annual report · app annual performance plan au african union auc african union commission ......

2018/19ADAANNUAL REPORT

1. PART A – GENERAL INFORMATION ............................................................................ 6

1.1 Public Entity’s General Information ......................................................................................6

1.2 List of abbreviations/acronyms ............................................................................................7

1.3 Foreword by the Executive Authority ...................................................................................8

1.4 Foreword by the Chairperson ................................................................................................9

1.5 ChiefExecutiveOfficer’sOverview .................................................................................... 11

1.6 Statementofresponsibilityandconfirmationofthe

accuracy of the annual report ............................................................................................. 13

1.7 ADA Board Members, ........................................................................................................... 14

1.8 Executive Committee ............................................................................................................ 15

1.9 Strategic overview ............................................................................................................... 16

1.10 Legislative and Other Mandates ........................................................................................ 17

1.11 Organizational Structure ..................................................................................................... 19

2. PART B – PERFORMANCE INFORMATION ............................................................... 20

2.1 Auditor-General’s Report: Predetermined Objectives ..................................................... 21

2.2 Situational analysis ............................................................................................................... 21

2.3 Strategic Outcome Oriented Goals .................................................................................... 25

2.4 Performance information by programmes ....................................................................... 27

2.5 Revenue collection ................................................................................................................ 44

2.6 Capital investment ................................................................................................................. 44

3. PART C – GOVERNANCE ............................................................................................ 45

3.1 Introduction............................................................................................................................. 46

3.2 Portfolio Committee.............................................................................................................. 46

3.3 Executive Authority ................................................................................................................ 46

TABLE OF CONTENTS

4 ADA ANNUAL REPORT 2018/2019

3.4 The Accounting Authority/ the Board ................................................................................ 46

3.5 Risk Management ................................................................................................................. 52

3.6 Internal Control Unit .............................................................................................................. 53

3.7 Internal Audit and Audit Committees ................................................................................ 53

3.8 Compliance with laws and regulations ............................................................................. 55

3.9 Fraud and Corruption ............................................................................................................ 55

3.10 MinimizingConflictofInterest ............................................................................................ 56

3.11 Code of conduct .................................................................................................................... 56

3.12 Health, Safety and Environmental Issues ......................................................................... 57

3.13 Company Secretary ............................................................................................................... 57

3.14 Social Responsibility ............................................................................................................. 57

3.15 Audit and Risk Committee Responsibility for the

Financial Year ended 31 March 2018 ............................................................................... 58

4. PART D - HUMAN RESOURCE MANAGEMENT ......................................................... 63

4.1 Introduction............................................................................................................................. 64

4.2 Human Resources oversight Statistics ............................................................................. 66

5. PART E - ANNUAL FINANCIAL STATEMENTS........................................................... 70

5.1 Report of the Auditor General.............................................................................................. 71

5.2 Annual Financial Statements .............................................................................................. 81

Part A: Strategic Overview


1.1 PUBLIC ENTITY’S GENERAL INFORMATION

REGISTERED NAME : AGRIBUSINESS DEVELOPMENT TRUST

REGISTERED NUMBER : IT 2041/1999

PHYSICAL ADDRESS :5 CASCADES CRESCENT

CASCADES OFFICE PARK

MONTROSE

PIETERMARITZBURG

3202

POSTAL ADDRESS :PRIVATE BAG X01

MONTROSE

PIETERMARITZBURG

3202

TELEPHONE NUMBER : +27 33 347 8600

FAX NUMBER : +27 33 347 0913

ADDRESS : [email protected]

WEBSITE ADDRESS : www.ada-kzn.co.za

EXTERNAL AUDITORS : OFFICE OF THE AUDITOR- GENERAL SA

BANKERS : ABSA BANK

COMPANY/BOARD SECRETARY : SIMANGELE MBATHA

7

Part A: GENERAL INFORMATION

ADA ANNUAL REPORT 2018/2019

ADA/The Agency/ Entity Agribusiness Development Agency

AGSA Auditor-General of South Africa

APAP Agricultural Policy Action Plan

APP Annual Performance Plan

AU African Union

AUC African Union Commission

BBBEE Broad-Based Black Economic Empowerment

CAADP Comprehensive Africa Agriculture Development Programme

CASP Comprehensive Agricultural Support Programme

COGTA Co-operative Governance and Traditional Affairs

DAFF Department of Agriculture, Forestry and Fisheries

DARD Department of Agriculture and Rural Development

DDG Deputy Director General

DEDTEA Department of Economic Development, Tourism and Environmental Affairs

DRDLR Department of Rural Development and Land Reform

EXCO Executive Committee

IPAP Industrial Policy Action Plan

KZN KwaZulu-Natal

MANCO Management Committee

MEC Member of Executive Council

MPL Member of Parliament

MTSF Medium Term Strategic Framework

NDP National Development Plan

NEPAD New Partnership for Africa’s Development

NGP New Growth Path

OHS Occupational, Health and Safety

PEMP Poverty Eradication Master Plan

PFMA Public Finance Management Act

PGDS Provincial Growth and Development Strategy

PGDP Provincial Growth and Development Plan

SABS South African Bureau of Standards

SCM Supply Chain Management

SCOPA Standing Committee on Public Accounts

WEP Women Empowerment Programme

1.2 LIST OF ABBREVIATIONS/ACRONYMS


2018/19 has been a year of ongoing success, noting solid achievements for the ADA and for that we remain proud of their staff, partners, and the government departments with whom we worked with to achieve this success. Through the following programmes, Capacity Building, Enterprise Value Chain and Infrastructure Development, the ADA has successfully implemented the mandate of the Department of Agriculture and Rural Development.

Over the years, the mandate of the ADA has expanded focusing more on agro-processing thus ensuring impact on the entire agricultural value chain. Since its establishment, the ADA has managed to support over 180 large and small commercial farms as well as individual entrepreneurs. In 2018/19, the ADA provided a total of 336 jobs within its projects, making the total number of jobs 2830 since its inception. These include created, sustained and seasonal jobs. This is evidence of the agricultural

sector’s contribution to ensuring the betterment of livelihood of our citizens.

Emanating from the programme of the rationalization of public entities, the Department has commissioned the merger of the Agribusiness Development Agency, Mjindi Farming and Ntingwe Tea Estate into one commercial entity. It is anticipated that the process will be finalized byDecember 31, 2019.

Inthe2019/20financialyear,theDepartment’splanfor the ADA is to continue supporting commercial projects aimed at empowering and broadening space for new black emerging farmers’ participation in the food value chain.

With continued support from the ADA Board of Trustees and staff, I trust that ADA can make significant imprints within the economy ensuringthat Kwa-Zulu Natal becomes a fundamental source ofeconomicbenefittoourbeautifulcountry.

Many thanks and appreciation to all.

___________________________________________

MS BONGI SITHOLE-MOLOI, MPL

MEC: Department of Agriculture And Rural

Development

1.3 FOREWORD BY THE EXECUTIVE AUTHORITY

9



It is my pleasure to present the 2018/19 Annual Report of the Agribusiness Development Agency (ADA). Agriculture and rural development are regarded as an integral part of economic development.

Strategy

In line with the recommendations of the King IV report on corporate governance, the main responsibility of the Board is to provide a strategic direction, approving policy and planning that give effect to that strategy and the set direction, overseeing implementation by management and ensuring accountability for the Entities performance by means of reporting.

During the year under review, the Board held a successful strategic planning session where the following resolutions, amongst many, were adopted;

• Identificationofspecialfocus(niche)commodities

• Development of sustainability plans for funded project

• Drive interdepartmental relations within the economic cluster

Governance

During the year under review the ADA Board ensured that its sub-committees were in place andeffective.Inthe2018/19financialyeartwo(2)external members of the Audit and Risk Committee resigned however they were replaced accordingly. Through the delegated committees, the Board achieved its responsibility for maintaining effective andefficientinternalcontrols,riskmanagementandperformance of the Entity.

Amalgamation

With the ADA being proclaimed as the nucleus of the new merged Entity, the ADA Board proactively undertook strategic visits to Mjindi Farming and Ntingwe Tea Estate. The aim of the visits were to understand and analyze the current status of the said Entities.

Challenges

High staff turnover continues to pose a challenge totheEntity,howevertheADAhasfilledtwo(2)keypositions being that of the interim Chief Executive OfficerandChiefFinancialOfficer.

As the ADA prepares to embark on its new strategic direction I am confident that the staff membersand the board are fully committed to achieving greatness.

I wish to extend my sincere gratitude to the Honourable MEC Ms Bongi Sithole-Moloi, the Portfolio Committee on Agriculture, SCOPA, the Department of Agriculture and Rural Development

1.4 FOREWORD BY THE CHAIRPERSON


(DARD) and other relevant stakeholders for their continued support during the period under review. I would furthermore like to thank the Board for their unwavering support and dedication in ensuring that ADA achieves its mandate.

Finally, my gratitude also goes to the ADA Staff and Management for their commitment and drive to ensure that the ADA delivers on its mandate even duringdifficulttimes.

Yours truly,

_____________________________________

DR ME NGIDI

Chairperson of The Board

11



It is with great honour to present to you the 2018/19 annual report

The 2018/19 financial yearmarked the ninth yearof ADA’s existence and I am pleased to report that the ADA was able to meet its targets and deliver on its 2018/19 operational plan using the available resources - in light of the internal organizational structural changes that are currently being carried through.

The performance of the Entity in the 2018/19 financialyearsignaledthatitismovingwithspeedtowards the realization of government’s 2030 vision which states that Agriculture is the driving force behind inclusive and integrated rural areas, through successful land reform, job creation and poverty alleviation.

The Agency has successfully provided support through the following programmes:

i.)Comprehensive Capacity Building - The Entity has trained more than 297 entrepreneurs which is 57 more than the target set to train in 2018/19. In helping forge partnerships to assist with capacity building and mentorship programs, we linked enterprises to eight institutions which include Allan Gray, eThekwini Metro, VINPRO, Citrus Growers Association and the Consumer Goods Council S.A.

ii.)Enterprise Development and Value Chain - The Entity has supported the provision of agro processing structures and has broadened the access of entrepreneurs to the whole agriculture valuechain. In2018/19financialyearwecreatedand sustained 336 seasonal and permanent jobs. As we extend our reach throughout the Province to broaden access to the value chain, it is envisaged that more jobs would be created.

iii.)Infrastructure Development – The origins of this programme lie in the Comprehensive Agricultural Support Programme (CASP) funding mechanism. The programme focuses on assisting enterprises with infrastructure according to the funding and needs analysis. The ADA supported six enterprises with Infrastructure development during the 2018/19 financialyear.

The Entity continues to be a going concern with 84% expenditure of the total budget allocation for the2018/19financialyearandtheremaining16%committed to projects and programmes.

Whilst we are pleased with the ADA achieving an unqualifiedauditopinionfromtheAuditorGeneral,we continue to strive towards achieving a clean audit. This will be achieved through improved internal control mechanisms. Further to that, the management has developed a comprehensive action plan to address matters of concerns raised in the 2018/19 audit report.

1.5 CHIEF EXECUTIVE OFFICER’S OVERVIEW


The ADA is proud to be in the forefront of the implementation of the rabbit production project with 6projectsbeingsupportedinthe2019/20financialyear.

Appreciation goes to the KZN provincial government and the Honourable MEC, Ms Bongi Sithole-Moloi for the unrelenting support and guidance. My gratitude goes to the Board of Trustees of the ADA and its sub-committees for their strategic direction and oversight. Finally, I wish to thank the hardworking and dedicated staff of the ADA for their contribution towards the achievement of the Entity’s goals and objectives.

Yours truly,

_____________________________

MR ZENZELE NDLELA

ChiefExecutiveOfficer

13



1.6 STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF THE ACCURACY OF THE ANNUAL REPORT

Tothebestofmyknowledgeandbelief, Iconfirmthe following:

All information and amounts disclosed in the annualreportisconsistentwiththeannualfinancialstatements 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 annual report guidelines for Schedule 3C of 2017 as issued by National Treasury.

The Annual Financial Statements (Part E) have been prepared in the GRAP standards applicable to the Public Entity.

The Chief Executive Officer is responsible for thepreparation of ADA’s performance information, annualfinancialstatementsandforthejudgmentsmade in this information.

The Chief Executive Officer is responsible for theestablishing and implementing a system of internal control designed to provide reasonable assurance as to the integrity and reliability of performance

information, the human resources information and theannualfinancialstatements.

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

………………………………………………………………..

Chief Executive Officer

Name: Mr. Zenzele Ndlela

Date: 30/05/2019

………………………………………………………………….

Chairperson of the BoardName: Dr. ME Ngidi

Date: 30/05/2019


1.7 BOARD OF TRUSTEES

Dr Mnqobi Edwin NgidiChairperson of the Board

Advocate Khayelihle Prince ThangoBoard Member, Human Resources & Remuneration

Committee Chairperson

Mr Mthandeni Vitalis KhumaloBoard Member

Ms Nonhlanhla Petronella LindaBoard Member

Mr Richard DladlaBoard Member

Ms Thandeka NtshangaseBoard Member ,Projects & Finance Committee

Chairperson

Ms Preetha DabideenDeputy Board Chairperson

Mr Aubrey Greyling MthembuBoard Member

Mr Nhlanhla KhambuleBoard Member

Ms Simangele MbathaCompany/Board Secretary

15



Mr Zenzele NdlelaChiefExecutiveOfficer

Position vacantChiefOparatingOfficer

Ms Mathobi MkhizeChiefFinancialOfficer

Mr Mustaq HoosenProject Manager

Ms Thandolwethu NtsuntshaActing Deputy SCM Manager

Mr Themba DuzeSpecialist: Planning, Monitoring

And Evaluation

Ms Zodwa MazibukoProject Manager

Ms Marsha NelsonDeputy Human Resources Manager

Mr Avinesh Dursen Legal Manager

Mr Bongani NtimbaChiefInformationOfficer

Mr Sthembiso NgubaneRiskandOfficeManager

Ms Rechi DlaminiProject Manager

Ms Sibongile MyakaSenior Internal Auditor

1.8 MEMBERS OF THE EXECUTIVE COMMITTEE

MEMBERS OF THE MANAGEMENT COMMITTEE


1.9 STRATEGIC OVERVIEW

OUR VISION

“A diverse, deracialized, prosperous, and sustainable agribusiness sector in KwaZulu-Natal.”

MISSION STATEMENT

ADA strives to promote, establish, facilitate and support the growth of black-owned and managed agricultural enterprises along agricultural value chains in KwaZulu-Natal through partnerships with individuals, communities, private sector and other public sector institutions in order to achieve a transformed Agribusiness Sector in KZN.

OUR VALUES

Organisationalvaluesdefinethekeyprinciplesandassociatedbehavioursthatarerequiredbyemployeeswhen executing the strategy and functions of the organisation and state what the clients, customers and stakeholders can expect from the organisation.

The values of ADA are:-

Integrity

We commit ourselves to ensuring our purpose, practices and values are ethically sound, at all times.

Accountability

We take accountability for all our actions in dealing with our clients and stakeholders and are mindful of possible consequences emanating from our decisions

Excellence

We commit to providing quality services and products to all our clients at all times consistent with the spirit of Batho-Pele.

Innovation

We commit to strive for continuous improvements through innovation and promoting a learning.

ADA will embed these values through demonstrated leadership, programmes and systems that develop, recognize and reward the supporting behaviours.

17



1.10 LEGISLATIVE AND OTHER MANDATES

ADA derives its mandate from the following policy and legislative imperatives:

• Cabinet Resolution No. 79 of 29 July 2009 authorizing the establishment of an Entity to support entrant commercial black farmers

• The National Policy Governing the Comprehensive Agricultural Support Programme (CASP)

• Land Reform Policy Guidelines and the Department of Rural Development and Land Reforms, Land Reform Recapitalization Programme

• Amended Deed of Trust for the KwaZulu-Natal Agricultural Development Trust (trading as the Agribusiness Development (ADA)

• Cabinet Resolution No. 245 of 11 November 2009 transferring the KwaZulu- Natal Development Trust from the Department of Agriculture, Environmental Affairs and Rural Development to the Department of Economic Development

Therefore, ADA’s mandate in this regard is “To provide agri-business support services to entrant black commercial farmers who have acquired land through the Government’s Land Reform Programme and on a private basis”.

It is intended that ADA will be established under provincial legislation as a Schedule 3C Public Entity. Should the promulgation of this legislation establishing ADA change it will affect the extent and nature of its mandate.

Further to the above, ADA is guided by the following other legislations, strategic documents and policies in implementing its mandate:

• The Constitution of the Republic of South Africa, Act No. 108 of 1996

• Public Finance Management Act, No. 1 of 1999

• National Treasury Regulations Gazette 23463

• Labour Relations Act, No. 66 of 1995

• Companies Act, No. 3 of 2011

• Occupational Health and Safety Act, No. 85 of 1999

• The National Development Plan (NDP) , 2030 – “Chapter 6: An integrated inclusive rural economy”

• Medium Term Strategic Framework (MTSF) – “Outcome 7: Vibrant, equitable and sustainable rural communities and food security for all”

• Nine Point Plan – “Number 2: Revitalization of Agriculture and Agro-processing value chain”

• New Growth Path (NGP)


• Industrial Policy Action Plan (IPAP)

• Agricultural Policy Action Plan (APAP)

• Poverty Eradication Master Plan (PEMP)

19



1.11 ORGANIZATIONAL STRUCTURE

COO

OPERATION: PA

CEO

BOARD

BOARD SECRETARY

CFO

EXECUTIVE ASSISTANT

CEO’S OFFICE

SPECIALIST PME

PME PRACTIONER

PME PRACTIONER

INTERNAL AUDITOR

SENIOR INTERNAL AUDIT

STRAT PARTNERSHIPFUNDRAISING OFFICER

PROJECT MANAGER:COASTAL

PROJECT MANAGER:SOUTH

PROJECT MANAGER:INLAND

PROJECT ADMIN

PROJECT ADMIN

PROJECT ADMIN PROJECT OFFICE

PROJECT OFFICE

PROJECT OFFICE

PROJECT OFFICE

PROJECT OFFICE

SCM PRACTIONER

SCM PRACTIONER

SCM PRACTIONER

PROJECT OFFICE

MARKETING ANDCOMMUNICATION

OFFICER

ENTERPRISE & CHAINDEVELOPMENT OFFICER

DEPUTY MANAGER: SCM

SCM CLERK

FINANCE MANAGER

DEPUTY MANAGER:HRM

FINANCE PA

IT

OFFICE MANAGEMENT AND

RISK

LEGAL MANAGER

RECEPTION

REGISTRY

HR ADMINISTRATOR

HR PRACTITIONER

ACCOUNTANT

PROJECTACCOUNTANT

CAPACITY BUILDING

RESEARCHER

RESEARCHER

SPECIALISTMARKETING &

COMMUNICATION


Part B: Performance Information

21

Part B: PERFORMANCE INFORMATION


2. PART B: PERFORMANCE INFORMATION

2.1 Auditor-General’s Report: Predetermined Objectives

The AGSA currently performs the necessary audit processes on the performance information to provide a limited assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the audit report.

Refer to page 71 to 119 of the Auditors report, published in section 5.1 which forms part of Part E of this report.

2.2 Situational analysis

2.2.1 Service delivery environment

Following a stellar performance in 2017, South Africa’s agriculture output shrank by massive 29.2% in the second quarter of 2018 and contributed to -0.8 of a percentage point to GDP growth. This follows a contraction of 24.2% quarter-on-quarter (q/q) in the third quarter of 2018. The decline was attributed to a decreasedproductioninfieldssuchascropsandhorticulturalproducts.

Forfieldcrops,thiswasnotsurprisingastheplantedareafor2018/19forcropsthatarecurrentlybeingharvested was cut by 7% year-on-year (y/y) to 6.12 million hectares with the biggest crop, being maize, falling by 12% year-on-year. Further, the decline in the planted area was largely due to depressed producer prices on the back of a massive crop of 17.66 million tonnes of maize in the 2018 harvest.

Nonetheless,theofficialcropestimatesindicatethecurrentharvestwillyieldatotalof13.8milliontonnesofmaizewhichiswayabovethelong-termaverageof12.5milliontonnesfothisfinancialyear.Fromasupply perspective, South Africa remains well supplied of this important staple as the huge carryover stock plus the current harvest will bring total supplies for the 2018/19 marketing season to just over 16.7 million tonnes with local consumption only 10.8 million tonnes.

Despite various challenges such as drought, land reforms and global economic uncertainty, it is fortunate that South Africa still remains the most advanced agricultural economy in Africa. In the 2019 Budget Speech, Minister Tito Titus Mboweni noted that R481.6 million has been allocated to the Small Enterprise Development Agency to expand the small business incubation programme.

A robust debate on land is taking place in South Africa. We are supporting private sector investments in agriculture by emerging farmers. R1.8 billion is allocated for the implementation of 262 priority land-reform projects over the next three years. R3.7 billion is set aside to assist emerging farmers seeking to acquire land to farm. All of which will speak directly into the growth of agribusiness in Kwa-Zulu Natal.


TheLandBankwillsupportsmallholders,andleveragepartnershipswithotherfinancialinstitutions.ItaimstodisburseR3billioninthenextfiscalyear.Guestspeakeratthe2018ProduceMarketingAssociation’s(PMA’s), Fresh Connections: Southern Africa Conference and Trade Show, Coillard Hamusimbi of the Indaba Agricultural Policy Research Institute (IAPRI) in Zambia noted in his presentation on fresh produce trade in Africa by that “African agriculture has greater opportunities than ever before. I do not recall a time when agriculture had such a centre position in terms of wanting to drive this continent to the next level economically, socially and otherwise. More so for fresh produce. Fresh produce will continue to lead the markets.” Despite available land and an abundance of water resources, the great paradox is that Africa cannot feed itself.

The continent relies heavily on food imports – most of the countries in Africa is a nett importer of food – as well as food aid. Against this background, there are pressure on currencies and rapid urbanisation is a critical challenge for most countries.

In a nutshell, Africa’s under-utilised resources, rapidly-increasing urbanisation and modern demand-driven consumer food-buying patterns provide vast opportunities to sell fresh produce to the young, informed and modernising consumer.

Inaddition, thepotentialsupply responseposesasignificantplatform tounlock thepotential for inter-continentalandspecificallyregionalandcross-bordertrade.Thedevelopmentoffreshfruitandvegetablemarkets in Africa is regarded as a key economic driver to stimulate growth and feed an ever-increasing modernised population.

