisions and contingencies

Provisions are recognised when: • the entity has a present obligation as a result of a past event; • it is probable that an outflow of resources embodying economic benefits or service potential will be required to

settle the obligation; and • a reliable estimate can be made of the obligation.

19

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.12 Provisions and contingencies (continued)

The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.

Where the effect of time value of money is material, 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 assessments of the time value of money and the risks specific to the liability.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.

Provisions are reviewed 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 will be required, to settle the obligation.

Where discounting is used, the carrying amount 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 which the provision was originally recognised.

Provisions are not recognised for future operating deficits.

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 when an entity: • has a detailed formal plan for the restructuring, identifying at least:

the activity/operating unit or part of a activity/operating unit concerned; the principal locations affected; the location, function, and approximate number of employees who will be compensated for services being

terminated; the expenditures that will be undertaken; and when the plan will be implemented; and

• has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.

A restructuring provision includes only the direct expenditures arising from the restructuring, which are those that are both: • necessarily entailed by the restructuring; and • not associated with the ongoing activities of the entity

No obligation arises as a consequence of the sale or transfer of an operation until the entity is committed to the sale or transfer, that is, there is a binding arrangement.

After their initial recognition contingent liabilities recognised in entity combinations that are recognised separately are subsequently measured at the higher of:

• the amount that would be recognised as a provision; and • the amount initially recognised less cumulative amortisation.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 25.

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

Loan commitment is a firm commitment to provide credit under pre-specified terms and conditions.

20

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.12 Provisions and contingencies (continued)

The entity recognises a provision for financial guarantees and loan commitments when it is probable that an outflow of resources embodying economic benefits and service potential will be required to settle the obligation and a reliable estimate of the obligation can be made.

Determining whether an outflow of resources is probable in relation to financial guarantees requires judgement. Indications that an outflow of resources may be probable are:

• financial difficulty of the debtor; • defaults or delinquencies in interest and capital repayments by the debtor;

breaches of the terms of the debt instrument that result in it being payable earlier than the agreed term and the ability of the debtor to settle its obligation on the amended terms; and

• a decline in prevailing economic circumstances (e.g. high interest rates, inflation and unemployment) that impact on the ability of entities to repay their obligations.

Where a fee is received by the entity for issuing a financial guarantee and/or where a fee is charged on loan commitments, it is considered in determining the best estimate of the amount required to settle the obligation at reporting date. Where a fee is charged and the entity considers that an outflow of economic resources is probable, an entity recognises the obligation at the higher of:

• the amount determined using in the Standard of GRAP on Provisions, Contingent Liabilities and Contingent Assets; and

• the amount of the fee initially recognised less, where appropriate, cumulative amortisation recognised in accordance with the Standard of GRAP on Revenue from Exchange Transactions.

1.13 Commitments

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

Disclosures are required in respect of unrecognised contractual commitments.

Commitments for which disclosure is necessary to achieve a fair presentation should be disclosed in a note to the financial statements, if both the following criteria are met:

• Contracts should be non-cancellable or only cancellable at significant cost (for example, contracts for computer or building maintenance services); and

• Contracts should relate to something other than the routine, steady, state business of the entity- therefore salary commitments relating to employment contracts or social security benefit commitments are excluded.

1.14 Revenue from exchange transactions

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

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

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

Measurement

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

21

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.14 Revenue from exchange transactions ( continued)

Sale of goods

Revenue from the sale of goods is recognised when all the following conditions have been satisfied: • the entity has transferred to the purchaser the significant risks and rewards of ownership of the goods; • the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor

effective control over the goods sold; • the amount of revenue can be measured reliably; • it is probable that the economic benefits or service potential associated with the transaction will flow to the entity;

and • the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

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

• the amount of revenue can be measured reliably; • it is probable that the economic benefits or service potential associated with the transaction will flow to the entity; • the stage of completion of the transaction at the reporting date can be measured reliably; and • the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

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

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

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

Interest, royalties and dividends

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

• It is probable that the economic benefits or service potential associated with the transaction will flow to the entity, and

• The amount of the revenue can be measured reliably.

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

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

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

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

1.15 Revenue from non-exchange transactions

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

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

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

22

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.15 Revenue from non-exchange transactions (continued)

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

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

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

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

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

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

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

The taxable event is the event that the government, legislature or other authority has determined will be subject to taxation.

