annual report - gifa · 2016/17 annual report of gifa, which details the performance of the agency...

Annual Report2016/17

82 Grayston Drive Sandton Johannesburg2017South Africa

P O Box 650780BenmoreSouth Africa2010

Telephone: +27 11 290 6600Fax: +27 11 290 6700

PR116/2017ISBN: 978-0-621-45376-8

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ANNUAL REPORT 2016-2017

Table of Contents

PART A: GENERAL INFORMATION ...................................................................................................................................3

1. GIFA GENERAL INFORMATION ............................................................................................................................................ 4

2. LIST OF ABBREVIATIONS/ACRONYMS .......................................................................................................................................... 5

3. FOREWORD BY THE MEC ...................................................................................................................................................... 6

4. REPORT OF THE ACCOUNTING OFFICER ........................................................................................................................ 7

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT...... 12

6. STRATEGIC OVERVIEW ....................................................................................................................................................................13

6.1 Vision .......................................................................................................................................................................................................................................................................................13

6.2 Mission ...................................................................................................................................................................................................................................................................................13

6.3 Values ....................................................................................................................................................................................................................................................................................13

7 LEGISLATIVE AND OTHER MANDATES .......................................................................................................................................14

8. ORGANISATIONAL STRUCTURE ...................................................................................................................................................14

PART B: PERFORMANCE INFORMATION ............................................................................................................................................15

1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES ..........................................................................................16

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE ....................................................................................................................16

2.1 Service Delivery Environment ...............................................................................................................................................................................................................................16

2.2 Service Delivery Process-flow for Project Preparation ...........................................................................................................................................................................17

2.3 Organisational environment ....................................................................................................................................................................................................................................17

4. PERFORMANCE INFORMATION BY PROGRAMME ...................................................................................................................18

4.1 Programme 1: Project Development .................................................................................................................................................................................................................18

4.2 Programme 2: Structured Finance .......................................................................................................................................................................................................................23

4.3 Programme 3: Administration .................................................................................................................................................................................................................................28

5. TRANSFER PAYMENTS ......................................................................................................................................................................36

6. CONDITIONAL GRANTS .................................................................................................................................................................36

7. DONOR FUNDS ..................................................................................................................................................................................36

8. CAPITAL INVESTMENT .....................................................................................................................................................................36

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PART C: GOVERNANCE ...........................................................................................................................................................................37

1. INTRODUCTION ................................................................................................................................................................................38

2. RISK MANAGEMENT..........................................................................................................................................................................38

3. FRAUD AND CORRUPTION ............................................................................................................................................................38

4. MINIMISING CONFLICT OF INTEREST .........................................................................................................................................38

5. CODE OF CONDUCT ........................................................................................................................................................................38

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES ....................................................................................................................38

7. PORTFOLIO COMMITTEES ..............................................................................................................................................................38

8. SCOPA RESOLUTIONS ......................................................................................................................................................................38

9. PRIOR MODIFICATIONS TO AUDIT REPORTS ...........................................................................................................................38

10. INTERNAL AUDIT AND AUDIT COMMITTEES ...........................................................................................................................38

11. AUDIT COMMITTEE REPORT .........................................................................................................................................................39

PART D: HUMAN RESOURCE MANAGEMENT ..................................................................................................................................41

1. INTRODUCTION ................................................................................................................................................................................42

2. OVERVIEW OF HUMAN RESOURCES ...........................................................................................................................................42

3. HUMAN RESOURCES OVERSIGHT STATISTICS .........................................................................................................................42

PART E: FINANCIAL INFORMATION ....................................................................................................................................................63

1. REPORT OF THE AUDITOR GENERAL .........................................................................................................................................64

2. ANNUAL FINANCIAL STATEMENTS .............................................................................................................................................67

PART A: GENERAL INFORMATION

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1. AGENCY GENERAL INFORMATION

PHYSICAL ADDRESS: 82 Grayston Drive

2nd floor

Johannesburg, Sandton

2010

POSTAL ADDRESS: PO Box 650780

Benmore

2010

TELEPHONE NUMBER/S: 011 290 6600/01

FAX NUMBER: 011 290 6700

EMAIL ADDRESS: [email protected]

WEBSITE ADDRESS: www.gifa.co.za

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2. LIST OF ABBREVIATIONS/ACRONYMS

AGSA Auditor General of South AfricaAO Accounting OfficerAPP Annual Performance PlanASISA Association of Investments and Savings South AfricaAWTT Alternative Waste Treatment TechnologyBASA Banking Association of South AfricaBBBEE Broad Based Black Economic EmpowermentCEO Chief Executive OfficerCFO Chief Financial OfficerCOJ City of JohannesburgDBSA Development Bank of Southern AfricaEB Enterprise BuildingGFA Gauteng Funding AgencyGIFA Gauteng Infrastructure Financing AgencyGPG Gauteng Provincial Government GPT Gauteng Provincial TreasuryGRAP Generally Recognised Accounting PracticesGICC Gauteng Infrastructure Coordinating CouncilHOD Head of DepartmentJSE Johannesburg Stock ExchangeMEC Member of Executive CouncilMTEF Medium Term Expenditure FrameworkOHSA Occupational Health & Safety ActPBC Premier’s Budgeting CouncilPFMA Public Finance Management ActPIC Public Investment CorporationPPF Project Preparation FacilityPPP Public Private PartnershipSCM Supply Chain ManagementSCOPA Standing Committee on Public AccountsSMME Small Medium and Micro EnterprisesSEIA Socio-economic Imact AssessmentSOPA State of the Province AddressTA Treasury ApprovalTIH Tshwane Innovation HubTMR Transformation, Modernisation and Re-industrialisationTR Treasury RegulationsWR West RandWWTT Waste Water Treatment TechnologyWWTP Waste Water Treatment Plant

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3. FOREWORD BY THE MEC

The vision for the Gauteng Infrastructure Financing Agency (GIFA) is to ensure alternative funding for Gauteng’s strategic infrastructure projects. As we enter the mid-term of the fifth administration of Gauteng Provincial Government (GPG) it is critical to reflect on the progress made to realise this vision and outline the future plans for the remainder of the term.

Over the past two and a half years the GIFA managed to build a sustainable pipeline of 23 projects that are at different stages of project development cycle. So far 65% of the pipeline completed feasibility studies and four of the projects have reached financial close stage and agreements will be finalised by the end of the year. The GIFA will continue to release bankable projects to the market once the feasibility studies are completed.

Over the years the GIFA has established partnerships with the Banking Associaton of South South Africa (BASA), the Development Bank of Southern Africa (DBSA), Association of Investment and Savings South Africa (ASISA) and the Public Investment Corporation (PIC). These partnerships have provided the GIFA with linkages to the funders through investor roadshows and one-on-one engagements. Post local government elections the GIFA’s engagement with municipalities has resulted in more projects being sourced especially from the West Rand and Sedibeng Districts.

In the coming years the GIFA will continue to create a sustainable pipeline of projects that will undergo development and be released to the market. The GIFA will also work with the Provincial Treasury and the Gauteng Planning Division to develop a financing model for the Master Plan. The model will be able to identify the fiscal gap to be financed off-balance sheet through private funding.

In conclusion I would like to thank the CEO of GIFA Mr Oupa Seabi for his leadership of the agency. I therefore present the 2016/17 Annual Report of GIFA, which details the performance of the agency and the audited Financial Statements as at 31st March 2017.

B Creecy, MEC

Department of Finance, Gauteng Province

Date: 31 May 2017

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4. REPORT OF THE ACCOUNTING OFFICER

• Introduction

The purpose of this report is to highlight the performance of the GIFA for the reporting period of 1 April 2016 to 31 March 2017 in compliance with Section 40 of the Public Finance Management Act, Act 1 of 1999 (as amended by Act 29 of 1999) and specific financial matters for the period under review.

The annual allocation of R102 650 000 was transferred to the GIFA, R50million for Project Preparation Facility and R52 650 000 for operational budget.

• Overview of the operations of the GIFA

• Significant events of 2016/17 Financial Year

The Annual Performance Plan

The GIFA’s 2016/17 Annual Performance Plan ensured that its plans and priorities are aligned to the imperatives of the Gauteng Provincial Government of transformation, modernisation and re-industrialisation.

Achievement of Planned Targets

a. Achieved a clean audit report for 2015/16 financial year.

b. GIFA achieved 97% of the planned targets in 2016/17.

c. 4 projects are at financial close stage and a TAII(b) was receieved from National Treasury for one project by March 2017.

d. More projects were sourced in 2016/17 to ensured that there is a sustainable pipeline of projects.GIFA embarked on a successful Funder Engagement Exercise which entailed investor roadshows. Different classes of investors both locally and internationally were engaged.

e. A total of 15 investors among them commercial banks, development finance institions and institutional indicated appetite for GIFA’s projects.

f. GIFA completed 6 feasibility studies by end 2016/17 financial year and ensured that the projects are ready for market release in 2017/18.

g. GIFA facilitated the signing of the Memorandumd of Understanding between the Office of the Premier, GIFA and the Public Investment Corporation (PIC)

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• Projects undertaken in 2016/17 Financial Year

In 2016/17 the GIFA was working on 22 active projects which are at different stages of project development. The GIFA’s project development process has five stages, which are:

• Initiation Stage

• Feasibility Stage

• Market Release Stage

• Procurement Stage

• Financial Close Stage

The diagrams below illustrate the status of GIFA projects at the end of March 2016.

• The preferred bidders have been identified for the four projects that have been registered with the National Treasury as PPPs.

• Three projects are awaiting the TAII(b) from National Treasury and one project has obtained a TAII(b) to enable GIFA to negotiate the contract with the preferred bidder. All four projects will conclude the financial close in 2017/18 financial year.

• The GIFA will release at least 4 projects to the market during the course of 2017/18 and others will be pitched to the potential investors at the second Gauteng Infrastructure Investment Conference in July 2017.

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• Overview of the financial results of GIFA

» Receipts

The GIFA receives an annual transfer payment from Gauteng Provincial Treasury (GPT), the controlling department of GIFA. This transfer payment is used to cover the operating costs and project preparation of the GIFA for the year. In 2016/17 GIFA was allocated an amount of R102 650 000. GIFA will continue to receive annual transfer payments from GPT in future years.

Other income amounts to R 38 million for GIFA, mainly comprising interest on bank balance and transfer from deferred income. The annual interest on bank balance was R 7 million and deferred Income of R31million was transferred to revenue in line with the actual payments made from the PPF.

Although the GIFA does not charge project sponsors the cost for the feasibility services rendered, the total cost of feasibility paid by GIFA will be capitalised and recovered as part of the project cost in order to replenish the PPF only when project is successfully funded through private sector investments.

» Expenditure

The budgets is prepared on a cash basis and presented to the GPT as part of GPT budget by economic classification linked to performance outcome objectives. It covers the fiscal period from 01 April 2016 to 31 March 2017 for GIFA.

In 2016/17, GIFA has spent 96% of its R52 650 000 operational budget. Under spending was mainly due to delays in the appointment of dealmakers for the GIFA, as well as the GIFA’s relocation to 75 Fox Street in Johannesburg CBD..

No unauthorized expenditure or fruitless and wasteful expenditure occurred in the year under review.

Expenditure per programme is as follows:

Programmes and Facility Appropriated Spending

Project Development 15 202 14 980

Structured Finance 4 945 3 733

Administration (includes: Stakeholder Management, Strategy, Finance and HR) 25 503 24 894

Project Preparation Facility 7 000 7 000

TOTAL 52 650 50 607

» Virements

Virements were done between programmes in order to ensure that cost savings from administrative programmes are channelled to the Project Development unit. The under expenditure referred to was after taking the virements into account.

For the 2016/17 financial year, a rollover of R14,8 million was requested. This includes interest received and the unspent portion of the allocated funds. Commitments will be funded from this roll-over and the remainder will be transferred to the Project Preparation Facility.

» Project Preparation Facility

In 2016/17 financial year the Project Preparation Facility (PPF) was allocated R50 million. The PPF Credit Committee approved funding for seven applications. These are projects that support the GPG’s 10 pillar programme and have a high probability of attracting private funding.

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» Future Plans of the GIFA

In the 2017/18 financial year, the GIFA will maintain the following key plans as outlined in the annual performance plan:

a. Sustainable flow of infrastructure projects pipeline

The GIFA will continue to ensure that there is a sustainable flow of strategic infrastructure projects that would be developed and issued to the market for alternative funding. The GIFA will source these projects from GPG departments, municipalities and provincial agencies. The projects will be presented to the Gauteng Infrastructure Coordinating Council (GICC) Technical Committee for endorsement. The GICC is the central point for coordination of infrastrcture projects in the province.

b. Funding model for social infrastrcuture projects

The GIFA will develop funding models for social infrastructure projects in light of the shortfalls in the provincial fiscal resources. These financing solutions will help to leverage fiscal resources to catalyse alternative sources of funding for social infrastructure projects in the province. The GIFA will continue working with the Gauteng Planning Division and Provincial Treasury to develop a financing model for the Infrastructure Master Plan. The model will be able to identify the gap in the fiscus to be financed off-balance sheet through private funding.

c. Achieve financial close for 2016/17 projects

The GIFA completed a number of feasibility studies in 2016/17 financial year. The priority for GIFA in 2017/18 is to release the projects to the market and achieve financial close for at least four projects by the end of the financial year.

d. Profile the role of GIFA and mobilise potential investors

The GIFA plans to continue building its profile within the province by engaging with the municipalities and source infrastructure projects. It will also continue to mobilise potential investors through various activities such as investor roadshows and conferences. The GIFA has forged partnerships with organisations such as the Development Bank of Southern Africa (DBSA), the Banking Association of South Africa (BASA), Association of Investments and Savings South Africa (ASISA), the Public Investment Corporation (PIC). Such partnerships have provided the GIFA with linkages to the funders. The GIFA will undertake an engagement exercise that is twofold, firstly aiming to provide the funders with an update of GIFA’s project pipeline and secondly to solicit funders interest on the projects.

e. Conduct the socio-economic impact assessment studies

The GIFA will conduct the soci-economic impact assessment studies (SEIA) of the projects during the feasibility phase and implementation phase. The SEIA will assist to evaluate impact of projects on the provincial priorities such as job creation, empowerment of women and youth, productive capacity of households, etc.

» Public Private Partnerships

No new PPP’s were implemented in the period under review, although there are four projects that have been registered as PPPs with the National Treasury. These projects are envisaged to be implemented in the new financial year.

» Discontinued activities

There are no discontinued activities and new or proposed activities to be reported for the 2016/2017 financial year.

» Supply chain management

No unsolicited bid proposals were concluded for the year under review.

No irregular expenditure was identified for 2016/17. The GIFA complied with the Supply Chain Management (SCM) policies was a focal point for the 2016/17 financial year to ensure that GIFA is compliant in all matters. There were no challenges experienced in SCM.

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» Gifts and donations

No gifts and donations were received in kind from related or non-related parties.

» Exemptions and deviations received from the National Treasury

There were no exemptions and deviations received from the National Treasury.

» Events after reporting date

The misunderstanding between GIFA and Telkom regarding the installation of lines at 75 Fox has been resolved. The invoice that was disputed in February 2017 was added to accruals

» Other

There were no other material facts or circumstances, which have an effect on the understanding of the financial state of affairs, not addressed elsewhere in this report.

» Acknowledgements

I wish to express special appreciation to the MEC, Ms. Barbara Creecy, for her guidance and support. I would also like to thank the GIFA staff for their tireless contributions in ensuring that the GIFA achieves its set targets and in striving to become a centre of excellence in project development and finance.

» Conclusion

The GIFA has stabilised all operations whereby the project development life cycle is carried out rigorously from the intake of projects to financial close. The GIFA is also in the process of revising the organisational structure to enhance the current capacity so that it can function optimally in delivering its mandate.

» Approval and sign off

The Annual Financial Statements set out on page 68 to 96 have been approved by the Accounting Officer.

Mr. P.H. SEABI

Accounting officer

Gauteng Infrastructure Financing Agency

Date: 31 May 2017

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

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

All information and amounts disclosed throughout the annual report are consistent.

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

The annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury.

The Annual Financial Statements (Part E) have been prepared in accordance with Generally Recognised Accounting Principles and the relevant frameworks and guidelines issued by the National Treasury.

The Accounting Officer is responsible for the preparation of the annual financial statements and for the judgements made in this information.

The Accounting Officer is responsible for establishing, and implementing a system of internal control that has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the annual financial statements.

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

In my opinion, the annual report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the department for the financial year ended 31 March 2017.

Yours faithfully

P.H. Seabi

Accounting Officer

Date: 31 May 2017

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6. STRATEGIC OVERVIEW

6.1. Vision

To ensure alternative funding for Gauteng’s strategic infrastructure projects.

6.2. Mission

• To set up a central point of coordination for all strategic infrastructure projects in the province;

• To identify bankable infrastructure projects through project filtration criteria and feasibility studies;

• To explore various funding mix through research on local and international best practices in project finance;

• To mobilise potential investors to support identified and approved infrastructure projects that are not funded through own Revenue Fund; and

• To monitor the implementation of infrastructure projects through successful contractual relationships between GPG departments and investors.

6.3. Values

The values and principles that underpin the Gauteng Provincial Treasury are predicated on the principles of Batho Pele and are:

Value What it means

Value Employees We attract, motivate and retain talented people through career path, developing skills and empowering our employees. We also help them perform at consistently high levels by encouraging their professional and personal development. We reward their performance, treat them fairly, equally and we aim to be an employer of choice

Honesty and Integrity We will represent information transparently and truthfully, will honour our commitments; firmly adhere to a code of moral and ethical principles and will display professionalism in the workplace by being non-biased and objective

Service Excellence We place high value on our stakeholders and strive to meet their expectations and requirements by offering consistently good customer service, in both roles of support and / or oversight

Team-work We align, collaborate and communicate within and across the business units to meet the needs of our customers/stakeholders. We are committed to information and knowledge sharing

Respect and Dignity We will treat others with sensitivity, respect and have consideration for their uniqueness and personality differences and act within the law.

Accountability We take full responsibility and ownership of our actions, by not passing the buck. We will have a positive, professional and productive approach to our work

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7. LEGISLATIVE AND OTHER MANDATES

• The GIFA was established as a government component in terms of section 7(5)(d) of the Public Service Act, 1994 following the President’s Proclamation No. 69 of 2014 (Government Gazette No. 38088), within the portfolio of the MEC responsible for Finance in the Province with effect from 17 October 2014;

• The Premier of Gauteng Province proclaimed the Administration and Operations of the GIFA in the General Notice that was published on 13 July 2015 in the Provincial Gazette. PART 2 of the General Notice outlines the objectives, functions and powers of GIFA.

• In 2009 EXCO approved the creation of the Gauteng Funding Agency (GFA) later known as GIFA with the following objectives:

• To support provincial departments and municipalities with planning, management and other technical expertise to roll out infrastructure more efficiently and effectively;

• To address challenges around infrastructure delivery capacity and skills where it lacks in government;

• To facilitate and coordinate alternative funding means for key strategic economic infrastructure projects.