Agricultural Potential

Theagriculture,forestryandfisherysectorsareregardedasimportanttoSA’ssocio-economicenvironment.

The agricultural sector is recognised as key to addressing poverty in the Province since the poorest people from KZN live in the rural areas. In spatially located areas of agricultural potential in the Province emphasis is placed on the need to release latent potential which exists in the land under custodianship of the Ingonyama Trust Board, and the resolution of the land reform initiatives in the Province.

In KZN, agriculture is based on a wide variety of crops; horticulture, forestry as well as animal husbandry. Field crops such as sugarcane and maize are scattered from the southern border of KZN to its northern border. Maize is the most widely grown crop in the country and in the Province. Horticulture sub-tropical fruits, mainly bananas, are produced in the South Coast (Port Shepstone and Port Edward) and pineapples in the north-coast (Hluhluwe). The forestry subsector is one of the strategic economic sectors in South Africawithasignificantcontributiontowardseconomicgrowthandjobcreation.

23



Drought Conditions in the Provinces during February/March 2019

February has been the “best month” since the beginning of the rainy season, yet still below normal when compared to the long-term mean. Despite the good rainfall the drought monitor map indicates minor drought status for the province. Most maize is tassling. Silage-making is in progress on the earlier planted crops. Large areas of Uthukela and Amajuba have been affected by heavy hail storms. Winter season augmentation of summer pastures is in progress as well as land preparation and planting for annual winter pastures. Livestock condition is variable depending on the rainfall and veld available in the communal areas. Commercial livestock is fair to good. Many farmers across the spectrum from subsistence to large commercial farmers have experienced crop losses due to either hail damage or lack of rainfall and/or irrigation. The average level of major dams has increased slightly when compared to the previous year (62% in 2019; 61% in 2018).

Agricultural Markets

Livestock domestic markets ABSA has reported that beef prices are increasing; Class A beef prices are expected to enjoy underlying support as demand should increase until April. The dry weather conditions in the maize production regions lead to an increase in maize prices which can impact negatively on future feedlot margins and weaner calf prices. Lamb and mutton prices decreased overall. Seasonally, mutton prices are at a lowest price level during March, April and May with the exception that prices of Class C grade mutton follow demand during April higher. Prices will start to recover in April onwards. The same is true for feeder lamb prices which reach a seasonal low during April. Pork prices traded lower across the different categories. According to seasonal price trends the prices of pork may continue to trade lower to sideways and following the suppressed prices of poultry and beef. The average poultry prices traded mixed. The continuation of cheap and competitive imports of poultry will limit the expected seasonal price increases over the April holidays.

Major Grain Commodities

The late plantingsanduncertainty about yield due to a lackof sufficient heat units andpossible frostdamage continues to underpin white maize prices, according to ABSA. The carry out of old season maize stocksbytheendofApril2019issufficientbutuncertaintyabouttheproductionconditionsfornewseasonmaize lead to higher counter-seasonal new season prices. The imported price of Brazilian maize in Cape Town is higher than maize landed from the inland production regions deterring follow up imports. The sharp decline in US wheat prices will trigger the publication of a new wheat tariff of more than R650/ton


soon.ThecurrenttariffisR491/ton.Localsoybeanandsunflowerseedpricesenjoysunderlyingsupportfrom the weakening Rand.

Summary of the report

Most parts of the country received near normal to above normal rainfall in February 2019; however signs of drought are still evident in some areas. Both livestock and veld conditions have improved in most parts, but poor in areas that received minimal rainfall. Land preparations for winter crops are underway. Dam levels have decreased in the majority of provinces when compared to the 2018 levels. There were reports ofdamagetocropsduetoheatwavesinFreeState;floodingalsooccurredintheprovince.Hailresultedin damages in Mpumalanga, KwaZulu-Natal and Western Cape. Fall Army Worm has been reported in Mpumalanga. Over SADC, crisis IPC (Phase 3) outcomes are likely to continue in most of Zimbabwe, Eastern DRC, parts of Southern Mozambique, Southern Madagascar and Lesotho between March and May 2019.

2.2.2 Organizational environment

ADA is a Public Entity established by the Provincial Government to provide agribusiness support services to black commercial entrepreneurs who have acquired land through the government’s land reform programme and on a private basis. It is geared to delivery of appropriate services to enable the agribusiness/agro-processing sector to achieve sustainable success through partnerships and innovative knowledge. TheEntity applies a client-centredapproach,wherebybeneficiaries are identified througha processofparticipation and consultation with government, the private sector and other stakeholders. This leads to thedevelopmentofsupporttoblackcommercialfarmers, includingthosewhohavefallenintofinancialdistress, and manages the delivery of a comprehensive range of services in response to target the farmers’ needs. The Entity provides development support to enterprises involved in large scale agribusiness operations from farming, processing, distribution, manufacturing, packaging and distribution of products.

Agribusiness Development Agency continues to strive to be among the most important and successful implementing agencies for agribusiness and its related sectors. The agricultural sector employs over 15.27% of people in Kwa-Zulu Natal, as well as thousands more who are engaged in agribusiness and the value chain process. Despite the global economic downturn, it is estimated that the agricultural sector shouldseea7%increaseintheinputtowardstheGDPwithin2019-2020financialyear.Iamgladtomentionthat ADA will certainly be contributing towards that increase. Given its importance, geographic spread and supportreach,theagri-foodindustryclearlyhasaverysignificantroletoplayinSouthAfrica’seconomicrecovery.

The year 2018/19 has been a more productive year due to stabilization with the appointment of the Chief ExecutiveOfficer,MrZenzeleNdlela, and the consistent support received from theBoardofDirectors.Strengthening Rural Economies and Communities is central to our Government’s ambitions and this year, asotheryears,ourfocushasbeentodrivecatalyticprojectswhichyieldedmuchbenefit,tonotonlythefarmer, but their communities well. We believe that this plan can be a catalyst for change and can put our economyonapathtoabetterfuture.Inthe2018-2019financialyearADAsupported59projectsthrough

25



capacity building intiatives, an increase from last years 34, which included Woman and Youth, and trained a total of 297 individual in the Agribusiness sector.

Althought uncertainties brought about by the discussions on amalgamations of entities continues to linger over our heads, the ADA continued to stride and make a difference in our Province. However, as a result of continuous effort and hard work, even while facing these challenges, we are proud to announce that ADA hasreceivedaunqualifiedauditopinionfortheyearunderreview.

The Entity continues to focus on implementing the following key focus/Programme areas:

Key Focus Areas/Programmes of ADA

The main thrusts of ADA are the following key services or programmes:

• Finance and Administration

• Comprehensive Capacity building

• Enterprise and Value Chain Development

• Infrastructure Development

Training or Bursaries offered by ADA

• Therewerenobursariesofferedduringthisfinancialyear.

Key policy developments and legislative changes

Nopolicydevelopmentsandlegislativechangesoccurredduringthe2018/19financialyear.

2.3 Strategic Outcome Oriented Goals

Strategic Outcome-orientated Goal 1: Financially productive and self –sustaining black agribusiness enterprises in the Province

• Goal Statement: To expedite the development of 100 successful business oriented Black-owned enterprises throughout the value chain in order to transform and improve the agribusiness sector in the Province by 2020

• Progress Made: ADA has achieved 70 of the target of 100 for the development of black-owned enterprisessettobeachievedby2020.24wereachievedin2018/19financialyears.

• Strategic Outcome-orientated Goal 2: Increased incomes along the agribusiness value chain

• Goal Statement: To promote and support the development of agribusiness along value chain through investing 70% of the total budget of ADA in income (i.e. turnover, wages, jobs opportunities) inducing developments by 2020


• Progress Made: ADA has achieved 53.08% (R138 736M of R261 359M) of the total budget invested inagribusinessvaluechainbetween2016/17and2018/19financialyearstobenefittheblack-ownedenterprises

• Strategic Outcome-orientated Goal 3: Improved market access in the agribusiness sector

• Goal Statement: To invest 60% of the total budget of ADA incrementally in the provision of market development and logistics supportive infrastructure in rural KZN by year 2020

• Progress Made: ADA has invested an amount of R178 013 801M between 2016/17 and 2018/2019 financialyearsintheprovisionofmarketdevelopmentandlogisticssupportiveinfrastructure.Thisamounts to 54.13% of the budget of R328 884Mil to date.

• Strategic Outcome-orientated Goal 4: Strengthen the capacity of the entrepreneurs, institutions and the agribusiness sector to perform optimally

• Goal Statement: To develop a comprehensive capacity building programme with the involvement of stakeholders in the sector for adoption by year 2016

• Progress Made: The goal was not reached in 2016/17, however ADA has ensured that capacity buildingforbeneficiariescontinuesthroughtargetedtrainingprogrammesandwiththesupportfromthe existing partnerships

• Strategic Outcome-orientated Goal 5:Aneffectiveandefficientadministrationthatpromotessoundcorporate governance and responsive service delivery

• Goal Statement:Aneffectiveandefficientadministrationthatpromotessoundcorporategovernanceand responsive service delivery to achieve 100% of its service delivery targets and consistent clean audit annually

• Progress Made: In 2017/18 financial year, ADAplaced stringentmethodsof reporting to ensureevidence was recorded and stored. The service delivery indicators and targets were reviewed for the financialyear2018/19toensurethattheywererealisticandrelevanttowardsachievingthestrategicgoalsandobjectives.TheADAreceivedaunqualifiedauditreportintheyear2018/19.

27



2.4

Perf

orm

ance

info

rmat

ion

by p

rogr

amm

es

PRO

GRA

MM

E 1:

FIN

ANCE

AN

D AD

MIN

ISTR

ATIO

N

STRA

TEG

IC O

BJEC

TIVE

S AN

D AC

TUAL

ACH

IEVE

MEN

TS:

Stra

tegi

c ob

ject

ives

Perf

orm

ance

Indi

cato

r

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et

2018

/201

9

Actu

al

Achi

evem

ent

2018

/201

9

Devi

atio

n fr

om

plan

ned

targ

et

to A

ctua

l Ac

hiev

emen

t fo

r 201

8/20

19

Com

men

t on

devi

atio

ns

1.3

Prom

ote

good

go

vern

ance

and

le

gally

sou

nd

orga

nisa

tion

Num

bero

fqua

rterlyfina

ncial

man

agem

ent r

epor

ts s

ubm

itted

to

Prov

inci

al T

reas

ury

in li

ne w

ith th

e bu

dget

pla

nnin

g ta

ble

-4

4N

il An

nual

Tar

get A

chie

ved

Perc

enta

ge o

f sup

plie

r’s v

alid

in

voic

es p

aid

with

in 3

0 da

ys o

f re

ceip

t by

the

Fina

nce

Depa

rtm

ent

-10

0%10

0%N

il An

nual

Tar

get A

chie

ved

Num

ber o

f ann

ual s

trate

gic

docu

men

ts p

rodu

ced

on p

lann

ing

and

repo

rtin

g as

per

sta

tuto

ry

requ

irem

ents

(APP

201

9/20

and

AP

R 20

17/1

8)

-2

2N

il An

nual

Tar

get A

chie

ved


Stra

tegi

c ob

ject

ives

Perf

orm

ance

Indi

cato

r

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et

2018

/201

9

Actu

al

Achi

evem

ent

2018

/201

9

Devi

atio

n fr

om

plan

ned

targ

et

to A

ctua

l Ac

hiev

emen

t fo

r 201

8/20

19

Com

men

t on

devi

atio

ns

Perc

enta

ge o

f act

ions

com

plet

ed in

lin

e w

ith th

e im

plem

enta

tion

plan

of

the

IT G

over

nanc

e Fr

amew

ork

-10

0%94

%N

ot a

chie

ved

15/1

6 ac

tions

as

per I

CT P

lan.

Th

e no

n-ac

hiev

emen

t was

due

to

del

ays

in a

ppro

val o

f the

re

view

ed IC

T Po

licy

as p

er th

e IC

T Im

plem

enta

tion.

The

pol

icy

requ

ired

reco

mm

enda

tion

from

the

PCC

whi

ch w

as n

ot

func

tiona

l due

to s

hort

age

of

staf

f. N

ew m

embe

rs h

ave

been

ap

poin

ted

to th

e co

mm

ittee

. Th

e Po

licy

will

be

revi

ewed

and

re

com

men

ded

in th

e ne

xt P

CC

ther

eafte

r sub

mitt

ed to

the

Boar

d fo

r app

rova

l.N

umbe

r of i

nter

nal a

udit

repo

rts

prod

uced

on

the

audi

ts p

erfo

rmed

(P

erfo

rman

ce In

form

atio

n,

halfyearlyand

ann

ualfina

ncial

stat

emen

t)

-6

6N

il An

nual

Tar

get A

chie

ved

Num

ber o

f rep

orts

pro

duce

d on

th

e im

plem

enta

tion

of th

e ris

k m

anag

emen

t reg

iste

rs (S

trate

gic,

op

erat

iona

l and

pro

ject

s)

-4

4N

il An

nual

Tar

get A

chie

ved

29



PRO

GRA

MM

E 1:

KEY

PER

FORM

ANCE

INDI

CATO

RS, P

LAN

NED

AN

D AC

TUAL

ACH

IEVE

MEN

T

PRO

GRA

MM

E 1:

FIN

ANCE

AN

D AD

MIN

ISTR

ATIO

N

Perf

orm

ance

Indi

cato

r

Actu

alAc

hiev

emen

t 20

14/1

5

Actu

alAc

hiev

emen

t 20

15/1

6

Actu

alAc

hiev

emen

t20

16/1

7

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et20

18/1

9

Actu

al

Achi

evem

ent

2018

/19

Devi

atio

n fr

om fo

r 20

18/1

9

Com

men

t on

devi

atio

ns

Num

bero

fqua

rterlyfina

ncial

man

agem

ent r

epor

ts

subm

itted

to P

rovi

ncia

l Tr

easu

ry in

line

with

the

budg

et p

lann

ing

tabl

e

--

--

44

Nil

Annu

al T

arge

t Ac

hiev

ed

Perc

enta

ge o

f sup

plie

r’s v

alid

in

voic

es p

aid

with

in 3

0 da

ys

of re

ceip

t by

the

Fina

nce

Depa

rtm

ent

--

--

100%

100%

Nil

Annu

al T

arge

t Ac

hiev

ed

Num

ber o

f ann

ual s

trate

gic

docu

men

ts p

rodu

ced

on

plan

ning

and

repo

rtin

g as

per

st

atut

ory

requ

irem

ents

(APP

20

19/2

0 an

d AP

R 20

17/1

8)

--

--

22

Nil

Annu

al T

arge

t Ac

hiev

ed


PRO

GRA

MM

E 1:

FIN

ANCE

AN

D AD

MIN

ISTR

ATIO

N

Perf

orm

ance

Indi

cato

r

Actu

alAc

hiev

emen

t 20

14/1

5

Actu

alAc

hiev

emen

t 20

15/1

6

Actu

alAc

hiev

emen

t20

16/1

7

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et20

18/1

9

Actu

al

Achi

evem

ent

2018

/19

Devi

atio

n fr

om fo

r 20

18/1

9

Com

men

t on

devi

atio

ns

Perc

enta

ge o

f act

ions

co

mpl

eted

in li

ne w

ith th

e im

plem

enta

tion

plan

of t

he IT

G

over

nanc

e Fr

amew

ork

--

--

100%

94%

-6%

15/1

6 ac

tions

as

per I

CT P

lan.

The

no

n-ac

hiev

emen

t w

as d

ue to

del

ays

in a

ppro

val o

f th

e re

view

ed

ICT

Polic

y as

pe

r the

ICT

Impl

emen

tatio

n.

The

polic

y re

quire

d re

c-om

men

datio

n fro

m th

e PC

C w

hich

was

not

fu

nctio

nal d

ue

to s

hort

age

of s

taff.

New

m

embe

rs h

ave

been

app

oint

ed to

th

e co

m-m

ittee

. Th

e Po

licy

will

be

revi

ewed

and

re

c-om

men

ded

in th

e ne

xt P

CC

ther

eafte

r sub

-m

itted

to th

e Bo

ard

for a

ppro

val.

Num

ber o

f int

erna

l aud

it re

port

s pr

oduc

ed o

n th

e au

dits

per

form

ed

(Per

form

ance

Info

rmat

ion,

ha

lf ye

arly

and

ann

ual

finan

cialstatemen

t)

--

--

66

Nil

Annu

al T

arge

t Ac

hiev

ed

Num

ber o

f rep

orts

pro

duce

d on

the

impl

emen

tatio

n of

the

risk

man

agem

ent r

egis

ters

(S

trate

gic,

ope

ratio

nal a

nd

proj

ects

)

--

--

44

Nil

Annu

al T

arge

t Ac

hiev

ed

31



PRO

GRA

MM

E 1:

FIN

ANCE

AN

D AD

MIN

ISTR

ATIO

N

Perf

orm

ance

Indi

cato

r

Actu

alAc

hiev

emen

t 20

14/1

5

Actu

alAc

hiev

emen

t 20

15/1

6

Actu

alAc

hiev

emen

t20

16/1

7

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et20

18/1

9

Actu

al

Achi

evem

ent

2018

/19

Devi

atio

n fr

om fo

r 20

18/1

9

Com

men

t on

devi

atio

ns

Perc

enta

ge o

f act

ions

co

mpl

eted

in li

ne w

ith th

e im

plem

enta

tion

plan

of t

he IT

G

over

nanc

e Fr

amew

ork

--

--

100%

94%

-6%

15/1

6 ac

tions

as

per I

CT P

lan.

The

no

n-ac

hiev

emen

t w

as d

ue to

del

ays

in a

ppro

val o

f th

e re

view

ed

ICT

Polic

y as

pe

r the

ICT

Impl

emen

tatio

n.

The

polic

y re

quire

d re

c-om

men

datio

n fro

m th

e PC

C w

hich

was

not

fu

nctio

nal d

ue

to s

hort

age

of s

taff.

New

m

embe

rs h

ave

been

app

oint

ed to

th

e co

m-m

ittee

. Th

e Po

licy

will

be

revi

ewed

and

re

c-om

men

ded

in th

e ne

xt P

CC

ther

eafte

r sub

-m

itted

to th

e Bo

ard

for a

ppro

val.

Num

ber o

f int

erna

l aud

it re

port

s pr

oduc

ed o

n th

e au

dits

per

form

ed

(Per

form

ance

Info

rmat

ion,

ha

lf ye

arly

and

ann

ual

finan

cialstatemen

t)

--

--

66

Nil

Annu

al T

arge

t Ac

hiev

ed

Num

ber o

f rep

orts

pro

duce

d on

the

impl

emen

tatio

n of

the

risk

man

agem

ent r

egis

ters

(S

trate

gic,

ope

ratio

nal a

nd

proj

ects

)

--

--

44

Nil

Annu

al T

arge

t Ac

hiev

ed

PROGRAMME 1: FINANCE AND ADMINISTRATION NARRATIVE

Purpose of the programme:

This programme is dedicated to provide core support services to ensure good governance, effective management and administration of the institution. This is done through developing and implementing effective management systems on Finance, Human Resources, Monitoring and Evaluation, Internal Audit, Marketing & Communications and Information Technology. This programme also plays a pivotal role in supporting other existing programmes within the institution to enable them to render quality service to our clients.

The programme aims to achieve the following objectives:

• A fully capacitated human resources able to deliver on its mandate

• Soundandstringentfinancialmanagementandcontroltoachieveacleanauditopinionannually

• Promote good governance and a legally sound organization

Achievements

In terms of operations, ADA has continued to develop its staff through training. The audit improvement planwhichwasimplementedinthe2017/18financialyearhasalsocontributedgreatlytotheimprovementofreportinginthe2019/20financialyear.TheEntityhasreceivedaunqualifiedauditopinionfortheyearunder review.

Challenges

The ICT Policy required to be reviewed by the PCC forum. The PCC was not functional due to shortage of senior staff members to appoint to form the committee. The ADA staff compliment has increased since then and members have been appointed to complete the committee. The Policy will be reviewed and recommended in the next PCC and thereafter submitted to the Board.


PRO

GRA

MM

E 2:

CO

MPR

EHEN

SIVE

CAP

ACIT

Y BU

ILDI

NG

STRA

TEG

IC O

BJEC

TIVE

S AN

D AC

TUAL

ACH

IEVE

MEN

TS:

Stra

tegi

c ob

ject

ives

Perf

orm

ance

Indi

cato

r

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et

2018

/201

9

Actu

al

Achi

evem

ent

2018

/201

9

Devi

atio

n fr

om

plan

ned

targ

et to

Ac

tual

Ach

ieve

men

t fo

r 201

8/20

19

Com

men

t on

devi

atio

ns

2.1

Impr

ove

the

know

ledg

e an

d sk

ills

base

of c

omm

erci

al

farm

ers,

agr

ibus

ines

s en

trepr

eneu

rs, p

rofe

ssio

nals

an

d ot

her s

take

hold

ers

with

in

the

sect

or

Num

ber o

f tra

inin

g se

ssio

ns fa

cilit

ated

fo

r tar

gete

d gr

oups

(a

grib

usin

ess

entre

pren

eurs

and

fa

rmer

s)

-17

20+3

Annu

al T

arge

t Exc

eede

d - T

he

over

achi

evem

ent s

tem

s fro

m

proj

ects

that

wer

e tra

ined

bu

t are

not

par

t of t

he p

roje

ct

2018

/19

list.

Num

ber o

f pro

ject

s su

ppor

ted

thro

ugh

capa

city

bui

ldin

g in

itiat

ives

(all

with

in

agrib

usin

ess)

-19

59+4

0An

nual

Tar

get E

xcee

ded

- The

ov

erac

hiev

emen

t ste

ms

from

pr

ojec

ts th

at w

ere

train

ed

but a

re n

ot p

art o

f the

pro

ject

20

18/1

9 lis

t.N

umbe

r of

entre

pren

eurs

tra

ined

in th

eir

rela

ted

agrib

usin

ess

ente

rpris

es

-64

81+1

7An

nual

Tar

get E

xcee

ded

- Th

e ov

erac

hiev

emen

t ste

ms

from

ent

erpr

enen

eurs

from

en

terp

rises

that

wer

e tra

ined

bu

t are

not

par

t of t

he

2018

/19

proj

ect l

ist.