Taxes are economic benefits or service potential compulsorily paid or payable to entities, in accordance with laws and or regulations , established to provide revenue to government. Taxes do not include fines or other penalties imposed for breaches of the law.

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

Recognition

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

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

Measurement

Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity.

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

23

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.15 Revenue from non-exchange transactions (continued)

Transfers

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

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

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

1.16 Cost of sales

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

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

Contract costs comprise: • costs that relate directly to the specific contract ; • costs that are attributable to contract activity in general and can be allocated to the contract on a systematic and

rational basis; and • such other costs as are specifically chargeable to the customer under the terms of the contract.

1.17 Investment income

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

1.18 Borrowing costs

Borrowing costs are interest and other expenses incurred by an entity in connection with the borrowing of funds.

Borrowing costs are recognised as an expense in the period in which they are incurred.

1.19 Fruitless and wasteful expenditure

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

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

1.20 Irregular expenditure

Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including -

(a) this Act; or (b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or (c) any provincial legislation providing for procurement procedures in that provincial government.

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

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

24

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.20 Irregular expenditure (continued)

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

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

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

1.21 Segment information

A segment is an activity of an entity: • that generates economic benefits or service potential (including economic benefits or service potential relating to

transactions between activities of the same entity); • whose results are regularly reviewed by management to make decisions about resources to be allocated to that

activity and in assessing its performance; and • for which separate financial information is available.

Reportable segments are the actual segments which are reported on in the segment report. They are the segments identified above or alternatively an aggregation of two or more of those segments where the aggregation criteria are met.

Measurement

The amount of each segment item reported is the measure reported to management for the purposes of making decisions about allocating resources to the segment and assessing its performance. Adjustments and eliminations made in preparing the entity's financial statements and allocations of revenues and expenses are included in determining reported segment surplus or deficit only if they are included in the measure of the segment's surplus or deficit that is used by management. Similarly, only those assets and liabilities that are included in the measures of the segment's assets and segment's liabilities that are used by management are reported for that segment. If amounts are allocated to reported segment surplus or deficit, assets or liabilities, those amounts are allocated on a reasonable basis.

If management uses only one measure of a segment's surplus or deficit, the segment's assets or the segment's liabilities in assessing segment performance and deciding how to allocate resources, segment surplus or deficit, assets and liabilities are reported in terms of that measure. If management uses more than one measure of a segment's surplus or deficit, the segment's assets or the segment's liabilities, the reported measures are those that management believes are determined in accordance with the measurement principles most consistent with those used in measuring the corresponding amounts in the entity's financial statements.

1.22 Related parties

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

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

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

25

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Accounting Policies

1.22 Related parties (continued)

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

1.23 Events after reporting date

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

• those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); and

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

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

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

26

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand 2018 2017

2. New standards and interpretations

2.1 Standards and interpretations effective and adopted in the current year

In the current year, the entity has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations:

Standard/ Interpretation:

• GRAP 20: Related parties

• GRAP 26 (as amended 2015): Impairment of cash­generating assets

• GRAP 109: Accounting by Principals and Agents

• GRAP 21 (as amended 2015): Impairment of non-cash­generating assets

• GRAP 18: Segment Reporting

2.2 Standards and interpretations issued, but not yet effective

Effective date: Years beginning on or after 01 April 2017

01 April 2017

01 April 2017

01 April 2017

01 April 2017

Expected impact:

The impact of the is not material. The impact of the is not material. The impact of the is not material. The impact of the is not material. The impact of the is not material.

The entity has not applied the following standards and interpretations, which have been published and are mandatory for the entity's accounting periods beginning on or after 01 April 2018 or later periods:

Standard/ Interpretation:

• Directive 12: The Selection of an Appropriate Reporting Framework by Public Entities

3. Inventories

Merchandise

Inventories recognised as an expense during the year

4. Receivables from exchange transactions

Deposits Employee benefits: Provision for leave Staff debtors Trade receivables Trade and subsistance advances Receivables - Impairment

27

Effective date: Years beginning on or after 01 April 2018

Expected impact:

Unlikely there will be a material impact

20,164 57,510

183,111 182,554

198,664 192,064 46,409 32,854

2,272 2,272 52,796 57,979 29,611 26,212

(202,915) (153,708)

