together, we are · 2020. 12. 15. · together, we are a stronger nation the spirit of ‘unity in...
TRANSCRIPT
ANNUAL REPORT | 2019/20
Together, we are
Together, we are a Stronger nation
The spirit of ‘unity in diversity’ and the philosophy of Ubuntu, perfectly encapsulates the theme for our annual report this year,
and we celebrate the ethos that underpins its concept: ‘I am, because we are’.
This singular idea is at the heart of our great nation. It is the universal bond that binds us together, and is the force that inspires us to continually strive towards
building a society that inspires national pride and a competitiveness on the global arena that paves the way forward for success and prosperity for all.
Annual Report 2019/20 | Brand South Africa 1
ContentsA. THE BIGGER PICTURE
About Brand South Africa Vision, Mission & ValuesOrganisational StructureMinister’s ForewordChairperson’s ForewordActing Chief Executive Officer’s Report
B. ABOUT THE NATION BRAND
The Nation Brand in contextEnvironmental Overview
C. MANAGING THE NATION BRAND
Performance of the Nation Brand Improved Nation Brand Reputation and Perceptions among South AfricansReputation Management Promotion of the Nation Brand Domestically and Internationally Stakeholder Outreach and Partnerships
D. ORGANISATIONAL STABILITY
Human CapitalInformation Technology and Controls
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1818
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2830323335
40
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5454545454545557585960606060606062
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68717273747576777879808193
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D. GOVERNANCE
Brand South Africa TrademarkEmployee RelationsCorporate GovernanceExecutive AuthorityBoard of TrusteesExCo Board MeetingsAudit and Risk Committee (ARCO)Human Capital, Remuneration and Social & Ethics Committee (HCRSEC)Marketing Committee (MARCO)Board RemunerationRisk ManagementFraud and Unethical ConductAvoiding Conflicts of InterestsCode of ConductBoard SecretaryExCo Profiles
E. FINANCIAL INFORMATION
Report of the Auditor-General to Parliament on the Brand South Africa TrustAnnexure – Auditor-General’s Responsibility for the audit General InformationIndexBoard of Trustee’s Responsibilities and ApprovalAudit and Risk Committee ReportStatement of Financial PositionStatement of Financial PerformanceStatement of Changes in Net AssetsCash Flow StatementStatement of Comparison of Budget and Actual AmountsAccounting PoliciesNotes to the Annual Financial Statements
F. PERFORMANCE RESULTS
Annual Report 2019/20 | Brand South Africa 3
The Bigger PictureSection A
Together we are… … more than the sum of our parts.For only in actively working together, towards a common goal and purpose, can we achieve the seemingly impossible.
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About Brand South Africa
Brand South Africa is strategically positioned as South Africa’s Nation Brand Management Agency.
Purpose and primary objective
The primary objective of the Trust is to develop and implement pro-active and coordinated marketing, communication and reputation management for South Africa. The aim is to contribute towards economic growth, job-creation, poverty alleviation and social cohesion by encouraging local and foreign investment, tourism and trade through the promotion of Brand South Africa.
Mandate
To build South Africa’s Nation Brand reputation in order to improve South Africa’s global competitiveness.
Arising from its mandate, Brand South Africa exists to build South Africa’s Nation Brand in order to:
• Build investor confidence and contribute towards attracting global investors, tourists, and increasing consumers of South African goods and services;
• Enhance South Africa’s international stature;• Develop and disseminate key messages that
effectively and positively tell the unique story of South Africa;
• Inspire pride, patriotism, social cohesion, nation building and positive change in South Africa;
• Inspire loyalty and advocacy in expatriate South Africans;
• Counter negative messages and impressions of South Africa;
• Showcase achievements of the NDP;• Assist government and the private sector in aligning
their country communication strategies; and• Leverage on strategic global events and engagements
to bring the Brand story to life and to create lasting
brand moments.
Brand South Africa was established in 2002, as the Brand South Africa Trust, in terms of the Trust Property Control Act No.57 of 1988 (as amended). Brand South Africa is a Schedule 3A Public Entity in terms of the Public Finance Management Act No.1 of 1999 (PFMA), which reports to the Presidency as its Executive Authority.
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Vision
A Nation Brand that inspires its people and is admired globally.
Mission
To be the authority on the Nation Brand and develop and implement proactive and coordinated marketing, communication, and reputation management strategies, by:
• Developing and articulating a South African Nation Brand
identity that will advance South Africa’s long-term positive
reputation and global competitiveness.
• Seeking the involvement and cooperation of various
stakeholders in building awareness and the image of the
Nation Brand domestically and internationally.
• Seeking to build individual alignment to the Nation Brand in
South Africa, and pride and patriotism amongst South Africans.
Values
1. Determined
Committed to achieving our objectives
2. Ubuntu
Operate with respect, compassion and humanity
3. Cooperation
Working hand-in-hand, together
4. Innovation
Explore new solutions through smart thinking
5. Diversity
A culture of inclusiveness, with unity in diversity
6. Integrity
Always doing the right thing, no matter the cost
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Organisational Structure1
ADMINISTRATION & TRAFFICMokgadi Mashapa
Filled
Vacant
Vacant
GM Marketing Sithembile Ntombela (D4)
GM CommunicationsThoko Modise (D4)
GM Stakeholder RelationsMpumi Mabuza (D4)
GM ResearchDr Petrus de Kock (D4)
GM Global MarketsDr Judy Smith-Horn (D4)
COUNTRY MANAGERS (X3)
UK - Pumela Salela CHINA -
US - Mudunwazi Baloyi (D4)
Marketing Manager
Tshepiso Malele (D3)
Activations Manager
Rabia Metedad (D3)Digital & New Media Manager
Matalane Ngobeni (D3)
Comms Officer International Tsabeng Nthite (D1)
Comms Officer Domestic Ntombi Ntanzi (D1)
Strategic Relationship Manager Government
Toni Gumede (D3)
Assistant Brand ManagerMasego Mosiane (C4)
Activations Officer Keineloe Phakathi (C4)
Digital SpecialistThandolwenkosi Mketsu (D1)
Graphic DesignerBrian Mthembu (C4)
Communications AssistantPhindile Maduna (C2)
Executive PA to CMOJabu Madonsela (C3)
Admin & TrafficMokgadi Mashapa (C2)
Relationship ConsultantLerato Legodi (D1)
Relationship ConsultantAnele Ngwenya (D1)
Strategic Relationship Manager Business
George Khoza (D3)
Strategic Relationship Manager Civil Society
Pumeza Ceza (D3)
Coordinator: MarketsLerato Zikalala (C4)
Programme Liaison: Global Markets
Jimmy Ranamane (D2)
Chief Financial OfficerNadine Thomas (E3)
Finance ManagerKgomotso Seripe (D4)
AccountantSfiso Hlongwane (C3)
Supply Chain OfficerNtiyiso Masuluke (C4)
Supply Chain Administrator Velly Thwala (C1)
Driver/MessengerJimmy Modiba (B2)
PA to CFO Roelien Rosslee (C2)
Senior Network Administrator Patrick Mathole (C3)
Executive Assistant: SP & PMDineo Choane (C4)
Human Capital OfficerLesedi Khalo (C4)
Cleaners (X2)
Veronica Weto Johanna Mofokeng (A2)
Assistant Board SecretaryTwitwi Rasebopye (C4)
ReceptionistNtombi Ralijiji (B1)
PA to Director GL & BS Kholiwe Mosiea (C2)
Manager: ITTebogo Gaokgorwe (D4)
Human Capital Manager Lwandile Masango (D2)
Director: Corporate ServicesDr Krishnee Kissoonduth (E3)
Director: Governance, Legal and SecretariatAdv Sifiso Nyoni (E3)
Corporate Legal Manager Bafana Makhubo (D4)
Executive PA to CEOKhomotso Phasha (C3)
CEODr KLM Makhubela (F1)
Manager in Office of the CEOThabiso Motau (D4)
BOARD OF TRUSTEES
Chief Marketing Officer(Vacant) (E4)
Researcher(Vacant) (C3) (Vacant) (D3)
Research Manager
Marketing & Activations Co-ordinator(Vacant) (C2)
Accountant (Vacant) (C2)
Senior Accountant(Vacant) (D2)
Supply Chain Manager(Vacant) (D3)
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ADMINISTRATION & TRAFFICMokgadi Mashapa
Filled
Vacant
Vacant
GM Marketing Sithembile Ntombela (D4)
GM CommunicationsThoko Modise (D4)
GM Stakeholder RelationsMpumi Mabuza (D4)
GM ResearchDr Petrus de Kock (D4)
GM Global MarketsDr Judy Smith-Horn (D4)
COUNTRY MANAGERS (X3)
UK - Pumela Salela CHINA -
US - Mudunwazi Baloyi (D4)
Marketing Manager
Tshepiso Malele (D3)
Activations Manager
Rabia Metedad (D3)Digital & New Media Manager
Matalane Ngobeni (D3)
Comms Officer International Tsabeng Nthite (D1)
Comms Officer Domestic Ntombi Ntanzi (D1)
Strategic Relationship Manager Government
Toni Gumede (D3)
Assistant Brand ManagerMasego Mosiane (C4)
Activations Officer Keineloe Phakathi (C4)
Digital SpecialistThandolwenkosi Mketsu (D1)
Graphic DesignerBrian Mthembu (C4)
Communications AssistantPhindile Maduna (C2)
Executive PA to CMOJabu Madonsela (C3)
Admin & TrafficMokgadi Mashapa (C2)
Relationship ConsultantLerato Legodi (D1)
Relationship ConsultantAnele Ngwenya (D1)
Strategic Relationship Manager Business
George Khoza (D3)
Strategic Relationship Manager Civil Society
Pumeza Ceza (D3)
Coordinator: MarketsLerato Zikalala (C4)
Programme Liaison: Global Markets
Jimmy Ranamane (D2)
Chief Financial OfficerNadine Thomas (E3)
Finance ManagerKgomotso Seripe (D4)
AccountantSfiso Hlongwane (C3)
Supply Chain OfficerNtiyiso Masuluke (C4)
Supply Chain Administrator Velly Thwala (C1)
Driver/MessengerJimmy Modiba (B2)
PA to CFO Roelien Rosslee (C2)
Senior Network Administrator Patrick Mathole (C3)
Executive Assistant: SP & PMDineo Choane (C4)
Human Capital OfficerLesedi Khalo (C4)
Cleaners (X2)
Veronica Weto Johanna Mofokeng (A2)
Assistant Board SecretaryTwitwi Rasebopye (C4)
ReceptionistNtombi Ralijiji (B1)
PA to Director GL & BS Kholiwe Mosiea (C2)
Manager: ITTebogo Gaokgorwe (D4)
Human Capital Manager Lwandile Masango (D2)
Director: Corporate ServicesDr Krishnee Kissoonduth (E3)
Director: Governance, Legal and SecretariatAdv Sifiso Nyoni (E3)
Corporate Legal Manager Bafana Makhubo (D4)
Executive PA to CEOKhomotso Phasha (C3)
CEODr KLM Makhubela (F1)
Manager in Office of the CEOThabiso Motau (D4)
BOARD OF TRUSTEES
Chief Marketing Officer(Vacant) (E4)
Researcher(Vacant) (C3) (Vacant) (D3)
Research Manager
Marketing & Activations Co-ordinator(Vacant) (C2)
Accountant (Vacant) (C2)
Senior Accountant(Vacant) (D2)
Supply Chain Manager(Vacant) (D3)
Annual Report 2019/20 | Brand South Africa 9
Minister’s ForewordNothing nurtures a sense of shared national pride better than the country consciously making efforts in nation building activities; and nothing unites a people better than sport, arts and culture.
T he Deputy Minister and I take great pleasure in presenting the Brand South Africa Annual Report for the 2019/2020 financial year.
This report is presented at a time when the world is grappling with a major challenge and is forging its way through the global pandemic that is COVID-19. On a global scale, there is a high level of uncertainty as to what the world will look like on the other side of this pandemic.
What is, however, certain is that the Nation Brand will be that much stronger and will remain the anchor for our Nation as it has always been, especially when considering the challenges we have successfully overcome in the past. It is in this same indominable spirit embodied in all South Africans – and in mankind – that I place my confidence. For, we shall overcome.
As the Executive Authority for the entity, we welcomed the appointment of the Board of Trustees for the organisation as assigned by His Excellency, President Cyril Ramaphosa, during the year under review. In terms of the Trust Deed, the current Board is appointed for a period of three years, effectively from 13 November 2019. These appointments came into effect after receiving a call for nominations for members to serve on the Board.
We are confident that the appointed Trustees under the leadership of Ms Thandi Tobias-Pokolo, as Chairperson of the Board, are well-suited to oversee the work of Brand South Africa in developing and implementing proactive and coordinated marketing, communication and reputation management strategies for South Africa.
It goes without saying, that there are many benefits to having a consolidated brand image. Foremost, is a consistent Brand South Africa message that creates strategic advantage for the nation brand in an increasingly competitive marketplace in terms of trade, investment and tourism, to name a few. We continue to encourage citizens both at home and abroad, including corporate citizens, to actively support the work of Brand South Africa. As I stated at the 2019 Brand South Africa Nation Brand Forum, nothing nurtures a sense of shared national pride better than a country consciously, and proactively engaging in nation building activities, as nothing unites a people better than sports, arts and culture. As a country, we’ve celebrated the Springboks when they won the 2019 Rugby World Cup in Japan. We were proud to honour the National Netball Team, the Spar Proteas, who were crowned the 2019 Africa Netball Cup Champions. We mourned the passing of Johnny Clegg, Xolani Gwala and many other South Africans that have inspired this Nation.
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Highlights
In the year ahead, it will be imperative for Brand South Africa to enhance the profile of the Nation Brand and lead with efficiency, humanity and compassion. As the world recovers and learns to live with the effects of COVID-19, it will fall within the ambit of Brand South Africa to motivate and identify new opportunities that inspire new ways of doing things, for all South Africans. Brand South Africa will continue to play a pivotal role in profiling the country’s investment drive and highlighting future achievements in the arts, culture and sports sectors.
As a country, we will need to collectively build upon our thriving democratic dispensation as enshrined in our Constitution. We will need to continue to protect and promote the freedom of expression, access to information, media freedom and independent Chapter 9 Institutions supporting our democracy, so as to ensure that all South Africans are able to freely exercise their democratic civil liberties.
I am cognisant of the fact that Brand South Africa has experienced challenges in the 2019/20 Financial Year, including but not limited to the imposition of a moratorium on the filling of vacancies, and the appointment of a new Board of Trustees seven months into the year - affecting its oversight capabilities. This no doubt influenced the findings on governance and oversight as identified in the AGSA report. These challenges, of course, do not take away from
the responsibility of all state bodies to ensure adherence to applicable legislation and National Treasury prescripts. The Executive Authority will engage the Board of Trustees and Management to ensure that all the serious lapses and matters raised by the Auditor-General are addressed and actioned appropriately. Notwithstanding these shortcomings, I commend the organisation for its continued commitment to implementing its mandate to promote our country’s reputation domestically and internationally.
To the Board of Trustees and Team Brand South Africa, we have faith that you will be vigilant in fulfilling your mandate, that you will be bolstered to work diligently and with integrity in promoting a credible and viable Brand South Africa. Our sincerest gratitude goes to the Board, Acting CEO and the team at Brand South Africa, past and present, for their continued commitment in driving the mandate of promoting the Nation Brand domestically and internationally. Thank you to the various stakeholders who have partnered with the organisation during the year; your support and contribution is highly valued as we continue to strive towards elevating the South African Nation Brand.
Minister Jackson MthembuMinister in the Presidency
WEF Africa, the 28th World Economic Forum on Africa took place in Cape Town from 4 to 6 September 2019 under the theme: “Shaping Inclusive Growth and Shared Futures in the Fourth Industrial Revolution”. Brand South Africa hosted a special session on the side-lines of WEF Africa focused on Ease of Doing Business, addressed by President Ramaphosa.
Springboks, 2019 Rugby World Cup Champions
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Chairperson’s Report
As the Chairperson of the Board of Trustees, it gives me great pleasure to present this Annual Report on Brand South Africa’s performance for
the 2019/20 financial year.
The year under review was one filled with many highlights and challenges for the country. I am pleased to report that Brand South Africa continued its efforts to strengthen collaborative engagements with stakeholders aimed at improving perceptions of our country. A Nation Brand is built by the coordinated actions and efforts of stakeholders, it is determined by a multitude of activities driven by the citizens, the private sector, academia, civil society and state institutions.
It brings me great pleasure to report that the organisation’s trajectory continues upwards, despite the many challenges it has had to face.
This report is published during one of the most difficult tests that our democratic nation has faced. Brand South Africa is not impervious to the challenges posed by high unemployment rates, especially among the youth of South Africa. Low economic growth and declining contributions from primary and secondary sectors have resulted in a negative ripple effect. During the financial year, incidents of attacks on foreign nationals and Gender-Based Violence (GBV) were major factors influencing the reputation of the Nation Brand domestically. Disruptions caused by the COVID-19 pandemic, along with measures taken to contain the spread of the virus, culminated in the declaration of a national state of disaster, and the implementation of a nationwide lockdown.
We are proud that this organisation was able to contribute to the COVID-19 awareness efforts that were required, so as to manage the spread of the pandemic in South Africa. In response to the outbreak of COVID-19, Brand South Africa developed and implemented reactive communication interventions to support government efforts to curb the spread of the virus and its subsequent effect on various sectors. The ability to respond to issues that impact on the Nation Brand in an agile and swift manner is an important trait of the organisation.
The attacks on foreign nationals and reported incidents of GBV were also addressed through thought-provoking multi-media campaigns aimed at reminding South Africans of the country’s cultural values and ushering in, once again, the spirit of Ubuntu.
South Africa has always been a country that faces its challenges with the same level of passion as it celebrates its successes. It is, therefore, important for the organisation to support the Presidential investment drive and to reinforce the message of South Africa as an investment destination of choice on the African continent.
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This was achieved through active participation at platforms such as the World Economic Forum Meeting on Africa and the South African Investment Conference. I would like to extend my appreciation to Ms Thulisile Manzini who was appointed as the Acting Chief Executive Officer in April 2019. Ms Manzini was instrumental in the induction process of the Board and in ensuring that the organisation’s performance targets were reached during the 2019/20 financial year, albeit, in the face of disruptions caused by COVID-19 that affected a great many activities.
During this reporting period, the entity developed the 5-year Strategic Plan and the 2020/2021 Annual Performance Plan. Looking to the future and the implementation of the new Strategic Plan, the Board of Trustees commits itself to ensure strategic leadership and continued oversight of the organisation, so that it remains an effective and reliable instrument of the state. Towards this end we will continue to support the management team in its drive to deliver on the entity’s strategic objectives.
I am convinced that together, we can continue to build a sustainable, trustworthy, highly-valued and innovative organisation. I believe that if those tenets remain at the heart of how we engage with all stakeholders, we will remain worthy custodians of the Nation Brand.
To continue on this journey, we must hold each other accountable for delivering on our purpose and ensure that it is reflected in new initiatives and daily decisions. With this in mind, we have great reason to look forward to a brighter future for South Africa. One that we collectively build, together.
Ms Thandi Tobias-Pokolo Chairperson – Board of Trustees
Highlights
At the 11th BRICS Summit, President Ramaphosa noted that South Africa seeks “to advance the interests not only of our own country, but also of the continent”.
Miss Universe Homecoming
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For the year under review, Brand South Africa achieved 83% of its performance targets, this despite the disruptions caused by the outbreak of the COVID-19
pandemic during the last quarter.
Through its programmes, Brand South Africa aims to support the government’s national priorities and outcomes in support of South Africa’s national objectives of inclusive economic growth, job creation, poverty alleviation and social cohesion. Through ongoing reputation management, proactive communication and marketing of the nation brand with and through stakeholders both domestically and internationally, Brand South Africa continues to make an indirect contribution to economic growth, job creation, poverty alleviation and social cohesion by encouraging local and foreign investment, tourism and trade through the promotion of the Nation Brand reputation.
Key organisational programmes implemented during the year include the Nation Brand Forum, Play Your Part, Global South Africans, the Constitutional Awareness programme, the comprehensive Stakeholder Relations programme, as well as the extensive body of insights developed by the Research Unit. The organisation was also able to support strategic initiatives led by the President such as South African Investment Conference, the G20 meeting in Japan and the UK-Africa Summit. All this was supported by a strategic Communications programme.
The team’s hard work has borne fruit in several instances, with the organisation receiving industry recognition for its award-winning marketing campaigns, building on its wins at the Loeries and Pendoring in 2018 to win another Silver at the 2019 Loeries Awards. Awareness levels of Brand South Africa is further proof of the impact of our work, with levels peaking at 49% in 2019. This from a baseline of 15% in 2014/15, improving steadily over the years to 38% in 2017 and 39% in 2018. Awareness of the Country logo and positioning “Inspiring New Ways” is also at peak levels, with 61% in 2019.
On the “Play Your Part” front – the flagship nationwide movement created to inspire, empower and celebrate active citizenship in South Africa – Brand South Africa launched a series of masterclasses themed ‘Play Your Part and turn your ideas into currency’. Partnering
with comedy brand Goliath and Goliath, the series was implemented in close to 20 schools and, backed by a nationwide radio and digital campaign, reached a combined total of 16 million listeners. Brand South Africa also continued to leverage off the potentially positive role that can be played by the South African diaspora through the Global South Africans initiative, reaching out to Global South Africans in the United States of America, the United Kingdom, Australia, China, France, Qatar and Germany during the course of the year. The Constitutional Awareness programme has been equally impactful. Intended to promote awareness of and affinity with the Constitution among South Africans, the #Inspiredbymyconstitution campaign showcased everyday manifestations of the Constitution of South Africa through a series of web films that were flighted on various multimedia platforms reaching a combined estimate of 5 million people.
Brand South Africa has also continued to provide research insights on the nation brand reputation both at home and abroad. The entity’s unique internal research capability and projects are central to decision-making, planning, and project implementation within the organisation.
These insights have enabled the organisation to not only proactively market and communicate nation brand
Acting Chief Executive Officer’s ReportThrough ongoing reputation management, proactive communication and marketing of the Nation Brand with and through stakeholders both domestically and internationally, Brand South Africa continues to make an indirect contribution to economic growth, job creation, poverty alleviation and social cohesion.
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strengths to a wide domestic and international audience, but has also allowed the entity to play a central role in transferring its knowledge on the strengths, challenges and opportunities for the enhancement of the Nation Brand reputation to key government departments, as well as with business and civil society stakeholders. In line with its objective to prioritise stakeholder engagement and as part of discharging our mandate, Brand South Africa embarked on several engagements with stakeholders across the globe. Over 50 collaborative activities were implemented in partnership with the private sector, civil society and state institution stakeholders domestically, and an additional 22 activities were carried out in strategic international markets, including the Country Offices in the UK, USA and China.
Communicating on the nation brand reputation is key, and the organisation worked tirelessly to profile the Nation Brand and showcase its strengths to domestic and international audiences and through all relevant platforms, publishing a total of 100 positive communication content pieces on various domestic and international media platforms as part of Brand South Africa’s public relations programme. Strategic media partnerships were also secured to ensure the dissemination of content to targeted audiences. Media engagements were another critical tool to position and drive a positive narrative for the
Nation Brand, with activities implemented during the year generating coverage AVE exceeding R30 million. The coronavirus outbreak required the creation of an unprecedented crisis communications strategy, with Brand South Africa running two main campaigns: ‘Prepare. Protect. Prosper (PPP)’ and ‘21 Days of Solidarity’, aimed at educating and informing South African citizens in rural and urban areas on COVID-19.
Africa Day was another highlight of the year. Recognising the need to respond to the incidents of violence against foreign nationals, a digital campaign was created to communicate the strong rejection of any form of violence aimed against immigrants from peer African countries living in South African communities. The award-winning campaign was aimed at rallying all Africans to endorse a culture of social inclusivity and advocate a better Africa for all to prosper, under the hashtag #OneAfricaOnePeople.
Turning inward, despite challenges in the filling of key positions that have negatively impacted our operational stability, Brand South Africa continues to have a dedicated, highly qualified, and passionate staff with high levels of engagement, as well as proficiency in the niche field of nation brand management. 74% of employees have degrees and post-graduate qualifications; and a total of 13% of employees have diplomas. Brand
South Africa has an appropriate talent acquisition strategy which focuses on hiring the right person for the right job with the right qualifications. Furthermore, through its training and development initiatives, Brand South Africa continues to offer bursaries for employees who wish to pursue their studies in order to contribute to the attainment of their individual, team and organisational goals at large.