• To develop strategic social infrastructure projects for funding through the fiscus.

ORGANISATIONAL STRUCTURE

Member of the Executive Council

Chief Executive Officer

Internal Audit (Governance &Compliance)

Communication, Marketing & Stakeholder Management

Project Development Structured Finance Strategy, Monitoring & Evaluation

Corporate Services (CFO)

PART B: PERFORMANCE INFORMATION

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1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES

The AGSA currently performs certain audit procedures on the performance information to provide limited assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported under the Predetermined Objectives heading in the Report on other legal and regulatory requirements section of the auditor’s report.

Refer to page 64 of the Report of the Auditor General, published as Part E: Financial Information.

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE

2.1. Service Delivery Environment

The type of service offered by the GIFA to its clients is project development support, financial structuring and facilitation of funding opportunities to finance infrastructure projects off budget or off-balance sheet of the project owners. The primary clients or beneficiaries of GIFA’s services are GPG departments and their agencies and municipalities. The GIFA does not deliver services directly to the public. Over the past years the clients have been:

• Department of Economic Development

• Department of Infrastructure Development

• Department of Roads and Transport

• Department of Sports, Recreation, Arts & Culture

• Department of Education

• Gauteng Growth and Development Agency

• Department of Health

• West Rand District Municipality

• Sedibeng District Municipality

• Johannesburg Metropolitan Council

• Ekhuruleni Metropolitan Council

• Tshwane Metropolitan Council

The GIFA supports these client institutions in preparing projects to a point where they can be funded and implemented. In 2016/17 the GIFA engaged municipalities particularly in the districts and it also took part in any provincial events to promote its services. This has impacted positively on the demand for GIFA services in the municipalities.

For GIFA to deliver an efficient and effective service to its clients it has developed a service delivery process flow for project preparation. The process flow explains the steps undertaken during project preparation.

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2.2. Service Delivery Process-flow for Project Preparation

Process Flow Activities

1. Project Initiation • Sourcing the projects from owner departments or municipalities.

• Defining the objectives and scope of the project..

• Funding application and approval from PPF.

2. Pre-feasibility • Development of project concept into a business plan containing high level estimates of key project parameters.

3. Full Project Feasibility • Improving the accuracy of all project parameters by undertaking comprehensive technical studies.

4. Project Structuring • Creation of appropriate technical and commercial structures for a project to attract the right mix of financing.

5. Transaction • Tangible agreements to procure the services of implementers to deliver agreed goods.

6. Post-implementation • Ensure that all parties to the project agreement understand their respective obligations.

2.3. Organisational environment

The GIFA has now established a sustainable pipeline of projects that have been sourced from provincial departments and municipalities. The mechanisms have been created through the GICC to ensure that there is a central point of coordination for infrastructure projects in the province and GIFA has always been involved in the GICC processes to identify or source strategic infrastructure projects that are suitable for alternative funding. Since 2015/16 financial year GIFA has strengthened its relationship with the Gauteng Planning Division which is the technical coordinator of the GICC. This has resulted in GIFA sourcing a sustainable pipeline of projects for feasibility studies.

The GIFA has made considerable efforts to improve stakeholder relations within government and outside. A number of events were undertaken by the GIFA to build relations that would ensure that GIFA’s offering and value is promoted. Some of the activities conducted by GIFA are;

• The Gauteng Infrastructure Investment Conference: The conference provided a good platform to engage with stakeholders in the infrastructure development and financial sectors. The success of the 2015 conference has provided a good case for Gauteng Provincial Government to host it again in 2017;

• The roadshows to municipalities: The GIFA engaged one-on-one with municipalities across Gauteng to promote GIFA’s value proposition and identify strategic infrastructure projects;

• Investor roadshows: The GIFA has engaged possible funding partners through investor roadshows and engagements and this has become an ongoing series of engagements. The GIFA has engaged strategic organisations such as BASA and ASISA and this has created links for GIFA with potential investors.

2.4. Key policy developments and legislative changes

There were no changes to relevant policies or legislation that may have affected the operations of the GIFA during the period under review.

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3. STRATEGIC OUTCOME ORIENTED GOALS

The following are the GIFA’s strategic goals and significant achievements with regard to outcome(s):

Strategic Goals Achievements Highlights

To ensure a sustainable pipeline of strategic infrastructure projects that are catalysts for socio-economic development through a coordinated process in the province

• 10 projects were sourced through the coordinated process to ensure that GIFA’s project pipeline remains sustainable.

To ensure that GPG develops infrastructure projects to bankable proposals that will attract funding from various sources

• 6 feasibility studies were completed.

To become a centre of excellence that applies various funding models for infrastructure financing solutions

• 5 financial models were developed and analysed.

To establish a network of investor partnerships and build investor confidence in GCR initiated projects

• Investor roadshows were organised to promote the GIFA’s projects and offerings.

• Stakeholder engagements were organised in district municipalities.

To ensure efficient and economic contracting for infrastructure projects in a manner that GCR realises the socio-economic benefits

• Identified preferred bidders for 4 projects and submitted TAII(b) applications to National Treasury. The projects are under financial close process.

4. PERFORMANCE INFORMATION BY PROGRAMME

4.1. Programme 1: Project Development

• Purpose:

The purpose of this business unit is to source infrastructure projects from sector departments, municipalities and provincial agencies through processes and structures such as GICC, MTEC, PBC and engagements with accounting officers. The business unit is responsible for developing the projects into comprehensive business plans that are ready for funding and implementation. The key activities of the business unit involve identification of appropriate projects, pre-feasibility and feasibility assessments, risk assessments, development of business plans, commercial and operational due diligence.

• List the strategic objectives for the financial year under review:

• To develop a framework for Central Point for coordination of infrastructure projects to promote better planning and funding synergy for strategic infrastructure projects across all spheres government in the province

• To complete feasibility studies to determine viability and the mix of funding required for infrastructure projects

• To develop a Project Filtration Criteria to identify strategic infrastructure projects that will have greater impact on provincial priorities

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ase

2

j. W

est R

and

Airp

ort

10 p

rojec

ts w

ere

sour

ced

whic

h is

an

over

-ach

ievem

ent b

y

one

proj

ect

Stak

ehol

der e

ngag

emen

t dr

ive in

201

6 to

pro

mot

e G

IFA re

sulte

d in

an in

crea

se

in re

ques

ts fo

r pro

ject

deve

lopm

ent s

uppo

rt f

rom

m

unici

paliti

es

20

ANNUAL REPORT 2016-2017Pr

ogra

mm

e N

ame:

Pro

ject

Dev

elop

men

t

Stra

tegi

c ob

ject

ives

Act

ual

Ach

ieve

men

t 20

15/2

016

Plan

ned

Targ

et

2016

/201

7A

ctua

l Ach

ieve

men

t 20

16/2

017

Dev

iati

on fr

om

plan

ned

targ

et t

o A

ctua

l Ach

ieve

men

t fo

r 20

16/2

017

Com

men

t on

dev

iati

ons

To c

ompl

ete

feas

ibilit

y stu

dies

to d

eter

mine

viab

ility

and

the

mix

of fu

nding

re

quire

d fo

r inf

rastr

uctu

re

proj

ects

5 pr

ojec

t fea

sibilit

y stu

dies

w

ere

com

plet

edCo

mpl

ete

6 pr

ojec

t fe

asib

ility

studi

es6

proj

ect f

easib

ility

studi

es w

ere

com

plet

ed:

a. Va

al Lo

gistic

s Hub

b. W

est R

and

Logis

tics H

ub

c. Ek

urhu

leni A

ltern

ative

Was

te Tr

eatm

ent

Tech

nolo

gy (A

WTT

)

d. Ci

ty o

f Tsh

wan

e Ag

ro-p

roce

ssing

Hub

e. In

dustr

ial D

evelo

pmen

t: Wes

t Ran

d Co

rrid

or

f. G

aute

ng S

choo

ls Pr

ogra

mm

e

Non

eN

one

6 Pr

ojec

t App

raisa

l Re

port

s (PA

Rs) w

ere

com

plet

ed

Com

plet

e 6

PARs

of

pro

jects

read

y fo

r fin

ancia

l stru

ctur

ing

6 PA

Rs w

ere

com

plet

ed:

a. Va

al Lo

gistic

s Hub

b. W

est R

and

Logis

tics H

ub

c. Ek

urhu

leni A

WTT

d. Ci

ty o

f Tsh

wan

e Ag

ro-p

roce

ssing

Hub

e. In

dustr

ial D

evelo

pmen

t: Wes

t Ran

d Co

rrid

or

f. G

aute

ng S

choo

ls Pr

ogra

mm

e

Non

eN

one

To d

evelo

p a

Proj

ect

Filtra

tion

Crite

ria to

iden

tify

strat

egic

infra

struc

ture

pr

ojec

ts th

at w

ill ha

ve

grea

ter i

mpa

ct o

n pr

ovinc

ial

prio

rities

The

Proj

ect F

iltrat

ion

Crite

ria fo

r ide

ntify

ing

strat

egic

infra

struc

ture

pr

ojec

ts w

as re

view

ed

Revie

w th

e Pr

ojec

t Fil

tratio

n Cr

iteria

for

iden

tifyin

g str

ateg

ic inf

rastr

uctu

re p

rojec

ts

Proj

ect F

iltrat

ion

Crite

ria fo

r ide

ntify

ing

strat

egic

infra

struc

ture

pro

jects

was

rev

iewed

N

one

Non

e

21

ANNUAL REPORT 2016-2017Pe

rfor

man

ce In

dica

tors

:

Perf

orm

ance

In

dica

tor

Act

ual

Ach

ieve

men

t 20

13/2

014

Act

ual

Ach

ieve

men

t 20

14/2

015

Act

ual

Ach

ieve

men

t 20

15/2

016

Plan

ned

Targ

et

2016

/201

7A

ctua

l Ach

ieve

men

t 20

16/2

017

Dev

iati

on

from

pla

nned

ta

rget

to

Act

ual

Ach

ieve

men

t fo

r 20

16/2

017

Com

men

t on

de

viat

ions

Effe

ctive

Fra

mew

ork

for C

entra

l Poi

nt

for C

oord

inatio

n of

Infra

struc

ture

Pr

ojec

ts

N/A

The

Fram

ewor

k fo

r Cen

tral P

oint

fo

r Coo

rdina

tion

of In

frastr

uctu

re

Proj

ects

was

de

velo

ped

The

Fram

ewor

k fo

r Cen

tral P

oint

fo

r Coo

rdina

tion

of In

frastr

uctu

re

Proj

ects

was

re

view

ed

Revie

w th

e Fr

amew

ork

for

Cent

ral P

oint

for

Coor

dina

tion

of

Infra

struc

ture

Pr

ojec

ts

The

Fram

ewor

k fo

r Ce

ntra

l Po

int

for

Coor

dina

tion

of I

nfra

struc

ture

Pro

jects

was

re

view

ed

Non

eN

one

Num

ber o

f pro

jects

sour

ced

thro

ugh

cent

ral p

oint

of

coor

dina

tion

of

infra

struc

ture

pr

ojec

ts pr

oces

ses

5 infra

struc

ture

pr

ojec

ts so

urce

d an

d de

velo

ped

5 inf

rastr

uctu

re

proj

ects

sour

ced

and

deve

lope

d

5 pr

ojec

ts w

ere

sour

ced

for f

easib

ility

studi

es th

roug

h ce

ntra

l poi

nt o

f co

ordi

natio

n of

inf

rastr

uctu

re

proj

ects

proc

esse

s

Sour

ce 9

pro

jects

for f

easib

ility

studi

es th

roug

h ce

ntra

l poi

nt o

f co

ordi

natio

n of

inf

rastr

uctu

re

proj

ects

proc

esse

s

10 p

rojec

ts w

ere

sour

ced

for f

easib

ility

studi

es th

roug

h ce

ntra

l poi

nt o

f coo

rdina

tion

of in

frastr

uctu

re p

rojec

ts pr

oces

ses:

a. M

erafo

ng B

io-e

nerg

y Pa

rk

b. M

erafo

ng S

olar

Ene

rgy

Farm

c. W

est R

and

Agro

-pro

cess

ing H

ub

d. In

dustr

ial D

evelo

pmen

t: Wes

t Ran

d Co

rrid

or

e. H

opita

ls Pr

ogra

mm

e

f. To

wns

hip E

cono

mic

Hub

s

g. Co

nstit

utio

n H

ill Pr

ecinc

t

h. Tr

i-gen

erat

ion

Plan

ts Ph

ase

2

i. Ro

ofto

op S

olar

pane

ls Ph

ase

2

j. W

est R

and

Airp

ort

10 p

rojec

ts w

ere

sour

ced

whic

h is

an o

ver-

achie

vem

ent b

y

one

proj

ect

Stak

ehol

der

enga

gem

ent

drive

in 2

016

to p

rom

ote

GIFA

resu

lted

in an

incr

ease

in

requ

ests

for p

rojec

t de

velo

pmen

t su

ppor

t fro

m

mun

icipa

lities

22


rfor

man

ce

Indi

cato

r

Act

ual

Ach

ieve

men

t 20

13/2

014

Act

ual

Ach

ieve

men

t 20

14/2

015

Act

ual

Ach

ieve

men

t 20

15/2

016

Plan

ned

Targ

et

2016

/201

7A

ctua

l Ach

ieve

men

t 20

16/2

017

Dev

iati

on

from

pla

nned

ta

rget

to

Act

ual

Ach

ieve

men

t fo

r 20

16/2

017

Com

men

t on

de

viat

ions

Num

ber o

f fe

asib

ility

studi

es

com

plet

ed

5 pr

ojec

t fea

sibilit

y stu

dies

wer

e co

mpl

eted

5 pr

ojec

t fea

sibilit

y stu

dies

wer

e co

mpl

eted

:

Com

plet

e 6

proj

ect

feas

ibilit

y stu

dies

6 pr

ojec

t fea

sibilit

y stu

dies

wer

e co

mpl

eted

:

a. Va

al Lo

gistic

s Hub

b. W

est R

and

Logis

tics H

ub

c. Ek

urhu

leni A

WTT

d. Ci

ty o

f Tsh

wan

e Ag

ro-p

roce

ssing

Hub

e. In

dustr

ial D

evelo

pmen

t: Wes

t Ran

d Co

rrid

or

f. G

aute

ng S

choo

ls Pr

ogra

mm

e

Non

eN

one

Num

ber o

f Pro

ject

Appr

aisal

Repo

rts

com

plet

ed

5 PA

Rs w

ere

com

plet

ed5

PARs

wer

e co

mpl

eted

6 PA

Rs w

ere

com

plet

edCo

mpl

ete

6 PA

Rs

of p

rojec

ts re

ady

for

finan

cial s

truct

uring

6 PA

Rs w

ere

com

plet

ed:

a. Va

al Lo

gistic

s Hub

b. W

est R

and

Logis

tics H

ub

c. Ek

urhu

leni A

WTT

d. Ci

ty o

f Tsh

wan

e Ag

ro-p

roce

ssing

Hub

e. In

dustr

ial D

evelo

pmen

t: Wes

t Ran

d Co

rrid

or

f. G

aute

ng S

choo

ls Pr

ogra

mm

e

Non

eN

one

Effe

ctive

Pro

ject

Filtra

tion

Crite

ria fo

r id

entif

ying

strat

egic

infra

struc

ture

pr

ojec

ts

N/A

Proj

ect F

iltrat

ion

Crite

ria w

as fo

r id

entif

ying s

trate

gic

infra

struc

ture

pr

ojec

ts w

as

deve

lope

d

Proj

ect F

iltrat

ion

Crite

ria fo

r id

entif

ying

strat

egic

infra

struc

ture

pr

ojec

ts w

as

revie

wed

Revie

w th

e Pr

ojec

t Fil

tratio

n Cr

iteria

for

iden

tifyin

g str

ateg

ic inf

rastr

uctu

re

proj

ects

Proj

ect F

iltrat

ion

Crite

ria fo

r ide

ntify

ing

strat

egic

infra

struc

ture

pro

jects

was

revie

wed

N

one

Non

e

Prog

ram

me

1 Ex

pend

itur

e

Prog

ram

me

Nam

e

2015

/201

620

16/2

017

Fina

l App

ropr

iati

onA

ctua

l Exp

endi

ture

(O

ver)

/ Und

er E

xpen

ditu

re

Fina

l App

ropr

iati

onA

ctua

l Exp

endi

ture

(O

ver)

/ Und

er E

xpen

ditu

re

R’0

00R

’000

Proj

ect D

evelo

pmen

t 16

497

15 9

4755

015

202

14 9

8022

2

23


4.2. Programme 2: Structured Finance

• Purpose:

The purpose of this programme is to structure finance for developed infrastructure projects and engages potential private and public funders with the aim of raising finance for the projects. The key activities in this business unit involve ensuring that the project is bankable.