Num

ber o

f ind

ivid

uals

tra

ined

with

in th

e ag

ribus

ines

s se

ctor

-24

029

7+5

7An

nual

Tar

get E

xcee

ded

- Th

e ov

erac

hiev

emen

t ste

ms

from

indi

vidu

als

from

the

agrib

usin

ess

sect

or th

at w

ere

train

ed b

ut a

re n

ot p

art o

f the

pr

ojec

t 201

8/19

list

.2.

2 Fo

rge

part

ners

hips

and

ne

twor

king

rela

tions

hips

with

in

the

agrib

usin

ess

valu

e ch

ain

2.6

Iden

tify

and

secu

re

pote

ntia

l inv

esto

rs, f

unde

rs

and

busi

ness

opp

ortu

nitie

s to

adv

ance

the

ADA

initi

ativ

es

and

ongo

ing

activ

ities

to h

elp

faci

litat

e tra

nsfo

rmat

ion

in th

e ag

ribus

ines

s la

ndsc

ape

Num

ber o

f wor

king

pa

rtne

rshi

ps fa

cilit

ated

to

sup

port

ADA

ca

paci

ty b

uild

ing

initi

ativ

es

-8

8N

ilAn

nual

Tar

get a

chie

ved

33



PRO

GRA

MM

E 2:

KEY

PER

FORM

ANCE

INDI

CATO

RS, P

LAN

NED

AN

D AC

TUAL

ACH

IEVE

MEN

TS

PRO

GRA

MM

E 2:

CO

MPR

EHEN

SIVE

CAP

ACIT

Y BU

ILDI

NG

Perf

orm

ance

Indi

cato

r

Actu

alAc

hiev

emen

t 20

14/1

5

Actu

alAc

hiev

emen

t 20

15/1

6

Actu

alAc

hiev

emen

t20

16/1

7

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et20

18/1

9

Actu

al

Achi

evem

ent

2018

/19

Devi

atio

n fr

om fo

r 20

18/1

9Co

mm

ent o

n de

viat

ions

Num

ber o

f tra

inin

g se

ssio

ns fa

cilit

ated

fo

r tar

gete

d gr

oups

(a

grib

usin

ess

entre

pren

eurs

and

fa

rmer

s)

--

--

1720

+3An

nual

Tar

get E

xcee

ded

- The

ov

erac

hiev

emen

t ste

ms

from

pr

ojec

ts th

at w

ere

train

ed

but a

re n

ot p

art o

f the

pro

ject

20

18/1

9 lis

t.

Num

ber o

f pro

ject

s su

ppor

ted

thro

ugh

capa

city

bui

ldin

g in

itiat

ives

(all

with

in

agrib

usin

ess)

--

--

1959

+40

Annu

al T

arge

t Exc

eede

d -

The

over

achi

evem

ent s

tem

s pr

ojec

ts th

at w

ere

train

ed

but a

re n

ot p

art o

f the

pro

ject

20

18/1

9 lis

t.N

umbe

r of

entre

pren

eurs

tra

ined

in th

eir

rela

ted

agrib

usin

ess

ente

rpris

es

--

--

6481

+17

Annu

al T

arge

t Exc

eede

d - T

he

over

achi

evem

ent s

tem

s fro

m

ente

rpre

nene

urs

ente

rpris

es

that

wer

e tra

ined

but

are

not

pa

rt o

f the

201

8/19

pro

ject

lis

t.N

umbe

r of i

ndiv

idua

ls

train

ed w

ithin

the

agrib

usin

ess

sect

or

--

--

240

297

+57

Annu

al T

arge

t Exc

eede

d -

The

over

achi

evem

ent s

tem

s fro

m in

divi

dual

s fro

m th

e ag

ribus

ines

s se

ctor

that

wer

e tra

ined

but

are

not

par

t of t

he

proj

ect 2

018/

19 li

st.

Num

ber o

f ADA

pa

rtne

rshi

ps fo

rged

to

sup

port

cap

acity

bu

ildin

g in

itiat

ives

w

ithin

agr

ibus

ines

s

--

--

88

Nil

Annu

al T

arge

t ach

ieve

d


PROGRAMME 2: COMPREHENSIVE CAPACITY BUILDING NARRATIVE


This programme seeks to avail capacity building support to projects that lack adequate allocation to fund capacity building of their staff. It also seeks to allow for the provision of “after funding support” to projects thatmaybegainingmarketsharebutcouldbenefitfromtraininginitiativesfundedbyADA.Itopenstheopportunity for ADA to respond to prospective clients whilst they await inclusion on the project list. It further provides a mechanism for extending capacity to projects whose growth is currently limited by lack of human capital. Training may be extended to address direct production capacity needs for existing ventures orbuildingthecapacityoftheprojectmembersaheadofdiversificationintoanewindustryorenhancedparticipation along the value chain. The trainings may also be provided to groups who require the training to help build their businesses.


• To improve the knowledge and skills base of commercial farmers, agribusiness entrepreneurs, professionals and other stakeholders within the sector

• Lobbyingandprovidingevidence-basedpolicybriefingtopolicymakersthroughresearch

Achievements

TheEntitytrained297projectbeneficiarieswhichwasanoverachievementfromthetargetsetat240.Theentity also overachieved on the number of entrepreneurs which was set at 64, however 81 were trained and 59 projects were supported through capacity building initiatives instead of the intended 19 projects. i.e. through attending expos and conferences.

35



PRO

GRA

MM

E 3:

EN

TERP

RISE

AN

D VA

LUE

CHAI

N D

EVEL

OPM

ENT

STRA

TEG

IC O

BJEC

TIVE

S AN

D AC

TUAL

ACH

IEVE

MEN

TS:

Stra

tegi

c ob

ject

ives

Perf

orm

ance

Indi

cato

rAc

tual

ac

hiev

emen

t 20

17/2

018

Plan

ned

Targ

et

2018

/201

9

Actu

al

Achi

evem

ent

2018

/201

9

Devi

atio

n fr

om p

lann

ed

targ

et to

Ac

tual

Ac

hiev

emen

t fo

r 20

18/2

019

Com

men

t on

devi

atio

ns

3.1

Prom

ote

the

deve

lopm

ent a

nd

inve

stm

ent i

n st

rate

gic

valu

e ch

ain

whe

re th

e pr

ovin

ce h

as p

oten

tial

com

para

tive

adva

ntag

e

3.3

Faci

litat

e an

d pr

omot

e in

vest

men

ts in

the

agrib

usin

ess

to fo

ster

tra

nsfo

rmat

ion

Num

ber o

f ent

erpr

ises

su

ppor

ted

in

agrib

usin

ess

sect

or

-24

26+2

Annu

al T

arge

t Exc

eede

d - T

he o

vera

-ch

ieve

men

t was

due

to th

e nu

mbe

r of

ent

erpr

ises

ass

iste

d w

ith p

rodu

ct

test

ing

and

acce

ss to

mar

ket b

ut w

ere

not p

art o

f the

201

8/19

pro

ject

list

.N

umbe

r of e

nter

pris

es

supp

orte

d w

ith

oper

atio

nal i

nput

s

-4

9+5

Annu

al T

arge

t Exc

eede

d - T

he

over

achi

evem

ent w

as d

ue to

the

re-

allo

catio

n o

f the

pro

ject

s bu

dget

for

2018

/19

to a

ssis

t ent

erpr

ises

with

in th

e ag

ribus

ines

s se

ctor

with

ope

ratio

nal

inpu

ts re

gard

less

if th

ey w

ere

on th

e pr

ojec

t lis

t or n

ot fo

r 201

8/19

. N

umbe

r of e

xhib

ition

s fa

cilit

ated

for t

he

supp

orte

d ag

ribus

ines

s en

terp

rises

-2

3+1

Annu

al T

arge

t Exc

eede

d - T

he

over

achi

evem

ent w

as d

ue to

ent

erpr

ise

that

wer

e no

t app

rove

d fo

r fun

ding

but

w

ere

supp

orte

d w

ith e

xhib

iting

thei

r pr

oduc

ts to

attr

act p

oten

tial m

arke

ts a

t theiden

tified

exh

ibition

s..

3.2

Impr

ove

acce

ss to

m

arke

ts a

nd e

nhan

ce

expo

rt c

apac

ities

, impo

rt

subs

titut

ions

and

link

ages

ac

ross

prio

rity

valu

e ch

ains

Num

ber o

f agr

ibus

i-ne

ss e

nter

pris

es s

up-

port

ed to

war

ds m

arke

t ac

cess

-8

14+6

Annu

al T

arge

t Exc

eede

d - T

he

over

achi

evem

ent w

as d

ue to

the

bene

ficiarie

sfro

magribus

ines

sen

terp

rises

that

atte

nded

MM

M to

un

lock

pot

entia

l mar

ket o

ppor

tuni

ties

but w

ere

not i

nclu

ded

in th

is in

dica

tor

durin

g pl

anni

ng p

hase

.


Stra

tegi

c ob

ject

ives

Perf

orm

ance

Indi

cato

rAc

tual

ac

hiev

emen

t 20

17/2

018

Plan

ned

Targ

et

2018

/201

9

Actu

al

Achi

evem

ent

2018

/201

9

Devi

atio

n fr

om p

lann

ed

targ

et to

Ac

tual

Ac

hiev

emen

t fo

r 20

18/2

019

Com

men

t on

devi

atio

ns

3.5

To c

reat

e an

d su

stai

n jo

bs d

irect

ly a

nd in

dire

ctly

al

ong

the

agric

ultu

ral v

alue

ch

ain

Num

ber o

f job

s su

ppor

ted

in

the

agr

ibus

ines

s en

terp

rises

(cre

ated

an

d su

stai

ned)

-23

833

6+9

8An

nual

Tar

get E

xcee

ded

- The

ove

ra-

chie

vem

ent w

as d

ue to

the

dem

and

in

labo

ur w

orke

rs fo

r im

plem

enta

tion

of

the

ADA

proj

ects

.

Num

ber o

f pro

ject

s su

ppor

ted

with

in

frast

ruct

ure

plan

ning

-19

4-1

5N

ot A

chie

ved

- The

feas

ibili

ty s

tudi

es

for 6

pro

ject

s w

ere

not d

one

due

to

the

dela

ys in

app

oint

men

t of s

ervi

ce

prov

ider

s fo

r EO

I. En

gine

erin

g se

rvic

es

for 9

pro

ject

s w

ere

also

del

ayed

by

the

late

app

oint

men

t of s

ervi

ce p

rovi

der f

or

EOI.

3.6

Deve

lop

and

attra

ct

yout

h en

trepr

eneu

rshi

p to

th

e ag

ribus

ines

s se

ctor

to

fost

er s

usta

inab

ility

Num

ber o

f you

th o

wne

d en

terp

rises

sup

port

ed

with

in th

e ag

ribus

ines

s se

ctor

-4

3-1

Annu

al ta

rget

not

ach

ieve

d as

Hon

ey

ValueCh

ainCK

certifi

catecou

ldnotbe

verifi

edasmajorityyou

thowne

rship.

Num

ber o

f w

omen

ow

ned

ente

rpris

es

supp

orte

d w

ithin

the

agrib

usin

ess

sect

or

-2

2N

ilAn

nual

targ

et a

chie

ved

37



PRO

GRA

MM

E 3:

KEY

PER

FORM

ANCE

INDI

CATO

RS, P

LAN

NED

AN

D AC

TUAL

ACH

IEVE

MEN

TS

PRO

GRA

MM

E 3:

EN

TERP

RISE

AN

D VA

LUE

CHAI

N D

EVEL

OPM

ENT

Perf

orm

ance

Indi

cato

r

Actu

alAc

hiev

emen

t 20

14/1

5

Actu

alAc

hiev

emen

t 20

15/1

6

Actu

alAc

hiev

emen

t20

16/1

7

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et20

18/1

9

Actu

al

Achi

evem

ent

2018

/19

Devi

atio

n fr

om fo

r 20

18/1

9Co

mm

ent o

n de

viat

ions

Num

ber o

f ent

erpr

ises

su

ppor

ted

in

agrib

usin

ess

sect

or

--

--

2426

+2An

nual

Tar

get E

xcee

ded

- The

ove

rach

ieve

men

t w

as d

ue to

the

num

ber o

f en

terp

rises

ass

iste

d w

ith

prod

uct t

estin

g an

d ac

cess

to

mar

ket b

ut w

ere

not p

art

of th

e 20

18/1

9 pr

ojec

t lis

t.N

umbe

r of e

nter

pris

es

supp

orte

d w

ith

oper

atio

nal i

nput

s

--

--

49

+5An

nual

Tar

get E

xcee

ded

- The

ove

rach

ieve

men

t w

as d

ue to

the

re-

allo

catio

n o

f the

pro

ject

s bu

dget

for 2

018/

19 to

as

sist

ent

erpr

ises

with

in

the

agrib

usin

ess

sect

or

with

ope

ratio

nal i

nput

s re

gard

less

if th

ey w

ere

on

the

proj

ect l

ist o

r not

for

2018

/19.

Num

ber o

f exh

ibiti

ons

faci

litat

ed fo

r the

su

ppor

ted

agrib

usin

ess

ente

rpris

es

--

--

23

+1An

nual

Tar

get E

xcee

ded

- Th

e ov

erac

hiev

emen

t was

du

e to

ent

erpr

ise

that

wer

e no

t app

rove

d fo

r fun

ding

bu

t wer

e su

ppor

ted

with

ex

hibi

ting

thei

r pro

duct

s to

at

tract

pot

entia

l mar

kets

at

theiden

tified

exh

ibition

s


PRO

GRA

MM

E 3:

EN

TERP

RISE

AN

D VA

LUE

CHAI

N D

EVEL

OPM

ENT

Perf

orm

ance

Indi

cato

r

Actu

alAc

hiev

emen

t 20

14/1

5

Actu

alAc

hiev

emen

t 20

15/1

6

Actu

alAc

hiev

emen

t20

16/1

7

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et20

18/1

9

Actu

al

Achi

evem

ent

2018

/19

Devi

atio

n fr

om fo

r 20

18/1

9Co

mm

ent o

n de

viat

ions

Num

ber o

f agr

ibus

ines

s en

terp

rises

sup

port

ed

tow

ards

mar

ket a

cces

s

--

--

814

+6An

nual

Tar

get E

xcee

ded

- Th

e ov

erac

hiev

emen

t was

du

etoth

ebe

nefic

iarie

sfro

m a

grib

usin

ess

ente

rpris

es th

at a

ttend

ed

MM

M to

unl

ock

pote

ntia

l m

arke

t opp

ortu

nitie

s bu

t w

ere

not i

nclu

ded

in th

is

indi

cato

r dur

ing

plan

ning

ph

ase.

Num

ber o

f job

s su

ppor

ted

in th

e

agrib

usin

ess

ente

rpris

es

(cre

ated

and

sus

tain

ed)

--

--

238

336

+98

Annu

al T

arge

t Exc

eede

d -

The

over

achi

evem

ent w

as

due

to th

e de

man

d in

labo

ur

wor

kers

for i

mpl

emen

tatio

n of

the

ADA

proj

ects

.N

umbe

r of p

roje

cts

supp

orte

d w

ith

infra

stru

ctur

e pl

anni

ng

--

--

194

-15

Not

Ach

ieve

d - T

he fe

asib

il-ity

stu

dies

for 6

pro

ject

s an

d e

ngin

eerin

g se

rvic

es

for a

n ad

ditio

nal 9

pro

ject

s w

ere

not c

ondu

cted

due

to

the

dela

ys in

the

appo

int-

men

t of s

ervi

ce p

rovi

ders

fo

r EO

I’s. T

he d

elay

s in

th

e ap

poin

tmen

t was

due

to

the

bid

requ

est b

eing

re

-adv

ertis

ed a

s th

ere

wer

e ch

alle

nges

with

sou

rcin

g su

itabl

e se

rvic

e pr

ovid

ers.

Num

ber o

f you

th o

wne

d en

terp

rises

sup

port

ed

with

in th

e ag

ribus

ines

s se

ctor

43

-1An

nual

targ

et n

ot a

chie

ved

as H

oney

Val

ue C

hain

CK

certifica

tecou

ldnotbe

verifi

edasmajorityyou

th

owne

rshi

p.N

umbe

r of

wom

en

owne

d en

terp

rises

su

ppor

ted

with

in th

e ag

ribus

ines

s se

ctor

22

Nil

Annu

al ta

rget

ach

ieve

d

39



PROGRAMME 3: ENTERPRISE AND VALUE CHAIN DEVELOPMENT NARRATIVE


This programme focuses on improving the value chain and to create an enabling environment for the black commercial farmers and agribusiness entrepreneurs to unlock business opportunities upstream and downstream the value chain and to access markets. This programme was also developed to promote the responsiveness of ADA to the capacity needs of the businesses belonging to the targeted groups.

Inpromotingresponsiveness,theprogrammeseekstoaddressneedsastheyariseduringthefinancialyear for initiatives that warrant a prompt response and where the intervention will have a multiplier effect. The programme seeks to address the non-tangible capacity needs of the business ranging from product testingtosecuringexhibitionspaceateventsthatareattendedbypossibleclientsofthefinishedproduct.


• Promote the development and investment in strategic value chains where the Province has potential comparative advantage

• To create and sustain jobs directly and indirectly along the agricultural value chain

• Develop and attract youth entrepreneurship to the agribusiness sector to foster sustainability

Achievements

The target for no. of enterprises supported in agribusiness was set for 24, however ADA overachieved on this target and supported 25 enterprises. Operational inputs were overachieved by supporting an additional enterprise. This ADA was very successful in this programme by achieving 6 out of the 8 indicators set.

Challenges

The ADA experienced challenges in sourcing relevant service providers to conduct EIA’s on some of the projectsidentifiedforsupport.Thiscontributedtowardsnotachievingthetarget.TheADAhassincere-advertised and a panel of engineers have been appointed for these services. The EIA’s will be reported in the2019/20financialyear.


PRO

GRA

MM

E 4:

INFR

AST

RUC

TURE

DEV

ELO

PM

ENT

STRA

TEG

IC O

BJEC

TIVE

S AN

D AC

TUAL

ACH

IEVE

MEN

TS:

Stra

tegi

c ob

ject

ives

Perf

orm

ance

In

dica

tor

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et

2018

/201

9

Actu

al

Achi

evem

ent

2018

/201

9

Devi

atio

n fr

om p

lann

ed

targ

et to

Act

ual

Achi

evem

ent f

or

2018

/201

9

Com

men

t on

devi

atio

ns

4.1F

acili

tate

the

prov

isio

n to

mar

ket

deve

lopm

ent a

nd

logi

stic

sup

port

ive

infra

stru

ctur

e

4.2

To p

rovi

de

tech

nica

l sup

port

to

all

infra

stru

ctur

e de

velo

pmen

t pro

ject

s

Num

ber

of p

roje

cts

supp

orte

d w

ith

agro

-pro

cess

ing

infra

stru

ctur

e

-6

6N

ilAn

nual

Tar

get A

chie

ved

Num

ber

of p

roje

cts

supp

orte

d w

ith

reso

urce

bas

ed

infra

stru

ctur

e

-5

6+1

Annu

al T

arge

t Exc

eede

d

The

over

achi

evem

ent w

as d

ue to

th

e re

-allo

catio

n of

pro

ject

fund

s.

Num

ber

of p

roje

cts

supp

orte

d w

ith p

hysi

cal

infra

stru

ctur

e

-5

6+1

Annu

al T

arge

t Exc

eede

d. T

he

achi

evem

ent w

as d

ue to

the

re-

allo

catio

n of

pro

ject

fund

s

Num

ber o

f pr

ojec

ts p

rovi

ded

with

logi

stic

s su

ppor

t

-4

7+3

Annu

al T

arge

t Exc

eede

d - T

he

over

achi

evem

ent w

as d

ue to

the

re-a

lloca

tion

of p

roje

ct fu

nds.

41



PRO

GRA

MM

E 4:

KEY

PER

FORM

ANCE

INDI

CATO

RS, P

LAN

NED

AN

D AC

TUAL

ACH

IEVE

MEN

TS

PRO

GRA

MM

E 4:

INFR

ASTR

UCTU

RE D

EVEL

OPM

ENT

Perf

orm

ance

Indi

cato

r

Actu

alAc

hiev

emen

t 20

14/1

5

Actu

alAc

hiev

emen

t 20

15/1

6

Actu

alAc

hiev

emen

t20

16/1

7

Actu

al

Achi

evem

ent

2017

/18

Plan

ned

Targ

et20

18/1

9

Actu

al

Achi

evem

ent

2018

/19

Devi

atio

n fr

om fo

r 20

18/1

9

Com

men

t on

devi

atio

ns

Num

ber o

f pro

ject

s su

ppor

ted

with

ag

ro-p

roce

ssin

g in

frast

ruct

ure

--

--

66

Nil

Annu

al T

arge

t Ach

ieve

d

Num

ber o

f pro

ject

s su

ppor

ted

with

re

sour

ce b

ased

in

frast

ruct

ure

--

--

56

+1An

nual

Tar

get E

xcee

ded

The

over

achi

evem

ent

was

due

to th

e re

-al

loca

tion

of p

roje

ct

fund

s.

Num

ber o

f pro

ject

s su

ppor

ted

with

phy

sica

l in

frast

ruct

ure

--

--

56

+1An

nual

Tar

get E

xcee

ded

- The

ove

rach

ieve

men

t w

as d

ue to

the

re-

allo

catio

n of

pro

ject

fu

nds.

Num

ber o

f pro

ject

s pr

ovid

ed w

ith lo

gist

ics

supp

ort

--

--

47

+3An

nual

Tar

get E

xcee

ded

- The

ove

rach

ieve

men

t w

as d

ue to

the

re-

allo

catio

n of

pro

ject

fu

nds.


PROGRAMME 4: INFRASTUCTURE DEVELOPMENT NARRATIVE


The programme seeks to support agribusiness enterprises with related infrastructure to remove the physical constraints that are faced by their agribusinesses. The origins of the programme lie in the Comprehensive Agricultural Support Programme (CASP) funding mechanism of the National Department of Agriculture. Agribusiness infrastructure are assessed and funding unlocked to address the infrastructure needs of the agribusinesses.Onceassessmentsarefinalized, theyarenormally followedbyagriculturalengineeringdesigns that are informed by the needs of the business and available funding.


• Facilitate the provision to market development and logistic supportive infrastructure

• Provide technical support to all infrastructure development projects

• To facilitate investment in agribusiness infrastructure and development

• To diversify the agribusiness industry in KZN through establishing industrial crops and new industries

Achievements

The ADA has achieved all its targets in this programme and over achieved on logistic support due to the re-allocation of funds.

