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17PROGRAMME 1: MANAGING

DIRECTOR’S OFFICE

FOREWORD BY THE MEC 2

STATEMENT BY THE CHAIRPERSON 4

MANAGING DIRECTOR’S OVERVIEW 6

ABOUT LEDA 9

INSTITUTIONAL FRAMEWORK 11

LEADERSHIP 12

PERFORMANCE REPORT BY PROGRAMMES 17

19PROGRAMME 2: ENTERPRISE

DEVELOPMENT AND FINANCE DIVISION

22PROGRAMME 3:

INDUSTRIALISATION DIVISION

27PROGRAMME 4: LAND AND

PROPERTY DEVELOPMENT DIVISION

30PROGRAMME 5: TRADE AND

INVESTMENT PROMOTION DVISION

35PROGRAMME 6: SUBSIDIARY COMPANIESGREAT NORTH TRANSPORT 36

RISIMA HOUSING AND FINANCE CORPORATION 38

CORRIDOR MINING RESOURCES 41

LIMPOPO CONNEXION 47

49PROGRAMME 7: CORPORATE SERVICES

60GOVERNANCE REPORT

70ANNUAL FINANCIAL STATEMENTS

CONTENTS

LIMPOPO ECONOMIC DEVELOPMENT AGENCY ANNUAL REPORT 2016/172

I am privileged and humbled to once again venture an assessment of the work undertaken by the Limpopo Economic Development Agency (LEDA), in concert with its sister implementing agencies. Oversight and management reports by the LEDA Board of Directors and executive management flag, in granular detail, various programmes and projects the organisation has championed in the past financial year – notwithstanding that such work, naturally, derives its scope and impetus from the legislative and resource support provided in part by the Department.

I, therefore, wish to confine my report to overarching macro issues that have defined the performance of LEDA insofar as it is the leading economic development and transformation agency in the province and, an economic policy implementing instrument for the provincial government. Firstly, and most crucially, has been LEDA’s rigorous policy advocacy and education of our communities; translating provincial economic development policy into tangible products and services for the benefit of our people.

In continuously defining and sharpening provincial economic development policy detail and certainty, the

Department has seen LEDA bring to bear and implement a robust and clearly segmented corporate strategy, which plugs into and echoes the Department’s own strategic framework. This was and is in areas of ongoing community engagement as to available business opportunities and government support, revitalisation and establishment of the province’s industrial assets such as parks and special economic zones, as well as resource and technical support pooling through targetted and result-driven public private partnerships.

Notably, LEDA has not only managed to deepen its consultation efforts within communities where the agency has existing or intended businesses – but also where community education and approval are requisites for harmonious implementation and equitable distribution of benefits where practical and possible. These are particularly resonant in the agency’s public participation outreach programmes for the establishment of Special Economic Zones in Tubatse and Musina/Makhado, the alignment of the agency’s development agenda with local economic development strategies of municipalities, and resource and skills audits within these stakeholder groupings as a joint planning and risk management intervention.

MECFOREWORD BY THE

Seaparo Sekoati

LIMPOPO ECONOMIC DEVELOPMENT AGENCY ANNUAL REPORT 2016/17 3

NOTABLY, LEDA HAS NOT ONLY MANAGED TO DEEPEN ITS CONSULTATION EFFORTS WITHIN COMMUNITIES WHERE THE AGENCY HAS EXISTING OR INTENDED BUSINESSES – BUT ALSO WHERE COMMUNITY EDUCATION AND APPROVAL ARE REQUISITES FOR HARMONIOUS IMPLEMENTATION AND EQUITABLE DISTRIBUTION OF BENEFITS WHERE PRACTICAL AND POSSIBLE.

A considerable achievement is, in the main, LEDA’s successful proposal and compliance with key regulatory requirements, culminating in the awarding of the Musina/ Makhado Special Economic Zone operating licence and, advanced plenary work on the Tubatse SEZ. The organisation has not only demonstrated great speed in attracting and securing anchor investments and tenants into the SEZs – but also in setting up the management structures to ensure and oversee the development of bankable business plans for the various economic sectors resident in and around the SEZ.

The agency has further and lastly, maximised on the political and cooperative governance support provided by the Department in how it engages and partners with district and local municipalities and national departments. This is evidenced by funding and infrastructure development work undertaken in partnership with the Department of Trade and Industry, developmental financial institutions such as the Development Bank of Southern Africa (DBSA), Small Enterprises Development Agency, (SEDA), as well as support to governmental diplomatic protocols in the regional integration and intercontinental trade space. I am, having noted the

fundamental components and roadmaps necessary to advance economic development through LEDA, pleased to affirm that the agency has achieved significant milestones and is poised to bring about large scale development in our province.

Seaparo SekoatiMEC: Economic Development, Environment and Tourism


CHAIRPERSONSTATEMENT BY THE

Mofasi Lekota

I am delighted to present the annual report of the Limpopo Economic Development Agency (LEDA) for the year ended 31 March 2017 to all our stakeholders and partners. In spite of unstable global and local markets,

LEDA, under the direction of the Board of Directors and in collaboration with the executive leadership, has managed to achieve some of its key objectives. It is pleasing to report that LEDA continues to contribute

towards strengthening and diversifying the economy of the Limpopo province in line with its strategic objectives and mandate.

Without the dedication of the many talented professionals in both the public and private sectors of our province, the collective goal of growing our provincial economy would remain an illusion never to be attained. I would like to thank all of LEDA’s many stakeholders for their continued support in our efforts towards attainment of LEDA’s and the province’s financial self-sustainability. We will continue to stimulate Limpopo’s economy by supporting the innovativeness of our small and medium enterprises (SMEs)

and improve general conditions that will enable the creation of jobs.

These positive developments are happening within a global economy characterised by uncertainty that undermines realisation of full economic growth at both nationally and provincially. Further, the Board and management reviewed our organisational strategies and tactics to help LEDA navigate around the macro-economic effects of the country’s down-grades by two international rating agencies. In its efforts to spearhead economic development in the province, LEDA continually seeks to deliver on its mandate of achieving a stronger and more inclusive economic development in the province. Internally, the difficulty of attracting competent candidates to fill vacant executive management positions represents a persistent risk and challenge for the agency’s operational leadership capacity. I am,

however, satisfied that the Board is paying adequate attention to this challenge

and plans are underway to improve the attractiveness of LEDA as an employer.


FINANCIAL PERFORMANCE AND INVESTMENTS

As of March 31, 2017, LEDA had assets of RXXXXX with a combined loan portfolio totalling RXXXXX. During the year under review, LEDA approved financing of SMEs totalling R23.92m.

In support of the National Development Plan’s initiatives of fostering the creation of employment and economic growth through industrialisation, LEDA focused this year on the creation of special economic zones (SEZs). I am pleased to announce that the Tubatse SEZ project is gaining admirable traction with satisfactory investment commitments in the pipeline. The establishment of the Musina – Makhado SEZ is in final pre-designation stages.

As part of our mission, we continue to work with companies to facilitate business to business networking, universities and research institutions to deepen our knowledge base, as well as investors to expand and modernise our provincial economy. We have also worked diligently to diversify LEDA’s service offerings by incorporating Limpopo Connexion as a subsidiary company spearheading our efforts of garnering technology to enhance productivity and efficiencies in our economy. Limpopo Connexion is expected to play a pivotal role in establishing an affordable, shared broadband open-access wide-area network infrastructure, accessible to the public, government and business. The Science and Technology Park establishment will provide a collaborative platform for the global network of clusters of innovation.

The development of large scale agro-processing business is bearing fruit with the acquisition of the potato processing plant in its final phase. LEDA’s focus in the next financial year will also entail developing and growing our agro-processing investments in line with the national and provincial food production priorities.

The acquisition of the remaining 95% equity in New Era Insurance during the year signals our strategic thrust towards developing integrated financial service offerings to our clients. This acquisition will support our medium-term goal of financial self-sufficiency. We are looking forward to more acquisitions and green field developments in our focus areas of agro-processing, financial services and natural resource beneficiation.

CORPORATE GOVERNANCE

The Board is satisfied that LEDA’s corporate governance complies with both legislation and best practice. I am proud to confirm that the directors have, in all material respects, applied the principles of King lll during the reporting period.

All of the Board’s specialised governance committees have met regularly to perform their delegated responsibilities to assist the Board in achieving its oversight responsibilities. All these committees, Credit & Investment, Procurement, Social & Ethics; Human Resources & Remuneration, Nominations; and Audit & Risk are dominated by non-executive directors and operate in accordance with their respective charters.

ACKNOWLEDGEMENTS

On behalf of the Board, I would like to thank the executives and staff at the LEDA group, subsidiaries and associate companies for their dedication and hard work which made these achievements possible. Our staff members are the heart and soul of our business and should be proud of our achievements in 2016/17. We recognise that we can, should and will do more in the coming years to address the challenges of unemployment, poverty and inequality.

We also appreciate the unwavering support and constructive feedback received from our shareholder and political leadership. The wise counsel and guidance from the Member of the Executive Council ensures that we stay on course and relevant to the economic needs of the people of Limpopo. We continue to enjoy positive and collaborative relationships with our sister agencies, as well as other economic development and financing partners. In the coming years the collaboration will result in demonstrable synergies benefiting the province and its people. My sincere thanks to my fellow directors and directors of our subsidiary and associate companies who have each made very significant contributions, both at Board meetings and through Board sub-committees.

Mr. Mofasi LekotaChairperson


OVERVIEWMANAGING DIRECTOR’S

Ben Mphahlele

It is my pleasure to amplify messages of the MEC and Board Chairperson regarding developments within LEDA during the year under review. Looking at external developments with a bearing on LEDA’s business and operations, South Africa’s economy has, as predicted, grown by not more than 0.3%. This was due to lower

output in sectors such as agriculture, mining and electricity. Debilitating conditions such as drought and operational challenges culminated in contraction of the

agricultural GDP during 2016. As a result, Sub-Saharan Africa experienced very low economic growth which has now translated into a recession for

the South African economy. This economic outlook was exacerbated, shortly after close of the 2016/17 financial year by the Standard and Poor (S&P) and Fitch Rating Agencies which downgraded South Africa’s foreign currency rating to sub-investment grade status.

The 2016/17 financial year unfolded when selected global economies (for instance the United States, Brexit geopolitics)

and, by implication South Africa), were undergoing targeted as opposed to wholesale economic policy

shifts and adjustments. The Limpopo province is at a pivotal point regarding accelerated implementation of the province’s policy plans and pronouncements that have to do with the interplay and balance between state intervention, government leadership and

market-driven forces. These also concern catalytic mega projects such as the Special Economic Zones, small and medium sized

enterprises and cooperatives, inculcation


of business mindedness and technical know-how in our communities, as well as the development of commercial products to corresponding domestic and international export markets.

LEDA has made great strides in funding and training enterprises, securing R48b in investment funding and putting in place the governance structures for the operation of the Musina/Makhado Special Economic Zone. The established Musina Makhado SEZ company has succeeded in entering into formal operations agreements that have put the SEZ into the first phase of implementation. This will bring about skills development, employment creation and investment to the magnitude of not less than R40b. LEDA has taken a nodal focus in the implementation of its economic development work, wherein time and resources are deployed in projects and partnerships that meet the bankability and sustainability muster. More specifically, considerable work has also been directed at consolidating the stakeholder base to ensure integrated and representative execution of mega and support projects.

During the year under review, LEDA capacitated 15 staff members who will, during the cause of the 2017/18 financial year, work closely with municipalities in the nodal growth points identified in the Limpopo Economic Development Plan, in an effort to further strengthen the province’s local economic development strategies. Risima Housing Finance Corporation continues to respond positively to the demand for decent housing in the province, being one of the most profitable subsidiaries. The same cannot be said about Great North Transport, which, irrespective of implementation of a turnaround strategy, continues to face operational challenges and therefore requires special attention during the new financial year to ensure that its operations are viable and benefit millions of commuters – who contribute immensely to the economic development of the province. Recently incorporated as a subsidiary

of LEDA during the period under review, Limpopo Connexion will bring about much desired local economic delivery technological infrastructure that is guaranteed to strengthen and expedite economic development during the succeeding years.

Increased competition for finite investment resources globally, on the African continent, in the region and within South Africa has marshalled in a new tactical challenge: how to leapfrog the provincial economy from its structural and ideological constraints – that is – its dependence on primary commodities with minimal localised beneficiation. Government’s call for radical economic transformation comes at a time when the Limpopo Economic Development Agency has turned a leaf in its pursuit to broaden the industrial base, accelerate manufacturing through other interventions, the revitalisation of industrial parks and upscaling revenue targets at holding and subsidiary company levels.

Details of overall and specific organisational performance in terms of numbers and strategic milestones are contained in the programme reports and those of subsidiary companies – but broadly speaking, LEDA has for the commercial component of the its mandate, to bolster revenue generation by focusing on recapitalisation of its various business portfolios – through exploration of investment instruments in transportation and logistics, in the housing finance market, mining and exploration, financial services, agri-business as well as information and communication technologies. We have fully embraced the advent of technology being a major catalyst for the fourth industrial revolution. The agency is, through the Limpopo Connexion, fast advancing in the development of a vibrant Information and Communication Technology industry broadband and the establishment of science and technology parks in the province. Such an intervention is crucial in ensuring connected and technologically savy and empowered businesses and communities.

WE, AS LIMPOPO, ARE AT A PIVOTAL POINT AS REGARDS ACCELERATED IMPLEMENTATION OF THE PROVINCE’S POLICY PLANS AND PRONOUNCEMENTS.


I note and pronounce on the fact that there was and continues to be growing sensitivity with regards to the time and scale it will take to implement projects with a broad-based development agenda – to ensure the creation of much needed employment and skills development. I am confident that LEDA is on firm footing and the right growth trajectory for the benefit of the people of our province. What is more pleasing is that LEDA has been hard at work on developing current workforce supply and demand data through the provision of learnership opportunities for leaners from the province, who need practical experience before being absorbed into the marketplace. This is important, as the province that best solves the talent supply equations will score the big wins in economic development competition.

I want to sincerely thank LEDA’s directors, investors and partners for their hard work and commitment. I would also like to thank the LEDA management and staff for their continued dedication, hard work in ensuring that LEDA remains at the coalface of service delivery and enterprise support as far as the provincial economic development is concerned.

Morore Benjamin MphahleleManaging Director

LEDA HAS MADE GREAT STRIDES IN FUNDING AND TRAINING ENTERPRISES, SECURING R48B IN INVESTMENT FUNDING AND PUTTING IN PLACE THE GOVERNANCE STRUCTURES FOR THE OPERATION OF THE MUSINA/MAKHADO SPECIAL ECONOMIC ZONE.


LEDA is established in terms of the Limpopo Economic Development Corporation Act, Act No. 5 of 1994, as amended, and complies with the Public Finance Management Act

(PFMA) as a Schedule 3D agency. It has been established as a special purpose vehicle, culminating from the amalgamation of four historical agencies, namely Trade and Investment Limpopo, the Limpopo Business Support Agency, the Limpopo Agribusiness Development Corporation and the Limpopo Economic Development Enterprise.

1. VISION

A leader in sustainable economic growth and job creation.

2. MISSION

To implement integrated economic development initiatives in Limpopo, through:

• accelerated industrial diversification;

• increased levels of trade and investment; and

• by developing sustainable enterprises.

The mission reflects the role of both the Limpopo Economic Development Agency (LEDA), as the policy-implementing arm of the province, and LEDET, as follows:

1) Providing business intelligence, as well as research and development (R&D) towards innovative solutions: Using scientific impact assessment tools and approaches to develop scenarios and business intelligence; monitor and evaluate the impact of projects; and provide capacity support in areas of development, such as economic development research. Being a first point of call in terms of business and market intelligence.

2) Conceptualising economic programmes and drivers: Unpacking policy directives, as well as understanding what is unique to the region and will stimulate growth. Supporting integrated region-wide planning on economic development, as well as investment planning and advancement.

Understanding the provincial value proposition and its comparative global competitiveness.

3) Identifying and packaging development opportunities and leveraging partnerships: Developing bankable business and/or project plans to best attract and leverage private sector and other partnerships and investment to targeted projects; and providing a framework for both government’s involvement and its exit/handover strategy and approach with regard to identified projects and programmes. Optimising and leveraging that which other partners are doing in a particular space.

4) Supporting local economic development (LED) capabilities (where LED is by definition localised): Providing a regional view and supportive framework to LED in terms of how it might integrate with, and benefit from a regional focus and strategic framework, while identifying and leveraging opportunities for collaboration.

5) Customising support for priority economic sectors and subsectors: Understanding the value chain of the sectors targeted for support, followed by clearly targeting support towards industrialisation and the growth of labour-intensive industries. Focusing only on sectors that are most likely to benefit from the impact and be consistent in terms of growth and development. Understanding the unique selling point of Limpopo. Driving Limpopo’s global competitiveness and understanding the global value chain.

6) Coordinating and managing the implementation of strategic infrastructure and economic interventions: Acting as a “Centre of Excellence”, providing capacity, capability and competence in project and programme management, project planning, project oversight and management of development interventions.

7) Facilitating trade and investment: Sourcing and facilitating funding for investment projects in the province; supporting business expansion and retention; supporting and driving enterprise development; and attracting new industries to the province.

ABOUT LEDA


3. INSTITUTIONAL VALUES

Values identify the principles for the conduct of the institution in carrying out its mission. In working towards the achievement of its vision and mission, LEDA subscribes to the following internal values, which are in line with the Batho-Pele principles and indicated in the table above.

The values discussion specifically emphasised that the values require targeted management intervention to ensure that these values are visible and “lived”, while they should also be assessed as part of LEDA’s performance management approach, under direction of the Managing Director.

4. STRATEGIC GOALS

1) Accelerated industrial diversification via strategic economic development interventions.

2) Sustainable enterprises in targeted sectors of the economy.

3) Increased trade and investment in Limpopo.

4) Public accountability; sound corporate governance; and sustainable resource utilisation.

Individually, each goal represents an aspiration LEDA seeks to achieve as it pursues its mission (aim). Collectively, the goals define the full spectrum of LEDA’s role and focus. The attainment of each goal will require LEDA-specific focus and, of great importance, support and collaboration from both internal and external stakeholders.

Service Delivery Agreement

LEDA’s work and focus are governed by its Service Delivery Agreement, which outlines LEDA’s primary objectives as follows:

1) To be both a stimulus and catalyst in enhancing provincial economic capacity.

2) To provide “thought leadership” by way of circumventing sporadic, uncoordinated and disjointed economic development projects which, in most instances, operate in direct contrast with stated policies and the province’s economic interests.

3) To strive towards organising a more coherent system of economic delivery in the province.

4) To act as custodian of policy implementation, by assisting government in identifying specific high-impact projects that will accelerate and

LEDA VALUE STATEMENT WHAT IT MEANS IN PRACTICE

Accountability The obligation to account. To take responsibility for one’s actions.

Excellence To be results-oriented and cost-effective; to ensure superior performance; to strive for client/stakeholder satisfaction.

Integrity To be professional, have a commitment to ethics and focus on justice and fairness. To be honest, trustworthy, open and loyal.

Transparency The obligation to act in an open and transparent manner.

DiversityTo display respect for different cultures and different perspectives. To encourage different views. To display tolerance towards others. A commitment to employment equity and the rural/urban balance required for the organisation’s main focus.


sustain growth and development, as well as to create productive and sustainable employment opportunities.

5) To lead government in planning and executing strategies towards shaping the future of Limpopo’s economy, by shifting from a culture of disaggregation to a more collaborative approach. It also has a long-term view with regard to expanding the provincial economy.