In closing, let us be reminded that is only through authentic storytelling that promotes a nation brand’s strengths while also acknowledging its weaknesses, that we as a country can inspire confidence and trust. Brand South Africa’s work, from the research insights, to the communication and marketing campaigns undertaken, to the stakeholder engagements implemented domestically and internationally, have constituted the backbone of this story.
Our staff and management have done a sterling job under challenging circumstances. I am grateful for their unwavering commitment and service.
Ms Thulisile Manzini Acting Chief Executive Officer
Highlights
Awareness levels of Brand South Africa is further proof of the impact of our work, with levels peaking at 49% in 2019.
Annual Report 2019/20 | Brand South Africa 15
About the Nation BrandWe take joy and satisfaction from the small wins we experience as a nation every day. As a brand that is committed to making South Africa shine on both the local and global arenas, our success is derived from the collective efforts of every single South African who stands behind our great nation.
Section B
Together we are… … growing the pride of a nation.A petrol attendant working on the N2 near Makhaza on the way to Cape Town went viral after paying a woman’s petrol when she forgot her bank card. Petrol attendant Nkosikho Mbele was praised for his kindness after Monet van Deventer took to social media to share her experience. She later helped to raise funds to help support him.
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Understanding the Nation Brand
THE NATION BRAND IN CONTEXT
About the Nation Brand
A Nation Brand can be described as a holistic view of a country’s image (including economic, political, social and cultural aspects), targeted at international and domestic audiences. Brand South Africa has the unique and highly challenging task of reconstructing the South African Nation Brand image through marketing and branding, communications, stakeholder outreach, as well as its research activities.
Brand South Africa’s mandate requires that the organisation clearly communicates on the reputation, competitiveness, and perceptions of South Africa, both domestically as well as in key international markets. In-house research produces invaluable insights on the country’s domestic and international reputation. The research data gives the organisation clear insights on the operating environment during each quarter and is also disseminated to all relevant stakeholders.
Reviewing the 2019/20 fiscal, it goes without saying that this year was not without its fair share of challenges and highlights. Therefore, what follows is a summary of key insights in the domestic and international operating environment that has had either a negative or positive impact on the image of the Nation Brand.
Environmental Overview: 2019/20
In a fast-paced and uncertain world, it is necessary to, at times, adapt at a speed faster than the dynamic changes unfolding in the environment. Developments in both the domestic and international arenas during the period under review illustrates the previous point in that, as we neared the end of the financial year, the global COVID-19 pandemic emerged, and turned not just South Africa, but the world, on its proverbial head.
During the final quarter of the period under review, both the domestic and international environment was dominated by the global outbreak of the COVID-19 pandemic. It should be indicated, however, that while a global health emergency is still unfolding, it is clear that the global economy is heading into serious turbulent territory – potentially far worse than the conditions following the 2008 Global Financial Crisis.
It is within this broader context that this environment analysis and overview gives us a brief moment to look back, and take stock of a period that ushered in paradigmatic change. The environment analysis engages with key trends and dynamics that impacted on the Nation Brand through manifestations in the organisational, and Nation Brand domestic and international operating environments. However, while the environment analysis engages these dynamics, it can be noted that regardless of externalities outside the Nation Brand’s control, the period under review also presented several reputation-enhancing opportunities and several reasons to celebrate.
In a fast paced and uncertain world, it is necessary to, at times, adapt at a speed faster than the dynamic changes unfolding in the environment.
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FROM THE DOMESTIC ENVIRONMENT:
� By the end of Q1 South Africa had emerged with the sixth administration and Parliament in place, with the first State of the Nation Address of the new administration being delivered;
� President Ramaphosa’s State of the Nation Address (SONA), delivered on 20 June 2019, presented the nation with seven key priorities, and in his address President Ramaphosa indicated:
“In an economy that is not growing, at a time when public finances are limited, we will not be able to do everything at one time. As we enter this new administration, we will focus on seven priorities:1. Economic transformation and job creation2. Education, skills and health3. Consolidating the social wage through reliable and
quality basic services4. Spatial integration, human settlements and local
government5. Social cohesion and safe communities6. A capable, ethical and developmental state7. A better Africa and World.”
� The period under review saw a general worsening of GDP outlook, and Public Sector governance, state capacity, and unethical conduct remained under scrutiny, due to ongoing revelations of corruption through platforms such as the Commission of Inquiry into State Capture;
� While the Nation Brand’s reputation was impacted negatively by dynamics in the point above, it is however important to indicate that achievements in the realm of Sport and People/Culture continued to drive positive domestic and international perceptions of the Nation Brand, including, among many others:
– The Springbok team’s over-all victory in the Rugby World Cup,
– Ms South Africa who won the Ms Universe contest, and
– the Ndlovu Youth Choir that reached the finals on ‘America’s Got Talent’ competition.
� These achievements reinforce the Nation Brand’s reputation through cultural positioning and the strength of South Africa’s creative and cultural industries; and
� During November 2019, the second South African Investment Conference, that forms part of the President’s five-year investment drive.
Ndlovu Youth Choir Springboks celebrated by South Africans South African Ministers at WEF Davos Meeting
President Cyril Ramaphosa
Annual Report 2019/20 | Brand South Africa 19
Table 1:
Women & child abuse
The level of crime
Government corruption
Xenophobia
Service delivery
Economy
Safety & security
Government performance
Land Expropriation without compentsation
Inequality
Living standards of ordinary citizens
Health care
Political debates
15.4%
12.8%
11.0%
10.3%
6.3%
6.0%
3.8%
3.8%
3.4%
3.0%
2.9%
2.6%
18.8%
Source: Brand South Africa, National Omnibus Survey 2019 (November 2019, n=2506)
Domestic EnvironmentBuilding on the key themes that emerged from the domestic environment outlined earlier, this section will briefly survey a few additional and notable issues. Reference will be made to key insights from Brand South Africa’s Domestic Perceptions Research programme to highlight, through actual research data, issues that had either a tangibly positive or negative impact on the perceptions and reputation of the Nation Brand.
Reputation challenges During the period under review, xenophobia, and GBV emerged as major challenges to the reputation of the Nation Brand.
As seen in the snapshot of results from the 2019 National Omnibus Survey, respondents believe that GBV, crime, corruption, xenophobia, and service delivery have the most negative impact on the Nation Brand’s reputation.
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Source: Brand South Africa, National Omnibus Survey 2019 (November 2019, n=2506)
Table 2:
Education
Sport
Health care
NSFAS
Arts & entertainment
Technological development & expertise
Economy
Government performance
Foreign investment opportunities
Government’s decision making
Government’s decision making
Worker’s unions
Black Economic Empowerment (BEE)
20.1%
17.7%
11.2%
7.4%
7.1%
6.4%
5.8%
5.5%
4.8%
3.8%
3.7%
3.4%
3.2%
Reputation strengths The most positive influencers on the reputation of South Africa both locally and abroad, are mainly three areas: Education, Sport and Health (most likely driven by the NHI), which collectively account for almost half (49%) of the positive sentiments. If one were to combine Education and NSFAS, it would take the grand total to 56%. In previous assessments it was assumed that the positive sentiment towards education was driven by NSFAS, but the results below indicate differently. Education stands alone and substantially more prominent than NSFAS. The positive perspective is that the Economy and Government Performance are almost neck-and-neck in terms of contributions.
As seen in the snapshot of results from the National Omnibus Survey (2019), Education, Sport, Health Care, NSFAS, Art & Entertainment have a decidedly positive influence on citizen perceptions, and ultimately, on the reputation of the Nation Brand.
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KEY THEMES EMERGING FROM THE INTERNATIONAL ENVIRONMENT:
During the period under review, and prior to the COVID-19 pandemic emerging, the international environment continued to be characterised by increasing policy uncertainty – especially among the developed nations – as well as major power rivalry in both political and economic contexts.
Additionally, turbulent changes were well underway in the international trade system due to increased polarisation, economic nationalism and protectionism, as well as economic and trade warfare tactics that were employed by the USA. These geopolitical dynamics were a major cause of uncertainty and a source of weakness in the global economy.
The general slowdown of global economic output, lagging and decreasing global trade and Foreign Direct Investment (FDI) activity, coupled with uncertainty about the future direction of these developments have led some analysts to replace the term ‘globalisation’ with - ‘slowbalisation’. The latter, essentially a play on the slowdown of global trade, and emerging uncertainty that undermines confidence in the global marketplace.
A brief synopsis of events that are defining the global arena:
� Increased trade war risks and economic downturn in 2019 continues to see a weakening of trade and manufacturing indicators;
� The above is linked to a deceleration of investment activity in the global economy;
� Intensified geopolitical friction manifested in sites of proxy conflict that points to further fragmentation of the global governance environment;
� The latter is also seen in Libya and Syria with the period under review also showing increased risk of a military escalation in confrontations between Iran, Israel, Saudi Arabia, as US-Iran geopolitical tensions increase. The US assassination of General Suleimani – Head of the Iranian Revolutionary Guard - in a drone strike outside Baghdad, during January 2020, clearly illustrates the deterioration of relations and escalation of confrontations;
� The World Bank, in the pre-COVID-19 period already projected that investment growth in emerging markets will be subdued, and below historical averages. FDI activity in the period under review was held back by weak global growth, elevated debt and reduced fiscal flexibility;
� However, a major positive development during this period was the operationalisation of the ‘African Continental Free Trade Area Agreement’ which is a major opportunity to enhance Pan-African relations and the reputation of the Nation Brand as one of the major continental drivers of African market integration; and
� Illustrating the strategic linkages between the South African and Pan-African economy is South Africa’s ranking as the fifth-largest source of Foreign Direct Investment on the continent, as noted in the 2019 ‘EY Africa Attractiveness Survey’. On the international stage, South Africa’s reputation was enhanced through international relations and strategic engagements, through a combination of State and working visits, and participation in multilateral engagements that drove South Africa’s profile as a nation committed to multilateralism and constructive cooperation in the realm of global governance.
Editorial credit: By Nhemz / Shutterstock.com
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International EnvironmentBuilding on the key themes emerging from the international environment outlined earlier, the sixth Administration’s international engagements kicked off in proverbial ‘high gear’ with President Ramaphosa confirmed as Chair of the African Union. His term of office formally commenced in January 2020. Furthermore, and given the significant challenges that multilateral institutions and platforms are facing with regards to trade wars and rising geopolitical tension, the Nation Brand performed exceptionally well in the pre-COVID-19 period of the year under review. Within this turbulent global environment, the Nation Brand stood out as a key African and developing nation in the following areas:
� The 28th World Economic Forum on Africa (WEF Africa) took place in Cape Town from 4 to 6 September 2019 under the theme: “Shaping Inclusive Growth and Shared Futures in the Fourth Industrial Revolution”. Brand South Africa hosted a special session which focused on ‘Ease of Doing Business’, which included an address by the President. This provided a much-needed opportunity to reinforce the message that South Africa is engaging in necessary structural reforms to enhance the ease of doing business in the South African market, in line with the Presidential five-year investment drive;
� The President’s participation in the first-of-its-kind Russia–Africa Economic Forum, held in Sochi, Russia, from 23 to 24 October 2019;
� President Cyril Ramaphosa’s State Visit to the United Republic of Tanzania;
� The 7th Summit of the Tokyo International Conference on African Development (TICAD VII) took place in Japan on 29 and 30 August 2019. The theme of the summit was “Advancing Africa’s Development through Technology, Innovation and People”;
� President Ramaphosa led the South African delegation to the G7 Summit in France from 24 to 26 August 2019, following South Africa’s invitation to attend as a key partner; and
� In line with a strategic focus on Pan-African affairs, President Ramaphosa undertook working visits to Gabon, Ghana, and Egypt among other countries, which underlined South Africa’s stance on the need for cooperation and mutual understanding between African nations.
From a reputational point of view, the Good Country Index (2019) ranks South Africa 47th overall out of 153 nations. In this index, South Africa ranks 3/153 countries in the International Peace & Security category, 18th for Science & Technology, and 31st for its contribution to World Order. This clearly shows a strong positive reputation of the Nation Brand on the international stage.
Additionally, the BRICS Summit stands out as a key achievement in the ongoing process of South Africa’s engagement within the global multilateral space. Essentially, the BRICS is increasingly acknowledged as an emerging institution of global governance. It is additionally recognised as the ‘voice’ of emerging markets, and that its position on multilateralism and issues of importance to the member nations as articulated in Summit Declarations, positions member states as seeking a fair, balanced, equitable world order.
The BRICS Research Group at the University of Toronto conducts extensive compliance research to track the extent of member states’ commitment to implementing Summit decisions. In its latest 2018 BRICS Compliance Report released in 2019, it is indicated that in the year following South Africa’s hosting of the 10th Summit, the ‘oveall compliance score comes to a historical high of 85%’. This means that member states are fully-committed to making BRICS decisions, and positions, a reality.
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The Good Country Index (2019) Graphic
Source: www.goodcountry.org/index/results#zaf
Overall Science & TechnologyGlobal Contribution
CultureGlobal Contribution
International Peace & SecurityGlobal Contribution
World OrderGlobal Contribution
Planet & ClimateGlobal Contribution
Prosperity & EqualityGlobal Contribution
Health & WellbeingGlobal Contribution
South Africa 18th 57th 3rd 23rd 124th 93rd 85th
International students Creative goods exports (2015)
Peace-keeping troops Charity giving Ecological footprint (2014)
Open trading Food aid
New Zealand
- + - + - + - + - + - + - +
Journal exports Creative goods exports
Dues in arrears to UN peace-keeping budgets as % of contribution
Refugees hosted Environmental agreements compliance (2015)
UN volunteers abroad
Pharmaceutical exports
- + - + - + - + - + - + - +
International publications
UNESCO dues in arrears as % contribution
International violent conflict
Refugees generated Hazardous pesticides exports
Remittance Cost Voluntary excess donations to the WHO
- + - + - + - + - + - + - +
Patents Press freedom Internet security UN Treaties signed Ozone Development assistance International Health Regulations Compliance
- + - + - + - + - + - + - +
Noble prizes Freedom of movement, i.e. visa restrictions
Arms exports Birth rate Renewable energy share (2015)
FDI outflows Humanitarian aid donations
- + - + - + - + - + - + - +
47
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Managing the Nation BrandWe take joy and satisfaction from the small wins we experience as a nation every day. As a brand that is committed to making South Africa shine on both the local and global arenas, our success is derived from the collective efforts of every single South African who stands behind our great nation.
Section C
Together we are… … growing the pride of a nation.On Heritage Day 2019, South African President Cyril Ramaphosa urged his fellow citizens to “wear with pride the honour that comes with being a South African.” He went further to say: “We know that regardless of their circumstances, every South African wants the same thing: a better life for themselves and their families and to live in peace and coexistence with others.
Let us work side by side to realise the South Africa we want.”
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MANAGING THE NATION BRAND
Brand South Africa’s strategic goals are both reactive to the environment and development priorities and are also proactive in constructing a desired future state of being. Individually, each goal was designed to represent aspirations Brand South Africa sought to achieve as it pursued its mission. Collectively, the goals define the full range of Brand South Africa’s role and focus. The attainment of each goal will require support and collaboration from both internal and external stakeholders.
The core mandate of the organisation is thus effected through the goals and organisational units below.
PERFORMANCE OF THE NATION BRAND
Domestic Perceptions Research A true ‘glance in the mirror’ moment for the organisation, and South Africans themselves was when we received the results from our domestic research study. As a country, it is vital that we monitor how South Africans see themselves. A continual through-the-year monitoring is necessary to gauge the success of Brand South Africa’s domestic strategy, and the support that the programme has garnered on home soil along the way.
The domestic research programme was carried out through monthly surveys and a national omnibus survey fieldwork (full year report) which was concluded in November 2019. The domestic perceptions research identified trust as a major factor that drives and influences the reputation of the Nation Brand domestically. Towards this end, questions pertaining to trust were introduced into the monthly surveys, and this aspect was also included in the national omnibus survey. During the fourth quarter, Brand South Africa received the final report of the 2019 National Omnibus Survey, as well as the Q4 Environment Analysis report, which mentions several indicators from the annual Omnibus Survey. These indicators were used to create the context for the current domestic environment for both the last quarter of the year, and, as a marker for the financial year as a whole.
Enhance understanding of the National Brand Performance
Improved National Brand reputation and perceptions among South Africans
Improved National Brand reputation domestically and internationally
Enhanced awareness of the National Brand identity, image competitiveness and value proposition
A cohesive approach when promoting and marketing the National Brand among stakeholders
Strengthening National Brand Advocacy domestically and among South Africans living abroad
Enhanced relations in private sector, academia, civil society and state institutions
CommunicationMarketing
StakeholderRelations
Global Markets
Research
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The National Pride construct has declined overthe last three years.
National Pride
75.0
2017
70.6
2018
68.0
2019
The attributes measuring the construct have shifted in importance, in 2019, as shown in this section, sport and individual achievements, particularly related to sport, has played an important role in maintaining national pride.
However, sport is not for everyone, the other factors, also indicate equally large clusters of society supporting other factors about the country that make South Africans feel proud, it is not ideal to develop a sense of national pride on a narrowly focused area, namely sport, and let other aspects decline in salience, that creates vulnerability.
Social Cohesion construct score over three years.
Social Cohesion
72.5
2017
61.4
2018
62.5
2019
When people inter act with one another on issues that have a collective positive influence on the country, such as sport, they tend to be more inclusive, more accepting and more accommodating.
However, should people interact in difficult circumstances there is a greater chance of animosity and strife.
Analysis of Global CompetitivenessOver the course of this financial year, several internal analyses were released, based on external reports which give an indication of the performance of the Nation Brand. These reports included:
� Press Freedom Index � IMD World Competitiveness report � Index of Economic Freedom � Transparency International – Corruption Perceptions � EY – Africa Attractiveness � Ibrahim Index of African Governance (IIAG)
� Climatescope � United Nations Development Programme - Human
Development Report (UNDP-HDR) � World Bank Ease of Doing Business (EDB) � World Economic Forum-Global Competiveness
Index (WEF-GCI) � Open Budget Index � The Nation Brand Index � Nation Brand Equity Indicators
Competitiveness has a constructive impact on the reputation of countries for a number of reasons. It plays a particular role in constructing an understanding of the broader enabling environments that impact on societal productivity and efficiency. Competitiveness is also a major factor that impacts on FDI decisions.
In the 2019 edition of the WEF Global Competitiveness Index (WEF-GCI), South Africa shows strong improvements, in the following:
� Over-all ranking – South Africa improves with seven positions from 67/140 in 2018, to 60/141 nations in 2019;
� The Institutions pillar improves from 69/140 to 55/141 – this is important due to reputation damage in the area of governance in recent years;
� Health, also historically a weaker area of SA’s performance, improves from 125 to 118 in 2019;
� Product market improves from 74 to 69 in 2019; and � South Africa (together with New Zealand) ranked 1st
out of 141 nations for budget transparency in the World Economic Forum’s Global Competitiveness Index (2019).
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IMPROVED NATION BRAND REPUTATION AND PERCEPTIONS AMONG SOUTH AFRICANS
‘Play Your Part’ Programme‘Play Your Part’ is a nationwide movement created to inspire, empower and celebrate active citizenship in South Africa. It aims to inspire all South Africans to contribute towards positive change by getting involved and becoming positive change agents. To facilitate this drive, Brand South Africa launched a series of masterclasses themed ‘Play Your Part and turn your ideas into currency’ – with comedy brand Goliath and Goliath, which targeted grade 11 and 12 learners from selected high schools across the country. The aim was to introduce learners to the Play Your Part movement and to remind them that they can play an important role as active citizens that can positively influence the Nation Brand.
� The series, which reached close to 20 schools, was backed by a nationwide radio and digital campaign. The radio campaign reached over 10 million listeners through mainstream and community radio, while the digital campaign reached over 6 million people.
� The ‘Play Your Part’ programme also allows Brand South Africa to collaborate with ‘Play Your Part Ambassadors’ to leverage their platforms and networks to further create awareness and to promote the programme.
� A total of 63 individual ‘Play Your Part’ ambassador-engagements (online and offline) were achieved and leveraged to promote active citizenship and the Nation Brand.
Play Your Part celebrating active citizenry
Play Your Part Series with Goliath and Goliath
Play Your Part
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Constitutional Awareness ProgrammeBrand South Africa has been tasked with creating awareness of the South African Constitution, among the country’s citizens. The objective is to promote the values contained in the Constitution through various activations. The programme aims to broaden the knowledge of the Constitution, foster Constitutional values and leverage these values to encourage active citizenship among South Africans.
Thirteen activations, targeting various audiences and highlighting constitutional values, were hosted across the country. Attempts were made to collaborate with government, business and civil society stakeholders in promoting the constitution throughout the year under review.
Deputy Minister Thembi Siweya on constitutional awareness
A critical component of the Constitutional Awareness programme is the Constitutional Awareness campaign driven by Brand South Africa. The #Inspiredbymyconstitution campaign sought to inspire young people by showcasing everyday manifestations of the Constitution of South Africa through a series of web films. These featured celebrity social influencers such as Hulisani Ravele, Nina Hastie and Latoya Makhene. The objective was to remind South Africans of their constitutional rights. A total of 17 marketing platforms were leveraged to flight the Brand South Africa-developed constitutional awareness campaign. The #InspiredByMyConstitution campaign was flighted on various multimedia platforms including television, radio, digital and outdoor Including Taxi TV and Uber TV. The estimated combined reach was in excess of 5 million people.
The Global South Africans ProgrammeThe Global South Africans (GSA) Programme is Brand South Africa’s flagship initiative that is aimed at strengthening relations and brand advocacy among South Africans living abroad. Brand South Africa continued to leverage off the potentially positive role that can be played by the South African diaspora through the GSA programme, by reaching out to GSAs in the United States of America, the United Kingdom, Australia, China, France, Qatar and Germany, with the aim of encouraging social cohesion and nation brand advocacy among citizens living abroad.
The Global South Africans Newsletter and the SA Good News website were also used to share messaging and to profile all GSA activations implemented during the year. The website is read by audiences in 180 countries, largely comprising the SA diaspora, with 11 000 email subscribers, 35 000 unique users and around 50 000 Facebook followers.
A total of 17marketing platforms were leveraged to flight the Brand South Africa-developed constitutional awareness campaign.
PJ Powers at GSA Australia
GSA Braai and Bat, France
GSA Mzansi Festival, United Kingdom
Annual Report 2019/20 | Brand South Africa 31
REPUTATION MANAGEMENT
Communication programme As part of profiling the Nation Brand and showcasing its strengths, the organisation developed and published a total of 100 positive communication content pieces on various domestic and international media platforms as part of Brand South Africa’s public relations programme. Strategic media partnerships were also secured to ensure the dissemination of content to targeted audiences. Some of the notable content pieces that were published and the resulting media partnerships included:
� A partnership with Euro News, Europe’s number one news channel, on World Economic Forum Meeting on Africa, allowed Brand South Africa content to reach more than 400 million homes across 160 countries. One of the key outputs from the partnership included a WEF Africa Focus report which was translated into 11 languages including French, Russian, Spanish, Greek, Italian, Portuguese, German, Hungarian, Persian, Arabic and Turkish. A total of 3.8 million people and 1.1 million investors were reached.
� As part of its activities to promote and enhance the country’s profile internationally, Brand South Africa published a special feature in the Japan Times to market the country as an investment destination during the hosting of the 7th Tokyo International Conference on African Development (TICAD) Summit. The Japan Times is Japan’s oldest and largest English newspaper with over 100 000 readers in print format and close to 9 million online page views.
� The coronavirus outbreak, during the last quarter, required the creation of unprecedented crisis communications strategies by all, for the benefit of South African citizens and their access to reliable information. Brand South Africa implemented multiple proactive, reactive and coordinated marketing and communications interventions on multi-media platforms to give the messaging a broader reach. Two main campaigns, namely ‘Prepare. Protect. Prosper (PPP)’ and ‘21 Days of Solidarity’, were aimed at educating and informing South African citizens in the rural and urban areas on COVID-19, so as to avoid the spreading of the virus.