• List the strategic objectives for the financial year under review

• To analyse and structure projects to bankability and funding

• To fund projects through alternative sources of funding

• To create a repository for data and relevant information that could be utilized for project financing solutions

• To develop an Investment Memorandum to profile GPG’s strategic projects and attract investor interest

• To develop Funder Engagement Plan and organize Investor Roadshows to promote bankable infrastructure projects

• To provide advice and support to GPG department with procurement and contracting for strategic infrastructure projects

• To monitor project development and implementation and evaluate the socio-economic impact of the projects in line with the provincial priorities

24


rate

gic

obje

ctiv

es, p

erfo

rman

ce in

dica

tors

, pla

nned

tar

gets

and

act

ual a

chie

vem

ents

Stra

tegi

c O

bjec

tives

:

Stra

tegi

c ob

ject

ives

Prog

ram

me

Nam

e: S

truc

ture

d Fi

nanc

e

Act

ual A

chie

vem

ent

2015

/201

6Pl

anne

d Ta

rget

2016

/201

7

Act

ual A

chie

vem

ent

2016

/201

7

Dev

iati

on fr

om p

lann

ed

targ

et t

o A

ctua

l A

chie

vem

ent

for

2016

/201

7

Com

men

t on

dev

iati

ons

To e

ngag

e th

e m

arke

t an

d inv

esto

rs a

nd p

rese

nt

bank

able

proj

ects

to

secu

re a

ltern

ative

fund

ing

N/A

Pres

ent 5

pro

jects

to th

e m

arke

t and

inv

esto

rs

8 pr

ojec

ts w

ere

pres

ente

d to

the

inves

tors

:

a. CO

J AW

TT

b. Ek

urhu

leni A

WTT

c. Ts

hwan

e AW

TT P

rojec

t

d. Se

dibe

ng/ W

est R

and

Bio-

gas

e. Lin

dley

Was

te W

ater

Trea

tmen

t Plan

t (W

WTP

)

f. Va

al Lo

gistic

s Hub

g. W

est R

and

Logis

tics H

ub

h. G

aute

ng S

choo

ls Pr

ogra

mm

e

8 pr

ojec

ts w

ere

pres

ente

d an

d th

is is

an o

ver-

achie

vem

ent b

y 3

pro

jects

The

infor

mat

ion

for 3

mor

e pr

ojec

ts w

as re

adily

avail

able

from

the

feas

ibilit

y stu

dies

at

the

time

of u

nder

takin

g th

e inv

esto

r roa

dsho

ws

To m

anag

e th

e pr

oces

ses o

f fina

ncial

an

d co

mm

ercia

l clo

se to

se

cure

alte

rnat

ive fu

nding

fo

r ban

kable

pro

jects

5 pr

ojec

ts re

ceive

d TA

II(a)

from

Nat

iona

l Tr

easu

ry

Conc

lude

finan

cial a

nd

com

mer

cial c

lose

of 4

pr

ojec

ts

The

pref

erre

d bi

dder

s for

the

follo

wing

pro

jects

wer

e id

entifi

ed a

nd TA

II(b)

app

licat

ions

wer

e su

bmitt

ed to

the

Nat

iona

l Tre

asur

y:

a. Ts

hwan

e In

nova

tion

Hub

: EB

2

b. Ts

hwan

e In

nova

tion

Hub

: EB

3

c. Tr

i-gen

erat

ion

Plan

ts pr

ojec

t

d. Ro

ofto

p So

larpa

nels

Proj

ect

Finan

cial a

nd c

omm

ercia

l clo

se o

f 4 p

rojec

ts w

as n

ot

achie

ved

how

ever

, TAI

I(b) f

or

Tri-g

ener

atio

n pr

ojec

t was

ob

taine

d an

d sti

ll aw

aiting

TA

II(b)

for t

he o

ther

thre

e pr

ojec

ts

The

proc

ess o

f tre

asur

y ap

prov

als w

as p

rotra

cted

. Th

ere

is co

ntinu

ous

cons

ultat

ions

with

the

Nat

iona

l Tre

asur

y to

fast-

track

the

appr

ovals

To d

evelo

p Fu

nder

En

gage

men

t Plan

to

prom

ote

bank

able

infra

struc

ture

pro

jects

to

fund

ers a

nd in

vesto

rs

The

Fund

er

Enga

gem

ent P

lan w

as

upda

ted

and

revie

wed

Revie

w a

nd u

pdat

e Fu

nder

Eng

agem

ent

Plan

The

Fund

er E

ngag

emen

t Plan

was

revie

wed

and

up

date

dN

one

Non

e

25


Stra

tegi

c ob

ject

ives

Prog

ram

me

Nam

e: S

truc

ture

d Fi

nanc

e

Act

ual A

chie

vem

ent

2015

/201

6Pl

anne

d Ta

rget

2016

/201

7

Act

ual A

chie

vem

ent

2016

/201

7

Dev

iati

on fr

om p

lann

ed

targ

et t

o A

ctua

l A

chie

vem

ent

for

2016

/201

7

Com

men

t on

dev

iati

ons

To c

reat

e a

repo

sitor

y fo

r dat

a an

d re

levan

t inf

orm

atio

n th

at c

ould

be

utili

zed

for p

rojec

t fin

ancin

g so

lutio

ns

The

repo

sitor

y of

po

tent

ial in

vesto

rs/

fund

ers w

as

main

taine

d an

d up

date

d

Main

tain

and

upda

te

repo

sitor

y of

pot

entia

l inv

esto

rs/ f

unde

rs.

The

repo

sitor

y of

pot

entia

l inve

stors

/ fun

ders

was

m

ainta

ined

and

upda

ted

Non

eN

one

To d

evelo

p an

Inve

stmen

t M

emor

andu

m to

pro

file

GPG

’s str

ateg

ic pr

ojec

ts an

d at

tract

inve

stor

inter

est

The

Inves

tmen

t M

emor

andu

m w

as

upda

ted

with

new

ba

nkab

le pr

ojec

ts

Upd

ate

the

Inves

tmen

t M

emor

andu

m w

ith

new

ban

kable

pro

jects

The

Inves

tmen

t Mem

oran

dum

was

upd

ated

with

ne

w b

anka

ble p

rojec

tsN

one

Non

e

To p

rovid

e ad

vice

and

supp

ort t

o G

PG

depa

rtm

ent w

ith

proc

urem

ent a

nd

cont

ract

ing fo

r stra

tegic

inf

rastr

uctu

re p

rojec

ts

6 ba

nkab

le pr

ojec

ts su

ppor

ted

durin

g TR

16 o

r con

vent

iona

l pr

ocur

emen

t and

pr

oces

ses

Prov

ide

supp

ort

to 5

ban

kable

pr

ojec

ts du

ring T

R16

or c

onve

ntio

nal

proc

urem

ent a

nd

cont

ract

ing p

roce

sses

5 ba

nkab

le pr

ojec

ts w

ere

supp

orte

d du

ring T

R16

or

conv

entio

nal p

rocu

rem

ent a

nd p

roce

sses

:

a. Ts

hwan

e In

nova

tion

Hub

: EB

2

b. Ts

hwan

e In

nova

tion

Hub

: EB

3

c. Tr

i-gen

erat

ion

Plan

ts pr

ojec

t

d. Ro

ofto

p So

larpa

nes P

rojec

t

e. Jew

elery

Man

ufac

turin

g Pr

ecinc

t

Non

eN

one

To m

onito

r pro

ject

deve

lopm

ent a

nd

impl

emen

tatio

n an

d ev

aluat

e th

e so

cio-

econ

omic

impa

ct o

f the

pr

ojec

ts in

line

with

the

prov

incial

prio

rities

4 M

onito

ring

and

Evalu

atio

n Re

port

s on

pro

jects

wer

e pr

oduc

ed

Prod

uce

4 M

onito

ring

and

Evalu

atio

n re

port

s on

pro

jects

4 M

onito

ring

and

Evalu

atio

n Re

port

s on

proj

ects

wer

e pr

oduc

edN

one

Non

e

26


rfor

man

ce In

dica

tors

Prog

ram

me

Nam

e: S

truc

ture

d Fi

nanc

e

Perf

orm

ance

In

dica

tors

Act

ual

Ach

ieve

men

t 20

13/2

014

Act

ual A

chie

vem

ent

2014

/201

5A

ctua

l A

chie

vem

ent

2015

/201

6

Plan

ned

Targ

et

2016

/201

7

Act

ual A

chie

vem

ent

2016

/201

7

Dev

iati

on

from

pla

nned

ta

rget

to

Act

ual

Ach

ieve

men

t fo

r 20

16/2

017

Com

men

t on

de

viat

ions

Num

ber

of p

rojec

ts pr

esen

ted

to

the

mar

ket a

nd

inves

tors

N/A

N/A

N/A

Pres

ent 5

pro

jects

to th

e m

arke

t and

inv

esto

rs8

proj

ects

wer

e pr

esen

ted

to th

e inv

esto

rs:

a. CO

J AW

TT

b. Ek

urhu

leni A

WTT

c. Ts

hwan

e AW

TT P

rojec

t

d. Se

dibe

ng/ W

est R

and

Bio-

gas

e. Lin

dley

WW

TP

f. Va

al Lo

gistic

s Hub

g. W

est R

and

Logis

tics H

ub

h. G

aute

ng S

choo

ls Pr

ogra

mm

e

8 pr

ojec

ts w

ere

pres

ente

d an

d th

is is

an o

ver-a

chiev

emen

t by

3 p

rojec

ts

Info

rmat

ion

for

3 m

ore

proj

ects

was

read

ily

avail

able

thro

ugh

feas

ibilit

y stu

dies

at

the

time

of

unde

rtak

ing

the

inve

stor

road

show

s

Num

ber o

f fin

ancia

l and

co

mm

ercia

l clo

se

conc

luded

N/A

N/A

5 pr

ojec

ts re

ceive

d TA

II(a)

from

Nat

iona

l Tr

easu

ry

Conc

lude

finan

cial a

nd

com

mer

cial c

lose

of 4

pr

ojec

ts

The

pref

erre

d bi

dder

s for

the

follo

wing

pro

jects

wer

e id

entifi

ed

and T

AII(b

) app

licat

ions

wer

e su

bmitt

ed to

the

Nat

iona

l Tre

asur

y:

a. Ts

hwan

e In

nova

tion

Hub

: EB

2

b. Ts

hwan

e In

nova

tion

Hub

: EB

3

c. Tr

i-gen

erat

ion

Plan

ts pr

ojec

t

d. Ro

ofto

p So

larpa

nels

Proj

ect

Finan

cial a

nd

com

mer

cial c

lose

of

4 pr

ojec

ts w

as n

ot

achie

ved

how

ever

, TA

II(b)

for T

ri-ge

nera

tion

proj

ect

was

obt

ained

and

sti

ll aw

aiting

TAI

I(b)

for t

he o

ther

thre

e pr

ojec

ts

The

proc

ess

of tr

easu

ry

appr

ovals

was

pr

otra

cted

. The

re

is co

ntinu

ous

cons

ultat

ions

w

ith th

e N

atio

nal

Trea

sury

to

fast-t

rack

the

appr

ovals

Effe

ctive

Fu

nder

En

gage

men

t Pl

an

N/A

Fund

er E

ngag

emen

t Pl

an w

as d

evelo

ped

and

impl

emen

ted

in lin

e w

ith b

anka

ble p

rojec

ts.

The

Fund

er

Enga

gem

ent P

lan

was

upd

ated

and

re

view

ed

Revie

w a

nd u

pdat

e Fu

nder

En

gage

men

t Plan

The

Fund

er E

ngag

emen

t Plan

was

up

date

d an

d re

view

edN

one

Non

e

27


ogra

mm

e N

ame:

Str

uctu

red

Fina

nce

Perf

orm

ance

In

dica

tors

Act

ual

Ach

ieve

men

t 20

13/2

014

Act

ual A

chie

vem

ent

2014

/201

5A

ctua

l A

chie

vem

ent

2015

/201

6

Plan

ned

Targ

et

2016

/201

7

Act

ual A

chie

vem

ent

2016

/201

7

Dev

iati

on

from

pla

nned

ta

rget

to

Act

ual

Ach

ieve

men

t fo

r 20

16/2

017

Com

men

t on

de

viat

ions

Effe

ctive

re

posit

ory

for d

ata

and

relev

ant

infor

mat

ion

that

cou

ld

be u

tilize

d fo

r pro

ject

finan

cing

solut

ions

N/A

Repo

sitor

y on

ac

cess

to fu

nding

for

infra

struc

ture

pro

jects

from

wid

e so

urce

s of

fund

ing in

stitu

tions

was

cr

eate

d.

The

repo

sitor

y of

po

tent

ial in

vesto

rs/

fund

ers w

as

main

taine

d an

d up

date

d

Main

tain

and

upda

te

repo

sitor

y of

pot

entia

l inv

esto

rs/ f

unde

rs

The

repo

sitor

y of

pot

entia

l inv

esto

rs/ f

unde

rs w

as m

ainta

ined

and

upda

ted

Non

eN

one

Effe

ctive

Inv

estm

ent

Mem

oran

dum

N/A

GFA

Inve

stmen

t M

emor

andu

m w

as

deve

lope

d an

d im

plem

ente

d in

line

with

the

proj

ect

pipe

lines

The

Inves

tmen

t M

emor

andu

m w

as

upda

ted

with

new

ba

nkab

le pr

ojec

ts

Upd

ate

the

Inves

tmen

t M

emor

andu

m w

ith n

ew

bank

able

proj

ects

The

Inves

tmen

t Mem

oran

dum

w

as u

pdat

ed w

ith n

ew b

anka

ble

proj

ects

Non

eN

one

Num

ber o

f ba

nkab

le pr

ojec

ts su

ppor

ted

durin

g TR1

6 or

co

nven

tiona

l pr

ocur

emen

t an

d co

ntra

cting

pr

oces

ses

N/A

3 pr

ojec

ts w

ere

supp

orte

d w

ith

proc

urem

ent a

nd

cont

ract

ing o

f ban

kable

pr

ojec

ts

6 ba

nkab

le pr

ojec

ts w

ere

supp

orte

d du

ring T

R16

or

conv

entio

nal

proc

urem

ent a

nd

proc

esse

s

Prov

ide

supp

ort t

o 5

bank

able

proj

ects

durin

g TR

16 o

r con

vent

iona

l pr

ocur

emen

t and

co

ntra

cting

pro

cess

es

5 ba

nkab

le pr

ojec

ts w

ere

supp

orte

d du

ring T

R16

or

conv

entio

nal p

rocu

rem

ent a

nd

proc

esse

s:

a. Ts

hwan

e In

nova

tion

Hub

: EB

2

b. Ts

hwan

e In

nova

tion

Hub

: EB

3

c. Tr

i-gen

erat

ion

Plan

ts Pr

ojec

t

d. Ro

ofto

p So

larpa

nels

Proj

ect

e. Jew

elery

Man

ufac

turin

g Pr

ecinc

t

Non

eN

one

Num

ber o

f m

onito

ring

and

evalu

atio

n re

port

s pr

oduc

ed

N/A

N/A

4 M

onito

ring

and

Evalu

atio

n Re

port

s on

pro

jects

wer

e pr

oduc

ed

Prod

uce

4 M

onito

ring

and

evalu

atio

n re

port

s on

proj

ects

4 M

onito

ring

and

Evalu

atio

n Re

port

s on

proj

ects

wer

e pr

oduc

edN

one

Non

e

28


Programme 2 Expenditure

Programme Name 2015/2016 2016/2017

Final Appropriation

Actual Expenditure

(Over)/ Under Expenditure

Final Appropriation

Actual Expenditure

(Over)/ Under Expenditure

R’000 R’000

Structured Finance 843 843 - 4 945 3 733 1 212

4.3. Programme 3: Administration

• Purpose:

The purpose of the Programme is to provide leadership, strategic management, communications and stakeholder management and administrative support to the GIFA. The key business unit activities involve developing the strategic plan of the GIFA and monitoring its implementation, implementation of the communication strategy and ensuring strengthened relations with key stakeholders, building the capacity of GIFA and ensuring that GIFA becomes a centre of excellence through research and knowledge management.

• Sub- programmes:

• Office of the CEO

• Marketing, Communications and Stakeholder Engagement

• Financial Management

• Information and Communication Technology

• Facilities Management

• Human Resource Management

• List the strategic objectives for the financial year under review

• To provide sound strategic direction and leadership to the GIFA through credible Strategic Plans, Annual Performance Plans and reliable management of GIFA’s performance.

• To support the GIFA through effective communications, marketing and stakeholder relations management.

• To ensure good governance and a sound control environment through relevant finance policies, in-year monitoring, and risk and security management.

• To ensure ICT governance within the GIFA in line with the Corporate Governance of ICT Framework (CGIF).

• To ensure the continuity of GIFA’s business in the event of disaster by constantly testing the credibility of established business continuity plans

• To efficiently manage GIFA facilities in compliance with PMFA and Occupational Health & Safety Act (OHSA).

• To establish an efficient and developmental human resources management for the GIFA.

29


rate

gic

obje

ctiv

es, p

erfo

rman

ce in

dica

tors

, pla

nned

tar

gets

and

act

ual a

chie

vem

ents

Stra

tegi

c O

bjec

tives

:

Prog

ram

me

Nam

e: A

dmin

istr

ation

Stra

tegi

c ob

ject

ives

Act

ual A

chie

vem

ent

2015

/201

6Pl

anne

d Ta

rget

20

16/2

017

Act

ual A

chie

vem

ent

2016

/201

7D

evia

tion

fr

om p

lann

ed

targ

et t

o A

ctua

l A

chie

vem

ent

for

2016

/201

7

Com

men

t on

de

viat

ions

To p

rovid

e so

und

strat

egic

dire

ctio

n an

d lea

ders

hip to

the

GIFA

thro

ugh

cred

ible

Stra

tegic

Plan

s, Ann

ual

Perfo

rman

ce P

lans a

nd re

liable

m

anag

emen

t of G

IFA’s

perfo

rman

ce

The

2016

/17

APP

was

dev

elope

d an

d su

bmitt

ed to

GPT

Dev

elop

2017

/18

Annu

al Pe

rform

ance

Plan

The

2017

/18

Annu

al Pe

rform

ance

Pl

an w

as d

evelo

ped

and

subm

itted

to

GPT

Non

eN

one

Perfo

rman

ce In

form

atio

n M

anag

emen

t Fr

amew

ork

was

revie

wed

Revie

w th

e Pe

rform

ance

Info

rmat

ion

Man

agem

ent F

ram

ewor

kPe

rform

ance

Info

rmat

ion

Man

agem

ent F

ram

ewor

k w

as

revie

wed

Non

eN

one

4 Q

uart

erly

Perfo

rman

ce R

epor

ts an

d 1

Annu

al Pe

rform

ance

Rep

ort w

ere

subm

itted

with

in th

e pr

escr

ibed

tim

es

Subm

it 4

Qua

rter

ly Pe

rform

ance

Re

port

s to

GPT

and

1 A

nnua

l Pe

rform

ance

Rep

ort

4 Q

uart

erly

Perfo

rman

ce R

epor

ts an

d 1

Annu

al Pe

rform

ance

Re

port

wer

e su

bmitt

ed w

ithin

the

pres

crib

ed ti

mes

Non

eN

one

To su

ppor

t the

GIFA

thro

ugh

effe

ctive

com

mun

icatio

ns,

mar

ketin

g an

d sta

keho

lder

relat

ions

m

anag

emen

t

5 ke

y co

mm

unica

tions

and

mar

ketin

g ac

tivitie

s wer

e un

dert

aken

in lin

e w

ith th

e In

tegr

ated

Mar

ketin

g an

d Co

mm

unica

tions

Stra

tegy

of G

IFA

Und

erta

ke 3

key

com

mun

icatio

ns

and

mar

ketin

g ac

tivitie

s in

line

with

the

Inte

grat

ed M

arke

ting

and

Com

mun

icatio

ns S

trate

gy o

f GIFA

3 ke

y co

mm

unica

tions

and

m

arke

ting

activ

ities w

ere

unde

rtak

en

in su

ppor

t of G

IFA’s

enga

gem

ent

with

key

stak

ehol

ders

Non

eN

one

To su

ppor

t the

GIFA

thro

ugh

effe

ctive

com

mun

icatio

ns,

mar

ketin

g an

d sta

keho

lder

relat

ions

m

anag

emen

t

7 ke

y sta

keho

lder

relat

ions

act

ivitie

s w

hich

enta

iled

mun

icipa

l visi

ts as

ke

y sta

keho

lder

s wer

e or

ganis

ed in

lin

e w

ith th

e St

akeh

olde

r Rela

tions

M

anag

emen

t Plan

Org

anise

3 k

ey s

take

hold

er re

latio

ns

activ

ities/

even

ts in

line

with

the

Stak

ehol

der R

elatio

ns M

anag

emen

t Pl

an

3 ke

y sta

keho

lder

relat

ions

act

ivitie

s w

ere

orga

nised

in lin

e w

ith th

e St

akeh

olde

r Rela

tions

Man

agem

ent

Plan

:

a. G

IFA’s

wor

ksho

p w

ith S

edib

eng

Dist

rict M

unici

pality

b. G

IFA’s

enga

gem

ent w

ith

Emfu

leni L

ocal

Mun

icipa

lity o

n pr

ojec

ts

c. G

IFA’s

enga

gem

ent w

ith

Mog

ale C

ity o

n Lin

dley

Was

te

Wat

er Tr

eatm

ent P

rojec

t

Non

eN

one

30


ogra

mm

e N

ame:

Adm

inis

trati

onSt

rate

gic

obje

ctiv

esA

ctua

l Ach

ieve

men

t 20

15/2

016

Plan

ned

Targ

et

2016

/201

7A

ctua

l Ach

ieve

men

t 20

16/2

017

Dev

iati

on

from

pla

nned

ta

rget

to

Act

ual

Ach

ieve

men

t fo

r 20

16/2

017

Com

men

t on

de

viat

ions

To e

nsur

e go

od g

over

nanc

e an

d a

soun

d co

ntro

l env

ironm

ent

thro

ugh

relev

ant fi

nanc

e po

licies

, in-

year

mon

itorin

g, ris

k an

d se

curit

y m

anag

emen

t

Achie

ved

unqu

alifie

d au

dit r

epor

t with

m

atte

rs fo

r 201

4/15

fina

ncial

year

Achie

ve a

clea

n au

dit r

epor

tCl

ean

audi

t ach

ieved

for 2

015/

16

finan

cial y

ear

Non

eN

one

3 Q

uart

erly

Finan

cial S

tate

men

ts w

ere

appr

oved

and

subm

itted

to

Gau

teng

Pro

vincia

l Tre

asur

y w

ithin

the

pres

crib

ed ti

mes

.

