annual report · dube tradeport annual report 2009/2010 3 vision, mission, business principles,...

annual rePort 2009 2010

3DUBE TRADEPORT ANNUAL REPORT 2009/2010

Vision, Mission, Business Principles, Values and Strategic Objectives 4

Foreword 5

Company Profile 6

Company Structure, Board of Directors, Executive Management and Staff 10

Chairperson’s Statement 14

Chief Executive Officer’s Review 15

Corporate Governance Report 17

Annual Performance Report 19

- Programme 1 – Administration 19

- Programme 2 – Technical Services 23

- Programme 3 – Commercial Development 26

- Programme 4 – Infrastructure and Development 29

Pictorial Progress Report 33

Annual Financial Statements 36

Contents

4

DUBE TRADEPORT wAS ESTABlIShED AS An ASSOCIATIOn InCORPORATED unDER SECTIOn 21 OF ThE COMPAnIES ACT, nO. 61 OF 1973, AS AMEnDED.

VisionTo be a catalyst for the creation of a globally competitive

multi-modal trade gateway in Southern Africa.

MissionTo stimulate economic development through the

provision of a world-class integrated trade and

logistics platform.

Business PrinciplesSo as to ensure its strategies are executed both

effectively and efficiently, Dube TradePort adheres to two

fundamental business principles, namely:

• Theeffectivemanagementandco-ordinationof

service providers; and

• Thefacilitationofparticipationbyrelevant

stakeholders in the implementation of strategies.

ValuesIn executing its business activities, dube tradeport is

committed to adherence to a clear set of

values, including:

• Professional excellence: being passionate about

value-adding professionalism;

• Ubuntu: creating open, honest relationships, built on

trust, mutual respect, dignity and fairness;

• Empowerment: actively embracing the economic

transformational and developmental agenda of

stakeholders;

• Innovation and creativity: succeeding through

innovative, creative and adaptable teams; and

• Service excellence: providing unsurpassed service

excellence of which our clients may be proud.

strategic objectivesDube TradePort’s key strategic business objectives include:

• Thefacilitationofnewintercontinentalairservices;

• Thesupportforandenablementofnewexportsupply

chains, inclusive of high-value manufacturing;

• Thesupportforandthestrengtheningofthetourism

and perishable goods sectors;

• Theestablishmentofanelectronictrading

platform; and

• Thestimulationofprivatesectorinvestment.

Vision, Mission, Business PrinCiPles, Values and strategiC oBjeCtiVes


The 2009/10 financial year saw highly visible progress in

terms of the construction of the Dube TradePort and King

Shaka International Airport, with more than 95% of the

project having been constructed.

During the latter half of the financial year, ‘hot’ and ‘cold’

commissioning of key facilities was already well underway

in anticipation of meeting the operational deadline of 01

May 2010.

The socio-economic impact of the project also became

better understood through a comprehensive study

undertaken by the Dube TradePort. The impact on the

projects in creating jobs throughout South Africa was

estimated at 58 972, in KwaZulu-natal at 48 295 and

in eThekwini at 34 157. Of the 58 972 employment

opportunities created throughout the economy,

13 880 were direct, 24 474 were indirect and 20 618

were induced.

A social accounting matrix formed the basis of the study,

depicting all the economic inter-linkages which exist

between the different role-players in particular production

systems, inclusive of production activities, households, the

government and enterprises. while the accuracy of high-

level numbers may always be questioned, having been

based on input-output models, they do, however, provide

viable high-level indicators of socio-economic

impact trends.

we are also proud that, working through the Provincial

Cabinet, we were successful in being able to officially

name the province’s new airport the King Shaka

International Airport. For this we are indebted to various

responsible institutions, such as the provincial and

the national Geographical naming Council, local

government and a number of civil society stakeholders.

There has also been good and steady progress regarding

the finalisation of the Dube TradePort Corporation Bill. This

will be ready for debate in the Provincial legislature in the

early part of the new financial year. we are hopeful that

the Bill will be formally adopted, opening the way for the

establishment of a new public entity to drive the business

of the Dube TradePort.

while remaining clearly focused on the core infrastructure

which was to be fully operational by 01 May 2010, ahead

of the FIFA world Cup football tournament, a number

of other key aspects of the Dube TradePort were also

advanced significantly during the 2009/10 financial year.

A Record of Decision for the AgriZone was approved

and construction will be undertaken early in the new

financial year, once final comments have been received

from interested stakeholders. In addition, the private

sector was invited in January 2010 to present proposals

regarding investment in both the TradeZone and Dube

City developments.

During this period, construction work on the Valuable

Cargo Facility, office buildings and various other

ancillary projects also commenced. Dube TradePort also

appointed worldwide Flight Services, an enterprise which

operates 127 cargo terminals across the world, as the

operator for the Dube TradePort Cargo Terminal.

This move provides us with a key strategic partner and

globally-networked organisation capable of building the

air freight business in KwaZulu-natal going forward.

In conclusion, I take this opportunity to thank my Cabinet

colleagues most sincerely for their active support of this,

KwaZulu-natal’s flagship mega-project, in spite of the

inescapable challenges associated with the provincial

cash flow crisis. Through judicious management, we were

successfully able to manage the cash flow requirements

necessary for the timely procedure of the construction

process and delivery of the identified core elements of this

flagship project.

lastly, I am particularly thankful to the Board of Directors

of the Dube TradePort, management and staff for the

commitment and professionalism displayed in taking the

project forward during the 2009/10 financial year.

……………………………………………………

Mr Michael Mabuyakhulu (MPP)MEC for Economic Development and Tourism

ForewordMR MIChAEl MABuyAKhulu (MPP)

MEC FOR ECOnOMIC DEVElOPMEnT AnD TOuRISM

6

Dube TradePort, incorporating the new King Shaka International Airport, is the single largest infrastructural investment in KwaZulu-Natal

Dube TradePort, a Section 21 Company, was established

by the KwaZulu-natal Provincial Government for the

strategic planning, establishment, design, construction,

operation, management and control of the Dube

TradePort Project and associated projects.

Dube TradePort, incorporating the new King Shaka

International Airport, is the single largest infrastructural

investment in KwaZulu-natal and is set to provide a telling

response to the national Government’s objectives of

alleviating poverty and addressing unemployment in

South Africa.

dube tradePortIn essence, Dube TradePort is a master-planned,

Greenfield airport-related development and has been

constructed on a 2 040-hectare site at la Mercy, some

30km north of Durban, in the Province of KwaZulu-natal,

located on the east coast of South Africa.

The massive development project was designed as

a world-class freight and passenger logistics facility

destined to create a highly competitive business

operating environment capable of attracting a diverse

range of investors, operators, users and tenants.

Central to Dube TradePort is King Shaka International

Airport, which is owned and operated by the Airports

Company South Africa (ACSA). The airport boasts a

3,7km runway, comfortably able to accommodate the

latest new Generation large Aircraft and will, by 2015,

have the capacity to handle 7,2 million passengers per

annum. Critically, the airport precinct has sufficient space

for projected expansion, increasing passenger-handling

capabilities to 45 million people a year by 2060.

The new aeronautical infrastructure is supported by Dube

TradePort, which, itself, comprises four key facilities.

Cargo terminal The 193 200 square metre Cargo Terminal, located

on a 41-hectare site adjacent the airport’s passenger

terminal, is owned by the Dube TradePort Company and

is exclusively operated on its behalf by internationally-

acclaimed worldwide Flight Services (wFS), the world’s

largest cargo-handling company. wFS currently works

with some 300 airlines and operates 127 cargo terminals

globally.

The Cargo Terminal, one of the most technologically

advanced in the world, has direct air-side access,

ensuring the rapid export and import of time-sensitive

products and has the ability to handle 100 000 tons

of cargo per annum at inception and the capacity to

expand to dealing with 2 million tons annually, within the

next 60 years.

Part of the Cargo Terminal is refrigerated, utilising various

temperature levels, so creating The Cold Chain, a facility

for the effective supply of perishables.

tradeZoneA specialist freight-oriented TradeZone, an advanced

export environment and multi-modal logistics platform

designed for manufacturing and service-based business

enterprises requiring speedy access to air cargo and

passenger services, has been developed close by.

Integral to the TradeZone is the Tradehouse, comprising

warehousing with offices above. In a world first, all freight

forwarders and shippers are located within this facility. An

elevated conveyor transfer system links the Tradehouse,

within the TradeZone, to the adjacent Cargo Terminal,

taking products directly from the warehouse to the Cargo

Terminal, where they are X-rayed and placed in storage.

This is the only system of its kind in the world, providing

Dube TradePort with a distinct competitive advantage.

The 26-hectare TradeZone Precinct comprises 180 000

square metres of floor-space at inception, becoming

home to trade and logistics warehousing, cargo and

other airport-related light industrial activities.

The TradeZone is a secure area, surrounded by fencing

and equipped with CCTV and a dedicated gatehouse.

agriZone The AgriZone, a 20-hectare development comprising

greenhouses with their own post-harvest packing and

sorting facilities, a tissue culture laboratory and a nursery,

CoMPany ProFile


together with research and growing areas, is

located nearby.

The area includes land for the cultivation of high-value

farming products and facilities for the promotion of

agricultural production for export.

This development is set to focus on products with a short

shelf-life and which, therefore, require airlifting immediately

after harvesting so as to preserve quality. The AgriZone

will give effect to this, so greatly reducing logistics and

transport costs for growers because of their proximity to

the main point of export.

In addition, the AgriZone will provide vital cold chain

infrastructure and services which will ensure an

uninterrupted cold chain process from producer to

importer. State-of-the-art climate-controlled facilities will

allow for all-year high-yield production, whilst significantly

reducing the impact on the environment.

The AgriZone will attract local farmers, emerging growers,

co-operatives and international horticultural companies.

dube CityDube City will serve as an urban hub for Dube TradePort.

located just one kilometre from the new airport complex,

Dube City – an urban ‘green’ precinct – is the first of its

kind in South Africa. This area is being developed as a

secure, world-class business and trade centre, with links

to the passenger and cargo terminals at the airport, the

TradeZone and the AgriZone.

It has been designed to attract significant private sector

investment in terms of offices, hotels, a conference centre,

numerous retail outlets and a range of commercially-

oriented service enterprises normally located adjacent

international airports.

The first phase of Dube City comprises a 12-hectare site

and is situated south of the airport’s passenger terminal.

Dube City’s totally developed capacity will cover some

180-hectares.

Project statusPhase one of this mega-project encompasses the

construction of the development at the la Mercy site on

the north coast of KwaZulu-natal, close to Durban. This

included the initial phase of the King Shaka International

Airport, the TradeZone, together with the Cargo Terminal,

the AgriZone and a portion of Dube City.

linked to such work was the construction of a new

interchange off the n2 highway, as well as the creation of

a link road to Dube TradePort and the R102.

institutional arrangements In terms of a Co-operation Agreement between ACSA

and the Dube TradePort Company, ACSA owns, has

constructed and operates all aeronautical infrastructures,

inclusive of the passenger terminal at King Shaka

International Airport. During the 2009/10 financial year,

we have negotiated with ACSA the conversion of lease

hold to freehold for the TradeZone, Cargo Terminal and

AgriZone, in addition to securing a further 10% for the

Joint Venture.

Dube City, a commercial property development, will be

implemented through a Joint Venture between ACSA and

the Dube TradePort Company, with each of the entities

owning 40% and 60% of the Joint Venture respectively. The

Dube TradePort Company has rights to the first 15 years of

development of the Joint Venture.

8

the airPort Boasts a 3,7kM runway, CoMFortaBly aBle to aCCoMModate the latest new generation large airCraFt

8

9DUBE TRADEPORT ANNUAL REPORT 2009/2010 9DUBE TRADEPORT ANNUAL REPORT 2009/2010

10

CoMPany struCture, Board oF direCtors, exeCutiVe ManageMent and staFF

Company structureDube TradePort is structured as follows:

• KwaZulu-NatalProvincialGovernment

• DepartmentofEconomicDevelopmentandTourism

• BoardofDirectors

• ChiefExecutiveOfficer

• ExecutiveTeam

In addition, Dube TradePort has entered into a Joint Venture with the Airports Company South

Africa (ACSA), whereby Dube TradePort owns 60% of la Mercy JV Property Investments (Pty) ltd.

Further details are contained in the Report of the Directors.

Board of directors

Name

Mel Clark

Rohan Persad

Owen Mungwe

Dr Kwazi Mbanjwa

Siddiq Adam

Christopher

hlabisa

Carol Coetzee

a) KZn Growth Fund Managers (Pty)

b) Black Balance Projects (Pty)

c) Ventureworx (Pty)d) Imvusa Trading 290 CCe) Participative Development

Initiative (S21 nPO)f) St Theresa’s Children’s

home (nPO)

a) non-Executive ACSA Board member

b) Chairperson: ACSA hR&T Board

c) Chairperson: la Mercy JV Property Investments (Pty) ltd.

a) Director: la Mercy JV Property Investments (Pty) ltd.

not available at time of print

none

none

Chairperson

CEO

CFO

Special Advisor

on Ministerial

lead Projects:

national

Department of

Transport

Senior General

Manager:

Operations,

KwaZulu-natal

Department

of human

Settlements

hOD:

Department of

Transport

Resigned 15 May 2009

Designation

43

47

40

54

39

49

B.Soc. Science

PG Dip IR

llB (Curr)

B.Soc. Science

Masters in Town

and Regional

Planning

university honours

Degree in

Financial Analysis

and Portfolio

Management

not available at

time of print

Master of

Science (Applied

Economics) (cum

laude)

Bachelor’s Degree

in Technology

(Civil)

Age Qualifications Other Directorships


executive Management and staff

The Dube TradePort staff complement comprises the following:

Rohan Persad (Chief Executive Officer)

Owen Mungwe (Chief Financial Officer)

Joanne hyatt (Corporate Affairs Executive)

Ahmed Bassa (Project Executive: Aeronautical)

hamish Erskine (Project Executive: IT)

Mlibo Bantwini (Project Executive: Infrastructure and Development)

Jabu ninela (Finance Officer)

leigh-Ann Shaw (Executive Assistant)

Bonny Mbatha (Receptionist)

Kate Ralfe (Project Manager: Spatial Planning – Appointed April 2009)

Ayesha Swalah (Chief Compliance and Risk Manager – Appointed June 2009)

laura Dongo (Administration Assistant – Appointed July 2009)

Mahomed Shiraz Mahomed (IT Architect – Appointed August 2009)

Paula Pather (Senior Property Manager – Appointed January 2010)

Robert Tucker (AgriZone Project Manager – Appointed January 2010)

unathi Kafile (AgriZone Project Officer – Appointed January 2010)

AgriZone Staff (x25) (Appointed 15 February 2010)

12

the Cargo terMinal, one oF the Most teChnologiCally adVanCed in the world, has direCt air-side aCCess, ensuring the raPid exPort and iMPort oF tiMe-sensitiVe ProduCts

12

13DUBE TRADEPORT ANNUAL REPORT 2009/2010 13DUBE TRADEPORT ANNUAL REPORT 2009/2010

14

ChairPerson’s stateMentMR MEl ClARK

The challenges of the 2009/10 financial year were all

managed most successfully through the collective efforts

of the Board and management of Dube TradePort, the

KwaZulu-natal Provincial Government’s Department of

Economic Development and Tourism and a number of

other government departments.