Digital Communication programme In support of the development of positive anecdotal stories to position the country favourably, content was also published on Brand South Africa’s digital assets. Content was streamlined and customised for the various platforms, which saw the organisation achieve a 6.8% increase in users who engage with Brand South Africa content on its digital platforms throughout the year.
The significant rise is due to an increase in content disseminated on social media, a focus on themes that resonate with audiences across various topics and target audiences as well as paid media campaigns to boost content reach. Overall, sports, arts and culture content has proven to be popular. The content pieces of South Africans flying the flag high across various industries performed very well. Users interacted with the content and got involved in the conversations. Video production continues to be an effective tool in driving online engagement.
Media EngagementMedia engagements are a critical tool in positioning and driving a positive narrative for the Nation Brand. A minimum of 11 strategic media engagement activities were implemented during the year, with a few additional tactical opportunities and a digital media engagement, being leveraged. Brand South Africa generated coverage AVE in excess of R30 million, with the organisation securing coverage through media tours at strategic platforms such as the WEF Africa and WEF Davos meetings, as well as the UK Royal Visit to the Southern Africa Press Conference. Platforms such as the Nation Brand Forum and the South African Investment Conference were also leveraged to positively position the Nation Brand.
6.8% increase in users who engage with Brand
South Africa content on its digital platforms
throughout the year.
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PROMOTION OF THE NATION BRAND DOMESTICALLY AND INTERNATIONALLY
For the year under review, Brand South Africa leveraged various Nation Brand enablers, such as arts and culture as well as sport, to favourably position the Nation Brand to both domestic and international audiences.
Creative domestic campaigns were also utilised to address Nation Brand disablers such as GBV and attacks on foreign nationals.
SportSouth Africa is a sport-loving nation – and this fact was confirmed in the Domestic Perceptions research environment analysis. Sport is a key driver of social cohesion and the international reputation of the Nation Brand. It was therefore a natural choice to use several key international sporting events that were targeted to promote the Nation Brand and contribute to social cohesion among South Africans.
� The organisation, through a partnership with the Nation Brands Flagbearer Campaign, leveraged the Africa Cup of Nations 2019 in Egypt to market and project a positive image of South Africa.
� The objective and key messaging was to mobilise support for ‘Bafana’ as the national team during AFCON, to improve South Africa’s competitive position through sport, to partner with the Egyptian Clubs fan base, to increase cultural exchange through sport and to achieve brand visibility through television broadcasts.
Leveraging sport as the driver of Nation Brand pride, Brand South Africa promoted ‘Play Your Part’ messages encouraging South Africans to support the Springboks during the Rugby World Cup dinner.
� This took the format of a video from Brand South Africa, airport messages and a breakfast engagement in collaboration with Jozi Cats and the SA Embassy in Japan.
� Brand South Africa also developed creative and messages in support of the Springbok send-off and welcome messages before, during and after the Rugby World Cup at international airport touchpoints.
Investment promotionThe successful ‘CEOs Know’ campaign was promoted on the Brand South Africa-owned YouTube channel, as well as other media platforms, such as Euro news, during the year. The campaign showcases various CEOs of multinational companies that share reasons for investing in South Africa based on their own experience and successes in the market.
Brand South Africa also leveraged WEF Africa, the South African Investment Conference and the WEF Davos meeting, to promote the Nation Brand through several marketing and activation elements. The organisation ensured that the Nation Brand was visible through all identified touchpoints and some of the key highlights of the marketing and activation elements are outlined below:
� Brand South Africa provided branded transportation that shuttled invited guests from the event venue, 15 on Orange, to the Cape Town International Convention Centre (CTICC) for the WEF Africa meeting. The shuttle service was provided for both the Brand South Africa engagement sessions, which took place over two days, delivering enhanced Nation Brand visibility to all invited guests, as well as other WEF Africa delegates and guests in attendance at the CTICC.
� Additional brand visibility was developed for the overall brand strategy used to strongly position the country at the 2019 South Africa Investment Conference.
Art showcase at the 2019 Nation Brand Forum
Minister Jackson Mthembu at the 2019 Nation Brand Forum
Annual Report 2019/20 | Brand South Africa 33
Africa MonthAfrica Day is acknowledged as a day of solidarity among African countries, and is celebrated to commemorate the formation of the African Union. The AU is an organisation that acknowledges a rich African heritage and also the fight against colonialism and apartheid.
Africa Day gives citizens the opportunity to recommit to interventions that develop a unified vision and a strengthened collaboration for a better Africa and a better world.
A digital campaign was created to communicate the strong rejection of any form of violence aimed against immigrants from peer African countries living in South African communities.
The award-winning campaign was aimed at rallying all Africans to endorse a culture of social inclusivity and advocate a better Africa for all to prosper, under the hashtag #OneAfricaOnePeople.
Nation Brand Forum In line with the Presidency’s State of the Nation Address, priority was given to reviving the Nation Brand identity, and Brand South Africa hosted the fourth instalment of the Nation Brand Forum targeting business, the public sector and the creative arts sector. This forum was held under the theme ‘Reviving South Africa’s Nation Brand identity’.
The forum programme, which was opened by Minister Jackson Mthembu, included a presentation by renowned marketer Thebe Ikalafeng, and a lively panel discussion which included a representative from Nando’s, the Johannesburg Stock Exchange, Mail & Guardian and Regency Global.
Marketing and advertising industry engagements The organisation collaborated with the South African Marketing Achievement Awards, which celebrated excellence in the art and science of marketing. The Awards recognised and rewarded successful marketing initiatives and thought leadership in the South African marketing industry. Brand South Africa was the host of the Marketing Resonance Award, which received 20 entries from brands such as KFC, Vodacom, Tiger Brands, Ariel, Royco, and SANBS. The Award recognised SAB INBEV, by Ogilvy & Mather, a brand that has managed to tap into truly South African insights
Brand South Africa also collaborated with the Loerie Awards to strengthen and deepen Brand South Africa’s visibility in the creative industry. The partnership provided Brand South Africa with an opportunity to host a Masterclass at the Loeries. The masterclass encouraged creatives and strategists to find new and different ways of collaborating with Brand South Africa when promoting the Nation Brand identity, image and awareness. The theme of the Masterclass was ‘Tell Better South African Stories’.Nation Brand Forum
Masterclass hosted by Brand South Africa at the Loeries
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Miss Universe Homecoming A unique tactical opportunity arose that Brand South Africa deemed strategic enough to support when Zozibini Tunzi was crowned Miss Universe in December 2019. Her win resulted in positive news for South Africa and plans were put in place to be part of her homecoming activities in collaboration with the Department of Communication and Digital Technologies and the Department of Sports, Arts and Culture to promote pride and patriotism.
Brand South Africa supported the series of homecoming activities through creatively contributing towards content that created hype towards the build-up of Zozibini’s return to South Africa.
The outpouring of support for Miss Universe showed us the great potential of international events such as beauty pageants and sports tournaments in uniting us as a people.
The following successful marketing campaigns were also implemented during the period under review:
� AFCON boosts South Africa’s reputation in Egypt � 2019 Sunday Times Generation Next Youth
Engagement � Netball, Banyana Banyana and Bafana Bafana send-off � Welcome messages in support of the Presidential
inauguration at O.R. Tambo International and Domestic terminals
� Voting and Freedom Month Campaign
STAKEHOLDER OUTREACH AND PARTNERSHIPS
The mandate of the organisation requires relationship development with stakeholders across the length and breadth of South African society – including Government, business and civil society. This is because the Nation Brand that the organisation manages is ultimately a composite of all six pillars of the Nation Brand hexagon.
A Nation Brand encompasses all the attributes, strengths and innovations that a nation offers the world in all its spheres of activity, be it in business, arts, science and innovation, infrastructure, manufacturing and governance, and tourism, to name a few. This means that the reputation of a Nation Brand is determined by a multitude of activities driven by the citizens, private sector, academia, civil society and state institutions. Thus, Brand South Africa works with and through these stakeholders to achieve its mandate.
Over 50 collaborative activities were implemented in partnership with the private sector, civil society and state institution stakeholders as part of the Stakeholder Relations programme domestically. An additional 22 activities were carried out in collaboration with stakeholders in strategic international markets. This includes the activities implemented in the Country Offices in the UK, USA and China.
Proud South Africans playing their part at AFCON
Miss Universe Homecoming
Annual Report 2019/20 | Brand South Africa 35
Some of the notable highlights include:
Corporate PYP collaboration - Fly Your Flag School Outreach ProgrammeBrand South Africa, through its flagship ‘Play Your Part’ programme, collaborated with IQbusiness to deliver on the ‘Fly Your Flag’ activation at Thabisang Primary School, Soweto, and in Johannesburg. As part of building young, active citizens and fostering national pride, Brand South Africa engaged with over 150 learners from grade 4 to grade 7 on the significance of South Africa’s national symbols, the importance of embracing the flag as a symbol of our unity in diversity and advancing the spirit of active citizenship, thus fostering a common national identity.
Heritage Education Schools Outreach Programme (HESOP) Brand South Africa, in collaboration with the National Heritage Council of South Africa, the Department of Basic Education, the South African National Parks, the National Arts Council, the National Film & Video Foundation, and the South Africa Heritage Resources Agency, hosted a five-day heritage schools outreach camp, in September 2019. The national camp, with all nine provinces represented, took place in Limpopo, with the aim of inculcating the culture of self-appreciation and national identity for school learners through a competition. The week-long heritage camp, focused on learner’s research skills, time management and oral presentation skills. As a result, the programme allowed Brand South Africa to utilise an opportunity to mobilise young people, in rallying behind embracing South Africa’s diverse Nation Brand identity, thus building pride, patriotism and social cohesion.
Nation Building Youth Day DialogueBrand South Africa collaborated with the Thabo Mbeki Foundation, Freedom Park and the Voortrekker Monument, in hosting a youth month activation. The programme plan for the activity included a tour of the Voortrekker monument and a dialogue on Youth Day.
The activity sought to address the role and responsibility of the youth in nation building. The dialogue also aimed to commemorate the youth of 1976 and to embrace the current dispensation for the 25 years of democracy.Former President, Mr Thabo Mbeki engaged the youth on South African History and encouraged them to reflect on the past while carving a way forward for the future. Freedom Front Plus leader and former Deputy Minister of Agriculture, Dr. Pieter Mulder took the youth through a Voortrekker Monument Tour.
More than 70 young people across diverse communities of South Africa attended the event to reflect on the history and the future of South African youth.
Collaboration with the Adelaide & Oliver Tambo Foundation The reputation and image of South Africa is strengthened through its efforts to build an inclusive and diverse economy, which upholds and protects the rights of women in society.
To that extent, Brand South Africa collaborated with the Tambo Foundation to host two successive events during the month of October 2019.
As part of the build-up to the Tambo Annual Lecture, Brand South Africa pioneered a panel discussion in which Congresswoman Maxine Waters and Ambassador Lindiwe Mabuza, were in conversation on the theme ‘Politics, Feminism and Friendship’. The objective of the event was to honour Congresswoman Waters and Ambassador Mabuza who have, and still relentlessly fight injustice today and speak truth to power.
The Oliver & Adelaide Tambo sixth Annual Lecture followed the panel discussion. The objective of the 2019 Lecture was to create a conversation around social and cultural activism. It explored the role of arts and culture in promoting
freedom, dignity, humanity, unity and social cohesion.
74th United Nations General Assembly, New York City, USA Brand South Africa provided support to Team South Africa’s participation at the 74th UN General Assembly which was held in New York City during the month of September 2019. The support was structured around communications and PR as well as participation in activities linked to providing thought leadership. Through a series of engagements, Brand South Africa leveraged the presence of the South Africa delegation to build and manage the reputation of the Nation Brand in the USA. This was especially important following the recent spate of criticism against xenophobic attacks, the land reform programme, and lack of certainty on policies to grow the economy.
Brand South Africa partnered with the Society for Africans in the Diaspora to host The African Exchange on the margins of the UNGA, as well as participatition at the Roundtable on The Africa Narrative, which presented unparalleled opportunities to showcase the nation brand and push a positive narrative aimed at changing perceptions, given the extensive reach and impact these
platforms provided.Minister Jackson Mthembu engaging with members of the Society for Africans in the Diaspora at the African Exchange
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Finally, through media engagements arranged for Minister Mthembu, Brand South Africa contributed to profiling South Africa as a competitive destination for investment, tourism and source of goods and services.
Brand South Africa leveraged the presence of the South Africa delegation to build and manage the reputation of the Nation Brand in the USA, following the recent spate of criticism against xenophobic attacks, the land reform programme, and lack of certainty on policies to grow the economy.
Top Lounge, Bonn, GermanyAs part of its partnership with Top Magazine Köln, Brand South Africa was given the platform to promote the nation brand and enhance relations with key stakeholders in the market, particularly business at the Top Lounge.
In addition to media and content placement in three editions of the magazine, Top Magazine highlighted the country’s attractiveness to a target audience of business and industry leaders, entrepreneurs, and economic policymakers at the Top Lounge event at no additional charge.
The Top Lounge is a networking and marketing platform that regularly brings together senior executives from the greater Cologne area. Top Lounge once hosted former President Nelson Mandela. The Top Lounge is located on the Petersburg mountain, a prominent feature of the Siebengebirge near Bonn, Germany. FT Africa Summit, London, UK Brand South Africa received a request from the Private Office of the President to provide marketing and communications support for President Ramaphosa’s working visit to the UK to provide the opening keynote address at the FT Africa Summit, an annual event hosted by the Financial Times. Hosted under the theme ‘Africa in Motion’, the conference showcased the premise that ‘for every problem in Africa, there are people working on solutions’.
In addition to ensuring country brand visibility, Brand South Africa provided a background report on key issues highlighted by potential investors and South African companies in the UK based on knowledge gathered on the ground, engaged with FT to publish an opinion editorial prior to the engagement, ensured coverage on social media, and arranged media engagements for the President with FT, SABC’s UK Bureau, BBC Focus on Africa as well as The Economist. Brand South Africa’s Acting CEO conducted the Ministerial and business leadership liaison.
As one of the world’s leading business news organisations, FT is recognised internationally for its authority, integrity and accuracy, and has a record paying readership of one million, three-quarters of which are digital subscriptions. As such, the President’s participation in the Summit as well as the support provided by Brand South Africa, certainly contributed to positioning the country as an investment destination of choice, particularly among UK-based business stakeholders.
Interview with President Ramaphosa on the sidelines of FT Africa Summit
Top Lounge, Germany
Annual Report 2019/20 | Brand South Africa 37
BRICS Summit 2019Brand South Africa collaborated with the South African Embassy in Brazil, to host a BRICS outreach engagement, following the decision by the host government not to host a BRICS Outreach Dialogue that year. The dialogue took the form of a cocktail reception hosted for President Ramaphosa and African Heads of Mission accredited to the Federative Republic of Brazil.
Approximately 120 attendees were eager to meet with President Ramaphosa and engage with other key stakeholders on matters relating to their respective portfolios, from trade and investment, to foreign policy to cultural exchanges. The engagement reinforced South Africa’s concerted efforts to place the African continent on the global agenda of BRICS. Welcoming the opportunity to interact with representatives from African countries based in Brazil, bordering the 11th BRICS Summit, President Ramaphosa noted that South Africa seeks “to advance the interests not only of our own country, but also of the continent”.
Team South Africa at the G20 Summit 2019Brand South Africa collaborated with the Presidency, the Department of Trade and Industry (the dti), the Department of International Relations and Cooperation and the Government Communication and Information System, to execute Team South Africa’s communication and stakeholder engagement programme at the start of the G20 Summit, in Osaka, Japan.
Team South Africa’s presence in Japan provided the organisation an opportunity to profile and position the South African Nation Brand, by leveraging this international platform.
The overall objective was to execute a programme that ensured country brand visibility, to positively position South Africa as a strategic partner for investment and trade and to champion Africa’s development Agenda.
World Economic Forum Meeting on Africa 2019The World Economic Forum Meeting on Africa 2019 (WEF Africa) took place in Cape Town, South Africa, in September 2019. The meeting hosted regional and global leaders from business, Government and civil society to explore solutions aimed at creating economic opportunities for all.
Brand South Africa collaborated with National Treasury, the dti, the GCIS and WESGRO, to implement an integrated stakeholder marketing and communication programme, in order to actively position the Nation Brand. The organisation’s contribution to the overall ‘Team South Africa’ programme included two engagements on the side lines as well as the construction of a Team SA hub/stand within the main conference venue.
BRICS Summit 2019
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A notable highlight of the Brand South Africa WEF Africa programme was the ‘Enhancing the ease of doing business in South Africa Seminar’, which featured a panel with the Minister of Tourism, the Chairperson of the ABSA Group, the CFO of the Johannesburg Stock Exchange and a respected Economist. President Cyril Ramaphosa delivered the keynote address at the seminar which was attended by over 100 guests. China International Import Expo (CIIE) 2019, Shanghai, ChinaBrand South Africa, in partnership with the South African Embassy in Beijing, the Consulate General in Shanghai and the Department of Trade and Industry, undertook a series of activities in support of Team South Africa’s participation at the China International Import Expo (CIIE) hosted in Shanghai in November 2019.
These included the ribbon-cutting ceremony led by Deputy Minister of Trade and Industry, Ms Nomalungelo Gina, and the South African Consul-General in Shanghai, Ms Mpho Hlahla, to officially open the South Africa Pavilion at the CIIE 2019.
Brand South Africa also organised and hosted a press conference on the sidelines of the CIIE 2019. The press conference was addressed by Deputy Minister Gina, who expressed her hope for the further development of China-South Africa trade relations. It was attended and covered by 15 China-based media outlets (print and television), including Xinhua News Agency, MangoTV and China Daily.
Providing South African exhibitors an opportunity to showcase South African products to the Chinese market over the five days that the Expo took place, the South Africa pavillion attracted considerable attention from Chinese enterprises. The entire Expo attracted more than 3 000 enterprises from all over the world.
South African Investment Conference 2019Brand South Africa supported the hosting of the second South Africa Investment Conference in November 2019. The Investment Conference is a platform that highlights new investment opportunities in the country. This year’s aim was to build on the successes of the inaugural Investment Conference that was held the previous year.
The conference attracted approximately R290 billion in investment commitments from companies in mining, forestry, manufacturing, telecommunications, transport, energy, agro-processing, consumer goods, pharmaceuticals, infrastructure, financial services, energy and ICT.
Brand South Africa played an integral part in the execution of the programme, by leading media relations, digital strategy and audio-visual content development. Brand South Africa also supported the Independent Development Corporation, in ensuring the branding framework for the conference was aligned to the country brand and positioning. The three-day event, led by President Ramaphosa, received extensive media coverage both domestically and internationally and was attended by over 1 800 delegates from business and Government.
President Ramaphosa on stage with investors at SAIC 2019
China International Import Expo 2019, China
China International Import Expo 2019, China
Annual Report 2019/20 | Brand South Africa 39
OrganisationalStability
Section C
Together we are…… the proponents of positivity and change.The Ndlovu Youth Choir from Limpopo wowed judges on America’s Got Talent earlier this year and went on to proceed to the final stage of the competition.
Only when foundations are strong and stable, can an unshakable future be built. But, the true mortar that holds this precept together is the people who are willing to lend their hands to building the dream… and not tearing it down.
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Annual Report 2019/20 | Brand South Africa 41
HUMAN CAPITAL
VACANCY RATE AND THE TURNOVER RATES PER CATEGORY:
a. The overall staff vacancy rate is 19.3%. The vacancy rate is above the 10% threshold, the increase in the vacancy rate is due to a combination of factors such as resignations, dismissals and the moratorium that was placed on the organisation by the Minister due to a proposed merger.
b. The overall staff turnover rate is 8.42%. The turnover rate is inclusive of three resignations and one dismissal.
c. Executive Commitee (ExCo) turnover rate is 25% (The ExCo turnover rate is due to one ExCo dismissal).
d. There were no resignations from the Critical Workforce Positions (CWP). Brand South Africa has eight positions which are deemed as CWP.
Jan-20
Dec-19
Nov-19
Oct-19
Sep-19
Aug-19
Jul-19
0 0,5 1 1,5 2 2,5
Dismissal Resignation
1
1
2
Staff MovementThe graph below indicates staff movement for the year 2019/20.
Graph One depicts staff terminations for Brand South Africa for the year under review. As indicated in the table, there were three resignations and one dismissal during the 2019/20 financial period.
Editorial credit: Andrey_Popov/ Shutterstock.com Editorial credit: Andrey_Popov/ Shutterstock.com
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LEARNING AND DEVELOPMENT
Brand South Africa sees the continual professional development and training of employees as the direct contributor towards improved performance and organisational effectiveness. Learning and development is also seen as an important component of human capital management. Brand South Africa offers a wide range of developmental opportunities that enable employees to obtain the skills, competencies and experience they need to contribute towards the attainment of individual, team and organisational goals in an increasingly diverse and demanding context.
Employee training is both the responsibility of the organisation as well as a shared responsibility between management and the individual employee undertaking the training. Such a symbiotic relationship requires leadership commitment to ensure that all employees have equal access to training and developmental opportunities, and can continuously improve their skills and competences.
During the year under review, the following study assistance applications and training interventions approved by the Acting Chief Executive Officer (ACEO) were conducted.
Bursaries
Table One - Bursaries
Course Employee Position
Master in Management of Strategic Marketing Activations Manager
Bachelor of Business Administration Admin and Traffic Coordinator
Master of Commerce General Manager: Marketing
Master of Management in the field of Digital Business IT Manager
Master of Management in the field of Digital Business Manager: Digital and New Media
CIPS Advanced Diploma Supply Chain Administrator
Senior Certificate Driver/Messenger/Facilities Coordinator
Table Two – Skills Development Short Courses
Course Employee Position
Advanced Human Resource Management Human Capital Manager
Advanced Labour Law Human Capital Officer
Training and Development Management Human Capital Administrator – Fixed Term Contract
Project Management Prince2 Coordinator - Markets
Digital Media TrainingCommunications AssistantGraphic DesignerDigital Content Manager – Fixed Term Contract
Risk Management in SCM Supply Chain Officer
Basic Fire FighterAccountantHuman Capital Administrator
Annual Report 2019/20 | Brand South Africa 43
Course Employee Position
Emergency Evacuation Procedures
PA to the Director Governance, Legal & Board SecretariatCoordinator - MarketsAssistant Brand ManagerAdmin and Traffic Coordinator
Emotional Intelligence
AccountantSupply Chain Officer Assistant Brand ManagerSenior IT AdministratorStrategic Relationship Manager: Civil Society Human Capital ManagerLegal ManagerMarketing ManagerDirector: Corporate ServicesHuman Capital Administrator – Fixed Term ContractExecutive PA to the Chief Marketing OfficerStakeholder Relations InternSupply Chain AdministratorActivations ManagerStrategic Relationship Manager: Government Human Capital OfficerCommunications AdministratorMarketing Intern
Business Writing Skills
Strategic Relationship Manager: Business Executive PA to the Chief Marketing OfficerHuman Capital OfficerFinance InternResearch InternMarketing InternStakeholder Relations InternCommunications InternRelationship Consultant GovernmentAdmin and Traffic CoordinatorAccountantHuman Capital Administrator Fixed Term ContractProgramme ManagerHuman Capital ManagerGraphic DesignerPA to Director Governance, Legal & Board Secretariat
Editorial credit: fizkes/ Shutterstock.com
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Course Employee Position
Time Management
ReceptionistSenior IT AdministratorDirector Governance, Legal and Board SecretariatAdmin and Traffic CoordinatorHuman Capital InternFinance InternHuman Capital ManagerActing Chief Financial OfficerSupply Chain InternMarketing InternResearch InternCommunications Intern
Job Evaluation Refresher
Director Corporate ServicesActing Chief Financial OfficerHuman Capital OfficerHuman Capital Administrator – Fixed Term ContractLegal ManagerAssistant Board SecretariatAccountantStrategic Relationship Manager: Civil Society Coordinator: MarketsRelationship Consultant: GovernmentAccountant Fixed Term Contractor x 2Strategic Relationship Manager: Business
People Job Profile ManagementDirector Corporate ServicesHuman Capital Manager
Introduction to People HR Workshop Director Corporate Services
Sage 300 People Personnel ManagementDirector Corporate ServicesHuman Capital OfficerHuman Capital Manager
People Equity Human Capital Manager
Sage 300 People Performance ManagementHuman Capital OfficerHuman Capital Manager
People Leave Training Director Corporate ServicesHuman Capital Manager Editorial credit: fizkes/ Shutterstock.com
Annual Report 2019/20 | Brand South Africa 45
Course Employee Position
Media Spokesperson Acting Chief Executive Officer
Project Management
Assistant Brand Manager Digital Specialist Accountant x2Supply Chain OfficerHHuman Capital OfficerPA to the Chief Marketing OfficerCommunications Officer – International
EMPLOYMENT EQUITY STATISTICS AND GENDER EQUITY
FIGURE 1: DEMOGRAPHIC COMPOSITION OF BRAND SOUTH AFRICA WORKFORCE
Brand South Africa is a progressive organisation that is driven by a desire to engage female professionals in key executive, management and support roles.