Challenges

Nochallengestonoteinthisprogrammefor2018/19financialyear.

43



Strategy to overcome areas of under performance

No Areas of underperformance and reasons Strategies to overcome them1 Number of projects supported with infrastructure

planningThe Entity has endevoured to enter into 3 year contracts with service providers as this will ensure a faster turnaround time for requests on activities to be conducted at projects and with the enterprises supported.

2 Percentage of actions completed in line with the implementation of the ICT Governance Strategy

The entity has resolved to ensure that the PCC meets on a continuous basis and that if members making up the committee resign that they are replaced timeously, so that processes are not delayed.

3 Number of projects supported with agro-processing infrastructure

The Entity has endevoured to enter into 3 year contracts with service providers as this will ensure a faster turnaround time for requests on activities to be conducted at projects and with the enterprises supported.

Changes to planned targets

Noin-yearchangesweremadeontheperformanceindicatorsandtargetsduringthefinancialyear.


LINKING PERFORMANCE WITH BUDGETS

Expenditure 2018/19 2017/18

Programme Name

Actual (Over)/Under

Actual (Over)/Under

Estimate Collected Collection Estimate Collected CollectionR’000 R’000 R’000 R’000 R’000 R’000

Finance & Admin-istration

48 788 41 769 7 019 47 480 41 456 6 024

Capacity Building & Mentorship

3 149 2 056 1 090 3 150 2 776 374

Enterprise Value Chain

31 227 23 530 7 697 525 227 298

Infrastructure Development

82 490 73 000 9 490 84 234 60 545 24 189

Total 165 654 140 355 25 296 135 389 105 004 30 885

2.5 Revenue collection

2018/19 2017/18

Source of revenueActual (Over)/

UnderActual (Over)/Under

Estimate Collected Collection Estimate Collected CollectionR’000 R’000 R’000 R’000 R’000 R’000

DARD 156 872 156 872 0 133 023 133 023 0COGTA 6 353 6 353 0 0 0 0Interest Revenue 1 650 2 305 -655 1 223 1 396 -173Sundry income 461 450 11 58 82.5 -25Project manage-ment fees

318 229 89 1 085 958.9 126

Total 165 654 166 210 -556 135 389 135 460 -72

The relevant narratives will be presented and discussed under Annual Financial Statements section.

2.6 Capital investment

2018/19 2017/18

Infrastructure Actual

Expenditure(Over)/

Under Expenditurer

Budget Actual Expenditure

(Over)/ Under ExpenditureEstimate

R’000 R’000 R’000 R’000 R’000 R’000Computer equipment

300 276 24 134 0 134

Motor Vehicles 1 738 1 656 82 1 250 0 1 250Computer software

324 411 -87 1 466 1 446 0

Repairs and Maintenance

320 98 222 213 129 84

Total 2682 2441 241 3063 1575 1468

Part C: Governance


3. PART C: GOVERNANCE

3.1 Introduction

IntermsofKingIV,CorporateGovernanceisdefinedastheexerciseofethicalandeffectiveleadershipbythe governing body, in our case, the Board of Trustees, towards the achievement of:

• Ethical culture

• Good performance

• Effective control

• Legitimacy

Over and above the legislative requirements emanating from the ADA’s Trust Deed and to a certain extent the Companies Act; corporate governance in public entities is generally applied through the precepts of the Public Finance Management Act (PFMA) in conjunction with the principles contained in the King Report on Corporate Governance.

3.2 Portfolio Committees

ADA reports to the Agriculture and Rural Development Portfolio Committee, the Finance Portfolio Committee and the Standing Committee on Public Accounts (SCOPA).

3.3 Executive Authority

The MEC for Agriculture and Rural Development is responsible for providing oversight over ADA, which includes the appointment and dismissal of the Board of Trustees.

3.4 The Accounting Authority/The Board

The roles and functions of ADA Board

The Board of Trustees of the ADA is the Accounting Authority for the entity. All non-executive members of the board were appointed by the Executive Authority responsible for Agriculture and Rural Development in accordance with Chapter 4 of the Amended Trust Deed of the Agribusiness Development Agency.

Duringtheperiodunderreview,theBoardwasfullycapacitatedwithallnine(9)positionsbeingfilled.

• TheBoardofTrusteesfulfilsitsprimarygovernanceroleandresponsibilitiesby:

• Steering the entity and setting its strategic direction;

47

Part C: GOVERNANCE

• Approving policies and planning that give effect to the strategy and the direction provided;

• Overseeing and monitoring of implementation and execution by management; and

• Ensuring accountability for organisational performance by means of among others, reporting and disclosure.

During the period under review, the ADA Board held a strategy development session over a two (2) day period,whichresultedinthesuccessfuldevelopmentofarefinedstrategy.

Delegation:

Through the different well-structured Board Committees, the Board delegates certain functions but without abdicating its own responsibilities. Delegation is formal and involves:

• Formal terms of reference which are established and approved and reviewed annually for each committee of the Board,

• The committees are appropriately constituted with due regard to the skills required by each committee,

• And a framework for delegating authority to management has been established and approved by the Board.

Commentary on the Board charter

The purpose of the Charter is to regulate the parameters within which the board operates and to ensure the application of the principles of good corporate governance in all dealings by, in respect of and on behalf of the entity.

In keeping with the principles of good corporate governance, the Board Charter is reviewed annually. Under the current year of review, the Charter was reviewed to be aligned with the recommendations of King IV.



Composition of the Board

Composition of the Board which was appointed on 1 September 2017 and which functioned from 01 April 2018 to 31 March 2019

Name Designation Date appointed Date of resignation Qualifications

No. of Meetings

held

No. of Meetings attended

by member

Dr ME Ngidi Chairperson 01/11/2013

Re-appointment in August 2017

-PhD in Poultry Science; Master’s Degree in Dairy Science; Bachelor of Science in Agriculture; Diploma in Animal Health and Extension

11 11

Mrs P Dabideen

Deputy Chairperson

01/11/2013


Bachelor of Procuration’s (B. Proc); AIPSA Dip in Insolvency Law; Adv. Diploma in Insolvency Litigation; Diploma in Business Rescue

11 8

Adv. KP Thango

Member August 2017 -B Proc; LLB; Diploma in Project Management

11 8

Ms T Ntshangase

Member August 2017 -B Com Degree in Supply Chain Management and Economics, Post Graduate Diploma in Project Management; CertificateinLeadership; Currently completing an MBA in Sustainable Business

11 10

Mrs NP Linda

Member August 2017 -B. Paed degree; B.ED. degree

11 11

Mr WR Dladla

01/11/2013


-Diploma in Agriculture; Bachelor of Agriculture; Hon. Bachelor of Agricultural Economics

11 8

Mr AG Mthembu

August 2017 -Bachelor of Arts in Educa-tion, Bachelor of Education; Secondary Teachers Di-ploma; Masters of Arts in History

11 11

Mr MV Khumalo

August 2017 -Diploma in Project Man-agement; Post-Graduate Diploma in Business Man-agement; Currently regis-tered for Masters in Busi-ness Administration

11 9

49

Part C: GOVERNANCE


Committees

As per the Trust Deed read together with the Board Charter, the Board is authorized to delegate certain functions to the different well-structured Board Committees.

Delegation is formal and involves:

• Formal terms of reference which are established, approved and reviewed annually for each committee of the Board,

• The committees are appropriately constituted with due regard to the skills required by each committee

Board Committees report on their quarterly activities at every Board meeting, thereby assisting the Board to perform its duties and taking effective decisions. All committees meet at least four times a year. The said committees are constituted as depicted in the below table.

During the period under review, there were two resignations from the Audit and Risk Committee, which resulted in two new members being appointed in August 2018.

BOARD COMMITTEES – from 01 April 2018 to 31 March 2019

Member Name Board Des-ignation

Projects & Fi-nance Commit-tee Designation

Human Resource & Remuneration Committee Desig-nation

Audit & Risk Committee Designation

1. Dr ME Ngidi Chairperson - - -2. Mrs P Dabideen Deputy

Chairperson- Member Member

3. Adv. KP Thango Member - Chairperson Member4. Ms T Ntshangase Member Chairperson - -5. Mrs NP Linda Member Member Member -6. Mr WR Dladla Member Member - Member7. Mr N Khambule Member Member - Member8. Mr AG Mthembu Member Member Member -9. Mr MV Khumalo Member Member Member -10. Mr SZ Hlophe Chairperson11. Mr SB Mnguni Deputy

Chairperson


BOARD COMMITTEES – from 01 April 2018 to 31 March 2019

Committee No. of meetings held

No. of members

Name of members

Human Resource and Re-muneration Committee

4 5 Adv. KP Thango 1 ; Mrs P Dabideen; Mrs NP Linda; Mr MV Khumalo; Mr AG Mthembu

Projects and Finance Com-mittee

6 6 Ms T Ntshangase 2 ; Mrs NP Linda; Mr WR Dladla; Mr N Khambule; Mr MV Khumalo; Mr AG Mthembu

Audit and Risk Committee 6 6 Mr V Mtshali 3 ; Mr N Sifumba 4 ; Mr N Khambule; Mr WR Dladla; Mrs P Dabideen; Adv. KP Thango; Mr SZ Hlophe 5 ; Mr SB Mnguni 6

____________________________________1 Committee Chairperson 2 Committee Chairperson3 Committee Chairperson – Resigned in 20184 Deputy Chairperson - Resigned in 20185 Current serving Committee Chairperson 6 Current serving Deputy Chairperson

51

Part C: GOVERNANCE


Remuneration of Board Members

Name Remuneration (R 000)

Committee Other allowance

Other re-imbursements

Total (R 000)

Dr Edwin Mnqobi Ngidi – Chairperson

147 511.00 Board - 45 720.86 193 231.86

Ms. Preetha Dabideen - Deputy chairperson

81 584.00 Board - 12 560.16 94 144.16

Adv. Khayelihle Thango 82 688.00 Board - 10 187.52 92 875.52Ms Thandeka Ntshangase

76 352.00 Board - 4 734.48 81 086.48

Mrs Nonhlanhla Linda 89 432.00 Board - 41 252.15 130 684.15Mr Nhlanhla Khambule 76 352.00 Board - 13 749.76 90 101.76Mr Mthandeni Khumalo 86 687.50 Board - 17 660.17 106 347.67Mr Aubrey Mthembu 89 303.50 Board - 59 283.46 148 586.96Mr Wakhe Richard Dladla

89 560.00 Board - 8 241.04 97 801.04

Mr V Mtshali – Chairperson

4 096.00 Audit and Risk Committee

- - 4 096.00

Mr Nkosana Sifumba 26 058.00 Audit and Risk Committee

- - 26 058.00

Mr Nhlanhla Khambule 5 232.00 Audit and Risk Committee

- 5 232.00

Adv. Khayelihle Thango 7 848.00 Audit and Risk Committee

- - 7 848.00

Mrs Preetha Dabideen 2 616.00 Audit Committee - - 2 616.00Mr Wakhe Richard Dladla


- - 5 232.00

Mr Silas Zwelakhe Hlophe - Chairperson


- 3 627.95 62 272.45

Mr Sandile Mnguni – Deputy Chairperson


2 591.44 39 170.44

Adv. Khayelihle Thango – Chairperson

10 800.00 Human Resource and Remuneration Committee

- - 10 800.00

Mrs Preetha Dabideen 6 540.00 Human Resource and Remuneration Committee

- - 6 540.00

Mr Mthandeni Khumalo 6 540.00 Human Resource and Remuneration Committee

- - 6 540.00

Mrs Nonhlanhla Linda 6 540.00 Human Resource and Remuneration Committee

- - 6 540.00


Name Remuneration (R 000)

Committee Other allowance

Other re-imbursements

Total (R 000)

Mr Aubrey Mthembu 6 540.00 Human Resource and Remuneration Committee

- - 6 540.00

Ms Thandeka Ntshangase – Chairperson

14 388.00 Projects and Finance Committee

- - 14 388.00

Mr Aubrey Mthembu 10 464.00 Projects and Finance Committee

- - 14 388.00

Mr Mthandeni Khumalo 14 388.00 Projects and Finance Committee

- - 14 388.00

Mr Wakhe Richard Dladla


- - 10 464.00

Mr Nhlanhla Khambule 11 772.00 Projects and Finance Committee

- - 11 772.00

Mrs Nonhlanhla Linda 14 388.00 Projects and Finance Committee

- - 14 388.00

Dr Mnqobi Edwin Ngidi- BoardChairperson


- - 5 232.00

Adv. Khayelihle Prince Thango


- - 4 578.00

Mrs Preetha Dabideen-Deputy Chairperson

654.00 Projects and Finance Committee

- - 654.00

1 102 359.50 0,00 227 012.71 1 329 372.21

3.5 Risk Management

ADAhasafunctionalriskmanagementunitthatreportstotheChiefExecutiveOfficerandisoverseenbytheAudit & Risk Committee. As a public entity, the institution implements the public sector risk management framework. The framework is reviewed and approved annually to ensure that it stays dynamic and relevant to the environment of the organization.

The organization ensures that risk assessments are performed annually to identify critical risks that affecttheorganizationatstrategicandoperational levels.Risksarefurther identifiedandmonitoredonthe projects that the organization is involved in. This process enables the organization to anticipate and proactively act to mitigate risks that might lead to the collapse of the projects.

The implementation of action plans as contained in the risk registers are monitored on monthly basis and reports are tabled to the Audit & Risk Committee for oversight.

53

Part C: GOVERNANCE


3.6 Internal Control Unit

Risk based audits were conducted as per the internal audit plan as follows:

• ITGC Audit

• Human Resource Management ( Payroll and Leave Management)

• Fleet Management

• Governance

• Risk Management

Legislated/Compliance Audit

• Audit of performance information (Quarterly)

• Annual Performance Information

• Review of the Half year Financial Statements

• Annual Financial Statements Review

Follow-up audits

• FollowupauditonimplementationofAGSAfindings

• Fleet Management

• ITGC

3.7 Internal Audit and Audit Committees

Key activities and objectives of the internal audit

• To be an independent, objective, assurance and consulting activity that is designed to add value and improve the operations of ADA.

• To assist the management of ADA to accomplish their objectives by bringing a systematic and disciplined approach in evaluating and improving the effectiveness of internal controls, governance and risk management processes.

Key activities and objectives of the audit committee

• The Audit Committee serves as an independent governance structure whose function is to provide an oversight role on the systems of internal control, risk management and governance.

• TheAuditCommitteeassiststheAccountingOfficerintheeffectiveexecutionofhisresponsibilitieswith the ultimate aim of the achievement of the Entity’s objectives.


Attendance of Audit Committee meetings by members

Committee Member Qualifications 09/04/18

24/04/18 (AFS REVIEW)

17/09/18 25/09/18 13/11/18 08/03/19

1. Mr V Mtshali 1

CA (SA); Registered Auditor (IRBA)

X X N/A N/A N/A N/A

2. Mr N Sifumba 2

MBL (Governance); B.Com

√ √ N/A N/A N/A N/A

3. Mr N Khambule

MSc Dev. Finance X √ X √ √ √

4. Adv. KP Thango

-B Proc.; LLB and Diploma in Project Management

√ X X √ √ X

5. Mrs P Dabideen

B Proc; AIPSA Dip in Insolvency Law; Adv. Diploma in Insolvency Litigation and Diploma in Business Rescue

X √ X √ X √

6. Mr WR Dladla

Diploma in Agriculture; Bachelor of Agriculture and

Hon. Bachelor of Agricultural Economics

√ √ X X √ √

Members who subsequently joined the Committee with effect from August 2018 – 31 March 2019

7. Mr SZ Hlophe 3

Master’s in Business Leadership (MBL)

B Com Honours (Accounting)

N/A N/A √ √ √ √

8. Mr SB Mnguni 4

CA (SA)

Master’s in Business Administration (MBA)

N/A N/A √ √ √ X

________________________________

Chairperson resigned in 2018

Dep Chairperson resigned in 2018

55

Part C: GOVERNANCE


3.8 Compliance with laws and regulations

Compliance with legislation is one of the prioritized management areas within ADA and in all its activities. ADA management strives to ensure that proper procedures are followed and that the policies are adhered to.

The Manager for legal services is tasked with the responsibility to monitor compliance with applicable prescripts and report to the CEO on the status of compliance across the institution. Mr Avinesh Dursen was appointed to the position of Legal Manager in 2018 and has ensured that the entity has remained in compliance with governance laws and regulations. During the period before his appointment the position of Legal Manager remained vacant, however in his absence the Entity’s legal matters were referred to DARD Legal Services for necessary support.

The Manager for legal services is tasked with the responsibility to monitor compliance with applicable prescripts and report to the CEO on the status of compliance across the institution. The Manager for legal services is responsible for, inter alia, the following:

• the drafting, review and editing of policy and contract documents to ensure compliance with all statutory and regulatory prescripts

• furnishing of legal opinions, advice and support

• defending and/or institution legal action against and/or for ADA (Litigation)

• presentationstoofficialsandreviewandcommentaryoncaselawtoempowerandcapacitatethem

• to ensure compliance with PAJA and PAIA

3.9 Fraud and Corruption

The ADA approach in the combat of fraud and corruption is guided by its Fraud and Anti-Corruption Policy which is in line with the public sector risk management framework. This document is communicated to staff to ensure that they remain vigilant and aware of the activities of fraud and corruption at all times.

The risk assessments are able to identify areas of vulnerability within the organization, and necessary actions are taken to ensure that measures are put in place to foil fraudulent activities from taking place.

Thefindingsof the InternalAudit arealso consideredby theorganization toguide its effortson fraudprevention towards those areas which are susceptible activities of this nature.

The ADA Fraud and Anti-Corruption Policy is applicable to both ADA staff and external partners, stakeholders, individuals, etc. hence all channels of fraud reporting are open to all these categories of contributors within ADA.


3.10 Minimizing Conflict of Interest

Inordertominimiseconflictofinterest,ADAhasenforcedthatallitsseniorofficialsandthosethatsitatitsbid committees signs declaration of business interest forms annually and at each Bid meeting. In instances whereamemberhasidentifiedpossibleareaofconflict,theyhavetorecuesthemselvesfromthemeeting.

(a)SCMofficialsandotherroleplayersinSCMarefamiliarizedwiththecodeofconduct;ofwhichconflictofinterestismentionedasoneofthepillars.Theofficialsarerequiredtoacknowledgebysigningthecodeof conduct and also declaration of interest forms on each and every bid committee meetings/ any ad hoc meetingsintendedfordeliberatingonSCMissues.Wheneverthereisaconflictofinterest,theindividualwill disclose and be recused from the deliberations.

(b)With regards toconflictof interest–serviceproviders/suppliers; the issueofconflictof interest iscontained as one of the special conditions of bid. The clause states that bidders should not perform any assignmentthatwouldbeinconflictwiththeirpriororcurrentobligationstootherclients,orthatmayplacethem in a position of not being able to carry out the assignment in the best interest of the Entity.

In addition, the service providers/ suppliers are required to disclose information by signing the following declarations;

• SBD 4 Form “Declaration of Interest”;

• SBD9Form“CertificateofIndependentBidDetermination”,and

• SBD 8 Form “Declaration of Bidders’ past SCM practices.

In all of the above, the onus to disclose lies with the individual/service provider.

Currently,theEntitydoesnothaveanautomatedsysteminplaceforidentifyingissuesofconflictofinterest.However, if it is found that therewasamisrepresentationof information; thebidder isnotifiedand thecompany and its directors gets listed on National Treasury’s list of restricted suppliers for a certain period.

3.11 Code of Conduct

The conduct of board members and employees of the Entity is governed by ADA Code of Ethics and Conduct, which has been approved by the board and circulated to all employees. ADA Code of Ethics outlines ethical values that underpin ethical behaviour across ADA.

DeclarationsofinterestarecompletedbyADAofficialsduringallinterviews,bidadjudication,bidevaluationand other management meetings when necessary.

57

Part C: GOVERNANCE


3.12 Health, Safety and Environmental Issues

In keeping with its endeavours to be fully compliant with the OHS Act 85 of 1993, the ADA was able to establishthehealthandsafetycommittee,appointthesafetyrepresentatives,firemarshalsandfirstaiders.The OHS Act and evacuation plans were displayed on the walls of the building for staff and stakeholders to familiarise themselves with these critical aspects of safety while within the ADA building.

All the appointed representatives were able to receive the necessary trainings in line with their appointments to be able to contribute and add value towards the entire OHS process of the organization.

The process to source the necessary equipment required was however frustrated by the appointed service providers who twice failed to deliver the requested equipment, and purchase orders issued had to be cancelled and the procurement process be restarted. Overall the safety of employees and stakeholders within the ADA building continues to receive priority from the management of the organization.

3.13 Company Secretary

The Companies Act, No 71 of 2008 (the Act) prescribes that all public and state-owned companies are required to have a company secretary. The role and responsibility of the company secretary is outlined in Section 88(1) - (2) of the Act.

The Company Secretary or the Board Secretary is responsible for the secretariat function of the Board and its Committees by ensuring compliance with statutory and regulatory requirements as well as ensuring that the decisions of the Board of Trustees are implemented. The Company Secretary is the secretariat responsible for all Board and Committee meetings.

The Company Secretary is further responsible for the induction of new Board members and on-going training of Board Members as well as the scheduling, preparation and administration of Board and Committee meetings. During the period under review, an induction programme titled Corporate Governance and Board Effectiveness was held by the ADA Board. Individual members also had an opportunity to attend different trainingsandworkshops,aspartofthebenefitofbeingregisteredmemberswiththeInstituteofDirectorsSA.

3.14 Social Responsibility

The South African National Policy Framework for Women’s Empowerment and Gender Equality ensures gender equality is at the centre of the country’s transformation process. In an effort to transform the lives of ordinary women, ADA established a Women Empowerment Programme (WEP). The programme seeks to address a number of challenges that women in particular face in the agribusiness sector.

The ADA has endevoured to host activities which speak to gender equality and have also assisted women and youth in their project related areas.


The mentorship programme focuses on ensuring that women are in the right businesses, have necessary skills, they are competent and have networking capabilities. With the right partnerships and knowledge, ADA is positive about the success of this programme. A lot of work lies ahead for the Entity which has been entrusted with the responsibility of driving and transforming the agribusiness sector in the Province of KwaZulu-Natal.