126,837 157,673

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand 2018 2017

4. Receivables from exchange transactions (continued)

Ageing of Trade and other receivables from exchange transactions

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

Receivables from exchange transactions

Current 30 - 60 days 61 - 90 days 91 - 120 days 120+ days

Reconciliation of provision for impairment of trade and other receivables

Opening balance Provision for impairment

5. Receivables from non-exchange transactions

Staff loans and debtors Tshwaraganang Cultural Group Receivables impairment

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

Opening balance

6. Cash and cash equivalents

Cash and cash equivalents consist of:

Cash on hand Bank balances

28

46,409

80,428

126,837

(153,708) (49,207)

(202,915)

51,909 15,000

(66,909)

66,909

5,556 32,881

119,236

157,673

(1,258) (152,450)

(153,708)

55,086 15,000

(66,909)

3,177

66,909

22,999 10,127 5,471,292 16,449,803

5,494,291 16,459,930

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand 2018 2017

7. Property, plant and equipment

2018 2017

Cost I Accumulated Carrying value Cost I Accumulated Carrying value Valuation depreciation Valuation depreciation

and and accumulated accumulated impairment impairment

Furniture and fixtures 1,210,960 (684,893) 526,067 1,146,797 (524,121) 622,676 IT equipment 552,786 (393,030) 159,756 482,131 (335,388) 146,743 MSICC Equipment 2,331 ,477 (2,312,661) 18,816 2,331 ,477 (2,158,281) 173,196 MSICC Furniture 186,698 (141,230) 45,468 186,698 (110,920) 75,778 Motor vehicles 622,507 (537,721) 84,786 622,507 (429,254) 193,253 Office equipment 1,077,748 (743,366) 334,382 879,472 (649,309) 230,163 Other equipment 32,754 (9,593) 23,161 32,754 (7,795) 24,959 Photography equipment 8,994 (8,234) 760 8,994 (7,940) 1,054 MSICC Office Equipment 500 (375) 125 500 (292) 208

Total 6,024,424 (4,831,103) 1,193,321 5,691,330 (4,223,300) 1,468,030

Reconciliation of property, plant and equipment - 2018

Opening Additions Depreciation Total balance

Furniture and fixtures 622,676 64,163 (160,772) 526,067 IT equipment 146,743 73,344 (60,331) 159,756 MSICC Equipment 173,196 (154,380) 18,816 MSICC Furniture 75,778 (30,310) 45,468 MSICC Office equipment 208 (83) 125 Motor vehicles 193,253 (108,467) 84,786 Office equipment 230,163 195,587 (91,368) 334,382 Other equipment 24,959 (1 ,798) 23,161 Photography equipment 1,054 (294) 760

1,468,030 333,094 (607,803) 1,193,321

Reconciliation of property, plant and equipment - 2017

Opening Additions Depreciation Total balance

Furniture and fixtures 780,159 (157,483) 622,676 IT equipment 184,760 46,049 (84,066) 146,743 MSICC Equipment 768,796 (595,600) 173,196 MSICC Furniture 106,089 (30,311) 75,778 MSICC Office Equipment 292 (84) 208 Motor vehicles 295,281 (102,028) 193,253 Office equipment 179,264 119,459 (68,560) 230,163 Other equipment 26,597 (1 ,638) 24,959 Photography equipment 2,982 (1 ,928) 1,054

2,344,220 165,508 (1,041,698) 1,468,030

Assets subject to finance lease (Net carrying amount)

Office equipment 58,199 72,357

A register containing the information required by Public Finance Management Act is available for inspection at the registered office of the entity.

29

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand 2018 2017

8. Intangible assets

2018 2017

Cost I Accumulated Carrying value Cost/ Accumulated Carrying value Valuation

Computer software 157,977

Reconciliation of intangible assets - 2018

Computer software

Reconciliation of intangible assets - 2017

Computer software

9. Finance lease obligation

Minimum lease payments due - within one year - in second to fifth year inclusive

less: future finance charges

Present value of minimum lease payments

amortisation and

accumulated impairment

(137,060)

Present value of minimum lease payments due - within one year - in second to fifth year inclusive

Non-current liabilities Current liabilities

Valuation amortisation and

accumulated impairment

20,917 142,831 (110,253)

Opening Additions Amortisation balance

32,578 18,560 (30,221)

Opening Additions Amortisation balance

58,787 10,319 (36,528)

69,577 34,416

103,993 (39,739)

64,254

35,245 29,009

64,254

29,009 35,245

64,254

It is entity policy to lease certain cell phones and certain equipment under finance leases.