In keeping with our empowerment objectives, females represent 63% of the total Brand South Africa workforce, with males comprising 37% of the remaining employee profile.
At management level, there is a 47.37% female representation versus the corresponding 52.63% male representation.
The 5.01% decrease in female representation at management level is attributed to a female member of staff resigning.
The 1% decrease from overall female representation is due to a male accountant being appointed. This is in alignment with Brand South Africa’s Employment Equity Plan which is in place to assist the organisation to mirror the national demographic.
Currently individuals with disabilities are not represented within the current staff complement. Brand South Africa has put plans in place to encourage and attract suitable candidates to apply for vacancies within the organisation. As part of the roll out for this initiative, the organisation has advertised vacant posts on the Disabled People of South Africa website, on social media, in widely read newspapers and on the Brand South Africa website.
MA
LE
FEMA
LE
63%37%
MA
LE
FEMA
LE
47%
53%
71%
29%67%
33%33%67%
17%
83%
M
ALE
FEMALE (5)
29%
71%
FEM
ALE (15)
MALE
EMPLOYMENT EQUITY STATISTICS & GENDER EQUITY
GENDER EQUITY
OVERALL MANAGEMENT LEVEL
EXCO GENERAL MANAGEMENT
MANAGEMENT
PROFESSIONALS GENERAL STAFF
WORKFORCE DEMOGRAPHIC
(1)
(2)
(2)
(5)
(3)
(6)
(1)
(6)
2%
94%
2%
2%
0%
BLACK (43)WHITE (1)
COLOURED (1)INDIAN (1)LIVING WITH DISABILITY (0)
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EMPLOYEE WELLNESS PROGRAMME
Brand South Africa is a strong believer in the adage that speaks to ‘a sound mind in a sound body’. The psychosocial wellbeing of all staff members is taken seriously, with the organisation’s wellness assistant programme being outsourced to an external service provider. The programme not only supports staff members but also supports their immediate family members and dependents living with the employee.
Brand South Africa Wellness DayThe annual Brand South Africa Wellness Day was held on 10 May 2020, and employees were afforded the opportunity to receive basic health screening and preventative treatments such as flu vaccine, tests for high cholesterol, sugar, and high blood pressure, as well as voluntary testing and counselling for HIV and AIDS.
In true Brand South Africa style, a few employees also participated in activities such as tug o’ war bubble soccer and tin stacking. The staff also attended workshops on managing stress in the workplace, as well as on absenteeism and the resulting impact it has on productivity and morale in the workplace.
HEALTH AND SAFETY
Brand South Africa is compliant with the legislative requirements concerning work hazards and the safeguarding of employee health that is keeping in line with the Occupational Health and Safety Regulation Act, 85 of 1993. The Act makes it compulsory for the organisation to establish an advisory council for occupational health and safety matters and to address any health and safety related issues with speed and due diligence.
INTERNSHIP PROGRAMME
An important consideration for Brand South Africa is to make a meaningful contribution to furthering the aims of the National Development Plan (NDP). The crossover between the NDP and Brand South Africa lies in the co-ordinated initiatives by both to build South Africa’s reputation as a country that is progressive, dynamic, inclusive and stable. The expected outcome will have a direct impact on the country’s global competitiveness, while the social offshoot is increased patriotism and pride among South Africans, and so, driving up active citizenry. To achieve these goals, Brand South Africa applied to host seven interns through the relevant SETA during the period under review, and was subsequently approved. The programme was a great success, in that the calibre of interns that the programme attracted exceeded management expectations. As a result, the organisation has since extended this internship programme for a further 12 months.
Wellness Day May 2019 - tug o’ war between teams. Wellness Day May 2019 - soccer between teams Wellness Day May 2019 - health testing sites for employees.
OHS Safety Representatives
Annual Report 2019/20 | Brand South Africa 47
INTERN NAME DEPARTMENT UNIT
Mr Nicholus Maphakela Corporate Services Human Capital
Ms Ntsepeng Letsoisa Finance Supply Chain
Mr Mduduzi Malinga Marketing and Communications Communications
Mr Kutullo Matloga Marketing and Communications Marketing
Mr Lehlohonolo Modise Marketing and Communications Research
Mr Andile Themba Marketing and Communications Stakeholder Relations
*Mr Lawrence Madire Finance Finance*Mr Laurence Madire has left the organisation as he was able to secure a permanent position outside of Brand South Africa.
Mr Nicholus Maphakela
Mr Lehlohonolo Modise
Ms Ntsepeng Letsoisa
Mr Andile Themba
Mr Mduduzi Malinga
*Mr Lawrence Madire
Mr Kutullo Matloga
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Leave Payout: 2018/19
REASON TOTAL AMOUNT NUMBER OF EMPLOYEES AVERAGE PAYMENT
Leave pay out on termination of service R 299 814.86 9 R 33 312.76
Leave Payout: 2019/20
REASON TOTAL AMOUNT NUMBER OF EMPLOYEES AVERAGE PAYMENT
Leave pay out on termination of service R 424 740.52 4 R 106 185.13
The two Leave Payout tables above reflect an increase of R72 872.37 on leave pay out for 2019/20 when compared to the 2018/19 fiscal. This increase is a direct result of the termination of services of two middle management staff, one senior manager and one executive member during the year under review. Brand South Africa continues to encourage staff to take annual leave within the financial period as required by the respective BCEA and Brand South Africa policies.
HUMAN CAPITAL GOVERNANCE (HCG)
The organisation is pleased to report that all HCG policies were reviewed and approved by the Board of Trustees to be in line with legislative requirements to strengthen the Human Capital support function at Brand South Africa.
INFORMATION TECHNOLOGY (IT)
The IT department has the overall responsibility for efficient IT Governance and in ensuring the efficient functioning of Brand South Africa’s IT infrastructure services.
INFRASTRUCTURE AVAILABILITY
The organisation achieved a 98,34% availability of all critical IT services and applications. This achievement is attributed to having planned support and scheduled maintenance of the IT infrastructure services and network upgrades to ensure high performance with minimal downtime. The Annual Performance Plan target for the 2019/20 fiscal was set at 98%.
BUSINESS CONTINUITY
Over the years, the IT department has managed to build and create preventative systems and recovery platforms to deal with potential cyber threats. In addition to preventative measures, the goal is always to enable ongoing operations no matter the operating conditions – an example of such an operating condition is the organisation continuing to operate during the COVID-19 pandemic. The Business Continuity Policy for the organisation was implemented during the COVID-19 lockdown. Employees were able to work remotely and access information over secured channels and remained productive.
IT AS A BUSINESS ENABLER
Information Technology (IT) plays a crucial role in helping the organisation deliver on its Presidential mandate of elevating the Nation Brand, and subsequently, reporting on the deliverables that the Office of the President requires of Brand South Africa.
We are pleased to report that the IT Department continues to deliver the paperless transactions and automated workflows needed for business processing.
The organisation’s information is strategically managed and maintained through the internet and the corporate website. The delivery of the Enterprise Resource Planning (ERP) solution has been a success due to project assurance methodologies employed by the organisation and supported by the Internal Auditors.
STRATEGIC PLANNING AND PERFORMANCE MONITORING
The Brand South Africa Board of Trustees subscribe fully to the Government-wide Monitoring and Evaluation Framework. Brand South Africa is, therefore, compliant in ensuring that Strategic Planning and Performance Information reporting is managed within the revelant prescripts, and is considered critical in determining and monitoring that the organisation is making progress towards meeting its mandate.
Brand South Africa submitted the Quarterly financial and non–financial performance information for the 2019/20 financial year to the Executive Authority and to the oversight bodies including the National Treasury, Government Communication and Information Systems (GCIS), Department of Planning, Monitoring and Evaluation (DPME) and Parliament, as well as for audit to the Auditor-General (AG).
Annual Report 2019/20 | Brand South Africa 49
CorporateGovernance
Section D
Together, we are single-minded in our leadership and development focus.
The Africa & Indian Ocean Gala Ceremony took place at Sugar Beach, Mauritius in 2019, where Durban won in three categories - Leading City Destination, Leading Meetings and Conference Destination, and Leading Cruise Port. The Port of Durban’s 2018/19 cruise season show passenger figures increasing by 29.4% over the previous year, according to TNPA’s recently released data. TNPA processed 255 422 passenger embarkations and disembarkations at the port, up from the 197 382 recorded in 2017/18. The port enjoyed 63 calls by 16 different cruise vessels.
To develop the port’s cruise sector facilities even further, the KwaZulu Cruise Terminal (KCT) consortium was awarded a 25-year concession to develop a new cruise terminal and is presently finalising the detailed design ahead of an anticipated commissioning date of 2020.
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Annual Report 2019/20 | Brand South Africa 51
Our collective mission, vision, goals and objectives as a Nation Brand are strongly led from the front by the Executive Committee and Board of Trustees of the Brand South Africa Trust.
NO. NAME QUALIFICATIONS GENDER
1. Ms Thandi Tobias-Pokolo: Chairperson
� Advanced Diploma in Economic Policy � Certificate in Economics and Public Finance � Certificate in Leadership Communication
Female
2. Dr Keabetswe Modimoeng:Deputy Chairperson
� Doctor of Philosophy (PhD): Management Sciences � MBA � Certificate in Applied Project Management- PMBOK � National Diploma: Public Relations Management
Male
3. Ms Loretta Jacobus � Studied Social Work Female
4. Mr Mlungisi Johnson � Short course in macro-economics and developmental economics � Certificate in Public Management and Development
Male
5. Ms Rachel Kalidass � CA(SA) � Bachelor of Commerce Honours � Certificate in the Theory of Accountancy (CTA) � Bachelor of Accounting Sciences (BCompt)
Female
6. Ms Muditambi Ravele � BTech (Business Administration) � Executive Sports Management Programme � Strategic Executive Marketing Programme � Diploma in Sports Management � Certificate in Public Relations � Certificate in Marketing � Post Professional Teacher’s Certificate in Physical Education � Sen Teacher’s Diploma
Female
7. Mr Andrew Madella � Diploma in Social Work � BPhil in Policy Analyses and Values Studies � BA Hons in Public Administration � Certificate in Human Resource Management � Postgraduate Diploma in Poverty, Land and Agrarian Studies � Enrolled for MPhil in Human Rights (Disability)
Male
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NO. NAME QUALIFICATIONS GENDER
8. Ms Tebogo Mamorobela � Municipal Executive Leadership & Finance Management � Executive Leadership Municipal Development Programme
Female
9. Mr Bushang Modipane � Professional Certificate in Public & Development Management � Post Graduate Diploma in Public Management
Male
10. Dr Stavros Nicolaou � B Pharm - Wits University � Fellow of the Pharmaceutical Society of South Africa
Male
11. Ms Sisanda Nkoala � MPhil: Rhetoric Studies � BA (Hons): Political Communication � BA: Film & Media Production
Female
12. Dr Ylva Rodny-Gumede � PhD (School of Oriental and African Studies) � MA Politics � MA Journalism � BA Media Studies, Politics and Law � Diploma in Postgraduate Supervision � Certificate in Marketing and Business Communication � East European and Balkan studies � Certificate in Project Management
Female
13. Mr Geoffrey Rothschild � C.A(SA) � C.M (SA)
Male
14. Mr Johannes Sebulela � Leverage Finance � Board Development Principles of Business Management (NMP) � Leadership Development Programme � Advanced Management Programme � Diploma in Marketing � BA (Com)
Male
Annual Report 2019/20 | Brand South Africa 53
CORPORATE GOVERNANCE
Brand South Africa is a Schedule 3A public entity registered as a trust in terms of the Trust Property Control Act, Act No. 57 of 1988. The Board of Trustees believes that good corporate governance is key to the entity’s success. The Board has already transitioned from King III to King IV which requires organisations to ‘apply and explain’ the relevant principles and recommended practices enunciated in the King Report on Corporate Governance in South Africa, 2016 (King IV) in order to realise the following outcomes; ethical culture, good performance, effective control, and legitimacy.
Executive AuthorityIn accordance with the Public Finance Management Act, Act No.1 of 1999 (PFMA), the Minister in the Presidency, Mr Jackson Mthembu, is the Executive Authority of Brand South Africa.
BOARD OF TRUSTEES
The Board was appointed by The Presidency, in consultation with the Executive Authority, on 6 November 2019. The Master of the High Court issued Board Members with their Letters of Authority on 13 November 2019.
� Ms Thandi Tobias-Pokolo, Chairperson, trustee � Dr. Keabetswe Modimoeng, Deputy Chairperson, trustee � Dr. Ylva Rodny-Gumede, trustee � Ms Loretta Jacobus, trustee � Mr Mlungisi Johnson, trustee � Ms Rachel Kalidass, trustee � Mr Andrew Madella, trustee � Dr Kingsley Makhubela, trustee � Ms Tebogo Mamorobela, trustee � Mr Bushang Modipane, trustee
� Dr. Stavros Nicolaou, trustee � Ms Sisanda Nkoala, trustee � Ms Muditambi Ravele, trustee � Mr Geoffrey Rothschild, trustee � Mr Johannes Sebulela, trustee
ExCo
� Ms. Thulisile Manzini, Acting Chief Executive Officer � Ms. Sithembile Ntombela, Acting Chief
Marketing Officer � Dr Krishnee Kissoonduth, Director: Corporate Services � Mr. Kgomotso Seripe, Acting Chief Financial Officer � Adv Sifiso S. Nyoni, Director: Governance, Legal and
Board Secretariat
In line with good corporate governance practice, all trustees are non-executive members, except the CEO who is an ex-officio executive trustee.
The Board adds significant value to Brand South Africa by: � Retaining full and effective control of the organisation � Determining Brand South Africa’s strategy and
strategic objectives � Determining and setting the tone from the top as
regards to the organisation’s values and principles of ethical practice
� Bringing independent, informed and effective judgement to bear on material decisions of Brand South Africa, including policies and budget approval, and
� Satisfying itself that Brand South Africa is governed effectively in accordance with best corporate governance practice, including risk management, internal control systems, and general oversight.
LEGAL AND REGULATORY COMPLIANCE
BRAND SOUTH AFRICA TRADEMARK
The organisation continues to experience bureaucratic problems with regards to registration of its trademarks in some foreign jurisdictions where its trademarks are purported to be registered.
Brand South Africa’s intention to lodge a court application against Brand Summit South Africa was delayed by administrative hurdles experienced at the registration authority offices. The application was actioned on the grounds that the Brand Summit South Africa name is confusingly similar to that of Brand South Africa. The matter has since not proceeded further.
EMPLOYEE RELATIONS
MISCONDUCT AND CONSEQUENCE MANAGEMENT
NATURE OF CONSEQUENCE
MANAGEMENT ACTION NUMBER
Dismissal 3
Verbal warning 0
Written warning 0
Final written warning 0
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BOARD CHARTER
The Board has a charter which is reviewed annually and provides a concise overview of the following:
� The segregation of the roles, functions, responsibilities and powers of the Board, the Executive Authority, individual trustees, Board committees, and Management;
� Matters reserved for final decision-making or approval by the Board; and � The practices and procedures of the Board on matters relating to corporate
governance, declarations of conflicts of interests, Board meeting documentation and procedures, as well as the induction, training, and evaluation of trustees.
BOARD COMPOSITION AND APPOINTMENT OF TRUSTEES
The Trust Deed provides that the Board should comprise no less than 11 trustees, with a maximum of 15. All trustees are appointed by the President of South Africa for a three-year term. The Board is unitary and consists of 15 trustees.
The Office of the Chairperson and the CEO are separate, and there is a clear division of responsibilities between these roles. During the year under review, Ms Thandi Tobias-Pokolo served as the Chairperson and was primarily responsible for the strategic leadership of the Board. Dr Keabetswe Modimoeng served as the Deputy Chairperson.
The CEO is supported by an Executive Committee consisting of the executive management team. ExCo is responsible for implementing the decisions of the Board in pursuit of the organisation’s mandate and objectives.
BOARD MEETINGS
The Board formally met two times during 2019/20 in accordance with its annual calendar. These Board meetings were held at Brand South Africa’s head office in Houghton. In addition, five special Board meetings and teleconferences were convened by the Board during the period under review to discuss urgent matters.
BRAND SOUTH AFRICA BOARD MEETINGS 2019/20
Board CommitteesIn terms of the provisions of the Board Charter, the Board is mandated to form committees to help carry out its fiduciary duties.
The following Board Committees were in place, during the period under review:
� Audit and Risk Committee (ARCO) � Human Capital, Remuneration and Social & Ethics Committee (HCRSEC) � Marketing Committee (MARCO)
All Board Committees comprise members of the Board. ExCo members attend meetings by invitation. Committees may seek external or independent professional advice to carry out their duties in accordance with the Board Policy on Access to Professional Advice. Board committees are all chaired by non-executive trustees.
Annual Report 2019/20 | Brand South Africa 55
BOARD YEAR-TO-DATE ATTENDANCE SCHEDULE 2019/20
Previous Board Members Meetings
MEMBERS MEETING DATES
NAME SURNAME TITLE 29/04/2019 14/05/2019 30/05/2019
Khanyisile Kweyama Ms ✓ ✓ ✓Babalwa Ngonyama* Ms ✓ ✓ ✓Geoff Rothschild Mr ✓ ✓ x
Given Sibiya Ms ✓ x ✓Janine Hills Ms ✓ ✓ ✓Kuseni Dlamini Mr ✓ x x
Lehlohonolo Bonoko Ms ✓ ✓ ✓Mpho Makwana Mr x x x
Muditambi Ravele Ms ✓ ✓ ✓Rashid Lombard Mr x ✓ ✓Stavros Nicoloau Mr ✓ ✓ ✓Thembi Kunene-Msimang Ms ✓ x ✓Mzimkulu Malunga Mr ✓ ✓ ✓
* Ms Babalwa Ngonyama resigned from the Board on 6 May 2019
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New *Board Members Meetings
MEMBERS MEETING DATES
NAME SURNAME TITLE 20/11/2019 02/12/2019 23/01/2020 02/03/2020 19/03/2020
Thandi Tobias Ms ✓ ✓ ✓ ✓ ✓Keabetswe Modimoeng Dr x ✓ ✓ ✓ x
Geoff Rothschild Mr x x ✓ ✓ ✓Rachel Kalidass Ms ✓ x ✓ x ✓Mlungisi Johnson Mr ✓ ✓ ✓ ✓ ✓Andrew Madella Mr ✓ ✓ ✓ ✓ ✓Bushang Modipane Mr ✓ ✓ ✓ ✓ ✓Tebogo Mamorobela Ms ✓ ✓ ✓ ✓ ✓Johannes Sebulela Mr x ✓ ✓ ✓ ✓Muditambi Ravele Ms ✓ ✓ ✓ ✓ ✓Ylva Rodny-Gumede Dr ✓ ✓ ✓ ✓ ✓Stavros Nicoloau Dr ✓ ✓ ✓ ✓ ✓Loretta Jacobus Ms ✓ ✓ ✓ ✓ ✓Sisanda Nkoala Ms ✓ ✓ ✓ ✓ ✓
* This Board was appointed on 13 November 2019
AUDIT AND RISK COMMITTEE (ARCO)
ARCO’s responsibilities include: � Ensuring the integrity, reliability, and accuracy of accounting and financial reporting systems. � Evaluating the adequacy and effectiveness of internal audit and risk management. � Maintaining transparent and appropriate relationships with external auditors. � Reviewing the scope, quality and cost of the statutory audit and the independence and objectivity of the auditors. � Ensuring compliance with applicable legislation and the requirements of regulatory authorities, especially those set out in the PFMA.
During the period under review, ARCO held one ordinary meeting in accordance with the organisation’s annual calendar, plus two special meetings. Ms Rachel Kalidass served as Chairperson of the Committee.
Annual Report 2019/20 | Brand South Africa 57
AUDIT AND RISK COMMITTEE YEAR-TO-DATE ATTENDANCE SCHEDULE 2019/20
Previous Audit and Risk Committee MembersNew Audit and Risk Committee Members
Members Meeting Dates
NAME SURNAME TITLE 24/04/2019 24/05/2019
*Given Sibiya Ms ✓ ✓*Geoff Rothschild Mr ✓ ✓*Janine Hills Ms ✓ ✓*Muditambi Ravele Ms ✓ ✓*Thuli Mashanda Ms ✓ ✓*Luyanda Mangquku Mr ✓ x**Dikeledi Thindisa Ms x ✓
* Ms Dikeledi Thindisa is a DoC representative
* * The end-of-term date for this committee was 31 May 2019
New Audit and Risk Committee Members
Members Meeting Dates
NAME SURNAME TITLE 22/01/2020 18/02/2020 18/03/2020
**Rachel Kalidass Ms ✓ ✓ ✓**Geoff Rothschild Mr ✓ ✓ ✓**Sisanda Nkoala Ms ✓ ✓ ✓
**YlvaRodny-Gumede Dr ✓ ✓ ✓
*Hennie Bekker* Mr ✓ x ✓* Mr Hennie Bekker is a GCIS Representative
* * The appointment date of this committee was 13 November 2019
HUMAN CAPITAL, REMUNERATION AND SOCIAL & ETHICS COMMITTEE (HCRSEC)
The terms of reference of the HCRSEC, as approved by the Board, addresses aspects of membership, structure, authority, and duties.
The responsibilities of this Committee include making recommendations to the Board on: � All policy matters that affect the employer-employee relationship. � All policy matters dealing with remuneration, recruitment, selection, the appointment
and the remuneration of executives. � All policy matters that affect the mental, social and physical wellbeing of staff. � All policy matters relating to social and ethics, as contemplated in the Companies Act,
Act No. 71 of 2008. � Approving human resource strategies and the organisational structure.
HCRSEC held one meeting during the reporting period, plus one special meeting. The Committee was chaired by Mr Mlungisi Johnson.
HCRSEC YEAR-TO-DATE ATTENDANCE REGISTER 2019/20
Previous Human Capital, Remuneration and Social & Ethics Committee
Members Meeting Dates
Name Surname Title 05/04/2019 10/05/2019
*Stavros Nicolaou Mr ✓ ✓*Mzimkulu Malunga Mr ✓ ✓*Mpho Makwana Mr ✓ x*Lehlohonolo Bonoko Ms ✓ ✓*Given Sibiya Ms ✓ ✓*Kuseni Dlamini Mr x x
*The end-of-term date for this committee was 31 May 2019
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New Human Capital, Remuneration and Social & Ethics Committee
Members Meeting Dates
Name Surname Title 02/12/2019 04/02/2019
Mlungisi Johnson Mr ✓ ✓Stavros Nicolaou Dr ✓ ✓Loretta Jacobus Ms ✓ ✓Andrew Madella Mr ✓ ✓Bushang Modipane Mr ✓ ✓
* The appointment date of this committee was 13 November 2019
MARKETING COMMITTEE (MARCO)
MARCO is responsible for advancing the mandate of Brand South Africa by overseeing the development and implementation of effective marketing and communications strategies. Its mandate includes:
� Reviewing the marketing policy and protocols, and recommending the same to the Board for approval;
� Offering expert advice and feedback on Brand South Africa’s marketing and communications activities and resources;
� Identifying areas of marketing and communications weaknesses and recommending remedial actions;
� Acting as a resource to advise management on serious communications issues; and
� Reviewing and recommending corporate profile policies and issues relating to Brand South Africa’s branding.
During the reporting period, MARCO was chaired by Ms Muditambi Ravele and held one meeting in accordance with its annual calendar. No special meetings were held during the period under review.