3.15 Audit and Risk Committee Report for the Financial Year ended 31 March 2019

REPORT OF THE AUDIT AND RISK COMMITTEE TO THE BOARD OF AGRICULTURAL DEVELOPMENT AGENCY FOR THE YEAR ENDED 31 MARCH 2019

The Audit Committee hereby presents its report to the Board for the year ended 31 March 2019.

OBJECTIVE

The audit and risk committee serves as an independent body to assist the Board with its responsibility for safeguardingassets,maintainingeffectiveandefficientinternalcontrols,riskmanagement,reviewingthefinancialinformationandoverseeingthepreparationofthefinancialstatements.

AUDIT AND RISK COMMITTEE RESPONSIBILITIES

The Audit and Risk Committee reports that it has complied with its responsibilities arising from Section 38 (1)(a) of the PFMA and Treasury Regulations 3.1.13. The Audit and Risk Committee also reports that it has adopted formal terms of reference as its audit and risk committee charter and has regulated its affairs in compliance with this charter. The audit committee has reviewed its charter during the year and has made amendments which were subsequently approved by the Board of Trustees. The Committee has accordingly discharged its responsibilities as contained in the Charter.

AUDIT AND RISK COMMITTEE COMPOSITION AND ATTENDANCE

TheAuditandRiskCommitteecomprisedofsixmembersthroughoutthefinancialyearofwhich2membersi.e. the Chair and the Deputy Chair are independent and external. The two independent members resigned duringtheyearandtheywereaccordinglyreplacedi.e.therewasnosignificantgaporvacancieswithintheAuditandRiskCommittee.TheCommitteeheld6meetingsduringthefinancialyearandthemember’sattendance was as follows:

No Name Positions

1. Mr. S Hlophe Independent Chairperson (resumed on 1/09/2018)2. Mr. S Mnguni Independent Deputy Chair (resumed on 01/09/2018)1. Mr. V Mtshali Independent Chairperson (resigned on 1/08/2018)2 Mr. N Sifumba Independent Deputy Chair (resigned on 01/08/2018)3. Mrs. P Dabideen Committee Member (Board Member)4. Mr. RW Dladla Committee Member (Board Member)5. Adv. K Thango Committee Member (Board Member)6. Mr. N Khambule Committee Member (Board Member)

59

Part C: GOVERNANCE


In the conduct of its duties, the Audit Committee has performed the following statutory duties and would like to report as follows:

1. EFFICIENCY AND EFFECTIVENESS OF INTERNAL CONTROLS

Thesystemofinternalcontrolemployedbytheentitytofinancialandriskmanagementispartiallyeffective,efficientand transparent. In linewith thePFMAand the recommendations from theKing IVReportonCorporate Governance requirements. Internal Audit provides the Audit Committee and management with assurance that the internal controls are appropriate and effective. This is achieved through the risk managementprocess,aswellastheidentificationofcorrectiveactionsandsuggestedenhancementstothe controls and processes.

Fromthevariousreportsof InternalAudit, theAuditReportontheannualfinancialstatementsandthemanagement report of the Auditor-General South Africa (AGSA), it was noted that certain matters were reportedindicatingdeficienciesinthesystemofinternalcontrol.Itisofcrucialimportancethattheissuesreported should receive ongoing attention and focus by management to effect qualitative administration andfinancialmanagementwithintheentity.Managementhascommittedtoimplementcorrectiveactionand this will be closely monitored by the Audit Committee.

2. IN-YEAR MANAGEMENT AND MONTHLY/QUARTERLY REPORT

The Agency has been reporting monthly and quarterly to Treasury as is required by the PFMA, and the said reports were presented to the Audit Committee for reviews and comments.

3. INTERNAL AUDIT

The Audit Committee reviewed and approved the Internal Audit Charter. The Internal Audit Plan was also approvedafterconsideringspecificriskareasfacingtheentity.TheAuditCommitteeconsiderstheinternalaudit function to be under-resourced and unable to operate optimally, given its current resources and budget,toadequatelyfulfilitsmandateandaddresstheriskspertinenttotheentity.TheAuditCommitteehasresolvedtohaveinternalauditfullyresourcedwhetherbywayoftheexternalserviceproviderorfillingthe vacancies. The Audit Committee would also report that out of the planned audits and activities of the Internal Audit, two projects could not be executed i.e. Supply Chain Management and Project Management. Suchauditshavesincebeenintegratedintoaplanforthefirstquarterofthenewfinancialyear.

4. REVIEW OF ANNUAL FINANCIAL STATEMENTS

The Audit and Risk Committee has reviewed the Annual Financial Statements, before submission to the Officeof theAuditor-General.The reportof theAuditor-Generalon theAnnualFinancialStatements for2018/19 is noted.While the entity received an unqualified audit opinion, the committee is concernedwith matters raised in the management letter and some compliance issues on the report itself. The Audit Committee will continuously engage management and review the action plans to address the issues raised.


Reviewed the entity’s compliance with legal and regulatory provisions where internal audit reports were discussedwiththeAuditCommitteeandManagementinwhichcorrectiveactionwasidentifiedininstanceswhereweaknessinthesystemsofinternalcontrolswereidentified.

Reviewed the information on predetermined objectives in which internal audit presented the annual performance report to the Audit Committee.

Reviewedthequalityandtimelinessofthefinancialinformationavailedtotheauditcommitteeforoversightpurposesduringtheyearsuchasinterimfinancialstatements.

5. RISK MANAGEMENT

Theassessmentofinternalcontrolsoverfinancialreportingisrisk-basedandhencetheAuditCommitteeis responsible for overseeing management’s risk policies and discussing the key risk exposures with management as per its charter.

The Audit and Risk Committee considered and approved the Risk Management Framework. The Entity conducted risk assessment workshops during the year addressing both operational and strategic risks. The Risk Management Committee (MANCO) discussed and accepted the risk registers. The audit committee noted and considered the risk registers and the updated risk registers where it was appropriate.

The progress on implementation of the mitigating factors is presented quarterly to the Audit Committee through the reports of internal audit to assess and monitor implementation.

The internal audit function provided independent assurance concerning the management’s assertions surrounding the robustness and effectiveness of risk management. Although there is room for improvement with risk identification, ratingandprioritization, theAuditCommitteewassatisfiedwith theoverall riskmanagement process and the entire risk management framework applied by the entity.

6. PERFORMANCE MANAGEMENT

The Audit and Risk Committee reviews quarterly performance reports and the internal audit reports on performancemanagement for 2018/2019financial yearbasedon theEntity’s approvedscorecardandperformance plan.

The Audit and Risk Committee is pleased to note that the overall internal and external audit ratings of the effectiveness of internal controls around performance management are satisfactory and controls are inplacetoprovidemanagementandtheBoardwithreasonableassurancethatsignificantriskswillnotmaterialize but there is room for improvement. In this regard the Entity achieved 87% of the set targets for the2018/19financialyear,theAuditCommitteeexpressedconcernwiththenon-achievementofcertainKey Performance Indicators and related targets.

The Committee has urged management to develop a comprehensive plan to address the issues of usefulness and reliability of reported performance information. The committee shall further commit to guiding management in developing effective structures and mechanisms to mitigate a future re-occurrence of non-meeting of targets and the issues as reported by internal audit.

61

Part C: GOVERNANCE


7. INFORMATION TECHNOLOGY GOVERNANCE AND COMPLIANCE (ITGC)

The Audit and Risk Committee is also responsible for Information Technology and Governance, as stipulated in its charter. The ITGC framework was considered and approved by the audit committee. Internal audit unit only reviewed the IT general controls. The application controls audit was not conducted, this is critical given the projects and the system to monitor this. This should be part of the responsibilities of the proposed external service provider. The Audit Committee is comfortable with the ITGC environment within the entity and we noted that basic issues that were raised were resolved by management.

RECOMMENDATIONS

• The Board should continue to ensure that financial sustainability plans are in place, monitoredregularly and that adequate steps are taken to ensure the sustainability of the entity.

• The Board must develop and rigorously enforce the funding policy that adheres to legislation.

• The post monitoring programs or unit must be revived and be implemented accordingly.

• The Board and management should continuously review, evaluate and monitor internal controls to implementremedialcoherentactiontoaddressweaknesses.TheAccountingOfficermustensurethat there are consequences for non-adherence with internal controls and non-compliance with laws and regulations.

• The Board through its management must develop proper action plans to address issues of underspending, this has risks of grans being recalled, unfortunately at the expense of service delivery.

• TheAccountingOfficersshouldensurethatrecommendationsoftheinternalandexternalauditareimplemented as per the action plans and report progress every quarter. This should assist towards clean audit and prevent unauthorized, irregular, fruitless and wasteful expenditure as well as non-compliance with laws and regulations.

• The Board should pay close attention to the rationalization (merger) and position the entity accordingly given this development.

CONCLUSION

TheAuditandRiskCommitteeconfirmsitscommitmenttoassisttheBoardtoachievecleanauditandclean administration. The Audit and Risk Committee also wishes to thank the Members of the Board and management for their cooperation and support as well as the teams from internal audit and the Auditor-General for their contributions.

_____________________________________

Silas Zwelakhe HlopheAudit and Risk Committee Chairperson

Date: 31/05/2019

Silas Hlophe

Part D: Human Resources Management


4. PART D: HUMAN RESOURCES MANAGEMENT

TheHumanResourcesManagementunitoftheADAhastheprimaryroletoprovideaserviceofefficientand effective support to the Entity. It is the aim of the unit to ensure thist through assisting the current and future workforce to remain fully skilled and competent to serve the organisation and province at large. In order to achieve this the unit is tasked to facilitate appropriate training interventions as and when necessary for employees to remain relevant in their functions with the most recent training programmes, conferences and seminars available to them. The Human Resources Unit is further tasked with ensuring that employees feel valuedby the organisation and therefore give of their best for the benefit of the organisation andachieve the mandate of the ADA.

Training

It is vital that we ensure that all employees maintain their skills through appropriate current learning opportunities which ensure their ability to meet the needs of the ever transforming agricultural environment. Whenskillsgapsareidentified,theappropriatetraininginterventionsaresorttofacilitateandbridgethegaps.

Duringthecourseofthe2018/19financialyear,theHumanResourcesUnitwassuccessfulwithprovidingplannedtrainingforemployeeswithprioritizedtraininginterventionsidentifiedtoensuretheircompetenciesare maintained. The unit also facilitated the processing of bursaries for qualifying employees to further upskillthemtoachievetertiaryqualifications.

Recruitment – Attracting and recruiting a skilled and capable workforce

Whilst the ADA continued to operate without a permanently appointed Chief Executive Officer for theyear, the recruitment processes commenced and an appointment for a fixed durationwas finalized attheendofFebruarywithanewlyappointedChiefExecutiveOfficerfinallybeingappointedbytheMECforDepartmentofAgricultureandRuralDevelopment,officiallytakingupofficeonthe1stMarch2019.OtherpositionshavebeenfilledduringthecourseofthefinancialyearincludingtheChiefFinancialOfficer.Afewpositionshaveproventobeachallengetofillandthereforewehavehadtorelookatthedurationofcontracts being offered. When conducting recruitment, candidates are selected according to the skills and competencies required to function effectively and meet the strategic objectives of the Entity. Whilst theunithassuccessfullyrecruitedanumberofindividualsduringthecourseofthefinancialyear,thestaffattrition due to the number of resignations is a matter of great concern and has created additional strain on the remaining workforce. The cost cutting measure requires an extensive approval process before recruitment can commence and this creates an extended vacancy period.

Employee Performance Management

The Employee Performance Management Development System has been successfully implemented with minor challenges. Thus far there has been good co-operation from all employees and the results are fastbecomingusefultoolsfortheidentificationofskillsgapsandpersonaldevelopmentplans.Withthe

65

Part D:HUMAN RESOURCES MANAGEMENT


staffattrition rateof theADAthiscreatesdifficultieswithmeasuringperformancewith thechangesofmanagement and leadership and therefore accurate performance requires a collaborative effort at times incorporating previous managers to assist in the rating of staff.

Challenges faced by the Entity

ADA is still experiencing uncertainty with the pending merger of the Entity’s due to take place, timeline for this to happen has been set to be completed at the end of the 2019 calendar year. With the Entity having all employees on contract it has created instability for the Entity and we have experienced a large number of resignations and we are unable to retain senior managers who want to leave ADA as we do not have any bargaining ability to make them stay. We have attempted to rectify the situation with the actingappointments,whilstrecruitmentcontinues;however,withafixeddurationcontractbeingofferedit becomes challenging to attract good quality and experienced candidates. The Entity is working closely with DARD to make progress with this process and is hopeful that the combined efforts will produce an effectiveandefficientoutcome.

Employee Wellness Programme

The Careways Group was appointed as a service provider to assists the Entity by conducting wellness programmes to enhance the well-being of employees and create a conducive working environment. Careways successfully conducted an Employee Wellness day. The Wellness day gave participants an opportunity to measure their cholesterol, glucose and blood pressure through medical screening. The opportunity for HIV Voluntary Counselling and testing as well as TB screening and cancer screening for employees was also available. Regular updates and newsletters of health related topics are shared with employees to create awareness.


4.2 Human Resources Oversight Statistics

4.2.1 Personnel Cost by Programme

programme Total Expenditure for the entity

(R’000

Personnel Expenditure

(R’000

Personnel exp. as a % of total

exp. (R’000

No. of employees

Average personnel cost

per employee (R’000)

Finance & Administration

138 951 670,36 23 971 942,00 17% 52,00 460 998,88

Total 138 951 670,36 23 971 942,00 0,17 52,00 460 998,88

4.2.2 Personnel cost by salary band

Level PersonnelExpenditure (R’000)

% of personnel exp. to total

personnel cost (R’000)

No. of employees

Average personnel cost per employee (R’000)

Top Management 2 439 415,50 10% 3 813 138,50 Senior Management 3 321 019,88 14% 3 1 107 006,63 Professional qualified

10 517 724,30 44% 11 956 156,75

Skilled 4 807 805,19 20% 13 369 831,17 Semi-skilled 2 885 977,13 12% 22 131 180,78 Unskilled - 0% 0 - Total 23 971 942,00 100% 52 460 998,88

4.2.3 Performance Rewards

programme Performance rewards Personnel Expenditure(R’000)

% of performance rewards to total personnel cost (R’000)

Top Management

Not applicable. ADA does not pay performance bonuses

Senior ManagementProfessionalqualifiedSkilledSemi-skilledUnskilledTotal

67

Part C: GOVERNANCE


4.2.4 Training costs

Directorate/Business Unit

Personnel Expenditure (R’000

Personnel Expenditure

(R’000

Training Expenditure

as a% of training

Cost.5%

No. of employees

trained

Avg training cost per

employee

Top Management R 2 439 415,50 R 16 272,22 5% 1 R 16 272,22 Senior Management

R 3 321 019,88 R 11 200,00 3% 1 R 11 200,00

Professional qualified

R 10 517 724,30 R 149 515,23 43% 6 R 24 919,21

Skilled R 4 807 805,19 R 134 609,85 39% 8 R 16 826,23 Semi-skilled R 2 885 977,13 R 35 760,00 10% 5 R 7 152,00 Unskilled

-

Total R23 971 942,00 R 347 357,30 100% 21 R 16 540,82

4.2.5 Employment and vacancies

programme 2018/19No. of Employees

2018/19Approved Posts

2018/19Vacancies

% of vacancies

Top Management 3 4 1 25%Senior Management 3 3 1 33%Professionalqualified 11 12 5 42%Skilled 13 13 4 31%Semi-skilled 22 23 2 9%Unskilled 0 0 0 0%Total 52 55 13 24%

4.2.6 Employment changes

Salary Band Employment at beginning of period

Appointments Terminations Employment at end of the period

Top Management 2 2 1 3Senior Management 3 0 0 3Professionalqualified 10 1 3 8Skilled 19 0 3 16Semi-skilled 6 1 0 7Unskilled 0 13 3 10Total 40 17 10 47


4.2.7 Reasons for staff leaving

Reason Number % of total no. of staff leaving

Death 0 0%Resignation 7 14.89%Dismissal 0 0%Retirement 0 0Ill health 0 0Expiry of contract 3 6.38%Other 0 0Total 10 21.27%

4.2.8 Labour Relations: Misconduct and disciplinary action

Nature of disciplinary Action Number

Verbal Warning 0Written Warning 2Final Written warning 0Dismissal 0

4.2.9 Equity Target and Employment Equity Status

LevelFemale

African Coloured Indian WhiteCurrent Target Current Target Current Target Current Target

Top Management

1 - - - - - - -

Senior Management

2 - - - - - - -

Professional qualified

5 - 1 - - - - -

Skilled 7 - 1 - - - - -Semi-skilled 12 - 1 - 1 - 1 - Unskilled - - - - - - - -Total 27 0 3 0 1 0 1 0

69

Part C: GOVERNANCE


Salary Band

Disabled StaffMale FemaleCurrent

Target

Current CurrentTarget

Target TargetCurrent

Top Management

None

Senior ManagementProfessionalqualifiedSkilledSemi-skilledUnskilled

Part E: Financial Information

71

Agribusiness Development Agency Trust(Registration number IT 2041/1999)

Annual Financial Statements for the year ended 31 March 2019


REPORT OF THE AUDITOR-GENERAL TO THE KWAZULU-NATAL PROVINCIAL LEGISLATURE ON THE AGRIBUSINESS DEVELOPMENT AGENCY

Report on the audit of the financial statements

Opinion

1. IhaveauditedthefinancialstatementsoftheAgribusinessDevelopmentAgencysetoutonpages81to84andagainonpages86to119,whichcomprisethestatementoffinancialpositionasat31March2019,thestatementoffinancialperformance,statementofchangesinnetassets,cashflowstatement and the statement of comparison of budget information with actual information for the yearthenended,aswellasthenotestothefinancialstatements,includingasummaryofsignificantaccounting policies.

2. Inmyopinion,thefinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheAgribusinessDevelopmentAgencyasat31March2019,anditsfinancialperformanceandcashflows for theyear thenended inaccordancewith theSouthAfricanStandardsofGenerallyRecognised Accounting Practice (SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA).

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 fortheauditofthefinancialstatementssectionofthisauditor’sreport.

4. I am independent of the entity in accordance with sections 290 and 291 of the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants and parts 1 and 3 of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA codes) as well astheethical requirementsthatarerelevant tomyaudit inSouthAfrica. Ihavefulfilledmyotherethical responsibilities in accordance with these requirements and the IESBA codes.

5. IbelievethattheauditevidenceIhaveobtainedissufficientandappropriatetoprovideabasisformy opinion.

Emphasis of matter

6. Idrawattentiontothematterbelow.Myopinionisnotmodifiedinrespectofthismatter.


Agribusiness Development Agency Trust(Registration number IT 2041/1999)Annual Financial Statements for the year ended 31 March 2019

Material underspending of conditional grant

7. Asdisclosedinnote9tothefinancialstatements,theentitymateriallyunderspentthegrantfromthe KwaZulu-Natal Department of Agriculture and Rural Development by R40,75 million. The underspending resulted from a number of infrastructure projects that were still in progress at year-end.

Responsibilities of the board of trustees, which constitutes the accounting authority, for the financial statements

8. The board of trustees, which constitutes the accounting authority, is responsible for the preparation and fair presentation of the financial statements in accordancewith the SAStandards ofGRAPand the requirements of the PFMA, and for such internal control as the board of trustees, which constitutestheaccountingauthority,determinesisnecessarytoenablethepreparationoffinancialstatements that are free from material misstatement, whether due to fraud or error.

9. In preparing the financial statements, the board of trustees, which constitutes the accountingauthority, is responsible for assessing the Agribusiness Development Agency’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the appropriate governance structure either intends to liquidate the 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

10. Myobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholeare 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,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

11. Afurtherdescriptionofmyresponsibilitiesfortheauditofthefinancialstatementsisincludedintheannexure to this auditor’s report.

Report on the audit of the annual performance report

Introduction and scope

12. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the

73




general notice issued in terms thereof, I have a responsibility to reportmaterial findings on thereported performance information against predetermined objectives for selected programmes presentedintheannualperformancereport.Iperformedprocedurestoidentifyfindingsbutnottogather evidence to express assurance.

13. My procedures address the reported performance information, which must be based on the approved performance planning documents of the entity. I have not evaluated the completeness and appropriateness of the performance indicators 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,myfindingsdonotextendtothesematters.

14. I evaluated the usefulness and reliability of the reported performance information in accordance withthecriteriadevelopedfromtheperformancemanagementandreportingframework,asdefinedin the general notice, for the following selected programmes presented in the annual performance report of the entity for the year ended 31 March 2019:

Programmes Pages in the annual performance report

Programme 3 – enterprise and value chain development 35 – 39Programme 4 – infrastructure development 40 – 42

15. 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.

16. Ididnotraiseanymaterialfindingsontheusefulnessandreliabilityofthereportedperformanceinformation for the programmes tabulated in paragraph 14 of this report.

Other matters

17. I draw attention to the matters below.

Achievement of planned targets

18. The annual performance report on pages 21 to 43 sets out information on the achievement of planned targets for the year andexplanationsprovided for theunderor overachievementof a significantnumber of targets.



Adjustment of material misstatements

19. Iidentifiedmaterialmisstatementsintheannualperformancereportsubmittedforauditing.Thesematerial misstatements were on the reported performance information of programme 3 - enterprise and value chain development, and programme 4 - infrastructure development. As management subsequentlycorrectedthemisstatements,Ididnotraiseanymaterialfindingsontheusefulnessand reliability of the reported performance information.

Report on the audit of compliance with legislation

Introduction and scope

20. In accordance with the PAA and the general notice issued in terms thereof, I have a responsibility toreportmaterialfindingsonthecomplianceoftheentitywithspecificmattersinkeylegislation.Iperformedprocedurestoidentifyfindingsbutnottogatherevidencetoexpressassurance.

21. Thematerialfindingsoncompliancewithspecificmattersinkeylegislationsareasfollows:

Annual financial statements

22. Theannualfinancialstatementssubmittedforauditingwerenotpreparedinaccordancewiththeprescribedfinancialreportingframeworkand/orsupportedbyfullandproperrecords,asrequiredbysection 55(1)(a) and (b) of the PFMA.

23. Material misstatements of current assets, current liabilities, revenue, expenditure and disclosure items identifiedby theauditors in the submittedfinancial statementswere correctedand/or thesupportingrecordswereprovidedsubsequently, resulting inthefinancialstatementsreceivinganunqualifiedauditopinion.