The pressure associated with the need to meet deadlines,

in line with operational readiness, became the major

priority and focus for wide-ranging stakeholder interests,

all of whom bonded together, intensely working towards

the common goal… the delivery of a successful project,

on time.

we are extremely pleased to be able to report now that

in excess of 90% of the targets established in the Dube

TradePort’s Annual Performance Plan were achieved

and, in a number of instances, against the odds. In terms

of a project development of this nature, it is critical that

management effectively controls the dynamic and ever-

changing circumstances as construction unfolds and

new issues arise. Such an approach demands flexible

capability and a solution-oriented mindset and business

practice – attributes which have most certainly come to

characterise the Dube TradePort’s executive

management team.

Changes in government resulting from the 2009 elections

impacted on a number of Dube TradePort’s Board

members, who relocated to other parts of the country.

This effectively resulted in remaining members of our

Board shouldering additional responsibilities and it

would be remiss of me not to take this opportunity to

extend my most grateful thanks to each of them for

their commitment and contributions, ensuring that –

collectively – we remained effective in our strategy/policy

and oversight role.

As Chairperson of the Board, I am confident that the new

Dube TradePort Corporation Bill will be approved by the

Provincial legislature in a timely manner, early in the new

financial year. There can be no doubt that the nature of

the Dube TradePort’s business will change fundamentally

as we move from a construction phase into an operations

phase from 01 May 2010, which will clearly require a new

structure, mandate and mode of operation.

In essence, the new legislation provides the framework

through which government will be able to participate in

the business as a direct shareholder and policy-maker.

This, in my view, would provide for more efficient processes

between Dube TradePort’s executive management, Board

and the provincial government.

In the interim, our Board has worked diligently towards

ensuring that the Dube TradePort Section 21 Company

develops the necessary capacity and acquires the

specialist skills to allow the business to effectively ease into

operational mode. This provides for a seamless transition

from a Section 21 Company to a Public Entity. In addition,

close attention has been paid to ensuring that a detailed

transition plan may be developed during the course of

the new financial year for the management of the hand-

over process to a new Public Entity.

I am especially proud to serve as Chairperson of the

Dube TradePort Board; a Board which has witnessed

and been an integral force behind the construction of a

strategic national and global asset, which will serve as a

catalyst for economic development for many decades

to come. Equally, I recognise that even more support will

be required from all stakeholders involved so as to ensure

that we continue to build on the competitive elements

we have created, particularly as regards international air

connectivity, which will surely open the way for numerous

new trade and tourism opportunities. This must be

regarded as a priority.

In closing, I would like to take the opportunity to thank

the MEC for Economic Development and Tourism for his

guidance and constant support through the course

of the 2009/10 financial year. I would also like to thank

the management of the Department of Economic

Development and Tourism for their continued co-

operation and support. I must also express my most

grateful thanks to the executive team and staff of the

Dube TradePort for a job well done and an exceptional

performance during the review period. Finally, I would like

to thank my Board colleagues without whose support,

guidance, leadership and active participation we could

not have achieved the level of success which is visible for

all to see.

we look forward now to embracing the new challenges

which lie ahead as we embark on yet another chapter in

the unfolding Dube TradePort development project.

Mr Mel ClarkChairperson: Dube TradePort


The 2009/10 financial year proved to be a highly

significant year for the Dube TradePort project.

Simultaneous core processes had to be managed,

including operational readiness requirements for the

various Dube TradePort facilities, negotiating additional

works excluded from the Engineer, Procure and Construct

Contract, developing the capacity of Dube TradePort

to respond to the emerging operational needs of the

business, negotiating with airlines and freight forwarders,

undertaking regulatory approvals, inviting private

sector participation in the tradeport sectors and, finally,

maintaining a sharp focus on ensuring the achievement

of critical Annual Performance Plan targets.

Overall, the four programmes, outlined in our Annual

Performance Report and contained in this document,

performed very well. In spite of the financial volatility

of global markets and the pressures attendant to

preparations for the project moving into the operational

phase, construction remained solidly on-track and well in

line with the projected completion date. Although several

problems, such as the positioning and quality of the

aviation fuel line, were raised, such risks were mitigated

and addressed in a timely manner by the contractor.

By March 2010, the first phase build was more than

90% complete.

A particularly significant achievement during the 2009/10

financial year was the appointment of the Cargo Terminal

operator. worldwide Flight Services was contracted to

manage, operate and secure business for the

Cargo Terminal.

The year under review saw the finalisation of the

contract, as well as pre-operation planning for the facility.

worldwide Flight Services is a global cargo operator

with extensive international experience, operating – as

it does – some 127 cargo stations world-wide. I have

no doubt that the signing of this contract marked the

beginning of a mutually beneficial business relationship,

and that exporters will welcome our move to having a

single, dedicated cargo operator in Durban. we consider

it most fortunate that we have been able to secure such

an internationally-acclaimed operator within a global

environment characterised at the time by recession and

a distinct lack of appetite by cargo operators to take on

new business.

with regard to our Commercial Development Programme,

a key achievement during the 2009/10 financial year was

the design and commencement of the construction of

Dube TradePort’s first buildings in both the Dube City, or

Support Zone, and the TradeZone.

The Dube TradePort ‘Tradehouse’ is destined to house

freight forwarders whose business is integrally linked to air

cargo. The building comprises some 6 000 square metres

of warehouse space and 3 000 square metres of office

space, which is accommodated on a mezzanine level.

The building will house a total of 24 modular units and

demand for access to this facility has been pleasingly

healthy. Currently leases are being negotiated with

different companies for units within the Tradehouse

and 100% occupancy is expected by the time of

commissioning. In addition, the construction of Dube

house, Dube TradePort’s own office building, located

in Dube City, commenced in november 2009 and was

progressing well.

Key to the overall success of the Dube TradePort is the

extent to which private sector development is attracted to

the site and its immediate surrounds.

During the 2009/10 financial year, Dube TradePort issued

a ‘Call for Proposals,’ which was extended to interested

developers, for land within both Dube City and the

TradeZone. This was a significant milestone in moves

towards securing additional development on-site and an

increased level of interaction with the private sector.

Importantly, too, the AgriZone project grew from strength-

to-strength during the review period. The design of the

facility was finalised, contractors were appointed to

undertake development work, agreements were signed

with producers with regard to more than eight hectares

of land within the AgriZone and Dube TradePort assumed

responsibility for the operation of the nursery. By the end of

the 2009/10 financial year, this facility had secured 200 of

the 600 species required for the rehabilitation of the new

airport site, as stipulated in the Record of Decision for the

first phase of construction.

notably, preparations for the transition from construction

to operations necessitated a review of our human

resources and culminated in our staff complement

growing significantly. having identified the specialist

skills required and having secured approval from the

ChieF exeCutiVe oFFiCer’s reViewMR ROhAn PERSAD

16

executing authority, six new positions were filled, whose

disciplines ranged from risk and compliance to property

management and the management of the AgriZone and

nursery operations.

Turning to the future, a significant new focus for the Dube

TradePort will be marketing and communication. Our

primary objective in this regard is to create a strong brand

identity for Dube TradePort in South Africa and abroad;

an identity which is capable of attracting cargo tonnage

and users, property investments and aviation-linked value

chains wishing to utilise the Dube TradePort offerings.

Importantly, we will simultaneously set out to ensure that

we develop the necessary and appropriate capacity so

as to be able to effectively service our brand promise to

potential clients, users and investors alike.

lastly, we will also turn our attention towards a range of

other aspects of the project, inclusive of public transport,

bulk infrastructure and additional road requirements,

closer co-ordination and partnerships with surrounding

land-owners, the addressing of environmental concerns,

obligations and opportunities for sustainability and the

securing of the support of multiple stakeholders in a

keenly focused and institutional process.

In conclusion and on behalf of the Dube TradePort, I take

this opportunity to thank the MEC, the Dube TradePort

Board of Directors, the Provincial Department of Economic

Development and Tourism and other government

departments for their support, contributions and

participation, without which we most certainly would not

have been able to meet our delivery targets and other

attendant time-frames.

Mr rohan PersadChief Executive Officer


introductionGlobally and in South Africa, Corporate Governance

frameworks continue to evolve.

Members of the Board of Directors of Dube TradePort

recognise and embrace the principles contained in the

King Report on Corporate Governance, which actively

promotes the highest levels of good governance in

South Africa.

Corporate Governance is a reflection of how an

organisation is managed and controlled.

In this regard, the Dube TradePort Board of Directors sets

out to ensure that the organisation meets the need for

transparency, accountability and integrity, while applying

ethical business standards in its every business activity

with those with whom it interacts.

Dube TradePort realises that truly meaningful Corporate

Governance must be based on self-regulation and

compliance with all regulations and this ideal remains

a priority for the organisation’s Board of Directors and its

executive management team. Indeed, Dube TradePort

has, wherever possible, committed itself to the principles

set out in the King Report on Corporate Governance for

South Africa.

third king report on Corporate governance (king iii)while the Third King Report on Corporate Governance

(King III) has an effective date of 01 March 2010, the

applicable requirements of King III are currently being

taken into account by Dube TradePort in drafting the

transition plan from the existing Section 21 Company

to the Schedule 3C Public Entity. By way of example,

a number of these elements include conducting an

induction for new members of the Board of the Schedule

3C Public Entity, establishing a process of conducting

evaluations of the Board’s performance, possibly

establishing a human Resource and Remuneration

Committee, establishing BEE procurement targets,

developing a combined assurance model and the like.

The applicable requirements of King III relating to the

Schedule 3C Public Entity will be phased-in over the

MTEF period.

sustainability reporting01 May 2010 marked the official commencement of

operations of the Dube TradePort – initially with the

operation of the Cargo Terminal which will be later

followed with the operation of the Tradehouse and

AgriZone – as the transition is made from ‘project phase’

to ‘operational phase.’ In establishing the Public Entity, a

sustainability reporting framework will be created which

will concentrate specifically on the operational aspects

of Dube TradePort, taking into account the fact that one

of the key aspects of King III focuses on the reporting of

sustainability issues.

delegation of authorityA comprehensive Delegation of Authority framework has

been put into place to ensure the timely and effective

implementation of the Board’s strategy. The Delegation of

Authority framework does not, however, divest the Board of

its responsibilities and the Board retains the prerogative to

withdraw any given Delegation of Authority at any time.

access to informationThe Board considers access to information as being

a cornerstone of good Corporate Governance and

has ensured unfettered access, collectively and by

individual members, to all company information, records,

documents and property so as to enable it to effectively

discharge its responsibilities. The provision made for

access to information applies to the Board as a whole, as

well as to the Sub-committee of the Board.

Board and sub-committee of the BoardDube TradePort’s Board of Directors is structured in such

a way as to bring a diverse mix of skills and experience

to the organisation and the business environment

within which it operates, while promoting effective inter-

governmental co-operation.

Consequently, the majority of the non-Executive Directors

of Dube TradePort’s Board, with the exception of the

independent Chairperson, are public service officials

within the KwaZulu-natal Provincial Government. The

Executive Directors bring additional perspectives to the

Board’s work through a deep understanding of Dube

TradePort’s business.

The Board is ultimately responsible to the KwaZulu-natal

Provincial Government’s Department of Economic

Development and Tourism and so accepts its obligation

for the effective management and control of

Dube TradePort.

In addition, the Board takes responsibility for the

organisation’s strategic direction and the establishment of

CorPorate goVernanCe rePort

18

policies and procedures, accountability for the approval

of major expenditure and the day-to-day activities of the

organisation’s executive management and staff.

Currently, the organisation’s Board comprises four non-

Executive Directors, the Chief Executive and the Chief

Financial Officer.

The Board meets at least four times a year and retains full

control over Dube TradePort. A total of four Board meetings

were conducted during the 2009/10 financial year.

Meetings of the Board and its Sub-committee were

attended by members as per the accompanying tables:

A Sub-committee of the Board has been established to

assist the Board in the discharge of its duties. Details of

this Sub-committee are provided herewith. There is full

disclosure by such Sub-committee of the Board.

role of the Chairperson and Chief executive officerThe role of the Chairperson of the Board is the

responsibility, together with the Board, for the

organisation’s strategic direction and its policies

and procedures.

The role of the Chief Executive Officer is the responsibility

for the effective management of Dube TradePort and the

implementation of strategy, policy and directives of

the Board.

audit CommitteeThe Audit Committee is chaired by an independent

chartered accountant, who has knowledge of the status

of the position, has the requisite business, financial and

leadership skills and is not a political office-bearer. The

Audit Committee includes two non-Executive Directors.

The Audit Committee meets at least four times a year

and is convened in line with formal Terms of Reference,

confirmed by the Board. The Audit Committee met four

times during the 2009/10 financial year.

CorPorate goVernanCe rePortCOnTInuED

Membership and attendance: Board meetings in 2009/10

Membership and attendance: audit Committee meetings in 2009/10

Member June 2009 August 2009 November 2009 March 2010

MC Clark √ √ √ √

R Persad √ √ √ √

K Mbanjwa A A A A

C Coetzee R

S Adam A √ A A

C hlabisa √ A √ A

O Mungwe √ √ √ √

√ = Attendance A = Apology R = Resigned 15 May 2009

Member October 2009 December 2009 February 2010 March 2010

S Khumalo √ √ √ √

C Coetzee R

S Adam √ A A A

C hlabisa A √ √ √

√ = Attendance A = Apology R = Resigned 15 May 2009


annual PerForManCe rePort

In order to efficiently carry-out and deliver on its mandate,

the Dube TradePort Company has in place and operates

a four-programme structure.