6) To pursue an industrialisation trajectory that is responsive to:

• the promotion of more labour-absorbing industrial sectors, with the emphasis on tradable labour-absorbing goods and services, as well as economic linkages that catalyse employment creation;

• the promotion of a broader-based industrialisation path that is characterised by greater levels of participation; and

• the intensification of Limpopo’s industrialisation process and the province’s movement towards a knowledge and skills-based economy.

INSTITUTIONAL FRAMEWORK

PROGRAMME MANAGEMENT

OFFICE

MANAGING DIRECTOR

GROUP INTERNAL AUDIT

GROUP COMPANY SECRETARY

GROUP COO

INDUSTRIALISATION

INFORMATION, KNOWLEDGE AND

PROGRAMME MANAGEMENT

ENTERPRISEDEVELOPMENT

TRADE AND INVESTMENT

PROMOTION

CORPORATE SERVICES

GROUPFINANCE

SEZ AND CORRIDOR DEVELOPMENT

PROPERTY AND INFRASTRUCTURE

DEVELOPMENT

AGRI BUSINESS DEVELOPMENT

RESEARCH AND DEVELOPMENT

INFORMATION TECHNOLOGY

FINANCIAL SUPPORT

BUSINESS SUPPORT

TRAINING AND DEVELOPMENT

GROWTH SECTORS

FOREIGN DIRECT INVESTMENT

DOMESTIC DIRECT INVESTMENT

EXPORT DEVELOPMENT

PROJECT FACILITATION AND

FUNDING

HUMAN RESOURCES

LEGAL SERVICES

MARKETING AND COMMUNICATIONS

ADMINISTRATION AND FASCILITIES

FINANCE MANAGEMENT

SUPPLY CHAIN

CHIEF RISK OFFICER

KEY SUBSIDIARIES

RISIMA HOUSING FINANCE CORP.

GREAT NORTH TRANSPORT

CORRIDOR MINING RESOURCES

BOARD OF DIRECTORS

LIMPOPO CONNEXION


BOARD OF DIRECTORS

B.Com; MBA; Directors Development Programme; Effective Leadership Programme; SAPOA Property Development Programme; Board Leadership Programme

Mofasi has accumulated more than 25 years business experience in financial management, economic development and planning, human capital consulting, talent and leadership consulting, corporate governance, and venture capital. He worked for several companies and organisations, including Deloitte, Johnson & Johnson and SAB Miller, the National African Chamber of Commerce (Nafcoc) and the Premier Soccer League (PSL). He served as director for JSE-listed companies, including Billboard Holdings and Gijima AST, Adcorp Holdings and Tanga Cement (listed on the Tanzanian stock exchange). He also served on boards of Afrisam as Deputy Chairperson, Bunker Hills Investments as Chairperson, Great North Transport as Chairperson and Limdev.

Mr M LekotaChairperson

Demetrios has been actively involved in business for over 43 years. His experience ranges from supplying auto electrical supplies and owning fuel stations to property developments. His property experience and developments span from Phalaborwa to Polokwane and was instrumental in the expansion and development of these cities. He currently serves as director to numerous compaanies involved in property ranging from commercial to residential. Held several directorships, amongst others, Limdev and Corridor Mining Resources (Soc) Ltd. Currently Deputy Chairperson of Leda.

Mr D KourtoumbellidesDeputy Chairperson

Master of Business Administration; Banker’s Diploma; Certificate in Programme for Management Development; Certificate in Programme on Investment Appraisal and Management.

(Appointed 1 December 2015)

Mr B MphahleleManaging Director

Victor has 10 years’ experience in business. He is the co-founder and Executive Director of Uramin-mago-lukisa mining company, and previously the Head of Communications for Uramin Inc. He is also the Executive Director responsible for Corporate Social Investment for Areva Resources Southern Africa. He is currently the Chairperson of the following companies: Corridor Mining Resources (Soc) Limited and Nakedi Solutions.

Mr S ChepapeDirector


BOARD OF DIRECTORS (cont.)

Board Leadership Programme

Chairperson of Great North Transport (Soc) Limited. Maphutha has 21 years’ experience in business, ranging from construction, electrical, logistics and mining in coal, platinum and chrome. He has held directorships in various companies, among others, Limdev.

CA (SA); B.Compt (Hons); Post Graduate Diploma in Mining Engineering

Kabela completed her AGA (Associate General Accountant) articles with First Rand Bank Limited and her TOPP Chartered Accountant articles with Sasol Synfuels International. She also holds a post-graduate Diploma in Mining Engineering from the University of the Witwatersrand.

She is the Managing Director of Kabela Consulting and has extensive experience as an accountant. She has held managerial positions in both the public and private sectors. She is the Chairperson of Interactive Intelligence South Africa, a subsidiary of a Group listed on DASDAQ and serves on various other Boards including two JSE-listed companies. She is the Chairperson of Audit committees of REDISA (Recycling and Economic Development Initiative of South Africa), Wescoal Holdings, ASA Metals and RBA Holdings.

Ms K MarogaDirector

Masters in Public Administration; B. Juris; Certi cate in Company Law; Board Leadership Programme; Executive Development Programme

Chairperson of Risima (Soc) Limited. Nkadimeng is Management Consultant and Corporate Advisor for several clients, including mining communities in Limpopo. He also specialises in mining, energy, infrastructure development, marketing and strategic stakeholder management. He is a director of several companies.

Mr S NkadimengDirector

Admitted Attorney of the High Court of South Africa. Has experience in Legal Civil Litigation & Labour Litigation, former Chairperson of the Housing Advisory Panel and currently still a member of the Limpopo Rental Tribunal. She joined Leda as a Director and is currently the Chairperson of the Human Resources and Remuneration Committee, the Deputy Chairperson of Risima Housing Finance – a subsidiary of Leda. She is currently finalising her MBA (Business and Professional Ethics).

Ms MA MphahleleDirector

Mr M MaphuthaDirector


M (Eng), BA, Post Graduate Diploma in Mining Engineering; Executive Management Programme Certificate; GM: Trade and Sector Development, LEDET

B. Juris; Project Management;

Strategic Investment Promotion and Competitiveness; Practical Labour Law

Ms C MokomaGroup Company Secretary

BA Hons; BA International Executive Development Programme; Management Advancement Programme; Civil Service Transformation Programme

(Appointed 1 June 2015)

Mr T MakunyaneDirector

BA Education. Project Management. Thabo Andrew Mokone was previously employed at Naphuno College of Education as a lecturer, Limpopo Department of Public Works as a CBPWP Co-Ordinator, General Manager EPWP at Road Agency Limpopo, and General Manager at Limpopo Department of Public Works. He is now the Director and Founder of Ngungwa Development, with interests in the Civil and Construction industry. Strategic Management; Organisational Transformation; Project Management; Opportunity Assessment and Evaluation; Organisational Transformation.

(Appointed 1 June 2015)

Mr T MokoneDirector

Ms L MajaShareholder Representative

Former college lecturer and Director: Education,Limpopo Education Department. Business involvementin manufacturing, agri-business, construction,communications and media. Published author. BA(Education); BA Honours.(Appointed 1 June 2015)

Mr S LedigaDirector


Master of Business Administration; Banker’s Diploma; Certificate in Programme for Management Development; Certificate in Programme on Investment Appraisal and Management.

(Appointed 1 December 2015)

Mr B MphahleleManaging Director

B.Com Hons; Master of Business Leadership

(Appointed 1 February 2016)

Mr H MaphuthaActing Executive Manager: Enterprise Development and Finance

B.Admin; B.Admin (Hons); PMD; CPBPM

(Acting MD until 30 November 2015)

Mr STM PhetlaGroup: Chief Operations Officer

BA; B.Ed; M.Ed; Human Resource Management, Personnel Training; Employee Wellness; Certificate in Business Project Management

(Appointed 1 February 2016)

Ms SN MaponyaActing Executive Manager: Human Resources

Masters in Business Leadership; B Compt Hons Accounting Sciences; B.Com Accounting Sciences

(Appointed 1 September 2015)

Mr GJ RouxActing Chief Financial Officer

EXECUTIVE MANAGEMENT


CEOs OF SUBSIDIARIES

Masters in Public Administration, Honours in Public Administration; Bachelors degree in Media Studies

(Appointed 1 March 2016 to 28 February 2017)

Mr Z MthethwaCEO: Risima Housing Finance Corporation

BA (Hons in Development and Management); BBibl.

Mr KR NkadimengCEO: Corridor Mining Resources

B.Admin (Busines Management & Development Administration); MBA (Strategic Management); Postgraduate Diploma in Management; Aligning Operations Strategy (Wits Business School); Advanced Port Captain’s Certificate (Marine Operations; Cargo Terminal Operations, Stevedoring; Logistics; Warehousing; Maritime Legislation); Advanced Galbraith’s Shipping Course, Technical/Engineering: NTC6

Mr S KeswaCEO: Great North Transport

Mr B RamasobaneActing CEO: Limpopo Connexion

B.Com (Vista University), B.Com Honours: Economics (Vista), M.Com Economics, PhD: Economics (University of Pretoria), Management Development Program (University of Manchester)

(Appointed 1 March 2017)

Dr S NokanengCEO: Risima Housing Finance Corporation

MBA; BSc. Computer Science; NHD (BTech) – Engineering Surveying; Project Management - Japan; Business Analysis - Singapore


PERFORMANCE REPORT BY PROGRAMMES

MANAGING DIRECTOR’S OFFICE

PROGRAMME 1



BACKGROUND

The purpose is:

• Providing strategic direction (what the organisation is all about, what the organisation stands for, whom the organisation supports and by what sort of means) and effective strategic management processes to ensure that the organisation is able to achieve its mandate.

• Effectively conducting ongoing and annual performance monitoring of programmes and introducing corrective measures as required,

as well as distilling lessons from programme implementation.

• Positioning LEDA (via the structured platform of stakeholder partnership) as a brand in the province.

STRATEGIC OBJECTIVE: EFFECTIVE LEADERSHIP AND ENHANCED CORPORATE GOVERNANCE

Strategic direction and overall support, management and administration will be provided.

ANNUAL PERFORMANCE INFORMATION

LEDA STRATEGIC GOAL

STRATEGIC OBJECTIVE

PROGRAMME PERFORMANCE INDICATOR

MEANS OF VERIFICATION ANNUAL

ANNUAL TARGETS

ACTUALS GAP REMARKS

4. Public accountability; sound corporate governance and sustainable resource utilisation

Effective leadership and enhanced corporate governance

Annual Board Organisational Performance Rating

Board assessment and Organisational Assessment rating

Establish baseline

Assessment done

None None

Number of Quarterly Performance Management and Compliance Reports produced.

Quarterly reports 4 4 None None


ENTERPRISE DEVELOPMENT AND FINANCE DIVISION

PROGRAMME 2



ENTERPRISE FINANCE

The Financial Support Division received a total of 158 loan applications with a total value of R77.24 million. The department approved 116 business loans amounting to R23.92 million during the year under review. Twenty nine applications were rejected due to them not meeting the criteria as stipulated in LEDA’s Credit Policy. Debt collection on the current LEDA Loan Book has improved from 85% to 95%.

The department has reviewed the Credit Policy and Collection Strategy including the Pricing Policy to align all of these to LEDA’s strategic direction. Moreover, LEDA signed a Memorandum of Understanding (MOU) with the Industrial Development Corporation (IDC) with the aim of increasing the demand for expansion and asset finance loans. In order to improve the uptake of large loan applications and assessment, the agency hasalso partnered with Absa Bank for the training of LEDA staff on analysis of financial statements and credit assessment.

BUSINESS SUPPORT

COOPERATIVES DEVELOPMENT PROGRAMME

In response to the call by the President of South Africa to assist cooperatives in accessing 30% of procurement opportunities, LEDA has been appointed by the Limpopo Department of Education (LDOE) as an Implementing Agent for the Department’s Schools Sanitation Maintenance Programme. The primary aim of the programme is to ensure effective implementation of sanitation facility maintenance and cleaning services to LDOE schools, thereby creating sustainable Co-operatives within communities. The project has created job opportunities for targeted groups; which are representative of the youth, women and people with disabilities.

The Limpopo Department of Education allocated a budget of R5m for schools sanitation maintenance and refurbishment for the period 2016/17, which has been committed and spent on 97 schools serviced by 24 co-operatives participating in the schools’ sanitation


LEDA GROUP OUTPUT

STRATEGIC OBJECTIVE

GROUP PERFORMANCE

INDICATORRESPONSIBLE

DIVISIONREPORTING

PERIOD

2016/17 ANNUAL TARGET ACTUAL GAP REMARKS

MEANS OF VERIFICATION

Total number of active enterprises supported

90% of enterprises supported still active at March 2020

Number of existing SMME’s incubated

Enterprise Development and

Finance

Annually 60 60 None None Working files

Number of existing Co-op’s supported


Finance

Annually 100 100 None None Working files

Number of new Co-op’s assisted with funding


Finance

Quarterly 20 0 20 Budget constraints Approval letters

Number of business loans disbursed per annum


Finance

Quarterly 250 loans 116 loans 134 loans Cash flow constraints Loan agreements/contracts

Rand value of business loans disbursed


Finance

Quarterly R50 million R32.65 million

R17.35 million

Lack of funding to venture in high value loans

Loan agreements

Increase in the absorption rate of trainee beneficiaries

25% absorption rate of trainee beneficiaries by March 2020

Number of off-take agreements signed with industry per annum


Finance

Quarterly 5 3 2 Partnership agreements could not be signed due to lack of full accreditation status

SLAs/MOUs

Revenue generated from training courses


Finance

Quarterly R10 million R2.41 million

R7.59 million

Partnership agreements could not be signed due to lack of full accreditation status

Financial reports

Number of trainees trained on requisite technical skills per annum


Finance

Quarterly 2 400 3 013 (613) Higher than expected student turnout during registrations

Learner data base and attendance register

Number of trainees trained on requisite business skills per annum


Finance

Quarterly 3 200 4 893 (1 693) Higher demand for business skills training

Learner data base and attendance register


maintenance and refurbishment programme. The programme has created 120 job opportunities. Over and above this, LEDA facilitated a process wherein 47 co-operatives accessed procurement opportunities worth R6.2 million from different stakeholders.

Co-operatives from Limpopo participated at the International Co-operatives Day Celebration 2016 which was held on 1 and 2 July 2016 at Mbombela, in Mpumalanga Province where two Limpopo Co-operatives won the first cash prize (R 250 000) and second cash prize (R200 000) in the National Co-operatives Excellence Awards.

FUNDING SUPPORT

LEDA continues to assist cooperatives to access funding from different strategic partners. During the period under review, LEDA assisted the following cooperatives to access support from the Department of Rural Development and Land Reform (DRDLR), namely:

• Lefowa Farming Co-operative received incentive support worth R1.2m

• Lamala Farming Agricultural Co-operative received incentive support worth R1.4m

• Matteotis Farming Agricultural Co-operative received incentive support worth R1.4m

• Makgadile Agricultural Co-operative received incentive support worth R672 605.

Over and above these, LEDA assisted 41 cooperatives to access finance worth R9.7m from different financiers/donors.

LEDA/TRANSNET ENTERPRISE DEVELOPMENT HUB (ONE STOP CENTRE)

Limpopo Enterprise Development Agency (LEDA) entered into a contract with Transnet SOC Ltd for implementation

of the Enterprise Development Hub initiative in Greater Tubatse Local Municipality. The project endeavours to create an enabling environment for small businesses to access a centralised enterprise developmental support service. Enterprise Development Hub was initiated for small businesses to have easy access to products and services offered by both provincial and national economic development institutions under the same roof (One Stop Centre). It is projected that the centre will be launched around June/July 2017.

SMME DEVELOPMENT

LEDA has entered into a Service Level Agreement (SLA) with the Companies and Intellectual Properties Commission (CIPC) for the establishment of a self service terminal centre in Polokwane. The terminal is to assist enterprises to register, submit annual returns, obtain BBBEE certificates, and related services. The centre is up and running and services on average 25 SMMEs per day. The centre will be launched around May/June 2017.

During the period under review, 157 enterprises have been assisted with different services, ranging from assistance in lodging annual returns, facilitation of business registration, submission of tax returns, BEE certificates, development of business plans and business profiles. LEDA also assisted 90 micro enterprises to access procurement opportunities worth R6.9m.

TRAINING AND DEVELOPMENT

The Training and Development Division‘s main activities are Business and Technical Skills Training. The division has trained a total of 7 906 learners. The actual number of learners trained during the period 2016/17 exceeded the annual performance target of 5 600 by 2 306 as depicted in the table below.

PROGRAMME TARGET ACTUAL

Business Training 3 200 4 893

Technical Training 2 400 3 013

Total 5 600 7 906


INDUSTRILISATION DIVISION

PROGRAMME 3

22


SPECIAL ECONOMIC ZONES: MUSINA MAKHADO SEZ

The Musina Special Economic Zone (SEZ) is one of ten SEZs announced by the Minister of Trade and Industry (DTI). Its establishment is driven by the projected outlook for logistics and cross border transport as well as the potential downstream and upstream beneficiation of mineral resources such as diamonds and coking coal, endowed in Musina itself and its neighbouring areas. This is aligned with the IPAP 2016/17, which makes provision for SEZs as important instruments to support long-term industrial and economic development. This will have a direct impact on employment and economic growth, as well as attract foreign direct investment. As required by Chapter 7 of the National Development Plan, the Musina-Makhado SEZ will also expand trade and investment for the country.

The potential establishment of a petro-chemical sector and the development of a metallurgical cluster in close proximity to the logistics hub in the SEZ, represent a unique opportunity to be the only such facility on the African continent. Technical feasibility studies indicate that the establishment of the Musina SEZ is viable and can play a significant role in the transport of goods from

South Africa to SADC and Sub-Saharan countries, whilst also providing a route for imported products from these regions for South African consumption and export to European and other countries. Musina is, therefore, inarguably a development stimulus on the North / South Corridor.

More specifically, the Musina-Makhado SEZ is established to:

• Support local economic development,

• Create jobs and contribute to the National GDP,

• Facilitate the creation of an industrial complex,

• Develop infrastructure required to support the development of targeted industrial activities,

• Attract foreign and domestic direct investment,

• Provide the location for the establishment of targeted investments;

• Enable the beneficiation of mineral and natural resources;

• Take advantage of existing industrial and technological capacity,

• Promote integration with local industry and increasing value-added production,


LEDA GROUP OUTPUT

STRATEGIC OBJECTIVE

GROUP PERFORMANCE


DIVISIONREPORTING

PERIOD



An increase in the contribution of the manufacturing/beneficiaton/production sector to the Provincial GDP/per region (GGP)

6.8% contribution of manufacturing industry to GDP-R

Number of agro-processing facilities brought online per annum

Agri-business Quarterly 4 0 4 Equity on Potato Processing Plant in Dendron

Board and BCIC Resolutions

An increase in the amount of jobs created by the manufacturing/benefication/production sector in Limpopo

25 000 jobs created by the manufacturing/benefication/production sector in Limpopo

Rand value of investment in agro-processing cluster facilitated per annum

Agri-business Annually R40 million R0 R40 million Even though the projects are approved, they are not yet in operation

Investment schedule

Status in the establishment of the SEZ’s

Industrialization Annually Master plan completed

Master plan not

completed

Master plan not in place

Appointing service provider’s to conduct EIA, Intermodal facility study and water engineering studies.

Master plan documents

Annually Designation of Tubatse

SEZ

Application for

designation submitted to

the dti

Application was not assessed by the DTI as per the stipulations in

the Act.