MARKETING COMMITTEE YEAR-TO-DATE ATTENDANCE SCHEDULE 2019/20
Previous Marketing Committee
Members Meeting Dat
Name Surname Title 11/04/2019
*Mpho Makwana Mr ✓*Thembi Kunene-Msimang Ms x*Janine Hills Ms ✓*Muditambi Ravele Ms ✓*Rashid Lombard Mr ✓*Mzimkulu Malunga Mr x
* The end-of-term date for this committee was 31 May 2019
New Marketing Committee
Members Meeting Dates
Name Surname Title 18/02/2020
*Muditambi Ravele Ms ✓*Johannes Sebulela Mr ✓*Andrew Madella Mr ✓*Tebogo Mamorobela Ms ✓*Ylva Rodny-Gumede Dr ✓
* The appointment date of this committee was 13 November 2019
Annual Report 2019/20 | Brand South Africa 59
BOARD REMUNERATION
Board remuneration paid during the year under review has been disclosed in the annual financial statements of the organisation, in line with good corporate governance practice.
RISK MANAGEMENT
Risks relating to the business of Brand South Africa are managed in accordance with the PFMA, as amended, as well as recommended good corporate governance practice. The Risk Management Strategy and Risk Materiality Framework help to ensure that all risks are kept at a manageable level.
FRAUD AND UNETHICAL CONDUCT
Brand South Africa’s Policy on whistle-blowing encourages employees to report any acts of fraud, dishonesty and any other form of unethical behaviour in accordance with the Protected Disclosures Act, No.26 of 2000, and the Companies Act, Act No.71 of 2008. A 24-hour hotline is in place and employees are constantly encouraged to use the hotline and are given the assurance that they will not suffer any form of victimisation or reprisals as a result of having reported any matter in good faith.
AVOIDING CONFLICTS OF INTERESTS
Trustees have a duty to disclose their personal interests in any of the items which are on the agenda at Board meetings. A declaration of conflicts and interests remains a standing agenda item throughout the year. In addition, Trustees are required to submit annual declarations of interests.
CODE OF CONDUCT
The trustees of Brand South Africa remain committed to achieving high standards of business integrity and ethics across all of the organisation’s activities. The Board has a Code of Conduct which sets out the required standard of conduct expected of Trustees, how to deal with dissent, how to manage conflicts of interests, expected disclosures and the management of external appointments.
BOARD SECRETARY
The Director: Governance, Legal and Board Secretariat serves as the Board Secretary and is responsible for ensuring the proper conduct of Board meetings. The Board Secretary provides support and guidance to the Board on matters related to governance, legislation, compliance, and ethics. Advocate Sifiso Nyoni’s function includes the preparation and circulation of Board papers and minutes of meetings, ensuring that the Board and its Committees are timeously provided with feedback. He is also responsible for making Trustees aware of laws and legislation relevant to or affecting the organisation and ensuring the proper retention of Brand South Africa’s important records.
In addition, the Board Secretary has certain statutory duties to perform in terms of the Companies Act, Act No.71 of 2008, and other regulations. The Board Chairperson and all trustees have unrestricted access to the services of the Board Secretary.
The Board Secretary also ensures that Brand South Africa’s processes and practices are reviewed and benchmarked on an on-going basis to ensure compliance with local and international governance standards.
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EXCO PROFILES AND BOARD OF TRUSTEES
Annual Report 2019/20 | Brand South Africa 61
Thulisile is behind the local and international engagements that the Nation Brand engages in. She expertly handles the marketing, reputation management and brand building aspects that are called for in the National Development Plan, and other Governmental requirements that may be needed. A keen strategist, Thulisile is adept at steering the strategic objectives of the organisation by leveraging human resource capital, and business acumen garnered over a very successful career. Her key functions include communications strategy and coordinated strategic engagements, increasing efficiencies in business operations as well as overseeing legislative mandates. Thulisile controls the organisation’s brand reputation through effective brand positioning and corporate identity management through the political and administrative interface of operations. She leads Brand South Africa with distinction and purpose, particularly where corporate governance is concerned, and oversees the interface of business systems and operations, supply chain processes and internal controls – with a hands-on approach of a leader that is results-driven.
Qualifications
Thulisile holds a Bachelor’s degree in Education from the University of Zululand, a Post Graduate Diploma in Management from the University of the Witwatersrand, Johannesburg, a Post Graduate Diploma in Business Administration from Wits Business School, a Certificate in Management Services from Technikon Pretoria and has completed a short course in Evidence Based Policy-Making and Implementation from the University of Cape Town in conjunction with DPME. She has also completed a short course on Women and Leadership Development from the Singapore Management University.
Sifiso is responsible for corporate governance and legal matters in the organisation, and holds the office of the Board Secretary. He is an experienced and capable leader that ensures that the organisation follows and is compliant with all corporate governance prescripts. Sifiso is a Chartered Marketer (SA), and is adept at evaluating marketing strategies and the outcomes thereof.
Qualifications
Sifiso holds an LLM degree (UP), Insolvency Law and Practice (SARIPA/UP), LLB (UNISA), Certificate in Compliance Management (UJ), Certificate in Board Governance (UJ), Certificate in Advanced Corporate and Securities Law (UNISA), MSc Marketing and Product Management (Cranfield University, UK), BSc Agric Ed (UNISWA) and participated in a Top Management Programme at the National University of Singapore (Business School). He is also an Insolvency Practitioner.
Sithembile is the organisation’s marketing and creative expert, and she has the knowledge, experience and the know-how to keep the Nation Brand foremost in the spotlight. She has 20 years’ experience in the field of marketing, garnered in both the public and private sector. Her expertise includes vision and strategy development and employing emerging technology into brand marketing strategies. Additionally, Sithembile is skilled at leading and driving branding and marketing efforts in order to increase and build on a brand’s growth and awareness targets. She is highly proficient in leadership and communication skills and has a deep understanding of the product development process. An all-round creative and innovative thinker, she has been selected as a judge for various prestigious advertising, creative and marketing awards, yet is equally adept at financial and business matters, as she has great acumen in these disciplines. She is also proficient with change management and building capacity.
Qualifications
Sithembile has a Diploma in Marketing Management (UKZN), PG Diploma in Marketing (Institute of Marketing Management), and is a Chartered Marketer CM(SA), with the Marketing Association of South Africa.
Ms Sithembile NtombelaActing Chief Marketing Officer
Adv Sifiso S. NyoniDirector: Governance, Legal and Board Secretariat
Ms Thulisile Manzini Acting Chief Executive Officer
ExCo PROFILES
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Kgomotso runs the organisational ‘checks and balances’ with precision and accuracy. He is responsible for financial, operational and supply chain management that ensures effective control of funding, budgets and maintaining a high level of reporting standards. He is the consummate professional that continuously seeks to deliver a high degree of excellence in all that he does, and has garnered audit experience spanning nine years, Financial Accounting Management over six years and is also an Associate General Accountant AGA (SA).
Qualifications
Kgomotso holds the following qualifications, including a Hons BCom Accounting (Hon) from Unisa, is currently registered as AGA (SA) member, a South African Institute of Chartered Accountants (SAICA) member.
Krishnee is a multi-faceted and dynamic leader who is responsible for the seamless and efficient running of the Corporate Services (CS) Department at Brand South Africa. The department itself is further sub-divided into Human Capital, Information Technology, Strategic Planning and Performance Information Management units. Under her supervision, the organisation continually achieves a high-level of legislative and corporate goals, as well as strategic and performance milestones that are necessary for the development and growth of the organisation as a whole.
Qualifications
Krishnee has obtained the following qualifications, including a Doctorate Degree in Public Administration (Unisa), Master’s Degree in Public Administration (University of Pretoria), Presidential Strategic Leadership Development Programme (University of North West), Bachelor of Science Degree in Computer Science (Unisa), as well as a Non-graduate Higher Education Diploma (Springfield College of Education).
Krishnee is further accredited as a Master Reward Professional (South African Reward Association), a Master Human Resources Professional (South African Board for People Practices) and a Global Remuneration Professional (South African Reward Association and WorldatWork).
Mr Kgomotso SeripeActing Chief Financial Officer
Dr Krishnee Kissoonduth Director: Corporate Services
Annual Report 2019/20 | Brand South Africa 63
BOARD OF TRUSTEES
Ms Rachel Kalidass
• CA(SA)• Bachelor of Commerce Honours• Certificate in the Theory of
Accountancy (CTA)• Bachelor of Accounting Sciences
(BCompt)
Ms Muditambi Ravele
• BTech (Business Administration)• Executive Sports Management
Programme• Strategic Executive Marketing
Programme• Diploma in Sports Management• Certificate in Public Relations• Certificate in Marketing• Post Professional Teacher’s Certificate
in Physical Education• Sen Teacher’s Diploma
Ms Loretta Jacobus
• Studied Social Work
Mr Andrew Madella
• Diploma in Social Work obtained • BPhil in Policy Analyses and Values
Studies • BA Hons in Public Administration• Certificate in Human Resource
Management • Postgraduate Diploma in Poverty, Land
and Agrarian Studies • Enrolled in MPhil in Human Rights
(Disability)
Mr Mlungisi Johnson
• Short course in macro-economics and developmental economics
• Certificate in Public Management and Development
Ms Tebogo Mamorobela
• Municipal Executive Leadership & Finance Management
• Executive Leadership Municipal Development Programme
Dr Keabetswe ModimoengDeputy Chairperson
• Doctor of Philosophy (PhD): Management Sciences• MBA• Certificate in Applied Project Management- PMBOK• National Diploma: Public Relations Management
Ms Thandi Tobias-PokoloChairperson
• Advanced Diploma in Economic Policy • Certificate in Economics and Public Finance • Certificate in Leadership Communication
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Ms Sisanda Nkoala
• MPhil: Rhetoric Studies• BA (Hons): Political Communication• BA: Film & Media Production
Dr Ylva Rodny-Gumede
• PhD (School of Oriental and African Studies)
• MA Politics • MA Journalism
Mr Bushang Modipane
• Professional Certificate in Public & Development Management
• Post Graduate Diploma in Public Management
Mr Johannes Sebulela
• Advanced Management Programme - INSEAD (France)
• Board Development Programme • BA (Com) • Leadership Development Programme • Principles of Business Management• Post Graduate Diploma in Marketing • Leverage Finance – Fitch (UK)
Mr Geoffrey Rothschild
• C.A(SA)• C.M. (SA)
Dr Stavros Nicolaou
• B Pharm• FPS (SA)• PhD (Honoris Causa)
Annual Report 2019/20 | Brand South Africa 65
Annual Financial Statements
Section E
Together, we are resilient.Even though a gallant second-half fightback from South Africa was not enough to prevent Australia from claiming a spot in the Netball World Cup final with a 55-53 win, the team won the hearts of many in South Africa.
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Annual Report 2019/20 | Brand South Africa 67
Report of the Auditor-General to Parliament on the Brand South Africa Trust Report on the audit of the financial statements
Opinion
1. I have audited the financial statements of the Brand South Africa Trust set out on pages 76 to 121, which comprise the statement of financial position as at 31 March 2020, statement of financial performance, statement of changes in net assets, cash flow statement and statement of comparison of budget and actual amounts for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies.
2. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Brand South Africa Trust as at 31 March 2020, and its financial performance and cash flows for the year then ended in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA).
Basis for opinion
3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities under those standards are further described in the auditor-general’s responsibilities for the audit of the financial statements section of this auditor’s report.
4. I am independent of the public entity in accordance with sections 290 and 291 of the Code of ethics for professional accountants and parts 1 and 3 of the International code of ethics for professional accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (IESBA codes) as well as the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA codes.
5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Emphasis of matters 6. I draw attention to the matters below. My opinion is
not modified in respect of these matters.
Restatement of corresponding figures
7. As disclosed in note 37 to the financial statements, the corresponding figures for 31 March 2019 were restated as a result of an error in the financial statements of the public entity at, and for the year ended, 31 March 2020.
Contingencies
8. With reference to note 28 to the financial statements, the public entity is a defendant in a number of lawsuits. The ultimate outcome of the matter could not be determined and no provision for any liability that may result was made in the financial statements.
Responsibilities of the accounting authority for the financial statements
9. The board of trustees, which constitutes the accounting authority, is responsible for the preparation and fair presentation of the financial statements in accordance with the SA Standards of GRAP and the requirements of the PFMA, and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
10. In preparing the financial statements, the accounting authority is responsible for assessing the public entity’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the appropriate governance structure either intends to liquidate the public entity or to cease operations, or has no realistic alternative but to do so.
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Auditor-General’s responsibilities for the audit of the financial statements
11. My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
12. A further description of my responsibilities for the audit of the financial statements is included in the annexure to this auditor’s report.
Report on the audit of the annual performance report
Introduction and scope
13. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof, I have a responsibility to report on the usefulness and reliability of the reported performance information against predetermined objectives for the selected programme presented in the annual performance report. I performed procedures to identify material findings but not to gather evidence to express assurance.
14. My procedures address the usefulness and reliability of the reported performance information, which must be based on the approved performance planning documents of the public entity. I have not
evaluated the completeness and appropriateness of the performance indicators included in the planning documents. My procedures do not examine whether the actions taken by the public entity enabled service delivery. My procedures also do not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, my findings do not extend to these matters.
15. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected programme presented in the annual performance report of the public entity for the year ended 31 March 2020:
Programme Pages in the annual performance report
Programme 2 - brand, marketing and reputation management
125 - 129
16. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.
17. I did not identify any material findings on the usefulness and reliability of the reported performance information for this programme:
• Programme 2 - brand, marketing and reputation management
Other matters
18. I draw attention to the matters below.
Achievement of planned targets
19. Refer to the annual performance report on pages 125 to 131 for information on the achievement of planned targets for the year and explanations provided for the under/overachievement of a significant number of targets.
Adjustment of material misstatements
20. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of programme 2: brand, marketing and reputation management. As management subsequently corrected the misstatements, I did not raise any material findings on the usefulness and reliability of the reported performance information.
Report on the audit of compliance with legislation
Introduction and scope
21. In accordance with the PAA and the general notice issued in terms thereof, I have a responsibility to report material findings on the public entity’s compliance with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance.
Annual Report 2019/20 | Brand South Africa 69
22. The material findings on compliance with specific matters in key legislation are as follows:
Procurement and contract management
23. Some goods and services with a transaction value above R500 000 were procured without inviting competitive bids, as required by treasury regulation 16A6.1.
24. Some contracts were extended or modified without the approval of a properly delegated official, as required by section 44 of the PFMA and treasury regulations 8.1 and 8.2.
25. A contract was awarded to a bidder based on preference points that were not allocated in accordance with the requirements of the Preferential Procurement Policy Framework Act and its regulations.
26. A contract was awarded to a bidder based on functionality criteria that was not stipulated in the original invitation for bidding, as required by the 2017 preferential procurement regulation 5(6) and (7).
Consequence management
27. Cases of improper conduct in the supply chain management system that may constitute an offence were not reported to the SAPS, as required by treasury regulation 16A9.1(b)(ii).
Annual Financial statements
28. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by section 55(1) (a) of PFMA. Material misstatements
of the commitments disclosure note identified by the auditors in the submitted financial statement were corrected, resulting in the financial statements receiving an unqualified audit opinion.
Other information
29. The accounting authority is responsible for the other information. The other information comprises the information included in the annual report. The other information does not include the financial statements, the auditor’s report and the selected programme presented in the annual performance report that has been specifically reported in this auditor’s report.
30. My opinion on the financial statements and findings on the reported performance information and compliance with legislation do not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon.
31. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements and the selected programme presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated.
32. I did not receive the other information prior to the date of this auditor’s report. When I do receive and read this information, and if I conclude that there is a material misstatement therein, I am required to communicate the matter to those charged with governance and request that the other information be corrected. If the other information is not corrected, I may have to retract this auditor’s report
and re-issue an amended report as appropriate. However, if it is corrected this will not be necessary.
Internal control deficiencies
33. I considered internal control relevant to my audit of the financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to express any form of assurance on it. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on compliance with legislation included in this report.
34. The accounting authority did not exercise adequate oversight responsibility over internal controls relating to procurement and contract management. This resulted in non-compliance with key legislation.
35. Management did not prepare regular, accurate and complete financial and performance reports that are supported and evidenced by reliable information.
Johannesburg06 November 2020
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Annexure – Auditor-General’s responsibility for the audit1. As part of an audit in accordance with the ISAs,
I exercise professional judgement and maintain professional scepticism throughout my audit of the financial statements and the procedures performed on reported performance information for the selected programme and on the public entity’s compliance with respect to the selected subject matters.
Financial statements
2. In addition to my responsibility for the audit of the financial statements as described in this auditor’s report, I also:
• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error; design and perform audit procedures responsive to those risks; and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the public entity’s internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of trustees, which constitutes the accounting authority.
• conclude on the appropriateness of the use of the going concern basis of accounting by the board of trustees, which constitutes the accounting authority, in the preparation of the financial statements. I also conclude, based on the audit evidence obtained, whether a material uncertainty exists relating to events or conditions that may cast significant doubt on the ability of the public entity to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements about the material uncertainty or, if such disclosures are inadequate, to modify my opinion on the financial statements. My conclusions are based on the information available to me at the date of this auditor’s report. However, future events or conditions may cause a public entity to cease operating as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and determine whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Communication with those charged with governance
3. I communicate with the accounting authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.
4. I also confirm to the accounting authority that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to have a bearing on my independence and, where applicable, actions taken to eliminate threats or safeguards applied.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Country of incorporation and domicile South Africa
Nature of business and principal activities The primary object of the Trust is to develop and implement proactive and co-ordinated marketing, communications and reputation management strategies for South Africa. The ultimate aim is to make a contribution towards economic growth, job creation, poverty alleviation and social cohesion by encouraging local and foreign investment, tourism and trade through the promotion of Brand South Africa.
Trustees Thandi Tobias (Chairperson)Andrew MadellaBushang ModipaneRachel KalidassSisanda NkoalaTebogo Mamorobela Mlungisi JohnsonStavros NicolaouMuditambi RaveleLoretta JacobusKeabetswe ModimoengJohannes SebulelaYlva Rodny-GumedeGeoffrey Rothschild
Registered office 103 Central StreetHoughtonJohannesburg2041
Business address 103 Central StreetHoughtonJohannesburg2041
Postal address PO Box 87168Houghton2041
Controlling entity The Presidency
Bankers Nedbank Limited
Auditors Auditor-General South Africa
Trust registration number IT 1986/02
General Information
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Index
The reports and statements set out below comprise the annual financial statements presented to the parliament:\
Page
Statement of Financial Position 76
Statement of Financial Performance 77
Statement of Changes in Net Assets 78
Cash Flow Statement 79
Statement of Comparison of Budget and Actual Amounts 80
Accounting Policies 81
Notes to the Annual Financial Statements 93
The annual financial statements set out on pages 125 to129, have been prepared on the going concern basis.
Johannes Sebulela
On behalf of the Board of Trustees
Annual Report 2019/20 | Brand South Africa 73
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
The Trustees are required by the Public Finance Management Act (Act 1 of 1999), to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is the responsibility of the Trustees to ensure that the annual financial statements fairly present the state of affairs of Brand South Africa as at the end of the financial year and the results of its operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on the annual financial statements and was given unrestricted access to all financial records and related data.
The annual financial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.
The annual financial statements are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.
The Trustees acknowledge that they are ultimately responsible for the system of internal financial control established by the entity and place considerable importance on maintaining a strong control environment. To enable the Trustees to meet these responsibilities, management sets standards for internal control aimed at reducing the risk of error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These
controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards in ensuring the entity’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the entity is on identifying, assessing, managing and monitoring all known forms of risk across the entity. While operating risk cannot be fully eliminated, the entity endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The Trustees are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or deficit.
The Trustees have reviewed the entity’s cash flow forecast for the year to 31 March 2020 and, in the light of this review and the current financial position, they are satisfied that the entity has or has access to adequate resources to continue in operational existence for the foreseeable future.
During the period under review, Brand South Africa was reporting through the then Department ofCommunications (DoC). The entity is wholly dependent on the DoC for continued funding of operations. The annual financial statements are prepared on the basis that Brand South Africa is a going concern and that DoC has neither the intention nor the need to liquidate or curtail materially the scale of the Brand South Africa’s operations.
The annual financial statements set out on pages 76 to 121, which have been prepared on the going concern basis, were approved by the Chairperson of the Board on 11 November 2020 and were signed by:
Thandi Tobias-PokoloChairperson of the Board of TrusteesDate: 11 November 2020
Board of Trustees’s Responsibilities and Approval
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
We are pleased to present our report for the financial year ended 31 March 2020.
Audit and Risk Committee responsibility
The audit and risk committee reports that it has complied with its responsibilities arising from section 55(1)(a) of the PFMA and Treasury Regulation 27.1.
The audit and risk committee also reports that it has adopted appropriate formal terms of reference as its audit committee charter, has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.
The effectiveness of internal control
In line with the PFMA and the King IV Report on Corporate Governance requirements, Internal Audit provides the audit and risk committee and management with assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. Based on the issues reported in the Auditor-General South Africa’s management report that indicate some deficiencies in the system of internal controls, especially around SCM processes, the audit and risk committee believes that the entity’s system of internal controls were partially effective. Management is in the process of addressing the identified weaknesses.
The audit and risk committee is satisfied with the content and quality of monthly and quarterly reports prepared and issued by the management of Brand South Africa during the year under review.
Evaluation of annual financial statements
The audit and risk committee has reviewed and discussed the unaudited annual financial statements to be included in the annual report.• reviewed the Auditor-General of South Africa’s
management report and management’s response thereto;
• reviewed the Brand South Africa’s compliance with legal and regulatory provisions;
• reviewed changes in accounting policies and practices;
• reviewed the entities compliance with legal and regulatory provisions; and
• reviewed significant adjustments resulting from the audit.
The audit and risk committee concur with and accept the Auditor-General of South Africa’s report the annual financial statements, and are of the opinion that the audited annual financial statements should be accepted and read together with the report of the Auditor-General of South Africa.
Internal audit
The audit and risk committee is satisfied that the internal audit function is operating effectively and that it has addressed the risks pertinent to Brand South Africa and its audits.
Rachel KalidassChairperson of the Audit and Risk CommitteeDate: 11 November 2020
Audit and Risk Committee Report
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Note(s)2020
R
2019 Restated
RAssets
Current Assets
Prepayments 9 976,307 681,277
Receivables from exchange transactions 10 1,249,295 1,897,441
Cash and cash equivalents 12 25,859,971 26,666,525
28,085,573 29,245,243
Non-Current Assets
Property, plant and equipment 3 5,174,329 5,026,063
Intangible assets 4&37 9,292,910 10,853,239
Heritage assets 5 170,556 170,556
Other financial assets 6 1,026,268 995,974
Operating lease asset 7 – 7,985
15,664,063 17,053,817
Total Assets 43,749,636 46,299,060
Liabilities
Current Liabilities
Operating lease liability 7 796,297 1,029,660
Payables from exchange transactions 14&37 16,544,289 23,867,418
Provisions 13 10,987,695 10,210,332
28,328,281 35,107,413
Total Liabilities 28,328,281 35,107,413
Net Assets 15,421,355 11,191,647
Accumulated surplus 15,421,355 11,191,647
The accounting policies on pages 8 1 to 93 and the notes on pages 94 to 121 form an integral part of the annual financial statements.