Our four programmes include:

Programme 1 – administrationSub-programmes

• OfficeoftheChiefExecutiveOfficer

• FinancialManagement

• CorporateServices

• Marketing

Programme 2 – technical servicesSub-programmes

• MasterPlanning

• EconomicImpactAssessmentRecordofDecision

• AirServices

• CargoTerminalOperations

• SpatialPlanning

Programme 3 – Commercial developmentSub-programmes

• TradeZone

• SupportZone

• JointVenture

Programme 4 – infrastructure and developmentSub-programmes

• Engineer,ProcureandConstructand

Infrastructure Investment

• BusinessDevelopment

• RegionalDevelopmentInvestmentInitiative

• ITPlatform

• AgriZone

The table below highlights the performance of each

Programme (and their respective sub-programmes) for

the 2009/10 financial year, against targets reflected in the

Annual Performance Plan for the year:

StrategicObjective

Measurable Objective

Performance Measure Indicator

2009/10 Target

2009/10ActualOutput

Comments

Programme 1: AdministrationSub-programme 1: Office of the Chief Executive Officer

To provide strategic direction and ensure successful operationalisation of the Dube TradePort

Implement mechanisms to monitor the Dube TradePort Company’s strategies

Achievement of APP targets

90% 74% Various factors outside the control of Dube TradePort had a significant impact on its performance for the 2009/10 financial year. These included the delay in obtaining EIA approval for the AgriZone, the lack of adoption of the DTP Bill, a lack of response in respect of the Regional Development Council and a delay in obtaining the licence to operate the Cargo Terminal, amongst others

To facilitate effective performance management

number of appraisals (management team) conducted annually

All (quarterly basis)

All Performance appraisals were held quarterly for all executives within Dube TradePort

To monitor the socio-economic impact emanation from the project

Establish a monitoring and evaluation framework and supporting mechanism

Annual assessment concluded with a report indicating the impact

Annual Completed The economic assessment was completed and the results published and shared with a range of stakeholders

20

annual PerForManCe rePort COnTInuED

StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Sub-programme 2: Financial Management

To ensure statutory compliance in respect of financial management

To provide timely and accurate GAAP/GRAP- compliant Annual Financial Statements and accurate organisational performance reports

Submission of reports on time

100%

To effectively guide Dube TradePort Company in complying with all tax requirements

Full compliance with SARS requirements

100% letter drafted to SARS following meeting

not within Dube TradePort control. Awaiting official response from SARS in respect of the tax exemption status of Dube TradePort

To ensure full compliance with the PFMA, Treasury Regulations and other relevant regulations/legislation

unqualified audit report

Annual TBC (after audit opinion has been issued)

To develop and implement a financial management plan for transition into a public entity

Implementing of Transition Plan

Approval of plan40% implemented

40% Preferred bidder appointed to develop operating model, organisational design and human resource plan for new public entity

Full compliance with policies and procedures

number of report points included in the external audit management reports

4 4 All report items in the 2008/09 financial year have been addressed. This has been confirmed by the external auditors during the interim review

To implement sound financial management practices

To ensure an efficient and effective budget control process by leading the budgeting process and ensuring standardisation thereof

Timely implementation of budget policy

100% 100% Budgets have been prepared in a timely manner and submitted

Develop effective internal audit controls

3 10 Three phases of internal audit completed. A total of 10 report items were noted from the three internal audit reports received

The Annual Financial Statements for 2009/10 and all quarterly reports were prepared in a timely manner and submitted to the relevant stakeholders

100% QPR

number of report points on internalaudit report


StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Sub-programme 3: Corporate Services

To implement best practice, in terms of Corporate Governance

To establish Dube TradePort Company as a public entity

Registration of public entity

Registration of public entity

Public participation concluded at end of March 2010

not within Dube TradePort control. Department of Economic Development and Tourism and Provincial legislature to amend Bill based on input received from the public participation process

To provide efficient and effective support to the Dube TradePort Company Board

number of Corporate Governance report items included in the internal/external audit reports

0 1 One report item relating to the updating of CIPRO records in respect of the external auditors was noted. This has been resolved

To develop and maintain strategic capacity within Dube TradePort Company and to promote sound labour relations

To create a strategy for human Resource Management and development

human Resource plan aligned to operational plan

Fill posts per 2009 updated human Resource plan

Posts per the 2009 updated human Resource plan were filled as required

Organogram amended and approved by Board in March 2010. Interviews undertaken and recommendations made for additional positions on the organogram

Develop public entity human Resource plan

Appointment made

Plan will be aligned to new operating model for the public entity

To efficiently monitor the performance of staff

updated performance agreements

Annual review Completed All staff members have performance agreements. Performance appraisals were conducted for all staff during 2009/10

To review, update and amend relevant human Resource Management policies and procedures

level of compliance with employment laws, human Resource directives and policies

100% TBC human Resource specialists and organisations specialists have been appointed and a review of the human Resource Policies and Procedures is included as a milestone

To provide efficient support services to Dube TradePort Company in the management of IT and communication

To efficiently and effectively facilitate the provision of IT support services

Availability of system to Dube TradePort Company users (%)

90% 90% no significant problems experienced during 2009/10

22


StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Sub-programme 4: Marketing

To promote project awareness and market interest (public buy-in)

To develop a comprehensive and effective marketing and communication strategy

Approved strategy Procure agency to develop an integrated three-year marketing and com-munication strategy and roll-out plan

Roll-out plan approved

Agency appointed in 2009 to develop and implement an effective marketing and communications strategy. The draft strategy and roll-out plan has been approved by EXCO

To increase public and market interest in the project

Percentage increase in registrations of interest on the database

30% increase from prior year

5% increase On reflection, a 30% increase in registrations of interest was an unrealistic target for this particular database. Most registrations of interest took place in the two prior years. In the next financial year registrations regarding property could increase. The website will need to be redesigned and focused



StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Programme 2: Technical ServicesSub-programme 1: Master Planning

To monitor the ‘As built’ construction development of the Dube TradePort against the approved Master Plan

To assess the delivery of the Master Plan Phase1 Aeronautical, Cargo Terminal and Bulk Infrastructure of the Engineer, Procure and Construct contract via construction monitoring, acceptance testing and monitoring of commissioning phases

Progress report highlighting key indicators(output = four quarterly reports per annum)

4 4 Passenger Terminal:On schedule. Baggage handling system, air bridges and hVAC system commissioned, building systems being calibrated and testedCargo Terminal:Commissioning of ETV and cargo systems complete, building hand-over and snagging ongoing. negotiations concluded for V.C.T. Bulk earthworks for the V.C.T. development in progress. Tenant fit-out for SAAC and E.A.S. in progressTradeZone:Roads and bulk infrastructure complete. Final snagging and hand-over in progress. Tradehouse development in progress with building internals commenced. Cargo pallet conveyor bridge-basescommenced

To review the Dube TradePort Master Plan 2010 - 2015

To conduct a detailed review of the Master Plan, inclusive of construction variations and forecasted demand and capacity requirements

Master Plan review

Publish RfP Appointment made via JV Company

Business circumstances have changed and it is more effective to conduct the Master Plan review via the JV Company

24


StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Sub-programme 2: Economic Impact Assessment (EIA) Record of Decision

To effectively monitor implementation of and adherence to Dube TradePort’s EIA obligations pre- and post-commission of the project

To track progress of the implementation of the EIA/Record of Decision obligations

Audit result per Department of Economic Development and Tourism audit conducted

90% 91,5% Three of four quarters have produced a result of 92%, while the actual audit result for the second quarter was 90%

To develop an Environmental Operations Plan

Approved Environmental Operations Plan (2010/11)

Appoint a consultant

Appointment to be made

Appointment of consultant anticipated to be made via JV Company. Due to delay by ACSA in officially passing on the RoD obligations to DTP, appointment made by DTP in first half of 2010/11

To incorporate Environmental Operations Plan obligations into both development initiatives and contractual agreements, with lessees, tenants and business partners for implementation

Percentage of development initiatives/ contractual agreements that incorporate Environmental Operations Plan obligations

Formulate relevant clauses

Relevant clauses have been drafted

Relevant clauses have been drafted and will be included in the contractual agreements with tenants, lessees, developers, etc

Sub-programme 3: Air Services

To establish Regional and International Air Connectivity

To refine business cases for targeted carriers

number of business cases reviewed and presented

1 4 Business cases presented to British Airways, Malaysian Airlines, Singapore Airline and Jet Airways

To establish a Route Development Fund and revisit negotiations with carriers

number of business cases developed (non-cumulative)

1 1 Although a Route Development Fund has not been established, discussions were initiated with Jet Airways of India in Beijing, with a view to introducing a service between India and Durban

Sub-programme 4: Cargo Terminal Operations

To position the Dube TradePort Cargo Terminal as the terminal of choice

To appoint a Cargo Terminal operator

Signed management contract with operator

Signed agreement

Agreement signed and pre-trial operations progressing

The Cargo Terminal operations contract was signed with wFS in August 2009. The pre-trial operations programme was initiated in January 2010 and this included recruitment and training of staff, introduction of operational management systems and synchronisation with other airport service providers


StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Sub-programme 4: Cargo Terminal Operations (continued)

To monitor regulatory compliance of the Cargo Terminal operator

Approved licence

licence to operate. lodge Performance Bond (SARS)

licence to be approved in April

The licence was approved in April 2010, prior to the opening of the Cargo Terminal

To appoint Valuable Cargo Terminal operator

Signed Service level Agreement with operator

Signed agreement

Valuable Cargo Terminal operator appointed

Contract was signed in April 2010 and the facility is scheduled for completion by October 2010

Sub-programme 5: Spatial Planning

To draw-down development rights with regard to Special Zone 10, as well as acquiring further development rights as required

To acquire further development rights and/or re-zoning

Approved development application

Conduct an options analysis

Memo on options (including recommendation) completed

Options have been analysed and will be presented in the form of a memo to the JV Company Board for final approval

To develop a GIS system and rights database

Stage completion percentage

75% Data collection and website development 75% complete

website and database has been developed. As-built documentation is currently being loaded onto the server

To facilitate the re-zoning of Mt. Moreland

Percentage of process completed

100% of re-zoning application completed

Re-zoning application finalised and submitted

All re-zoning documentation has been completed and presented. The eThekwini Municipality has considered the proposals and has decided to appoint consultants to amend the work already done

To comprehensively plan for specific projects within the Dube TradePort region

To create detailed project plans

number of project plans completed

2 1 work regarding the watson highway completed, including desktop wetland delineation, layout diagram, engineering costings and valuationlayout diagram and desktop wetland delineation completed for Inyaninga

To conduct research on international best practice examples

number of articles published

1 Article in draft form An abstract has been submitted to the South African Planning Institute for the presentation of an article at the Planning Africa Conference. The paper is currently in draft form

26

StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Programme 3: Commercial DevelopmentSub-programme 1: TradeZone

To establish effective operation, management and maintenance of the TradeZone

To develop the TradeZone Business Plan

Approval of Business Plan

Annual review of objectives and targets

not completed The current Business Plan is regarded as adequate for the present. It was agreed to review the plan once the airport is operational

To develop and operationalise the TradeZone Establishment Plan: Operations, Management and Maintenance Plan

level of operationalisation

Partial operation-alisation

Partial opera-tionalisation

Final Establishment Plan and specifications for operational requirements completed

wFS has been requested to undertake the facilities management in the Tradehouse

To secure investment into the TradeZone

To develop and commission the Tradehouse spec-build

Complete design, construct and commissioning of Tradehouse

Partial completion and start of commissioning of the Tradehouse

Construction underway

Construction of the Tradehouse is monitored via weekly progress reports

Percentage of tenants secured for the Tradehouse

40% 100% Consultation with tenants on their internal layout and specifications are ongoing. letters of Intent have been signed and all but one unit in the Tradehouse allocated. It is expected that the leases will be signed between May and July 2010

To develop a commercial centre for the TradeZone

Completed scoping

Approved ToR Initial scoping report complete

An analysis of the scoping report revealed that the ideal location for the commercial node would be towards the centre of the TradeZone, as opposed to its original location, as reflected in the call for proposals

To effectively develop individual TradeZone stands

Percentage of TradeZone stands leased and/or developed

Initiate lease and development negotiations

Call for proposals initiated in February 2010

First proposals from developers have been received

TradeZone sites will only be leased from 2010/11. This measure includes Dube TradePort Company spec-build, tenant-build, developer-build and the like



StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Sub-programme 2: Support Zone

To establish effective operation, management and maintenance of the Support Zone

To develop and implement a Commercial and Operations Plan

Approved Commercial and Operations Plan

Commence implementa-tion of plan

Financial model in draft form

Financial model (which forms part of the Commercial and Operations Plan) is currently being prepared

To master-develop and secure investment into the Support Zone

To effectively implement the first phase of the layout plan

Percentage completion of Dube TradePort Company building, including detailed design

15% 15% Construction underway. Detailed design for the remainder of elements underway and in line with the construction programme

Percentage completion of urban design infrastructure

10% Design for the first phase of the Support Zone 1 complete

Contract signed, but construction has yet to commence. Detailed engineering design underway

To efficiently plan and implement the additional infrastructure requirements for the ultimate S1 development

Approved ultimate infrastructure requirements

Finalise high- level design, costing and phasing plan for ultimate infrastructure requirements

Final costings done. Procured via EPC variation order

high-level design completed, preliminary costing complete and S1 development phasing plan completed

Percentage completion of design and construction of infrastructure

5%(cumulative)

5% Design of the road and bulks to the edge of the site and through the second phase of S1 is ongoing

To secure investment into the Support Zone

Percentage of S1 sites leased/developed (Support Zone sites will only be leased in 2010/11)

Initiate lease and devel-opment negotiations

Call for proposals initiated in February 2010

Dube TradePort property development policy approved by Dube TradePort Board in november 2009. Detailed development guidelines for investors was completed and included in the RfP pack issued to potential investors