The average lease term was 2-5 years and the average effective borrowing rate was 8% (2017: 8%).

32,578

Total

20,917

Total

32,578

37,926 53,012

90,938 (36,998)

53,940

14,863 39,077

53,940

39,077 14,863

53,940

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

10. Operating lease asset (accrual)

Current liabilities (38,274) (47,604)

30

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand 2018 2017

10. Operating lease asset (accrual) (continued)

Northern Cape Economic Development. Trade and Investment Promotion Agency entered into a three year contract with Property connection in relation to the rental of the office premies with an escalation of 8% per year. The straightlining of the lease resulted in a operatin lease accrual of R29 204 (2017: R32 528).

Northern Cape Economic Development, Trade and Investment Promotion Agency entered into a three year contract with Upington Hotel (PTY) Ltd in relation to the rental of the office premises in Upington with an escalation 8% per year. The straightlining of the lease resulted in a operating lease accrual of R9 070 (2017: R15 074).

11. Payables from exchange transactions

Trade payables Deposits received Other payables Employee benefits: Leave Liability Employee cost Employee benefits: Accrued Bonus Liability

Ageing of trade and other payables

O - 30 days 31 - 60 days 61 - 90 days 91 - 120 days 120+ days

12. Unspent conditional grants and receipts

Unspent conditional grants and receipts comprises of:

Unspent conditional grants and receipts National Lottery Board Industrial Development Corporation: SCP Grafters UNIDO Regional Office Department of Trade and Industry: Special Economic Zone

Movement during the year

Balance at the beginning of the year Additions during the year Income recognition during the year

See note 15 for reconciliation of grants from National/Provincial Government.

31

2,099,426 9,820

46,286 305,220

2,507 87,433

2,550,692

718,757 20,815 41 ,522 13,059

1,756,539

2,550,692

24,833

8,100 2,620,146

2,653,079

12,039,987 3,880,316

(13,267,224)

2,653,079

2,255,750 9,820

46,286 339,316

2,507 82,095

2,735,774

1,608,617 52,220 51 ,283

5,339 1,018,315

2,735,774

24,833 1,512,266

8,100 10,494,788

12,039,987

16,141,301 6,676,294

(10,777,608)

12,039,987

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

13. Revenue

Government grants & subsidies Interest received Other income Rendering of services Sale of goods Public contributions and donations

The amount included in revenue arising from exchanges of goods or services are as follows: Interest received - investment Other income Rendering of services Sale of goods

The amount included in revenue arising from non-exchange transactions is as follows: Taxation revenue Transfer revenue Government grants & subsidies Public contributions and donations

14. Investment revenue

Interest revenue Bank

32

2018

21,331 ,224 468,219

15,496 2,313,136

273,435

2017

19,814,608 736,761

70,852 2,121,177

86,411 395,978

24,401,510 23,225,787

468,219 736,761 15,496 70,852

2,313,136 2,121 ,177 273,435 86,411

3,070,286 3,015,201

21,331,224 19,814,608 395,978

21,331,224 20,210,586

468,219 736,761

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

15. Government grants and subsidies

Operating grants Department of Trade Industry: Special Economic Zone Industrial Development Corporation: CSP Grafters Department of Economic Development and Tourism

Conditional and Unconditional

Included in above are the following grants and subsidies received :

Conditional grants received Unconditional grants received

National Lottery Board

Balance unspent at beginning of year

Conditions still to be met - remain liabilities (see note 12).

2018

10,474,642 2,792,582 8,064,000

21,331,224

13,267,224 8,064,000

21,331,224

24,833

2017

8,533,664 2,243,945 9,036,999

19,814,608

10,777,608 9,037,000

19,814,608

24,833

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

Department of Trade and Industry - Special Economic Zone

Balance unspent at beginning of year Current-year receipts Conditions met - transferred to revenue

Conditions still to be met - remain liabilities (see note 12).

10,494,788 2,600,000

(10,474,642)

2,620,146

15,071,678 3,956,774

(8,533,664)

10,494,788

This is a conditional grand to be applied for the operational activities of the entity and other related projects for the SEZ Upington.

Industrial Development Corporation - CSP Grafters

Balance unspent at beginning of year Current-year receipts Conditions met - transferred to revenue

Conditions still to be met - remain liabilities (see note 12).

This is a conditional grant to be applied for funding of the CSP Grafters Operations.