The

4th

Qua

rter

Fina

ncial

Sta

tem

ent

was

subm

itted

as p

art o

f the

201

5/16

An

nual

Finan

cial S

tate

men

t.

Com

pile

and

subm

it 3

Qua

rter

ly an

d 1

Annu

al Fin

ancia

l Sta

tem

ents

to

Gau

teng

Pro

vincia

l Tre

asur

y

3 Q

uart

erly

Finan

cial S

tate

men

ts w

ere

appr

oved

and

subm

itted

to

Gau

teng

Pro

vincia

l Tre

asur

y w

ithin

the

pres

crib

ed ti

mes

.

The

4th

Qua

rter

Fina

ncial

St

atem

ent w

as su

bmitt

ed a

s par

t of

the

2016

/17

Annu

al Fin

ancia

l St

atem

ent.

Non

eN

one

The

GIFA

fina

nce

polic

ies, b

usine

ss

proc

esse

s, pr

oced

ures

and

syste

ms

wer

e re

view

ed

Revie

w th

e G

IFA fi

nanc

e po

licies

, bu

sines

s pro

cess

es, p

roce

dure

s and

sy

stem

s

The

GIFA

fina

nce

polic

ies, b

usine

ss

proc

esse

s, pr

oced

ures

and

syste

ms

wer

e re

view

ed

Non

eN

one

The

GIFA

’s Ri

sk M

anag

emen

t Stra

tegy

w

as d

evelo

ped

Dev

elop

GIFA

’s Ri

sk M

anag

emen

t St

rate

gy

The

GIFA

’s Ri

sk M

anag

emen

t St

rate

gy w

as d

evelo

ped

Non

eN

one

All c

ontra

cts c

onclu

ded

with

GIFA

are

m

anag

ed in

term

s of d

elive

rable

s vs

paym

ents

Ensu

re a

ll con

tract

s con

clude

d w

ith G

IFA a

re m

anag

ed in

term

s of

deliv

erab

les v

s pay

men

ts

All c

ontra

cts c

onclu

ded

with

GIFA

ar

e m

anag

ed in

term

s of d

elive

rable

s vs

pay

men

ts

Non

eN

one

All c

ontra

cts c

onclu

ded

with

GIFA

are

m

anag

ed in

term

s of d

elive

rable

s vs

paym

ents

Ensu

re a

ll con

tract

s con

clude

d w

ith G

IFA a

re m

anag

ed in

term

s of

deliv

erab

les v

s pay

men

ts

All c

ontra

cts c

onclu

ded

with

GIFA

ar

e m

anag

ed in

term

s of d

elive

rable

s vs

pay

men

ts

Non

eN

one

4 qu

arte

rly re

port

s on

the

man

agem

ent a

nd o

pera

tions

of t

he

Proj

ect P

repa

ratio

n Fa

cility

(PPF

) wer

e pr

oduc

ed

Prod

uce

4 qu

arte

rly re

port

s on

the

man

agem

ent a

nd o

pera

tions

of

the

PPF

ensu

ring

com

plian

ce to

the

PFM

A

4 qu

arte

rly re

port

s on

the

man

agem

ent a

nd o

pera

tions

of t

he

PPF

wer

e pr

oduc

ed

Non

eN

one

To e

nsur

e IC

T go

vern

ance

with

in th

e G

IFA in

line

with

the

Corp

orat

e G

over

nanc

e of

ICT

Fram

ewor

k (C

GIF)

6 IC

T Po

licies

for G

IFA w

ere

deve

lope

dRe

view

6 IC

T Po

licies

for G

IFA

6 IC

T Po

licies

for G

IFA w

ere

revie

wed

Non

eN

one

To e

nsur

e th

e co

ntinu

ity o

f GIFA

’s bu

sines

s in

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cts c

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with

GIFA

are

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aged

in

term

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ent a

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of th

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surin

g co

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iance

to th

e PF

MA

N/A

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ect P

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cility

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ent a

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ns o

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ere

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uced

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uce

4 qu

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rts o

n th

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emen

t and

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erat

ions

of

the

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ens

uring

co

mpl

iance

to th

e PF

MA

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s on

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man

agem

ent

and

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ns o

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ojec

t Pre

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ity w

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uced

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ogra

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tegi

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sfer o

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t of

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ster w

as c

ompl

eted

.

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’s Bu

sines

s Con

tinuit

y Pl

an w

as re

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ed a

nd

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ted

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ess C

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and

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and

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ities w

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cient

ly an

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ce w

ith

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ant l

egisl

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n, re

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ions

and

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licies

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facilit

ies

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ent

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facil

ities w

ere

man

aged

ef

ficien

tly a

nd in

com

plian

ce

with

relev

ant l

egisl

atio

n, re

gulat

ions

and

pol

icies

on

facilit

ies m

anag

emen

t

Prod

uce

4 qu

arte

rly

repo

rts o

n fac

ilities

m

anag

emen

t ens

uring

co

mpl

iance

to P

FMA

and

OH

SA

Prod

uce

4 qu

arte

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rts o

n fac

ilities

m

anag

emen

t en

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g co

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iance

to

PFM

A an

d O

HSA

4 qu

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port

s on

facilit

ies m

anag

emen

t en

surin

g co

mpl

iance

to

PFM

A an

d O

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wer

e pr

oduc

ed

Non

eN

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preh

ensiv

e an

d im

plem

enta

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R

Dev

elopm

ent P

lan fo

r G

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ted

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man

agem

ent a

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rol o

f HR

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men

ts, re

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s an

d H

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ters

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ted

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ts, re

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R re

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ters

with

in G

FA

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HR

Plan

and

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licies

was

dev

elope

dRe

view

the

GIFA

HR

Plan

and

pol

icies

The

HR

Plan

and

po

licies

wer

e re

view

edN

one

Non

e

Cred

ible

and

relia

ble H

R Po

licies

N

/AN

/ARe

view

ed a

nd u

pdat

e H

R Po

licies

for G

IFAIm

plem

enta

ble Tr

aining

and

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evelo

pmen

t Plan

N/A

N/A

Dev

elope

d an

d im

plem

ente

d th

e H

R Tr

aining

Plan

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elop

and

impl

emen

t HR

Train

ing P

lan

The

HR

Train

ing P

lan

was

dev

elope

d an

d im

plem

ente

d

Non

eN

one

36


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mm

e N

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inis

trat

ion

Stra

tegi

c ob

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ual A

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et t

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reem

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)

5.

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AN

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ENT

S

GIFA

did

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y tra

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r pay

men

ts.

6.

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ND

ITIO

NA

L G

RA

NT

S

GIFA

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not

pay

or r

eceiv

e an

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nditio

nal g

rant

s.

7.

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NO

R F

UN

DS

GIFA

did

not

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ive a

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onor

fund

s.

8.

CA

PITA

L IN

VES

TM

ENT

GIFA

pro

cure

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s dur

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ancia

l yea

r (R’

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le A

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ty, p

lant

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ipm

ent

TO

TAL

GIFA

036

636

6

PART C: GOVERNANCE

38


1. INTRODUCTION

GIFA is committed to maintain the highest standards of governance that is fundamental to the management of public finances and resources. Governance structures are in place to effectively, efficiently and economically utilise the allocated resources and ensure that it is applied towards the objectives of the organisation.

2. RISK MANAGEMENT

GIFA has a risk management policy and strategy in place and regularly conducts risk assessments to determine the effectiveness of its risk management strategy and to identify new and emerging risks. There is a Risk Management Committee in place that reviews the risks and mitigations and report to the CEO.

The risks within GIFA is managed well and the Audit Committee has oversight of the progress and status thereof.

3. FRAUD AND CORRUPTION

A fraud and corruption strategy is in place and controls are set to detect and prevent fraud and corruption within the organisation. No incidences of fraud and corruption were reported for the 2016/17 financial year.

4. MINIMISING CONFLICT OF INTEREST

Senior management submits financial disclosures and conflict of interest declarations are made at the relevant committee meetings.

No conflict of interest was reported for the 2016/17 financial year.

5. CODE OF CONDUCT

All GIFA employees are bound by the Code of Conduct, which is based on Public Service Code of Conduct.

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES

There are no Health Safety and Environmental issues that has a significant impact on the operations of the GIFA.

7. PORTFOLIO COMMITTEES

GIFA attends Portfolio Committee meetings with the Department of Treasury. No significant issues were raised.

8. SCOPA RESOLUTIONS

SCOPA did not raise any matters relating to GIFA.

9. PRIOR MODIFICATIONS TO AUDIT REPORTS

A detailed plan was developed and implemented to resolve all matters reported by the AGSA in the previous financial year.

Findings relating to Supply Chain management (SCM) non-compliance and the 30-day payment were addressed.

10. INTERNAL AUDIT AND AUDIT COMMITTEES

Internal audit performed two audits, being SCM and performance audits. No significant matters were raised.

GFA and GIFA formed part of the Gauteng Cluster 2 audit committee and attended quarterly meetings. (Refer to the Audit Committee report).

39


11. AUDIT COMMITTEE REPORT

Gauteng Infrastructure Financing Agency

We are pleased to present our report for the twelve months ended 31 March 2017.

Audit Committee and attendance

The Audit Committee consists of the external Members listed hereunder and is required to meet a minimum of at least two times per annum as per the provisions of the Public Finance Management Act, 1999 (Act Number 1 of 1999) (PFMA). In terms of the approved Terms of Reference (GPG Audit Committee Charter), five meetings were held during the current year, i.e. three meetings to consider the Quarterly Performance Reporting (financial and non-financial) and two meetings to review and discuss the Annual Financial Statements and the Auditor-General of South Africa’s (AGSA) Audit and Management Reports.

Non-Executive members

Name of member Number of meetings attended

Mr. Japie du Plessis (Chairperson) 05Ms. Tshidi Molala 05Ms. Catherine Motsisi 04 (Appointed 1 September 2016)

Executive members

In terms of the GPG Audit Committee Charter, officials listed hereunder are obliged to attend meetings of the Audit Committee:

Compulsory attendees Number of meetings attended

Mr. Oupa Seabi (Accounting Officer) 04Ms. Rianda Kruger (Chief Financial Officer) 02 (Resigned 1 February 2017)Mr. Victor Molate (Acting Chief Financial Officer) 03Ms. Lorraine Francois (Chief Audit Executive) 04

The Audit Committee noted that the Accounting Officer did not attend all five scheduled Audit Committee meetings and delegated a proxy to attend on his behalf. Therefore, the Audit Committee is satisfied that the Agency adhered to the provisions of the GPG Audit Committee Charter.

The Members of the Audit Committee met with the Senior Management of the Agency, Internal Audit and the AGSA, individually and collectively to address risks and challenges facing the Agency. A number of in-committee meetings were held to address control weaknesses and deviations within the Agency.

Audit Committee responsibility

The Audit Committee reports that it has complied with its responsibilities arising from section 38(1)(a) of the PFMA and Treasury Regulation 3.1.13. The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with this Charter and has discharged all its responsibilities as contained therein.

The effectiveness of internal control and Information and Communication Technology (ICT) Governance

The Audit Committee has observed that the overall control environment of the Agency has improved during the period under review. The overall opinion of Internal Audit on the internal control design at the Agency is adequate and effective.

The Audit Committee also reviewed the progress with respect to the ICT Governance in line with the ICT Framework issued by the Department of Public Services and Administration. The Audit Committee is satisfied with the ICT internal control.

The Agency did implement the recommendations made by the Audit Committee.

40


Internal Audit

Internal Audit was effective during the financial year. The Audit Committee is satisfied that the Internal Audit Plan represents a clear alignment with the key risks, has adequate information systems coverage, and a good balance across the different categories of audits, i.e. risk based, standard/transversal, performance and computer audits. From a resource point of view, Internal Audit needs to be equipped to provide assurance on a greater number of risks.

The Audit Committee has noted considerable improvement in the communication between the Executive Management, the AGSA and the Internal Audit Function, which has strengthened the Corporate Governance initiatives within the Agency. Combined assurance needs to be implemented within the GPG.

Risk Management

Progress on the Agency’s risk management was reported to the Audit Committee on a quarterly basis. The Audit Committee is satisfied that the actual management of risk is receiving attention, although there are areas that still require improvement. Management should take full responsibility for the entire Enterprise Risk Management process to even further enhance the performance of the Agency.

Forensic Investigations

No forensic investigations were requested for the Agency during the financial year under review.

The quality of quarterly reports submitted in terms of the PFMA and the Division of Revenue Act

The Audit Committee is satisfied with the content and quality of the financial and non-financial quarterly reports prepared and submitted by the Accounting Officer of the Agency during the year under review and confirms that the reports were in compliance with the statutory reporting framework.

Evaluation of the Annual Financial Statements

The Audit Committee has:• Reviewed and discussed the audited Annual Financial Statements to be included in the Annual Report with the AGSA

and the Accounting Officer;• Reviewed the Audit Report of the AGSA;• Reviewed the AGSA’s Management Report and Management’s response thereto; • Reviewed the Agency’s compliance with legal and regulatory provisions; and • Reviewed significant adjustments resulting from the audit.

The Audit Committee concurs with and accepts the AGSA’s conclusions on the Annual Financial Statements and is of the opinion that the audited Annual Financial Statements be accepted and read together with the report of the AGSA.

One-on-One meetings with the Accounting Officer

The Audit Committee has met with the Accounting Officer for the Agency to address unresolved issues.

One-on-One meetings with the Executive Authority

The Audit Committee has met with the Executive Authority for the Agency to apprise the MEC on the performance of the Agency.

Auditor-General of South Africa

The Audit Committee has met with the AGSA to ensure that there are no unresolved issues.

Mr. Japie du PlessisChairperson of the Audit CommitteeDate: 31 July 2017

PART D: HUMAN RESOURCE MANAGEMENT

42


1. INTRODUCTION

The information contained in this part of the annual report has been prescribed by the Minister for the Public Service and Administration for all departments in the public service.

2. OVERVIEW OF HUMAN RESOURCES

As at 31 March 2017, GIFA had 29 approved positions on Persal. All 29 were filled. An additional 2 employees were seconded to GIFA, bringing the staff complement to 30. For purposes of this report, only information relating to the 29 posts will be used.

3. HUMAN RESOURCES OVERSIGHT STATISTICS

3.1. Personnel related expenditure

The following tables summarises the final audited personnel related expenditure by programme and by salary bands. In particular, it provides an indication of the following:

• amount spent on personnel

• amount spent on salaries, overtime, homeowner’s allowances and medical aid.

Table 3.1.1 Personnel expenditure by programme for the period 1 April 2016 and 31 March 2017

Programme Total expenditure

(R’000)

Personnel expenditure

(R’000)

Training expenditure

(R’000)

Professional and special services

expenditure (R’000)

Personnel expenditure

as a % of total expenditure

Average personnel cost per employee

(R’000)

AMINISTRATION 24 620 14 238 150 773 30 647

PROJECT DEVELOPMENT 19 166 5 700 30 0 12 950

STRUCTURED FINANCE 3 738 3 032 1 0 6 1 010

TOTAL 47 524 22 970 181 773 48

Table 3.1.2 Personnel costs by salary band for the period 1 April 2016 and 31 March 2017

Salary band Personnel expenditure

(R’000)

% of total personnel cost

No. of employees

Average personnel cost per employee

(R’000)

Lower skilled (Levels 1-2) 0 0 0 0

Skilled (level 3-5) 662 3 4 166

Highly skilled production (levels 6-8) 2 958 13 7 422

Highly skilled supervision (levels 9-12) 3 468 15 5 694

Senior and Top management (levels 13-16) 15 882 69 13 1 222

Total 22 970 100 29

43


Table 3.1.3 Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for the period 1 April 2016 and 31 March 2017

Programme

Salaries Overtime Home Owners Allowance Medical Aid

Amount (R’000

Salaries as a % of personnel

costs

Amount (R’000)

Overtime as a % of

personnel costs

Amount (R’000)

HOA as a % of personnel

costs

Amount (R’000)

Medical aid as a % of

personnel costs

ADMINISTRATION 10 735 47 0 0 280 1 771 3

PROJECT DEVELOPMENT

4 111 18 0 0 160 0 480 2

STRUCTURED FINANCE

1 923 8 0 0 0 0 0 0

TOTAL 16 769 440 1 251

Table 3.1.4 Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for the period 1 April 2016 and 31 March 2017

Salary band Salaries Overtime Home Owners Allowance Medical Aid

Amount (R’000)

Salaries as a % of personnel costs

Amount (R’000)

Overtime as a % of personnel costs

Amount (R’000)

HOA as a % of personnel costs

Amount (R’000)

Medical aid as a % of personnel costs

Skilled (level 1-2) 0 0 0 0 0 0 0Skilled (level 3-5) 1 074 0 0 0 28 0 58 0Highly skilled production (levels 6-8)

1 908 5 0 0 55 0 89 0

Highly skilled supervision (levels 9-12

2524 11 0 0 14 0 12 0

Senior management (level 13-16)

10 198 49 0 0 343 1 61 0

Total 15 704 65 0 0 440 1 220 0

3.2. Employment and Vacancies

The tables in this section summarise the position with regard to employment and vacancies.

The following tables summarise the number of posts on the establishment, the number of employees, the vacancy rate, and whether there are any staff that are additional to the establishment.

This information is presented in terms of three key variables:

• programme

• salary band

• critical occupations (see definition in notes below).