Awaiting response from the dti

Designation letter


• Promote regional development,

• Create decent work and other economic and social benefits in the region in which it is located, including the broadening of economic participation by promoting small, micro and medium enterprises and co-operatives, and

• Promote skills and technology transfer.

PROJECT MILESTONES

SEZ Designation

Following the processes of pre-feasibility study, feasibility study and extensive public consultation process, Cabinet approved the designation of the Musina-Makhado SEZ in July 2016. The anchor project for the SEZ will be a metallurgical cluster set to attract investment to the value of R40 billion. This has a potential to create in excess of 19000 jobs. The cluster is planned to produce high grade steel for the domestic and export market, and its manufacturing capacity will consist of a power, coking, ferrochrome, pig iron, steel, stainless steel, lime plants and supporting facilities.

Land Tenure

After negotiations with the Mulambwane Community Property Association, LEDA concluded a Notarial Lease Agreement for an initial period of 90 years with an option to extend for another 30 years. The lease agreement between LEDA and the MCPA was concluded in December 2016.

Governance

• In line with the SEZ Act to facilitate the operationalisation of the SEZ, Musina-Makhado SEZ (SOC) Limited was established and registered with the CIPC on 27 Feb 2017 and an interim board was appointed.

• The Musina-Makhado SEZ SOC appointed the operator in March 2017 to expedite the development and location of investors in the zone.

Investment Attraction

In order to accelerate investment attraction, LEDA appointed a service provider to assist with investment promotion and attraction for the Northern Site of the SEZ in December 2017. The Environmental Impact Assessment (EIA) study for the Northern Site of the Musina-Makhado SEZ (Antonvilla) has been completed and approved.

ECONOMIC EMPOWERMENT

The Musina-Makhado SEZ has provided a unique opportunity to the empowerment of the community of Mulambwane whose members are the successful claimants of land in the area under the Restitution of Land Rights Act. The Mulambwane’s claimed land has been identified for the development of the South African Metallurgical Industrial Park. Through the leadership of the Provincial Department of Rural Development and Land Reform, a long-term lease agreement has been negotiated and concluded between the Mulambwane Community Property Association (MCPA) and LEDA.

THE NEXT STEPS

• Completion of the Environmental Impact Assessment

• Completion of the Water Engineering Study

• Completion of the Intermodal Transport Hub

• Consolidated Master Plan

• Appointment of the full complement SEZ Entity Board

• Appointment of key executives and personnel

• Securing of the Operational and Infrastructure Budgets (OPEX &CAPEX)

• Gazetting of the SEZ by the dti


TUBATSE SEZ

The Tubatse SEZ is located in the Eastern Limb of the Bushveld Igneous Complex in Steelpoort. There is already developed property for the manufacturing of the mining input supplies in Steelpoort which LEDA is in the process of acquiring. The property is 36 hectares in extent and the developed part is at present 11 000 square metres of lettable industrial space. Additionally LEDA has secured 1220 hectares of land adjacent to this industrial property thus extending the potential industrial area to include medium and large scale manufacturing and beneficiation activities. Engineers’ designs for the whole area have been completed, outlining the different land uses in the form of a SEZ Master Plan.

In keeping with the government’s national policy of regional integration and industrialisation, the Limpopo Province, through the Department of Economic Development, Environment and Tourism (LEDET), identified Steelpoort as an area with huge potential for the SEZ development.

Tubatse SEZ has an investment pipeline of R13.2 billion at present and the lettable industrial space is likely to be fully occupied. There is an estimated 6 000 jobs that would be created in the short-term. There is an additional

80 000 square metres of developable land with infrastructure within the 36 hectares of land that LEDA is in the process of acquiring. The property would be able to host most of the investors. The Tubatse SEZ would be able to operate immediately within the current infrastructure.

The Tubatse Special Economic Zone constitutes an important milestone in the planned Platinum and Chrome Cluster within the Dilokong Spatial Development Initiative. The Dilokong Spatial Development Initiative had yielded positively over the years in creating a demand base for mining input supplies as a result of the growth in the mining sector in the area. The demand for the mining inputs supplies created an opportunity for large scale industrialisation for both the manufacturing of mining inputs and the beneficiation of mining outputs.

The establishment of the Special Economic Zone (SEZ) in Tubatse is driven by the projected mining and beneficiation outlook of the Platinum Group of Metals (PGM) in South Africa. The greater Tubatse area lies in the eastern limb of the Bushveld Igneous Complex (BIC), which contains the world’s largest reserves of platinum group metals (PGMs), along with vast quantities of iron ore, chromium, titanium and vanadium. Fifteen mines are currently operational in Greater Tubatse, with at least 22 new ones expected to start operations shortly.


The Tubatse Special Economic Zone will impact positively on more than a million people in the province due to improved economic activities within the Dilokong Spatial Economic Initiative as well as improving economic progress within other districts and municipalities. These economic activities will not only yield improvements of the wellbeing of the provincial citizens but will also contribute to the enhancement of requisite skills and of South Africa’s role in regional integration.

INVESTMENT OPPORTUNITIES

TUBATSE SEZ TARGETED INVESTMENTS

CLUSTER INVESTMENT PROJECTS products

Iron Ore Steel and Iron Furnace Iron Pellets and Steel

Vanadium Cluster Vanadium Pentoxide Plant Vanadium Pentoxide and Redox Batteries

Chrome Cluster Ferrochrome Furnace and Chemical Plant

Ferrochrome and Chrome Chemicals

Mining Input Cluster Manufacturing and Services Plants

Yellow Metal Assembly, Mauntenance, Pumps, Valves

and Others

Energy and Manufacturing Manufacturing of Solar Panels Components

Solar Panels/Energy

Platinum Cluster Platinum Smelter and Base Metal Refinery

Refines Platinum, Fuel Cells and Cat Converters, etc.

PROJECT MILESTONES (2016/17)

• Land (1220 ha) for the SEZ development has been successfully secured with the Dithamaga Trust Community (MoA signed).

• The fifteen potential investors have submitted letters of intent to locate in the Tubatse Platinum SEZ at a combined investment value of approximately R13.2 billion.

• The Strategic Environmental Assessment has been completed and consultations with key stakeholders (community, provincial departments and private sector) have been conducted in the month of July 2017.

• The engineering designs and infrastructure needs assessments that culminated in a SEZ Master Plan have been completed. A 3D model and video have been developed as marketing tools for the SEZ (see concept below).

LAND AND PROPERTY DEVELOPMENT DIVISION

PROGRAMME 4



PROGRAMME 1: INCREASE NUMBER OF TENANTS IN THE PREMISES

The division managed to increase tenants by net of 68 new tenants against an annual target of 96. These represent a negative variance of -28 new tenants below the annual target performance. LEDA managed to contribute to economic activity of the province through providing space to 1 330 entrepreneurs, who created 11 265 jobs (end March 2016, 1 316 tenants and 11 786 jobs). Most of our tenants were lost due to economic meltdown. We will, as a corrective intervention, advise clients to check with the dti as regards incentive schemes in place to assist SMMEs to minimise the impact of the economic meltdown. There is also a need to revamp our entire property portfolio, to bring it to an acceptable industry standard and attractive to our customers. Funds are, however, still a challenge as we are currently spending more on operational maintenance to keep the structures in a usable state.

PROGRAMME 2: RENTAL COLLECTION

The total rental collection for the 2016/17 financial year amounted to R84.95 million, of which R77.31 million was collected on current rental raised (87% of R88.61 million current rent raised) against an annual target of R80 million. R5.52 million is arrear collection, against R7.75 million annual target on arrears. The cumulative arrears for the division stand at R147.91 million. However, the Land and Property Development Unit and Legal Services are currently working hand in hand to ensure that outstanding arrears are collected. Most files from external legal practitioners have been withdrawn and the Legal Department is issuing summonses directly.

REFURBISHMENT OF LEDA PROPERTIES

• Industrial Parks

The DTI Critical Infrastructure Programme Division has approved R52 million: R12m for Seshego and R40m Nkowankowa, to fund the completion of security features at Seshego Industrial Park phase 1B and the refurbishment of Nkowankowa Industrial Park. The project will include high mast lighting, CCTV cameras and a nine kilometre security fence around the Nkowankowa Industrial Park. Once

phase one is completed for both parks, LEDA will source funding to refurbish the top structure to increase occupancy in the industrial parks.

• Shopping Complexes

LEDA owns 14 shopping complexes which were built 35 years ago, and their current conditions are not competitive to attract good tenants. There is thus a need to totally demolish the existing structures and to rebuild modernised complexes. Of the 14 shopping complexes, 11 are functional and these have satisfactory occupancy while three are 100% vacant. We are currently doing a market study for Giyani phases 1 and 2 to determine if there is need for their redevelopment.

• LEDA Properties Marketing Strategy

The occupancy of LEDA’s industrial parks is at an average of 80%; however, the tenants mix is skewed towards storage. We are planning to develop a robust marketing strategy - a strategy that will include but not be limited to adverts on local radio, newspapers, billboards and meetings with different stakeholders and putting posters on GNT, to diversify the tenants mix in the industrial parks.

AGRIBUSINESS

The strategic objective of the Agribusiness Development Unit is to facilitate agribusiness opportunities through establishment of Agro-processing and packhouse facilities that are intended to enhance economic development and job creation. Agriculture is, within the framework of the Limpopo Economic Development Plan (LDP), identified as one of the three pillars of economic development in the province. Whereas Limpopo is competitive in primary production of high value agricultural commodities, most of the value addition and products processing is done outside the province.

Dendron Potato Processing Plant

Agribusiness will be acquiring an equity to the value of R12 million in a potato processing plant in Dendron.


This is in partnership with commercial farmers around Dendron, which is regarded as the potato belt in the province. Dendron produces in total around 450 000 tons of potatoes per annum, which equates to 21% of South Africa’s total production of potatoes. Its unique selling point is that it is the largest in Limpopo and the seventh largest in the country. The project is also aligned to Limpopo Agro-Processing Strategy. Of utmost importance, is that emerging black potato farmers in Dendron will not only have access to the market for their potatoes, but will also have a share in the processing plant. Factory workers will also have a share. The plant is envisaged to process 8 000 tons of french fries per annum.

Mashashane Hatchery

Mashashane Hatchery continued to produce high quality day old chicks. The hatchery has managed to generate income to the value R12 313 971, exceeding its annual target of R7.9 million by R4 413 971, despite the fact that there were occasional breakdowns of hatching machines during the course of the year. The hatchery managed to maintain mortality at less than 2% - which is below

the industry norm of 5%. Among four hatcheries in the province, Mashashane Hatchery is the only hatchery that services the emerging broiler farmers in the province – while the other three mainly serve their contract growers.

Venteco Tea Estate (Pty) Ltd

Venteco Tea Estate (Pty) Ltd is a black-owned tea producing business located in the Tshivhase and Mukumbani farms in the Vhembe District. The estate did not perform as expected during the year under review, mainly due to high costs of production as well as drought. For instance, while the annual target for the value of tea sold was R45.7 million, Venteco only managed to raise R15.4 million, resulting in a shortfall of R30.3 million. As part of its diversification programme, the company has signed a Cooperation Agreement with the Industrial Development Corporation (IDC) for the commissioning of a pre-feasibility study for the development of 250ha of macadamia nuts with a de-hulling and drying process plant, as well as the development of 150ha of avocados, with packhouse and cold storage.

Pepperdew processing in one of LEDA’s factories within the Seshego Industrial Park

Day Old Chicks at the LEDA Mashahane Hatchery


LEDA GROUP OUTPUT STRATEGIC OBJECTIVE

GROUP PERFORMANCE


DIVISIONREPORTING

PERIOD



Proportion of Group income generated by LEDA Group’s subsidiaries and tertiary divisions

% of Group income generated by LEDA Group’s subsidiaries and tertiary divisions

Percentage return on assets generated by the Group’s subsidiaries and tertiary divisions

Land and Properties

Annually 11% 25.9% 14.9% Due to less repairs and maintenance costs

Annual Financial Statements

Number of beneficiaries/clients benefitting from LEDA Group services

Quarterly 96 68 28 More tenants moved out during Q2 and Q4

AZ rental

TRADE AND INVESTMENT PROMOTION DIVISION

PROGRAMME 5


LIMPOPO ECONOMIC DEVELOPMENT AGENCY ANNUAL REPORT 2016/17 31LIMPOPO ECONOMIC DEVELOPMENT AGENCY ANNUAL REPORT 2016/17

LEDA is working towards achieving benefits of export-led growth, which will only be realised in the medium and longer term when all obstacles of trade and export are reduced to a minimum in the industry. Export performance has been critical for the economic development of the province in recent years, as it has contributed to faster growth and poverty reduction. Exporting has produced economic benefits, deriving from efficiency gains associated with exploiting comparative advantages and improved allocation of scarce resources. LEDA has done so through:

• Better use of capacity, dissemination of knowledge, information and experience, and

• Trade Promotions, Trade facilitation, Trade and Export Development and participation in the programmes emanating from strategic relationships.

During the 2016/17 financial year, Limpopo experienced drought which had not occurred in many years. As a result, agricultural produce and raw materials were affected. Not enough produce was available for fresh produce export and processing. The economy was not doing well in general and the currency exchange rate was unstable. This led to a decline in the Rand value of exports realised for the year.

TRADE PROMOTIONS

Trade Promotions has worked in collaboration with other stakeholders to promote value added exportable products of the Limpopo province. The stakeholders included the Department of Trade and Industry (dti), Small Enterprise Development Agency (SEDA), Cape Craft Design Institute (CCDI), Department of Agriculture, Forestry and Fisheries (DAFF), Department of Small

Business Development (DSBD), Limpopo Economic Development Environment and Tourism (LEDET) and the Department of Sports, Arts and Culture (DSAC). About 40 businesses were exposed to local, national and international markets through participation in exhibitions. During the exposure, businesses were able to network, showcase their products and be able to activate market intelligence and sales.

The Trade and Export Development Unit held a successful Buyer and Seller Networking session whereby information was disseminated and parties were able to share information. About 200 delegates attended the event. Products were also exhibited during the event. Among other guests, delegates from Mozambique representing the Investment Promotion Centre (CPI) were also present. The CPI presented investment and export opportunities that are available in Mozambique.

EXPORT DEVELOPMENT

One hundered businesses were exposed to export awareness, development and individual attention on product development. This kind of training is performed on a continuous basis.

STRATEGIC PARTNERSHIPS

Trade and Export Development was able to implement programmes of building export capabilities and competitiveness of businesses, so that they can be able to participate in the economy of the global world through ‘Programma Uitzending Managers’ (PUM), which is Dutch for ‘Manager Deployment Programme’. Two businesses were exposed to the mentorship through this programme.


LEDA GROUP OUTPUT

STRATEGIC OBJECTIVE

GROUP PERFORMANCE


DIVISIONREPORTING

PERIOD



Investments into the Province as a proportion of GDP per region

45% investment into Province as ration of GDP per region

Rand value of investment facilitated per annum

Trade and Investment

Quarterly R7.5 billion R17.6 billion R10.1 billion Substantive investment by provate sector companies in the province

Investment agreements/MOUs

Rand value of exports realised per annum

Trade and Investment

Quarterly R350 million R206 million R144 million The economy is in recession. Agricultural produce and agro-processing is affected by drought

Reports form clients


The Trade and Investment Promotion (TIP) Division has been operating in a challenging environment after some two years of subdued performance and internal challenges and the need to re-align the strategic importance of the Trade and Investment in Limpopo as a core function and hence a key division.

The core mandate of the Trade and Investment is outlined in the Corporate Plan as driving the attainment of the strategic objective which seeks to direct the efforts of LEDA towards the relevant and meaningful facilitation of investment and trade opportunities for the province; reflected in:

1. An increase in investments into the province as a proportion of GDP per region.

2. An increase in the value and volume of exports into key strategic markets, including African Union, BRICS, European Union, Gulf Cooperation Council Countries and ASEAN.

The division was able to exceed the annual investment target of R7.5 billion by R10.24 billion besides the following factors:

• Economic performance remained challenging in 2015/2016, with GDP growth of only 1.3%. This sluggish growth was primarily due to depressed commodity demand from China, low global commodity prices, low investment, erratic capital flows and low consumer and business confidence. Real GDP growth was downward in 2016, with a rate of just 0.7%.

• The historical shortages in electricity have had a knock-on effect on the economy, while the worst drought in two decades continued to devastate agriculture whose real proportion of GDP was been reduced by 16.2%.

Table I: Historical Increase in Fixed Direct Investment

BASELINE DATA - Audited Performance2016/2017 Estimated

2016/17 QUARTERLY ACTUAL PERFORMANCE (ACT)

TOTAL2013/14 2014/15 2015/2016 Q1 Q2 Q3 Q4

R0.50 R1.30 R3.20 R7.50 R- R5.50 R8.20 R3.90 R17.60

2016/17 Quarterly Targets (TAR) R1.15 R2.25 R2.71 R1.25 R7.36

2016/17 Variance (ACT-TAR) -R1.15 R3.25 R5.49 R2.65 R10.24

Figure I: Fixed Direct Investment Historical

R18.00

R16.00

R14.00

R12.00

R10.00

R8.00

R6.00

R4.00

R2.00

0

2013/14 2014/15 2015/16 2016/17

Estimated

Q1 Q2 Q3 Q4 TotalBaseline data - Audited performance 2016/17 Quarterly Actual Performance (ACT)

R0.5

0 R1.3

0

R3.2

0

R7.5

0

R0.0

0

R5.5

0

R8.2

0

R3.9

0

R17.

60


The investment is mostly attributed to the Coal-based Independent Power Producer Programme with KEPCO and the Investment Consortium, The Japanese appetite for the Eastern Limb PGM discovery and the outcome of the Inspire Limpopo International Tourism Trade and Investment Conference haves unlocked over R5 billion in mining and mineral beneficiation.

In furthering the Limpopo Green Economy Plan, LEDA was working with a number of leading companies on a first of its kind renewable energy project in Phalaborwa. The project is a 50 megawatt biomass project that will attract R2.5 billion investment and retain significant wealth within the Ba-Phalaborwa local economy. The biomass will be farmed on approximately 7 000 hectares of land and will create approximately 1 500 new sustainable jobs. All of the pre-feasibility work was complete and financial close was in April 2017. The model is totally replicable and we believe that this renewable energy solution can be rolled out across the province taking the job creation opportunities to various hotspots.

Business leaders, international trade partners, foreign investors, representatives from embassies and SADC countries all joined South Africa corporate business at an event to inspire investment in Limpopo late last year.

The Inspire Limpopo International Trade and Investment Expo 2016 was held from 16 – 18 November 2016 in Bela -Bela, and the selection of international traders, investors, innovative service providers, business dignitaries and delegates met in an informative, insightful and interactive environment. The

LEDA was invited by the South African Embassy in Seoul, South Korea, at the trade and investment seminar co-hosted on 24th to 27th November 2016 with the Korea Chamber of Commerce. The seminar was successful and the notable outcome has been:

• The technology investment partnership for small scale mining,

• The Draft M.o.U with the Incheon Free Zones Authority on the development of world class Special economic zones,

• The partnership with Korea Development Agency on capacity development.

• The opportunity for twinning between Musina-Makhado and City of Incheon

• Collaboration in the development of the industrial parks with South Korea’s KICOX and the development of a formalised relationship is underway.

• The engagement with KEPCO (Korea Electric & Power Company) is in engagements with Marubeni for diversification into hydro-power and a solar park. KEPCO has a concept of a solar power plant with ESS (energy storage systems) to make the energy available when required. It was mentioned that this was precisely the type of technology that Eskom requires.