Statement of Financial Position
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Note(s)2020
R
2019 Restated*
RRevenue
Revenue from exchange transactions
Other income 16 674,654 65,787
Partnership income 17 300,000 12,167,117
Finance income 18 1,335,633 1,695,839
Total revenue from exchange transactions 2,310,287 13,928,743
Transfer revenue
Government grants 15 207,914,000 200,430,000
Total revenue 15 210,224,287 214,358,743
Expenditure
Employee related costs 19 68,647,932 66,404,597
Activation fees 22 56,439,163 70,574,973
Depreciation and amortisation 3&4 4,711,168 4,222,389
Lease rentals on operating lease 24 4,000,404 4,153,639
Debt Impairment 11 179,000 544
Research fees 22 3,103,332 7,495,717
Branding and collateral 22 3,008,156 5,897,199
Media Buy 22 17,441,349 30,051,604
Loss on foreign exchange 24 280,657 458,426
Loss on disposal of assets 24 – 94,388
Agency fees 22 8,393,995 9,735,040
General Expenses 21 39,789,423 30,956,902
Total expenditure 205,994,579 230,045,418
Surplus/(Deficit) for the period 4,229,708 (15,686,675)
Statement of Financial Performance
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accumulatedsurplus
R
Total netassets
ROpening balance as previously reported 30,120,156 30,120,156
Adjustments
Correction of errors 1,360,796 1,360,796
Balance at 01 April 2018 as restated* 31,480,953 31,480,953
Deficit for the year (18,139,493) (18,139,493)
Transfer of surplus funds to National Treasury (4,602,629) (4,602,629)
Correction of errors 2,452,816 2,452,816
Total changes (20,289,306) (20,289,306)
Restated* Balance at 01 April 2019 11,191,647 11,191,647
Surplus for the year 4,229,708 4,229,708
Total changes 4,229,708 4,229,708
Balance at 31 March 2020 15,421,355 15,421,355
Statement of Changes in Net Assets
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Note(s)2020
R
2019 Restated*
RCash flows from operating activities
Receipts
Grant allocation 207,914,000 200,430,000
Finance income 1,313,906 1,621,117
Other receipts 974,654 11,806,302
Total receipts 210,202,560 213,857,419
Payments
Employee costs (68,007,053) (63,934,542)
Suppliers (139,702,956) (145,104,314)
Total payments (207,710,009) (209,038,856)
Net cash outflows from operating activities 26 2,492,551 4,818,563
Cash flows from investing activities
Purchase of property, plant and equipment 3 (2,701,106) (1,154,054)
Purchase of other intangible assets 4 (598,000) (117,964)
Net cash outflows from investing activities (3,299,106) (1,272,018)
Cash flows from financing activities
Payment to National Treasury – (4,602,629)
Net increase (decrease) in cash and cash equivalents (806,555) (1,541,737)
Cash and cash equivalents at the beginning of the year 26,666,525 28,208,262
Cash and cash equivalents at the end of financial year 12 25,859,970 26,666,525
Cash Flow Statement
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Budget on Cash Basis
Approvedbudget
RAdjustments
R
FinalBudget
R
Actualamounts oncomparable
basisR
Difference between
final budge and actual
R ReferenceStatement of Financial Performance
Revenue
Revenue from exchange transactions
Other income – 674,654 674,654 674,654 –
Partnership Income – 300,000 300,000 300,000 –
Interest received – investment – 1,335,633 1,335,633 1,335,633 –
Total revenue from exchange transactions – 2,310,287 2,310,287 2,310,287 –
Revenue from non-exchange transactions
Transfer revenue
Government grants & subsidies 207,914,000 – 207,914,000 207,914,000 –
Expenditure
Personnel (71,144,000) – (71,144,000) (68,647,932) 2,496,068 (i)
Brand Communication and Reputation Costs (105,246,000) – (105,246,000) (99,081,758) 6,164,242 (iii)
Capital Expenditure (3,274,000) – (3,274,000) (3,299,106) (25,106)
Operating Expenses (28,250,000) – (28,250,000) (33,250,689) (5,000,689) (ii)
Total expenditure (207,914,000) – (207,914,000) (204,279,485) 3,634,515
Basis difference
Depreciation & amortisation (4,711,168)
Loss on foreign exchange (239,252)
Capital Expenditure 3,299,106
Actual Amount in the Statement of Financial Performance 4,229,709
(i) The personnel budget savings were due to the vacancies and the moratorium that was placed on vacancies.(ii) The expenditure in operating costs was due to reduction in anticipated legal and consulting fees.(iii) Brand, Communication and Reputation cost budget was underspent due to the tender cancellation for Digital and PR agency.
Statement of Comparison of Budget and Actual Amounts
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies
1. Presentation of Annual Financial Statements
The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act (Act 1 of 1999).
These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention as the basis of measurement, unless specified otherwise. They are presented in South African Rand.
A summary of the significant accounting policies, which have been consistently applied in the preparation of these annual financial statements, are disclosed below.
These accounting policies are consistent with the previous period.
1.1 Presentation currency
These annual financial statements are presented in South African Rand, which is the functional currency of the entity.
1.2 Going concern assumption
These annual financial statements have been prepared based on the expectation that the entity will continue to operate as a going concern for at least the next 12 months
1.3 Significant judgements and sources of estimation uncertainty
In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgment is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgments include:
Trade receivablesThe entity assesses its trade and other receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the surplus or deficit makes judgments as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.
The impairment for trade and other receivables is calculated on an individual basis, based on historical performance, adjusted for specific current economic conditions and other indicators present at the reporting date that correlate with the defaults on the debtor.
Fair value estimationThe carrying value less impairment provision of trade receivables and payables is assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the entity for similar financial instruments.
Impairment testingThe entity reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. These are based on estimated fair values and or value in use for each asset or group of assets.
ProvisionsIn all provisions raised, management determined an estimate based on the information available.
Useful lives of assetsThe entity’s management determines the estimated useful lives and related depreciation charges for property,plant and equipment as well as intangibles assets. Management adjusts the depreciation charge where useful lives are different from previously estimated useful lives.
Allowance for doubtful debtsOn debtors an impairment loss is recognised in surplus and deficit when there is objective evidence that it is impaired. The impairment is measured as the difference between the debtors carrying amount and the present value of estimated future cash flows discounted at the effective interest rate, computed at initial recognition.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued
1.4 Property, plant and equipment
Property, plant and equipment are tangible non-current assets that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.
The cost of an item of property, plant and equipment is recognised as an asset when:• it is probable that future economic benefits or
service potential associated with the item will flow to the entity; and
• the cost of the item can be measured reliably.
Property, plant and equipment is initially measured at cost.
The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.
Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition.
Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, it’s deemed cost is the carrying amount of the asset(s) given up.
When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.
Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management.
Items such as spare parts, standby equipment and servicing equipment are recognised when they meet the definition of property, plant and equipment.
Property, plant and equipment are depreciated on the straight line basis over their expected useful lives. Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.
The useful lives of items of property, plant and equipment have been assessed as follows:
Item Depreciation method
Average useful life
Leasehold improvements Straight line Lease term
Furniture and fixtures Straight line 10 – 17 years
Motor vehicles Straight line 5 years
Office equipment Straight line 5 – 13 years
IT equipment Straight line 2 – 10 years
Finance leased office equipment Straight line Lease term
The depreciable amount of an asset is allocated on a systematic basis over its useful life.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.
The depreciation method used reflects the pattern in which the asset’s future economic benefits or service potential are expected to be consumed by the entity. The depreciation method applied to an asset is reviewed at least at each reporting date and, if there has been a significant change in the expected pattern of consumption of the future economic benefits or service potential embodied in the asset, the method is changed to reflect the changed pattern. Such a change is accounted for as a change in an accounting estimate.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued
1.4 Property, plant and equipment (continued)
Brand South Africa assesses at each reporting date whether there is any indication that the entity expectations about the residual value and the useful life of an asset have changed since the preceding reporting date. If any such indication exists, entity revises the expected useful life and/or residual value accordingly. The change is accounted for as a change in an accounting estimate.
The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset.
Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use of the asset.
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
Brand South Africa separately discloses expenditure to repair and maintain property, plant and equipment in the notes to the financial statements.
1.5 Intangible assets
An intangible asset is recognised when:• it is probable that the expected future economic
benefits or service potential that are attributable to the asset will flow to the entity; and
• the cost or fair value of the asset can be measured reliably.
Brand South Africa assesses the probability of expected future economic benefits or service potential using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.
Where an intangible asset is acquired through a non-exchange transaction, its initial cost at the date of acquisition is measured at its fair value as at that date.
Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised when:• it is technically feasible to complete the asset so that
it will be available for use or sale;• there is an intention to complete and use or sell it;• there is an ability to use or sell it;• it will generate probable future economic benefits
or service potential; and• there are available technical, financial and other
resources to complete the development and to use or sell the asset.
• the expenditure attributable to the asset during its development can be measured reliably.
Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.
Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.
Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:
Item Depreciation method
Average useful life
Computer software and licences Straight line 3 – 10 years
Mobile application Indefinite
Intangible assets are derecognised: • on disposal; or• when no future economic benefits or service
potential are expected from its use or disposal.
The gain or loss arising from the derecognition of intangible assets is included in surplus or deficit when the asset is derecognised.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued
1.6 Heritage assets
Class of heritage assets means a grouping of heritage assets of a similar nature or function in an entity’s operations that is shown as a single item for the purpose of disclosure in the annual financial statements.
Heritage assets are assets that have a cultural, environmental, historical, natural, scientific, technological or artistic significance and are held indefinitely for the benefit of present and future generations.
RecognitionThe entity recognises a heritage asset as an asset if it is probable that future economic benefits or service potential associated with the asset will flow to the entity, and the cost or fair value of the asset can be measured reliably.
Initial measurementHeritage assets are measured at cost.
Where a heritage asset is acquired through a non-exchange transaction, its cost is measured at its fair value as at the date of acquisition.
Subsequent measurementAfter recognition as an asset, a class of heritage assets is carried at its cost less any accumulated impairment losses.
ImpairmentThe entity assesses at each reporting date whether there is an indication that heritage assets may be impaired. If any such indication exists, the entity estimates the recoverable amount or the recoverable service amount of the heritage asset.
TransfersTransfers from heritage assets are only made when the particular asset no longer meets the definition of a heritage asset.
Transfers to heritage assets are only made when the asset meets the definition of a heritage asset.
DerecognitionThe entity derecognises heritage asset on disposal, or when no future economic benefits or service potential are expected from its use or disposal.
The gain or loss arising from the derecognition of a heritage asset is included in surplus or deficit or deficit when the item is derecognised (unless the Standard of GRAP on leases requires otherwise on a sale and leaseback).
1.7 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity.
The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility.
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
Derecognition is the removal of a previously recognised financial asset or financial liability from an entity’s Statement of Financial Position.
A derivative is a financial instrument or other contract with all three of the following characteristics:
• Its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the ‘underlying’).
• It requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors.
• It is settled at a future date.
A financial asset is:• cash;• a residual interest of another entity; or• a contractual right to: – receive cash or another financial asset from
another entity; or – exchange financial assets or financial liabilities
with another entity under conditions that are potentially favourable to entity.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued
1.7 Financial instruments (continued)
A financial liability is any liability that is a contractual obligation to:• deliver cash or another financial asset to another
entity; or• exchange financial assets or financial liabilities under
conditions that are potentially unfavourable to entity.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
Liquidity risk is the risk encountered by entity in the event of difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
A financial asset is past due when a counterparty has failed to make a payment when contractually due.
Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument.
Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial liabilities that have fixed or determinable payments, excluding those instruments that:• entity designates at fair value at initial recognition.
Financial instruments at cost are investments in residual interests that do not have a quoted market price in an active market, and whose fair value cannot be reliably measured.
ClassificationBrand South Africa has the following types of financial assets (classes and category) as reflected on the face of the Statement of Financial Position or in the notes thereto:
Class CategoryCash and cash equivalents
Financial assets measured at fair value
Receivables from exchange transactions
Financial assets measured at fair value
Other financial assets Financial assets measured at fair value
Brand South Africa has the following types of financial liabilities (classes and category) as reflected on the face of the Statement of Financial Position or in the notes thereto:
Class CategoryPayables from exchange transactions
Financial liability measured at fair value
Lease liabilities Financial liability measured at fair value
Initial recognitionBrand South Africa recognises a financial asset or a financial liability in its Statement of Financial Position when the entity becomes a party to the contractual provisions of the instrument.
Subsequent measurement of financial assets and financial liabilitiesThe entity measures all financial assets and financial liabilities after initial recognition using the following categories:• Financial instruments at amortised cost.
All financial assets measured at amortised cost, or cost, are subject to an impairment review.
Gains and lossesA gain or loss arising from a change in the fair value of a financial asset or financial liability measured at fair value is recognised in surplus or deficit.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued
1.7 Financial instruments (continued)
For financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired, or through the amortisation process.
Impairment and uncollectibility of financial assetsThe entity assesses at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired.
Financial assets measured at amortised cost:
If there is objective evidence that an impairment loss on financial assets measured at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in surplus or deficit.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is by adjusting an allowance account. The reversal does not result in a carrying amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in surplus or deficit.
Financial assets measured at cost:
If there is objective evidence that an impairment loss has been incurred on an investment in a residual interest that is not measured at fair value because its fair value cannot be measured reliably, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed.
Derecognition
Financial assetsThe entity derecognises financial assets using trade date accounting.
The entity derecognises a financial asset only when:• the contractual rights to the cash flows from the
financial asset expire, are settled or waived;• entity transfers to another party substantially all of
the risks and rewards of ownership of the financial asset; or
• entity, despite having retained some significant risks and rewards of ownership of the financial asset, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party, and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. In this case, entity:
– derecognise the asset; and – recognise separately any rights and obligations
created or retained in the transfer.
The carrying amounts of the transferred asset are allocated between the rights or obligations retained and those transferred on the basis of their relative fair values at the transfer date. Newly created rights and obligations are measured at their fair values at that date. Any difference between the consideration received and the amounts recognised and derecognised is recognised in surplus or deficit in the period of the transfer.
If Brand South Africa transfers a financial asset in a transfer that qualifies for derecognition in its entirety and retains the right to service the financial asset for a fee, it recognise either a servicing asset or a servicing liability for that servicing contract. If the fee to be received is not expected to compensate the entity adequately for performing the servicing, a servicing liability for the servicing obligation is recognised at its fair value. If the fee to be received is expected to be more than adequate compensation for the servicing, a servicing asset is recognised for the servicing right at an amount determined on the basis of an allocation of the carrying amount of the larger financial asset.
If, as a result of a transfer, a financial asset is derecognised in its entirety but the transfer results in the entity obtaining a new financial asset or assuming a new financial liability, or a servicing liability, the entity recognise the new financial asset, financial liability or servicing liability at fair value.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued1.7 Financial instruments (continued)
If the transferred asset is part of a larger financial asset and the part transferred qualifies for derecognition in its entirety, the previous carrying amount of the larger financial asset is allocated between the part that continues to be recognised and the part that is derecognised, based on the relative fair values of those parts, on the date of the transfer. For this purpose, a retained servicing asset is treated as a part that continues to be recognised. The difference between the carrying amount allocated to the part derecognised and the sum of the consideration received for the part derecognised is recognised in surplus or deficit .
If a transfer does not result in derecognition because entity has retained substantially all the risks and rewards of ownership of the transferred asset, entity continues to recognise the transferred asset in its entirety and recognise a financial liability for the consideration received. In subsequent periods, entity recognises any revenue on the transferred asset and any expense incurred on the financial liability. Neither the asset, and the associated liability nor the revenue, and the associated expenses are offset.
Financial liabilitiesBrand South Africa removes a financial liability (or a part of a financial liability) from its Statement of Financial Position when it is extinguished — i.e. when the obligation specified in the contract is discharged, cancelled, expires or waived.
An exchange between an existing borrower and lender of debt instruments with substantially different terms is accounted for as having extinguished the original financial liability and a new financial liability
is recognised. Similarly, a substantial modification of the terms of an existing financial liability or a part of it is accounted for as having extinguished the original financial liability and having recognised a new financial liability.
The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in surplus or deficit. Any liabilities that are waived, forgiven or assumed by another entity by way of a non-exchange transaction are accounted for in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers).
PresentationInterest relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.
Losses and gains relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit .
A financial asset and a financial liability are only offset and the net amount presented in the Statement of Financial Position when the entity currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
In accounting for a transfer of a financial asset that does not qualify for derecognition, the entity does not offset the transferred asset and the associated liability.
1.8 Tax
Tax expensesBrand South Africa is exempt from taxation by the South African Revenue Services (SARS) in terms of Section 10 (1)(ca)(1) of the Income Tax 58 of 1962 as amended.
1.9 Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.
When a lease includes both land and buildings elements, the entity assesses the classification of each element separately.
Finance leases – lesseeFinance leases are recognised as assets and liabilities in the Statement of Financial Position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.
The discount rate used in calculating the present value of the minimum lease payments is Brand South Africa’s incremental borrowing rate.
Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of on the remaining balance of the liability.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued
1.9 Leases (continued)
Any contingent rents are expensed in the period in which they are incurred.
Operating leases – lesseeOperating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.
1.10 Employee benefits
Employee benefits are all forms of consideration given by entity in exchange for service rendered by employees.
A qualifying insurance policy is an insurance policy issued by an insurer that is not a related party (as defined in the Standard of GRAP on Related Party Disclosures) of entity, if the proceeds of the policy can be used only to pay or fund employee benefits under a defined benefit plan and are not available to entity’s own creditors (even in liquidation) and cannot be paid to entity, unless either:• the proceeds represent surplus assets that are
not needed for the policy to meet all the related employee benefit obligations; or
• the proceeds are returned to entity to reimburse it for employee benefits already paid.
Termination benefits are employee benefits payable as a result of either:• entity’s decision to terminate an employee’s
employment before the normal retirement date; or• an employee’s decision to accept voluntary
redundancy in exchange for those benefits.
Other long-term employee benefits are employee benefits (other than post-employment benefits and termination benefits) that are not due to be settled within twelve months after the end of the period in which the employees render the related service.
Vested employee benefits are employee benefits that are not conditional on future employment.
Composite social security programmes are established by legislation and operate as multi-employer plans to provide post-employment benefits as well as to provide benefits that are not consideration in exchange for service rendered by employees.
A constructive obligation is an obligation that derives from entity’s actions where by an established pattern of past practice, published policies or a sufficiently specific current statement, entity has indicated to other parties that it will accept certain responsibilities and as a result, entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
Short-term employee benefitsShort-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service..
Short-term employee benefits include items such as:• wages, salaries and social security contributions;• short-term compensated absences (such as paid
annual leave and paid sick leave) where the compensation for the absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service;
• bonus, incentive and performance related payments payable within twelve months after the end of the reporting period in which the employees render the related service; and
• non-monetary benefits (for example, medical care, and free or subsidised goods or services such as housing, cars and cellphones) for current employees.
When an employee has rendered service to Brand South Africa during a reporting period, the entity recognise the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service:• as a liability (accrued expense), after deducting any
amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and
• as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.
The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The entity measures the expected cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued1.10 Employee benefits (continued)
The entity recognise the expected cost of bonus, incentive and performance related payments when entity has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the Brand South Africa has no realistic alternative but to make the payments.
A present obligation exists when Brand South Africa has no realistic alternative but to make payments.
Post-employment benefitsPost-employment benefits are employee benefits (other than termination benefits) which are payable after the completion of employment.
Post-employment benefit plans are formal or informal arrangements under which entity provides post- employment benefits for one or more employees.
Post-employment benefits: Defined contribution plansDefined contribution plans are post-employment benefit plans under which entity pays fixed contributions into a Sanlam umbrella fund and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service to entity during a reporting period, entity recognises the contribution payable to a defined contribution plan in exchange for that service:
• as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the reporting date, an entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and
• as an expense, unless another Standard requires or permits the inclusion of the contribution in the cost of an asset.
Where contributions to a defined contribution plan do not fall due wholly within twelve months after the end of the reporting period in which the employees render the related service, they are discounted. The rate used to discount reflects the time value of money. The currency and term of the financial instrument selected to reflect the time value of money is consistent with the currency and estimated term of the obligation.
1.11 Provisions and contingencies
Provisions are recognised when:• the entity has a present obligation as a result of a
past event;• it is probable that an outflow of resources
embodying economic benefits or service potential will be required to settle the obligation; and
• a reliable estimate can be made of the obligation.
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.
Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation.
The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the obligation.
Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as an interest expense.
A provision is used only for expenditures for which the provision was originally recognised.
Provisions are not recognised for future operating surplus (deficit).
If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision.
Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 28.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued
1.12 Commitments
Items are classified as commitments when an entity has committed itself to future transactions that will normally result in the outflow of cash.
Disclosures are required in respect of unrecognised contractual commitments.
Commitments for which disclosure is necessary to achieve a fair presentation should be disclosed in a note to the financial statements, if both the following criteria are met:• contracts should be non-cancellable or only
cancellable at significant cost (for example, contracts for computer or building maintenance services); and
• contracts should relate to something other than the routine, steady, state business of the entity – therefore salary commitments relating to employment contracts or social security benefit commitments are excluded.
1.13 Revenue from exchange transactions
Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.
MeasurementRevenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.
1.14 Revenue from non-exchange transactions
Revenue comprises gross inflows of economic benefits or service potential received and receivable by an entity, which represents an increase in net assets, other than increases relating to contributions from owners.
Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be returned to the transferor.
Control of an asset arise when entity can use or otherwise benefit from the asset in pursuit of its objectives and can exclude or otherwise regulate the access of others to that benefit.
RecognitionAn inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow.
The entity satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non- exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.
MeasurementRevenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity.
When, as a result of a non-exchange transaction,the entity recognises an asset, it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When a liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the liability is recognised as revenue.
1.15 Finance income
Finance income is recognised on a time-proportion basis using the effective interest method.
1.16 Translation of foreign currencies
Foreign currency transactionsA foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
At each reporting date:• foreign currency monetary items are translated
using the closing rate;• non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and
• non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued1.16 Translation of foreign currencies (continued)
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in surplus or deficit in the period in which they arise.
When a gain or loss on a non-monetary item is recognised directly in net assets, any exchange component of that gain or loss is recognised directly in net assets. When a gain or loss on a non-monetary item is recognised in surplus or deficit , any exchange component of that gain or loss is recognised in surplus or deficit.
Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.
1.17 Comparative figures
Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current year.
1.18 Fruitless and wasteful expenditure
Fruitless expenditure means expenditure which was made in vain and could have been avoided had reasonable care been exercised.
All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the Statement
of Financial Performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the Statement of Financial Performance.
1.19 Irregular expenditure
Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including:(a) this Act;(b) the State Tender Board Act, 1968 (Act No. 86 of
1968), or any regulations made in terms of the Act; or
(c) any provincial legislation providing for procurement procedures in that provincial government.
National Treasury practice note no. 4 of 2008/2009 which was issued in terms of sections 76(1) to 76(4) of the PFMA requires the following (effective from 1 December 2018):
Irregular expenditure that was incurred and identified during the current financial and which was condoned before year end and/or before finalisation of the financial statements must also be recorded appropriately in the irregular expenditure register. In such an instance, no further action is also required with the exception of updating the note to the financial statements.
Irregular expenditure that was incurred and identified during the current financial year and for which condonement is being awaited at year end must be
recorded in the irregular expenditure register. No further action is required with the exception of updating the note to the financial statements.
Where irregular expenditure was incurred in the previous financial year and is only condoned in the following financial year, the register and the disclosure note to the financial statements must be updated with the amount condoned.
Irregular expenditure that was incurred and identified during the current financial year and which was not condoned by the National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accounting officer or accounting authority may write off the amount as debt impairment and disclose such in the relevant note to the financial statements. The irregular expenditure register must also be updated accordingly. If the irregular expenditure has not been condoned and no person is liable in law, the expenditure related thereto must remain against the relevant programme/expenditure item, be disclosed as such in the note to the financial statements and updated accordingly in the irregular expenditure register.
1.20 Budget information
Brand South Africa is typically subject to budgetary limits in the form of appropriations or budget authorisations (or equivalent), which is given effect through authorising legislation, appropriation or similar.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Accounting Policies continued
1.20 Budget information (continued)
General purpose financial reporting by entity shall provide information on whether resources were obtained and used in accordance with the legally adopted budget.
The approved budget is prepared on a accrual basis and presented by economic classification linked to performance outcome objectives.
The approved budget covers the fiscal period from 01/04/2019 to 31/03/2020.
The annual financial statements and the budget are on the same basis of accounting therefore a comparison with the budgeted amounts for the reporting period have been included in the Statement of comparison of budget and actual amounts.
Comparative information is not required.
1.21 Related parties
Management are those persons responsible for planning, directing and controlling the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions.
Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, that management in their dealings with the entity.
Only transactions with related parties not at arm’s length or not in the ordinary course of the business are disclosed.
1.22 Events after reporting date
Events after reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Two types of events can be identified:• those that provide evidence of conditions that
existed at the reporting date (adjusting events after the reporting date); and
• those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting date).
Brand South Africa will adjust the amount recognised in the financial statements to reflect adjusting events after the reporting date once the event occurred.