Expenditure management

24. The entity did not take effective and appropriate steps to prevent irregular expenditure amounting toR11,55millionasdisclosedinnote28totheannualfinancialstatements,asrequiredbysection51(1)(b)(ii) of the PFMA. All of the irregular expenditure was the result of non-compliance with Supply Chain Management (SCM) Regulations.

Procurement and contract management

25. Competitive bids for some project expenditure were adjudicated by a bid committee that was not properly constituted in accordance with the entity’s SCM policy, as required by treasury regulation 16A.6.2(a), (b) and (c).

75




Strategic planning

26. The annual performance plan for 2018-19 was not submitted timeously for approval by the executive authority, as required by treasury regulation 30.1.1.

Consequence management

27. Iwasunabletoobtainsufficientappropriateauditevidencethatdisciplinarystepsweretakenagainstofficialswhohadincurredirregularexpenditure,asrequiredbysection51(1)(e)(iii)ofthePFMA.

Other information

28. The board of trustees, which constitutes the accounting authority, is responsible for the other information. The other information comprises the information included in the annual report. The otherinformationdoesnotincludethefinancialstatements,theauditor’sreportandthoseselectedprogrammespresentedintheannualperformancereportthathavebeenspecificallyreportedinthisauditor’s report.

29. Myopiniononthefinancialstatementsandfindingsonthereportedperformanceinformationandcompliance 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, considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsandthe selected programmes presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

31. The other information I obtained prior to the date of this auditor’s report is the human resource management information. If, based on the work I have performed on the other information that I obtained prior to the date of this auditor’s report, I conclude that there is a material misstatement of this other information, I am required to report that fact. When I do receive and read the general and governance information, which includes the foreword by the executive authority and the chairperson oftheboard,thechiefexecutiveofficer’sviewaswellastheauditcommittee’sreport,ifIconcludethatthere is a material misstatement therein, 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. Iconsideredinternalcontrolrelevanttomyauditofthefinancialstatements,reportedperformanceinformation and compliance with applicable legislation; however, my objective was not to express anyformofassuranceonit.Themattersreportedbelowarelimitedtothesignificantinternalcontroldeficiencies that resulted in the findings on the annual performance report and the findings oncompliance with legislation included in this report.

33. Managementdidnotadequatelymonitorthepreparationandreviewofthefinancialstatementsandthe annual performance report, which resulted in material adjustments having to be processed.

34. There has also been instability in key management positions, which resulted in a lack of proper supervision, reviews as well as monitoring of the implementation of the audit action plan and compliance with the applicable laws and regulations.

Pietermaritzburg

31 July 2019

AGRIBUSINESS DEVELOPMENT AGENCY TRUST(Registration number IT 2041/1999)

ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2019

PRESENTED TO THE BOARD OF TRUSTEES AND AUDIT & RISK COMMITTEE



INDEX

The reports and statements set out below comprise the annual financial statements presented to theBoard of Trustees:

Page

Responsibility of the Trustees 80

Statement of Financial Position 81

Statement of Financial Performance 82

Statement of Changes in Net Assets 83

Cash Flow Statement 84

Statement of comparison in Budget and Actual 85

Accounting Policies 86 -100

Notes to the Annual Financial Statements 101 -119

79




Corporate Information

Registration numberIT 2041/1999

Registered office5CascadesCrescent,CascadesOfficePark,Montrose,KwaZulu-Natal,Pietermaritzburg,3202

Postal addressPrivate Bag X01, Cascades, Montrose, 3202

TrusteesDr Mnqobi Edwin Ngidi, Mrs Preetha Dabideen, Mr Wakhe Richard Dladla, Adv. Khayelihle Prince ThangoMs Thandeka Ntshangase, Mrs Nonhlanhla Petronella Linda, Mr Nhlanhla Khambule, Mr Mthandeni Vitalis Khumalo, Mr Aubrey Greyling Mthembu

AuditorsAuditor - General South Africa

PreparerTheannualfinancialstatementswereinternallycompiledby:MMkhizeChiefFinancialOfficerandapprovedby the Board of Trustees

Bankers ABSA Bank 4 Frosterley Park, La Lucia Ridge, Durban

Nature of business and principal activities

The Agribusiness Development Agency is a public entity established in 2009 to serve as a special purpose vehicle to drive socio-economic transformation in the agricultural and agribusiness sector in KwaZulu-Natal.

The Agency provides holistic agricultural support services to entrant commercial farmers, focusing mainly on previously disadvantaged farmers, who have acquired land through the government’s Land Reform Programme and on private basis.The ADA also aims to develop strategies to address inequities, create opportunities for the farmers to participate in the value chain, provide access to markets and foster sustainability in the agricultural sector.



Responsibility of the Trustees

The Trustees are responsible for the maintenance of adequate accounting records. It is their duty to ensure thatthepreparationofannualfinancialstatementsisdoneefficiently.Integrityisinsisteduponinallofthe functions of the Trustees. Auditors have the responsibility of reporting on the fair representation of the annualfinancialstatements.

The annual financial statements have been prepared in accordance with South African Standards ofGenerally Recognised Accounting Practice and in the manner required by the Public Finance Management Act.

TheTrusteesarealsoresponsiblefortheTrust’ssystemsofinternalfinancialcontrolaswellastoensurethat appropriate accounting policies supported by reasonable and prudent judgment and estimates, are applied on a consistent and going concern basis. The system of internal control is designed to provide reasonable,butnotabsoluteassuranceastothereliabilityofthefinancialstatementsandtoadequatelysafeguard, verify and maintain accountability of assets, and to prevent and detect misstatement and loss. The Trustees, are of the opinion, based on the information and explanations given and on comment by the independent external auditors on the results of their statutory audit, that the Trust’s internal accounting controlsareadequate,sothatthefinancialrecordsmayberelieduponforpreparingtheannualfinancialstatements and maintaining accountability for assets and liabilities. The Trustees believe that the Trust’s assets are protected and used as intended in all material respects with appropriate authorisation. Nothing has come to the attention of the Trustees to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review.

Inpreparingtheannualfinancialstatements,theTrusthasusedappropriateaccountingpolicies,supportedby reasonable judgments and estimates, and has complied with all applicable accounting standards.

Theannualfinancialstatementshavebeenpreparedonthegoingconcernbasis,sincetheTrusteeshaveevery reason to believe that the Agency has adequate resources in place to continue in operation for the foreseeable future.

Theannualfinancialstatementssetoutonpages78to119wereapprovedbytheboardofTrusteeson24May 2019 and are signed on their behalf by:

________________________________________

Dr Mnqobi Edwin NgidiChairperson of the ADA Board of Trustees.

81




STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2019

Figures in Rand Note(s) 2019 2018

Assets

Current Assets

Receivables from exchange and non-exchange transactions 2 7 602 674 3 845 049Prepayments 3 33 040 837 7 514 711Deposits 17 118 17 118Cash and cash equivalents 4 25 984 446 28 382 285

66 645 075 39 759 163Non-Current Assets

Property, plant and equipment 5 4 120 917 3 173 853Intangible assets 6 2 863 973 3 472 333

6 984 890 6 646 186Total Assets 73 629 965 46 405 349

Liabilities

Current Liabilities

Operating lease liability 7 4 762 866 4 531 205Payables from exchange transactions 8 2 409 790 1 963 659Unspent conditional grants and receipts 9 42 146 089 22 055 944Provisions 10 880 609 822 823

50 199 354 29 373 631Total Liabilities 50 199 354 29 373 631Net Assets 23 430 611 17 031 718Share capital / contributed capital 11 5 000 5 000Accumulated surplus 23 425 611 17 026 718Total Net Assets 23 430 611 17 031 718



STATEMENT OF FINANCIAL PERFORMANCE


Revenue

Revenue from exchange transactions

Gain on disposal of assets 296 027 -Interest received 13 232 075 374 989Sundry Income 13 154 618 81 797Project Management Fees 13 229 810 173 438Gain on foreign exchange - 1 192 950Total revenue from exchange transactions 912 530 1 823 174

Revenue from non-exchange transactions

Transfer revenue

Government grants & subsidies 13 112 833 811 113 324 230Total revenue 13 113 746 341 115 147 404

Expenditure

Assets written off - (336 044)Depreciation and amortisation 5&6 (1 951 429) (1 568 674)Employee related costs 15 (25 397 201) (23 886 754)Finance costs 16 - (334)General Expenses 18 (9 136 115) (10 356 887)Loss on disposal of assets and liabilities - (35 079)Repairs and Maintenance (120 586) (153 797)Operating lease rental 7 (5 069 851) (5 095 449)Project Expenses 20 (65 672 266) (68 436 893)Total expenditure (107 347 448) (109 869 911)Surplus for the year 6 398 893 5 277 493

83




STATEMENT OF CHANGES IN NET ASSETS

Figures in RandShare capital / contributed

capitalAccumulated

surplus Total net assets

Balance at 01 April 2017 5 000 11 749 225 11 754 225Changes in net assets

Restated surplus for the year - 5 277 493 5 277 493Total changes - 5 277 493 5 277 493

Balance at 01 April 2018

Changes in net assets Surplus for the year

5 000 17 026 718 17 031 718

- 6 398 893 6 398 893Total changes - 6 398 893 6 398 893Balance at 31 March 2019 5 000 23 425 611 23 430 611

Note(s)



CASH FLOW STATEMENT


Cashflowsfromoperatingactivities

Receipts

Project management fees 147 382 958 860Sundry income 154 618 81 797Interest received 232 075 1 396 293Government Grants from non exchange transactions 3 840 000 -Transfers and subsidies 9 133 071 336 106 510 212

137 445 411 108 947 162

Payments

Employee costs (25 286 166) (23 454 672)Suppliers (112 563 008) (81 947 253)Finance costs - (334)

(137 849 174) (105 402 259)Net cash flows from operating activities 21 (403 763) 3 544 903

Cash flows from investing activities

Purchase of property, plant and equipment 5 (1 931 964) (1 646 256)Proceeds from sale of property, plant and equipment 5 348 907 6 302Purchase of intangible assets 6 (411 019) (4 583)Net cash flows from investing activities (1 994 076) (1 644 537)Cash flows from financing activities

Finance lease payments - (6 166)

Net increase/(decrease) in cash and cash equivalents (2 397 839) 1 894 200Cash and cash equivalents at the beginning of the year 28 382 285 26 488 085Cash and cash equivalents at the end of the year 4 25 984 446 28 382 285

85




UNAUDITED STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

Revenue from exchange transactions

Approved Adjustments Final ActualAmounts on comparable

basis

Difference: Final Budget and

Reference actual

ReceiptsProject Management fee - 318 000 318 000 147 382 (170 618) 1Government grants and subsidies

120 014 000 4 3 211 000 163 225 000 134 837 792 (28 387 208) 2

Other Income 61 000 400 000 461 000 475 113 14 113Interest Received 900 000 750 000 1 650 000 2 305 619 2 305 619 3Total revenue from exchange transactions

120 975 000 44 679 000 165 654 000 137 765 906 (27 888 094)

PaymentsCompensation of employees

(30 856 000) 3 490 000 (27 366 000) (25 286 166) 2 079 834 4

Capital Assets (300 000) (1 582 000) (1 882 000) (2 306 211) (424 211) 5Project Expenditure (72 852 460) (44 013 965) (116 866 425) (97 179 526) 19 686 899 6Goods and services (16 966 540) (2 573 035) (19 539 575) (13 659 330) 5 880 245 7

Total expenditure (120 975 000) (44 679 000) (165 654 000) (138 431 233) 27 222 767

Deficit before taxation - - - (665 327) (665 327)Actual Amount on Comparable Basis as Presented in the Budget and Actual Comparative Statement

- - - (665 327) (665 327)

The variance between the actual and budget amounts are presented and explained in Note 23 and .24



ACCOUNTING POLICIES

1. Presentation of Annual Financial Statements

TheannualfinancialstatementshavebeenpreparedinaccordancewiththeStandardsofGenerallyRecognised Accounting Practice (GRAP), issued by the Accounting Standards Board (ASB).

Theseannualfinancialstatementshavebeenpreparedonanaccrualbasisofaccountingandareinaccordancewithhistoricalcostconventionasthebasisofmeasurement,unlessspecifiedotherwise.Theyarepresented in South African Rand.

The following GRAP Standards were approved by the Accounting Standards Board but are not yet effective

GRAP 32 Service Concession Arrangements: Grantor

GRAP 108 Statutory Receivables

IGRAP17ServiceConcessionArrangementsWhereaGrantorControlsaSignificantResidualInterestinanAsset

GRAP 20 Related - party disclosures

The above standards will be adopted when they become effective from the 1st of April 2019 (except for those standards that are not are not applicable to the Entity)

The above standards do not have any material effects on the current Financial Statements

The entity has opted to apply GRAP 20 in formulating disclosure on related parties.

• Thecashflowstatementispreparedinaccordancewiththedirectmethod.

• Specificinformationhasbeenpresentedseparatelyonthestatementoffinancialpositionsuchas:

- Receivables from non-exchange transactions,

- Payables from non-exchange transactions

• Disclosure of any amount and nature of any restrictions on cash balances is required. A summary of thesignificantaccountingpolicies,whichhavebeenconsistentlyappliedinthepreparationofthese annualfinancia

1.1 Going concern assumption

Theseannualfinancialstatementshavebeenpreparedbasedontheexpectationthattheentitywillcontinueto operate as a going concern for at least the next 12 months.

1.2 Trade and other receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is evidence that the agency will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carryingamountandthepresentvalueofestimatedfuturecashflows,discountedattheeffectiveinterestrate.

87




1.3 Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call accounts with banks and investments in money market instruments.

1.4 Accounting estimates and assumptions

Inpreparingtheannualfinancialstatements,managementisrequiredtomakeestimatesandassumptionsthat affect the amounts presented in the annual financial statements and related disclosures. Use ofavailable information and the application of judgements is inherent in the formation of estimates. Actual results in the future could differ from these estimates whichmay bematerial to the annual financialstatements.Significantjudgementsinclude:

1.4.1 Useful lives of property, plant and equipment and intangible assets

The entity depreciates or amortises its property, plant and equipment and intangible assets over the estimated useful lives of the assets, taking into account the residual values of the assets at the end of their useful lives, which is determined when the asset becomes available for use. The useful lives and residual values of the assets are based on industry knowledge and reviewed annually.

1.4 .2 Revenue recognition

Accounting policy note 1.13 on Revenue from both exchange transactions and non-exchange transactions describes the conditions under which revenue is recorded by the management of the entity. In making their judgements, management considered the detailed criteria for the recognition of revenue as set out in GRAP 9; Revenue from Exchange Transactions and GRAP 23 Revenue from Non Exchange Transactions and in particular,whenserviceshavebeenrendered.Themanagementoftheentityissatisfiedthatrecognitionofthe revenue in the current year is appropriate.

1.4.3. Provisions

Management determined an estimate for provision raised based on the information available.

1.4.4. Financial assets and liabilities

Theclassificationoffinancialassetsandliabilitiesintocategories,isbasedonmanagement’seducatedjudgements.

1.4.4.1 Recognition and measurement - Financial assets and liabilities

Theentitymeasuresafinancialassetandfinancialliabilityinitiallyatitsfairvalueplustransactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialliability.Transactioncostsareaddedtofinancialinstrumentcarriedatamortisedcost



1.4.5 Impairment of property plant and equipment

The impairment of property, plant and equipment is based on the input provided by the entity’s technical advisors including those of management. This input includes the conditional assessment of assets after physicalverification.

1.5 Property, plant and equipment

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

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

• itisprobablethatfutureeconomicbenefitsorservicepotentialassociatedwiththeitemwillflowto

• the entity; and the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

Initial measurement

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.

Whensignificantcomponentsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyare accounted for as separate items (major components) of property, plant and equipment.

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

Subsequent measurement

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

89




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:

Furniture and fixturesItem Depreciation method Avarage Useful life

Straight line 7- 9 yearsMotor vehicles Straight line 5 - 8 yearsComputer equipment Straight line 6 - 8 yearsFinance lease Straight line 2 - 3 yearsOtherfixedassets Straight line 3 - 5 years

The depreciable amount of an asset is allocated on a systematic basis over its useful life.

Eachpartofanitemofproperty,plantandequipmentwithacostthatissignificantinrelationtothetotalcost of the item is depreciated separately.

Thedepreciationmethodusedreflectsthepatterninwhichtheasset’sfutureeconomicbenefitsorservicepotential are expected to be consumed by the entity. The depreciation method applied to an asset is reviewedatleastateachreportingdateand,iftherehasbeenasignificantchangeintheexpectedpatternofconsumptionofthefutureeconomicbenefitsorservicepotentialembodiedintheasset,themethodischangedtoreflectthechangedpattern.Suchachangeisaccountedforasachangeinanaccountingestimate.

The entity assesses at each reporting date whether there is any indication that the entity expectations about the residual value and the useful life of an asset have changed since the preceding reporting date. If any such indication exists, the entity revises the expected useful life and/or residual value accordingly. The change is accounted for as a change in an accounting estimate.

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

Items of property, plant and equipment are derecognised when the asset is disposed of or when there are nofurthereconomicbenefitsorservicepotentialexpectedfromtheuseoftheasset.

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

Assets which the entity holds for rentals to others and subsequently routinely sell as part of the ordinary course of activities, are transferred to inventories when the rentals end and the assets are available-for-sale.Proceedsfromsalesoftheseassetsarerecognisedasrevenue.Allcashflowsontheseassetsareincludedincashflowsfromoperatingactivitiesinthecashflowstatement.

7 - 9 years



The entity separately discloses expenditure to repair and maintain property, plant and equipment in the notestothefinancialstatements(seenote5).

1.6 Intangible assets

Anassetisidentifiableifiteither:

• is separable, i.e. is capable of being separated or divided from an entity and sold, transferred, licensed, rentedor exchanged, either individually or togetherwith a related contract, identifiable assets orliability, 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.

The entity assesses the probability of expected future economic benefits or service potential usingreasonable 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.

Anintangibleassetisregardedashavinganindefiniteusefullifewhen,basedonallrelevantfactors,thereisnoforeseeablelimittotheperiodoverwhichtheassetisexpectedtogeneratenetcashinflowsorservicepotential. 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.

Reassessingtheusefullifeofanintangibleassetwithafiniteusefullifeafteritwasclassifiedasindefiniteis 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.

91




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

Computer softwareItem Amortisation method Avarage Useful life

Straight line 3 - 8 years

The entity discloses relevant information relating to assets under construction or development, in the notestothefinancialstatements(seenote).

1.7 Financial instruments

Afinancialinstrumentisanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityor a residual interest of another entity.

A financial asset is:

• cash;

• a residual interest of another entity; or

• a contractual right to:- receivecashoranotherfinancialassetfromanotherentity;or- exchangefinancialassetsorfinancialliabilitieswithanotherentityunderconditionsthatare

potentially favourable to the entity.

Financial assets are measured at amortised cost using the effective interest rate method, less any impairment. Interest income is recognised by applying the effective interest rate except for short-term receivables when the recognition of interest would be immaterial.

Afinancialliabilityisanyliabilitythatisacontractualobligationto:

• delivercashoranotherfinancialassettoanotherentity;or

• exchangefinancialassetsorfinancialliabilitiesunderconditionsthatarepotentiallyunfavourabletothe entity.

Financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis, except for short-term trade payables where the recognition of interest will be immaterial.

Initialmeasurementoffinancialassetsandfinancialliabilities

Theentitymeasuresafinancialassetandfinancialliabilityinitiallyatitsfairvalueplustransactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialassetorfinancialliability.

3 - 8 years



Subsequent measurement of financial assets and financial liabilities

Theentitymeasuresallfinancialassetsandfinancialliabilitiesafterinitialrecognitionusingthefollowingcategories:

• Financial instruments at fair value.

1.8 Leases

Finance leases - lessee

Initial recognition and measurement

Financeleasesarerecognisedasassetsandliabilitiesinthestatementoffinancialpositionatamountsequal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. Thecorrespondingliabilitytothelessorisincludedinthestatementoffinancialpositionasafinanceleaseobligation.

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

Subsequent measurement

Minimumleasepaymentsareapportionedbetweenthefinancechargeandreductionoftheoutstandingliability.Thefinancechargeisallocatedtoeachperiodduringtheleasetermsoastoproduceaconstantperiodic rate of on the remaining balance of the liability.

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

Operating leases - lessor

Operating lease revenue is recognised as revenue on a straight-line basis over the lease term.

Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease revenue.

The aggregate cost of incentives is recognised as a reduction of rental revenue over the lease term on a straight-line basis.

Theaggregatebenefitofincentivesisrecognisedasareductionofrentalexpenseovertheleasetermona straight-line basis.

Incomeforleasesisdisclosedunderrevenueinstatementoffinancialperformance.

93




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.

1.9 Impairment of cash-generating assets

Cash-generating assets are assets used with the objective of generating a commercial return. Commercial returnmeansthatpositivecashflowsareexpectedtobesignificantlyhigherthanthecostoftheasset.

Impairmentisalossinthefutureeconomicbenefitsorservicepotentialofanasset,overandabovethesystematic recognitionof the lossof theasset’s futureeconomicbenefitsor servicepotential throughdepreciation (amortisation).

Carryingamountistheamountatwhichanassetisrecognisedinthestatementoffinancialpositionafterdeducting any accumulated depreciation and accumulated impairment losses thereon.

Acash-generatingunitisthesmallestidentifiablegroupofassetsusedwiththeobjectiveofgenerating

acommercialreturnthatgeneratescashinflowsfromcontinuingusethatarelargelyindependentofthecashinflowsfromotherassetsorgroupsofassets.

Costsofdisposalareincrementalcostsdirectlyattributabletothedisposalofanasset,excludingfinancecosts 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:

• the period of time over which an asset is expected to be used by the entity; or

• the number of production or similar units expected to be obtained from the asset by the entity.

Judgements made by management in applying the criteria to designate assets as cash-generating assets or non-cashgenerating assets, are as follows:



1.10 Impairment of non-cash-generating assets

Cash-generating assets are assets used with the objective of generating a commercial return. Commercial returnmeansthatpositivecashflowsareexpectedtobesignificantlyhigherthanthecostoftheasset.