UNIDO Regional Office

Balance unspent at beginning of year

Conditions still to be met - remain liabilities (see note 12).

1,512,266 1,280,316

(2,792,582)

8,100

1,036,690 2,719,520

(2,243,944)

1,512,266

8,100

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

33

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand 2018 2017

16. Public contributions and donations

Transfer payment received - Department of Economic Development and Tourism 395,978

This transfer payment received are the audit fee paid by Department of Economic Development and Tourism to the Auditor -General on behalf of this public entity.

34

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

17. Employee related costs

Basic UIF Employer contributions

Remuneration of chief executive officer - T Dikeni

Annual Remuneration Occasional income Total Allowances Contributions to UIF and Pension Funds

T Dikeni was appointed as Chief Executive Officer on 18 April 2017.

Remuneration of chief finance officer - T Mangojane

Annual Remuneration Occasional income Total Allowances Contributions to UIF and Pension Funds

Remuneration of project exeutive - W Engelbrecht

Annual Remuneration Occasional income Total Allowances Contributions to UIF and Pension Funds

W Engelbrecht contract ended as Project Executive on 30 June 2017.

Remuneration of human resource manager - T Luse

Annual Remuneration Occasional income Total Allowances Contributions to UIF and Pension Funds

Remuneration of Witsand nature reserve manager - 0 Coetzee

Annual Remuneration Occasional income Total Allowances Contributions to UIF and Pension Funds

35

2018

4,637,412 66,562

1,060,776

5,764,750

1,067,061 34,859

181 ,301 21 ,610

1,304,831

740,592 74,334

5,530 98,061

918,517

267,141 22,262

6,417 2,230

298,050

740,592 74,334

128,585 98,061

1,041 ,572

407,857 2,326

16,170 1,784

428,137

2017

4,084,606 59,268

1,037,710

5,181,584

726,009 74,847 74,093 96,315

971,264

1,146,751 15,204 20,237

1,933

1,184,125

734,793 55,945 98,438 97,457

986,633

401 ,833 9,612

13,682 1,933

427,060

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

18. Finance costs

Finance leases

19. Cost of sales

Sale of goods lnventoy - Opening balance Inventory - Purchased Inventory - Closing Balance

20. General expenses

Advertising Arbitration Award Auditors remuneration Bank charges Catering Chalets expenses Cleaning Compensation Commissioner Computer expenses Consumables Donations Electricity Exhibition expenditure Fines and penalties Fuel and oil Insurance Laundry expenses Motor vehicle expenses Postage and courier Printing and stationery Renovations Relocation expenses Rent paid: Equipment Security Staff welfare Subscriptions and membership fees Sundry expenses Telephone and fax Venue and conference centre hire Uniforms

21. Auditors' remuneration

External Audit Fees

36

2018

54,194

57,510 183,110 (20,164)

220,456

583,262

689,654 46,558

158,946 15,514

13,541 110,062 35,115

198,008 41,640 71,167 66,564

198,279 154,214 75,428 44,981

215,057 79,914 49,756

274,915 8,867

14,785 58,886 93,900

290,812 14,935 24,633

3,629,393

689,654

2017

11,887

82,122 182,554 (57,510)

207,166

258,562 848,500 810,193

35,109 100,518

11,869 26,636

34,020 100,986

10,000 130,500 189,760

13,846 42,050

186,035 133,691

14,733 157,100 34,551

412,189 76,650 65,657 23,310

48,877 69,242

318,536 9,605

4,162,725

810,193

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

22. Cash used in operations

(Deficit) surplus Adjustments for: Depreciation and amortisation Finance costs - Finance leases Impairment deficit Movements in operating lease assets and accruals Changes in working capital: Inventories Receivables from exchange transactions Other receivables from non-exchange transactions Payables from exchange transactions Unspent conditional grants and receipts

23. Financial instruments disclosure

Categories of financial instruments

2018

Financial assets

Receivablels from exchange transactions Cash and cash equivalents

Financial liabilities

Payables from exchange transactions Unspent conditional grants and receipts Finance lease obligation

2017

Financial assets

Reeivables from exchange transactions Receivables from non-exchange transactions Cash and cash equivalents

Financial liabilities

Payables from exchange transactions Unspent condtional grants and receipts

37

2018

(1 ,752,368)

638,028 54,194 49,208 (9,329)

37,346 (18,373)

3,177 (185,082)

(9,386,908}

(10,570,107)