28

StrategicObjective



2009/10 Target

2009/10 ActualOutput

Comments

Sub-programme 3: Joint Venture

To master-develop and secure investment into the Joint Venture land

To develop and operationalise the Joint Venture Commercial Development Plan

Approval and implementation of the Joint Venture Business Plan

Approved Joint Venture Business Plan

Business Plan has not yet been completed

Draft Joint Venture Interim Business Plan and commercial policy approved by the Joint Venture Board

To identify and develop key investment projects for the Joint Venture

Approved Dube TradePort commercial strategy for Joint Venture land (2011/12)

Initiate implementation of Dube TradePort priority commercial projects

ToR is in progress. lease agreements have yet to be finalised

Draft ToR for procurement of Petrol Filling Station developed. lease rates for advertising board sites to be developed



StrategicObjective



2009/10 Target

2009/10 ActualOutput

Comments

Programme 4: Infrastructure and DevelopmentSub-programme 1: Engineer, Procure and Construct and Infrastructure Investment

To provide effective implementation and management of EPC-related agreements

To secure sufficient land for the development of the TradeZone, AgriZone and Support Zone

Signed shareholders agreement

Signed shareholders agreement

Established measurement criteria to monitor shareholders agreement

Shareholders agreement signed in 2009

Measurement criteria not established

Measurement criteria were not necessary for the current financial year

To monitor the implementation of the co-operation agreement

number of disputes successfully resolved

All All All disputes successfully resolved

To monitor the development of phase one of the Dube TradePort infrastructure

Percentage of construction completed (cumulative)

Adherence to payment schedule

97%

100%

97%

100%

Payment schedule was revised early in the year to adjust for variation orders

To provide effective verification of the EPC contract

Percentage of deviations from contract price (arising from on-site verification reports and EPC compliance reports)

5% 9,04% Actual deviations exceeded target as a result of additional requirements arising from the operational mandate of Dube TradePort Company

To implement the Economic Impact Assessment Record of Decision mitigations

To effectively implement the Environmental Impact Assessment projects

Rehabilitation of wetlands

Ongoing Ongoing Rehabilitation plans concluded and plantation of the rehab species remains on-track

Provision of R102 link

Construction Complete

Construction almost complete

Physically completed by the end of March 2010. Directional signage, road markings and the like completed in April 2010

Provision of sewer treatment works

Construction complete

Environmental Impact Assessment underway

Construction could not commence as the Environmental Impact Assessment approval was outstanding

30


StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Sub-programme 2: Business Development

To facilitate commercial opportunities and new business development

To develop a comprehensive business development strategy

Approved strategy

Implementa-tion

Implement strategy

The procurement process was put on hold due to a change of plans as it was decided that various service providers should work on a range of identified opportunities

To identify suitable opportunities emanating from the development of Dube TradePort which would enhance passenger and cargo volumes

number of opportunities identified and/or ventures successfully facilitated

4 4 Four opportunities identified. Business Plan and Feasibility Study complete for two opportunities

Sub-programme 3: Regional Development Investment Initiative

To develop a shared strategic vision, strategy and projects within a 15km radius of the Dube TradePort site and within

To formulate an agreed vision and strategy

Influence IDP to account for shared vision and strategy (DTP/ThG)

Creation of planning framework

Planning framework created

Municipality IDP received and reviewed. Commented on northern Spatial Development Framework

Roll-out of projects within a 15km radius of the Dube TradePort site (number of projects initiated)

Secure purchase ofadditional land

land purchased from ThG

Ongoing negotiations with ThG on broader plan on hold. negotiations commenced with PIC. Draft agreement developed

To agree both joint projects and Dube TradePort-specific projects

Initiation of on-site-specific Dube TradePort projects (number of projects initiated)

1 Feasibility Study completed

Feasibility Study revealed that the bio-gas project is better suited to be managed by the Municipality

To establish an effective Regional Development Council (RDC)

Integrated development planning

Develop a proposal for a Regional Development Council

n/A not within Dube TradePort control. Proposal developed and submitted to the Office of the Premier


StrategicObjective



2009/10 Target

2009/10ActualOutput

Comments

Sub-programme 4: IT Platform

To establish the effective operation and management of the IT Platform

To develop and implement an IT and Telecoms common user platform and backbone for the TradeZone, Support Zone and AgriZone including: Electronic Trade Facilitation Platform, Value-added Services, Revenue Collection Functionality, Bulk Service On-selling, Electronic Billboard and Advertising

Decision on preferred option for Electronic Trade Platform and implementation of platform

high-level design of Trade Platform

n/A The process with SGS was terminated as the commercial terms were not in line with Dube TradePort Company’s expectations

Decision on scope and first phase services of common user platform and implementation of platform

Finalise implementation of Phase 1 of Dube TradePort IT Platform

Contract concluded for IT master contractor

The current procurement process did not yield a suitable vendor. This impacted the procurement of Phase 1 Dube TradePort IT Platform goals 70% of the Phase 1 objectives were met

Percentage completion of Cargo Terminal and TradeZone warehousing system

50% 50% The Tradehouse is still currently under construction and cannot accommodate the warehousing system

Sub-programme 5: AgriZone

To design and construct the AgriZone

To design and procure AgriZone facilities for Phase 1

Approved Design Reports

100% 100% Design Reports completed and approved

Completed procurement process for the construction contract (civils)

100%Complete design and procurement process

Construction site handed over in late March 2010

not within Dube TradePort control. Construction could only commence after the Environmental Impact Assessment had been approved

Greenhouses and pack-houses

Contract signed

Contract signed, but construction has yet to commence due to delay in Environmental Impact Assessment approval. Construction commenced in May 2010

To obtain regulatory approvals

number of approvals obtained

1 1 Environmental Impact Assessment approved

To construct the AgriZone

Percentage construction completed

60% 5% not within Dube TradePort control. Construction could only commence after Environmental Impact Assessment had been approved

32


StrategicObjective



2009/10 Target

2009/10 Actual Output

Comments

Sub-programme 5: AgriZone (continued)

To operate and secure investment into the AgriZone

To implement an effective Financial, Operational and Maintenance Model

Approved Financial, Operational and Maintenance Model for the entire AgriZone

100% new additions to model complete (Block ‘D’)

The model has been updated to take into account the most recent operational requirements, including those for Block ‘D’

Completed Business Plan for the nursery

Complete Business Plan

Business Plan completed

Business Plan for the nursery completed. nursery is operational

To secure tenants for the AgriZone and to stimulate exports

Percentage of AgriZone facilities occupied for each of the following facilities (to commence in 2010/11):GreenhousesBlock ‘A’

Draft agreements with tenants

Agreement with tenants drafted

Draft agreements with tenants for Block ‘A’ have been completed

Greenhouse Block ‘C’

Sign heads of Agreement

heads of Agreement signed

negotiations held with four potential tenants. Signed heads of Agreement with potential tenants

Greenhouse Block ‘D’

Sign Management Contract

Delayed due to late Environmental Impact Assessment approval

not within Dube TradePort control. Environmental Impact Assessment had to be approved first

Sourcing of operator or partner

Operator selected

Alternative design work undertaken after discussions with operator, hence construction could not commence

To establish a fully functional nursery

necessary facilities and equipment sourced/established

100% (procure/establish all necessary facilities/equipment)

100% All necessary equipment/facilities required to date have been procured

There was a change in the nursery operations as Dube TradePort took over the operation and management of the facility at the beginning of the fourth quarter

Area of plant rehabilitation completed

40-hectares (cumulative)

65,7-hectares Rehabilitation programme, including alien plants control

To conduct innovative research and development for the intensive agriculture industry

Approval of research programme and research output

Develop model for research and development training

Programme timelines changed to 2011

Programme put on hold due to budget constraints

Tissue culture facility


PiCtorial Progress rePortAS AT 31 MARCh 2010

View looking north east over the multi storey parkade and car rental parking

View looking west over the CFR and State Protocol Buildings with The Cargo Precinct at the back

Apron Ground Services and Maintenance Buildings

Arrivals level retail fit-out nearing completion

Control Tower and Cargo Terminal Precinct

Departures level leading through from check in to the Boarding lounges

Multi Storey Offices with Boulevard Road to the right of picture

the 193 200 square Metre Cargo terMinal, loCated on a 41-heCtare site adjaCent the airPort’s Passenger terMinal, is owned By the duBe tradePort CoMPany

34

36

Consolidated annual FinanCial stateMentsFOR ThE yEAR EnDED 31 MARCh 2010

DuBE TRADEPORT

ASSOCIATIOn InCORPORATED unDER SECTIOn 21

REGISTRATIOn nuMBER: 2002/002810/08

CONTENTS PAgE

Approval of the Consolidated and Company Annual Financial Statements

Report of the Audit Committee

Report of the Auditor-General

Report of the Directors

Statement of Financial Position

Statement of Comprehensive Income

Statement of Changes in Equity

Statement of Cash Flows

notes to the Consolidated and Company Annual Financial Statements

Detailed Income Statement

Schedule of Project Costs

36

37

38

40

44

45

46

47

48

69

71

approval of Consolidated annual Financial statementsThe Consolidated and Company Annual Financial Statements for the year ended 31 March 2010 set out on

pages 36 to 71 were approved by the Board of Directors on the 28th day of May 2010 and are signed by:

ChIEF EXECuTIVE OFFICER Mr Rohan Persad

ChAIRPERSOn Mr Mel Clark


The members of the Audit Committee are appointed by the Dube TradePort Board. In terms of Treasury Regulations and the King III Report on Corporate Governance, the Chairperson of the Audit Committee, appointed in January 2008 is independent.

The primary role of the Audit Committee is to assist the

Board in discharging its responsibilities to safeguard

Dube TradePort’s assets, maintain adequate accounting

records and develop and maintain effective systems of

internal control.

During the 2009/10 financial year the Audit Committee

met four times, as required by the Terms of Reference, and

undertook the following activities:

1. reviewed the audit Committee’s term of reference to ensure relevance.

2. internal audit Function a. Reviewed Internal Audit Charter and approved

the 2009/10 Internal Audit Plan and Budget.

b. Internal Audit functioned during the financial

year under review. The Internal Auditors

attended three out of the four Audit Committee

meetings and provided Internal Audit Reports

at the end of each internal audit cycle. The final

Internal Audit Reports were reviewed and

approved in February/March 2010. The Internal

Audit Reports demonstrated that the financial

controls, accounting systems and reporting are

adequately provided for.

3. external audit Function a. Reviewed and approved the 2008/09 Audited

Annual Financial Statements for submission to

the Dube TradePort Board

b. Reviewed the 2008/9 external audit

report tabled

c. Reviewed and approved the 2009/10 Audited

Annual Financial Statements for submission to

the Dube TradePort Board

d. Met thrice with the office of the Auditor-General

to ensure that there are no unresolved issues

of concern.

e. Approval of the 2009/10 external audit fee.

4. risk Management and Fraud Prevention a. The integrated risk management framework

was approved.

b. The fraud prevention plan was updated

and adopted.

5. Performance information a. Reviewed the 2008/09 Annual

Performance Report.

b. Reviewed monthly/quarterly

management reports.

6. updates and amendments to dube tradePort’s policies and procedures were reviewed.

7. the materiality and significant framework was reviewed and updated.

In undertaking the above-mentioned activities the

Audit Committee fulfilled its mandate as set out in the

Committee’s Terms of Reference in all material aspects.

The Audit Committee reviewed and evaluated the Annual

Financial Statements for the year ended March 2010, and

approved that they be submitted to Dube TradePort Board

for approval.

FOR ThE yEAR EnDED 31 MARCh 2010rePort oF the audit CoMMittee

DuBE TRADEPORT

ASSOCIATIOn InCORPORATED unDER SECTIOn 21

REGISTRATIOn nuMBER: 2002/002810/08

ChAIRPERSOn: AuDIT COMMITTEEMr Shadrack Khumalo

38

rePort oF the auditor-generalFOR ThE yEAR EnDED 31 MARCh 2010

REPORT OF THE AUDITOR-GENERAL TO THE KWAZULU-NATAL PROVINCIAL LEGISLATURE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF DUBE TRADEPORT FOR THE YEAR ENDED 31 MARCH 2010

report on the Consolidated Financial statements

introduction1. I have audited the accompanying consolidated

financial statements of Dube TradePort, which

comprise the consolidated and separate statement

of financial position as at 31 March 2010, and

the consolidated and separate statement of

comprehensive income, consolidated and separate

statement of changes in equity and consolidated

and separate cash flow statement for the year then

ended, and a summary of significant accounting

policies and other explanatory information, and the

accounting authority’s report as set out on pages 40 to 68

accounting authority’s responsibility for the Consolidated Financial statements2. The accounting authority is responsible for the

preparation and fair presentation of these financial

statements in accordance with the South African

Statements of Generally Accepted Accounting

Practice (SA Statements of GAAP) and in the

manner required by the Companies Act of South

Africa, 1973 (Act no. 61 of 1973) (Companies Act).

This responsibility includes: designing, implementing

and maintaining internal control relevant to

the preparation and fair presentation of financial

statements that are free from material misstatement,

whether due to fraud or error; selecting and

applying appropriate accounting policies; and

making accounting estimates that are reasonable in

the circumstances.

auditor-general’s responsibility 3. As required by section 188 of the Constitution of

South Africa, section 4 of the Public Audit Act of South

Africa, 2004 (Act no. 25 of 2004) (PAA) and section

300 of the Companies Act, my responsibility is to

express an opinion on these financial statements

based on my audit.

4. I conducted my audit in accordance with

International Standards on Auditing and General

Notice 1570 of 2009 issued in Government Gazette

32758 of 27 November 2009. Those standards require

that I comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance

about whether the financial statements are free from

material misstatement.

5. An audit involves performing procedures to obtain

audit evidence about the amounts and disclosures

in the financial statements. The procedures selected

depend on the auditor’s judgement, including the

assessment of the risks of material misstatement of

the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor

considers internal control relevant to the entity’s

preparation and fair presentation of the financial

statements in order to design audit procedures that

are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness

of the entity’s internal control.

An audit also includes evaluating the

appropriateness of accounting policies used and the

reasonableness of accounting estimates made by

management, as well as evaluating the overall

presentation of the financial statements.