The KEPCO investment in Thaba-Metsi 600 MW Coal Based Power Plant in Lephalale in partnership with Marubeni and the PIC, Industrial Development Corporation (IDC) and DBSA of South Africa remains the notable first for Korean Investment in Limpopo Province.

The partnership with the IDC cemented via an MoU and the IDC’s remarkable focus in Limpopo has unlocked several investments. The IDC as an investor has managed to exploit the opportunities in Limpopo. This state-owned development financier has grown its presence in the province in recent years. The developmental financial institution has increased its activities significantly over the past three years, when Limpopo was the smallest contributor to the IDC’s portfolio. Since then, Limpopo has received R10 billion in funding approvals from the IDC or about 14% of its total approvals, almost twice the province’s rate of economic contribution. Limpopo’s portfolio now accounts for R15.4 billion — 10.5% at market value or R8.2 billion at cost.

Mining and quarrying accounts for R9 billion of this amount, while manufacturing accounts for R3.8 -billion — a reflection of the province’s strategic intent of growing the sector. The IDC has helped create 14 700 jobs in the province. Some of the IDC’s investments include its contribution to Palabora Mining Company, which has a beneficiation stream through its production of copper cathodes among other products; Tzaneen blueberries; the newly opened Park Inn Hotel in Polokwane; Foskor fertilizer manufacturer, where the IDC has a long history of investment; as well as Capricorn FM, Limpopo’s only commercial radio station. These investments will increase in 2017/2018.


The investment in PMC has unlocked the IMBS novel technology and innovation in the steel sector with the production of SuperScrap™ from the magnetite deposits in PMC dumps. This is a world first and there are plans to produce 7.5 million tons of SuperScrap™ in the next five years. LEDA has been instrumental in facilitating and supporting IMBS to commercialise the Masorini Process and will continue to unlock additional opportunities emanating from the IMBS investment of over R800 million to date.

The Japanese investments in Limpopo have been instrumental in Mokopane in the development of the Eastern Limb and has unlocked a potential investment pipeline estimated at R8 billion in the next five years and global leadership in the PGM sector in terms of global competitiveness. This will further drive industrialisation in Limpopo and contribute significantly to South Africa’s global leadership in the PGM Sector.

The partnership with Coal India Limited has not progressed much, however notwithstanding the challenges in the coal sector in India, LEDA is still in discussions with CIL on potential investment in Lephalale and in this light LEDA has been a key player in the CIL-Investment Task Team.

The coal sector has seen great strides in project progressing positively from Feasibility to DFS. Two key projects have been facilitated in Makhado and Lephalale. Both these projects are accepted to some on stream in the next three years and will jointly contribute almost R8 billion in fixed direct investment into Lephalale and Makhado.

The MEC of Economic Development, Environment and Tourism, Honourable Sekoati, has announced in 2016 the establishment of the Provincial Film Commission during his 2016-2017 budget speech. LEDA was mandated to implement a film commission. Following the MEC’s announcement of the establishment of a film commission. LEDA Board took a resolution to establish Limpopo Film Commission on 23 June 2016 at a meeting held in Euphoria Golf Estates. The Board resolved that a business plan, indicating the implications of creating such a commission, be developed. The draft Business Plan was developed internally by LEDA Creative Industries. This led to the launch of Limpopo Film Commission on 13 December 2016 at Meropa Casino in Polokwane.

SUBSIDIARY COMPANIESGREAT NORTH TRANSPORT RISIMA HOUSING AND FINANCE CORPORATIONCORRIDOR MINING RESOURCESLIMPOPO CONNEXION

PROGRAMME 6



GREAT NORTH TRANSPORT (GNT)MANDATE

To provide a range of diversified profit generating good quality transport services that will support and enhance the economic sustainability and competitive advantage of Limpopo and the region. GNT’s primary task is that of facilitating and providing accessible transport mobility and linkages from Limpopo into South Africa and the broader SADC region.

STRATEGIC OBJECTIVES

• A visible, reputable and well governed transport company

• Transport services that support economic growth and development in the region

• Short-term viability and long-term sustainability in revenue and resourcing requirements

• World-class, sustainable and integrated operating systems and service quality

• A high performance culture in a safe and conducive environment

KEY SERVICES

Great North Transport continues to provide and facilitate mobility of commuters and passengers throughout Limpopo Province and parts of Mpumalanga Province through the following key services:

• Commuter Services

• Private Hires

• Cross-Border Services

• Contracts – Employee / Scholar Services – Partially

OPERATIONS PERFORMANCE OVERVIEW

Passenger transportation is the core business of GNT derived from its mandate of facilitating mobility of commuters to different destinations daily. This mandate is also an integral part of various outcomes in the medium-term strategy framework for public services. At the heart of GNT’s operating model, the following aspects are key functions:

BUS OPERATIONS

The bus operation is the biggest key deliverable in the entire business value chain. It is the nucleus of services delivery to multitudes of commuters and passengers travelling the length and breadth of the province and beyond. With 11 depots, GNT is the second largest passenger bus company in South Africa. At capacity the company operated 501 buses covering 800 routes daily.

BUS MAINTENANCE

Service reliability and availability depend to a large extent on the capacity of the maintenance function in its turnaround on spares replacements, diagnosis, servicing and general auxiliaries. Whilst the company operates with two different models of buses, particularly in Seshego, Marble Hall, Hoedspruit and Bushbuckridge, compared to one type in the rest of the depots, our maintenance department managed to have a sufficient number of buses in operation daily during the year under review. Among other things of critical importance to maintenance, is the refurbishment and welding activities. These are also carried out internally throughout the 11 depots.

INSPECTORATE

Customer service activities overlap many functions within the company, culminating in providing safe, reliable passenger services to passengers and commuters. The Inspectorate Department, which focuses on oversight of bus operations on the various routes, incorporates processing of customers queries to bring about overall satisfaction. During the year under review, GNT strengthened its Inspectorate Department through centralised reporting to head office. That enhanced the coordination of routine management inspections by executives.

DRIVER TRAINING

Driver training is a flagship project, driving skills enhancement programme for internal drivers and also applied for learnerships every year. As the passenger transportation company, GNT has an obligation to


continuously perfect the driving ability of the current drivers in the employ of the company to minimise road accidents. Over the past few years the programme has facilitated participation of female drivers from the learnership programme, most of whom were later employed by the company, making it the leading female driver employer across the logistics industry. It is also used to prepare drivers participating in the Driver of the Year competitions.

During the year under review, 26 drivers were trained and prepared for the provincial drivers competition, which involved both bus and truck companies. Three drivers, of which two were females, were awarded winning positions and each received a prize of R5 000.

STAKEHOLDER ENGAGEMENT MANAGEMENT

GNT on talk shows on Limpopo radio station

Interacting with the broader public in Limpopo Province is seen by management of GNT as necessary and critical in brand equity development in the company’s home of origin, Limpopo Province. To that end, the company embarked on a public relations campaign through talk shows on both commercial and local community radio stations. Although the campaign is well underway, much work still lies ahead to ensure that our medium to long term goals of achieving the GNT brand equity in the province, is indeed achievable. Among the many issues discussed via these print and electronic mediums, the company recommitted to improving its service offerings to the entire province.

Passenger Transport Forums

The establishment of passenger forums across all depots provides both management and passengers with a platform for engagement on pertinent issues of common interest. Through stakeholder engagement programmes, GNT interacts with passengers on a monthly basis and has seen an enhanced and improved relationship over time.

Carrying Makes a Difference - GNT on Brand Strategy workshops

The success of every company hinges on carrying across the strength and influence of its brands into the market and into the organisation. It is on that basis that GNT embarked on the introduction of a brand strategy workshop for all managers to lay a foundation for organisation-wide brand education workshops aimed at infusing a GNT brand culture that will enhance the company’s public image. Carrying makes a difference, is GNT’s value proposition, a pay-off line, a brand promise and the company’s working focus. This slogan is the brand philosophy that must permeate across all levels of the organisation to achieve a single brand culture.

The GNT Brand equity is paramount to the longevity of the organisation and therefore it is critical that the strategy is dissected to give expression in the day to day activities of the entire company. When that shared sense of purpose is achieved throughout the company, the brand value will increase.



GROUP PERFORMANCE


DIVISIONREPORTING

PERIOD






Greater North Transport

Annually 0% 1..7% 1.7% High breakdown rate of buses


Quarterly 27 million

22.1 million

4.7 million

Ageing fleet, high break downs and community unrests

Q merit system


RISIMA HOUSING AND FINANCE CORPORATION BACKGROUND

Risima is a wholly owned subsidiary of Limpopo Economic Development Agency (LEDA). LEDA was established in terms of Section 3D of the Public Finance Management Act (PFMA) and the Limpopo Development Corporation Act (LDCA); and was specifically established for the purpose of giving effect to Section 3(1) of the LDCA, which requires that LEDA, in consultation with the Executive Council, to encourage, plan, finance, coordinate, promote and carry out, either directly or indirectly, the development of the province and its people, in fields including housing, economic development and community development.

STRATEGIC INTENT

Risima is primarily focused on the GAP market to address the shortage of housing stock and limited housing finance. Key leading economic indicators are pointing to a near term economic growth strengthening. This would likely strengthen employment and, in turn Household Sector Disposable Income growth. This will translate into improved housing affordability on a national average basis. Improved housing affordability, combined with improving economic growth, should be a catalyst for some strengthening in the demand for housing in the GAP market.

PARTNERSHIPS

GOVERNMENT EMPLOYEES HOUSING SCHEME (GEHS)

Risima has entered into a partnership with the Department of Public Service and Administration to implement the Government Employees’ Housing Scheme (GEHS) in Limpopo. This is intended to directly assist 20 000 government employees. The main objective of the scheme is to promote home ownership among government employees and they invited Risima to express an interest in the proposed non-mortgaged product designed for the scheme.

FINANCE LINKED INDIVIDUAL SUBSIDY PROGRAMME (FLISP)

Risima has also entered into an agreement with the Limpopo Department of Cooperative Governance, Human Settlements and Traditional Affairs (COGHSTA) to implement FLISP in the province. This programme is aimed at assisting people who earn between R3 500 and R15 000 per month. These people are classified as the GAP market i.e. people who earn too much to qualify for an RDP house and too little to qualify for a bond. This is in line with the company’s vision of playing a critical role in eradicating the backlog in the affordable housing space.

HOME LOAN APPROVALS FOR THE 2016/17 FINANCIAL YEAR

The company approved a total of 191 home loans against an annual target of 190, thus exceeding the set target by one home loan.

The total value of the home loans approved amounts to R110.8m against an annual target of R78.9m, thus recording a positive variance of R31.9m. The company has exceeded its budgeted target despite pressures in the market that are affecting household disposable income. This is largely due to high demand for home loans at the low end of the market. A table depicting home loan approvals for the 2016/17 financial year follows on p.39.

RECAPITALISATION

For the company to make a sizeable impact in the GAP market, there is an urgent need to recapitalise the entity. The biggest challenge facing the GAP market is the lack of housing stock between R250 000 and R500 000 and the limited home loan finance. The company has positioned itself to play a bigger role in the creation of stock and the financing of the end users in this market segment. For Risima to carry out this mandate, the company needs to be adequately capitalised. A number of initiatives have been taken to recapitalise this company in this regard.


FINANCIAL PERFORMANCE FOR THE 2016/17 FINANCIAL YEAR

INCOME STATEMENT

• The 22% increase in revenue/interest is due to the efficient implementation of the approved loans into the loan system, price review and high loan implementation.

• The 45% increase in other income is due to improvement on pricing.

• The Other revenue generating stream is of R651k which is 35% of interest received from FLISP funds investment in 2016/17 and revised administration prices.

• The 29% increase in investment income is due to improved cash resources collections and implementation.

• The 76% increase in profit from R18.633m to R32.714m is due to R4.090m adjustment on impairment; R651k management fee received from FLISP funds and revised pricing in administration income.

BALANCE SHEET

• Risima’s balance sheet indicators show a 21% increase in loans balance from R358.532m to R431.993 m. This increment was due to the product B loan book valued at R28.9m being transferred from LEDA to Risima and the new loan book implemented valued at R93.5m added to the existing book.

• A 10% decrease in cash and cash equivalents is due to improved implementation of the new loan book.

• The 90% increase in trade and other receivables is due to R1.3m from new clients who paid their deposits before loans were registered at the Deeds Office. These loans are going to be registered and implemented in the new financial year 2017/18.

• A 15% increase in Total Assets was due to the product B loan book valued at R28.9m from LEDA and the new implemented loan book.

• The company realised 8.4% ROE and 7.0% ROA due to the increments on the statement of financial position of the company

NUMBER OF LOANS VALUE APPROVED

ANNUAL TARGET ACTUAL YTD VARIANCE ANNUAL TARGET ACTUAL YTD VARIANCE

190 191 (1) R78.9m R110.8m R31.9m



GROUP PERFORMANCE


DIVISIONREPORTING

PERIOD






Risima Housing Corporation

Annually 5.7% 7.5% 1.8% Target exceeded due to 14.8% year on year growth in total assets


Quarterly 190 191 (1) None Loan agreements


Below is a summary of the Balance Sheet and the Income Statement for the 2016/17 financial year:

FINANCIAL INDICATOR

2017R’000

2016R’000

2015R’000

Loan Book and Receivables 434 528 365 158 330 621

Repossessed Properties 425 441 441

Bad Debts Provision (2 535) (6 625) (6 260)

Financial Assets 432 418 358 974 324 802

Cash and Cash Equivalents 35 549 39 724 16 767

Shareholder Loan Account - - -

Trade and other receivables 001 0 001

Property, Plant and Equipment 362 176 253

Other Assets 35 912 39 900 17 021

Total Assets 468 330 398 874 341 823

Revenue (Interest) Income 39 836 32 681 28 948

Other Income 2 700 1 865 7 221

Investment Income 769 596 852

Impairment Adjustment 4 090 0 0

Total Income 47 395 35 142 37 021

Operating Expenses 14 681 16 197 14 564

Finance Cost - - 002

Total Expenses 14 681 16 197 14 566

TOTAL PROFIT 32 714 18 945 22 455


Corridor Mining Resources (SOC) Ltd (CMR) is a wholly-owned subsidiary of Limpopo Economic Development Agency (LEDA). Its primary responsibility is the execution of the resources development strategy of LEDA through investment in mining opportunities. The principal business activity of CMR is investment of capital into mining-related opportunities with an aim of unlocking value in the form of, among others, financial returns, job creation and contribution to a broader objective of economic growth in the province.

The year under review was characterised by some successes and matters which did not necessarily go according to plan. A summary of key successes include Tshepong Chrome Mine commencing with mining operations, Fumani Gold Mine mining rights application being concluded, DMR follow-up directives addressed and submitted, and successful renewal of three mining permits at Tshepong Chrome Mine. Clarity was received regarding CMR subsidiaries’ legal status, obtained through a High Court declaratory order. Corridor Mining Resources has also raised R10.8m internally from LEDA Group coffers.

FINANCIAL OVERVIEW

The organisation recorded a total income of R3 329 386 of which R2 665 303 is interest received from interest bearing loans, VanMag and Rock Island in particular. Total assets grew from R119 050 504 to R134 626 952 which represent a 13.03% increase year-on-year. The

capital amount expended on the projects during the period under review amounted to R13 106 834 against a total budget of R55 100 000. The deficit was due to inadequate funding.

Income generated (R3 329 386) continue to underperform expenses which came in at R15 465 215. This is due to the fact that the majority of CMR assets are still in project phase, and those operating are either grappling with losses or undergoing development which requires continued capital investment. The liquidity risk continues to be mitigated by the loans advanced by the parent company, LEDA.

SOME OPERATIONAL CHALLENGES

A number of challenges were also experienced during the period under review. These include one fatality at the Sefateng Chrome Mine and CMR’s failure to achieve all APP targets, especially capital expenditure and failure to receive final and favourable outcome to the “retention permit” application processes for both Khumong and Rock Island. Another setback was the company not succeeding in resolving the issue of double granting of rights in Khumong. The company is, however, seeking legal opinion to assist in determining available remedies, as well as deciding on the next course of action.

Despite underperformance insofar as capital expenditure is concerned, important progress in a number of other areas was recorded. Table 1 on the following page summarises some of the key achievements.

CORRIDOR MINING RESOURCES



GROUP PERFORMANCE


DIVISIONREPORTING

PERIOD






Corridor Mining Resources

Annually -7% -5.2% -1.8% Project not at stage of providing returns, no dividends evident in the income statement, hence gap of -2%

Annual Financial Statement


Quarterly 150 89 47 None Affected by challenges in the mining sector


ASSET CATEGORY ASSET NAME KEY DEVELOPMENTS

Subsidiaries

Fumani Granting of mining right remain outstanding despite responding to all DMR directives.

SefatengAn amount of R10.8m was invested into the company for use towards rehabilitation of the

area previously mined under mining permit.

Tshepong

Mining operations commenced during the period under review.

A number of jobs in excess of 130 were created.

Three mining permits were successfully renewed for a further 12 months.

Autumn Star

Mining permits applications were refused by DMR for failure to submit the EMP as was

requested. Management has appealed the decision. At the time of report, the matter was still

under consideration.

In the meantime, DMR was also interdicted to further process a DCM section 102 application

to incorporate PGMs into its mining right.

Joint Ventures ASA MetalASA Metals remained under business rescue as was reported in the previous APR of

2015/16FY. It remains unclear if the company can be rehabilitated back to sustainable

financial health.

Associates

VanMag

The company was forced through a court process to compile annual financial statements for

the past three years and table them for approval at the company AGM. Through this process,

the company was also forced to formally acknowledge the CMR loan which was a subject of

AGSA query in the past.

Atta Clay

CMR approached the MEC of LEDET for approval to dilute company shareholding in Atta

Clay in favour of BEE entities and/or host communities. The dilution is required in order to

meet Atta Clay empowerment threshold – a prerequisite for DMR to grant new mining rights.

At the end of the period, approval was still outstanding.

Inca MiningThe majority shareholder (PBD) has offered to buy CMR at 2% interest and split it between

employees and the community trusts. At the time of writing, The CMR Board had not yet

made a final decision on the offer.

RIGHTS AND LICENCES

The most valuable assets of a mining organisation (second to ore deposit) are the rights it holds, be it prospecting, mining permits, or mining rights without which mining operations cannot be undertaken. Table 2 provides an updated report of CMR status of its mineral rights assets and the recorded significant developments associated with each one of them during the period under review.


ASSET CATEGORY ASSET NAME KEY DEVELOPMENTS

Subsidiaries

FumaniThe application for a mining right to mine gold was finalised with the Department of Mineral

Resources (DMR). The final outcome remains pending despite numerous attempts and

interventions made to bring the matter to finality.

SefatengMining rights remain valid for a period of 30 years with expiry date set for 2044. Mine

development is progressing well.

TshepongThree mining permits to mine chrome at Twyfelaar farm have been renewed successfully for a

further 12 months, the next expiring date being August 2017.

KhumongSubsequent to the expiry of the prospecting right, the company applied for a retention permit

with DMR. The retention application has been accepted, but final outcome is still pending.

Autumn StarAn application for three mining permits to mine Platinum Group Metals at Dilokong Chrome

Mine (DCM) tailings dumps was refused by DMR. An appeal of the decision was lodged with

the department and its processing is underway.

Mokopane Kodumela

Since the expiry of the prospecting right, the company applied for the renewal of the right with

DMR and the application was accepted. DMR has advised that, before it can consider granting

of the renewal application, the Prospecting Work Programme (PWP) has to be completed first.