Departments have identified critical occupations that need to be monitored. In terms of current regulations, it is possible to create a post on the establishment that can be occupied by more than one employee. Therefore, the vacancy rate reflects the percentage of posts that are not filled.

44


Table 3.2.1 Employment and vacancies by programme as on 31 March 2017

ProgrammeNumber of posts

on approved establishment

Number of posts filled Vacancy RateNumber of employees

additional to the establishment

ADMINISTRATION 20 19 0 1PROJECT DEV 7 6 2 0STRUCTURED FINANCE 3 3 0 0

Note: Two secondments were made to administration

Table 3.2.2 Employment and vacancies by salary band as on 31 March 2017

Salary bandNumber of posts on

approved establishmentNumber of posts filled

Vacancy Rate

Number of employees additional to the establishment

Lower skilled ( 1-2) 2 2 0 0Skilled(3-5) 2 2 0 0Highly skilled production (6-8) 7 7 0 0Highly skilled supervision (9-12) 5 5 0 0Senior management (13-16) 13 13 0 0Total 29 29 0 0

Table 3.2.3 Employment and vacancies by critical occupations as on 31 March 2017

Critical occupationNumber of posts on

approved establishmentNumber of posts filled

Vacancy Rate

Number of employees additional to the establishment

Highly skilled supervision (9-12) 5 5 0 0

Senior management (13-16) 13 13 0 0

Total 18 18 0 0

3.3. Filling of SMS Posts

The tables in this section provide information on employment and vacancies as it relates to members of the Senior Management Service by salary level. It also provides information on advertising and filling of SMS posts, reasons for not complying with prescribed timeframes and disciplinary steps taken.

Table 3.3.1 SMS post information as on 31 March 2017

SMS LevelTotal number of

funded SMS posts Total number of SMS posts filled

% of SMS posts filled

Total number of SMS posts vacant

% of SMS posts vacant

Director-General/ Head of Department 1 1 100 0 0Salary Level 16 1 1 100 0 0Salary Level 15 6 6 100 0 0Salary Level 14 3 3 100 0 0Salary Level 13 3 3 100 0 0Total 14 14 100 0 0

45


Table 3.3.2 SMS post information as on 30 September 2016






Director-General/ Head of Department 1 1 100 0 0

Salary Level 16 1 1 100 0 0




Total 14 14 100 0 0

Table 3.3.3 Advertising and filling of SMS posts for the period 1 April 2016 and 31 March 2017






Director-General/ Head of Department 1 1100 0 0





Total 14 14 100 0 0

Table 3.3.4 Reasons for not having complied with the filling of funded vacant SMS - Advertised within 6 months and filled within 12 months after becoming vacant for the period 1 April 2016 and 31 March 2017

Reasons for vacancies not advertised within six months

The positions that were filled in 2016/17 were advertised in newspapers, as well as the DPSA vacancy circulars. Positions for Head of Project Development and Head of Structured Finance are extremely specialised and classified as scare skills. These positions were referred to head-hunters.

Reasons for vacancies not filled within six months

Suitable candidates could not be found. Head-hunting processes were undertaken to identify suitable candidates.

Table 3.3.5 Disciplinary steps taken for not complying with the prescribed timeframes for filling SMS posts within 12 months for the period 1 April 2016 and 31 March 2017

Reasons for vacancies not advertised within six months

No disciplinary steps were taken. Delays were due to scarcity of skills

Reasons for vacancies not filled within six months

Suitable candidates could not be found. Head-hunting processes were undertaken to identify suitable candidates.

46


3.4. Job Evaluation

Within a nationally determined framework, executing authorities may evaluate or re-evaluate any job in his or her organisation. In terms of the Regulations all vacancies on salary levels 9 and higher must be evaluated before they are filled. The following table summarises the number of jobs that were evaluated during the year under review. The table also provides statistics on the number of posts that were upgraded or downgraded.

Table 3.4.1 Job Evaluation by Salary band for the period 1 July 2016 and 31 March 2017

Salary band

Number of posts on approved

establishment

Number of Jobs

Evaluated

% of posts evaluated by salary

bands

Posts Upgraded Posts downgraded

Number% of posts evaluated

Number% of posts evaluated

Lower Skilled (Levels1-2) 2 0 0 0 0 0 100Skilled (Levels 3-5) 2 0 100 0 100 0 100Highly skilled production (Levels 6-8) 7 0 100 0 100 0 100Highly skilled supervision

(Levels 9-12)5 0 100 0 100 0 100

Senior Management Service A 2 0 100 0 100 0 100Senior Management Service B 3 0 100 0 100 0 100Senior Management Service Band C 5 0 100 0 100 0 100Senior Management Service Band D+ 2 0 100 0 100 0 100Senior Management Service Band D 1 0 100 0 100 0 100Total 29 00 100 0 100 0 100

Note: Out of 33 posts approved on the organisational structure, 5 are frozen and in process of consultation with the DPSA.

The following table provides a summary of the number of employees whose positions were upgraded due to their post being upgraded. The number of employees might differ from the number of posts upgraded since not all employees are automatically absorbed into the new posts and some of the posts upgraded could also be vacant.

Table 3.4.2 Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1 April 2016 and 31 March 2017

Gender African Asian Coloured White Total

Female 1 0 0 0 1Male 0 0 0 0 0Total 1 0 0 0 1

Employees with a disability 0

The following table summarises the number of cases where remuneration bands exceeded the grade determined by job evaluation. Reasons for the deviation are provided in each case.

47


Table 3.4.3 Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2016 and 31 March 2017

Occupation Number of employees Job evaluation level Remuneration level

Reason for deviation

Lower Skilled

(Levels1-2)

2 2 3 Positions were supposed to be Job Evaluated for correct levels to be established.

Skilled (Levels 3-5) 0 0 0

Highly skilled production

(Levels 6-8)

2 6 & 7 8 Employees were promoted due to work load

Highly skilled supervision

(Levels 9-12)

9 7 – 12 11 - 15 Employees were seconded to the then GFA to assist with the establishment of the agency.

Senior Management Service A

3 13 13 - 15 Employees were seconded to the then GFA to assist with the establishment of the agency.

Senior Management Service B

2 14 14 & 16 Other employees were seconded to the then GFA to assist with the establishment of the agency.

Senior Management Service Band D+

0 0 0

Senior Management Service Band D

0 16 16

The following table summarises the beneficiaries of the above in terms of race, gender, and disability.

Table 3.4.4 Profile of employees who have salary levels higher than those determined by job evaluation for the period 1 April 2016 and 31 March 2017

Gender African Asian Coloured White Total

Female 5 0 2 1 8Male 5 2 3 0 10Total 10 2 5 1 18

Employees with a disability 0 0 0 0 1

Total number of Employees whose salaries exceeded the grades determine by job evaluation 18

3.5. Employment Changes

No staff turnover took place in 2016/17.

48


Table 3.5.1 Annual turnover rates by salary band for the period 1 April 2016 and 31 March 2017

Salary band Number of employees at beginning of period-1 April 2016

Appointments and transfers into the department

Terminations and transfers out of the department

Turnover rate

Lower skilled ( Levels 1-2) N/A N/A N/A N/ASkilled (Levels3-5) N/A N/A N/A N/AHighly skilled production (Levels 6-8) N/A N/A N/A N/AHighly skilled supervision (Levels 9-12) N/A N/A N/A N/ASenior Management Service Bands A N/A N/A 1 N/ASenior Management Service Bands B N/A N/A 1 N/ASenior Management Service Bands C N/A N/A N/A N/ASenior Management Service Bands D N/A N/A N/A N/AContracts N/A N/A N/A N/ATotal N/A N/A 2 N/A

Table 3.5.2 Annual turnover rates by critical occupation for the period 1 April 2016 and 31 March 2016

Critical occupation

Number of employees at beginning of period-April 20YY

Appointments and transfers into the department

Terminations and transfers out of the department

Turnover rate

N/A

TOTAL

The table below identifies the major reasons why staff left the department.

Table 3.5.3 Reasons why staff left the department for the period 1 April 2016 and 31 March 2017

Termination Type Number % of Total Resignations

Death N/A N/A

Resignation 2 3.5Expiry of contract N/A N/ADismissal – operational changes N/A N/ADismissal – misconduct N/A N/ADismissal – inefficiency N/A N/ADischarged due to ill-health N/A N/ARetirement N/A N/ATransfer to other Public Service Departments N/A N/AOther N/A N/ATotal N/A N/ATotal number of employees who left as a % of total employment 1 3.5

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Table 3.5.4 Promotions by critical occupation for the period 1 April 2016 and 31 March 2017

OccupationEmployees 1 April 2015

Promotions to another salary level

Salary level promotions as a % of employees by occupation

Progressions to another notch within a salary level

Notch progression as a % of employees by occupation

Skilled levels N/A N/A N/A N/A N/AHighly Skilled N/A N/A N/A N/A N/ATOTAL N/A N/A N/A N/A N/A

Table 3.5.5 Promotions by salary band for the period 1 April 2016 and 31 March 2017

Salary Band Employees 1 April 2015

Promotions to another salary level

Salary bands promotions as a % of employees by salary level

Progressions to another notch within a salary level

Notch progression as a % of employees by salary bands

Lower skilled (Levels 1-2) N/A N/A N/A N/A N/ASkilled (Levels3-5) N/A N/A N/A N/A N/AHighly skilled production (Levels 6-8) 1 1 100% 1 100%Highly skilled supervision (Levels 9-12) N/A N/A N/A N/A N/ASenior Management (Level 13-16) N/A N/A N/A N/A N/ATotal 1 1 100% 1 100%

3.6. Employment Equity

Table 3.6.1 Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2017

Occupational categoryMale Female

TotalAfrican Coloured Indian White African Coloured Indian White

Legislators, senior officials and managers 1 0 0 0 0 0 0 0 1Professionals 4 2 1 2 1 1 0 1 13Technicians and associate professionals 1 0 0 1 1 1 0 1 5Clerks 1 0 0 0 8 1 0 0 10Service and sales workers 0 0 0 0 0 0 0 0 0Skilled agriculture and fishery workers 0 0 0 0 0 0 0 0 0Craft and related trades workers 0 0 0 0 0 0 0 0 0Plant and machine operators and assemblers 0 0 0 0 0 0 0 0 0Elementary occupations 0 0 0 0 0 0 0 0 0Total 7 2 1 3 2 3 0 2 29Employees with disabilities 0 0 0 1 0 0 0 0 0

50


Table 3.6.2 Total number of employees (including employees with disabilities) in each of the following occupational bands as on 31 March 2017

Occupational bandMale Female


Top Management 1 0 0 0 0 0 0 0 1Senior Management 4 2 1 2 1 1 0 1 12

Professionally qualified and experienced specialists and mid-management

1 0 0 0 1 2 0 0 4

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents

0 1 0 0 8 1 0 0 10

Semi-skilled and discretionary decision making 0 0 0 0 2 0 0 0 2

Unskilled and defined decision making 0 0 0 0 0 0 0 0 0

Total 6 3 1 2 12 4 0 1 29

Table 3.6.3 Recruitment for the period 1 April 2016 to 31 March 2017

Occupational band Male Female Total

African Coloured Indian White African Coloured Indian White

Top Management 0 0 0 0 0 0 0 0 0Senior Management 2 0 0 0 0 0 0 2Professionally qualified and experienced specialists and mid-management

0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0

Semi-skilled and discretionary decision making

0 0 0 0 0 0 0 0 0

Unskilled and defined decision making 0 0 0 0 1 0 0 0 1Total 2 0 0 0 1 0 0 0 3Employees with disabilities

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Table 3.6.4 Promotions for the period 1 April 2016 to 31 March 2017

Occupational band Male Female Total

African Coloured Indian White African Coloured Indian White

Top Management 0 0 0 0 0 0 0 0 0

Senior Management 0 0 0 0 0 0 0 0 0Professionally qualified and experienced specialists and mid-management

0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0

Semi-skilled and discretionary decision making 0 0 0 0 1 0 0 0 0Unskilled and defined decision making 0 0 0 0 0 0 0 0 0Total 0 0 0 0 1 0 0 0 0Employees with disabilities 0 0 0 0 0 0 0 0 0

Table 3.6.5 Terminations for the period 1 April 2016 to 31 March 2017

Occupational bandMale Female


Top Management 0 0 0 0 0 0 0 0 0Senior Management 0 0 0 0 0 0 0 1 1Professionally qualified and experienced specialists and mid-management 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0

Semi-skilled and discretionary decision making 0 0 0 0 0 0 0 0 0Unskilled and defined decision making 0 0 0 0 0 0 0 0 0Total 0 0 0 0 0 0 0 1 1Employees with Disabilities 0 0 0 0 0 0 0 0 0

Table 3.6.6 Disciplinary action for the period 1 April 2016 to 31 March 2017

Disciplinary actionMale Female


Irregular expenditure 0 0 0 0 0 0 0 0 0

Table 3.6.7 Skills development for the period 1 April 2016 to 31 March 2017

Occupational categoryMale Female


Legislators, senior officials and managers 1 1 0 2 2 0 0 0 6Professionals 2 1 0 0 7 0 0 0 10Technicians and associate professionals 0 0 0 0 0 0 0 0 0Clerks 0 0 0 0 2 0 0 0 2Service and sales workers 0 0 0 0 0 0 0 0 0Skilled agriculture and fishery workers 0 0 0 0 0 0 0 0 0Craft and related trades workers 0 0 0 0 0 0 0 0 0Plant and machine operators and assemblers 0 0 0 0 0 0 0 0 0Elementary occupations 0 0 0 0 2 0 0 0 2Total 3 2 0 2 13 0 0 0 20Employees with disabilities 0 0 0 0 0 0 0 0 0

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3.7. Signing of Performance Agreements by SMS Members

All members of the SMS must conclude and sign performance agreements within specific timeframes. Information regarding the signing of performance agreements by SMS members, the reasons for not complying within the prescribed timeframes and disciplinary steps taken is presented here.

Table 3.7.1 Signing of Performance Agreements by SMS members as on 31 May 2016

SMS Level Total number of funded SMS

posts

Total number of SMS

members

Total number of signed performance

agreements

Signed performance agreements as % of total number of SMS members

Director-General/ Head of Department 1 1 1 100Salary Level 16 1 1 1 100Salary Level 15 3 3 3 100Salary Level 14 5 5 5 100Salary Level 13 4 4 4 100Total 14 14 14 100

Table 3.7.2 Reasons for not having concluded Performance agreements for all SMS members as on 31 March 2017

Reasons

All SMS members completed their performance contracts for 2016/2017 and have time until the 31 May each respective year to complete new performance contracts for the new performance cycle.

Table 3.7.3 Disciplinary steps taken against SMS members for not having concluded Performance agreements as on 31 March 2017

Reasons

All SMS members completed their performance contracts for 2016/2017 and have time until the 31 May each respective year to complete new performance contracts for the new performance cycle.

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3.8. Performance Rewards

To encourage good performance, the department has granted the following performance rewards during the year under review. The information is presented in terms of race, gender, disability, salary bands and critical occupations (see definition in notes below).

Table 3.8.1 Performance Rewards by race, gender and disability for the period 1 April 2016 to 31 March 2017

Race and Gender

Beneficiary Profile Cost

Number of beneficiaries Number of employees % of total within group Cost (R’000) Average cost per employee

African

Male 4 7 0 19 5Female 3 12 100 3 1Asian

Male 1 2 50 7 7Female N/A N/A N/A N/A N/AColoured

Male 2 3 50 8 2Female 1 2 50 2 2White

Male 0 1 N/A N/A N/AFemale 0 1 100 N/A N/ATotal 11 28 39 13

Table 3.8.2 Performance Rewards by salary band for personnel below Senior Management Service for the period 1 April 2016 to 31 March 2017

Salary band

Beneficiary Profile Cost Total cost as a % of the total

personnel expenditure

Number of beneficiaries

Number of employees

% of total within salary

bands

Total Cost (R’000)

Average cost per

employee

Lower Skilled (Levels 1-2) 2 2 100 1 0 0Skilled (level 3-5) 0 2 0 0 0Highly skilled production (level 6-8) 2 6 33 3 0 0Highly skilled supervision (level 9-12) 2 4 50 4 0 0Total 6 14 43 8 0 0

Table 3.8.3 Performance Rewards by critical occupation for the period 1 April 2016 to 31 March 2017

Critical occupation

Beneficiary Profile Cost

Number of beneficiaries Number of employees % of total within occupation Total Cost (R’000)

Average cost per employee

None 0 0 0 0 0

Total 0 0 0 0 0

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Table 3.8.4 Performance related rewards (cash bonus), by salary band for Senior Management Service for the period 1 April 2016 to 31 March 2017

Salary bandBeneficiary Profile Cost Total cost as a % of

the total personnel expenditure

Number of beneficiaries

Number of employees

% of total within salary bands

Total Cost (R’000)

Average cost per employee

Band A N/A 2 0 0 0 0Band B 2 3 67 0 0 0Band C 2 4 50 0 0 0Band D 1 3 33 0 0 0Total 5 12 42 0 0 0

3.9. Foreign workers

The tables below summarise the employment of foreign nationals in the department in terms of salary band and major occupation.

Table 3.9.1 foreign workers by salary band for the period 1 April 2016 and 31 March 2017

NB! No Foreign workers employed with GIFA.

Salary band01 April 2016 31 March 2017 Change

Number % l Number % of total Number % Change

Lower skilled 0 0 0 0 0 0Highly skilled production (Lev. 6-8) 0 0 0 0 0 0Highly skilled supervision (Lev. 9-12) 0 0 0 0 0 0Contract (level 9-12) 0 0 0 0 0 0Contract (level 13-16) 0 0 0 0 0 0Total 0 0 0 0 0 0

Table 3.9.2 Foreign workers by major occupation for the period 1 April 2016 and 31 March 2017

NB! No Foreign workers employed with GIFA.

Major occupation 01 April 2017 31 March 2017 Change

Number % of total Number % of total Number % Change

0 0 0 0 0 0 00 0 0 0 0 0 0

3.10. Leave utilisation

The Public Service Commission identified the need for careful monitoring of sick leave within the public service. The following tables provide an indication of the use of sick leave and disability leave. In both cases, the estimated cost of the leave is also provided.

55


Table 3.10.1 Sick leave for the period 1 April 2016 to 31 March 2017

Salary bandTotal days

% Days with Medical

certification

Number of Employees

using sick leave

% of total employees using

sick leave

Average days per

employee

Estimated Cost

(R’000)

Lower Skills (Level 1-2) 0 0 0 0 0 0Skilled (levels 3-5) 37 83 4 17 9 16Highly skilled production (levels 6-8) 67 84 6 16 11 49Highly skilled supervision (levels 9 -12) 89 92 5 8 18 59Top and Senior management (levels 13-16) 94 90 13 10 7 78Total 287 49 28 51 45 216

Table 3.10.2 Disability leave (temporary and permanent) for the period 1 April 2016 to 31 March 2017

Salary band Total days

% Days with Medical

certification

Number of Employees using disability leave

% of total employees using disability leave

Average days per

employee

Estimated Cost

(R’000)

Lower skilled (Levels 1-2) 0 0 0 0 0 0Skilled (Levels 3-5) 0 0 0 0 0 0Highly skilled production (Levels 6-8) 0 0 0 0 0 0Highly skilled supervision (Levels 9-12) 0 0 0 0 0 0Senior management (Levels 13-16) 0 0 0 0 0 0Total 0 0 0 0 0 0

The table below summarises the utilisation of annual leave. The wage agreement concluded with trade unions in the PSCBC in 2000 requires management of annual leave to prevent high levels of accrued leave being paid at the time of termination of service.