6. I believe that the audit evidence I have obtained is

sufficient and appropriate to provide a basis for my

audit opinion.

opinion 7. In my opinion, these financial statements present fairly,

in all material respects, the consolidated and

separate financial position of Dube TradePort as at 31

March 2010 and its consolidated and separate

financial performance and its consolidated

and separate cash flows for the year then ended, in

accordance with the SA Statements of GAAP and in

the manner required by the PFMA and the

Companies Act.

emphasis of MattersI draw attention to the matters below. My opinion is not

modified in respect of these matters:

restatement of Corresponding Figures8. As disclosed in note 12.1 to the financial statements,

the corresponding figures for 31 March 2009 have

been restated as a result of an error regarding interest

and legal fees discovered during the financial year ended

31 March 2010.


significant uncertainty9. with reference to note 19.1 to the financial statements,

the entity is the defendant in a claim by an

unsuccessful bidder in the procurement of design,

construction and maintenance contract of the

company. The entity is opposing the claim, as it

believes the claim to be illegitimate. The ultimate

outcome of the matter cannot presently be

determined, and consequently no provision for any

liability that may result has been made in the

financial statements at this stage.

additional MatterI draw attention to the matter below. My opinion is not

modified in respect of this matter:

unaudited supplementary schedules10. The supplementary information set out on pages 69

to 71 does not form part of the financial statements

and is presented as additional information. I have

not audited these schedules and accordingly I do

not express an opinion thereon.

report on other legal and regulatory requirements 11. In terms of the PAA and General Notice 1570 of 2009

issued in Government Gazette 32758 of 27 November

2009, I include below my findings on the report on

predetermined objectives, compliance with the Public

Finance Management Act of South Africa,1999

(Act no.1 of 1999) (PFMA), and financial

management (internal control).

FindingsPredetermined objectives

Non-compliance with regulatory and reporting

requirements

Public Finance Management Act

Lack of effective, efficient and transparent systems and

internal controls regarding performance management

12. The accounting authority did not ensure that Dube

TradePort had and maintained an effective,

efficient and transparent system and internal

controls regarding performance management, which

described and represented how the entity’s processes

of performance planning, monitoring, measurement,

review and reporting would be conducted, organised

and managed, as required in terms of section 51(1)

(a)(i) of the PFMA.

usefulness of information13. The following criteria were used to assess the

usefulness of the planned and reported performance:

• Consistency:Hastheentityreportedonits

performance with regard to its objectives, indicators

and targets in its approved strategic plan and annual

performance plan, i.e. are the objectives, indicators

and targets consistent between planning and

reporting documents?

• Relevance:Isthereaclearandlogicallinkbetween

the objectives, outcomes, outputs, indicators and

performance targets?

• Measurability:Areobjectivesmademeasurable

by means of indicators and targets? Are indicators

well defined and verifiable, and are targets specific,

measurable and time bound?

The following audit finding relates to the above criteria:

Planned and reported indicators, Measures and targets not well defined 14. For the selected programmes, 100% of the planned

indicators were not clearly defined in writing to allow

for data to be collected consistently.

internal Control 15. I considered internal control relevant to my audit of

the financial statements and the report on

predetermined objectives and compliance with

the PFMA, but not for the purposes of expressing an

opinion on the effectiveness of internal control.

The matter reported below is limited to the deficiency

identified during the audit.

leadership16. The accounting authority did not exercise oversight

responsibility over reporting and compliance with

laws and regulations regarding predetermined objectives.

PIETERMARITZBuRG31 July 2010

40

rePort oF the direCtorsFOR ThE yEAR EnDED 31 MARCh 2010

The Directors present their report on the activities of the Company for the year ended 31 March 2010. This report forms part of the Annual Financial Statements.

legal entityDube TradePort is a Section 21 Company registered as

such in terms of the Companies Act no. 61 of 1973. The

Company registration number is 2002/002810/08.

nature of Business and operations Dube TradePort has been created as an implementation

vehicle and service delivery company by the Provincial

Government of KwaZulu-natal. It is responsible for the

strategic planning, design, construction and operation

of the Dube TradePort Project as well as other related

projects. Key components of the Dube TradePort are the

King Shaka International Airport, a TradeZone, an AgriZone

and Dube City.

relevant legislation governing dube tradePort operationsDube TradePort is not listed as a public entity as

contemplated by the Public Finance Management Act

no. 1 of 1999. however, the Company abides with the

obligations of the PFMA and Treasury Regulations as

contained within the Grant Funding Agreement with the

Department of Economic Development and Tourism.

In addition the Company is required to comply with

the Companies Act no. 61 of 1973. The draft KwaZulu-

natal Dube TradePort Corporation Bill, once legislated,

transforms Dube TradePort from a Section 21 Company to

a Schedule 3C Public Entity in terms of the Public Finance

Management Act. In preparation for this legislation, Dube

TradePort has commenced the transition process.

statement of responsibilityThe Directors are responsible for the maintenance of

adequate accounting records, the preparation and

integrity of the Annual Financial Statements and related

information. The auditors are responsible to report on the

fair presentation of the Annual Financial Statements.

The Annual Financial Statements have been prepared in

accordance with South African Statements of Generally

Accepted Accounting Practice. This responsibility includes:

• designing,implementingandmaintaininginternal

control relevant to the preparation and fair

presentation of Annual Financial Statements that are

free from material misstatement, whether due to fraud

or error;

• Selectingandapplyingappropriateaccounting

policies; and

• Makingaccountingestimatesthatarereasonablein

the circumstances.

The Directors are also responsible for the Company’s

systems of internal financial controls. These are designed

to provide reasonable, but not absolute, assurance as to

the reliability of the Annual Financial Statements and to

adequately safeguard, verify and maintain accountability

of assets, and to prevent and detect misstatement and

loss. nothing has come to the attention of the Directors to

indicate that any material breakdown in the functioning

of the controls, procedures and systems has occurred

during the year under review.

In discharging its responsibility relating to the effectiveness

of the system and process of risk management, the

Directors have reviewed and approved the integrated risk

management framework, risk assessment report and the

fraud prevention plan. The materiality and significance

framework was also approved during the 2009/10

financial year.

As part of Dube TradePort’s governance process, Directors

are required to disclose all interests in contracts awarded

by Dube TradePort. During the year under review, none

of the Directors of Dube TradePort had any interest in

contracts awarded by Dube TradePort.

Financial resultsThe financial results for the year under review are set out

on pages 36 to 71 in the Consolidated Annual

Financial Statements.

joint Venture

In fulfilling one of the requirements of the Co-Operation

Agreement (signed between Dube TradePort and the

Airports Company South Africa (ACSA)) Dube TradePort

entered into a Joint Venture with the Airports Company


South Africa (ACSA) whereby Dube TradePort owns 60% of

la-Mercy JV Property Investments (Pty) ltd.

The main object of the JV Company (la-Mercy JV

Property Investments (Pty) ltd.) is that of a property

holding, development and letting company, the intention

being to develop the joint venture area in accordance with

the Development Framework Plan and the Master Plan.

During the 2009/10 financial year the main focus of the

JV Company has been in setting up the institutional

arrangements between the shareholders.

The financial year end of la-Mercy JV Property

Investments (Pty) ltd. is 31 March and the results of the

operations of the JV Company have been included in the

Consolidated Annual Financial Statements of

Dube TradePort.

Financial resultsThe results of operations for the year under review are

set out in the Annual Financial Statements which reflect

both the consolidated and entity results. Dube TradePort

continues to be funded by Provincial Government and

remains a going concern.

taxationThe entity is currently in the process of applying for an

income tax exemption from South African Revenue

Services under section 10(1) (cA) of the Income Tax Act

(Income Tax Act no. 58 of 1962). The Directors have noted

the tax payable as a contingent liability pending the

outcome of their application.

events subsequent to Period endThe Directors are not aware of any matters or

circumstances arising since the end of the financial year,

not otherwise dealt with in the Annual Financial Statements

The Board of Directors comprises:

Mr MC Clark non-Executive Chairperson Appointed on 09 September 2002

Mr R Persad Executive Director Appointed on 07 April 2005

Ms Cl Coetzee non-Executive Director Resigned on 15 May 2009

Dr KB Mbanjwa non-Executive Director Appointed on 07 April 2005

Mr S Adam non-Executive Director Appointed on 25 november 2008

Mr C hlabisa non-Executive Director Appointed on 25 november 2008

Directors

42

FOR ThE yEAR EnDED 31 MARCh 2010 COnTInuED

rePort oF the direCtors

Attorneys

PKX Attorneys

2 Princess Street

Pietermaritzburg

3201

The Audit Committee comprises:

Mr S Khumalo Chairperson (Independent)

Ms Cl Coetzee non-Executive Director Resigned on 15 May 2009

Mr S Adam non-Executive Director Appointed on 25 november 2008

Mr C hlabisa non-Executive Director Appointed on 27 August 2009

Audit Committee


Registered Office and Postal Address

15th Floor, The Marine

22 Dorothy nyembe Street

(formerly Gardiner Street)

Durban

4001

Auditors

Auditor-General

Bankers

ABSA Business Banking: Public Sector KZn

Frosterley Park

la lucia

4019

Standard Bank

1 Kingsmead way

Kingsmead

Durban

4001

nedbank

2nd Floor, Kingsmead Building

90 Braam Fischer Road

Durban

4001

44

Consolidated stateMent oF FinanCial PositionAS AT 31 MARCh 2010

Assets

Non-current assets

Property, plant & equipment

Investment property

Interest in Joint Venture

Total non-current assets

Current assets

Trade and other receivables

loan receivable

Cash & cash equivalents

Total current assets

Total assets

Equity and liabilities

Equity attributable to owners of the parent

non-controlling interests

Total equity

Non-current liabilities

long-term of finance lease

Total non-current liabilities

Current liabilities

Short-term finance lease

Trade and other payables

Deferred income

Total current liabilities

Total equity and liabilities

4

23

22

5

14

6

25

7

7

8

9

454 733 030

-

-

454 733 030

108 734 698

39 348 057

148 082 755

602 815 785

67 265 497

-

67 265 497

79 969

79 969

32 862

81 303 013

454 134 444

535 470 319

602 815 785

1 636 747 307

552 549 600

60

2 189 296 967

1 174 859 438

1 200 000

169 147 855

1 345 207 293

3 534 504 260

225 159 411

-

225 159 411

-

-

35 539

66 094 648

3 243 214 662

3 309 344 849

3 534 504 260

1 636 747 307

552 897 794

-

2 189 645 101

1 175 240 103

-

170 396 632

1 345 636 735

3 535 281 836

224 913 666

(163 781)

224 749 885

-

-

35 539

67 281 750

3 243 214 662

3 310 531 951

3 535 281 836

1 033 384 581

-

-

1 033 384 581

773 566 532

-

64 027 953

837 594 485

1 870 979 066

131 950 830

-

131 950 830

35 539

35 539

44 430

15 217 397

1 723 730 870

1 738 992 697

1 870 979 066

notesgroup

2010R

Company2010

R

Company2009

R

(Restated)

Company2008

R


Consolidated stateMent oF CoMPrehensiVe inCoMe

FOR ThE yEAR EnDED 31 MARCh 2010

(Restated)

Government grants

Interest income

As previously reported

Prior year adjustment

Other income

Total revenue

Total operating expenses



Total comprehensive income for

the year

Total comprehensive income/(loss)

attributable to:

Equity holders of the parent

non-controlling interest

10 29 705 908

65 027 500

38 647 644

26 379 856

64 971

94 798 379

(30 113 046)

(29 545 234)

(567 812)

64 685 333

78 769 938

83 396 751

-

-

110 219

162 276 908

(69 477 893)

-

-

92 799 015

92 962 836

(163 821)

78 769 938

83 389 744

-

-

68 219

162 227 901

(69 019 320)

-

-

93 208 581

notesgroup

2010R

Company2010

R

Company2009

R

46

Consolidated stateMent oF Changes in equityFOR ThE yEAR EnDED 31 MARCh 2010

Balance at 01 April 2008

Total comprehensive income for the year – restated



Balance at 31 March 2009 – restated



Total comprehensive income for the year

Increase in share capital on business combination

Balance at 31 March 2010

Total equity attributable to:

Equity holders of the parent


12

12

25

67 265 497

64 685 333

38 873 289

25 812 044

131 950 830

106 138 786

25 812 044

93 208 581

225 159 411

67 265 497

64 685 333

38 873 289

25 812 044

131 950 830

106 138 786

25 812 044

92 799 015

40

224 749 885

224 913 666

(163 781)

notesAccumulated Fundsgroup

2010R

Company2010

R


1 598 253 731

(1 937 458 986)

(339 205 255)

83 396 751

(9 850)

(255 818 354)

(604 398 468)

-

40

-

(552 897 794)

43 892

(1 157 252 330)

1 519 483 793

(44 430)

1 519 439 363

106 368 679

64 027 953

170 396 632


Consolidated stateMent oF Cash Flows

(Restated)

Cash flows from operating activities

Cash receipts and government grants

Cash paid to suppliers and employees

Cash utilised in ordinary activities

Interest received



Interest paid

Net cash outflow from operating activities

Cash flows from investing activities

Additions to plant & equipment

Acquisition of a joint venture

Business combinations

loan advanced to joint venture

Additions to investment property

Proceeds on disposal

Net cash outflow from investing activities

Cash flows from investing activities

Deferred income on grants

Decrease in finance liabilities

Net cash inflow from financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

13

22

23

6

1 299 311 718

(2 030 421 523)

(731 109 805)

65 027 500

38 647 644

26 379 856

(17 520)

(666 099 825)

(578 833 191)

-

-

-

-

16 486

(578 816 705)

1 269 596 426

-

1 269 596 426

24 679 896

39 348 057

64 027 953

1 598 253 731

(1 937 848 850)

(339 595 119)

83 389 744

(9 850)

(256 215 225)

(604 398 468)

(60)

-

(1 200 000)

(552 549 600)

43 892

(1 158 104 236)

1 519 483 793

(44 430)

1 519 439 363

105 119 902

64 027 953

169 147 855

notesgroup

2009R

Company2010

R

Company2009

R

48

notes t0 the Consolidated annual FinanCial stateMentsFOR ThE yEAR EnDED 31 MARCh 2010

1. Basis of Preparation The Consolidated Annual Financial Statements have

been prepared on the going concern basis utilising

the historical cost concept.