Brand South Africa will disclose the nature of the event and an estimate of its financial effect or a statement that such estimate cannot be made in respect of all material non-adjusting events, where non-disclosure could influence the economic decisions of users taken on the basis of the financial statements.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements
2. New standards and interpretations
2.1 Standards and interpretations issued, but not yet effective
The entity has not applied the following standards and interpretations, which have been published and are mandatory for the entity’s accounting periods beginning on or after 01 April 2020 or later periods:
Standard/Interpretation:Effective date:Years beginning on or after Expected impact:
• IGRAP 20: Accounting for Adjustments to Revenue 01 April 2020 Not expected to impact results but may result in additional disclosure
• GRAP 1 (amended): Presentation of Financial Statements 01 April 2020 Impact is currently being assessed
• GRAP 34: Separate Financial Statements 01 April 2020 Unlikely there will be a material impact
• IGRAP 1 (revised): Applying the Probability Test on Initial Recognition of Revenue
01 April 2020 Not expected to impact results but may result in additional disclosure
• GRAP 109: Accounting by Principals and Agents 01 April 2020 Unlikely there will be a material impact
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
3. Property, plant and equipment2020 2019
Cost R
Accumulated depreciation
andaccumulated impairment
R
Carrying value
RCost
R
Accumulated depreciation
and accumulated impairment
R
Carrying value
RLeasehold property 1,443,991 (1,156,221) 287,770 1,443,991 (940,394) 503,597
Furniture and fixtures 2,389,385 (1,665,796) 723,589 2,365,176 (1,381,908) 983,268
Motor vehicles 1,055,976 (787,629) 268,347 1,055,976 (576,433) 479,543
Office equipment 4,381,879 (1,940,960) 2,440,919 2,708,718 (1,549,880) 1,158,838
IT equipment 5,576,066 (4,122,362) 1,453,704 4,859,409 (2,958,592) 1,900,817
Total 14,847,297 (9,672,968) 5,174,329 12,891,438 (7,865,375) 5,026,063
Reconciliation of property, plant and equipment – 2020
Opening balance Additions Depreciation TotalLeasehold property 503,597 – (215,827) 287,770
Furniture and fixtures 983,268 24,209 (283,888) 723,589
Motor vehicles 479,543 – (211,196) 268,347
Office equipment 1,158,838 1,960,241 (678,160) 2,440,919
IT equipment 1,900,817 716,656 (1,163,769) 1,453,704
5,026,063 2,701,106 (2,552,840) 5,174,329
Reconciliation of property, plant and equipment – 2019 Opening balance Additions Disposals Depreciation TotalLeasehold property 719,452 – – (215,855) 503,597
Furniture and fixtures 1,245,249 19,427 – (281,408) 983,268
Motor vehicles 690,738 – – (211,195) 479,543
Office equipment 1,492,478 112,457 (32,478) (413,619) 1,158,838
IT equipment 1,997,094 1,058,762 (83,489) (1,071,550) 1,900,817
6,145,011 1,190,646 (115,967) (2,193,627) 5,026,063
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
4. Intangible assets
31 March 2020 31 March 2019
Cost R
Accumulated amortisation
andaccumulated impairment
R
Carrying value
RCost
R
Accumulated amortisation
andaccumulated impairment
R
Carrying value
R
Computer software, other 15,046,776 (6,178,866) 8,867,910 14,873,776 (4,020,537) 10,853,239
Mobile application 425,000 – 425,000 – – –
Total 15,471,776 (6,178,866) 9,292,910 14,873,776 (4,020,537) 10,853,239
Reconciliation of intangible assets – 2020
Opening balance Additions Amortisation TotalComputer software 10,853,239 173,000 (2,158,329) 8,867,910
Mobile application – 425,000 – 425,000
10,853,239 598,000 (2,158,329) 9,292,910
Reconciliation of intangible assets – 2019
Opening balance Additions Transfers Amortisation TotalComputer software 7,584,447 117,964 5,158,016 (2,007,188) 10,853,239
ERP Development-WIP 5,158,016 – (5,158,016) – –
12,742,463 117,964 – (2,007,188) 10,853,239
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
5. Heritage assets31 March 2020 31 March 2019
Cost/Valuation
R
Accumulated impairment
lossesR
Carryingvalue
R
Cost/Valuation
R
Accumulated impairment
lossesR
Carryingvalue
RArt Collections 170,556 – 170,556 170,556 – 170,556
Reconciliation of heritage assets 2020
Opening balance TotalArt Collections 170,556 170,556
Reconciliation of heritage assets – 2019
Opening balance TotalArt Collections 170,556 170,556
Heritage assets The heritage assets comprise of works of art such as collage mirrors, beaded mirrors, beaded sable, sculptures, paintings and jewelled bowls. These items were classified as heritage assets because they meet the definition criteria of GRAP 103.
6. Other financial assets2020
R2019
RAt amortised cost
Deposits paid on leased property – opening balance 995,974 966,575
Interest earned 30,294 29,399
1,026,268 995,974
Financial assets pledged as collateral
Collateral
Carrying value of financial assets pledged as collateral for liabilities or contingent liabilities 1,026,268 995,974
Details of the reclassification is as follows: The deposit is held as a collateral by the lessor for premises currently being leased by Brand South Africa for its Head office situated at 103 Central Street, Houghton for a period of five years from 1 August 2016 ending 31 July 2021.
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Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
2020 R
2019 R
7. Operating lease asset (accrual)
Current assets – 7,985
Current liabilities (796,297) (1,029,660)
(796,297) (1,021,675)
Operating lease liabilities arise from straight – lining of payments under the operating lease.
8. Employee benefit obligations
Defined contribution planIt is the policy of Brand South Africa to provide retirement benefits to all its permanent employees. Brand South Africa operates a defined contribution provident fund, which is subject to the Pensions Fund Act. The Fund is administered by Sanlam as an Umbrella Fund because of its size. Under the current arrangements both the employee and employer contributes 7.5% of retirement funding with the employer funding the operating costs over and above the retirement contributions.
Brand South Africa is under no obligation to cover any unfunded benefits.
The amount recognised as an expense for defined contribution plans 3,572,200 3,782,348
Total number of employees participating in the plan 44 49
9. Prepayments
Computer software 976,307 681,277
10. Receivables from exchange transactions
Trade debtors 1,004,545 1,593,964
Income accrued 153,965 132,238
Staff debt 68,210 271,959
Other receivables 22,575 (100,720)
1,249,295 1,897,441
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10. Receivables from exchange transactions (continued)
Trade receivables past dueTrade receivables which are less than three months overdue are not considered for impairment. Trade receivables mainly comprise of partnerships contributions from Multichoice, Old Mutual and dti.
2020 R
2019 R
Total carrying amounts of trade receivables
Trade debtors 1,004,545 1,593,964
Ageing receivables – March 2020 Current 30 days 60 days > 90 days TotalTrade receivables 1,004,545 – – – 1,004,545
Ageing receivables – March 2019 Current 30 days 60 days > 90 days TotalTrade receivables 1,593,964 – – – 1,593,964
Receivables impairedThe ageing of the trade receivables impaired is as follows:
2020 R
2019 R
Over six months – 155,000
Reconciliation of provision for impairment of trade receivables
Opening balance 135,000 155,000
Reversal of provision (135,000) (20,000)
– 135,000
Reconciliation of provision for impairment of other receivables
Opening balance 170,934 336,578
Reversal of provision (170,934) (165,644)
– 170,934
The creation and release of provision for impaired receivables has been included in the operating expenses note. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.
The maximum exposure to credit risk at the reporting date is the fair value of receivables above. Brand South Africa does not hold any collateral as security.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2020 R
2019 R
11. Debt impairment
Debt impairment 179,000 544
12. Cash and cash equivalents
Cash and cash equivalents consist of:
Bank balances 25,856,149 26,656,660
Cash on hand 3,822 9,865
25,859,971 26,666,525
Credit quality of cash at bank and short term deposits, excluding cash on hand
Credit rating
Nedbank: Ba1 25,856,149 26,656,660
13. Provisions
Reconciliation of provisions – 31 March 2020
Opening Balance AdditionsUtilised during
the year TotalLeave provision 3,323,645 1,586,895 (1,596,924) 3,313,616
Bonus provision 6,886,687 6,365,153 (5,600,136) 7,651,704
Provision for doubftul debts – 22,375 – 22,375
10,210,332 7,974,423 (7,197,060) 10,987,695
Reconciliation of provisions – 31 March 2019
Opening Balance AdditionsUtilised during
the yearReversed during
the year TotalLeave provision 1,901,642 3,433,986 (2,011,983) – 3,323,645
Bonus provision 6,409,068 6,886,687 (5,417,496) (991,572) 6,886,687
8,310,710 10,320,673 (7,429,479) (991,572) 10,210,332
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 99
13. Provisions (continued)
The leave provision relates to employees’ accumulated leave at year end. The provision is based on the assumption that employees will commute leave on demand and on resignation.
The bonus provision relates to Brand South Africa’s best estimate for performance related bonus payment at year end. The performance bonuses have been determined using the Brand South Africa’s performance bonus policy.
2020 R
2019 R
14. Payables from exchange transactions
Trade payables 9,284,591 17,808,625Salary related payables 411,059 646,914Accrued operating expenses 6,848,639 3,035,346Sundry creditors – 30,624Accrued capex expenses – 2,345,912Total 16,544,289 23,867,421
Ageing of trade payablesCurrent 9,284,591 14,306,11530 Days - 3,502,510
9,284,591 17,808,625Trade payables include the following suppliers with significant account balance:
Brand Fusion (Pty) Ltd – 4,217,206Ebony and Ivory Advertising Marketing Promotions (Pty) Ltd 4,396,856 5,631,822FTI Consulting South Africa (Pty) Ltd – 732,951Atlantis – 909,797African Response 1,099,456 –
5,496,312 11,491,780Accrued operating expenses include the following suppliers with significant account balance: FTI – 1,009,290Department of labour-WCF – 1,297,704
– 2,306,999Accrued capex expenses include the following suppliers: Vodacom Cellphone – 317,466Technobrain-ERP – 2,028,446
– 2,345,912
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2020 R
2019 R
15. Total Revenue
Other income 674,654 65,787
Partnership income – related parties 300,000 12,167,117
Interest received – investment 1,335,633 1,695,839
Government grant 207,914,000 200,430,000
210,224,287 214,358,743
The amount included in revenue arising from exchanges of goods or services are as follows:
Other income 674,654 65,787
Partnership income – related parties 300,000 12,167,117
Interest received – investment 1,335,633 1,695,839
2,310,287 13,928,743
The amount included in revenue arising from non-exchange transactions is as follows:
Transfer revenue
Government grants – unconditional 207,914,000 200,430,000
16. Other income
Proceeds on insurance claim 30,337 31,100
Royalties-Brand South Africa image library – 364
Supplier discounts and recovered amounts 148,662 –
MICT Grant 495,655 34,323
674,654 65,787
MICT grant received in the current financial year is for the 7 interns recruited in March 2019. This is a conditional grant reserved to pay for their stipends.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 101
2020 R
2019 R
17. Partnership income
SAPBA Partnership Income – DTI – 2,916,775
WEF Davos Partnesrhip Income – Multichoice/Old Mutual – 1,000,000
BRICS Partnership Income – DTI – 8,250,342
MTN Partnership Income 300,000 –
300,000 12,167,117
18. Investment revenue
Interest revenue
Cash and bank deposits 1,335,633 1,666,440
Financial instruments held at amortised cost – 29,399
1,335,633 1,695,839
The total interest income earned by Brand South Africa is from both current and call accounts at an average interest rate of 5% per annum (March 2019: 5.25%) as well as interest earned from financial instruments carried at amortised cost whose average interest is 3% (2019: 3%). Brand South Africa invests its money with Nedbank which has a Ba1 rating.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2020 R
2019 R
19. Employee related costs
Basic (i) 48,426,328 48,642,909
Bonus 5,653,137 5,895,114
Medical aid – company contributions 644,759 600,863
UIF 102,929 98,078
WCA 313,125 –
SDL 519,924 522,068
Defined contribution plans (ii) 3,572,200 3,782,348
Travel, motor car, accommodation, subsistence and other allowances 156,798 –
Overtime payments (iii) 4,890 20,354
Acting allowances (iv) 2,683,354 745,389
Travel allowance 1,136,323 516,000
Cost of living allowance -COLA (v) 5,434,165 5,581,474
68,647,932 66,404,597
(i) The basic salaries decreased due to the savings realised on vacant positions.(ii) The defined contribution plan decreased due to the decrease in salaries as well decrease in pension fund group benefit rates contributions.(iii) Overtime allowance significantly reduced due to the reduction in projects for repairs and maintenance.(iv) Acting allowance significantly increased due to the suspensions of three executives positions, CMO, CFO and CEO.(v) Cost of living allowance increased due to currency fluctuations as a result of a weakening Rand value. The cost of living allowance is paid to the country managers in the UK, China and
USA as part of their employment contract on a monthly basis.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 103
2020 R
2019 R
19. Employee related costs (continued)
Remuneration of Acting Chief Executive Officer – T.G Manzini ( 09 April 2019 – to date)Annual Remuneration 1,494,545 –
Acting Allowance 1,748,015 –
Contributions to UIF 1,636 –
3,244,196 –Remuneration of Acting Chief Executive Officer - T. Kunene-Msimang ( 13 August 2018 - 08 April 2019 )Annual Remuneration 85,943 2,387,683
Leave paid out 225,631 –
Contributions to UIF 297 24,769
Other – 1,744
311,871 2,414,196
Due to the suspension of the CEO, the board member Ms Thembi Kunene-Msimang was appointed as the acting CEO with effect from 13 August 2018 until the 08 April 2019.
Remuneration of Director: Governance, Legal & Secretariat – S.S Nyoni Annual Remuneration 1,716,778 1,626,927
Performance Bonuses 247,822 50,992
Contributions to UIF, Medical and Pension Funds 152,545 197,389
Other – 754
2,117,145 1,876,062
Remuneration of Chief Executive Officer - L.M Makhubela suspended with full pay since April 2018Annual Remuneration 3,789,349 3,660,058
Contributions to UIF 1,785 38,385
3,791,134 3,698,443Remuneration of Acting Director of Corporate Services - T. Gaokgorwe (01 June 2018 - 30 October 2018)Acting Allowance - 252,233
Due to the resignation of the Director of Corporate Services, Mr Tebogo Gaokgorwe was appointed as the acting Director of Corporate Services with effect from 1 June 2018 until 30 October 2018.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2020 R
2019 R
19. Employee related costs (continued)
Remuneration of Acting Chief Financial Officer - K. Seripe ( 7 March 2019 - to date)
Acting Allowance 940,154 28,029
Due to the suspension of the CFO, Mr Kgomotso Seripe was appointed as the acting CFO with effect from 07 March 2019 to date
Remuneration of Chief Marketing Officer - L. Magapatona-Sangaret (Terminated employment 7 March 2019)
Annual Remuneration – 1,816,524
Car Allowance – 193,050
Performance Bonuses – 4,751
– 2,014,325
Ms Linda Magapatona-Sangaret worked for a period of 10 months in the previous financial year. The employment contract was terminated on the 7 March 2019.
Remuneration of Director: Corporate Services – J. Tshipa (Resigned 31 May 2018)
Annual Remuneration – 283,290
Car Allowance – 106,868
Contributions to UIF, Medical and Pension Funds – 10,354
Other – 1,305
– 401,817
Remuneration of Director: Corporate Services – K. Kissoonduth commenced 1 January 2019
Annual Remuneration 1,597,202 399,660
Contributions to UIF, Medical and Pension Funds 175,183 55,833
Other – 1,701
1,772,385 457,194
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 105
2020 R
2019 R
19. Employee related costs (continued)
Remuneration of Acting Chief Marketing Officer - S Ntombela (11 February 2019 - 31 March 2020)
Acting Allowance 957,319 75,035
Due to the suspension of the Chief Marketing officer, Ms Sithembile Ntombela was appointed as the acting Chief Marketing Officer with effect from 11 February 2019 to 31 March 2020.
Remuneration of Chief Financial Officer - N Thomas (Terminated employment on 04 December 2019)
Annual Remuneration 928,279 1,494,370
Car Allowance – 418,119
Contributions to UIF, Medical and Pension Funds 203,119 163,866
Other – 318
1,131,398 2,076,673
Ms Nadine Thomas worked for a period of 12 months in the previous financial year. She was on suspension with full pay since 7 March 2019 and her employment contract was susquequently terminated on the 4 of December 2019.
20. Finance costs
Interest expense – 1,852
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2020 R
2019 R
21. General expenses
Advertising 1,226,318 351,624
Auditors remuneration 2,958,146 3,120,442
Bank charges 104,890 127,694
Computer expenses 2,421,985 2,818,973
Consulting and professional fees – Other 3,698,039 1,691,306
Consumables 378,085 101,842
Courier & Delivery expenses 60,655 2,502
Consulting and professional fees -Legal fees 2,926,642 2,383,865
Insurance 331,959 212,019
Conferences and Seminars 494,013 152,260
Motor vehicle expenses 68,953 48,788
Placement fees 928,800 821,343
Printing and stationery 432,537 171,354
Repairs and maintenance 58,598 70,535
Security 24,013 6,647
Staff Wellness expenses 16,138 141,969
Subscriptions and membership fees 1,044,610 2,571,813
Telephone and internet 3,556,542 4,005,215
Staff training and development 1,243,584 568,908
Travel and subsistence - domestic 6,007,352 3,305,446
Travel and subsistence - overseas 4,688,411 2,812,117
Water and electricity 1,438,799 1,175,369
Other operating expenses 220,821 1,481,853
Removal and storage costs 34,103 22,094
Audit and Risk Committee remuneration 74,400 225,195
Board remuneration 865,040 1,055,942
Venue expenses 4,485,990 1,509,787
39,789,423 30,956,902
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 107
2020 R
2019 R
22. Brand, Communication and Reputation costs
Research fees (i) 3,103,332 7,495,717
Branding and collateral (ii) 3,008,156 5,897,199
Media buy (iii) 17,441,349 30,051,604
Agency – Digital management 340,750 2,238,407
Agency – Reputation management 3,292,331 1,290,689
Agency – Public relations & communication (iv) 4,760,914 6,205,944
Activation fees – Domestic and International activities (v) 56,439,163 70,574,973
88,385,995 123,754,533
(i) Research fees decrease is due to the cancellation of the tender for International perception study.(ii) Branding and Collateral decreased due to the BRICS and SAPBA events that did not take place in the current year.(iii) Media buy budget was increased in the prior year due to the national elections, therefore, enhanced communication interventions and reputation management activities were
required. The current year reflects standard budget allocation and spend.(iv) Public relations and communications decreased due to the cancellation of the contract with the service provider through whom the reputation and public relations funds were utilised.(iv) Activations budget was increased in the prior year due to the national elections’ awareness activities domestically, the additional support for the SA Premier Business Awards as well
as the second Presidential SA Investment Conference. The China office was fully functional in the prior year and BRICS was hosted in South Africa. The current year reflects standard budget allocation and spend.
23. Auditors’ remuneration
External audit 1,536,137 1,817,770
Internal audit 1,422,009 1,302,672
2,958,146 3,120,442
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2020 R
2019 R
24. Operating surplus (deficit)
Operating surplus (deficit) for the year is stated after accounting for the following:
Operating lease charges
Premises
• Contractual amounts-Office rental JHB 3,756,309 3,814,352
Equipment
• Contractual amounts 244,095 339,287
4,000,404 4,153,639
Loss on exchange differences 280,657 458,426
Loss on disposal of property, plant and equipment – 94,388
Depreciation and Amortisation expense 4,711,168 4,222,389
Employee costs 68,647,932 66,404,597
25. Repairs and maintenance
– Office building 28,370 70,535
– Motor vehicles 30,029 –
58,399 70,535
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 109
2020 R
2019 R
26. Cash generated from operations
Surplus/(Deficit) for the year 4,229,708 (15,686,675)
Depreciation and amortisation 4,711,168 4,222,389
Gain on disposal of assets – –
Loss on disposal of assets – 94,388
Forex differences – 458,426
Finance costs – Finance leases – –
Movement in financial assets (30,294) (29,398)
Impairment of financial assets – 544
Movements in lease liability (233,365) 236,628
Movements in provisions 754,987 1,899,622
Movement in lease assets 7,985 –
Changes in working capital:
Prepayments (295,030) 272,767
Receivables from exchange transactions 648,146 (781,216)
Payables from exchange transactions (7,300,754) 14,140,447
Other non-cash items – (9,359)
2,492,551 4,818,563
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2020 R
2019 R
27. Commitments
Authorised and approved expenditure
Already contracted for but not provided for
• Open purchase orders 6,745,976 2,136,824
• Tenders 17,048,422 25,357,393
• Request for Proposal (RFP) 1,107,464 2,790,234
24,901,862 30,284,451
Total operational commitments
Already contracted for but not provided for 24,901,862 30,284,451
Operating leases – as lessee (expense)Operating lease payments represent rentals payable by Brand South Africa for its office space located at 103 Central Street Houghton.The lease for the building for the Houghton office was renewed for a further five years on the 01 August 2016 to 31 August 2021.
Minimum lease payments due – rental of building
– within one year 4,350,196 3,991,005
– in second to fifth year inclusive 1,491,105 5,841,301
5,841,301 9,832,306
Minimum lease payments due – rental of PABX
– within one year 91,702 87,852
– in second to fifth year inclusive 23,255 87,852
114,957 175,704
Minimum lease payments due – rental of printing machine – –
– within one year 12,158 129,499
12,158 129,499
Operating lease payments for office equipment represent rentals payable by Brand South Africa for leasing PABX telephone lines for a period of three years from 1 July 2018 until 30 June
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 111
2021. 28. Contingencies
Brand South Africa terminated a contract with service a provider during the last two financial years. The case is pending before the Arbitration Foundation of Southern Africa and High Court respectively.
The entity’s legal representatives and management consider the prospects of success of the actions taken against Brand South Africa to be remote.The estimate of the financial impact for the termination of the contract is R8,151,457.00.
Brand South Africa also cancelled a contract with a service provider that was appointed without proper disclosures being made. The entity’s legal representatives consider the prospects of success of actions taken against the entity to be remote. The estimate of the financial impact for the cancellation of contract is R150,000.00.
In addition, there are currently two pending legal proceedings against the entity by two former Brand South Africa employees which involve financial exposure. The cases are expected to be resolved within the next financial year. The estimate of the financial impact for all cases is R1,117,434.
29. Related parties
Related partyThe Presidency Executive Authority
South African Broadcasting Corporation Strategic Partner trade related activities
The Government Printing Works Strategic Partner trade related activities
National Treasury Strategic Partner trade related activities
Proudly South African Strategic Partner trade related activities
Department of Trade and Industry Strategic Partner trade related activities
CSIR Strategic Partner trade related activities
Department of International Relations and Cooperation (DIRCO) Strategic Partner trade related activities
Members of key management Executive directors (Refer to note 20)
Media, Information and Communication Technologies Sector Education and Training Authority (MICT SETA) Strategic Partner trade related activities
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2019 R
29. Related parties (continued)
Related party balances
Amount included in accounts payables regarding related partyDepartment of International Relations and Cooperations – 81,731
Amounts included in accounts receivable regarding related partiesNational Treasury – 135,000South African Broadcasting Corporation – 20,000Department of Trade and Industry – 329,137Department of International Relations and Cooperations 10,330 _National Film and Video Foundation (NFVF) 844,742 _
Amounts included in other receivablesSouth African Broadcasting Corporation – 145,644
Provision for doubtful debts related to outstanding balances with related partiesSouth African Broadcasting Corporation – 165,644National Treasury – 135,000
Payments to related partiesThe Government Printing Works – 2,270
Transfer paymentsDepartment of Communications 207,914,000 200,430,000
Related party transactions
Amounts included in Other Income regarding related partiesDepartment of Trade and Industry – 11,167,117
Media, Information and Communication Technologies Sector Education and Training Authority (MICT SETA) 495,655 –
Transactions with all the related parties are at arms length. The amounts outstanding are unsecured, interest free and repayable within 30 days.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 113
30. Remuneration of independent ARCO members
The board term ended on 31 May 2019 and the newly elected board commenced on the 13 of November 2019 resulting in the decrease in number of ARCO meetings attended in the current financial year. The decrease in the ARCO fees is due to the decrease in the number of meetings held.
2020 R
2019 R
Luyanda Mangquku 38,000 99,750
Thuli Mashanda 36,400 90,800
74,400 190,550
31. Remuneration of board members
The previous board members’ term ended on the 31 of May 2019 with the new board members appointed on the 13 of November of the same year. The Brand South Africa board members are paid fees as per the National Treasury circular relating to committee fees..