Table 3.10.3 Annual Leave for the period 1 April 2016 to 31 March 2017

Salary band Total days takenNumber of Employees

using annual leaveAverage per employee

Lower skilled (Levels 1-2) 0 0 0Skilled Levels 3-5) 75 4 22Highly skilled production (Levels 6-8) 139 6 22Highly skilled supervision(Levels 9-12) 101 5 22Senior management (Levels 13-16) 276 13 21Total 591 28 21

Table 3.10.4 Capped leave for the period 1 April 2016 to 31 March 2017

Salary band Total days of capped leave

taken

Number of Employees using

capped leave

Average number of days taken per

employee

Average capped leave per employee as on 31

March 20ZZ

Lower skilled (Levels 1-2) 0 0 0 0Skilled Levels 3-5) 0 0 0 0Highly skilled production (Levels 6-8) 0 0 0 0Highly skilled supervision(Levels 9-12) 0 0 0 0Senior management (Levels 13-16) 0 0 0 19Total 0 0 0 19

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The following table summarise payments made to employees as a result of leave that was not taken.

Table 3.10.5 Leave pay-outs for the period 1 April 2016 and 31 March 2017

Reason Total amount (R’000) Number of employees

Average per employee (R’000)

Leave pay out for 2016/17 due to non-utilisation of leave for the previous cycle

64 2 64

Capped leave pay-outs on termination of service for 2016/17 0 0 0Current leave pay out on termination of service for 2016/17 0 0 0Total 64 2 64

3.11. HIV/AIDS & Health Promotion Programmes

Table 3.11.1 Steps taken to reduce the risk of occupational exposure

Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any)

Key steps taken to reduce the risk

Health Screening seasons are conducted Information sessionsDistribution of condoms and information pamphlets

Table 3.11.2 Details of Health Promotion and HIV/AIDS Programmes (tick the applicable boxes and provide the required information)

Question Yes No Details, if yes

1. Has the department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position.

X SMS manager appointed an EHWP practitioner to oversee and roll out of EHWP functions.

2. Does the department have a dedicated unit or has it designated specific staff members to promote the health and well-being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose.

X

3. Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme.

X

4. Has the department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent.

X

5. Has the department reviewed its employment policies and practices to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed.

X All policies makes provisioning for no discrimination.

6. Has the department introduced measures to protect HIV-positive employees or those perceived to be HIV-positive from discrimination? If so, list the key elements of these measures.

X

7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved.

X Department of Health and GEMS does not visit departments of less than 120 employees.

8. Has the department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators.

X

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3.12. Labour relations

Table 3.12.1 Collective agreements for the period 1 April 2016 and 31 March 2017

Subject matter Date

N/AN/A

Total number of Collective agreements None

The following table summarises the outcome of disciplinary hearings conducted within the department for the year under review.

Outcomes of disciplinary hearings Number % of total

Correctional counselling 0 0Verbal warning 0 0Written warning 0 0Final written warning 0 0Suspended without pay 0 0Fine 0 0Demotion 0 0

Dismissal 0 0Not guilty 0 0Case withdrawn 0 0Total 0 0

Table 3.12.2 Misconduct and disciplinary hearings finalised for the period 1 April 2016 and 31 March 2017’

Total number of Disciplinary hearings finalised 0

Table 3.12.3 Types of misconduct addressed at disciplinary hearings for the period 1 April 2016 and 31 March 2017

Type of misconduct Number % of total

Unauthorised Expenditure 0 0Counselling Sessions 0 0Total 0 0

Table 3.12.4 Grievances logged for the period 1 April 2016 and 31 March 2017

Grievances Number % of Total

Number of grievances resolved N/ANumber of grievances not resolved N/ATotal number of grievances lodged N/A

Table 3.12.5 Disputes logged with Councils for the period 1 April 2016 and 31 March 2017

Disputes Number % of Total

Number of disputes upheld N/ANumber of disputes dismissed N/ATotal number of disputes lodged N/A

58


Table 3.12.6 Strike actions for the period 1 April 2016 and 31 March 2017

Total number of persons working days lost N/ATotal costs working days lost N/AAmount recovered as a result of no work no pay (R’000) N/A

Table 3.12.7 Precautionary suspensions for the period 1 April 2016 and 31 March 2017

Number of people suspended N/ANumber of people whose suspension exceeded 30 days N/AAverage number of days suspended N/ACost of suspension(R’000) N/A

3.13. Skills development

This section highlights the efforts of the department with regard to skills development.

Table 3.13.1 Training needs identified for the period 1 April 2016 and 31 March 2017

Occupational category Gender

Number of employees

as at 1 April 2016/2017

Training needs identified at start of the reporting period

LearnershipsSkills Programmes & other short courses

Other forms of training

Total

Legislators, senior officials and managersFemale 4 0 8 0 8Male 10 0 19 0 19

ProfessionalsFemale 6 0 15 0 15Male 1 0 7 0 7

Technicians and Associate professionalsFemale 0 0 1 0 1Male 0 0 3 0 3

Clerks Female 2 0 9 0 9Male 0 0 0 0 0

Service and sales workersFemale 0 0 0 0 0Male 0 0 0 0 0

Skilled agriculture and fishery workersFemale 0 0 0 0 0Male 0 0 0 0 0

Craft and related trades workersFemale 0 0 0 0 0Male 0 0 0 0 0

Plant and machine operators and assemblers

Female 0 0 0 0 0Male 0 0 0 0 0

Elementary occupationsFemale 2 0 6 0 6Male 0 0 0 0 0

Sub TotalFemale 0 0 0 0 0Male 0 0 0 0 0

Total 25 0 68 0 68

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Table 3.13.2 Training provided for the period 1 April 2016 and 31 March 2017

Occupational category Gender

Number of employees

as at 1 April 2016/2017

Training provided within the reporting period

LearnershipsSkills Programmes

& other short courses

Other forms of training

Total

Legislators, senior officials and managers

Female 2 0 2 0 2Male

4 0 4 0 4

ProfessionalsFemale 7 0 7 0 7Male 3 0 3 0 3

Technicians and associate professionals


0 0 0 0 0

Clerks


0 0 0 0 0

Service and sales workersFemale 0 0 0 0 0Male 0 0 0 0 0

Skilled agriculture and fishery workersFemale 0 0 0 0 0Male 0 0 0 0 0

Craft and related trades workersFemale 0 0 0 0 0Male 0 0 0 0 0

Plant and machine operators and assemblersFemale 0 0 0 0 0Male 0 0 0 0 0

Elementary occupationsFemale 2 0 2 0 2Male 0 0 0 0 0

Sub TotalFemale 0 0 0 0 0Male 0 0 0 0 0

Total 20 0 20 0 20

3.14. Injury on duty

The following tables provide basic information on injury on duty.

Table 3.14.1 Injury on duty for the period 1 April 2016 and 31 March 2017

Nature of injury on duty Number % of total

Required basic medical attention only N/A N/ATemporary Total Disablement N/A N/APermanent Disablement N/A N/AFatal N/A N/ATotal N/A N/A

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3.15. Utilisation of Consultants

The following tables relates information on the utilisation of consultants in the department. In terms of the Public Service Regulations “consultant’ means a natural or juristic person or a partnership who or which provides in terms of a specific contract on an ad hoc basis any of the following professional services to a department against remuneration received from any source:

a. The rendering of expert advice;

b. The drafting of proposals for the execution of specific tasks; and

c. The execution of a specific task which is of a technical or intellectual nature, but excludes an employee of a department.

Table 3.15.1 Report on consultant appointments using appropriated funds for the period 1 April 2016 and 31 March 2017

Project title Total number of consultants that worked on project

Duration (work days) Contract value in Rand

AFS Review 1 2 28 728.00Monitoring and Evaluation 2 15 285 000.00Contracts Review 2 2 22 811.40

Total number of projects Total individual consultants Total duration Work days Total contract value in Rand

3 5 19 336 539.40

Table 3.15.2 Analysis of consultant appointments using appropriated funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2016 and 31 March 2017

Project title Percentage ownership by HDI groups

Percentage management by HDI groups

Number of consultants from HDI groups that work on the project

Monitoring and Evaluation 100 100 100

Table 3.15.3 Report on consultant appointments using Donor funds for the period 1 April 2016 and 31 March 2017

Project title Total Number of consultants that worked on project Duration (Work days) Donor and contract value in Rand

N/A N/A N/A N/A

Total number of projects Total individual consultants Total duration Work days Total contract value in Rand

N/A N/A N/A N/A

Table 3.15.4 Analysis of consultant appointments using Donor funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2015 and 31 March 2016

Project title

Percentage ownership by HDI groups

Percentage management by HDI groups

Number of consultants from HDI groups that work on the project

N/A N/A N/A N/A

Severance Packages

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Table 3.16.1 Granting of employee initiated severance packages for the period 1 April 2016 and 31 March 2017

NOT APPLICABLE NO SEVERANCE PACKAGE OFFERED

Salary band Number of applications received

Number of applications referred to the MPSA

Number of applications supported by MPSA

Number of packages approved by department

Lower skilled (Levels 1-2) N/A N/A N/A N/ASkilled (Levels 3-5) N/A N/A N/A N/AHighly skilled production (Levels 6-8) N/A N/A N/A N/AHighly skilled supervision (Levels 9-12) N/A N/A N/A N/ASenior management (Levels 13-16) N/A N/A N/A N/ATotal N/A N/A N/A N/A

62


PART E: FINANCIAL INFORMATION

64

ANNUAL FINANCIAL STATEMENTS for year ended 31 March 2017

1. REPORT OF THE AUDITOR GENERAL

Report of the auditor-general to the Gauteng Provincial Legislature on the Gauteng Infrastructure Financing Agency

Report on the audit of the financial statements

Opinion

1. I have audited the financial statements of Gauteng Infrastructure Financing Agency set out on pages 68 to 96, which comprise the statement of financial position as at 31 March 2017, the statement of financial performance, statement of changes in net assets, and cash flow statement for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies

2. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Gauteng Infrastructure Financing Agency as at 31 March 2017 and its financial performance and cash flows for the year then ended, in accordance with South African Standards of Generally Recognised Accounting Practise (SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa of 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 my report.

4. I am independent of the government component in accordance with the International Ethics Standards Board for Accountants’ Code of ethics for professional accountants (IESBA code) together with the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA code.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion .

Responsibilities of the accounting officer for the financial statements

6. The accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with SA Standards of GRAP and with the requirements of the PFMA, and for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.

7. In preparing the financial statements, the accounting officer is responsible for assessing the Gauteng Infrastructure Financing Agency’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless there is an intention either to liquidate the government component or to cease operations, or there is no realistic alternative but todo so.

Auditor-general’s responsibilities for the audit of financial statements

8. My objectives are to obtain reasonable assurance about whether 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 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

9. A further description of my responsibilities for the audit of the financial statements is included in the annexure to the auditor’s report.

65


Report on the audit of the annual performance report

Introduction and scope

10. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004)(PAA) and the general notice issued in terms thereof I have a responsibility to report material findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance.

11. My procedures address the reported performance information, which must be basedon the approved performance planning documents of the government component. I have not evaluated the completeness and appropriateness of the performance indicators included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies andinformation 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.

12. 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 programmes presented in the annual performance report of the government component for the year ended 31 March 2017:

Programmes Pages in the annual performance report

Programme 1: Project development 18 to 22

Programme 2: Structured finance 23 to 27

Programme 3: Administration 28 to 36

13. I performed procedures to determine whether the reported performance information was properly presented and consistent with the approved performance planningdocuments. 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.

I did not identify any material findings on the usefulness and reliability of the reported performance information for the selected programmes.

Other Matter

14. I draw attention to the following matter :

Achievement of planned targets

15. Refer to the annual performance report on pages 15 to 36 for information on theachievement of the planned targets for the year and explanations provided for the[under/overachievement] of a significant number of targets.

Report on the audit of compliance with legislation

Introduction and scope

16. In accordance with the PAA and the general notice issued in terms thereof I have a responsibility to report material findings on the compliance of the government component with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance.

17. I did not identify any instances of material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA.

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Other information

18. The Gauteng Infrastructure Financing Agency’s accounting officer 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 thereon and those selected programmes presented in the annual performance report that have been specifically reported on in the auditor’s report.

19. 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.

20. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements and the selected programmes presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed on the other information obtained prior to the date of this auditor’s report, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Internal control deficiencies

21. 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 thereon. I did not identify any significant deficiencies in internal control.

Johannesburg

31 July 2017

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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 selected programmes and on the government component’s compliance with respect to the selected subject matters.

Financial statements

In addition to my responsibility for the audit of the financial statements as described in the 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 government component’s internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the [board of directors, which constitutes the accounting officer’s.

• conclude on the appropriateness of the accounting officer use of the going concern basis of accounting in the preparation of the financial statements. I also conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Gauteng Infrastructure Financing Agency ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the financial statements. My conclusions are based on the information available to me at the date of the auditor’s report. However, future events or conditions may cause a government component to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Communication with those charged with governance

2. I communicate with the accounting officer 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.

3. I also confirm to the accounting officer 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 here applicable, related safeguards.

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2. ANNUAL FINANCIAL STATEMENTS

Table of Contents

Statement of Financial Position 69

Statement of Financial Performance 70

Statement of Changes in Net Assets 71

Cash Flow Statement 72

Notes to the Annual Financial Statements (including Accounting policies) 73

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STATEMENT OF FINANCIAL POSITION as at 31 March 2017

Note 2016/17 2015/16

R’000 R’000

ASSETS

Current assets 161 302 129 006

Cash and cash equivalents 4 154 665 120 685Trade and other receivables from exchange transactions 5 3 986 4 321Trade and other receivables from non-exchange transactions 5 2 651 4 000

Non-current assets 2 443 5 033

Receivables from exchange transactions 5 - 2 000Intangible assets 6 782 1 480Property, plant and equipment 7 1 661 1 553

Total assets 163 745 134 039

LIABILITIES

Current liabilities 5 841 3 639

Trade and other payables 11 4 587 2 657Provisions 12 1 214 964Finance lease 15 40 18

Non-current liabilities 113 583 94 613

Leave pay provision 12 149 145Deferred Income 9 113 431 94 446Finance lease 15 3 22

Total liabilities 119 424 98 252

NET ASSETS

Net assets and reserves 44 321 35 787

Accumulated surplus 44 321 35 787

Total net assets and liabilities 163 745 134 039

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STATEMENT OF FINANCIAL PERFORMANCE for the year ended 31 March 2017

Note 2016/17 2015/16

R’000 R’000

Revenue from non-exchange transactions 83 670 45 554

Transfer Payment 16 52 650 45 000Other income 17 31 020 554*

Revenue from exchange transactions 7 489 5 297

Other income 17 7 489 5 297

Total revenue 91 159 50 851

Expenditure

Compensation of employees 18 (23 664) (16 567)Depreciation and amortisation 19 (1 577) (1 263)Project Development fees (47 290) (14 676)Other Expenditure 20 (10 688) (7 713)

TOTAL EXPENDITURE (83 219) (40 219)

SURPLUS FOR THE YEAR 7 940 10 632

*Other income was previously classified as revenue from exchange transaction.

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STATEMENT OF CHANGES IN NET ASSETS for the year ended 31 March 2017

Accumulated Surplus Total net assets

R’000 R’000

Prior year transfer from GFA 45 155 45 155Total changes for the period (9 368) (9 368)Balance as at 31 March 2016 35 787 35 787

Balance as at 01 April 2016 35 787 35 787Total changes for the period 8 534 8 534Surplus for the year ended 31 March 2017 7 940 7 940Change in accounting estimates 594 594

Balance as at 31 March 2017 44 321 44 321

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CASH FLOW STATEMENT for the year ended 31 March 2017

Note 2016/17 2015/16

R’000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts 113 827 74 892Transfer payment 56 334 69 595Conditional grant received (PPF) 50 000 -Other receipts 7 493 5 297

Payments (79 462) (40 222)Employee costs (23 414) (15 903)Payments to suppliers (56 048) (24 319)

NET CASH FLOW FROM OPERATING ACTIVITIES 22 34 365 34 670

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of property, plant and equipment (366) (381)Acquisition of intangible assets - (324)NET CASH FLOWS FROM INVESTING ACTIVITIES (366) (705)

CASH FLOWS FROM FINANCING ACTIVITIESFinance lease movements (19) 40NET CASH FLOWS FROM FINANCING ACTIVITIES (19) 40

Net increase/(decrease) in cash and cash equivalents 33 980 34 005Cash and cash equivalents at beginning of period 120 685 86 680Cash and cash equivalents at end of period 4 154 665 120 685

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ACCOUNTING POLICIES for the year ended 31 March 2017

1. General Information

The Gauteng Infrastructure Financing Agency (GIFA) is a Government Component of the Gauteng Provincial Treasury (GPT) and was established with the approval of the Gauteng Provincial Treasury and the Executive Committee of the Province on 1 July 2015, with closing balances from the dis-established trading entity, Gauteng Funding Agency, transferred to the GIFA.

The GIFA is governed by policies and procedures in line with that of the GPT and its financial statements are accounted for in terms of the Standards of Generally Recognized Accounting Practice (GRAP) as from 1 July 2015. As part of the GPT, the GIFA is audited by the Auditor-General and has to comply with the Public Finance Management Act, Act 1 of 1999 (as amended by Act 29 of 1999).

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below and have been consistently applied for the reporting period, unless otherwise stated.

2.1 Basis of preparation

The financial statements have been prepared in compliance with the Standards of Generally Recognised Accounting Practice (GRAP), including any interpretations, guidelines and directives issued by the Accounting Standards Board (ASB) on 1 April 2015. This is in accordance with the following policies, which have been applied consistently in all material aspects, unless otherwise indicated.

Where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the financial statements and to comply with the statutory requirements of the Public Finance Management Act, Act 1 of 1999 (as amended by Act 29 of 1999), and the Treasury Regulations issued.

The financial statements are prepared on an accrual basis of accounting, using the historical cost convention. Except as otherwise disclosed, these accounting policies are consistent with those applied by the dis-established GFA trading entity and in line with the GPT policies.

The preparation of the financial statements in conformity with GRAP requires the use of some critical accounting estimates. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas that required judgment in the process of application are disclosed in policy note 2.22.