At amortised cost

126,837 5,494,291

5,621,128

At amortised cost

2,550,692 2,653,079

64,254

5,268,025

At amortised cost

157,673 3,177

16,459,930

16,620,780

At amortised cost

2,735,774 12,039,987

2017

56,014

1,078,226 11 ,887

152,450 47,604

24,611 855,936

1,089 220,567

(4,101,314)

(1,652,930)

Total

126,837 5,494,291

5,621,128

Total

2,550,692 2,653,079

64,254

5,268,025

Total

157,673 3,177

16,459,930

16,620,780

Total

2,735,774 12,039,987

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

23. Financial instruments disclosure (continued) Finance lease obligation

24. Commitments

Authorised capital expenditure

Already contracted for but not provided for • Consultants and other professional fees

Total capital commitments Already contracted for but not provided for

Authorised operational expenditure

Already contracted for but not provided for • Consultants and other professional fees • Operating lease contracts

Total operational commitments Already contracted for but not provided for

Total commitments

Total commitments Authorised capital expenditure Authorised operational expenditure

2018

53,940

14,829,701

75,728

75,728

64,182 1,441 ,991

1,506,173

1,506,173

75,728 1,506,173

1,581,901

2017

53,940

14,829,701

4,166,398

4,166,398

232,879 2,375,723

2,608,602

2,608,602

4,166,398 2,608,602

6,775,000

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

Operating leases - as lessee (expense)

Minimum lease payments due - within one year - in second to fifth year inclusive

1,008,430 433,561

1,441,991

933,732 1,441,991

2,375,723

Operating lease payments represent rentals payable by the entity for certain of its office properties. Leases are negotiated for an average of three years and increase with 8% per year. No contingent rent is payable.

25. Contingencies

The enitity is currently in process of review applications for case numbers C349/2015 and C63/2015. These legal consultations relates to Public Servants Association matters and the financial exposure related to these matters are estimated at R350 000 and R300 000 respectively.

The entity is currently in process of legal consultation (Case no: 1980/2015) to evict a supplier from the Mittah Seperepere International Convention Centre, appointed during 2012 for six month period to manage the centre. The economic benefits to be received from the supplier from the trading activities is not certain and cannot be estimated reliably. The estimated cost to be incurred relating to this matter is estimated at R400 000.

38

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

26. Related parties

Relationships Board Members

Department with significant influence

Members of key management

Related party balances

2018

L Bomela (Chairperson) T Makweya (Deputy Chairperson) P Nonjola L Moremedi M Kies N Kgantsi K Williams F Witbooi OH Fielding (Former board member)

2017

Northen Cape Department of Economic Development and Tourism Industrial Development Tourism Northern Cape Tourism Authority T Dikeni (CEO Appointed 18 April 2017) T Mangojane T Luse W Engelbrect (Contract ended 30 June 2017) 0 Coetzee

Amounts included in Trade receivable (Trade Payable) regarding related parties OH Fielding 21,209

3,528 T Luse T Dikeni Northern Cape Tourism Authority

Unspent conditional grants and receipts Northern Cape departmetn of Trade and Industry Industrial Development Corporation

Related party transactions

Grants received from related parties Northern Cape Department of Economic Development and Tourism Northern Cape Department of Trade and Industry Industrial Development Corporation

Provision for doubtful debt on Trade and other Receivables regarding related parties OH Fielding T Luse

Travel claims paid to related parties T Luse T Mangojane W Engelbrecht T Dikeni

Transfer payment received from related parties Northern Cape Department of Economi Development and Tourism

Remuneration of management

Executive management

39

2,741 981

(54,248)

(2,620,146)

(8 ,064,000) (2,600,000) (1 ,280,316)

(9,946)

4,900 800

8,600

(10,494,788) (1 ,512,266)

(9,037,000) (3,956,774) (2,719,520)

(21 ,909) (9,946)

10,500

1,000

395,979

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

26. Related parties (continued)

2018

Annual Remuneration

Name T Mangojane - Chief Financial officer 740,592 T Luse - Human Resources Manager 740,592 W Engelbrecht - Special Economic Zone Project executive 267,141 0 Coetzee - Witsand Nature Reserve Manager 407,857 T Dikeni - Chief Executive Officer 1,067,061

3,223,243

2017

Annual Remuneration

Name T Mangojane - Chief Financial officer 726,009 T Luse - Human Resources Manager 734,793 W Engelbrecht - Special Economic Zone Project executive 1,146,751 0 Coetzee - Witsand Nature Reserve Manager 401,833

3,009,386

27. Prior period errors

Correction of prior years Finance lease asset not previously recorded and accounting for prior years depreciation.This resulted in a understatement of Property,Plant and equipment amounting to R44 836.