The Consolidated Annual Financial Statements have

been prepared in accordance with Generally

Accepted Accounting Practice, comprising

International Financial Reporting Standards (IFRS)

and International Accounting Standards and in

the manner required by the Companies Act of South

Africa, 61 of 1973, as amended, and incorporate the

following principal accounting policies, which have

been consistently applied in all material respects.

2. adoption of new and revised standards The Group has adopted IFRS 3 Business

Combinations, issued by the International Accounting

Standards Board (IASB). This standard is applicable

only at the beginning of an annual reporting period

that commences on or after 30 June 2007.

The Group has adopted IAS 27 Consolidated and

Separate Financial Statements, issued by the

International Accounting Board (IASB). This standard

is applicable for annual periods commencing on

or after 01 January 2005. Amendments made to this

statement in 2008 have been considered.

3. accounting Policies 3.1 going Concern

The Consolidated Annual Financial Statements have

been prepared on a going concern basis.

3.2 Consolidation

3.2.1 Basis for Consolidation

The Consolidated Annual Financial Statements

include the consolidated financial position, results of

operations and cash flows of Dube TradePort and its

investment in the la-Mercy JV Properties (Pty) ltd.

(lM JV) which has been accounted for as

a subsidiary.

3.2.2 Business Combinations

Acquisitions of subsidiaries are accounted for using

the acquisition method. The cost of the acquisition

is measured at the aggregate fair values at the date

of exchange of net assets and equity instruments

issued by the Group in exchange for control of

the acquiree.

Any excess of the cost of the business combination

over the Group’s interest in the net fair value of the

assets is recognised as goodwill on acquisition.

The non-controlling interest in the acquiree is

measured at the non-controlling interest’s proportion

of the net fair value of the asset and liabilities.

All intra-group transactions, balances, income and

expenses are eliminated on consolidation.

non-controlling interests in the net assets are

separately identified from the Group’s interest

3.2.3 Accounting for Subsidiaries

The investment in lM JV has been accounted for

as a subsidiary as the Group has power over more

than half of the voting rights, power to appoint or

remove majority of the members of the Board of

Directors and the power to cast the majority of the

votes at meetings of the Board of Directors.

The results of subsidiaries are included in profit or

loss from the effective date of acquisition up to the

effective date of disposal.

3.3 Foreign Currency Translation

The financial statements are presented in South

African Rands, which is the Company’s functional

and presentation currency.

Foreign currency transactions are translated

into the functional currency using the exchange rates

prevailing at the dates of the transactions.

Foreign exchange gains and losses resulting from

the settlement of such transactions and from the

translation at year end exchange rates of monetary

assets and liabilities denominated in foreign

currencies are recognised in profit or loss, except

when recognised in equity for qualifying cash

flow hedges.

.

3.4 Property, Plant & Equipment

Property, plant and equipment represents tangible

items that are held for use in the supply of services

and for administrative purposes and are expected to

be used during more than one period.

Property, plant and equipment is stated at

cost, excluding the costs of day-to-day servicing,

less accumulated depreciation and accumulated

impairment value. Costs include the cost of replacing

part of such equipment when that cost is incurred if

the recognition criteria are met.


Buildings 8-25 years

Equipment & tools 3-15 years

Computers & software 3 years

Furniture & fittings 6-10 years

Motor vehicles 5 years

Plant 1-25years

Sundry & office equipment 5 years

land is not depreciated. Depreciation on other assets is

calculated on cost using the straight-line method over the

remaining period from acquisition date to the end of the

assets useful life.

The annual depreciation rates are based on the

following estimates:

Assets under construction represents freehold buildings,

and includes all direct expenditure, but excludes the

costs of abnormal amounts of waste material, labour,

or other resources incurred in the production of self-

constructed assets.

Minor assets, with a cost of R1 000 or less, are not

capitalised but expensed on acquisition.

Property, plant and equipment is de-recognised upon

disposal or when no future economic benefits are

expected to flow from its use or disposal. Any gain or loss

on de-recognition of the asset (calculated between the

net disposal proceeds and the carrying amount of the

asset) is included in the income statement in the year the

asset is de-recognised.

The asset’s residual values, useful lives and depreciation

methods are reviewed, and adjusted if appropriate, at

each financial year end.

3.5 Impairment of Assets

A review for impairment indicators is carried out at each

financial year end to determine whether there is any

objective evidence that an asset is impaired. A financial

asset is considered to be impaired if objective evidence

indicates that one or more events have had a negative

effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset

measured at amortised cost is calculated as the

difference between its carrying amount and the present

value of the estimated future cash flows discounted

at the original effective interest rate. An impairment

loss in respect of an available-for-sale financial asset is

calculated by reference to its fair value.

Impairment losses are recognised in profit and loss. If,

in a subsequent period, the amount of the impairment

loss decreases and the decreases can be related

objectively to an event occurring after the impairment

was recognised, the previously recognised impairment

loss is reversed. Any subsequent reversal of an impairment

loss is recognised in the income statement, to the extent

that the carrying value of the asset does not exceed the

amortised cost at the reversal date.

3.6 Intangible Assets

Intangible assets are stated at cost less accumulated

amortisation and accumulated impairment losses, if any.

Intangible assets with an indefinite useful life are not

amortised, but instead are tested for impairment on an

annual basis.

Intangible assets with finite useful lives are amortised to

profit or loss on a straight-line basis over their estimated

useful lives. useful lives and amortisation methods are

reviewed at the end of each annual reporting period,

or more frequently when there is an indication that

the intangible asset may be impaired, with the effect

of any changes accounted for on a prospective basis.

Amortisation commences when the intangible asset is

available for use. The residual values of intangible assets

are assumed to be zero.

3.7 Investment Properties

Investment properties, which are properties held to earn

rentals and/or for capital appreciation, are stated at

cost less accumulated depreciation and accumulated

impairment losses, if any.

Depreciation is calculated so as to write off the cost of

the investment property on a straight-line basis, over

its estimated useful life to its estimated residual value.

Depreciation commences when the property is ready for

its intended use. The estimated useful lives of depreciable

properties are disclosed under property, plant and

equipment and can be general purpose buildings or

special purpose buildings.

3.8 Financial Instruments

non-derivative financial assets comprise trade and other

receivables, rental deposits paid and cash and

cash equivalents.

Trade and other receivables are stated at their nominal

value as reduced by appropriate allowances for the

estimated irrecoverable amounts.

Cash and cash equivalents comprise short-term highly

liquid investments, cash at banks and in hand.

50

notes t0 the Consolidated annual FinanCial stateMentsFOR ThE yEAR EnDED 31 MARCh 2010 COnTInuED

Available-for-sale Financial Assets

Investments in joint ventures are classified as available-

for-sale investments and are subsequently measured at

fair value. Gains and losses from changes in fair value

of available-for-sale investments are recognised directly

in equity until the financial asset is disposed of or it is

determined to be impaired, at which time the cumulative

gain or loss previously recognised in equity is recognised

in gains or losses on re-measurement and disposal of

financial instruments in profit or loss. Interest income

is recognised in profit or loss by applying the effective

interest rate method.

The net gain or loss recognised in profit or loss

incorporates any gains or losses on re-measurement

transferred from equity to profit or loss, dividends and

interest income on the financial asset.

These investments are classified as non-current assets

unless management intends to dispose of the investments

within twelve months of the balance sheet date.

The Company’s principal financial liabilities comprise

trade and other payables, provisions and

deferred income.

Trade and other payables are stated at their

nominal value.

3.9 Cash & Cash Equivalents

Cash and cash equivalents are carried at cost. For the

purpose of the cash flow statement, cash and cash

equivalents comprise cash on hand, and deposits held

on call with banks and investments in money market

instruments, net of bank overdrafts. Amounts held with

Dube TradePort’s bankers in favour of its service providers

are also included in cash and cash equivalents.

3.10 Provisions

Provisions are recognised when there is a present

obligation (legal or constructive) as a result of a past

event, it is probable that an outflow of resources will be

required to settle the obligation, and a reliable estimate

can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate

of the consideration required to settle the present

obligation at the balance sheet date, taking into account

the risks and uncertainties surrounding the obligation.

where a provision is measured using the cash flows

estimated to settle the present obligation, its carrying

amount is the present value of those cash flows.

3.11 Accumulated Funds

The Company is registered under the Companies Act

as an Association Incorporated under Section 21 and

as such no income and property shall be transferred to

members directly or indirectly. The accumulated funds of

the Company are therefore non-distributable.

3.12 Revenue Recognition

Revenue represents the gross inflow of economic benefits

during the period arising in the course of the ordinary

activities when those inflows result in increase in equity/

reserves. The following specific recognition criteria must

also be met before revenue is recognised:

government grants

Government grants are not recognised until there is

reasonable assurance that the Company will comply with

the conditions attaching to them and that the grants

will be received.

Revenue received from Government grants are

recognised as revenue to the extent that the Company

has complied with any criteria, conditions or obligations

embodied in the grant funding agreement.

Grants related to assets are Government grants whose

primary condition is that an entity qualifying for them

should purchase, construct or otherwise acquire long-

term assets and shall be presented in the statement of

financial position by setting up the grant as

deferred income.

Government grants received are recognised as deferred

income, to the extent that the criteria, conditions or

obligations have not been met.

Other Income

Other Income received is accounted for on an

accrual basis.

Interest Income

Interest income is recognised as interest income accrues,

and is accounted for at the end of each month.

Revenue is measured at the fair value of

consideration received.


3.13 Taxes

Current tax assets and liabilities for the current and prior

periods are measured at the amount expected to be

recovered from or paid to the taxation authorities. The

tax rates and tax laws used to compute the amount

are those that are enacted or substantively enacted at

balance sheet date.

The effects of deferred taxation shall be recognised

and disclosed in the Annual Financial Statements if the

exemption from income taxation is rejected by South

African Revenue Services.

3.14 Employee Benefits

The Company does not offer any retirement or post-

retirement benefits. Short-term benefits are provided for in

respect of leave pay as follows:

• Employeeentitlementstoannualleaveandannual

bonuses are recognised when they accrue to

employees; and

• Anaccrualhasbeenraisedfortheliabilityfor

annual leave and annual bonuses as a result of

services rendered by employees up to the

balance sheet.

3.15 Leases

Operating Leases

leases where significant portion of the risk and rewards

are retained by the lessor are classified as operating

leases. Payments made under operating leases are

charged to the income statement on a straight-line basis

over the period of the lease.

Finance Leases

leases where the Company has substantially all the risks

and rewards of ownership are classified as finance leases.

Finance leases are capitalised at the inception of the

lease at the lower of the fair value of the lease asset or

the current minimum lease payments.

Each lease payment is allocated between the liability

and finance charges so as to achieve a constant rate

on the finance balance outstanding. The corresponding

rental obligation net of finance charges, are included

in other long-term liabilities. The finance cost element is

charged to the income statement over the lease period.

The property, plant and equipment acquired under

finance lease is depreciated over the useful life

of the asset.

3.16 Comparative Figures

Comparative figures have been adjusted to conform to

changes in presentation and classification in the current

year, where necessary.

In the current year, a prior year adjustment has been

made. Thus, three-year comparatives have been disclosed

on the balance sheet and the notes to the Annual

Financial Statements. This is in accordance with the

revised IAS 1 Presentation of Financial Information.

3.17 government grant

Grants from the Government are recognised at their

fair value in profit or loss where there is a reasonable

assurance that the grant will be received and the Group

has complied with all attached conditions. Grants

received where the Group has yet to comply with all

attached conditions are recognised as a liability (and

included in deferred income) and released to income

when all attached conditions have been complied with.

Government grants received are included as a separate

line item in profit and loss.

52

FOR ThE yEAR EnDED 31 MARCh 2010notes t0 the Consolidated annual FinanCial stateMents

group 2010

gross carrying amount

Work under construction

EPC

AgriZone

Cargo Terminal

TradeZone

SupportZone

Capitalised assets

Buildings

Plant

Equipment

Computers & software

Furniture & fittings

Motor vehicles

Leased assets

leased equipment

Company 2010



EPC

AgriZone

Cargo Terminal

TradeZone

SupportZone

Capitalised assets

Buildings

Plant

Equipment



Motor vehicles

Leased assets

leased equipment

1 549 874 719

9 711 427

23 957 965

26 578 483

9 951 027

8 858 679

3 183 144

1 124 900

3 380 070

367 656

1 306 490

141 049

1 638 435 609

1 549 874 719

9 711 427

23 957 965

26 578 483

9 951 027

8 858 679

3 183 144

1 124 900

3 380 070

367 656

1 306 490

141 049

1 638 435 609

529 727 917

(1 958 432)

22 943 297

26 578 483

9 951 027

8 858 679

3 183 144

1 011 893

2 951 168

108 395

1 042 897

-

604 398 468

529 727 917

(1 958 432)

22 943 297

26 578 483

9 951 027

8 858 679

3 183 144

1 011 893

2 951 168

108 395

1 042 897

-

604 398 468

1 020 146 802

11 669 859

1 014 668

-

-

-

113 007

589 558

259 261

263 593

141 049

1 034 197 797

1 020 146 802

11 669 859

1 014 668

-

-

-

113 007

589 558

259 261

263 593

141 049

1 034 197 797

-

-

-

-

-

-

-

(160 656)

-

-

-

(160 656)

-

-

-

-

-

-

-

(160 656)

-

-

-

(160 656)

Opening Balance

R

Additions/ (Transfers)

R

Disposals

R

4. Property, Plant & equipment

Closing Balance

R



EPC

AgriZone

Cargo Terminal

TradeZone

SupportZone

Capitalised assets

Buildings

Plant

Equipment



Motor vehicles

Leased assets

leased equipment

Company 2010

Accumulated depreciation


EPC

AgriZone

Cargo Terminal

TradeZone

SupportZone

Capitalised assets

Buildings

Plant

Equipment



Motor vehicles

Leased assets

leased equipment

-

-

-

-

-

585 441

-

81 493

455 836

132 365

310 925

122 242

1 688 302

-

-

-

-

-

585 441

-

81 493

455 836

132 365

310 925

122 242

1 688 302

-

-

-

-

-

585 441

-

27 414

106 157

34 825

223 060

28 210

1 005 107

-

-

-

-

-

585 441

-

27 414

106 157

34 825

223 060

28 210

1 005 107

-

-

-

-

-

-

-

54 079

479 700

97 540

87 865

94 032

813 216

-

-

-

-

-

-

-

54 079

479 700

97 540

87 865

94 032

813 216

-

-

-

-

-

-

-

(130 021)