The company is seeking funding to do as advised.

Joint Ventures

Rock IslandThe company had applied for two retention permits after the expiry of the prospecting right.

The retention permits were accepted by DMR but granting is still pending.

ASA MetalDilokong Chrome Mine (DCM) has applied for section 102 to incorporate mining and treatment

of PGMs into its mining right. At the time of writing, the decision was still pending.

Associates

VanMagA mining right to mine vanadium and magnetite was issued to the company around July 2010.

The mining right is valid for a period of ten years and expires in 2020.

Mahube Tameng

Mining right for Platinum Group Metals has been granted but not yet issued, awaiting an

execution date.

Inca MiningThere is no development of any note; save to say that INCA Mining is an old operational mine,

mining limestone.

Atta ClayThe new mining rights applied for are still not granted. The process is awaiting finalisation of

the empowerment transaction which will ensure that the company meets the minimum 26%

ownership by previously disadvantaged entities.

UPDATE ON KEY STAKEHOLDER ISSUES

The state of relations with host communities can be described as healthy and going from strength to strength. The creation of jobs and hiring of locals in Tshepong Chrome and honouring other commitments previously made, have also contributed in the building of a trust relationship. Where challenges remain, the company continues to work towards win-win solutions in the spirit of relationship building.


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LIMPOPO CONNEXION The Limpopo Connexion is a wholly owned subsidiary of Limpopo Economic Development Agency (LEDA), a schedule 3D Provincial Public Entity in terms of the PFMA. The Limpopo Provincial Department of Economic Development, Environment and Tourism established Limpopo Connexion to promote and implement the objectives of the Provincial Government as set out in the Limpopo Development Corporation Act, No. 5 of 1994. The broad mandate of Limpopo Connexion is: Service delivery improvement, development of ICT as a sector for job creation and enhancement of the provincial economy.

The key strategic objectives of Limpopo Connexion are to:

1. Establish an affordable, shared broadband open access wide area network infrastructure to provide access to citizens, government and businesses;

2. Establish a Science and Technology Park to create a collaborative platform for global network of clusters of innovation for:

• Development of an ecosystem and attract a talented workforce,

• Coordination and attraction of funding partnerships, venture capitalists, research institutions, anchor companies, multinational companies, SMMEs, donors and investors.

• Fostering a culture of entrepreneurship, enhancing regional economies and the creation of much needed job opportunities.

3. Implement Free and Open Source Software (FOSS) to lower the cost of ICT operations in public and private institutions

The Broadband network infrastructure feasibility study has been completed, and planning for the implementation of the project will commence in quarter two of 2017/2018. The study suggests that a broadband network would thus be essential to economic infrastructure for the acceleration of the growth and transformation of the

Limpopo economy. More specifically, the aim of the Broadband project is to:

• Establish open access, shared, secure, and affordable next generation broadband network telecommunications infrastructure aimed at;

• Developing ICT as an economic sector, improving service delivery, as well as transforming Limpopo into a knowledge economy and information society to help bridge the digital divide; and

• Provide broadband connectivity and access to over 90% of Limpopo households currently numbering 1.6 million, government institutions and businesses by 2022.

IMPLEMENTATION OF FREE AND OPEN SOURCE SOFTWARE (FOSS)

In order to implement the Free and Open Source Software (FOSS) in the province, the first step is to develop a methodology that can be used to assess an entity’s readiness in terms of its migration from proprietary software to Free and Open Source Software. This methodology will then be used to assess all interested institutions and through the use of well-defined methods and techniques, produce a well-informed roadmap for migration. The FOSS project will commence in quarter one of the 2017/2018 financial year.

FREE AND OPEN SOURCE SOFTWARE DAY

Limpopo Connexion hosted a Free and Open Source Software Day on 17 March 2017. The offline content project that enables schools in Limpopo to access educational information even when they have no Internet connectivity was launched on the same day. The initiative follows approval of Open Source Software usage in state departments by the South African government in 2007. The event was attended by 400 delegates from across the province as well as roleplayers from government and industry. The delegates gained insights from industry speakers and demonstrations regarding the role of Free


and Open Source Software in empowering schools, small businesses and rural communities. Limpopo Connexion developed and implemented the following Free and Open Source Software systems.

• Wildlife Trade Permit System (implemented in LEDET’s head office and all districts)

• Tourism Guide Registration System

• Event Registration System

Free and Open Source Systems currently being developed are an eHeritage Portal and database as well as a Farmers portal for Limpopo Province. Limpopo Connexion secured conditional grants of R100 million and R6 million for the Broadband and Free and Open Source Software to initiate pilot projects in these environments.

Grant funding of R3.3 million was also secured for two projects from Tirelo Bosha – Public Service Improvement Facility, a Belgium funded programme, implemented by the Department of Public Service and Administration. These projects are 1) Limpopo Public Access Heritage Portal and Mobile Application and 2) Emerging Farmers Portal and Mobile Application. The Heritage Portal will serve Limpopo Department of Sports, Arts and Culture, Limpopo Heritage Agency and community at large. The Emerging Farmers Portal will be developed in collaboration with LEDA Agribusiness; Limpopo Department of Agriculture and Rural Development and National Development Agency.

Collaboration and co-investment was initiated with the Department of Science and Technology to extend the Mobile Application Laboratory Southern Africa – the mLab - to Limpopo Province. The partnership between Limpopo Connexion, DST and the mLab is a strategic alliance which seeks to create an ecosystem of partnerships. Co-funding the expansion of an internationally established mLab model that combines development of coding skills, start-up accelerator, seed funding and various youth innovation programmes is aligned with Limpopo Connexion’s mandate to build an ICT sector and improve service delivery through the use of ICT. The mLab will form part of the provincial ICT innovation cluster and the forthcoming Limpopo Science and Technology Park. The success of a Science and Technology Park is measured by the number of commercialised technology innovations and number of new jobs created through the supported enterprises, which can be realised through the mLab initiative.

In the 2016/17 financial year, Limpopo Connexion has empowered 1397 community members in participating in information society and knowledge economy. The skills included FOSS awareness, graphic design and Basic Computer Literacy. In addition to the current Community Development Centres established in Waterberg and Mopani districts, there will be two additional community centres established in the Sekhukhune and Vhembe districts in the 2017/18 financial year. This will assist in increasing the number of community members to be trained in Information Society and ICT skills.


CORPORATE SERVICES DIVISION

PROGRAMME 7



2. LONG-SERVICE RECOGNITION AWARDS

LEDA has a long-service award recognition policy to reward staff for their loyalty and dedication, which serves as a staff retention strategy.

3. SOUND LABOUR RELATIONS

The labour relations programme ensures that employees of LEDA are treated fairly and that LEDA adheres to the legislation governing employment and relationship practices. This includes that employees should be fairly and equitably treated, with due concern for their job security and the principle of freedom of association and disassociation. The purpose is to advance the economic development, social justice, labour peace and democratisation of the workplace by fulfilling the primary objects of the Labour Relations Act No. 66 of 1995.

4. OCCUPATIONAL HEALTH AND SAFETY

LEDA subscribes to the provisions of the Occupational Health and Safety Act, No. 85 of 1993, as amended. This concerns the health and safety of persons at work, as well as the health and safety of persons using operational equipment. It also includes the protection against hazards to health and safety of persons other than employees at the workplace, arising out of and in connection with the activities of persons at work. Another objective is to establish a health and safety committee to provide for matters connected therewith and prevent and report workplace injuries.

4.1. EMPLOYEE WELLNESS PROGRAMME (EWP)

Employee health and wellness have developed into an important strategic parameter for companies. The programme offers businesses of all sizes a powerful, proactive strategy for promoting the well-being, productivity and motivation of employees. LEDA has

1. GROUP LEDA STAFF PROFILE

EMPLOYEE LEVELAPPROVED

ESTABLISHMENTVACANCIES

RACE GENDERSTAFF

TERMINATIONS

AFRICANS WHITES MALES FEMALES MALES FEMALES

Top Management 12 6 5 1 6 0 0 0

Senior Management 45 11 30 4 24 10 2 0

Professionally Qualified 126 39 85 2 61 26 5 1

Skilled technical and academically qualified

217 48 168 1 80 89 3 6

Semi-skilled 188 36 151 1 51 101 1 7

Unskilled - - - - - - - -

TOTAL PERMANENT 588 140 439 9 222 226 11 14

Temporary Staff 2 - 2 0 2 0 1 0

Interns 28 - 28 0 7 21 2 1

TOTAL 618 140 469 9 231 247 14 15

HUMAN RESOURCES DEPARTMENT


assumed the responsibility of being at the forefront of employee wellness and related activities of the group. The envisaged programmes in the strategy enable the agency to address unique situations of employees and numerous challenges they struggle with on a daily basis in order to cope with modern-day demands on all levels. The Strategy is outcome-based, and is hinged on the following areas:

• Better stress management

• Increased productivity and better customer service

• Image improvement

• Healthy and positive living

• Fewer occupational injuries

• A safe workplace

• Less absence due to ill health

• Lower staff turnover

The issues listed below receive priority in each quarter of a year in terms of the plan and the national calendar’s priorities:

(a) Response to HIV/AIDS

Our service provider provides counselling and advice to people affected and infected.

(b) Compliance with the Occupational Health and Safety Act

• Safety of employees is adhered to by safety awareness programmes in the workplace

• OHS audit inspection is held quarterly in each office to monitor workplace hazards

• OHS meetings are held quarterly, rotating per region to follow-up the implementation of safety standards

• Coordination of fire prevention and protection programmes are in place

• Coordinate the implementation of OHS strategy within LEDA

• Compliance of Compensation for Occupational Injuries and Diseases Act (COIDA) is submitted yearly before the end of May


Employee Assistance Programme (EAP)

• Wellness events are held quarterly to promote wellness of employees in the workplace.

• Different kinds of counselling are provided through a network of services including the 24-hour call centre.

• Promotion of healthy living guides on site.

5. SKILLS DEVELOPMENT

LEDA, like all employers of its size in the country, conducts the skills development programmes in compliance with the Skills Development Act. The purposes of the Skills Development Act are:

• to develop the skills of the South African workforce

- to improve the quality of life of workers, their prospects of work and labour mobility;

- to improve productivity in the workplace and the competitiveness of employers;

- to promote self-employment; and

- to improve the delivery of social services;

• to increase the levels of investment in education and training in the labour market and to improve the return on that investment;

- to encourage employers to use the workplace as an active learning environment;

- to provide employees with the opportunities to acquire new skills;

- to provide opportunities for new entrants to the labour market to gain work experience; and

- to employ persons who find it difficult to be employed;

• to encourage workers to participate in learning programmes;

• to improve the employment prospects of persons previously disadvantaged by unfair discrimination and to redress those disadvantages through training and education;

• to ensure the quality of learning in and for the workplace;

• to assist:

- work-seekers to find work;

- retrenched workers to re-enter the labour market;

- employers to find qualified employees; and to provide and regulate employment services.

• encouraging partnerships between the public and private sectors of the economy to provide learning in and for the workplace; and

• cooperating with the South African Qualifications Authority.

6. 2016/17 ANNUAL TRAINING REPORT

NUMBER OF EMPLOYEES

TRAINED

TRAINING BUDGET

TRAINING COSTS

20% MANDATORY

GRANT REFUND RECEIVED

BALANCE

258 4,357,781.92 (R4,517,323.93) R315,107.64 R155,565.63

6.1. DEVELOPMENTAL PROGRAMMES

• Five employees attended a programme in investment appraisal and risk analysis in July to August 2016 offered by Queens University in Canada.

• Sixteen employees attended a local economic development programme offered by Wits Business School which started in October 2016 and finished in March 2017.

6.2. EDUCATIONAL FINANCIAL ASSISTANCE

Linked with the Skills Development Act is the LEDA Educational Financial Assistance which is linked to a skills development programme which allows employees to apply for financial assistance in order to further their studies or specialised qualifications. The programme is aimed at ensuring that all employees are given an opportunity to re-skill and develop themselves through a joint training agreement with the employer, tailor and record their needs


in accordance with the Personal Development Plans (PDPs). The overall purpose of the programme is to ensure employees are abreast with and equipped for the rapidly advancing changes within their professional spheres.

6.3. INTERNSHIP PROGRAMME

Consistent with the national employment and skills development initiatives, youth empowerment policies and programmes, the LEDA’s corporate activities include the recruitment and placement of interns in its operations. Given its status as a government entity, the agency draws and skills young students and graduates from local communities by training and assisting them in various areas, including:

• An introduction to the world of work;

• Assisting them in the practical application of academic theory learned at university in a real life work environment, under guidance and supervision; and

• Where applicable, exposing them to career opportunities and contacts through the LEDA stakeholder network.

7. PERFORMANCE MANAGEMENT

LEDA has a Performance Management System (PMS) aligned with the strategic needs and the operational

context of the organisation. The system seeks to improve the organisational and individual performance by rewarding high performance of staff and identifying the training needs of employees. Due to complexity of the LEDA operations, the system had to be revised or reviewed in order to enable all business units and subsidiaries to set accurate targets that could be monitored and tracked for the growth of the company and the employees themselves. A new Performance Management Development System (PMDS) was then developed and implemented across the LEDA group of companies for implementation from the financial year 2016/17. All employees received training on the elements of the system and have been able to align their performance to the targets in the Annual Performance Plans (APPs) of the divisions.

8. EMPLOYMENT EQUITY

LEDA has established an Employment Equity and Skills Development Committee (EESDC). This committee convenes on occasion to look at the Employment Equity imperatives and advise management on mitigations that can be put in place in order to meet the EE targets. Road shows are conducted at all the LEDA offices to raise awareness about the Employment Equity Act and to consult with LEDA employees on EE issues within LEDA. In compliance with section 21 of the Employment Equity Act, the unit developed an Employment Equity Report for LEDA and submitted this to the Department of Labour in January 2016.

LEDA awarded selected staff long service awards in recognition of their work and commitment to the organisation.


ADMINISTRATION AND FACILITIES

The Administration and Facilities component of LEDA plays an integral part of ensuring that the entire organisation is well-equipped to discharge its mandate. The core activities are as follows:

• Management of Office Space – With its head office at Lebowakgomo, LEDA has regional offices and training centres across the five districts of Limpopo Province whose day to day responsibility is to facilitate business development and entrepreneurship. The role of administration is to equip those establishments with resources such as office equipment and communication infrastructure adequately to ensure that the organisation discharges its responsibilities to business communities. During the period under review, as a cost-cutting exercise, the mobile communication contract was migrated to the new Transversal Contract.

• Hygiene – The LEDA work environment subscribes to the policies of Occupational Safety regimes and that call for the institution to create a work environment that is safe and habitable for the entire workforce. Part of the responsibilities is to ensure that the workstations across LEDA are safe in line with Occupational

Safety regulations. That includes appropriating right numbers of personnel for cleaning both the office environments as well outside office circumference, such as the garden, etc.

• Safety of assets, employees and customers – For safety of LEDA’s assets, employees and its customers, Administration and Facilities is responsible for access control to LEDA offices and guarding of empty factories by deploying the appropriate number of protection offices and security guards to LEDA’s offices, factories and shopping complexes to ensure only authorised people are allowed access to the facilities.

• Management of the pool vehicles – The LEDA fleet of vehicles is controlled and coordinated by the administration services. Allocated to different offices, vehicles play a critical role in service delivery, as well as transportation of human and physical resources between LEDA offices, stakeholder companies and clients. To ensure that the fleet is always readily available for delivery and transportation services, administration services keeps track of all maintenance schedules throughout the financial years.


MARKETING & COMMUNICATIONS

The Limpopo Economic Development Agency’s (LEDA) Marketing and Communications department is both strategic and operational in nature – mandated to service the LEDA holding company and offer marketing and public relations technical and specialist support to the agency’s subsidiary companies. The department has key focal areas, namely: corporate communications; corporate branding; stakeholder management; and corporate social responsibility / investment. All four work streams are discharged independently of each other and in an integrated fashion – owing to overlaps in the interdependencies present in the comprehensive execution of marketing and public relations value chains. The Marketing and Communications department has the following strategic objectives:

• Identification and selection of target markets and stakeholders;

• Establishment and review of marketing, stakeholder and communication objectives, strategies and tactics; and

• Investment in communities through relevant CSI/R programmes.

According to research, 80% of all new jobs and capital investment emanates from promotion of business retention and expansion. It is for this reason that the Marketing department focuses on creating strategies that support business development initiatives within the areas of business attraction, and entrepreneurship in addition to business retention and expansion. Business marketing and advertising strategies are aimed at enhancing business development and promoting the Limpopo province. Strategic programmes and activities were developed within the following activities:

• Integrated marketing and advertising campaigns;

• Event management, sponsorships, media and public relations, collateral materials; and

• Communication through social media channels, including video and corporate websites. Marketing maintains corporate brand standards and brand image across all media.

BRAND DEVELOPMENT & EDUCATION

The amalgamation process has resulted in LEDA inheriting multiple institutions and their divergent brands – including branding on buildings, motor vehicles, marketing collateral such as banners, as well as on communication platforms such as websites and printed material. Adequate rebranding of these assets under the LEDA umbrella required finalisation of the merger of the institutions from a corporate strategy perspective on the one hand, and significant investment into rebranding projects within and outside of Limpopo on the other.

Phase 1 of the brand audit and realignment process occurred during April 2012 to April of 2016, and focused mainly on streamlining branding of LEDA core and regional offices. Investment in branding has, therefore, been limited to buildings and vehicles pending completion of a business turn around corporate strategy. The 2016/17 brand development work has, in the main continued on a similar trajectory: that of branding through office building and road signage, corporate stationary and through strategic events. The department is also responsible for ensuring brand education and ownership to internal and external stakeholders. The turnaround strategy, now completed, is informing Phase 2 in the nature and scope of branding investment going forward. There is, for instance, greater focus on destination marketing aimed at positioning Limpopo as a worthwhile investment frontier, as well as closer scrutiny in how provincial institutions mandated to champion / support economic development are branded, and how these brands co-exist in a fluid and competitive environment.

PUBLIC RELATIONS & EVENTS MANAGEMENT

The LEDA Marketing and Communications department continues to be instrumental in the conceptualisation, planning, advisory and project management of brand promotion and corporate social investment projects in the province. The events include stakeholder management and engagement work-platforms onto which LEDA creates opportunities to promote its goods and services


and, engage on a first hand interaction basis with complimentary work undertaken by other institutions and the prevailing market intelligence therefrom. Working in partnership with other provincial state departments and agencies in the economic development space, the Limpopo Economic Development Agency has ensured successful management of events that underpinned and supported the core business / programmes of the agency. Prominent events included:

• The Inspire Limpopo International Investors Conference in support of the Trade and Investment Promotion Division.

• The Marula and Mapungubwe festivals to advance arts and culture (LEDA has a Creative Industries sub-programme) and the sustainable development of cooperatives and small enterprises.

• Annual LEDA Golf Day – an event with fundraising and stakeholder engagement orientation.

• LEDA not only exhibited at the Durban Tourism Indaba from 6 to 9 May at the ICC Convention Centre, but was also a sponsor of the event.