Non-Executive
Current board members – service term commenced on 13 November 2019
Thandi Tobias (Chairperson) 50,544 –
Andrew Madella 30,966 –
Bushang Modipane 27,949 –
Rachel Kalidass 42,557 –
Sisanda Nkoala 33,348 –
Tebogo Mamorobela 26,202 –
Mlungisi Johnson 26,202 –
Stavros Nicolaou 31,284 –
Muditambi Ravele 31,155 –
Loretta Jacobus 17,885 –
Keabetswe Modimoeng – –
Johannes Sebulela 25,740 –
Ylva Rodny-Gumede 36,144 –
Geoffrey Rothschild 28,585 –
408,561 –
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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2019 R
31. Remuneration of board members (continued)
Previous board members – service term ended on 31 May 2019
Khanyisile Kweyama (Chairperson) 69,984 125,868
Babalwa Ngonyama 20,822 61,963
Mpho Makwana 16,966 46,854
Given Sibiya 13,846 199,992
Stavros Nicolaou 62,975 74,805
Janine Hills 40,800 93,233
Kuseni Dlamini 11,910 41,636
Lehlohonolo Bonoko 37,426 81,515
Geoff Rothschild 23,820 76,250
Muditambi Ravele 52,008 78,150
Mzimkulu Malunga 14,480 90,540
Rashid Lombard 9,528 50,905
Thembi Kunene-Msimang ( Acting CEO 13 Aug 2018 – 08 Apr 2019) 21,236 34,231
395,801 1,055,942
32. Risk management
Financial risk managementBrand South Africa’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
Brand South Africa’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Brand South Africa’s financial performance. Risk management is carried out by management under policies approved by the accounting authority. The entity identifies, evaluates and hedges financial risks in close co-operation with Brand South Africa’s operating units. The accounting authority provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
Liquidity riskBrand South Africa’s risk to liquidity is a result of the funds available to cover future commitments. Brand South Africa manages liquidity risk through an ongoing review of future commitments.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 115
32. Risk management (continued)
Credit riskThe entity is exposed to credit risk mainly on cash deposits, cash equivalents, and trade debtors. Brand South Africa only deposits cash in a major bank with high quality credit standing.
Trade receivables are concentrated around a few major government departments. These are assessed to be high quality as they usually pay up their accounts within thirty 30 days of invoicing.
Financial assets exposed to credit risk at year end were as follows:
2020 R
2019 R
Financial instrument
Nedbank call account 18,105,461 10,466,000
Nedbank current account 7,750,688 16,190,660
Receivables from exchange transactions 996,374 1,590,606
Market risk
Interest rate riskBrand South Africa’s income and operating cash flows are largely independent of changes in market interest rates even though it generates investment revenue from excess cash deposited in the call account.
Foreign exchange riskBrand South Africa operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, Chinese Yuan Renminbi (CNY), Swiss Franc (CHF) and the UK pound. Foreign exchange risk arises from future commercial transactions and liabilities.
Foreign currency exposure at Statement of Financial Position date
Liabilities
Current: GBP 10 000 (2019 : USD 159 050) 221,811 2,321,621
Payable (2019 : GBP 11 270 – 214,101
Exchange rates used for conversion of foreign items were:Brand South Africa reviews its foreign currency exposure, including commitments on an ongoing basis.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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33. Going concern
The annual financial statements have been prepared on the going concern basis. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
Brand South Africa is expected to continue operating as a going concern. There are no indications from the Executive Authority that the approved grant allocation for the financial year 2019/20 will be stopped.
34. Fruitless and wasteful expenditure details
2020 R
2019 R
Opening balance 1,499,055 250
Correction of prior period error (1,236,280) –
Penalties for late registration of Compensation Fund – 1,297,704
Interest charged on late payment to Sanlam pension fund – 2,832
Prepayment of the talent module system not implemented – 148,675
Unauthorised leave taken by an employee – 49,594
Booking services cancelled 5,160 –
Closing balance 267,935 1,499,055
The fruitless and wasteful expenditure incurred in the current year relates to a flight booking service that was cancelled late and therefore related costs could not be avoided.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 117
2020 R
2019 R
35. Irregular expenditure
Opening balance 25,452,839 10,546,417
Irregular expenditure incurred in the current year 7,331,733 13,537,929
Irregular expenditure incurred in the prior year identified in the current year – 1,368,493
Closing balance 32,784,572 25,452,839
Details of irregular expenditure – current year Disciplinary steps taken/criminal proceedings
Payments to supplier with no contract in place To be determined 122,768
Continuation of service after expiration of contract To be determined 61,813
Unauthorised appointment of service provider To be determined 1,300,650
Contract cancelled due to tender irregularities Respective employees disciplined 807,161
Unauthorised expenditure on service providers To be determined 3,560,649
Inappropriate procurement process followed To be determined 1,478,692
7,331,73336. Segment information
General information
Identification of segmentsBrand South Africa is organised and reports to management on geographic basis: South Africa, China, USA and UK. Management uses these same segments for determining strategic objectives.Segments were aggregated for reporting purposes.
Information reported about these segments is used by management as a basis for evaluating the segment performances and for making decisions about the allocation of resources. The disclosure of information about these segments are also considered appropriate for external reporting purposes.
Types of services by segmentAll four segments perform administrative, communication, reputation and brand management services.
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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36. Segment information (continued)
Segment surplus or decifit, assets and liabilities 31 March 2020
South AfricaR
ChinaR
USAR
UKR
TotalR
Revenue
Revenue from non-exchange transactions 207,914,000 – – – 207,914,000
Interest revenue 1,335,633 – – – 1,335,633
Other income 974,654 – – – 974,654
Total segment revenue 210,224,287 – – – 210,224,287
Entity's revenue 210,224,287
Expenditure
Salaries and wages 59,202,886 – 4,845,599 4,599,447 68,647,932
Other expenses 130,263,937 1,105,226 2,295,759 3,681,725 137,346,647
Total segment expenditure 189,466,823 1,105,226 7,141,358 8,281,172 205,994,579
Total segmental surplus/(deficit) 4,229,708
Assets
Segment assets 43,727,261 – – – 43,727,261
Total assets as per Statement of Financial Position 43,727,261
Liabilities
Segment liabilities 28,305,906 – – – 28,305,906
Total liabilities as per Statement of Financial Position 28,305,906
Other information South Africa
Capital expenditure 3,299,106
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 119
36. Segment information (continued)
Segment surplus or deficit, assets and liabilities – 2019
South Africa China USA UK TotalRevenueRevenue from non-exchange transactions
200,430,000 – – – 200,430,000
Revenue from exchange transactions 12,167,117 – – – 12,167,117
Interest revenue 1,695,839 – – – 1,695,839
Other income 65,787 – – – 65,787
Total segment revenue 214,358,743 – – – 214,358,743
Entity's revenue 214,358,743
Expenditure
Salaries and wages 60,863,037 794,623 2,683,336 2,038,351 66,379,347
Other expenses 154,978,523 1,458,701 4,046,647 3,182,199 163,666,070
Total segment expenditure 215,841,560 2,253,324 6,729,983 5,220,550 230,045,417
Total segmental surplus/(deficit) (15,686,674)
Assets
Segment assets 46,299,060 – – – 46,299,060
Total assets as per Statement of Financial Position 46,299,060
Liabilities
Segment liabilities 35,107,410 – – – 35,107,410
Total liabilities as per Statement of Financial Position 35,107,410
Other information South Africa
Capital expenditure 1,272,018
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
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37. Prior period errors
The financial statements have been restated to correct the misstatements that were recorded in the previous financial period. The nature of misstatements for different account balances is described below:
1. Prepayments – The services relating to the prepayment were rendered in the previous period, the amount prepaid was erroneously not reversed and the corresponding expense also not recognised.
2. Trade and other payables – The reconciling items on supplier balances were erroneously not considered, this resulted in overstatement of trade and other payables.
3. Intangible assets – The CRM software and AX Dynamics systems were erroneously amortised over three years instead of ten years, this resulted in overstatement of depreciation and amortization account and understatement of intangible assets in the previous financial period.
4. Reversal of prior year allowances – The amounts relating to allowance for doubtful debts, other impairments, accounts receivables and staff wellness were reversed or adjusted in the prior period based on the new information received in the current year.
The correction of the error(s) results in adjustments as follows:
2020 R
2019 R
Statement of financial position
Prepayments – (148,675)
Payables from exchange transactions – 487,165
Intangible assets – 3,262,330
Accrued expenses – 25,250
Opening Accumulated Surplus or Deficit – (1,360,796)
Allowance for doubtful debts – 305,933
Other impairments – (121,745)
Statement of financial performance
General expenses – 148,675
Brand, Communication and Reputation costs – (487,165)
Depreciation and amortisation – (1,901,533)
Staff wellness – (25,250)
Activation costs – (305,933)
Other income – 121,745
Brand South Africa Trust Annual Financial Statements for the year ended 31 March 2020
Notes to the Annual Financial Statements continued
Annual Report 2019/20 | Brand South Africa 121
Performance ResultsSection F
Together, we are determined.The World Rugby Awards bestowed honors on coach Rassie Erasmus and the Springboks as a team while Pieter Steph du Toit was named player of the year, Erasmus won the top coaching award just before the Springboks were honoured with the team of the year award.
Brand South Africa | Annual Report 2019/20122
F
Annual Report 2019/20 | Brand South Africa 123
PROGRAMME 1: ADMINISTRATION
SUPPORTING STRATEGIC GOAL 1: SOUND GOVERNANCE, HIGH PERFORMANCE AND THE OPTIMAL UTILISATION OF AVAILABLE RESOURCES
STRATEGIC OBJECTIVE
PERFORMANCE INDICATORS
BASELINE 2018/2019
TARGET 2019/2020
ACTUAL ANNUAL PERFORMANCE 2019/2020
VARIANCE EXPLANATION
1.Sound internal controls and good governance
1.1. Audit outcome on previous year’s financial information
Qualified audit opinion on financial information
Unqualified audit opinion on financial information
Target met:Unqualified audit opinion on financial information
No variance
1.2. Audit outcome on previous year’s non-financial performance information
Unqualified audit opinion on performance information, with other matters
Unqualified audit opinion on performance information
Target met: Unqualified audit opinion on performance information
No variance
1.3. Number of satisfactory reports on monitoring and improvements in the internal control environment
2x reports per annum outlining monitoring and improvements in the internal control environment
Quarterly satisfactory internal audit & AG reports on internal controls
Target met: 3x satisfactory internal audit & AG reports on internal control
No variance
2. A high performing organisation through the optimal utilisation of technological, financial and human resources
2.1. Percentage overall organisational performance rating
80% overall organisational performance rating
90% overall organisational performance rating
Target not met: 83% overall organisational performance rating
Due to the COVID-19 Pandemic, most of the Brand South Africa targets were not implemented.
2.2. Percentage variance on approved budget vs. actual expenditure
5% Variance as per materiality framework on budget versus expenditure
5% variance as per materiality framework on budget versus expenditure
Target met: 4% variance as per materiality framework on budget versus expenditure
No variance
2.3. Percentage availability of all IT systems
98% availability of all IT systems
98% availability of all IT systems
Target met (exceeded): 98,73%. % availability of all IT systems
No variance
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F
PROGRAMME 2: BRAND, MARKETING AND REPUTATION MANAGEMENT
SUPPORTING STRATEGIC GOAL 2: PROACTIVE AND COORDINATED REPUTATION MANAGEMENT OF THE NATION BRAND
STRATEGIC OBJECTIVE
PERFORMANCE INDICATORS
BASELINE 2018/2019
TARGET 2019/2020 ACTUAL ANNUAL PERFORMANCE 2019/2020
VARIANCE EXPLANATION
3.Enhanced understanding of the Nation Brand performance
3.1. Number of analysis reports on performance of the Nation Brand produced
2.2.1. 12x analysis reports on performance of the Nation Brand produced
12x research reports on performance of the Nation Brand produced
Target met: 12x analysis reports on performance of the Nation Brand produced
No variance
3.2. Number of SA Incorporated research analysis reports produced
2.2.2. 4x SA Incorporated research analysis reports produced
4x SA Incorporated research analysis reports produced
Target not met: 3x SA Incorporated research analysis reports produced
The planned SA Inc. engagement in Ghana, with University of Ghana Business School cancelled due to COVID-19 measures taken by both the Ghanaian and South African governments
3.3. Number of domestic perceptions research studies concluded
2.2.3. 4x quarterly domestic perceptions research conducted, including online survey, focus group
4x quarterly domestic perceptions research conducted
Target met: 4x quarterly domestic perceptions research conducted
No variance
3.4. Number of international research studies on reputation and perceptions of Nation Brand conducted
2.2.4. 1x Investor Perceptions study encompassing 16 markets conducted
1x Investor Perceptions study conducted
Target not met Project cancelled due to reprioritised five-year strategic plan. To initiate development of SA Global Reputation Study to replace International Investor Perceptions Study from 2020/21
3.5. Number of approved Annual SA Competitiveness Forum outcome reports
2.2.5 1x approved Annual SA Competitiveness Forum outcome report
1x approved Annual SA Competitiveness Forum outcome report
Target met: 1x approved Annual SA Competitiveness Forum outcome report
No variance
Annual Report 2019/20 | Brand South Africa 125
STRATEGIC OBJECTIVE
PERFORMANCE INDICATORS
BASELINE 2018/2019
TARGET 2019/2020 ACTUAL ANNUAL PERFORMANCE 2019/2020
VARIANCE EXPLANATION
4. Improved Nation Brand reputation and perceptions amongst South Africans
4.1.Play Your Part activities that promote the Nation Brand values implemented in all nine provinces (at least one per province)
2.3.1 9x PYP activities implemented
9x PYP activities implemented
Target met: (exceeded) 10x PYP activities implemented
The PYP activity in Mpumalanga was a tactical opportunity targeting schools in Mpumalanga
4.2. Number of Brand South Africa-led activations utilised to promote constitutional awareness
2.3.2. 10x activations utilised to promote constitutional awareness
10x activations utilised to promote constitutional awareness
Target met: (exceeded) 13x activations utilised to promote constitutional awareness
The Annual Target was exceeded additional due to additional platforms, in Limpopo and the North West, being leveraged in collaboration with Office of the Deputy Minister in the Presidency
4.3. Number of marketing platforms utilised for the promotion of the constitutional awareness campaign
2.3.3. 16x marketing platforms utilised for the constitutional awareness campaign
16x marketing platforms utilised for the constitutional awareness campaign
Target met: (exceeded) 17x marketing platforms utilised for the constitutional awareness campaign
Voting campaign expanded to radio due to strategic importance
Brand South Africa | Annual Report 2019/20126
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PROGRAMME 2: BRAND, MARKETING AND REPUTATION MANAGEMENT
SUPPORTING STRATEGIC GOAL 3: PROACTIVE AND COORDINATED COMMUNICATION OF THE NATION BRAND VALUE SYSTEM AND VALUE PROPOSITION
STRATEGIC OBJECTIVE
PERFORMANCE INDICATORS
BASELINE 2018/2019
TARGET 2019/2020 ACTUAL ANNUAL PERFORMANCE 2019/2020
VARIANCE EXPLANATION
5. Improved Nation Brand Reputation and Perceptions Domestically and Internationally
5.1. Content and Communication programmes that engage with issues that are strategic to the reputation of the Nation Brand developed
3.1.1.16x positive communication content pieces published
100x positive communication content pieces published
Target met:100x positive communication content pieces published
No variance
5.2. Number of users who engage with Brand SA content on its digital platforms
3.1.2. 4x reports per annum outlining positive content disseminated on digital platforms
5% increase in users who engage with Brand SA content on its digital platforms
Target met: (exceeded) 6.8% increase in users who engage with Brand SA content on its digital platforms
Annual target of 5% was exceeded due to the popularity of content posted. This was a new target and we could not be sure what to expect without a digital agency. This has provided us with insights on the types of content that work in order to increase engagement levels across digital platforms. As such the targets for the new fiscal have been set accordingly.
5.3. Number of media hosting activities to position the Nation Brand implemented
3.2.1. 4x implemented media engagement activities to strengthen relations and liaison with media
11x implemented media engagement activities to strengthen relations and liaison with media
Target met: 11x implemented media engagement activities to strengthen relations and liaison with media
No variance
Annual Report 2019/20 | Brand South Africa 127
PROGRAMME 2: BRAND, MARKETING AND REPUTATION MANAGEMENT
SUPPORTING STRATEGIC GOAL 4: PROACTIVE AND COORDINATED MARKETING OF THE NATION BRAND AND THE NATION BRAND IDENTITY
STRATEGIC OBJECTIVE
PERFORMANCE INDICATORS
BASELINE 2018/2019
TARGET 2019/2020 ACTUAL ANNUAL PERFORMANCE 2019/2020
VARIANCE EXPLANATION
6. Enhanced awareness of the Nation Brand identity, image, and competitiveness and Nation Brand value proposition
6.1. Number of international platforms utilised to promote the Nation Brand
4.1.1 8x international platforms utilised to promote the Nation Brand
12x international platforms utilised to promote the Nation Brand identity, image, values and competitiveness
Target met: (exceeded) 16x international platforms utilised to promote the Nation Brand identity, image, values and competitiveness
The Annual Target was exceeded due to the following: • Leveraging of an existing partnership to
promote the Nation Brand with Regency Global on an ongoing basis;
• A tactical opportunity was identified with South African Business magazine to promote the Nation Brand to a targeted audience (particularly on the continent) for a 12-month period; and
• An opportunity presented itself for Brand South Africa to promote the Nation Brand at the NASCAR Africa project that was deemed strategic
• enough to support.
6.2. Number of domestic platforms utilised to promote the Nation Brand
4.1.2 18x domestic platforms utilised to promote the Nation Brand
18x PYP domestic platforms utilised to promote the Nation Brand
Target met: 18x domestic platforms utilised to promote the Nation Brand
No variance
Brand South Africa | Annual Report 2019/20128
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STRATEGIC OBJECTIVE
PERFORMANCE INDICATORS
BASELINE 2018/2019
TARGET 2019/2020 ACTUAL ANNUAL PERFORMANCE 2019/2020
VARIANCE EXPLANATION
7. A cohesive approach when promoting and marketing the Nation Brand amongst targeted stakeholders
7.1. Number of Brand South Africa-led Nation Brand alignment training workshops implemented in Provinces
4.2.1. 80x institutions reached through Nation Brand alignment training
9x Nation Brand alignment training workshops implemented in provinces (1x per province)
Target not met: 7x Nation Brand alignment training workshops implemented in provinces (1x per province)
Brand South Africa-Led workshops in the Northern Cape and Eastern Cape could not be delivered due to restrictive measures put in place by government to curb the spread of the COVID-19 pandemic.
7.2. Number of
Stakeholder-led
platforms utilised to
deliver Nation Brand
alignment training
New Indicator Leverage off 3x Stakeholder-led platforms to deliver Nation Brand alignment training
Target met: (exceeded) 10x Stakeholder-led platforms to deliver Nation Brand alignment training
The Annual Target was exceeded due to the following: • Brand South Africa honoured a request from
the City of Johannesburg for specialised training, Gauteng Premier’s office, National Department of Tourism, Invest Durban and Nelson Mandela Museum. Brand SA optimised on its presence in the programme of both the JCI and Invest Durban
7.3. Number of new registrations on marketer’s portal
4.2.2. 500x new registrations on marketers portal
500x new users on marketer’s portal
Target met:(exceeded)680x new registrations on marketer’s portal
The Annual Target was exceeded due to the following: • The aggressive promotion and stakeholder
engagements sessions boosted • the numbers; • The increased number of stakeholder
training sessions as well as exposure from the gospel awards; and
• Successful promotional activities
8. Strengthened Nation Brand advocacy, domestically and amongst South Africans living abroad
8.1. Number of PYP ambassador engagements (online or offline) achieved in promoting the Nation Brand
4.3.1. 200x new PYP ambassadors registered
60x PYP ambassador engagements (online or offline) achieved in promoting the Nation Brand
Target met: (exceeded) 63x PYP ambassador engagements (online or offline) achieved in promoting the Nation Brand
The PYP ambassadors were mobilised in three strategic and important engagements; 1. The Miss Earth platforms;2. Zozibini’ s homecoming; and 3. The COVID-19 pandemic.
8.2. Number of Brand South Africa led GSA activations implemented
4.3.2.17 x GSA activations
18x Brand South Africa led GSA activations
Target not met:15x Brand South Africa led GSA activations
The Remaining 2x Brand South Africa led GSA Activations for Quarter 4 were postponed/cancelled due to contact and/or travel restrictions imposed as a result of COVID-19 1. GSA Activation in Wales (postponed); and2. GSA Activation Ghana (cancelled, travel not
allowed)
Annual Report 2019/20 | Brand South Africa 129
PROGRAMME 3: STAKEHOLDER RELATIONS
SUPPORTING STRATEGIC GOAL 1: PROACTIVE AND COORDINATED REPUTATION MANAGEMENT OF THE NATION BRAND
STRATEGIC OBJECTIVE
PERFORMANCE INDICATORS
BASELINE 2018/2019
TARGET 2019/2020 ACTUAL ANNUAL PERFORMANCE 2019/2020
VARIANCE EXPLANATION
9. Enhanced relations with Stakeholders towards the promotion of the Nation Brand reputation, domestically and internationally
9.1. Number of coordinated activities implemented in partnership with private sector stakeholders
2.1.2. 12x coordinated activities implemented in partnership with private sector stakeholders
14x coordinated activities implemented in partnership with private sector stakeholders
Target met: (exceeded) 17x coordinated activities implemented in partnership with private sector stakeholders
The annual target was exceeded as Brand South Africa leveraged an opportunity to profile the Nation Brand and the organisation at the WTM Africa Tourism Investment Summit 2019 and Sustainability Week. These platforms allowed the organisation to engage with a number of domestic and international audiences. Brand South Africa honoured a request from Post Bank to support World Savings Day in the interest of getting corporates to buy into the Play Your Part programme
9.2. Number of coordinated activities implemented in partnership with state institution stakeholders
2.1.3. 14x coordinated activities implemented in partnership with state institution stakeholders
16x coordinated activities implemented in partnership with state institution stakeholders in collaboration with Global Markets for international partner
Target met: (exceeded) 17x coordinated activities implemented in partnership with state institution stakeholders in collaboration with Global Markets for international partner
No variance
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STRATEGIC OBJECTIVE
PERFORMANCE INDICATORS
BASELINE 2018/2019
TARGET 2019/2020 ACTUAL ANNUAL PERFORMANCE 2019/2020
VARIANCE EXPLANATION
9.3. Number of coordinated activities implemented in partnership with civil society stakeholders
2.1.4. 12x coordinated activities implemented in partnership with civil society stakeholders
14x coordinated activities implemented in partnership with civil society stakeholders
Target met: (exceeded) 15x coordinated activities implemented in partnership with civil society stakeholders
The annual target was exceeded due to the University of Fort Hare Intergenerational Dialogue event taking place in Q1, while planned for Q2, as per stakeholder’s request
9.4. Number of in-market activities implemented with stakeholders (civil society, government and private sector)
2.1.5.48x in-market activities implemented
20x Brand South Africa-led in-market activities implemented
Target met: (exceeded)22x Brand South Africa-led in-market activities implemented
A number of tactical opportunities were identified during the course of the 2019/20 Financial Year that were deemed strategic enough to support, hence the annual target of in-market activities implemented could be met
9.5. Number of activities implemented at strategic platforms
2.1.6 7x activities implemented at strategic platforms
8x activities implemented at strategic platforms that will secure speaking platforms at other relevant international strategic events
Target met: 8x activities implemented at strategic platforms that will secure speaking platforms at other relevant international strategic events
No variance
Annual Report 2019/20 | Brand South Africa 131
Notes
Brand South Africa | Annual Report 2019/20132
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BRAND SOUTH AFRICA
103 Central StreetHoughton 2198Johannesburg, GautengSouth AfricaTel: +27 11 712 5000Fax: +27 11 483 0124Email: [email protected]
BRAND SOUTH AFRICA CHINA
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WEBSITES:
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BRAND SOUTH AFRICA UK
Millennium Bridge House,2 Lambeth Hill, LondonEC4V 4GGTel +44 (0)207 002 7114Cell: +44 207 002 4095RP416/2020ISBN 978-0-621-48983-5