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

Impairmentisalossinthefutureeconomicbenefitsorservicepotentialofanasset,overandabovethesystematic recognitionof the lossof theasset’s futureeconomicbenefitsor servicepotential throughdepreciation (amortisation).

Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use.

Identification

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

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

Irrespective of whether there is any indication of impairment, the entity also test a non-cash-generating intangibleassetwithanindefiniteusefullifeoranon-cash-generatingintangibleassetnotyetavailableforuse for impairment annually by comparing its carrying amount with its recoverable service 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.

1.11 Share capital / contributed capital

Contributed capital is the initial contribution made by the Kwazulu-Natal Provincial government.

1.12 Employee benefits

Post-employment benefits: Defined contribution plans

Definedcontributionplansarepost-employmentbenefitplansunderwhichanentitypaysfixedcontributionsinto a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions ifthefunddoesnotholdsufficientassetstopayallemployeebenefitsrelatingtoemployeeserviceinthecurrent and prior periods.

When an employee has rendered service to the entity during a reporting period, the entity recognise the contributionpayabletoadefinedcontributionplaninexchangeforthatservice:

95




• as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the reporting date, an 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 contribution in the cost of an asset.

Wherecontributionstoadefinedcontributionplandonotfallduewhollywithintwelvemonthsaftertheendof the reporting period in which the employees render the related service, they are discounted. The rate used todiscountreflectsthetimevalueofmoney.Thecurrencyandtermofthefinancialinstrumentselectedtoreflectthetimevalueofmoneyisconsistentwiththecurrencyandestimatedtermoftheobligation.

1.13 Provisions

Provisions are recognised when:

• the entity has a present obligation as a result of a past event;

• itisprobablethatanoutflowofresourcesembodyingeconomicbenefitsorservicepotentialwillberequired to settle the obligation; and

• a reliable estimate can be made of the obligation.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 26.

All the provisions are short-term in nature and thus ignore the effect of discounting.

1.14 Revenue

Revenuecomprisesgross inflowsofeconomicbenefitsorservicepotential receivedand receivablebyan entity, which represents an increase in net assets, other than increases relating to contributions from owners.

Recognition

Revenuecomprisesofrevenuefromexchangeandnonexchangetransactions.An inflowofresourcesfrom a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent thataliabilityisalsorecognisedinrespectofthesameinflow.

Astheentitysatisfiesapresentobligation recognisedasa liability in respectofan inflowof resourcesfrom 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.



Grants and other donor income

Bequeststhatsatisfythedefinitionofanassetarerecognisedasassetsandrevenuewhenitisprobablethatthefutureeconomicbenefitsorservicepotentialwillflowtotheentity,andthefairvalueoftheassetscan be measured reliably.

Interest earned on grant income

Interest earnedonconditional grantmonies received is reflectedas “ amountsowing to funders”, in acasewherespecificpermissionisrequiredfromthefunderbeforeitcanbeexpendedonprojectactivities.When approval is granted, interest earned is transferred to conditional grants and recognised as revenue in accordance with principles set out in paragraphs above.

Unspent grants

When conditional grants they are received are initially recognised as a liability. Once the entity has complied with all the conditions of the grant received, the grant is re-allocated from liability and recognised in the Statement of Financial Performance.

Other income

Revenue from the sale of bid documents is recognised upon receipt of cash.

1.15 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 offinancialperformance in theyear that theexpenditurewas incurred.Theexpenditure isclassified inaccordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenueinthestatementoffinancialperformance.

1.16 Irregular, fruitless and wasteful expenditure

Irregularexpenditureasdefinedinsection1ofthePFMAisexpenditureotherthanunauthorisedexpenditure,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. 1 of 2018/2019 which was issued in terms of sections 76(2)(e) to 76(4) (a) of the PFMA requires the following (effective from 1 December 2018):

97




1.16.1 Recognition

Irregularexpenditureisincurredwhentheresultingtransactionisrecognisedinthefinancialrecordsofthepublic entity in accordance with the relevant Accounting Framework.

For a public entity applying Generally Recognised Accounting Practice (GRAP) to incur irregular expenditure, thenoncompliancemustbelinkedtoafinancialtransaction.Althoughatransactionmaytriggerirregularexpenditure, a public entity will only record irregular expenditure when a transaction is recognised as expenditure in the Statement of Financial Performance in accordance with GRAP.

1.16.2 Irregular expenditure incurred in prior years.

AAccounting authorities of public entities must deal with previous cases of irregular expenditure that werenotcondonedor removedfromnotes to theannualfinancialstatements in termsof the IrregularExpenditure Framework.

Irregularexpenditurethatwasincurredandidentifiedduringthecurrentfinancialyearandwhichwasnotcondoned 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 theamountfromthepersonconcerned.Ifrecoveryisnotpossible,theaccountingofficeroraccountingauthority may write off the amount as debt impairment and disclose such in the relevant note to the financialstatements.Theirregularexpenditureregistermustalsobeupdatedaccordingly.Iftheirregularexpenditure has not been condoned and no person is liable in law, the expenditure related thereto must remainagainsttherelevantprogramme/expenditureitem,bedisclosedassuchinthenotetothefinancialstatements and updated accordingly in the irregular expenditure register.

1.17 Budget information

Entity is subjected to budgetary limits in the form of appropriations or budget authorisation’s (or equivalent), which is given effect through authorising legislation, appropriation or similar.

Generalpurposefinancialreportingbyentityshallprovideinformationonwhetherresourceswereobtainedand used in accordance with the legally adopted budget.

The approved budget is prepared on a cash basis and presented by economic classification linked toperformance outcome objectives.

Theapprovedbudgetcoversthefiscalperiodfrom2018/04/01to2019/03/31.

The annual financial statements and the budget are on the different basis of accounting therefore acomparison with the budgeted amounts for the reporting period have been included in the Statement of comparison of budget and actual amounts.

Changesbetweentheapprovedandfinalbudgetareaconsequenceofreallocationswithinthebudget.



1.18 Related parties

A related party is a person or an entity with the ability to control or jointly control the other party, or exercise significantinfluenceovertheotherparty,orviceversa,oranentitythatissubjecttocommoncontrol,orjoint control.

Controlisthepowertogovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromits activities.

Joint control is the agreed sharing of control over an activity by a binding arrangement, and exists only whenthestrategicfinancialandoperatingdecisionsrelatingtotheactivityrequiretheunanimousconsentof the parties sharing control (the ventures).

Related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party, regardless of whether a price is charged.

Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsofanentity,but is not control over those policies.

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 toinfluence,orbeinfluencedby,thatmanagementintheirdealingswiththeentity.

The entity is exempt from disclosure requirements in relation to related party transactions if that transaction occurs within normal supplier and/or client/recipient relationships on terms and conditions no more or less favourable than those which it is reasonable to expect the entity to have adopted if dealing with that individual entity or person in the same circumstances and terms and conditions are within the normal operating parameters established by that reporting entity’s legal mandate.

Where the entity is exempt from the disclosures in accordance with the above, the entity discloses narrative information about the nature of the transactions and the related outstanding balances, to enable users of theentity’sfinancial statements tounderstand theeffectof relatedparty transactionson itsannualfinancialstatements.

1.19 Events after reporting date

Events after reporting date are those events, both favourable and unfavourable, that occur between the reportingdateandthedatewhenthefinancialstatementsareauthorisedforissue.Twotypesofeventscanbeidentified:

• those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); and

99




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

Theentitywilladjusttheamountrecognisedinthefinancialstatementstoreflectadjustingeventsafterthereporting date once the event occurred.

Theentitywilldisclosethenatureoftheeventandanestimateofitsfinancialeffectorastatementthatsuch estimate cannot be made in respect of all material non-adjusting events, where non-disclosure could influencetheeconomicdecisionsofuserstakenonthebasisofthefinancialstatements.

1.20 Commitments

Itemsareclassifiedascommitmentswheretheentitycommitsitselftofuturetransactionthatwillresultsin the future outflow of resources. Commitments represents both goods and services that have beenapproved and contracted for where the expenditure has been approved and the contract has been awarded at the reporting period.

1.21 Risk management

It isthepolicyoftheentitytodisclose informationthatenablestheusersof itsfinancialstatementstoevaluatethenatureandextentofrisksarisingfromfinancialinstrumentstowhichtheentityisexposedonthe reporting date. Risk and exposure are disclosed as follows:

Credit Risk

Eachclassoffinancialassetisdiscloseseparately.

Maximumexposuretocreditrisknotcoveredbycollateralisspecified.Financialassetscoveredbycollateralarespecified.

Liquidity risk

Liquidityriskistheriskthattheentitywillencounterdifficultyinmeetingtheobligationsassociatedwithitsfinancialliabilitiesthataresettledbydeliveringcashoranotherfinancialasset.

Liquidity risk is managed by ensuring that all assets are reinvested at maturity at competitive interest rates inrelationtocashflowrequirements.Liabilitiesaremanagedbyensuringthatallcontractualpaymentsaremet on a timeous basis and if required, additional new arrangements are established at competitive rates toensurethatcashflowrequirementsaremet.

A maturity analysis for financial liabilities (where applicable) that shows the remaining undiscountedcontractualmaturitiesisdisclosedinthenotestotheannualfinancialstatements.



1.22 Prepaid Expenses

Amounts prepaid are recognised in the Statement of Financial Position when the payments are made and are derecognised as and when the goods or services are received or the funds are utilised. Prepayments outstanding at the end of the year are carried in the Statement of Financial Position at cost.

1.23 Foreign currency translation

CashflowsarisingfromforeigncurrencytransactionsaretranslatedintoSouthAfricanRandsusingthespot exchange rates prevailing at the date of payment and losses or gains are recognised in the Statement of Financial performance.

1.24 Rounding

UnlessotherwisestatedfinancialfigureshavebeenroundedtothenearestoneRand.

1.25 Current year comparison with budget

Acomparisonbetweentheapproved,finalbudgetandactualamountsforeachprogrammeoreconomicclassificationisincludedintheStatementofComprarisonofBudgetandActualAmounts.

1.26 Employee Costs

Thecostofshorttermbenefitisrecognisedduringtheperiodinwhichtheemployeesrenderedtherelatedservice. The provision for employee entitlements to salaries and annual leave represent the amount which the entity has a present obligation to pay as result of employees service provided for at the reporting date. The provision and accrual has been calculated at undiscounted amount on current salary rates

1.27 Expenditure

Expenditure is recognised on an accrual basi

101




NOTES TO THE ANNUAL FINANCIAL STATEMENTS

Figures in Rand 2019 2018

2. Receivables from exchange and non-exchange transactionsStaff Debt 85 134 -Other receivables 7 435 112 5 049Project management fees - COGTA 82 428 -

Receivables from non-exchange transactions- DARD - 3 840 0007 602 674 3 845 049

Receivables are as a result of staff salary overpayment which have been fully recovered in the current year and grants or management fees that were not received at year end.

3. Prepaid Expenses

CategoriesPrepayment of software licences 126 726 75 601Prepayment of good and services 1 619 478 7 439 110Transfers 31 294 633 -

33 040 837 7 514 711

-Prepaymentsonsoftwareareforlicencefeespaidpartlyfor2019and2020financialyears.

-Transfersrelatestodirecttransfersmadetobeneficiarieswhichhavenotbeenutilisedbythebeneficiariesby 31 March 2019.

- Prepayment of goods and services relates to project funds paid in respect of which goods have not been received by year end



4. Cash and cash equivalents

Figures in Rand 2019 2018Operational Account 822 275 1 948 612KZN Department of Agriculture and Rural Development Call Account- DARD 22 900 811 13 844 320KZN Department of Agriculture and Rural Development Call Account - Operational

926 815 6 236 229

KZN-Co-operativeGovernance&TraditionalAffiarsCallAcount-COGTA 1 328 322 6 353 124Cash on hand 6 223 -

25 984 446 28 382 285ABSA : 40-5078-5995

Cash book balance at beginning of the year 1 949 113 4 109 001Cash book balance at the end of the year 822 275 1 948 612

- -Bank statement balance at beginning of the year 1 948 612 4 109 001Bank statement balance at the end of the year

DARD ABSA Call Account- 92-7008-9495

822 275 1 948 612

Cash book balance at beginning of the year 13 844 320 7 570 948Cash book balance at the end of the year 22 900 811 13 844 320

- -Bank statement balance at beginning of the year 13 844 320 7 570 948Bank statement balance at the end of the year

DARD- Operational ABSA Call Account- 92-7008-9704

22 900 811 13 844 320

Cash book balance at beginning of the year 6 236 229 6 304 230Cash book balance at the end of the year 926 815 6 236 229

- -Bank statement balance at beginning of the year 6 236 229 6 304 230Bank statement balance at the end of the year 926 815 6 236 229Cash book balance at beginning of the year 6 353 124 8 503 906Cash book balance at the end of the year 1 328 322 6 353 124Bank statement balance at beginning of the year 6 353 124 8 503 906Bank statement balance at the end of the year 1 328 322 6 353 124Cash on hand 6 223 2 647

103




5. Property, plant and equipment

2019 2018

Cost / Valuation

Accumulated depreciation

and accumulated

impairment

Carrying value

Cost / Valuation

Accumulated Carr

depreciation and

accumulated impairment

Carrying value

Computer equipment 3 514 665 (1 580 333) 1 934 332 3 382 683 (1 209 937) 2 172 746Motor vehicles 2 385 386 (869 851) 1 515 535 1 420 995 (1 289 139) 131 856Furniture and fixtures 1 767 516 (1 273 739) 493 777 1 767 516 (1 111 935) 655 581Otherfixedassets 574 992 (397 719) 177 273 504 898 (291 228) 213 670Total 8 242 559 (4 121 642) 4 120 917 7 076 092 (3 902 239) 3 173 853

Reconciliation of property, plant and equipment - 2019Opening Additions Disposals Depreciation Total

Furnitureandfixtures 655 581 - - (161 804) 493 777Motor vehicles 131 856 1 655 897 (20 155) (252 063) 1 515 535

Computer equipment 2 172 746 203 274 (31 214) (410 474) 1 934 332Otherfixedassets 213 670 72 793 (1 511) (107 679) 177 273Total 3 173 853 1 931 964 (52 880) (932 020) 4 120 917

Reconciliation of property, plant and equipment - 2018Opening balance Additions Disposals Depreciation Impairment

loss Total

Finance lease asset

6 789 - - (6 789) - -

Furniture and fixtures

787 561 40 000 - (171 980) - 655 581

Motor vehicles 266 199 - - (134 343) - 131 856Computer equipment

1 454 023 1 430 314 (41 381) (370 111) (300 099) 2 172 746

Otherfixedassets

95 883 175 942 - (58 155) - 213 670

2 610 455 1 646 256 (41 381) (741 378) (300 099) 3 173 853

Expenditure incurred to repair and maintain property, plant and equipmentExpenditure incurred to repair and maintain property, plant and equipment included in Statement of Financial Performance

Furniture and Fixtures 98 085 105 905Motor Vehicles 22 501 47 892

120 586 153 797



6. Intangible assets

2019 2018Cost/ Valuation

Accumulated amortisation

and accumulated

impairment

Carrying value

Cost / Valuation

Accumulated amortisation

and accumulated

impairment

Carrying value

Computer software 8 224 547 (5 360 574) 2 863 973 7 813 498 (4 341 165) 3 472 333

Reconciliation of intangible assets - 2019Opening balance

Additions Amortisation Total

Computer software 3 472 333 411 019 (1 019 379) 2 863 973

Reconciliation of intangible assets - 2018Opening balance

Additions Amortisation Impairment loss

Total

Computer software 4 330 990 4 583 (827 295) (35 945) 3 472 333

7. Operating lease Liability

Current liabilities (4 762 866) (4 531 205)Leasepaymentsunderanoperatingleaseshallberecognisedasanexpenseinthestatementoffinancialperformance on a straight line basis over the lease term unless another systematic basis is more representativeofthetimepatternoftheuser’sbenefit.

Minimun lease payments dueWithin one year 5 371 746 4 806 397Insecondtofifthyear 24 810 749 16 851 766Morethanfiveyears - 12 969 838

30 092 468 34 628 001Theentityenteredintoa10yearleaseforofficepremisescommencingonthe1stofMarch2014.Leaserentals are subjected to a 8% escalation rate per annum.

There is also another lease for 3 years with Minolta which commenced on the 1st of October 2017 with no escalation rate, the lease expires on 30 September 2020.

Leasepaymentsunderanoperatingleaseshallberecognisedasanexpenseinthestatementoffinancialperformance on a straight line basis over lease term unless another systematic basis is more representative ofthetimepatternoftheusersbenefit.TheVATincreaseby1percentwasadjustedintherentalfigurefrom1April 2018.

105




8. Payables from exchange transactions

Trade payables 85 318 225 361

Accrued expenses 2 311 920 1 632 949Leave accrual 12 552 105 349

2 409 790 1 963 659

The leave accrual of R12 552 as disclosed above is annual leave payable to employees who left the organisation at year end.

9. Unspent Grants

2019 Opening balance

Receipts Interest Payments Closing balance

KZN Department of Agriculture and rural Development (DARD)

16 222 147 130 997 792 1 786 044 (108 250 990) 40 754 993

KZN Department of Cooperative Governance and Traditional Affairs

5 833 797 - 287 501 (4 730 202) 1 391 096

22 055 944 130 997 792 2 073 545 (112 981 192) 42 146 089

2018Opening balance

Receipts Interest Payments Closing balance

KZN Department of Agriculture and Rural Development (DARD).

14 675 991 106 510 212 532 082 (109 336 138) 12 382 147

Accrued income - KZN DARD - 3 840 000 - - 3 840 000KZN Department of Cooporate Governance and Traditional Affairs.

9 506 085 - 489 242 (4 161 530) 5 833 797

24 182 076 110 350 212 1 021 324 (113 497 668) 22 055 944

10. Provisions

Reconciliation of provisions - March 2019Opening Balance Movement Total

Provisions (Leave pay) 822 823 57 786 880 609

Reconciliation of provisions - March 2018

Opening Balance Movement Total

Provisions (Leave pay) 735 355 87 468 822 823

11. Share capital / contributed capitalIssued 5 000 5 000



12. Prior Period errors

Conditional government grant that the ADA receives from Department of Agriculture and Rural Development (DARD) for implementing projects on behalf of DARD is to be recognised, in terms of Grap 23, as revenue fromnon-exchangetransactions.Inthepreviousyearstheentityerroneouslyclassifiedtherevenuearisingfrom conditional grant received from the DARD as an exchange transaction as the conditions of the grant havebeenmet.Thiserrorhasbeencorrectedfor2017/18financialyeartoaccountforthisrevenueasrevenue from non-exchange transactions.

13. Revenue

Theprioryearerrorhadnofinancialeffectonaccumulatedsurplus.Project management fees 229 810 173 438

Gain on disposal of assets 296 027 -

Forex Gain - 1 192 950Sundry income 154 618 81 797Interest Received 232 075 374 989Government grants & subsidies 112 833 811 113 324 230

113 746 341 115 147 404

The amount included in revenue arising from exchanges of goods or services are as follows:Project management fees 229 810 173 438Forex Gain - 1 192 950Gain on disposal of assets 296 027 -Other income 154 618 81 797Interest received 232 075 374 989

912 530 1 823 174

The amount included in revenue arising from non-exchange transactions is as follows:Taxation revenueTransfer revenueGovernment grants & subsidies 112 833 811 113 324 230

14. Employee benefit obligations

Defined contribution plan

ItisthepolicyoftheADAtoprovidepensionbenefitstoallitsemployees.Thepensionfundbenefitcameintoeffect in February 2014. Theentityisundernoobligationtocoveranyunfundedbenefits.

The total economic entity contribution to such schemes 6 305 287 5 559 017Theamountrecognisedasanexpensefordefinedcontributionplansis 2 621 716 2 291 673

107




15. Employee related costs

Basic salaries 15 512 412 14 703 240Workmen’s Compensation 38 359 34 159Movement in leave provision 57 786 87 468Salaries -PAYE 5 645 479 5 128 429Pension 2 621 716 2 291 673Board Committee Fees 1 337 270 1 536 436Leave accrual 184 179 105 349

25 397 201 23 886 754

16. Finance costs

Finance leases - 33417. Audit fees

Current year paid 980 614 908 029

18. General expenses

Advertising 283 024 553 740Audit fees 980 614 908 029Bank charges 27 661 28 753Travel and subsistence 1 359 599 2 282 276Catering 106 274 123 975Cleaning 452 490 429 975Computer Expenses 443 703 1 014 731Computer Software Licenses 407 154 623 873Consulting 10 2 065

Electricity and water 425 426 300 433Insurance 230 367 186 272Legal Fees 523 099 169 062Marketing 245 322 635 471Motor vehicle expenses 266 780 226 021OfficeConsumables 42 837 2 221Other expenses 1 946 6 779Photocopying and printing 258 191 285 807Publications 123 266 114 449Recruitment costs 58 506 28 663Security 675 204 603 967Small assets 1 398 3 691Staff Wellness 157 119 77 347Stationery 134 977 93 558Subscriptions 59 844 41 205Telephone and fax 966 142 889 349Training 463 751 393 037

9 136 115 10 356 887



19. Taxation

No provision has been made for taxation as the Trust is exempt from income tax.