• LEDA sponsored the South African Local Government Association (SALGA) for its provincial assembly/conference that took place at the Ranch Hotel in Polokwane

• LEDA sponsored COSATU in Limpopo for the worker’s day celebration

• LEDA sponsored the Annual Makhado Show

During the year under review, the department proactively identified events and sponsorships with speaking opportunities for LEDA’s executive and senior management team that met target markets and provided maximum exposure for the agency. Examples of salient communications and public relations milestones for the financial year under review included scripted radio campaigns and print media coverage of:

• LEDA’s community consultation outreach programme as a precursor for the awarding of the Musina Makhado Special Economic Zone by Parliament, through the department of Trade and Industry (the dti);

• The establishment of Limpopo Connexion, its core programmes and mandate;

Trade and Industry Minister, Dr. Rob Davies, arrives at the LEDA Seshego Industrial Park Launch Function.


• Crisis communications to normalise strained relations between LEDA and stakeholders in the Tshivhase Tea Estate over administrative disputes; and

• Joint media relations work with the dti in the coverage of Minister Rob Davies formal launch of the Limpopo Industrial Parks Revitalisation Programme; thus putting in perspective and giving practical application to LEDA’s mission of accelerated industrial diversification, increased levels of trade and investment and the development of sustainable enterprises.

MEDIA RELEASE HIGHLIGHTS AND PUBLISHING PARTNERSHIPS / ADVERTISING.

The Marketing department develops and distributes media releases on behalf of LEDA and its subsidiaries in an effort to strengthen brand image, promote Limpopo’s assets and to announce investment opportunities in the province. Quality assurance and targeted development of content are critical in the dissemination of LEDA

corporate information through established and reputable media houses and titles with well-defined and audited reader profiles and circulation figures (Audited Bureau of Circulation). It is with this in mind that LEDA secured a media and publishing partnership with the Mail & Guardian – to profile economic developments and milestones in the province, with the view of attracting investment and facilitating trade. A similar arrangement was entered into with Global Africa Network, publishers of the Limpopo Business Journal – focusing on advertorials promoting the LEDA group of companies and progress in the establishment of Special Economic Zones in the province. We have distributed a total of 25 000 newsletters etc. Marketing supported over ten significant business development events.

CORPORATE SOCIAL INVESTMENT PROGRAMMES

During the year under review, LEDA’s Corporate Social Investment (CSI) activities were primarily directed towards social upliftment, building sustainable communities and education. The following are examples per focus area:

LEDA Brand Education: The Division is responsible for ensuring brand education and ownership to internal and external stakeholders.


A screenshot of the Limpopo Economic Development Agency sponsored advertorial that appeared in the Mail and Guardian of November 11 – 17 2016.

BELOW: A page in Limpopo Business, advertising Risima Housing and Finance Corporation, a LEDA subsidiary company.

PROFILE

The Risima Housing Finance Corporation (Pty) Ltd is a subsidiary company of LEDA, which is charged with the responsibility of providing housing finance and related services that enable the people of Limpopo to acquire decent homes.

The organisation was established in 2000. Its core focus is providing access to home loan finance and property development finance for the residents of the province. Its current strategic plan includes an intention to investigate possible partnerships in the development of property and rental stock in the

proposed Special Economic Zones in the Greater Tubatse and the Musina local municipalities.

Product portfolio (finance categories):• Residential building construction – allows

clients to build a house of their choice• Purchasing of existing residential houses –

clients buy existing houses, either from owners, developers or through estate agencies

• Purchasing of sites – enables clients to purchase vacant land with a view to build in the near future

Risima Housing Finance CorporationThe corporation exists to improve access to housing for the citizens of Limpopo Province.

PROFILE

• Extensions and renovations – clients are assisted with financing for home improvements

• Switch bonds – entails taking over a bond from another financial institution

• Installation of solar-water-heating systems – assists existing clients who want to switch to energy efficient systems

• Additional loans – clients who have equity on their properties can apply for additional loans

• Access bond – available to clients who pay more than the required instalment on their home loans

Official classificationThe company is classified under schedule 3D of the Public Finance Management Act as a provincial government business enterprise that deals with home-loan finance to the end-users who are per-manently employed citizens of the Republic of South Africa, resident in Limpopo’s rural and urban areas and where property ownership is evidenced by the Permission to Occupy or Deed of Grant

and Title Deed, to purchase or build residential properties.

Financial performanceThe most recent financials for Risima indicate that:• In the last financial year, the company recorded

a total income of R37-million with a profit of R22.5-million against the targeted budget of R12.3-million.

• The total loan book grew from R298.2-million to million loan impairment excluded. Despite the funding constraints, there was a positive variance of R26.6-million.

• Total assets recorded for the year are currently R336.7-million.

Risima stakeholder engagementThe Department of Public Service and Administration established the Government Employees Housing Scheme (GEHS) to assist government employees with access to home-loan finance and Risima was selected as one of the implementing agents of the scheme.

Risima is also appointed by COGHSTA to imple-ment and administer the Financial Linked Individual Subsidy Programme (FLISP) in the province.

CONTACT INFOLebowakgomo (head office)Tel: +27 15 633 4732 or +27 15 633 4700Polokwane (regional office)Tel: +27 15 295 5120Ritavi (regional office)Tel: +27 15 303 1731Thohoyandou (regional office)Tel: +27 15 962 4900


Social Upliftment Programme

• A five thousand litres water tank was installed at Ntlaku Drop-in Centre (district, municipality) to cater for the vegetable garden which will assist in sustaining the centre to feed the elderly, orphans and vulnerable children;

• Funding was provided to moral re-generation prorammes at Tivumbeni College (Mopani District); CPD Centre in Nzhelele (Vhembe); and Mas-Tech College (Seshego, Capricorn Municipality) where learners were exposed to strategies of how to overcome adversity, take action, have different world views /perspectives;

• Funding was provided for LEDA’s Annual Charity Fundraising Golf Day aimed at generating funds which were dominated toward investment in a disadvantaged community in Phalaborwa;

• LEDA sponsored Premier’s Annual Charity Golf Tournament at Legend Golf & Safari Resort (Entabeni);

• LEDA sponsored the MEC’s roadshow that took place in Thaba Moshate, Burgersfort; and

• LEDA sponsored the Junior Chamber International (SA) Polokwane for the Youth Business Funding Opportunities Seminar that took place at the Polokwane Royal.

Education Programme

This programme is intended to improve the level and quality of education in Limpopo where there is evidence of a shortage of scarce skills. LEDA, with a grant from LEDET, has therefore during the year under review funded:

• A project to renovate Nghilazi Primary School (district, municipality) to ensure an appropriate learning environment; and

• LEDA sponsored the learners at CPD centre with R3 000 for 264 bathing soaps and 16 washing soaps which were delivered at the centre.



GROUP PERFORMANCE


DIVISIONREPORTING

PERIOD



Capacitated and performning human capital contributing to enhanced organisational performance

Trained and capacitated staff

Rand value spent on staff training and development

Corporate services Quarterly R5 047 400 R3 946 124 R1 101 276 None Training expenditure report

Streamlined and optimized business systems and processes

Group system Maturity Rating achieved by March 2020 (DPSA Standard)

Percentage ICT systems uptime across the Group

Chief Financial Officer

Quarterly 95% uptime 93% uptime 2% uptime Due to electricity

System


GOVERNANCE REPORT


LIMPOPO ECONOMIC DEVELOPMENT AGENCY ANNUAL REPORT 2016/17 61LIMPOPO ECONOMIC DEVELOPMENT AGENCY ANNUAL REPORT 2016/17

1. COMPLIANCE

Limpopo Economic Development Agency (LEDA) is listed as a schedule 3D public entity in the Public Finance Management Act, 1999 (Act 1 of 1999) and as such endorsed the principles as set out in the protocol on Corporate Governance, and where applicable, the King III Code on Corporate Governance and has endeavored to comply with the principles incorporated in the Code of Corporate Practices and Conduct.

LEDA has a formalised system of Corporate Governance as set out below.

2. GOVERNING BODIES

2.1 BOARD OF DIRECTORS

LEDA has a Board structure that is made up of a majority of non-executive members who are appointed by the MEC for Limpopo Economic Development, Environment and Tourism (LEDET). The Board meets at least once per quarter.

The framework for the payment of directors’ remuneration is approved by the MEC for LEDET and is aligned to the remuneration guidelines as per Department of Public Enterprises.

Directors of LEDA have attended induction programmes.

2.2 BOARD COMMITTEES

The Board of Directors has appointed Board Committees to assist in carrying out its responsibilities.

The Board appoints at least three directors per committee to provide expertise on matters pertaining to that committee’s mandate. All committees carry out responsibilities on behalf of the Board.

2.2.1 Board Audit and Risk Committee

The Board Audit and Risk Committee consists of non-executive Directors and independent members. The Chairperson is appointed by the Board. The Authority of

the committee is detailed in a charter which is reviewed and approved annually by the Board. The committee’s duties, among others include reviewing financial reports and cash flow projections, overseeing financial governance issues and recommending financial policies for approval to the Board. The report of the Board Audit and Risk Committee is included in the annual financial statements and sets out responsibilities covered by this committee.

2.2.2 Board Human Resources and Remuneration Committee

The Board Remuneration and Human Resources Committee consists of non-executive directors and is chaired by a non-executive member who is appointed by the Board. The committee reviews and recommends annual staff remuneration increases, terms and conditions of employment, payment of incentives and bonuses, general fringe benefits, remuneration policies and the appointment of executives.

2.2.3 Board Nominations Social and Ethics Committee

The Committee assists the Board with balancing the effectiveness of the Board.

The Committee also assists the Board with the oversight of social and ethical matters in line with Section 72(4) of the Companies Act no 71 of 2008, read with regulation of the Company Regulations, 2011.

2.2.4 Board Procurement Committee

The Committee assists the Board to ensure that the integrity of LEDA’s procurement processes is maintained. The Committee oversees adherence to policies, procedures and applicable legislation. The Committee approves the appointment of service providers falling within the Board delegation.

The Committee is responsible through its activities for the promotion of Broad Based Economic Empowerment.


2.2.5 Board Credit and Investment Committee

The Committee evaluates investment strategies of LEDA and ensures the effective utilisation of LEDA’s financial resources. It also assesses funding applications falling within the Board delegation.

2.3 MANAGING DIRECTOR AND EXECUTIVES

The managing director is appointed by the Board, as are the executives. Both the managing director and executives are involved in the day to day business activities of the organisation and are responsible for ensuring that decisions, strategies and objectives of the Board are implemented in accordance with the approved LEDA strategy and budget. The performance contract of the managing director is approved by the Board.

3. MATERIALITY AND SIGNIFICANCE FRAMEWORK

A Materiality and Significance Framework, approved by the Board, is in place. Its purpose is to regulate disclosure of material facts to the MEC of LEDET, disclosure of the entity’s annual financial statements and obtain approval from the MEC of LEDET for participation in certain significant transactions.

4. INTERNAL AUDIT

The Internal Audit function is performed by an in-house Internal Audit division.

Internal Audit executes its duties in terms of the Internal Audit Charter that is approved by the Board annually. The Charter defines the purpose, authority and responsibility of the Internal Audit function. Internal Audit carries out its work in terms of a work plan which is based on the risk profile of the entity and which is approved annually by the Board Audit and Risk Committee.

5. MANAGEMENT REPORTING

Comprehensive management reporting disciplines are in place. These include the annual preparation of

a corporate performance plan and budget which is approved by the Board and the MEC of LEDET. EXCO sits monthly to ensure the smooth running of the organisation.

6. CODE OF ETHICS

The company has a code of ethics which requires employees and directors to observe high ethical standards to ensure that business practices are conducted in a manner which is beyond reproach.

7. NON-FINANCIAL INFORMATION

7.1 EMPLOYMENT EQUITY

The Board Remuneration and Human Resources Committee monitors and evaluates LEDA’s performance on employment equity. The targets are reviewed regularly.

7.2 BLACK ECONOMIC EMPOWERMENT

The company is committed to the achievement of the objectives laid out in Government’s Broad-Based Black Economic Empowerment (B-BBEE) strategy. Policies and procedures are in place to address preferential procurement practices which support black economic empowerment.

7.3 CORPORATE SOCIAL INVESTMENT

The entity has a corporate social investment programme in place which ensures that the entity is involved in the community through support – financial or in kind – of deserving causes, organisations, institutions or projects. The current policy is under review.

7.4 WORKER PARTICIPATION

A process has been activated where employees of LEDA participate in discussions on staff welfare and policy formulation through the relevant employee consultative forum. LEDA has a Recognition Agreement with NEHAWU.


7.5 INFORMATION ON NON-EXECUTIVE AND EXECUTIVE DIRECTORS OF THE COMPANY

The directors for the accounting period were as follows:

DIRECTOR (INTERIM MEMBERS APPOINTED FROM 28 AUGUST 2013)

Mr M H Lekota Chairperson

Mr D Kourtoumbellides Deputy Chairperson

Mr S V Chepape

Ms K Maroga

Mr M Maphutha

Ms M A Mphahlele

Mr S C Nkadimeng

Mr T A Mokone

Mr S Lediga

Mr T L Makunyane

Mr M B Mphahlele Managing Director

7.6 BOARD AUDIT AND RISK COMMITTEE

MEMBER

Ms K Maroga Chairperson

Mr S C Nkadimeng

Mr T A Mokone

7.7 BOARD REMUNERATION AND HUMAN RESOURCES COMMITTEE

MEMBER

Ms M A Mphahlele Chairperson

Mr S C Nkadimeng

Ms S Maleka

Mr S Lediga

Mr T A Mokone


7.8 BOARD PROCUREMENT COMMITTEE

MEMBER

Mr D Kourtoumbellides Chairperson

Mr S V Chepape

Ms L Matlala

Mr T L Makunyane

7.9 BOARD CREDIT AND INVESTMENT COMMITTEE

MEMBER

Mr M Maphutha Chairperson

Mr T L Makunyane

Mr I Masekwameng

Ms M A Mphahlele

Mr D Kourtoumbellides

Mr M Ralebipi

7.10 BOARD SOCIAL AND ETHICS COMMITTEE

MEMBER

Mr S Lediga Chairperson

Mr S V Chepape

Mr T Nkoana

Ms N Ntsaba


8. BOARD ATTENDANCE 2016/17

8.1. BOARD MEETINGS/WORKSHOPS

LEDA Board meetings/workshops

NAME

1 2 3 4 5 6 7 8 9

7/4/

2016

30/5

/201

6

22/6

/201

6

23/6

/201

6

7/9/

2016

29/9

/201

6

30/1

1/20

16

27/2

/201

7

28/2

/201

7

Lekota M H (Chairperson)

Kourtoumbellides D (Deputy Chairperson)

Chepape S V

Maphutha M

Maroga K

Mphahlele M A

Nkadimeng S C

Lediga S

Mokone T A

Makunyane T L

8.2. BOARD AUDIT AND RISK COMMITTEE

NAME

1 2 3 4 5 6 7 8 9

24/5

/201

6

27/7

/201

6

01/8

/201

6

17/0

8/20

16

19/9

/201

6

14/1

1/20

16

13/2

/201

7

27/3

/201

7

20/4

/201

7

Maroga K (Chairperson)

Nkadimeng S C

Mokone T A


8.3. BOARD CREDIT AND INVESTMENT COMMITTEE

NAME

1 2 3 4 5

05/4

/201

6

04/5

/201

6

05/9

/201

6

13/1

2/20

16

18/4

/201

7

Maphutha M (Chairperson)

Mphahlele M A

Kourtoumbellides D

Makunyane T L

Masekwameng I

Relebipi M

8.4. BOARD SOCIAL AND ETHICS COMMITTEE

NAME

1 2

31/8

/ 20

16

10/1

1/ 2

016

Lediga S

Chepape S V

Ntsaba M

Nkoana T

8.5. BOARD NOMINATIONS COMMITTEE

NAME

1 2 3

7/4/

201

6

30/5

/ 20

16

7/9/

2016

Lekota M H (Chairperson)

Kourtoumbellides D


8.6. BOARD PROCUREMENT COMMITTEE

NAME

1 2 3 4 5

4/5/

2016

19/1

2/ 2

016

17/1

/ 20

17

30/1

/ 20

17

30/3

201

7

Kourtoumbellides D (Chairperson)

Chepape S V

Matlala M L

Makunyane T L

8.7. BOARD REMUNERATION AND HUMAN RESOURCES COMMITTEE

NAME

1 2 3 4 5 603

/5/2

016

15/7

/201

6

18/8

/201

6

14/1

0/20

16

28/1

1/20

16

20/2

/ 20

17

Mphahlele M A (Chairperson)

Nkadimeng S C

Maleka S

Lediga S -

Mokone T A -

8.8. RISIMA BOARD MEETINGS/WORKSHOPS

NAME

1 2 3 4 5

26/5

/201

6

27/7

/201

6

10/8

/201

6

17/1

1/ 2

016

16/0

2/20

17

Nkadimeng S C (Chairperson)

Mphahlele M A (Deputy Chairperson)

Ntsaba M M

Ramoshaba W M

Lediga S


8.9. VENTECO TEA ESTATES BOARD MEETINGS/WORKSHOPS

NAME

1 2 3 4

23/5

/201

6

2/6/

2016

28/7

/201

6

23/8

/ 20

16

Modisha I W

Ramaano A

Tshivhase D E

Prof. Phendla S

8.10. LIMPOPO CONNEXION (SOC) LTD

NAME

1 2 3 4

25/1

0/20

16

23/0

1/20

17

03/0

2/20

17

20/0

3/20

17

Prof. Howard R

Kale A

Mathabatha YSM

8.11. CORRIDOR MINING RESOURCES

NAME

1 2 3 4

25/0

5/20

16

25/0

8/20

16

22/1

1/20

16

23/0

2/20

17

Chepape V

Kourtoumbellides D

Maroga K

Maleka S

Makunyane T

Ralebipi M

Masekwameng I

Mphahlele MB

Nkadimeng K


8.12. GREAT NORTH TRANSPORT BOARD MEETINGS

NAME

1 2 3 4 5 6

27/0

5/20

16

02/0

9/20

16

19/0

9/20

16

07/1

0/20

16

24/1

1/20

16

7/3/

2017

Maphutha M (Chairperson)

Maroga K (Deputy Chairperson)

Nkadimeng C

Nokaneng S (served until Feb 2017)

Masekwameng I (appointed11/09/2015)

Mokone T (appointed 11/09/2015)

Phasha O (appointed 31/05/2016)

8.13. GREAT NORTH TRANSPORT BOARD AUDIT AND RISK COMMITTEE MEETINGS

NAME

1 2 3 4 5 6 7

18/5

/201

6

27/7

/201

6

26/8

/201

6

28/9

/201

6

2/9/

2016

14/3

/201

7

22/3

/201

7

Nokaneng S (Chairperson) (served until Feb 2017) - -

Nkadimeng C

Masekwameng I

Mokone T (member from 7/3/2017) - - - - -


ANNUAL FINANCIAL STATEMENTS



LIMPOPO ECONOMIC DEVELOPMENT AGENCY AND ITS SUBSIDIARIES TRADING AS LEDACONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2017

GENERAL INFORMATION

COUNTRY OF INCORPORATION AND DOMICILE

South Africa

NATURE OF BUSINESS AND PRINCIPAL ACTIVITIES

Financing, Development, Business and Financial Management Support of Small and Medium Enterprises, Public Transport, Rental of Properties, Housing Finance, Mining and Exploration, Agriculture, Export Promotion and Investment Attraction in Limpopo.