40

Occasioanl Income

74,334 74,334 22,262

2,326 34,859

208,115

Occasioanl Income

74,847 55,945 15,204

9,612

155,608

Allowances Contributions Total to UIF and

Pension Funds

5,530 98,061 918,517 128,585 98,061 1,041 ,572

6,417 2,230 298,050 16,170 1,784 428,137

181 ,301 21 ,610 1,304,831

338,003 221,746 3,991,107

Allowances Contributions Total to UIF and

Pension Funds

74,093 96,315 971,264 98,438 97,457 986,633 20,237 1,933 1,184,125 13,682 1,933 427,060

206,450 197,638 3,569,082

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand 2018 2017

27. Prior period errors (continued)

Correction of prior years Momentum Creditor of which the overpayment was incorrectly raised as a debtor which led to incorrectly impairment provided. This resulted in a overstatement of receivables from exchange transactions amounting to R89 270 and impairment loss amounting to R4 476.

Correction of prior years Finance lease liabilities not previously recorded and accounting for prior years split between the capital redemption and interest. This resulted in a understatement of Finance Lease Liability amounting to R46 156.

Correction of Protea Hotel Upington, Enslin, POSTMA, Momentum and Matthew and Partners creditors as per prior years Creditor statements.This resulted in a overall understatement of Trade and other payables amounting to R235 658.

Correction of prior years finance lease asset depreciation not previously capitalised. This resulted in a understatement of depreciation amounting to R3 435.

Correction of prior years finance lease liabilities capital and interest redemption of the finance lease payments. This resulted in a understatement of Finance cost amounting to R3 934.

Correction of POSTMA Creditor which resulted in double counting of the expenditure. This resulted in a ovetstatement of Repairs and maintenance amounting to R144 298.

Correction of Protea Hotel Upington, Enslin, POSTMA, Momentum and Matthew and Partners creditors as per prior years Creditor statements and Prior years capital redemption and interest portion of the monthly finance lease liability payments.This resulted in a overall understatement of General expenses amounting to R21 995.

The above errors resulted in a understatement of accumulated surplus amounting to R145 068.

The following symbols will be used to indicate the change in accounts: Assets: Decrease(-) Increase(+) Liabilities: Decrease(+) Increase(-) Income: Decrease(+) Increase(-) Expenses: Decrease(-) Increase(+) Equity: Decrease(+) Increase(-)

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

Statement of financial position Property, plant and equipment Finance lease obligation Receivables from exchange transactions Payables from exchange transactions Accumulated surplus

Statement of financial performance Depreciation and amortisation Finance costs Impairment loss/ Reversal of impairments Repairs and maintenance • General expenses

41

44,836 (46,156) (89,270) 235,658

(145,068)

3,435 3,934

(4,476) (144,298)

21,995

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

28. Risk management

Financial risk management

2018 2017

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

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

Liquidity risk

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

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

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

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

At 31 March 2018 Less than 1 Between 1 Between 2 Over 5 years year and 2 years and 5 years

Trade and other payables 2,550,692 Finance Lease obligation 35,245 29,009 Unspent Conditional grant and receipts 2,653,079

At 31 March 2017 Less than 1 Between 1 Between 2 Over 5 years year and 2 years and 5 years

Trade and other payables 2,735,774 Finance Lease obligation 14,863 39,077 Unspent Conditional grant and receipts 12,039,987

42

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

28. Risk management (continued)

Credit risk

2018 2017

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

Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Sales to retail customers are settled in cash or using major credit cards. Credit guarantee insurance is purchased when deemed appropriate.

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

Financial instrument Cash and cash equivalents Trade and other receivables from exchange and non-exchange transactions

Market risk

Interest rate risk

2018 5,494,291

251 ,460

2017 16,459,930

250,043

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

29. Fruitless and wasteful expenditure

Opening Balance Fruitless and wasteful expenditure incurred

383,571 84,207

467,778

367,841 15,730

383,571

Interest and penalties on the late payment of the South African Revenue Services amounts to R47 597.52 (2017: R12 009).