Significant accounting policies and disclosure

The GIFA has prepared its financial statements in compliance with Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board (ASB) as from

1 April 2015. The list of Standards of GRAP, interpretations and directives and the impact on adoption are as follows:

A. Standards, interpretations and amendments to these adopted by the government component:

Applicable Standards of GRAP that the government component is required to apply and that are applicable to the operations of the government component:

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Standards Description

GRAP 1 Presentation of Financial Statements

GRAP 2 Cash Flow Statements

GRAP 3 Accounting Policies, Changes in Accounting Estimates and Errors

GRAP 4 The Effects Of Changes In Foreign Exchange Rates

GRAP 9 Revenue from Exchange Transactions

GRAP 13 Leases

GRAP 14 Events After the Reporting Date

GRAP 17 Property, Plant and Equipment

GRAP 19 Provisions, Contingent Liabilities and Contingent Assets

GRAP 21 Impairment of Non-cash-generating Assets

GRAP 23 Revenue from Non-exchange Transactions (Taxes and Transfers)

GRAP 25 Employee Benefits

GRAP 26 Impairment of Cash-generating Assets

GRAP 31 Intangible Assets

GRAP 100 Discontinued OperationsGRAP 104 Financial InstrumentsGRAP 105 Transfer of Functions between Entities Under Common Control

Interpretations of the Standards of GRAP that the government component is required to apply and that are applicable to the operations of the government component:

Interpretations DescriptionsIGRAP 1 Applying the Probability Test on Initial Recognition of RevenueIGRAP 3 Determining Whether an Arrangement Contains a LeaseIGRAP 13 Operating Leases – Incentives

IGRAP 14 Recognised Accounting Practice Evaluating The Substance Of Transactions Involving The Legal Form Of A Lease

IGRAP 16 Intangible Assets - Website CostsDirectives issued and effective that the government component is required to apply and that are applicable to the operations of the government component:

Directives Description

Directive 1 Repeal of Existing Transitional Provisions in, and Consequential Amendments to, Standards of GRAP

Directive 2 Transitional Provisions for the Adoption of Standards of GRAP by Public Entities, Municipal Entities and Constitutional Institutions

Directive 5 Determining the GRAP Reporting FrameworkDirective 7 The Application of Deemed Cost on the Adoption of Standards of GRAP

Standards of GRAP approved, but for which the Minister of Finance has not yet determined an effective date, that the government component may consider in formulating an accounting policy:

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Standards DescriptionGRAP 20 Related Party DisclosuresGRAP 32 Standard of GRAP on Service Concession Arrangements: GrantorGRAP 108 Statutory ReceivablesGRAP 109 Accounting by Principals and Agents IGRAP 17 Interpretation of the Standard of GRAP on service concession arrangements where a grantor controls a

significant residual interest in an assetStandards of GRAP, interpretations, directives, amendments to standards and amendments to interpretations issued by the ASB and that are effective but not applicable to GIFA:

Standard DescriptionGRAP 5 Borrowing CostsGRAP 6 Consolidated and Separate Financial StatementsGRAP 7 Investments in AssociatesGRAP 8 Interests in Joint VenturesGRAP 10 Financial Reporting In Hyperinflationary EconomiesGRAP 11 Construction ContractsGRAP 12 InventoriesGRAP 16 Investment PropertyGRAP 18 Segment ReportingGRAP 24 Presentation of Budget information in Financial StatementsGRAP 27 AgricultureGRAP 103 Heritage AssetsGRAP 106 Transfer of Functions between entities not under common controlGRAP 107 MergersIGRAP 2 Changes in Existing Decommissioning, Restoration and Similar LiabilitiesIGRAP 4 Practice Rights to Interests Arising From Decommissioning, Restoration and Environmental Rehabilitation

FundsIGRAP 5 Applying the Restatement Approach under The Standard of GRAP on Financial Reporting in Hyperinflationary

EconomiesIGRAP 6 Loyalty ProgrammesIGRAP 7 The Limit on a Defined Benefit Asset, Minimum funding Requirements and their InteractionIGRAP 8 Agreements for the Construction of Assets from Exchange TransactionsIGRAP 9 Distributions of Non-Cash Assets to OwnersIGRAP 10 Assets Received From CustomersIGRAP 11 Consolidation – Special Purpose EntitiesIGRAP 12 Jointly Controlled Entities – Non-Monetary Contributions by VenturesIGRAP 15 Revenue – Barter Transactions Involving Advertising ServicesDirective 3 Transitional provisions for high capacity municipalitiesDirective 4 Transitional provisions for medium and low capacity municipalitiesDirective 6 Transitional provisions for revenue collected by the South African Revenue Service (SARS)Directive 8 Transitional provisions for Parliament and Provincial LegislaturesGuide 1 Guideline on Accounting for Public Private PartnershipsIFRS 4 (AC 141) Insurance ContractsIFRS 6 (AC 143) Exploration for and Evaluation of Mineral ResourcesIFRIC12 (AC445) Service Concession ArrangementsSIC–25 (AC 425) Income Taxes-Changes in the Tax Status of an Entity or its ShareholdersSIC–29 (AC 429) Service Concession Arrangements – Disclosures

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2.2 Going concern

The financial statements have been prepared on a going concern basis in line with GRAP 105, “Transfer of functions between entities under common control”. All GFA assets, liabilities and surpluses have been transferred to the Gauteng Infrastructure Financing Agency (GIFA) at net book value as shown in the GFA annual financial statements. All contracts have been ceded to GIFA. The transfer was done on 30 June 2015.

2.3 Presentation currency

Amounts have been presented in the currency of the South African Rand (ZAR) which is also the functional currency of GIFA.

2.4 Rounding

Unless otherwise stated financial figures have been rounded to the nearest one thousand Rand (R’000).

2.5 Foreign currency translation

Monetary assets and liabilities that are denominated in foreign currencies are translated at the closing rate at the reporting date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates are recognised in the statement of financial performance.

2.6 Comparative information

2.6.1 Prior period comparative information

Prior period comparative information has been presented in the current year’s financial statements. The 2016 comparatives are for the 9 months ending 31 March 2016. Where necessary figures included in the prior period financial statements have been reclassified to ensure that the format in which the information is presented is consistent with the format of the current year’s financial statements.

2.7 Revenue

2.7.1 Revenue from exchange transactions

An exchange transaction is one in which the GIFA receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange.

The GIFA recognises revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits or service potential will flow to the entity.

Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is impaired, the GIFA reduces the carrying amount to its recoverable amount, being the estimated future cash flows discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the original effective interest rate.

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2.7.2 Revenue from non-exchange transactions

Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, the GIFA either receives value from another party without directly giving approximately equal value in exchange, or gives value to another party without directly receiving approximately equal value in exchange.

Revenue received from transfer payments and donations are recognised as revenue to the extent that the GIFA has complied with any of the criteria, conditions or obligations embodied in the agreement. A deferred income liability is recognised to the extent that the criteria, conditions or obligations have not been met.

As the GIFA satisfies the present obligation recognised as a liability (deferred income), it reduces the carrying amount of the liability and recognises an amount of revenue equal to that reduction.

Revenue from non-exchange transactions comprises the fair value of a transfer payment received or receivable from the Gauteng Provincial Treasury.

The GIFA received a transfer payment from Gauteng Provincial Treasury to fund its operating expenditure, which is recognised in full as revenue.

2.8 Expenditure

2.8.1 Compensation of employees

The accounting policy in terms of the compensation of employees is in line with the policy of the Gauteng Provincial Treasury, and is as follows:

a. Short-term employee benefits

The costs of short-term employee benefits are expensed in the statement of financial performance in the year in which it occurs.

Short-term employee benefits that give rise to a present or constructive obligation are recognised and disclosed in the notes to the financial statements. This is limited to a leave pay accrual as set out in note 13.

Salaries and wages shown in the statement of financial performance comprise payments to employees (including leave entitlements, thirteenth cheque and performance bonuses).

b. Post-retirement benefits

Employer contributions are expensed in the statement of financial performance.

No provision is made for retirement benefits in the financial statements of the GIFA, or in the financial statements of the parent department. Any potential liabilities are disclosed in the financial statements of the National Revenue Funds and not in the financial statements of the employer department. This policy is in line with the Gauteng Provincial Treasury’s policy.

c. Termination benefits

Termination benefits such as severance packages are recognised as an expense in the statement of financial performance.

d. Other long-term employee benefits

Other long-term employee benefits (such as capped leave) are recognised as expenditure in the statement of financial performance.

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2.8.2 Key management personnel

Compensation paid to key management personnel is included in the disclosure for related parties.

2.9 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.

2.9.1 Operating leases

OPERATING LEASES - LESSEE

Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of financial performance on a straight-line basis over the period of the lease.

The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease liability.

Receipts from operating leases (net of any incentives paid to the lessee) are recognised in the statement of financial performance on a straight-line basis of the period of the lease.

The lease for the building is classified as an operating lease and payments made under the operating lease are charged to the statement of financial performance on a straight-line basis over the period of the lease. The difference between actual lease payments and the amount recognised is shown as part of current liabilities.

A lease deposit is held by the landlord as collateral for damages and amounts owed by the GIFA. The lease deposit can be applied to such damages and outstanding amounts at the end of the lease period.

The sub-lease of the ground floor of the building is classified as an operating lease and receipts from the operating sub-lease are recognised in the statement of financial performance on a straight-line basis over the period of the lease. The difference between actual lease payments and the amount recognised is shown as part of current liabilities, and the difference between actual sub-lease receipts and the amount recognised is shown as part of current assets.

The lease commitment and sub-lease receivable for future years are disclosed in the notes to the financial statements.

2.9.2 Finance leases

FINANCE LEASES - LESSEE

Finance leases are recognised as assets in the statement of changes in net assets 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 changes in net assets as a finance lease obligation. The discount rate used in calculating the present value of the minimum lease payments is the prime lending rate at the inception of the lease. Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate on the remaining balance of the liability. Any contingent rents are expensed in the period in which they are incurred.

2.10 Leasehold Improvements

Leasehold improvements expenditure is capitalised and depreciated over the original lease period of five years plus the extended lease period of three years. The amount being depreciated is net of the tenant allowance paid to the entity, which reduces the capitalised cost of the leasehold improvements. The tenant allowance paid to the entity did not include VAT, as the GIFA is not registered for VAT purposes

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2.11 Cash and cash equivalents

Cash and cash equivalents comprise bank balance and petty cash held.

Cash and cash equivalents are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Interest earned on the bank balance does not accrue to the GIFA but to the Revenue Fund of the Gauteng Provincial Government.

2.12 Trade Payables

Trade payables comprise accruals for services that have been acquired in the ordinary course of business.

Trade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method.

2.13 Financial Instruments

The GIFA classifies its financial instruments based on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition.

The GIFA recognises a financial instrument in its statement of financial position when it becomes a party to the contractual provisions of the instrument. Financial instruments are measured initially at fair value, including transaction costs.

GIFA recognises financial assets using trade date accounting.

Financial assets at amortised cost are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method.

Short-term receivables and payables are not discounted where the initial credit period granted or received is consistent with terms used in the public sector, either through established practices or legislation.

For financial instruments measured at amortised cost, a gain or loss is recognised in surplus or deficit when the financial instrument is derecognised, and through the amortisation process.

A financial asset is derecognised only when:

a. The contractual rights to the cash flows from the financial asset expire, are settled or waived;

b. GIFA transfers to another party substantially all of the risks and rewards of ownership of the financial asset; or

c. GIFA, 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, GIFA shall:

i. Derecognise the asset; and

ii. Recognise separately any rights and obligations created or retained in the transfer.

GIFA shall remove a financial liability (or a part of a financial liability) from its statement of financial position when, and only when, it is extinguished — i.e. when the obligation specified in the contract is discharged, cancelled, expires or waived.

A financial asset and a financial liability are only offset and the net amount presented in the statement of financial position when GIFA 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.

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The statement of financial position includes financial assets classified as financial assets at amortised cost.

Financial assets at amortised cost are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the reporting date. These are classified as non-current assets. The GIFA’s financial assets at amortised cost comprise ‘Receivables’ and ‘Cash and cash equivalents’ in the statement of financial position. Details included in note 2.12 and 2.13 respectively.

The statement of financial position includes financial liabilities classified as financial liabilities at amortised cost.

Financial liabilities at amortised cost are non-derivative financial liabilities with fixed or determinable payments that are not quoted in an active market. The GIFA’s financial liabilities at amortised cost comprise ‘Trade payables’ in the statement of financial position. Details included in note 2.15.

2.14 Property, plant and equipment

The cost of an item of property, plant and equipment is recognised as an asset if it is probable that future economic benefits or service potential associated with the item will flow to the GFA and the cost or fair value of the item can be measured reliably.

Property, plant and equipment is recognised using the cost model. Items are measured initially at cost and after initial recognition, stated at historical cost less accumulated depreciation and accumulated impairment losses.

When an item of property, plant and equipment is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition.

Repairs and maintenance are charged to the statement of financial performance during the financial period in which they are incurred.

Depreciation is charged so as to write off the cost of assets to residual values over its expected useful lives using the straight-line basis. Estimated useful lives are as follows:

Computer equipment - 3 to 10 yearsOffice equipment – 3 to 10 yearsOffice furniture – 5 to 10 yearsAudio visual equipment – 3 to 12 yearsLeasehold improvements – 8 to 10 years

Residual values, remaining useful lives and depreciation methods are reviewed annually and adjustments are made if appropriate.

An asset’s carrying amount is written down immediately to its recoverable service amount if the asset’s carrying amount is greater than its estimated recoverable service amount.

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits or service potential are expected from its use or disposal.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of financial performance.

2.15 Intangible assets

An intangible asset is an identifiable non-monetary asset without physical substance. An asset is identifiable if it either :

a. is separable, i.e. is capable of being separated or divided from the GIFA and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless of whether the GIFA intends to do so; or

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b. Arises from contractual or other legal rights, excluding those granted by statue, regardless of whether those rights are transferable or separable from the GIFA or from other rights and obligations.

An intangible asset is recognised if it is probable that future economic benefits or service potential that are attributable to the asset will flow to the GIFA and the cost or fair value of the asset can be measured reliably.

Intangible assets are measured initially at cost.

When an intangible asset is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition.

After initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Costs associated with the acquisition of computer software are recognised as intangible assets.

Computer software is amortised over their expected useful lives using the straight-line basis. Estimated useful life:

Intangible assets (general software that are upgradable) – maximum 10 years

Intangible assets (software specifically developed for GIFA) – 4 years

The remaining useful lives and amortisation method are reviewed annually and adjustments are made if appropriate.

An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of financial performance.

2.16 Impairment of non-cash generating assets

After each quarterly asset count GIFA assesses property, plant and equipment for impairment. If there are any indications of impairment the GIFA estimates the recoverable service amount of the asset. If the asset’s carrying value exceeds its recoverable amount, the asset is impaired. In assessing whether there is any indication that an asset may be impaired, the GIFA considers all sources information. The impairment loss is charged as an expense in the Statement of Financial Performance.

2.17 Provisions

Provisions are recorded in the notes to the financial statements when there is a present legal or constructive obligation to forfeit economic benefits as a result of events in the past and 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 of the obligation can be made. The provision is measured as the best estimate of the funds required to settle the present obligation at the reporting date.

2.18 Contingent assets

A contingent asset is a possible asset that arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

Feasibility costs paid from the Project Preparation Facility (PPF) are added to the total cost of the project. When such projects are funded successfully, the feasibility costs are recovered and paid back into the PPF.

Contingent assets are not recognised in financial statements since this may result in the recognition of revenue that may never be realised. Contingent assets are disclosed in the notes to the financial statements and when the realisation of revenue is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.

Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements.

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If it has become virtually certain that an inflow of economic benefits or service potential will arise and the asset’s value can be measured reliably, the asset and the related revenue are recognized in the financial statements of the period in which the change occurs.

2.19 Commitments

Contracted commitments (except for the lease of the building) to be paid after 1 December 2016 are not recognised in the statement of financial position as a liability or as expenditure in the statement of financial performance, but are included in the disclosure notes.

These commitments are linked to specific service delivery contracts and are payable in future years.

2.20 Irregular expenditure

Irregular expenditure is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any legislation applicable to GIFA, including the Public Finance Management Act (PFMA), 1999.

Irregular expenditure is recognised as expenditure in the statement of financial performance. If the relevant authority does not condone the expenditure it is treated as an asset until it is recovered or written off as irrecoverable

2.21 Fruitless and wasteful expenditure

Fruitless and wasteful expenditure is expenditure which was made in vain and would have been avoided had reasonable care been exercised.

Fruitless and wasteful expenditure is recognised as expenditure in the statement of financial performance according to the nature of the payment and not as a separate line item on the face of the statement of financial performance. If the expenditure is recoverable it is treated as an asset until it is recovered from the responsible person or written off as irrecoverable.

2.22 Events after the reporting date

Events after the 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. GIFA shall only adjust the amounts recognised in its annual financial statements to reflect adjusting events after the reporting date for those events that provide evidence of conditions that existed at the reporting date

2.23 Key areas of judgement in applying accounting policies

The following key areas of judgment were required in preparation of the financial statements:

a. The estimated useful lives of assets are based on its expected useful lives and are measured against the industry norms.

b. The recoverability of any financial assets, having to make provisions in cases where recoverability might be questionable.

c. c)Transfer of receivables from contingent asset to receivables, based on level of certainty of future events

2.24 Change in estimate

A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability or the amount of the periodic consumption of an asset that results from the assessment of the present status of and expected future benefits and obligations associated with assets and liabilities. The useful lives of assets are assessed at every reporting period.

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2.25 Related party transactions

The GIFA, being a Government Component of the Gauteng Treasury, is related through this relationship, to all other GPG Departments and entities.

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 management, or be influenced by management in their dealings with the entity.

Only transactions with related parties not in arm’s length or not in the ordinary course of business are disclosed.

3. Financial risk management

Financial risk factors

The GIFA’s activities expose it to some financial risks, most of which are managed through the procurement and payment processes. The GIFA did not have direct access to its bank account, and thus cash management was not performed at GIFA but at GPT.

Risk management is the responsibility of GIFA management and is monitored by a central team within Gauteng Provincial Treasury. The most significant financial risks are related to reporting (inaccurate financial information that might result in inaccurate reporting and not meeting reporting deadlines in terms of PFMA) and financial systems (payment systems not aligned to business processes). The risk of reporting was mitigated by the implementation of an independent financial package, enabling the GIFA to record financial information on an accrual basis.

a. Market risk

Fair value interest rate risk

The GIFA had an interest-bearing asset, being the rental deposit. Interest is earned and capitalised every year at a rate of prime minus 2%, compounded annually in arrears.

Exposure to market interest rates is limited to interest earned on the rental deposit and to interest payable on late settlement of accounts, which is governed by the 30-day payment period of the GPG.

b. Credit risk

Credit risk was managed on a departmental basis. GIFA is not exposed to credit risks, as it is not allowed to borrow as per the PFMA.

The interest bearing rental deposit is governed by the contractual agreement that all interests accrue at prime less 2% at the end of each year. Interest accrued is added to the deposit and becomes payable at the date of return of the deposit.

Maximum exposure to credit risk

The maximum exposure to credit risk at the reporting date is the carrying value of each financial asset mentioned in the notes to follow.