20. Schedule of grants and expenditure

Project expenditure Project opening balance

Project allocation

Current year Project closing expenditure

balance01 April 2018/ 2019 31 March 2019 31 March 2019

Bambanana - 7 000 000 - 7 000 000Cappeny Estates 5 630 837 22 491 5 137 898 515 430Cathedral Peak Outgrower 1 379 772 12 780 222 14 159 994 -Celokuhle 2 943 897 5 650 516 5 593 856 3 000 557Contractor Development 85 (85) - -Cowboy Abattoirs (127 452) 127 452 - -Dabhazi/Maphophoma Mill 2 061 165 10 766 494 10 366 260 2 461 399Dagster Farm - 163 185 163 185 -Emadungeni Piggery-COGTA 4 735 306 1 289 083 3 342 738 2 681 651Empangisweni Trust 95 056 68 086 163 142 -Empangisweni Trust-COGTA 826 672 20 509 847 181 -Eston Family trust - 3 102 079 19 389 3 082 690Fertilizer Aggregators 337 983 (13 114) 324 869 -Fish Feed UKZN - 367 559 367 559 -Honey Value Chain 512 407 598 475 1 080 441 30 441Inkandla Essential Oils 1 395 710 602 925 1 923 635 75 000Isibone Primary Co-op - 214 500 214 500 -Isisekelo Co-op - 11 200 11 200 -Izithelo Zempilo 65 234 (54 034) 11 200 -KZN Essential oils 2 874 495 3 357 186 3 206 326 3 025 355MaAnde Investments 4 790 170 (65 451) 1 790 471 2 934 248Madzikane - 7 627 368 2 191 673 5 435 695Mgodeni - 1 500 000 - 1 500 000Mkhumbana 2 073 608 (113 215) 1 675 717 284 676Model Butchery 480 975 948 418 1 429 393 -Mshibe - 450 000 - 450 000Mthethwa Processing 1 038 173 (8 295) 1 017 378 12 500

Nhlanhleni - 271 743 176 505 95 238Nkunzana 992 405 (992 405) - -Nofisa 1 916 324 1 772 356 3 008 454 680 226Nkwali 353 983 259 076 453 773 159 286Phathokwakho - 1 109 119 1 109 288 (169)Rapid dawn - 503 563 - 503 563

109




Programme 2- Comprehensive capacity building

607 032 2 040 350 2 056 556 590 826

Pragramme 3- Enterprise and value chain development

239 778 (39 010) 188 250 12 518

Siyaphambili Tannery 2 400 139 621 372 2 291 900 729 611Summerhill 921 816 5 168 116 852 901 5 237 031Techno Serve (3 246 801) 3 402 286 39 000 116 485Thokazi Farm and Ophondweni - 715 628 306 402 409 226Thulwane - 3 970 000 - 3 970 000Weeneen Chicory 656 394 (234 162) 151 232 271 000Young Farmers Development programme

(1 678 824) 1 678 824 - -

Charlestown - 402 055 - 402 055River Valley - 1 034 700 - 1 034 700Siyahluma - 5 400 000 - 5 400 000Kwazigugu - 700 000 - 700 000

34 276 339 84 197 165 65 672 266 52 801 238

Project expenditure by classification

2019 TotalExpenditure

2018 TotalExpenditure

Employee Costs 2 872 875 7 642 505Travel & accommodation 1 329 804 1 172 572Production inputs 10 744 735 7 070 394Production implements 181 491 419 209Training 761 647 11 094 815Engineering services 1 419 107 2 675 705Farm equipment 15 129 446 9 975 269Farm Management service 65 000 2 872 506Operating expenses 5 328 088 4 772 242Feasibility study 879 669 1 580 814Construction 14 592 845 19 160 862Direct transfers 12 367 559 -

65 672 266 68 436 893



21. Cash (used in) generated from operations

Surplus 6 398 893 5 277 493Adjustments for:Depreciation and Amortisation 1 951 429 1 568 674Loss on sale of assets (296 027) 35 079Asset written off - 336 046Movements in operating lease assets

231 661 651 103

Movements in provisions 57 786 (87 468)Changes in working capital:Decrease/(Increase) Receivables from non-exchange transactions (3 757 625) (3 051 502)(Increase) / Decrease in Prepaid expenses (25 526 126) 3 307 223(Decrease)/Increase in Payables from exchange transactions

446 101 (2 365 613)

(Decrease)/Increase in Unspent conditional grants and receipts

20 090 145 (2 126 132)

(403 763) 3 544 903

22. Going concern

We draw attention to the fact that at 31 March 2019, the entity had an accumulated surplus of R 23 425 611 and that the entity’s total assets exceed its liabilities by R 23 430 611.Theannualfinancialstatementshavebeenpreparedonthebasisofaccountingpoliciesapplicabletoagoingconcern.Thisbasispresumesthatfundswillbeavailabletofinancefutureoperationsandthattherealisationof assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The ability of the entity to continue as a going concern is dependent on a number of factors. The most significantoftheseisthatthememberscontinuetoprocurefundingfortheongoingoperationsfortheentityandthattheagreementreferredtoinnote16,theseannualfinancialstatementswillremaininforceforsolong as it takes for the entity.

23. Reconciliation of budget surplus with Financial Statements

Thebudgetisapprovedonacashbasisbyfunctionalclassification.Theapprovedbudgetcoverstheyearfrom1April2018to31March2019.Thefinancialstatementsarepreparedonanaccrualbasisusingaclassificationofthenatureofexpensesinthestatementoffinancialperformance.Thefinancialstatementsdiffer from the budget, which is approved on a cash basis.

Reconciliation of cash between the accrual and cash basis

Theamountsinthefinancialstatementswereadjustedfromtheaccrualbasistoacashbasisandreclassifiedbyclassificationtobeonthesamebasisasthefinalapprovedbudget.Theamountsoftheseadjustmentsareidentifiedinthefollowingtable.Areconciliationbetweentheactualamountsonacomparablebasisaspresented in the statement of comparison of budget and actual amounts and the actual amounts in the cash flowstatementfortheyearthatended31March2019ispresentedbelow.

111




GRAP 24 Reconciliation

OperatingActivities

FinancingActivities

InvestingActivities

Total

Actual amount comparable basis as presented in the budget and actual comparative statement

(665 327) - (1 994 076) (2 659 403)

Timing difference 261 564 - - 261 564(403 763) - (1 994 076) (2 397 839)

24. Budget differences

Material differences between budget and actual amounts

1. Project Management Fees

- The Budget was adjusted to accommodate the Project Management fee that is for the implementation of the Local EconomicDevelopment projects on behalf of KZN Cooperative Governance and Traditional Affairs (COGTA).

- Project management fees were under collected because COGTA projects were not fully implemented by year end. Projectmanagement fees of R82 810.00 was still receivable at year end.

2. Government grants and subsidies

- Government grants were adjusted by roll- over of funds that were received in the 2017/18 Financial year.

3. Interest received

- The higher than expected interest was earned on positive bank balances due to slower spending during the year. A bulk of expenditure was committed at year end

4. Employee Costs

The under expenditure is due various vacant positions resulting from a number of staff resignations in the currentyearaswellaslongoutstandingpoststhatcouldnotbefilledinthecurrentyear..

5. Capital expenditure

The higher than budgeted expenditure is due to the purchase of motor vehicles that was not initially budgeted for.Theacquisitionwasfinancedthroughsavingsfromemployeecosts..

6. Project expenditure.

- The under expenditure is due to various projects that were in progress at year end. A further under expenditure on comparable basis is due to expenditure incurred by year end and paid for in April 2019.

7. Goods and services.

The under expenditure on comparable basis is due to expenditure that was incurred by year end and payment only made in April 2019. A further under expenditure is due to savings from: Marketing expenses; Repairs and maintenance; Advertising; Legal fees; Travel and accommodation and Telephone expenses.



25. Commitments

Approved and Contracted for

Capital Commitments

Property, plant and equipment - 1 246 662Intangible assets - 209 922

- 1 456 584Committed but not yet contracted for

Authorised operational expenditure 31 694 616 -

Approved and Contracted for

Already contracted for but not provided for

Operational expenditure 18 868 039 37 306 921

Total commitments

Total commitmentsAuthorised capital expenditure - 1 456 583Authorised operational expenditure 50 562 673 37 711 025

50 562 673 39 167 608

TheapprovedandnotyetcontractedforcommitmentsincludestransfersbytheADAtobeneficiariesthattookplaceinMarch2019andhadnotbeenusedbythebeneficiariesatyearend.

26. Related party relationships and transactions

26.1 Related party relationships

Mjindi Farming is a related party to the ADA as they are both controlled by the DARD.

26.2 Related party transactions

26.2.1 Department of agriculture and rural development (DARD)Revenue 130 997 792 121 334 000

DARD is the sole shareholder of the Agribusiness Development Agency (ADA).The ADA received the funding for operations and project implementation in the form of transfers from DARD. Operational expenditure is funded through equitable share while projects are funded through a conditional grant.

26.2.2 Agricultural Economic Association of South Africa (AESA)

Expenditure - 60 000

DrThulasizweMkhabela(ChiefOperationsOfficer)andActingCEOisaVicePresidentatAESA.DrThulasizweMkhabela left the ADA as his contract expired in May 2018.

113




26.2.3. Management remuneration for the period ended 31 March 2019

Salary Pension Other allowances

Total

DrTSMkhabela-ChiefOperationsOfficer 243 904 15 031 - 258 935MrZNdlela-ChiefExecutiveOfficer 257 530 9 473 - 267 003MsWMMkhize-ChiefFinancialOfficer 526 723 54 842 - 581 565MsNNMkhathini-ActingChiefFinancialOfficer 451 434 32 162 232 798 716 394Ms VR Dlamini- Project Manager 1 098 779 84 371 43 404 1 226 554Mr M Hoosen- Project Manager 979 582 75 380 - 1 054 962Ms Z Mazibuko 979 582 75 380 - 1 054 962Mr T Duze - Specialist PM&E 979 582 75 380 - 1 054 962Subtotal 5 517 116 422 019 276 202 6 215 337

5 517 116 422 019 276 202 6 215 337

- Dr TS Mkhabela left the ADA as his contract expired in May 2018.- Mr C Boldogh his term of secondment ended on 31 October 2018.- MsNNMkhathinistartedActingasChiefFinancialOfficer(CFO)at04October2017andwasterminatedin

31 October 2018.- Ms WM Mkhize was appointed as CFO on 01 November 2018.- Mr Z Ndlela was seconded as acting CEO on 01 November 2018 and was appointed as the Interim CEO of

the ADA on 01 March 2019.

26.2.4 Management remuneration for the period ended 31 March 2018

Salary Pension Other allowance

Total

DrTSMkhabela-ChiefOperationOfficer- 1 202 450 91 968 150 819 1 445 237MsTBMNgwenya-ChiefFinancialOfficer-(CFO)

598 032 44 396 - 642 428

Ms NN Mkhathini - Acting CFO - 346 640 26 890 211 474 585 004Ms C Vilakazi - Specialist PM & E - 94 246 - - 94 246Ms VR Dlamini - Project Manager - 1 046 456 80 269 - 1 126 725Mr P Sapsford - Project Manager - 417 678 - - 417 678Ms T Duze - Specialist PM & E - 237 044 18 224 - 255 268Mr T Mnguni ( Acting project Manager) - 600 482 61 833 131 526 793 841Mr M Hoosen - Project Manager - 237 044 18 224 - 255 268Ms Z Mazibuko - Project Manager - 237 044 18 224 - 255 268 - 5 017 116 360 028 493 819 5 870 963



-MrCBoldogh-ActingChiefExecutiveOfficer(CEO)from1Octoberto31March2018butispaidbytheDepartment of Agriculture- Ms C Vilakazi resigned in April 2017- Mrs NN Mkhathini started Acting as CFO at 04 October 2017.- Ms TBM Ngwenya resigned in 30 September 2017.- Mr P Sapsford was appointed as senior manager in July 2017 and contract ended in November 2017.- Mr T Mnguni started Acting in February to 31 December 2017.- Mr M Hoosen was appointed as senior manager from 01 January 2018.- Ms Z Mazibuko was appointed as senior manager from 01 January 2018 -Mr TS Duze was appointed as senior manager from 01 January 2018.

26.2.5 Remuneration of Board Committees2019 Board Board fees Board travel TotalDr ME Ngidi ( Chairperson) 147 511 61 023 208 534Mrs P Dabideen ( Deputy Chairperson) 81 584 12 560 94 144Adv KP Thango 82 688 10 188 92 876Ms T Ntshangase 76 352 4 734 81 086Mrs NP Linda 89 432 41 252 130 684Mr Nhlanhla Khambule 76 352 13 750 90 102Mr MV Khumalo 86 688 17 660 104 348Mr AG Mthembu 89 304 59 283 148 587Mr WR Dladla 89 560 8 241 97 801Total 819 471 228 691 1 048 162

819 471 228 691 1 048 162

2019 Audit and Risk Committee (ARC) ARC Fees Travel TotalMr SZ Hlophe (Chairperson) 58 645 3 628 62 273Mr S Mnguni ( Deputy Chairperson) 36 579 2 591 39 170Mr V Mtshali 4 096 - 4 096Mr N Sifumba 26 058 - 26 058Mr N Khambule 5 232 - 5 232Mr KP Thango 7 848 - 7 848Mr WR Dladla 5 232 - 5 232Mrs P Dabideen 2 616 - 2 616

146 306 6 219 152 525

2019 Human Resource and Remuneration Committee (HR&R) HR&R Fees TotalAdv - KP Thango 10 800 - 10 800Mrs P Dabideen 6 540 - 6 540Mr MV Khumalo 6 540 - 6 540Mrs NP Linda 6 540 - 6 540Mr AG Mthembu 6 540 - 6 540

36 960 - 36 960

115




2019 Project and Finance Committee (PFC) PFC Fees TotalMs T Ntshangase (Chairperson) 23 760 - 23 760Mr MV Khumalo ( Deputy Chairperson) 14 388 - 14 388Mrs NP Linda 14 388 - 14 388Mr AG Mthembu 14 388 - 14 388Mr WR Dladla 10 464 - 10 464Mr N Khambule 11 772 - 11 772Dr ME Ngidi 5 232 - 5 232Adv KP Thango 4 578 - 4 578Mrs P Dabideen 654 - 654

99 624 - 99 624

2018 BoardBoard

Fees Travel Total

Dr MS Mbatha - (Chairperson) - Term ended in August 2017 208 730 - 208 730Dr ME Ngidi - (Appointed as Chairperson in September 2017) 298 104 - 298 104Adv. K Thango - (Appointed in September 2017) 50 155 - 50 155Ms. T Ntshangase - (Appointed in September 2017) 48 915 - 48 915Mrs. NP Linda - (Appointed in September 2017) 50 155 16 254 66 409Mr. N Khambule - (Appointed in September 2017) 47 675 - 47 675Mr. MV Khumalo - (Appointed in September 2017) 50 155 - 50 155Mr. AG Mthembu - Appointed in September 2017 50 155 53 408 103 563Adv RR Nirghin 25 441 - 25 441Ms N Zwane 25 441 - 25 441Mrs. P Dabideen - (Deputy Chairperson) 132 360 - 132 360Mr IZ Ngcobo 25 441 - 25 441Mr WR Dladla 50 155 - 50 155

1 062 882 69 662 1 132 544

2018 Audit and Risk Committee (ARC) ARC Fees Travel TotalMr Simjee - (Chairperson - Term ended in August 2017) 36 017 - 36 017Mr V Mtshali - (Appointed as Chairperson in September 2017) 38 578 - 38 578Mr A Ngcobo 15 900 - 15 900Mr. S Ndlovu 9 540 - 9 540Adv RR Nirghin 9 540 - 9 540Mr. N Sifumba - (Appointed in September 2017) 19 851 - 19 851Mr. N Khambule 2 480 - 2 480Adv. K Thango 9 540 - 9 540Mrs P Dabideen 12 020 - 12 020Mr IZ Ngcobo 15 900 - 15 900Dr ME Ngidi 15 900 - 15 900

185 266 - 185 266



2018 Human Resource and Remuneration Committee (HR &R)

HR & R Fees Travel Total

Ms P Dabideen (Chairperson - Term ended in August 2017 ) 32 507 - 32 507Adv. K Thango - Appointed as Chairperson in September 2017) 16 778 - 16 778Mr. MV Khumalo 7 950 - 7 950Mrs. NP Linda 7 950 - 7 950Mr. AG Mthembu 7 950 - 7 950Ms N Zwane 11 183 - 11 183Adv RR Nirghin 11 183 - 11 183Mr IZ Ngcobo 11 183 - 11 183

106 684 - 106 684

2018 Project and Finance Committee (PFC) PFC Fees Travel TotalMs Nonjabulo Zwane - (Chairperson) - Term ended in August 2017

24 557 - 24 557

Mr WR Dladla 16 143 - 16 143Ms. T Ntshangase - (Appointed Chairperson in September 2017)

8 176 - 8 176

Mr. AG Mthembu 14 150 - 14 150Mr. MV Khumalo 11 670 - 11 670Mr. N Khambule 14 150 - 14 150Mrs. NP Linda 7 440 - 7 440Dr ME Ngidi 4 473 - 4 473Mrs. P Dabideen 11 183 - 11 183

111 942 - 111 942TOTAL 1 466 774 69 662 1 536 436

27. Contingencies

27.1 Contingent liabilities

2 916 224 -

A possible contingent liability as ADA decided to cancel the contract provider with a service provide due to non viability of the project and cost estimated thereof that were estimated by the services provider without taking into account the drawings. If the services provider were to sue for entire contract and amount of R2916 224 might be paid by the entity.

27.2 Contingent assets

Contingent asset - Ndaleni Promotions - 44 614

A contingent asset of R44 614.00 arose as a result of the case with the service provider that was dismissed with costs in favour of ADA. In March 2019, the ADA took a resolution not to pursue the recovery of legal costs from Ndaleni and it the costs of recovering the debt were estimated to be higher than the recoverable amount.

117




28. Irregular and fruitless and wasteful expenditure

28.1 Irregular expenditure

Opening balance 99 591 483 84 543 627Add: Irregular Expenditure - current year 11 545 873 15 047 856Less: Amounts recoverable (not condoned) - -Less: Amounts not recoverable (not condoned) - -Irregular expenditure awaiting condonation 111 137 356 99 591 483

Irregularexpenditurefor2017/18financialyearhasbeensubmittedtotheTreasuryforcondonation.Nofurtheraction was taken.

28.2 Fruitless and wasteful expenditureOpening balance 98 694 98 023Add : Fruitless expenditure - current year 3 542 2 276Less: Amount recovered (736) (1 605)Total 101 500 98 694

Fruitless and wasteful expenditure is due to interest charged by suppliers on invoices paid late.The amount of R97 060 has been condoned by ADA Board but awaiting for Treasury’s condonation. No further action was taken.

The following fruitless and wasteful expenditure has been recovered from the responsible employees:

Employees: S Mabaso TotalAmount recovered 736 1 933

Analysis of expenditure awaiting condonation per age classificationPrior years 99 591 483 80 699 927

Details of irregular expenditure – current yearAction taken by ADA

Appointment without following SCM Process

Internal processes still to be followed for remedial action.

5 227 476

BAC comprised of less than four members at appropriate senior level.

No one could be held accountable and this constituted non compliance.

1 185 895

Limited bidding used Internal processes still to be followed for remedial action.

5 132 502

11 545 873

Details of irregular expenditure condoned

Details of irregular expenditure recoverable (not condoned) -

Details of irregular expenditure not recoverable (not condoned)-

11 545 873



29. Events after the reporting period

Therewerenoeventsthattookplaceyearendrelatingto2018-19financialyear.

30. Financial instruments disclosure

Categories of financial instruments

2019

Financial assets At fair value At amortised cost

Total

Receivables from non exchange transactions 7 602 674 - 7 602 674Operational account 822 275 - 822 275KZN Department of Agriculture and Rural Development Call Account

22 900 811 - 22 900 811

KZN Department of Agriculture and Rural Development Call AccountOperational

926 815 - 926 815

KZN Cooperative Governance and Traditional Affairs- COGTA

1 328 322 - 1 328 322

Deposits 17 118 - 17 11833 598 015 - 33 598 015

Financial liabilities

At fair valueAt amortised

cost TotalPayables from exchange transactions 2 409 790 - 2 409 7902018

Financial assets At fair valueAt amortised

cost TotalReceivables from non exchange transactions 3 845 049 - 3 845 049Operational account 1 948 612 - 1 948 612KZN Department of Agriculture and Rural Development Call Account

13 844 320 - 13 844 320

KZN Department of Economic Development, Tourism and Environmental Affairs Call Account

6 236 229 - 6 236 229

KZN Cooperative Governance and Traditional Affairs- COGTA

6 353 124 - 6 353 124

Deposits 17 118 - 17 11832 244 452 - 32 244 452

Financial liabilitiesAt fair value

At amortised cost Total

Payables from exchange transactions 1 963 657 - 1 963 657

119




Credit risk

The entity does not have a huge debtors’ book. Its exposure to credit risk is minimal. The items indicated under trade and other receivables refer to employee’s debt and one supplier as indicate in event after reporting period. Thecashandcashequivalentsaredepositsplacedwithhighcreditfinancialinstitutions.Thedepositscompriseofgrants received from theDepartment reflected in thecashandcashequivalentnote.Theentity limits itsexposurebydealingwithwell-establishedfinancialinstitutions.Theentitydoesnothavesignificantexposuretoan individual debtor or counter party.Liquidity risk

The entity’s exposure to liquidity risk is minimal as it is 100% funded by the Department of Agriculture and RuralDevelopment.Theannualbudgetsareapprovedatthebeginningofeachfiscalyearanddraw-downsarerequestedatthebeginningofeachquarter.Cashflowsaremonitoredmonthlyagainstbudgetsandadjustmentsare made where necessary. Risk management assessments are conducted annually to assist with identifying anypossiblecashflows,liquidityorotherrisks.Interest rate risk

Although the entity’s funds are subject to interest rate risk, these funds are placedwith reputable financialinstitutions.Theentitydoesnothedgeanyofitsfunds,butmonitorsthefluctuationsininterestratesandobtainsadvicefrombankofficialsonaregularbasis.Foreign exchange risk

Althoughtheentity’sfundsaresubjecttoforeignexchangefluctuationrisk,duetoYoungFarmersprojectwherestudent are taken to Denmark to study, the payment of these funds are done by the reputablefinancialinstitutions.

31. Amalgamation

TheGovernmentiscurrentlyreviewingstate-ownedentitiesinanefforttorationalizeandachieveefficiencyofservice delivery, while eliminating duplication, where applicable. As a result, a decision was taken by the KwaZulu Natal Cabinet to amalgamate certain related entities within the Province. The Agribusiness Development Agency, together falls under the Department of Agriculture, together with Mjindi Farming and Ntingwe Tea Estate. A decision was taken to amalgamate the three , to form a new entity that will be responsible for commercialisation of agriculture and development of agribusiness; agricultural infrastructure development, including irrigation schemes; facilitation and implementation of catalytic and complex agricultural and agribusiness projects; as well as facilitation of investment into agriculture and agribusiness in KwaZulu Natal through suitable models such as direct investment and partnerships. The Agribusiness Development Agency (ADA), is proposed to be the entitythatwillabsorbtheothertwo,inordertofulfilthismandate.

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

________________________________________________________________________________________________________

________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Notes

Contact Info

[email protected]

Agribusiness Development Agency5 Cascades Crescent, Cascades OfficePietermariztburgKwaZula-Natal 3202

033 347 8600

annual report · app annual performance plan au african union auc african union commission ......

Documents