Penalties paid for damages to rental car rented from Worldwide travel amounts to Rnul (2017: R3 196).

Penalties paid for late return of rental vehicle rented from Astra Travel amounts to R1 287 (2017: R275).

Cost with regards to the cancellation of Advert tender SEZ/06/2016 amounts to Rnul (2017: R250).

Interest and penalties on the late payment to Auditor General amounts to R18 548.22 (2017: Rnul).

Cost with regards to the cancellation of advert Government Gazette amounts to R250 (2017: Rnul).

Cost with regards to the flight change fee to Zilka Tours amounts to R1 868 (2017: Rnul).

Interest on the late payment to Property Connection amounts to R2 702.80 (2017: Rnul).

Penalty on the late payment of property renting from Protea Hotel Upington R4 500 (2017: Rnul).

Interest charged for the late payment to Postmasburg Radio & TV amounts to R1 940.49 (2017: Rnul).

Penalty on the late payment to Momentum Provident funds amounts to R1 012.79 (2017: nul).

The above instances which does not relate to cashflow problems will be investigated with the intention to recover.

43

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

30. Irregular expenditure

Opening balance Add: Irregular Expenditure - current year Add: Irregular Expenditure - prior year

2018

8,675,516 1,384,346

2017

8,656,278

19,238

10,059,862 8,675,516

Details of irregular expenditure - current year

Overspending of contract amount In contravention with SCM processes

31. Segment information

General information

Identification of segments

Disciplinary steps taken/criminal proceedings None None

1,293,691 90,655

1,384,346

The entity is organised and reports to management on the basis of three major functional areas : Northern Cape Economic Development, Trade and Investment Promotion Kimberley office, Special Economic Zone Upington and Witsand Nature reserve. The segments were organised around the type of service delivered and the target market. Management uses these same segments for determining strategic objectives. Segments were aggregated for reporting purposes.

Information reported about these segments is used by management as a basis for evaluating the segments' performances and for making decisions about the allocation of resources . The disclosure of information about these segments is also considered appropriate for external reporting purposes.

44

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

31. Segment information (continued)

Segment surplus or deficit, assets and liabilities

2018

Revenue Revenue from non-exchange transactions Revenue from exchange transactions

Total segment revenue

Entity's revenue

Expenditure Employee related costs Consulting and professional fees Depreciation and amortisation Impairment loss/ Reversal of impairment Finance costs Lease rentals on operating lease Repairs and maintenance Sale of goods/Inventory Training Travel General Expenditure

Total segment expenditure

Total segmental surplus/(deficit)

45

NCEDA

10,856,582 57,597

10,914,179

6,045,809 427,176 309,243

49,208 48,799

592,360 134,371

1,228,329 1,493,422 1,695,861

12,024,578

SEZ WITSAND Total

10,474,642 21,331,224 413,960 2,598,729 3,070,286

10,888,602 2,598,729 24,401,510

24,401,510

1,910,740 1,799,308 9,755,857 5,791,323 10,356 6,228,855

104,955 223,825 638,023 49,208

190 5,205 54,194 325,407 917,767

53,744 42,477 230,592 220,456 220,456

1,228,329 1,537,976 169,806 3,201,204

951,123 982,409 3,629,393

10,675,458 3,453,842 26,153,878

(1,752,368)

Northern Cape Economic Development, Trade and Investment Promotion Agency Annual Financial Statements for the year ended 31 March 2018

Notes to the Annual Financial Statements Figures in Rand

31. Segment information (continued)

Assets Inventories Receivables from exchange transactions Cash and cash equivalents Property, plant and equipment Intangible assets

Total segment assets

Total assets as per Statement of financial Position

Liabilities Operating lease liability Finance lease obligation Payables from exchange transactions Unspent conditional grants and receipts

Total segment liabilities

Total liabilities as per Statement of financial Position

46

NCEDA

54,243 1,175,296

377,867 11,249

1,618,655

29,204 37,171

1,111,424 32_,933

1,210,732

SEZ

9,230 4,251,375

255,555 6,444

4,522,604

9,070

1,111,192 2,620,146

3,740,408

WITSAND

20,164 63,364 67,620

559,899 3,224

714,271

27,083 328,076

355,159

Total

20,164 126,837

5,494,291 1,193,321

20,917

6,855,530

6,855,530 --

38,274 64,254

2,550,692 2,653,079

5,306,299

5,306,299