Receivables pledged as security

The GIFA does not hold any collateral as security.

Credit quality of financial assets neither past due nor impaired

The credit quality of both non-current and current receivables is high.

84

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017

The receivable from the Department of E-Government, as well as the debt relating to the co-funding agreement with the City of Johannesburg are governed by contractual agreements and as per management’s assessment thereof, not at risk of being defaulted.

The deposit and interest capitalised were confirmed via written confirmation from the landlord and is governed by contractual agreement.

Receivables past due but not impaired

The ageing of amounts past due but not impaired is as follows:

The deposit and capitalised interest becomes payable at the end of the lease period, taking extensions into consideration.

Payment from the City of Johannesburg was confirmed in writing and is expected to be paid in the 2016/17 financial year.

c. Liquidity risk

For the GIFA, prudent liquidity risk management implies maintaining sufficient cash to meet its commitments. The GIFA has the responsibility to limit spending and commitment of funds to the approved budget/transfer payment.

Maturity analysis

Financial liability Due in less than a year Due in two to five years TotalTrade payables (refer to note 11) 4 587 - 4 587

4. Cash and cash equivalents

2016/17 2015/16

R’000 R’000

Bank & Petty Cash 38 016 26 239Project preparation facility 116 649 94 446

Total 154 665 120 685

Cash and cash equivalents represent money held in the bank account of the Gauteng Infrastructure Financing Agency (GIFA), as well as the balance of petty cash held.

The Project Preparation Facility comprises a cash facility that is ring-fenced for the use of performing feasibility studies for projects.

5. Receivables

2016/17 2015/16

R’000 R’000

Current receivables-exchange transactionse-Government: Rental receivable - 333Deposit held 2 229 2 229Interest receivable 1 737 1426Supplier debt - 333Staff debt 20 -Total 3 986 4 321

85


2016/17 2015/16

R’000 R’000

Current receivables-non exchange transactionsCo-funding receivable: City of Johannesburg - 4 000TEDA claims recoverable (Co-funding) 751 -GTAC claims recoverable (Co-funding) 1 900 -Total 2 651 4 000

Co-funding receivable: City of Johannesburg

The co-funding agreement with the City of Johannesburg runs over a 3 year period, with the following payments as per the contract:

2016/17 R’000

2015/16 R’000

Less than one year - 4 000More than one year, not greater than five years - 2 000

- 6 000

Gauteng Department of e-Government: Rental receivable (R333) for 2016 and R 0

GIFA sub-leased the ground floor to GPG DAV centre in an arms-length transaction. The lease term expired on 31 March 2016.

Deposits held (R2 229) and Interest receivable (R1 737)

Deposits held represents the leasehold deposit paid, with interest receivable being interest accrued on the deposit held as per the contract stipulations. The lease deposit is held by the landlord as collateral for damages and amounts owed by the GIFA at the end of the lease period.

Supplier debt

Supplier debt related to an overpayment to a supplier. This debt was settled.

6. Intangible assets

No intangible assets were pledged as security.

2016/17 R’000

2015/16 R’000

Cost Accumulated amortisation

Carrying value

Cost Accumulated amortisation

Carrying value

• Accounting & general software 217 157 60 217 134 83• Monitoring & evaluation system &

Website Development 2 613 1 891 722 2 613 1 216 1 3972 830 2 048 782 2 830 1 350 1 480

86


The carrying amounts of intangible assets can be reconciled as follows:

2016/17 R’000

Carrying value at the beginning

of the year

Change in Estimates

Amortisation for the year

Carrying value at the end of

the year• Accounting & general software 83 23 60• Monitoring & evaluation system 1 397 (4) 671 722

1 480 (4) 694 782

The carrying amounts of intangible assets can be reconciled as follows:

2015/16 R’000

Carrying value

transferred in

Additions Amortisation for the year

Carrying value at

the end of the year

• Accounting & general software 93 7 17 83• Monitoring & evaluation system 1 573 317 493 1 397

1 666 324 510 1 480

7. Property, plant and equipment

All assets of the GIFA are non-cash generating assets.

Remaining useful lives of assets were estimated based on the general condition of the assets, as well as the technical specifications and usability thereof.

No property, plant or equipment is pledged as security.

2016/17 R’000

2015/16 R’000

Cost Accumulated depreciation

Carrying value

Cost Accumulated depreciation

Carrying value

• Computer equipment 886 377 509 756 274 482• Office equipment 1 113 734 379 1 019 792 227• Office furniture 2 734 2 204 530 2 722 1 935 787• Audio visual equipment 118 99 19 118 104 14• Small assets 12 9 3 12 9 3• Leasehold improvements 3 298 3 117 181 3 298 3 297 1• Finance Lease asset 81 41 40 42 3 39

8 242 6 581 1 661 7 967 6 414 1 553

87


Carrying amounts can be reconciled as follows:

2016/17 R’000

Carrying value at the beginning of

the year

Additions Change in Estimates

Write-offs

Depreci-ation for the year

Carrying value at the

end of the year

• Computer Equipment 482 144 5 8 114 509• Office equipment 227 209 42 9 90 379• Office furniture 787 18 - 1 274 530• Audio visual equipment 14 - 10 - 5 19• Small assets 3 - 1 - 1 3• Leasehold improvements 1 - 541 - 361 181• Finance Lease asset 39 39 38 40

1 553 410 599 18 883 1 661

The carrying amounts of property, plant and equipment can be reconciled as follows:2015/16 R’000

Carrying value transferred in

+

Corrections

+

Additions

+

Write-Offs

-

Depreci-ation for the year

-

Carrying value at the end of

the year +

• Computer equipment 343 9 243 25 88 482• Office equipment 315 8 62 35 123 227• Office furniture 947 9 34 - 203 787• Audio visual equipment 25 - - - 11 14• Small assets 5 - - - 2 3• Leasehold improvements 325 - - - 324 1• Finance lease assets - - 42 - 3 39

1 960 26 381 60 754 1 553

88


8. Contingent assets

Feasibility studies paid from the Project Preparation Facility are added to the funding requirements of the project and will be refunded to the GIFA upon successful financing.

An inflow of economic benefits to the value of the expensed costs is thus probable and recognised as contingent assets.

Contingent assets as at 31 March 2017:

PROJECT

Committed feasibility cost

R’000

Expenditure as at 31 March 2016

(recognised as contingent assets):

R’000

Expenditure as at 31 March 2017

(recognised as contingent assets):

R’000

TOTAL CONTINGENT

ASSETS

R’000Ekurhuleni Waste to Energy feasibility 5 696 168 3 302 3 470Tshwane Waste to Energy feasibility 8 059 386 3 186 3 572Transaction Advisor EB2 & EB3 7 070 - 3 607 3 607Consolidation of CoJ & Sedibeng 995 - 995 995Tshwane Agro-processing 4 751 - 4 000 4 000Kopanong Precinct Project 20 000 - 11 121 11 121Schools Project 8 000 - 5 591 5 591Lindley Waste Water Project 3 415 - 2 685 2 685Rooftop Solar 4 675 - 1 692 1 692West Rand Logistics Phase 2 3 762 - 1 836 1 836CONTINGENT ASSETS 66 423 554 38 015 38 569

9. Deferred Income

Movement during the year:

2016/17 R’000

2015/16 R’000

Balance at the beginning of the year 94 446 75 000Additions for the year 50 000 20 000Income recognition during the year (note 17) (31 015) (554)

113 431 94 446

Money received or transferred to the Project Preparation Facility (PPF) is recognised as deferred income. A deferred income liability is recognised to the extent that payments from the PPF have not been made.

As the GIFA incurs expenditure for feasibility studies funded through the PPF, it reduces the carrying amount of the liability and recognises an amount of revenue equal to that reduction. During the 2016/17 an amount of R 31 million was recognised as income, resulting in a movement of the balance of deferred income.

10. Categories of financial instruments:

A. Financial Assets

2016/17 R’000

2015/16 R’000

Current receivables (refer to note 5) 6 637 8 321Non-current receivables - 2 000Cash and cash equivalents (refer to note 4) 154 665 120 685

161 302 131 006

89


B. Financial Liabilities

2016/17 R’000

2015/16 R’000

Trade payables (refer to note 11) 4 587 2 657Finance lease (refer to note 15) 42 40

4 629 2 697

11. Trade and other payables from exchange transactions

2016/17 R’000

2015/16 R’000

Accruals 4 304 898GGDA: JMP-IDZ 105 1 700Salary payments control 40 -Gauteng Provincial Treasury 28 59e-Government 110 -

4 587 2 657

Accruals are non-interest bearing and normally settled on 30 day terms.

GGDA relates to a co-funding agreement on the JMP Project.

Gauteng Provincial Treasury and e-Gov – payables relates to salaries paid to two officials that were transferred to GIFA in January and February 2017.

12. Leave and service bonus provision

2016/17 R’000

2015/16 R’000

Leave provision 149 145Leave pay accrual 529 573Service bonus provision 160 119Performance bonus provision 525 272

1 363 1 109

The short-term portions of leave pay commitments are shown as an accrual, where provisions represent the long-term (longer than 12 months) liability to the GIFA.

13. Contractual commitments

The entity has service delivery contracts that are cancellable on notice periods as stipulated in the contracts. These liabilities will be paid from the operating budget.

The cost contracted but not yet incurred at statement of financial position date are as follows:

2016/17 R’000

2015/16 R’000

Contracted 2 089 7 6892 089 7 689

90


EXPENSE ITEM SERVICE PROVIDER2016/17

R’000Feasibility Study CoJ Waste Treatment Aurecon South Africa 481Refreshments Pureau 6Maintenance Air Technology 29System maintenance Phuthumani 19JMP Grant Thornton 18Internet & data charges Internet Solutions 27Credential Verification SAQA 5Consulting Services Phakamo Holdings 149Consulting Services Safiri 98Courier Services Rorisang Trading 17Feasibility Study Rossal NO 98 3Training Keybase Training 24Service Priority of SA 4Research studies on alternative Grant Thornton 1 192Training Wits Business School 17

2 089

During 2016/17 financial year, six projects were submitted and five approved for funding from the PPF, to the value of R52 million (2016: ten projects for R54 million).

Details of the 31 March 2017 contracted commitments from PPF are as follows:

PROJECT2016/17

R’000

Feasibility Study for Ekurhuleni Waste 2 226Feasibility Study for Tshwane Waste 4 487 Transaction Advisor for EB2 & EB3 3 463Transaction Advisor for Rooftop Solar 2 983Feasibility Study for Lindley Waste 729Consulting and Advisory Services for West Rand 1 926Transaction Advisor for Schools programme 509Transaction Advisor for Kopanong Precinct 8 879Transaction Advisor for Merafong Solar Farm 2 298Transaction Advisor for Trigen 1 086

28 586Feasibility costs paid from the Project Preparation Facility (PPF) are expensed in the Statement of Financial Performance and added to the total cost of the project. When such projects are funded successfully, the feasibility costs are recovered and paid back into the PPF. Such costs are disclosed under note 8, Contingent Assets

91


14. Lease commitment building

The entity leases property under a non-cancellable contract. Minimum lease payments on non-cancellable operating leases are as follows:

2016/17 R’000

2015/16 R’000

Less than one year 2 967 2 9182 967 2 918

15. Finance lease

2016/17 R’000

Future Minimum lease payments

R’000

Future Finance Charges

R’000

Present value of future minimum lease payments

R’000

Amounts payable under finance leasesWithin one year 42 (3) 39 Within two to five years 4 (1) 3 More than five years - - -Total future minimum lease payments 46 (4) 42 Less: Amount due for settlement within 12 months (current portion) (42) 3 (39)

Non-current future minimum lease payments 4 (1) 3

2015/16 R’000

Future Minimum

lease payments

R’000

Future Finance Charges

R’000

Present value of future minimum lease payments

R’000

Amounts payable under finance leasesWithin one year 21 (3) 18 Within two to five years 23 (1) 22 Total future minimum lease payments 44 (4) 40 Less: Amount due for settlement within 12 months (current portion) (21) 3 (18)

Non-current future minimum lease payments 23 (1) 22

The entity leases some of its equipment under finance leases. The lease term is for 27 months and Interest rate is 10.25%. Interest rate is fixed and no contingent rent is payable. Rentals can continue after the lease term has expired. No restrictions are imposed by lease arrangements.

16. Transfer payments

A transfer payment is received annually from Gauteng Provincial Treasury (GPT), the controlling department of GIFA. This transfer payment is used to cover the operating costs and Project Preparation Facility of the GIFA. The transfer payment for the 2016/17 amounts to R 102, 6 million.

92


17. Other income

2016/17 R’000

2015/16 R’000

Other income from exchange transactionsInterest received on bank balance and deposits 7 446 3 510Rental sub-lease income - 1 316Leave provision gain 41 -Other income 2 471

7 489 5 297

Other from income from non-exchange transactionsRevenue from non-exchange transaction 5 -Revenue transfer from deferred income 31 015 554

31 020 554

18. Staff Costs

2016/17 R’000

2015/16 R’000

Salaries 20 971 14 499Employer contribution: medical 286 154Employer contribution: pension 1 717 1 251Leave pay 5 343Service and performance bonus provisions 685 320

23 664 16 567

19. Depreciation and amortisation

2016/17 R’000

2015/16 R’000

Depreciation: Property, plant and equipment 883 753

Depreciation of computer equipment 114 88Depreciation of office equipment 90 122Depreciation of office furniture 274 203Depreciation of audio visual equipment 5 11Depreciation of small assets 1 2Depreciation of leasehold improvements 361 324Depreciation of finance lease asset 38 3

Amortisation: Intangible assets 694 510TOTAL 1 577 1 263

93


20. Other expenditure

Other expenditure include the following items:

2016/17 R’000

2015/16 R’000

Advertising 127 459Audit fees 548 436Bank charges 9 2Consumables 159 7Interest paid 6 1Printing & Stationery 123 333Rental of building 5 836 3 760Operating utilities 916 -Membership fees 22 23Security costs 11 13Telephone costs 709 411Training 233 161Rent operational costs - 659Parking 1 1Postage 2 -Legal expenses 317 23Maintenance and repairs 57^ 66System support and maintenance 527 516Venues and facilities 126 535Travel and accommodation 285 87Assets write off 18 -Catering Services 176 81Consulting Services 237 -Other costs 243 139*

10 688 7 713 #

# 2016 comparatives are for the 9 months ending 31 March 2016

*Catering Services for 2016 was included in other costs

^Maintenance and repairs R’000

Office furniture 46Office equipment 11 Total 57

21. Taxation

No provision for taxation has been made in the financial statements, as the GIFA is not a tax paying entity. (The entity, as part of the Department of Treasury, is exempt, as per S10 of the Income Tax Act, 1962 (Act 58 of 1962)

94


22. Net cash flows from operations activities

2016/17 R’000

2015/16 R’000

Surplus for the year 7 940 10 632Non-cash movements (29 189) 1 432

Depreciation and amortization 1 577 1 263Deferred Income (31 015) (554)Service bonus and leave provisions 254 663Loss on sale of fixed assets - 60Gain from non-exchange transaction (5) -

(21 249) 12 064Changes in working capital: 55 614 22 606

(Increase)/decrease in current and non-current receivables 3 684 24 596Increase/(decrease) in trade and other payables 1 930 (1 990)Increase/(decrease) in conditional grant received (note 9) 50 000 -

Net cash flows from operating activities 34 365 34 670*

*Finance lease charges were reclassified to the cash flow statement for 2017(R19) and 2016 (R40) under cash flows from financing activities.

23. Related parties and related party transactions

a. The GIFA is a Government Component of Gauteng Provincial Treasury; therefore Gauteng Provincial Treasury is considered a related party. The following transactions took place between GPT and the GIFA:

2016/17 R’000

2015/16 R’000

Transfer payment (note 16) 52 650 25 000PPF Capitalization (note 16) 50 000 20 000

102 650 45 000

b. As part of Gauteng Provincial Government, the Gauteng Department of E-Government is considered a related party. GIFA received an asset from E-government to the value of R 5 999.00 without paying any consideration.

c. The Tshwane Economic Development Agency, GTAC and DBSA IIPSA are debtors of the GIFA through co-funding agreements and thus related parties.

d. The GIFA is conducting feasibility studies on behalf of Gauteng Provincial and Local government. These Departments and Municipalities/Regional Councils are, by nature of the transactions, related parties. Identified related parties for 2016/2017 for feasibility work performed are:

Gauteng Department of Infrastructure Development Gauteng Department of Economic Development Gauteng Department of Education City of Johannesburg Metropolitan Municipality West Rand District MunicipalityTshwane Metropolitan Municipality Ekurhuleni Metropolitan Municipality Mogale City Municipality Government Technical Advisory Centre (GTAC)DBSA IIPSA Fund (DBSA)

95


Related Party Balances

Amounts included in receivable (payable) regarding related parties:

DBSA IIPSA FundGTACTEDAGGDAGPTe-GOV

e. The compensation paid for management is shown below:

Senior management emoluments:2016/17

R’0002015/16

R’000

CEO: GIFA 2 084 1 489

Basic salary 1 097 805Non pensionable allowance 752 552 Employee contribution: medical aid 19 14Employee contribution: pension 143 105Performance bonus 73 13

Head: Corporate Services 1 374 967Basic salary 906 677Non pensionable allowance 242 202Pension 118 88Employee contribution: medical aid 38 -Employee contribution: Housing 7 -Performance bonus 63 -

Head: Project Development 1 698 1 105 Basic salary 1 189 773 Non pensionable allowance 355 231 Employee contribution: medical aid - - Employee contribution: pension 154 101 Performance bonus - -

Head: Structured Finance 810 1 216Basic salary 572 851Employee contribution: pension 74 254 Service bonus 25 -Non pensionable allowance 139 111

Manager: Strategy & Monitoring 1 205 845Basic salary 685 507Non pensionable allowance 367 272Employee contribution: pension 89 66 Performance bonus 55 - S&T: Advances 9

96


24. Change in estimate

During the year the following changes were made to the estimations employed in accounting for transactions, assets, liabilities, events and circumstances:

Value derived using the original estimate

R’000

Value derived using amended estimate

R’000

Value impact of change in estimate

R’000Change in depreciation/amortization resulting from reassessment of useful lives. The following categories are affectedAudio equipment 103 93 10Computer equipment 382 377 5Office equipment 776 734 42Small Assets 9 8 1Lease hold Improvement 3 298 2 757 541Monitoring &Evaluation System 1 887 1 891 (4)

25. Contingencies

There are no contingencies to report.

26. Subsequent events

The misunderstanding between GIFA and Telkom regarding the installation of lines at 75 Fox has been resolved. The invoice that was disputed in February 2017 was added to accruals.

Annual Report2016/17

82 Grayston Drive Sandton Johannesburg2017South Africa

P O Box 650780BenmoreSouth Africa2010

Telephone: +27 11 290 6600Fax: +27 11 290 6700

PR116/2017ISBN: 978-0-621-45376-8

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annual report - gifa · 2016/17 annual report of gifa, which details the performance of the agency...

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