(130 021)

-

-

-

-

-

-

-

(130 021)

(130 021)

Opening Balance

R

Current Depreciation

R

Disposals

R

4. Property, Plant & equipment (continued)

Closing Balance

R

group 2010Accumulated depreciation

54


notes t0 the Consolidated annual FinanCial stateMents


EPC

AgriZone

Cargo Terminal

Capitalised assets

Equipment



Motor vehicles

Leased assets

leased equipment

1 020 146 802

11 669 859

1 014 668

113 007

589 558

259 261

263 593

141 049

1 034 197 797

567 667 567

10 014 650

1 014 668

31 368

92 757

10 156

-

-

578 831 166

452 479 235

1 655 209

-

81 639

512 080

249 105

263 593

141 049

455 381 910

-

-

-

-

(15 279)

-

-

-

(15 279)

Opening Balance

R

2009


Additions

R

Disposals

R


Closing Balance

R


EPC

AgriZone – work in progress

Cargo Terminal operations

Capitalised assets

Equipment



Motor vehicles

Leased assets

leased equipment

-

-

-

54 079

479 700

97 540

87 865

94 032

813 216

-

-

-

14 638

56 244

25 682

52 719

28 210

177 493

-

-

-

39 441

436 613

71 858

35 146

65 822

648 880

-

-

-

-

(13 157)

-

-

-

(13 157)

2009





EPC

AgriZone

Capitalised assets

Equipment



Motor vehicles

Leased assets

leased equipment

452 479 235

1 655 209

81 639

512 080

249 105

263 593

141 049

455 381 910

452 479 235

1 655 209

10 398

24 386

8 148

263 593

-

454 440 969

-

-

71 241

677 063

240 957

-

141 049

1 130 310

-

-

-

(189 369)

-

-

-

(189 369)

Opening Balance

R

Additions

R

Disposals

R

Closing Balance

R

2008



EPC – work in progress

AgriZone – work in progress

Capitalised assets

Equipment



Motor vehicles

Leased assets

leased equipment

-

-

39 441

436 613

71 858

35 146

65 822

648 880

-

-

11 744

157 841

24 231

35 146

28 210

257 172

-

-

27 697

468 141

47 627

-

37 612

581 077

-

-

-

(189 369)

-

-

-

(189 396)

2008


56


net carrying value at the beginning of

the year

Additions

Disposals

Depreciation

Current year depreciation

Adjustment to retained earnings

net carrying value at the end of the year

1 033 384 581

604 398 468

(30 635)

(1 005 107)

(1 005 107)

-

1 636 747 307




EPC

AgriZone

Cargo Terminal

TradeZone

SupportZone

Capitalised assets

Buildings

Plant

Equipment



Motor vehicles

Leased assets

leased equipment

452 479 235

1 655 209

-

-

-

-

42 198

75 467

177 247

228 447

75 227

454 733 030

1 549 874 719

9 711 427

23 957 965

26 578 483

9 951 027

8 273 238

3 183 144

1 043 407

2 924 234

235 291

995 565

18 807

1 636 747 307

1 549 874 719

9 711 427

23 957 965

26 578 483

9 951 027

8 273 238

3 183 144

1 043 407

2 924 234

235 291

995 565

18 807

1 636 747 307

1 020 146 802

11 669 859

1 014 668

-

-

-

58 928

109 858

161 721

175 728

47 017

1 033 384 581

group2010

R

Net Carrying Values

Company2010

R

Company2009

R

Property, Plant & Equipment Reconciliation

There are no encumbrances or restrictions on the use of the assets.

Company2008

R

549 233

454 440 969

-

(257 172)

(228 962)

(28 210)

454 733 030

1 033 384 581

604 398 468

(30 635)

(1 005 107)

(1 005 107)

-

1 636 747 307

454 733 030

578 831 166

(2 122)

(177 493)

(177 493)

-

1 033 384 581


(i) The money is held in accounts by third parties

as deposits, relating to purchase of property,

development of the AgriZone, the ICM Contract and

Variations of EPC and Ilembe contracts. This relates to

both the Group and Company.

There are no impairments or encumbrances on

accounts receivable. The values above are a close

approximation of the fair value.

Expenses paid in advance

Advance payment to Ilembe

Rental deposit

SARS - VAT input

Retention VAT

Interest accrued : investments

Interest accrued : amount held in trust

Debtor : VB

Debtor : ACSA

Debtor : JV

Deposits held in trust account (i)

Variations of EPC contract

Purchase of property

AgriZone Development

ICM Contract and Ilembe Variations

Ethekwini Municipality

herwood Farm

54 769

60 882 500

84 345

47 713 084

-

-

-

-

-

-

-

-

-

-

-

108 734 698

43 439

-

105 720

92 400 924

583 042

56 973

504 329

16 006

-

558 242

1 080 590 763

39 816 048

47 516 396

346 587 692

553 314 687

93 000 000

355 940

1 174 859 438

182 306

-

105 720

92 400 924

583 042

56 973

504 329

16 006

800 040

-

1 080 590 763

39 816 048

47 516 396

346 587 692

553 314 687

93 000 000

355 940

1 175 240 103

21 645

12 176 500

85 023

36 691 320

-

-

25 812 044

-

-

-

698 780 000

62 000 000

486 780 000

150 000 000

-

-

773 566 532

group2010

R

Company2010

R

Company2009

R

5. trade & other receivables

Company2008

R

Cash and cash equivalents consist of cash

on hand and balance with banks:

ABSA investment account

ABSA cheque account

ABSA Bank Account: 4069597715

ABSA Bank Account: 4069597838

nedbank: 164 818 376

nedbank cheque account

nedbank call account

Standard Bank

Petty cash

26 379 500

294 169

1 005 076

11 668 312

-

-

-

-

1 000

39 348 057

5 001 713

31 115 975

1 053 057

131 977 793

37

-

-

(1 720)

1 000

169 147 855

5 001 713

31 115 975

1 053 057

131 977 793

37

41 769

1 207 008

(1 720)

1 000

170 396 632

26 379 084

578 070

13 727 777

23 342 022

-

-

-

-

1 000

64 027 953

6. Cash & Cash equivalents

(Restated)

58



Total liability

less: Short-term portion

Reconciliation of minimum lease payments

as at 31 March 2010

less than one year


as at 31 March 2009

less than one year

Two to five years


as at 31 March 2008

less than one year

Two to five years

112 831

(32 862)

79 969

Present

Value

35 539

35 539

Present

Value

44 430

35 539

79 969

Present

Value

32 862

79 969

112 831

35 539

(35 539)

-

Minimum

Payments

37 351

37 351

Minimum

Payments

54 098

37 351

91 449

Minimum

Payments

50 382

91 449

141 831

35 539

(35 539)

-

79 969

(44 430)

35 539

Interest

Cost

1 812

1 812

Interest

Cost

9 668

1 812

11 480

Interest

Cost

17 520

11 480

29 000

group2010

R

Company2010

R

Company2009

R

Company2008

R

7. Finance lease liabilityCertain sundry equipment is leased under a non-

cancellable lease agreement. The lease term is five

years. As the lease terms transfer substantially all the risks

and rewards of ownership to the Company, the lease is

classified as finance lease. The lease agreement ends

30 november 2010. Dube TradePort has the option to

purchase the asset at the end of the lease term at a

nominal value. Interest rate is linked to the prime rate.


Balance at the beginning of the year

Charged to the income statement

Balance at end of the year

190 725 612

1 598 253 731

(77 764 832)

(604 398 468)

1 106 816 043

1 533 005 258

604 398 468

587 242 291

17 156 177

(1 005 107)

2 136 398 619

3 243 214 662

In the current year, leave pay provision is

accounted for as an accrual, in accordance with

IAS 27. The movement in provisions detailed above

is disclosed as there were provisions in prior years.

Accruals

leave Pay Accrual

Audit Fee Accrual

lease accruals

Retention – creditor

Creditor - ACSA

9.1 Deferred income grant: government

grants

Opening balance at beginning of year

Grants received during the year

Transferred to income for the year

Transferred to fixed assets

Closing balance

9.2 Deferred income grant: Fixed Asset

Opening balance at beginning of year


Transferred to assets under construction


Amortisation of deferred grant

Closing balance at end of year

Total deferred income

80 757 613

459 400

86 000

-

-

81 303 013

358 471

186 929

545 400

86 078 578

443 500 000

(75 444 134)

(454 134 444)

-

-

454 134 444

454 134 444

-

-

454 134 444

454 134 444

60 240 695

933 800

-

52 642

4 867 511

66 094 648

-

-

-

190 725 612

1 598 253 731

(77 764 832)

(604 398 468)

1 106 816 043

1 533 005 258

604 398 468

587 242 291

17 156 177

(1 005 107)

2 136 398 619

3 243 214 662

60 240 636

933 800

15 000

52 642

4 867 511

1 172 161

67 281 750

-

-

-

14 498 199

719 198

-

-

-

15 217 397

545 400

173 798

719 198

-

1 299 311 718

(29 705 908)

(1 078 880 198)

190 725 612

454 134 444

1 078 880 198

1 078 745 816

134 382

(9 384)

1 533 005 258

1 723 730 870

group2010

R

Company2010

R

Company2009

R

8. trade & other Payables

The movement in provisions are as follows:

9. deferred income

Company2008

R

60



The non-Executive Directors are not remunerated as they are all Government officials, except for the Chairperson who is

entitled to remuneration.

#Appointed during the year

*Bonus in proportion to time spent in that role

Grants: unconditional (operational)

Grants: conditional (capex)

Government grants recognised

14 257 821

15 448 087

29 705 908

78 208

-

177 492

(9 384)

2 464 548

1 396 668

123 954

865 491

78 435

1 227 363

104 326

900 255

78 772

649 836

58 079

-

-

17 200

8 114

24 957 519

53 812 419

78 769 938

320 776

(10 763)

1 005 107

(1 005 107)

2 610 249

1 516 782

94 799

939 923

58 745

1 332 916

83 307

977 677

18 331

705 721

44 107

568 889

8 889

15 787

26 675

24 957 519

53 812 419

78 769 938

305 776

(10 763)

1 005 107

(1 005 107)

2 610 249

1 516 782

94 799

939 923

58 745

1 332 916

83 307

977 677

18 331

705 721

44 107

568 889

8 889

15 787

26 675

group2010

R

Company2010

R

Company2009

R

10. government grants

11. surplus for the yearSurplus for the year is arrived at after the following:

Auditors remuneration

Foreign exchange loss

Depreciation for the year

Amortisation of deferred income

Executive Directors remuneration

Fees for services rendered as Directors

CEO - Salary

- Bonus

CFO/BEE - Salary

- Bonus

Executive management remuneration

Project Executive Aeronautical - Salary

- Bonus

Project Executive TradeZone - Salary

- Bonus

Corporate Affairs Executive - Salary

- Bonus

#Project Executive Infrastructure & Development

- Salary

- Bonus*

*Non-Executive Directors remuneration

Non-Executive Director – Independent Chairperson


(Restated)

12. restatement of Comparatives

12.1 Prior year interest adjustment

Interest

legal fees

net effect on income statement

Balance Sheet

Retained earnings

Surplus for the year

Adjustment for :

Depreciation

Interest received

Interest paid

Profit on sale of assets

Surplus before working capital changes

working capital changes in:

(Increase) in trade and other receivables

Increase/(decrease) in trade and other payables

Increase/(decrease) in provisions

Cash utilised in ordinary activities

65 027 500

(1 599 929)

63 427 571

131 950 830

64 685 333

177 492

(65 027 500)

17 520

(12 339)

(159 494)

(730 950 311)

(664 831 833)

(66 292 276)

173 798

(731 109 805)

38 647 644

(1 032 117)

37 615 527

106 138 786

92 799 015

1 005 107

(83 396 751)

9 850

(13 256)

10 403 965

(349 609 220)

(401 673 572)

52 783 550

(719 198)

(339 205 255)

26 379 856

(567 812)

25 812 044

25 812 044

93 208 581

1 005 107

(83 389 744)

9 850

(13 256)

10 820 538

(350 415 657)

(401 292 907)

51 596 448

(719 198)

(339 595 119)

As Previously Stated

31 March 2009

Prior Year Adjustment

31 March 2009

Restated

31 March 2009

Income Statement

In the previous financial period, interest earned on monies

held with the attorney, together with agency fees payable,

were incorrectly unaccounted for. This has been corrected

in the current year, resulting in a prior year adjustment.

Interest has been realised as revenue. Effects of the prior

year adjustment on the financial statements relate to the

Company only as there was no consolidation in the prior

year. These are as follows:

group2010

R

Company2010

R

Company2009

R

13. Cash Flow from operating activities

62

Airports Company South Africa (ACSA)

Purchase of investment property by Dube TradePort

Purchase of investment property by lM JV

loan receivables – la-Mercy JV

Receivables – ACSA

Payables - ACSA

lease payments – la-Mercy JV

The loan to the JV is receivable when the JV has funds

available for that purpose, having regard to its liabilities

and commitments. The loan may be subject to interest,

at the discretion of the Board of Directors of the JV.

The net payable to ACSA relates to rates expenses that

were paid by ACSA.

The lease relates to lease of land from la-Mercy JV in extent of 12-hectares of land within sub-division 8. The lease is for a

period of 15 years, commencing 01 July 2009 at a rate of R100 pa.

428 815 725

-

1 200 000

-

-

67



The following are the related parties of Dube TradePort:

Airports Company South Africa and the la-Mercy JV

Property Investment (Pty) ltd.

Details of transactions between the Company and related

parties are disclosed as follows:

The remuneration of Directors and other members of key

management during the year have been disclosed in note 12

and only relate to short-term benefits as long-term benefits are

not available.

The remuneration of Directors and key management is

determined by the Board of Directors having regard to the

performance of individuals and market trends.

-

-

-

-

-

-

428 815 725

348 194

-

800 040

1 172 161

-

group2010

R

14.1 Trading transactions:

14.2 Compensation to key management:

14.3 Other related party transactions:

Company2010

R

Company2009

R

14. related Parties


15. losses through Criminal Conduct or unauthorised, irregular or Fruitless and wasteful expenditureDuring The year under Review no losses Through Criminal Conduct Occurred. no unauthorised, Irregular, Fruitless Or

wasteful Expenditure was Incurred And no Criminal Or Disciplinary Steps were Taken.

16. transactions with owners acting in their Capacity as ownersDuring The year under Review no Transactions Of This nature were Entered Into.

17. operating leases

17.1 Leasing arrangements:

Office building

A lease agreement entered into between Dube TradePort and Old Mutual Properties Company for suite 1501 and 1502

measuring approximately 779 rentable square metres. The lease commences from 01 April 2008 and terminates on 31

March 2011. The lease payments are disclosed in note 18.2.

Parking bays

A lease for parking between Interpark and Dube TradePort has no fixed termination. It shall continue until terminated by

either party. Interpark is entitled to vary the monthly parking fee. There is no set escalation rate.

18. Project Funds

The approved budget for the next financial year in terms of the Grant Funding Agreement with the Department of

Economic Development and Tourism is R526 905 000 of which R31 953 167 will be in respect of the unconditional grant

and the balance in respect of the conditional grant.

Minimum lease payments:

Office rentals

Rental paid

lease accrual

Parking bays

land lease

Operating lease commitments: Rental

not later than one year

later than one year but not later than five years

Total of future minimum lease payments

713 620

660 007

53 613

77 445

713 620

713 620

1 427 240

713 620

660 977

52 643

103 645

67

713 620

-

713 620

713 620

660 977

52 643

103 645

67

713 620

-

713 620

group2010

R

Company2010

R

Company2009

R

17.2 Payments recognised as an expense:

64

notes t0 the Consolidated annual FinanCial stateMentsFOR ThE yEAR EnDED 31 MARCh 2010 COnTInuED

19. Contingent liabilities 19.1 Court proceedings:

There is pending litigation relating to a non-compliant bidder in the procurement of Design, Construction

and Maintenance Contract of Dube TradePort In the unlikely event that Dube TradePort is unsuccessful,

an amount of R11.4m may be paid.

19.2 Application for income tax exemption

Dube TradePort is currently in the process of applying for an income tax exemption from South African

Revenue Service under section 10(1) (cA) of the Income Tax Act (Income Tax Act no. 58 of 1962).

The possible taxation liability, should the application be unsuccessful, amounts to approximately R63m.

20. risk Management 20.1 Liquidity risk:

liquidity risk is the risk that the Company will be unable to service payment obligations timeously or

fund asset growth.

The Company’s exposure to liquidity is as a result of the funds available to cover future commitments. The

Company manages liquidity risk through an ongoing review of future commitments and credit facilities.

Cash flow forecasts are prepared and are monitored.

20.2 Credit risk:

Credit risk is the risk of potential loss from the failure of customers, clients or counter parties to fulfill

obligations to the Company.

Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The Company only

deposits cash with major banks with high-quality credit standing and limits exposure to any one

counter-party.

Trade receivables comprise advance payment to Ilembe, VAT input claim against SARS, and rental

deposits paid. Management evaluate credit risk on an ongoing basis.

The Company is not exposed to guarantees for the financing facilities.

20.3 Interest rate risk:

Interest rate risk refers to the potential adverse impact on earnings as a result of changes in interest rates.

Deposit and financial instruments attract interest at rates that vary with prime. The Company policy is to

manage interest rate risk so that fluctuations in variable rates do not have a material impact on profit/(loss).

20.4 Foreign exchange risk:

The Company’s activities expose it to the risks of fluctuations in foreign currency exchange rates due

to transactions or balances traded or denominated in foreign currencies.

21. Commitments Approved Commitments

The entity has the following approved commitments:

1. Additional works construction contract with Ilembe Airport Construction Services (Pty) ltd. approximately is

R530 000 000.00. This amount has been deposited in the Escrow account with nedbank.

2. Construction of the greenhouses and packing facilities contract with Bosch Inveka BV. The value of the contract

is approximately R350 000 000.00. This amount has been ceded to Standard Bank of Southern Africa.


Current Commitments

The entity has a current commitment relating to the Cargo Terminal with worldwide Flight Services SA for an

amount of R40 000 000.00.

The Company also has a commitment of audit fees payable of R290 000.00 for the current year audit.

22. interest in joint Venturesla-Mercy JV Property Investment (Pty) ltd In response to the need to invest in property, it was

necessary for the formation of the la-Mercy JV Property Investment (Proprietary) limited (lM JV).The

express purpose of lM JV is that of holding, developing and letting property.

la-Mercy JV Property Investment (Proprietary) limited is owned 60% by Dube TradePort and 40% by Airports

Company South Africa and they contributed the required necessary financial resources directly proportional to

their shareholding. lM JV was officially launched on 29 May 2009. Effective 01 April 2009, Dube TradePort acquired

a 60% interest in lM JV by acquiring 60 shares for R60. Each shareholder advanced to lM JV funding by way

of shareholders loans. As at 31 March 2010, the Company’s portion of the loan in lM JV amounted to R1, 2million.

Interest held

Investment at cost

-

-

60%

-

60%

60

group

2010

Company

2010

Company

2009

In the current year the JV incurred a loss. Dube TradePort’s

share of the loss based on a 60% holding of the JV is

(R245 732) and has been consolidated in the Group

accounts based on the acquisition method.

66



Investment – land la Mercy (Ptn 5 & 9)

Investment – land Farm Klip Fontein

Investment – land la Mercy (Ptn 4, 6, 8, 10 & 11)

Balance at the end of the year

23.1 Land – La Mercy (Ptn 5 & 9)

At Cost


Acquisition


23.2 Land – Farm Klip Fontein

At Cost


Acquisition


-

-

-

-

-

-

-

-

-

-

428 815 725

123 733 875

-

552 549 600

-

428 815 725

428 815 725

-

123 733 875

123 733 875

428 815 725

123 733 875

348 194

552 897 794

-

428 815 725

428 815 725

-

123 733 875

123 733 875

-

-

-

-

-

-

-

-

-

-

This comprises the purchase of sub-divisions

5 and 9 in extent of 302,9605-hectares, of

the la Mercy Airport no. 15124 from Airports

Company South Africa ltd.

The land has been valued by an independent

professional appraiser, CB Richard Ellis, who

holds the relevant professional qualification

and has recent experience in the location

and category of the investment property

being valued.

Based on the valuation done by eThekwini

Municipality (market value of approximately

R1 757 481 737.00) the Directors are of the

opinion that the historic cost of the land is

correctly reflected, based on the strategic

location and future developmental potential.

group2010

R

Company2010

R

Company2009

R

Company2008

R

23. investment Property


This comprises the purchase of the remainder and portion 11 (of 3) of the Farm Klip Fontein no. 922 in extent of

approximately 57-hectares from Tongaat hulett ltd.

The land has been valued by an independent professional appraiser, CB Richard Ellis, who holds the relevant

professional qualification and has recent experience in the location and category of the investment property being

valued.

Based on the valuation done by the eThekwini Municipality (market value of approximately R330 658 482.00), the

Directors are of the opinion that the historic cost of the land is correctly reflected based on the strategic location and

future developmental potential.

23.3 Land – La Mercy (Ptn 4, 6, 8, 10 & 11)

At Cost


Acquisition


-

-

-

-

-

-

-

348 194

348 194

-

-

-

group2010

R

Company2010

R

Company2009

R

23. investment Property (continued)

Company2008

R

This comprises the purchase of sub-divisions 4, 6, 8, 10 and 11 in extent of 848,808-hectares, of the la Mercy Airport no.

15124 from Airports Company South Africa ltd.

The land has been valued by an independent professional appraiser, CB Richard Ellis, who holds the relevant

professional qualification and has recent experience in the location and category of the investment property being

valued. The fair value of this investment property is R887 000 000.

23.4 Fair Value Methods and Key Assumptions

In the valuer’s professional opinion, there is sufficient evidence that the developable land will be taken up by private

sector operators over time. Therefore, a Depreciated Cost Based Valuation Approach in valuing the property has not

been adopted. The approach used in valuing bulk land is the consideration of the present value with reference to bulk

land market comparables.

The property has been valued on the basis of a non –inflation adjusted net Present Value of net proceeds from the

forward sale of the “leasehold” sites. A discounted rate of 11,5% pa has been assumed. The valuation assumes that

the services and structures are in a a satisfactory state of repair and condition and that relevant Building and Town

Planning Regulations have been complied with.

24. Business CombinationsOn 24 August 2009, the effective date of acquisition, Dube TradePort acquired 60% of the ordinary share capital of la-

Mercy JV Property Investments (Pty) ltd. (lM JV). The express purpose of the lM JV is that of holding, developing and

letting property. The interest in lM JV has been accounted for as a subsidiary as Dube TradePort has power over more

than half of the voting rights, power to appoint or remove the majority of the members of the Board of Directors and

the power to cast the majority of the votes at meetings of the Board of Directors.

68



Ordinary share capital – non-controlling interest

Opening Balance – Accumulated Funds


Attributable to equity holders of the parent


Total Equity

-

67 265 497

64 685 333

-

-

131 950 830

40

131 950 830

92 799 015

92 962 836

(163 821)

224 749 885

60

60

-

131 950 830

93 208 581

-

-

225 159 411

group2010

R

Company2010

R

Company2009

R

(Restated)

The total authorised number of ordinary shares is R100 with a par value of R1 each in the subsidiary lM JV. The Group

has a 60% equity holding in the subsidiary.

26. Issuance of Annual Financial Statements

The Annual Financial Statements, as authorised by the Board of Directors of Dube TradePort, were issued on 28 May

2010. The power to amend these Annual Financial Statements after issuance vests with the Board of Directors of

Dube TradePort.

27. Expenditure Relating to FIFA World Cup 2010 – Tickets & Clothing

During the year, no expenditure was incurred on the FIFA world Cup 2010 in respect of tickets and clothing.

28. Events Subsequent to Year End

The Directors are not aware of any matter or circumstance arising since the end of the financial year, not otherwise

dealt with in the Consolidated Annual Financial Statements.

The cost of the combination is made up as follows:

Purchase consideration:

- Cash paid

Total purchase consideration

The consideration paid was for 60% of the ordinary share

capital in lM JV. non-controlling interest in ordinary share

capital is R40.

group2010

R

Company2010

R

Company2009

R

Company2008

R

25. equity


notes t0 the Consolidated detailed inCoMe stateMent


(Restated)

Revenue

Grants received

Interest received



Interest received : trustees and accrual

Sundry income

Expenditure

Administration fees

Auditors remuneration

Bank charges

Cellphone costs

Cleaning materials

Courier services

Consumables

Computer maintenance costs

Depreciation

Dumping cost

Directors fees

Directors’ remuneration

Electricity and water

Entertainment

Equipment tools expense

Foreign exchange loss

Furniture and office equipment

Fuel

Insurance

Interest paid

lease expense

legal fees



Maintenance

Management fees

Materials – alien control

Overseas travel

Printing and stationery

Plant, equipment & vehicle hire – alien

Professional services

Protective clothing

Refreshments

Rent paid

Share of joint venture loss

Staff costs

Staff welfare

Subscriptions

Security

Software and computer equipment

94 798 379

29 705 908

65 027 500

38 647 644

26 379 856

-

64 971

30 113 046

220 613

78 208

7 202

59 620

23 715

25 175

686

84 806

168 108

-

17 200

1 520 622

27 850

29 004

-

-

268

-

25 679

17 520

-

1 599 929

1 032 117

567 812

69 544

-

-

330 604

42 348

-

1 882 257

11 464

791 381

-

5 128 985

5 148

-

-

162 276 908

78 769 938

42 027 868

41 368 883

110 219

69 477 893

530 412

320 776

18 133

69 648

35 339

32 336

239 336

130 637

1 005 107

185

-

-

100 581

67 143

65 807

10 763

11 655

87 774

75 840

9 850

67

2 635 849

85 812

658 358

28 595

291 982

80 487

513 690

3 653 722

1 050

18 282

817 265

-

9 137 886

24 738

6 372

200 739

29 997

162 227 901

78 769 938

42 020 861

41 368 883

68 219

69 019 320

530 412

305 776

17 902

69 648

35 339

32 336

239 336

130 637

1 005 107

185

-

-

100 581

67 143

65 807

10 763

11 655

87 774

75 840

9 850

67

2 635 849

85 812

658 358

28 595

291 982

80 487

513 690

3 653 722

1 050

18 282

817 265

-

9 137 886

24 738

6 372

200 739

29 997

group2010

R

Company2010

R

Company2009

R

70


notes t0 the Consolidated detailed inCoMe stateMent

Subsistence & travel

Training

Rates

Project costs

Telephone & fax

Vehicle rental

habitat Rehabilitation Expense


81 806

36 557

-

17 719 936

106 811

-

64 685 333

348 315

1 278 458

671 718

45 547 933

201 693

237 002

196 560

92 799 015

Note 1

348 315

1 278 458

228 377

45 547 933

201 693

237 002

196 560

93 208 581

group2010

R

Company2010

R

Company2009

R

(Restated)


Project costs

Programme One: Administration

Marketing

Programme Two: Technical Services

Master planning

Spatial planning

Air services

Programme Three: Commercial Development

TradeZone

SupportZone

Programme Four: Infrastructure and Development

Regional investment initiative

Business development

IT Platform

2 297 325

10 632 034

-

1 880 690

709 096

1 266 093

934 698

-

17 719 936

7 439 953

12 623 994

583 233

1 675 406

14 738 084

6 805 061

820 921

126 228

735 053

45 547 933Note 1

7 439 953

12 623 994

583 233

1 675 406

14 738 084

6 805 061

820 921

126 228

735 053

45 547 933

group2010

R

Company2010

R

Company2009

R

(Restated)

note 1

sChedule oF ProjeCt CostsFOR ThE yEAR EnDED 31 MARCh 2010

15th Floor, The Marine, 22 Dorothy nyembe Street (Gardiner Street), Durban, 4001

PO Box 2801, Durban, KwaZulu-natal, South Africa, 4000, Tel: +27 31 307 2857, Fax: +27 31 307 2636

Email: [email protected], Web: www.dubetradeport.co.za

DUBE TRADEPORT ANNUAL REPORT 2009/2010

annual report · dube tradeport annual report 2009/2010 3 vision, mission, business principles,...

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