DIRECTORS

Mr M Lekota (Chairperson)Mr D Kourtoumbellides (Deputy Chairperson) Mr SV ChepapeMr SC Nkadimeng Ms K MarogaMr M Maphutha Ms MA Mphahlele Mr TL Makunyane Mr TA MokoneMr S LedigaMr MB Mphahlele (Managing Director)

REGISTERED OFFICEEnterprise Development House Main RoadLebowakgomo 0737

BUSINESS ADDRESSEnterprise Development House Main RoadLebowakgomo 0737

POSTAL ADDRESSPO Box 760Lebowakgomo 0737

HOLDING ENTITYLimpopo Department of Economic Development, Environment and Tourism (LEDET)

BANKERS ABSA Bank Limited

AUDITOR Auditor-General of South Africa

SECRETARY Ms MC Mokoma

LEVEL OF ASSURANCEThese consolidated annual financial statements have been audited in compliance with the applicable requirements of the Public Audit Act of South Africa, 2004 (Act 25 of 2011).

PREPARERThe financial statements were internally compiled by: Mr GJ Roux,Acting Group Chief Finance Officer

ROUNDING Rounding to the nearest Rand has been applied



AUDIT COMMITTEE REPORT

REPORT OF THE BOARD AUDIT COMMITTEE IN TERMS OF TREASURY REGULATION 27.1.7 AND 27.1.10(b) AND (c) OF THE PUBLIC FINANCE MANAGEMENT ACT 1 OF 1999 (THE PFMA)

In meeting its responsibilities and in executing its duties, the Board Audit and Risk Committee is required to consider the adequacy and effectiveness of the entity’s internal controls and the quality of its financial information.

The Committee has adopted formal terms of reference and satisfied its responsibilities, during the year under review, in compliance with its terms of reference. In order to discharge its responsibilities, the Committee has reviewed, on a regular basis during the year under review, the following:

• The risk areas of LEDA’s operations to be covered in the scope of internal audits;

• Activities of the internal audit function to determine the effectiveness thereof;

• Internal audit reports, including the response of management to issues raised therein;

• The external audit scope to ensure that the critical areas of the business are being addressed;

• The external auditors’ report and management letter;

• The operational effectiveness of the entity’s policies, systems and procedures;

• The effectiveness of the system for monitoring compliance with laws and regulations; and

• The annual financial statements.

Based on the outcome of such reviews and information provided by management and internal audit, we are of the view that the internal controls of the entity operated fairly effective throughout the year under review.

This report is provided by the Audit and Risk Committee, appointed in respect of the 2017 financial year of Limpopo Economic Development Agency and its subsidiaries.

1. MEMBERS OF THE AUDIT AND RISK COMMITTEE

The members of the Audit and Risk Committee are all independent, non-executive directors of the group and include:

NAME QUALIFICATION

Ms K Maroga (Chairperson) Chartered Accountant (SA)

Mr SC Nkadimeng B Juris, Masters in Public Admin

Mr TM Mokone BA Education, Project Management

The Committee is satisfied that the members thereof have the required knowledge and experience as set out in Section 94(5) of the Companies Act 71 of 2008 and the Public Finance Management Act, 1 of 1999 (PFMA) and Regulation 42 of the Companies Regulation, 2011.



2. MEETINGS HELD BY THE AUDIT AND RISK COMMITTEE

The Audit and Risk Committee performs the duties laid upon it by Section 94(7) of the Companies Act 71 of 2008 and the Public Finance Management Act, 1 of 1999 (PFMA) by holding meetings with the key roleplayers on a regular basis and by the unrestricted access granted to the external auditor.

The members attended the requisite number of meetings for the year. During the year the following meetings were held:

24 May 2016, 27 July 2016, 1 August 2016, 17 August 2016, 19 September 2016, 14 November 2016, 13 February 2017 and 27 March 2017.

3. EXTERNAL AUDITOR

The Committee satisfied itself through enquiry that the external auditor is independent as defined by the Companies Act, 71 of 2008 and the Public Finance Management Act, 1 of 1999 (PFMA) and the Public Audit Act, 25 of 2001 (revised in 2004) and as per the standards stipulated by the auditing profession. Requisite assurance was sought and provided by the Companies Act, 71 of 2008 and the Public Finance Management Act, 1 of 1999 (PFMA) that internal governance processes within the Auditor General of South Africa support and demonstrate the claim to independence.

The Audit and Risk Committee, in consultation with executive management, agreed to the terms of the engagement.

4. FINANCIAL STATEMENTS

Following the review of the financial statements, the Audit and Risk Committee recommend Board approval thereof.

5. INTERNAL AUDIT

The Board Audit and Risk Committee has had unrestricted access and reports on the risk areas of the Group’s operations to be covered in the scope of internal audits, activities of the internal audit function to determine the effectiveness thereof and reviewed internal audit reports, including the response of management to issues raised therein.

Based on the outcome of such reviews and information provided by management and internal audit, we are of the view that the internal controls of the entity operated fairly effective throughout the year under review.

On behalf of the Board Audit and Risk Committee

Ms K Maroga

Board Audit and Risk Committee Chairperson



DIRECTORS’ RESPONSIBILITIES AND APPROVAL

The directors are required in terms of the Limpopo Development Corporations Act; Companies Act, 71 of 2008; and the Public Finance Management Act 1 of 1999 (PFMA) to maintain adequate accounting records and are responsible for the content and integrity of the consolidated and separate annual financial statements and related financial information included in this report. It is their responsibility to ensure that the consolidated and separate annual financial statements fairly present the state of affairs of the Group and the Agency as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with South African Statements of Generally Accepted Accounting Practice. The external auditor is engaged to express an independent opinion on the consolidated and separate annual financial statements.

The consolidated and separate annual financial statements are prepared in accordance with South African Statements of Generally Accepted Accounting Practice as per the directive of the South African Accounting Standards Board’s pending finalisation of the accounting framework for South African state-owned entities and are based upon appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates.

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

The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the group’s cash flow forecast for the next financial year and, in the light of this review and the current financial position, they are satisfied that the group has or has access to adequate resources to continue in operational existence in future.

The consolidated and separate annual financial statements set out on pages 84 to 163, which have been prepared on the going concern basis, were approved by the Board on 31 May 2017 and were signed on its behalf by:

Mr M Lekota Mr MB Mphahlele

Chairperson Managing Director



DIRECTORS’ REPORT

The directors have pleasure in submitting their report on the consolidated and separate annual financial statements of Limpopo Economic Development Agency and its subsidiaries and the group for the year ended 31 March 2017.

1. NATURE OF BUSINESS

Limpopo Economic Development Agency and its subsidiaries are engaged in financing, development, business and financial management support of small and medium enterprises, public transport, rental of properties, housing finance, mining exploration, agriculture, export promotion and investment attraction in Limpopo and operates principally in the Limpopo province of South Africa.

There have been no material changes to the nature of the group’s business from the prior year.

2. REVIEW OF FINANCIAL RESULTS AND ACTIVITIES

The consolidated and separate annual financial statements have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice (in accordance with the directive from the South African Accounting Standards Board’s pending review and finalisation of the accounting framework for South African state-owned entities) and the requirements of the Limpopo Development Corporation Act; the Companies Act, 71 of 2008; and the Public Finance Management Act, 1 of 1999 (PFMA). The accounting policies have been applied consistently compared to the prior year.

3. SHARE CAPITAL

There have been no changes to the authorised or issued share capital during the year under review.

4. DIRECTORATE

The directors in office at the date of this report are as follows:

DIRECTORS OFFICE DESIGNATION

Mr M Lekota Chairperson Non-executive Independent

Mr D Kourtoumbellides Deputy Chairperson Non-executive Independent

Mr SV Chepape Director Non-executive Independent

Mr SC Nkadimeng Director Non-executive Independent

Ms K Maroga Director Non-executive Independent

Mr M Maphutha Director Non-executive Independent

Ms MA Mphahlele Director Non-executive Independent

Mr TL Makunyane Director Non-executive Independent

Mr TA Mokone Director Non-executive Independent

Mr S Lediga Director Non-executive Independent

Mr MB Mphahlele Managing Director Executive



5. INTERESTS IN SUBSIDIARIES, ASSOCIATES AND JOINT ARRANGEMENTS

Details of material interests in subsidiary companies, associates and joint ventures are presented in the consolidated financial statements in notes 7, 8 and 9.

There were significant acquisitions and divestitures during the year ended 31 March 2017 as per note 7, 8 and 9.

6. HOLDING ENTITY

The group’s ultimate shareholder is Limpopo Department of Economic Development, Environment and Tourism (LEDET) which holds 100% (2016: 100%) of the group’s equity. Limpopo Department of Economic Development, Environment and Tourism (LEDET) is a provincial department in the Limpopo province of South Africa.

7. EVENTS AFTER THE REPORTING PERIOD

The directors are not aware of any other significant matters up to the date of this report.

8. MANAGEMENT TURNAROUND STRATEGY - GREAT NORTH TRANSPORT (SOC) LIMITED

Great North Transport (SOC) Limited’s Board of Directors considered a turnaround strategy during the Board meeting dated 14 March 2017 to turn the financial position of the company from loss making to profit making. The strategy included the replacement of the old fleet, implementation of a fleet management system and centralisation of finance and payroll, as well as introduction of in-house maintenance programme.

9. AUDITORS

The Auditor-General of South Africa continued in office as auditors for the agency and its subsidiaries for 2017.

10. SECRETARY

The Group Company Secretary is Ms MC Mokoma.

Business address

Enterprise Development House

Main Road

Lebowakgomo 0737



11. CERTIFICATION FROM THE GROUP COMPANY SECRETARY

In terms of the provisions of the Companies Act, the group company secretary certifies that, to the best of her knowledge and belief, the Limpopo Economic Development Agency and its subsidiaries have lodged with the Registrar of Companies for the financial year ended 31 March 2017, all such returns as are required of the state owned companies in terms of the Companies Act, and that all such returns are true and correct.

Ms MC MokomaGroup Company Secretary



REPORT OF THE AUDITOR-GENERAL

REPORT OF THE AUDITOR-GENERAL TO LIMPOPO PROVINCIAL LEGISLATURE ON THE LIMPOPO ECONOMIC DEVELOPMENT AGENCY AND ITS SUBSIDIARIES

REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

QUALIFIED OPINION

1. I have audited the consolidated and separate financial statements of the Limpopo Economic Development Agency and its subsidiaries (the group) set out on pages 84 to 163, which comprise the consolidated and separate statement of financial position as at 31 March 2017, and the consolidated and separate statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, as well as the notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

2. In my opinion, except for the possible effect of the matter described in the basis for qualified opinion section of this report, the consolidated and separate financial statements present fairly, in all material respects, the financial position of the Limpopo Economic Development Agency and its subsidiaries as at 31 March 2017 and their financial performance and cash flows for the year then ended in accordance with the South African Statements of Generally Accepted Accounting Practice (SA Statements of GAAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Companies Act of South Africa, 2008 (Act No. 71 of 2008) (Companies Act).

BASIS FOR QUALIFIED OPINION

Property, plant and equipment

3. I identified items of property, plant and equipment that were not included in the underlying accounting records. As the entity did not maintain an adequate system of recording items of property, plant and equipment, I was unable to confirm the items by alternative means. Consequently, I was unable to determine whether any adjustment relating to property, plant and equipment stated at R405 063 936 in the financial statements was necessary.

4. 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 consolidated and separate financial statements section of my report.

5. I am independent of the entity 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.

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

EMPHASIS OF MATTERS

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



MATERIAL IMPAIRMENTS

8. As disclosed in notes 11, 13 and 19 to the separate financial statements, material impairments to the amounts of R142 636 007, R171 529 783, R117 969 478 and R106 324 101 respectively, were made to loans to / (from) subsidiaries and associates, other financial assets (loans and receivables) and trade and other receivables, respectively, as a result of losses incurred by subsidiaries/associates and irrecoverable loans and debt.

IRREGULAR EXPENDITURE

9. As disclosed in note 46.1 to the financial statements, irregular expenditure amounting to R107 134 848 and R13 638 728 has been incurred by the group and the entity respectively, due to contravention of supply chain management policies.

RESPONSIBILITIES OF THE ACCOUNTING AUTHORITY TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

10. The Board of Directors which constitute the accounting authority is responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with SA Statements of GAAP and the requirements of the PFMA and Companies Act, and for such internal control as the accounting authority determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

11. In preparing the consolidated and separate financial statements, the accounting authority is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the accounting authority either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so.

AUDITOR-GENERAL’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

12. My objectives are to obtain reasonable assurance about whether the consolidated and separate 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 consolidated and separate financial statements.

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

REPORT ON THE AUDIT OF THE ANNUAL PERFORMANCE REPORT

INTRODUCTION AND SCOPE

14. 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 objectives presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance.



15. My procedures address the reported performance information, which must be based on the approved performance planning documents of the entity. I have not evaluated the completeness and appropriateness of the performance indicators included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, my findings do not extend to these matters.

16. 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 objectives presented in the annual performance report of the entity for the year ended 31 March 2017:

Objectives

Pages in the annual

performance report

Objective 1– Accelerated industrialisation in Limpopo through strategic economic development interventions 23 - 26

Objective 2 – An increase in sustainable enterprises in targeted sectors of the economy 20 - 21

Objective 4 – An increase in trade and investment in targeted sectors in Limpopo 31 - 34

Objective 5 – An increase in access to socio-economic development through innovative products and services offered by the Group’s subsidiaries and tertiary divisions 36 - 48

17. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

18. I did not identify any material findings on the usefulness and reliability of the reported performance information for the following objectives:

• Objective 1– Accelerated industrialisation in Limpopo through strategic economic development interventions

• Objective 2 – An increase in sustainable enterprises in targeted sectors of the economy

• Objective 4 – An increase in trade and investment in targeted sectors in Limpopo

• Objective 5 – An increase in access to socio-economic development through innovative products and services offered by the Group’s subsidiaries and tertiary divisions

OTHER MATTERS

19. I draw attention to the matters below:

ACHIEVEMENT OF PLANNED TARGETS

20. Refer to the annual performance report on pages 18 to 59 for information on the achievement of planned targets for the year and explanations provided for the underachievement of a significant number of targets.



ADJUSTMENTS OF MATERIAL MISSTATEMENTS

21. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of all above objectives. As management subsequently corrected the misstatements, I did not raise any material findings on the usefulness and reliability of the reported performance information.

REPORT ON AUDIT OF COMPLIANCE WITH LEGISLATION

INTRODUCTION AND SCOPE

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

23. The material findings in respect of the compliance criteria for the applicable subject matters are as follows:

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

24. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records as required by section 55(1)(a) and (b) of the PFMA and section 29(1)(a) of the Companies Act. Material misstatements of non-current assets, current assets, current liabilities, revenue, expenditure and disclosure items identified by the auditors in the submitted financial statements were corrected and the supporting records were provided subsequently, but the uncorrected material misstatement related to non-current asset resulted in the financial statements receiving a qualified audit opinion.

REVENUE MANAGEMENT

25. Effective and appropriate steps were not taken to collect all money due, as required by section 51(1)(b)(i) of the PFMA and Treasury Regulation 31.1.2 (e).

OTHER INFORMATION

26. The Limpopo Economic Development and its subsidiaries accounting authority is responsible for the other information. The other information comprises the information included in the annual report which includes the director’s report, the audit committee’s report and the company secretary’s certificate as required by the Companies Act. The other information does not include the consolidated and separate financial statements, the auditor’s report thereon and those selected objectives presented in the annual performance report that have been specifically reported on in the auditor’s report.

27. 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.

28. 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 consolidated and separate financial statements and the selected objectives 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

29. I considered internal control relevant to my audit of the consolidated and separate financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to express any form of assurance thereon. The matters reported below are limited to the significant internal control deficiencies that resulted in the basis for qualified opinion, the findings on the annual performance report and the findings on compliance with legislation included in this report.

LEADERSHIP

30. The critical position of chief financial officer was vacant for 19 months, with vacancies and a lack of capacity within the finance department. Internal controls and the accounting authority’s review did not detect or prevent the risks of material misstatements to the financial statements. The accounting authority over-relied on a key individual for the overall presentation of the financial statements. The slow response by leadership and its inability to follow a pro-active approach have resulted in numerous material misstatements in financial statements leading to a qualified opinion.

FINANCIAL AND PERFORMANCE MANAGEMENT

31. Senior management did not adequately oversee the operations of the entity, as the financial statements contained material misstatements not detected by the entity’s own system of internal control. The entity’s asset register was inadequate to identify items of property, plant and equipment.

GOVERNANCE

32. Although risk management activities took place within the entity and the necessary policies and procedures have been formulated and documented, the entity’s reactive approach in addressing inadequate systems of internal controls indicates that there are inadequate mitigating processes in place to address the entity’s reliance on a key individual and to guide the entity through periods of change and unpredictability.

Polokwane

27 August 2017



ANNEXURE – AUDITOR-GENERAL’S RESPONSIBILITY FOR THE AUDIT

1. 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 on the entity’s compliance with respect to the selected subject matters.

FINANCIAL STATEMENTS

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

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors, which constitutes the accounting authority.

• conclude on the appropriateness of the Board of Directors, which constitutes the accounting authority’s 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 entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the financial statements. My conclusions are based on the information available to me at the date of the auditor’s report. However, future events or conditions may cause an entity 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.

• obtain sufficient, appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion.

COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE

3. I communicate with the accounting authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

4. I also confirm to the accounting authority that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to have a bearing on my independence and here applicable, related safeguards.



STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2017

NOTES

GROUP AGENCY

2017R

2016R

2017R

2016R

Assets

Non-Current Assets

Biological assets 3 2 117 760 2 117 760 2 117 760 3 104 805

Investment property 4 187 624 792 187 624 792 187 624 792 185 150 029

Property, plant and equipment 5 405 063 936 405 063 936 74 839 921 36 000 745

6 31 649 157 31 649 157 - -

Intangible assets 7 96 109 721 96 109 721 419 248 608 420

Investments in subsidiaries 8 - - 164 042 763 172 504 414

Investments in associates 10 107 526 099 107 526 099 17 501 091 17 503 591

Loans to group companies 11 31 666 302 31 666 302 35 118 653 165 829 484

Other financial assets 13 532 053 063 532 053 063 114 516 157 108 545 252

Environmental rehabilitation deposit 17 33 734 223 33 734 223 - -

1 427 545 053 1 427 545 053 596 180 385 689 246 740

Current Assets

Inventories 18 48 870 663 44 695 466 20 547 703 1 660 849

Loans to group companies 11 - - 58 119 648 21 112 309

Loans to related parties 12 1 500 006 1 500 000 - -

Other financial assets 13 35 683 713 37 105 978 9 077 363 12 262 539

Trade and other receivables 19 85 044 842 88 944 853 70 113 035 90 647 601

Prepaid expenses 16 5 659 336 6 089 437 - -

Cash and cash equivalents 20 152 780 997 155 567 362 29 635 268 65 268 851

329 539 557 333 903 096 187 493 017 190 952 149

Total Assets 1 757 084 610 1 632 432 976 783 673 402 880 198 889

Equity and Liabilities

Equity

Equity Attributable to Equity Holders of Parent

Share capital 21 409 216 005 409 216 005 409 216 005 409 216 005

Reserves 21 88 366 070 64 411 432 85 250 715 64 481 426

Retained income 673 031 860 623 720 865 129 340 571 195 810 821

1 170 613 935 1 097 348 302 623 807 291 669 508 252

Non-controlling interest (72 654) (1 958 591) - -

1 170 541 281 1 095 389 711 623 807 291 669 508 252

Liabilities

Non-Current Liabilities

Loans from group companies 11 - - 8 933 483 70 673 487

Loans from related party 12 38 004 000 28 146 442 - -

Other financial liabilities 23 13 792 165 - - -

Finance lease obligation 24 72 367 282 92 197 827 1 245 153 -

Retirement benefit obligation 15 28 078 000 27 409 000 14 573 000 14 207 000

Deferred income 25 1 891 845 6 136 998 1 891 845 -

Deferred tax 14 7 133 722 7 926 814 - -

Provisions 26 50 470 583 37 228 793 987 000 574 500

211 737 597 199 045 874 27 630 481 85 454 987





NOTES

GROUP AGENCY

2017R

2016R

2017R

2016R

Current Liabilities

Loans from related party 12 - 5 585 608 - -

Other financial liabilities 23 33 857 559 23 935 863 - -

Current tax payable 5 465 664 - - -

Finance lease obligation 24 21 423 945 19 714 874 9 531 57 550

Operating lease liability 65 100 6 665 - -

Trade and other payables 27 254 057 625 225 956 152 80 424 222 68 123 135

Retirement benefit obligation 15 2 765 000 2 784 000 1 412 000 1 412 000

Deferred income 25 27 882 924 30 834 805 27 066 924 30 825 274

Provisions 26 29 287 915 29 179 424 23 322 953 24 817 691

374 805 732 337 997 391 132 235 630 125 235 650

Total Liabilities 586 543 329 537 043 265 159 866 111 210 690 637

Total Equity and Liabilities 1 757 084 610 1 632 432 976 783 673 402 880 198 889

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2017 (CONTINUED)



STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

NOTES

GROUP AGENCY

2017R

2016R

2017R

2016R

Revenue 28 1 027 661 192 1 009 592 606 121 666 276 118 406 521

Cost of sales 29 (287 849 296) (244 392 396) (16 662 105) (12 276 928)

Gross profit 739 811 896 765 200 210 105 004 171 106 129 593

Other income 30 24 759 270 60 992 871 13 625 806 24 644 734

Operating expenses 31 (1 070 111 500) (1 011 577 151) (424 802 250) (403 522 840)

Government grant received 345 533 787 286 699 129 280 779 898 286 699 129

Loans to subsidiaries recouped on deregistration - - (127 361 942) -

Operating profit (loss) 31 39 993 453 101 315 059 (152 754 317) 13 950 616

Investment revenue 32 15 398 374 7 825 326 86 320 898 20 615 540

Commission received 259 611 - - -

Income/(loss) from equity accounted investments 9 939 361 9 610 543 - -

Transfer from policyholder liabilities for insurance contracts 33 916 111 - - -

Finance costs (14 680 774) (12 691 502) (36 831) (4 408 454)

Profit (loss) before taxation 34 51 826 136 106 059 426 (66 470 250) 30 157 702

Taxation 33 (629 204) (11 692 597) - -

Profit (loss) for the year 51 196 932 94 366 829 (66 470 250) 30 157 702

Other comprehensive income

Items that will not be reclassified to profit or loss

Fair value adjustment on other financial assets available for sale 13 839 283 20 831 028 13 069 289 19 882 271

Fair value adjustment on other financial assets acquired in business combination 7 000 000 - 7 000 000 -

Total items that will not be reclassified to profit or loss 20 839 283 20 831 028 20 069 289 19 882 271

Other comprehensive income after tax 20 839 283 20 831 028 20 069 289 19 882 271

Total comprehensive loss for the year 72 036 215 115 197 857 (46 400 961) 50 039 973

Total comprehensive income (loss) attributable to

Owners of the parent 70 150 278 113 388 621 (46 400 961) 50 039 973

Non-controlling interest 1 885 937 1 809 236 - -

72 036 215 115 197 857 (46 400 961) 50 039 973

Profit (loss) attributable to

Owners of the parent 49 310 995 92 557 593 (66 470 250) 30 157 702

Non-controlling interest - Continuing operations 1 885 937 1 809 236 - -

51 196 932 94 366 829 (66 470 250) 30 157 702

FOR THE YEAR ENDED 31 MARCH 2017



STATEMENT OF CHANGES IN EQUITYG

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216

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43 5

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0 73

9 32

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3 53

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9 76

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9 21

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531

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983

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191

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--

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92 5

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20 8

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1 75

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16 a

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1 09

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095

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--

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49 3

10 9

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1 88

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20 8

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70 1

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15

Tran

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115

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3 11

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Bala

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1540

9 21

6 00

544

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--

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30 1

57 7

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19 8

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19 8

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19 8

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71

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Note

s21

22




STATEMENT OF CASH FLOWS

NOTES

GROUP AGENCY

2017R

2016R

2017R

2016R

Cash flows from operating activities

Cash generated from (used in) operations 36 110 787 695 97 958 893 (107 247 466) 11 682 379

Interest income 13 272 398 6 696 092 8 184 256 11 493 066

Dividends received 2 125 976 1 129 234 78 136 642 9 122 474

Finance costs (14 680 774) (12 691 502) (36 831) (4 408 454)

Net cash from operating activities 111 505 295 93 092 717 (20 963 399) 27 889 465

Cash flows from investing activities (33 888 028) (22 854 207) (41 908 532) (2 496 998)

Purchase of property, plant and equipment 5 3 874 728 392 442 122 954 -

Sale of property, plant and equipment 5 (11 077 213) (18 602 184) (9 890 363) (18 602 184)

Purchase of investment property 4 2 025 694 50 041 914 - 2 492 492

Sale of investment property 4 (1 873 322) 3 716 407 - (556 775)

Purchase of other intangible assets 7 5 337 259 - - -

Profit on sale of assets 195 036 - - -

Sale of other intangible assets 7 (6 688 993) - - -

Movements in loans to group companies 37 1 375 618 (16 633 475) 31 963 488 37 048 304

Movements in financial assets (59 803 340) (65 794 637) 4 214 271 (31 639 600)

Purchase of biological assets 3 (2 117 760) (2 118 969) (2 460 195) (2 118 969)

Movement in biological assets 3 3 104 805 2 091 059 2 091 059 1 013 746

Movement in operating lease obligation 58 435 (6 665) - -

Movement in prepaid expenses 430 101 4 489 813 - -

Movement in financial liabilities (1 395 150) - - -

Finance lease payments (18 121 474) 17 286 861 1 197 134 (364 148)

Net cash from investing activities (118 563 604) (47 991 641) (14 670 184) (15 224 132)

Cash flows from financing activities

Movement in loan to related party 4 271 944 (21 213 125) - -

Net cash from financing activities 4 271 944 (21 213 125) - -

Total cash movement for the year (2 786 365) 23 887 951 (35 633 583) 12 665 333

Cash at the beginning of the year 155 567 362 132 190 054 65 268 851 52 603 518

Total cash at end of the year 20 152 780 997 156 078 005 29 635 268 65 268 851




ACCOUNTING POLICIES

1. PRESENTATION OF CONSOLIDATED AND SEPARATE ANNUAL FINANCIAL STATEMENTS

Limpopo Economic Development Agency (LEDA) is a juristic entity established in terms of the Limpopo Development Corporation Act, 5 of 1994 and operates as a Provincial Government Business Enterprise, entitled to make profit, as listed in schedule 3D of the Public Finance Management Act, 1 of 1999 (as amended by Act 29 of 1999).

LEDA’s mandate is to promote and carry out the economic development of the Limpopo Province in the agricultural, commercial, financial andindustrial fields, as well as mining, transport, housing finance, export promotion and investment attraction.

The consolidated annual financial statements of the LEDA Group for the year ending 31 March 2017 comprises the Agency, its subsidiaries and the Group’s interests in associates and joint ventures (together referred to as the Group).

BASIS OF PREPARATION

The consolidated and separate annual financial statements have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice as approved Accounting Framework in accordance with the South African Accounting Standards Board’s Directive 12 and the requirements of the Limpopo Development Corporation Act; the Companies Act, 71 of 2008; and the Public Finance Management Act, 1 of 1999 (PFMA).

The consolidated and separate financial statements have been prepared under the historic cost convention, as modified by accounting for available for sale financial assets, financial assets at fair value through profit and loss, and biological assets at fair value.

These accounting policies are consistent with the previous period.

1.1 CONSOLIDATION BASIS OF CONSOLIDATION

The financial statements incorporate the financial statements of the Agency and all investees which are controlled by the group.

The group has control of an investee when it has power over the investee; it is exposed to or has rights to variable returns from involvement with the investee; and it has the ability to use its power over the investee to affect the amount of the investor’s returns.

The results of subsidiaries are included in the financial statements from the effective date of acquisition to the effective date of disposal.

Adjustments are made when necessary to the financial statements of subsidiaries to bring their accounting policies in line with those of the group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the group’s interest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controlling



interests are allocated to the non-controlling interest, even if this results in a debit balance being recognised for non-controlling interest.

Transactions which result in changes in ownership levels, where the group has control of the subsidiary, both before and after the transaction, are regarded as equity transaction and are recognised directly in the statement of changes in equity.

The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent.

Business combinations

A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party, or parties, both before and after the amalgamation and that control is not transitory.

The assets transferred and liabilities assumed are recognised by the transferee at their carrying values on initial recognition.

Where the transferee and transferor account for similar assets and liabilities using different financial reporting frameworks, the carrying amounts of the assets and liabilities transferred to the transferee are adjusted to the accounting framework used by the transferee on initial recognition. The net effect of the adjustments is recognised in accumulated profit or loss when assets and liabilities have been recognised. The net identifiable assets transferred represent a contribution from the ultimate parent and are recognised in equity on consolidation as a separate reserve.

Investment in associates

An associate is an entity over which the group has significant influence and which is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

An investment in associate is accounted for using the equity method, except when the investment is classified as held-for-sale in accordance with IFRS 5 Non-current assets held-for-sale and discontinued operations. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost adjusted for post acquisition changes in the group’s share of net assets of the associate, less any impairment losses.

Losses in an associate in excess of the group’s interest in that associate are recognised only to the extent that the group has incurred a legal or constructive obligation to make payments on behalf of the associate.

Any goodwill on acquisition of an associate is included in the carrying amount of the investment, however, a gain on acquisition is recognised immediately in profit or loss.

Profits or losses on transactions between the group and an associate are eliminated to the extent of the group’s interest therein.

When the group reduces its level of significant influence or loses significant influence, the group proportionately reclassifies the related items which were previously accumulated in equity through other comprehensive income to profit or loss as a reclassification adjustment. In such cases, if an investment remains, that investment is measured to fair value, with the fair value adjustment being recognised in profit or loss as part of the gain or loss on disposal.

ACCOUNTING POLICIES (CONTINUED)



Joint ventures

An interest in a joint venture is accounted for using the equity method, except when the investment is classified as held-for-sale in accordance with IFRS 5 Non-current assets held-for-sale and discontinued operations. Under the equity method, interests in joint ventures are carried in the consolidated statement of financial position at cost adjusted for post acquisition changes in the agency’s share of net assets of the joint venture, less any impairment losses. Profits or losses on transactions between the agency and a joint venture are eliminated to the extent of the agency’s interest therein.

When the agency loses joint control, the group proportionately reclassifies the related items which were previously accumulated in equity through other comprehensive income to profit or loss as a reclassification adjustment. In such cases, if an investment remains, that investment is measured to fair value, with the fair value adjustment being recognised in profit or loss as part of the gain or loss on disposal.

1.2 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY

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

Trade receivables, Held to maturity investments and Loans and receivables

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

The impairment for trade receivables, held to maturity investments and loans and receivables is calculated on an individual basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the instrument.

Allowance for slow moving, damaged and obsolete stock

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

Impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined, based on the higher of value-in-use calculations and fair values, less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumptions used may change which may then impact our estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets.




The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows, used to determine the value in use of goodwill and tangible assets, are inherently uncertain and could materially change over time.

PROVISIONS

Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 25 - Provisions.

Policy liabilities for insurance contracts

Discounted liabilities

The key assumptions used in the calculation of the insurance liabilities are based on recent experience investigations of the company’s business. Every year each assumption is reviewed based on the results of the most recent experience investigations. The intention is to arrive at a best estimate of the company’s experience. Once the best estimate is determined, compulsory margins (per SAP104 version 8) are incorporated as described above. Where data is not credible (e.g. withdrawal and mortality on individual business), more prudent assumptions are used based on industry data, where available.

To allow for the expected deterioration in claims due to AIDS, the AIDS tables produced by the Actuarial Society of South Africa were used as a base.

The results of the experience investigations are briefly described below:

Demographic assumptions

Due to the small number of individual life policies, experience investigations were carried out. However, the results were also adjusted, based on market statistics.

Mortality

The AIDS assumption remains unchanged.

Withdrawals

A detailed withdrawal investigation was carried out, previously based on homogenous groupings of business. Based on this investigation, the withdrawal assumptions were left unchanged from previous years.




Economic assumptions

Investment return

The interest rate was set with reference to the risk-free rate, as recommended by IFRS for non-profit and non-linked business. This was done by using the current zero-coupon yield curve at the appropriate term. The long-term investment return assumption adopted (8.02% p.a. before compulsory margins) was set relative to the expected long-term yield on risk free assets (assuming an average duration of 5.5 years).

Inflation

The current assumed level of future expense inflation is 6.02% per annum. This level of inflation is in line with the current economic situation (i.e. the inflation implied by the fixed and index-linked curves and the South African Reserve Bank’s inflation target of between 3% and 6% per annum) and the assumption that life companies typically suffer expense increases slightly above general inflation.

Expenses

Expenses per policy from the last valuation were increased with inflation to arrive at the expense per policy for the current valuation. An expense over-run reserve was established to cover excess expenses that were not covered by the per policy expenses.

Taxation

Future taxation and taxation relief are allowed for at the rates and on the bases applicable to Section 29A of the Income Tax Act at the reporting date. The company’s current tax position is taken into account, and taxation rates, consistent with that position and the likely future changes in that position, are allowed for.

Effect of change in assumptions

No changes were made to the valuation assumptions since the previous valuation.

Sensitivity analysis

The sensitivity of the insurance liabilities to the main assumptions was tested by calculating the effect of certain assumptions not being met. The following sensitivities were tested:

• Increasing renewal expenses by 10%;

• Increasing withdrawals by 10%;

• Increasing the inflation rate by 1% (absolute change in rate);

• Reducing the valuation interest rate by 1% (absolute change in rate); and

• Increasing claims experience by 10%.




Discounted and undiscounted liabilities are not sensitive to the assumptions as they are valued retrospectively.

The investment contracts are also not sensitive to changes in assumptions since a minimum of the Fund Scheme is held and they are valued retrospectively, i.e. the fund balance is held.

Outstanding claims

The company’s estimates for reported and unreported losses and establishing resulting provisions and related reinsurance recoverables are continually reviewed and updated. Adjustments resulting from this review are reflected in profit and loss. The process relies upon the basic assumption that past experience, adjusted for the effect of current developments and likely trends, is an appropriate basis for predicting future events.

Contingencies and commitments

Contingencies recognised in the current year required estimates and judgments. Commitments require certain judgement when determining if a contractual obligation exists and to determine if the Group (and Agency) future expenditure has been committed in an irrevocable agreement or that there are elements of non-cancelability.

Recognition and measurement of insurance contracts

Premiums, acquisition costs and policyholder benefits

Premiums

Group scheme premiums receivable in terms of policy contracts are accounted for as premium income when receivable and where there is reasonable assurance of collection in terms of the policy contracts. Where premiums are not determined in advance, they are accounted for upon receipt. Premiums are shown before the deduction of acquisition costs. Premiums written include adjustments to premiums written in prior accounting periods.

Outward reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct insurance.

Acquisition costs

Expenses for the acquisition of insurance contracts consist of commission and marketing management costs, paid by the company upon the acquisition of new and additional insurance business and are expensed in full when incurred.

The related reinsurance commission, which consist of commission received or earned on insurance premiums ceded to reinsurers, is measured at fair value of the considerations received or receivable and represents the amount receivable for services provided in the normal course of business.

Policyholder benefits

Policyholder benefits comprise of insurance claims paid and claims events that have occurred, but not yet reported to the company.




Insurance claims

Claims on insurance contracts include death payments that are charged to the statement of profit or loss when the company is notified of a claim by policyholders. The amount is based on the estimated liability for compensation owed to the policyholder. Claims also include claims that arise from death events that have occurred up to the reporting date, even if they have not been reported to the company.

Insurance claims are recorded as an expense gross of any reinsurance recovery when they are incurred. Claims incurred consist of claims paid during the financial period together with the movement in the provision for outstanding claims. The provision for outstanding claims comprises the company’s estimate of the undiscounted ultimate cost of settling all claims incurred but not paid at the reporting date, whether reported or not.

Reinsurance recoveries are recognised in profit or loss in the same period as the related gross claim at the undiscounted amount receivable in terms of the contract. Anticipated reinsurance recoveries are disclosed separately as assets. These estimated reinsurance and other recoveries are assessed in a manner similar to the assessment of claims outstanding.

Policyholder liabilities

Discounted liabilities

A liability for contractual benefits that are expected to be incurred in the future is recorded when the premiums are recognised. The liability is determined as the sum of the expected discounted value of the benefit payments and the future administration expenses that are directly related to the contract, less the expected discounted value of the theoretical premiums that would be required to meet the benefits and administration expenses based on the valuation assumptions used. The liability is based on assumptions as to mortality, persistency, maintenance expenses and investment income that are established at the time the contract is issued. A margin for adverse deviations is included in the assumptions.

Policyholder liabilities have been established in accordance with the Financial Soundness Valuation basis as set out in the guidelines issued by the Actuarial Society of South Africa in Prudential Guidance Note (SAP 104) (Version 8). Under this guideline, provisions are valued using realistic expectations of future experience, with prescribed margins for prudence and deferral of profit emergence.

Undiscounted liabilities

The undiscounted portion of the policyholder liabilities consist of the incurred but not reported (IBNR) reserves. The IBNR reserves are determined using an estimate of office premium, by examining run–off triangles and claim patterns for the business and then setting up an IBNR reserve using the Bornheutter–Ferguson method.

Reinsurance contracts held

The company reinsures insurance risk in the normal course of business for the purpose of limiting its net loss potential through the diversification of its risks. Reinsurance arrangements do not relieve the company from its direct obligations to its policyholders.




Contracts entered into by the company with reinsurers under which the company is compensated for losses on one or more contracts issued by the company and that meet the classification requirements for insurance contracts are classified as reinsurance contracts held.

The benefits to which the company is entitled under reinsurance contracts held are recognised as reinsurance assets. These assets consist of short–term balances due from reinsurers (classified within receivables) as well as longer term receivables (classified as reinsurance assets) that are dependent on the expected claims and benefits arising under the related reinsured insurance contracts. Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the reinsured insurance contract and in accordance with the terms of each reinsurance contract.

The company assesses its reinsurance assets for impairment on an annual basis. If there is objective evidence that the reinsurance asset is impaired, the company reduces the carrying amount of the reinsurance asset to its recoverable amount and recognises the impairment loss in the statement of profit or loss.

Receivables and payables related to insurance contracts

Receivables and payables related to insurance contracts and reinsurance contracts are initially measured at fair value and subsequently at amortised cost. They are recognised when due. These include amounts due to and from agents, brokers and insurance contract holders.

Liabilities and related assets under liability adequacy tests

The net liability recognised for insurance contracts is tested for adequacy by discounting current best estimates of all future contractual cash flows, which comprise of future premiums, claims, claims handling and administration expenses, as well as investment income from the assets backing such liabilities. Where a shortfall is identified, an additional provision is made and the company recognises the deficiency in profit or loss for the period.

Recognition and measurement of investment contracts

The company issues investment contracts where the returns are directly linked to the performance of the underlying investments.

Provision is made for expected payments to policyholders in terms of policies that incorporate a savings element and are in–force at period end. The provision is calculated based on the terms and conditions of the policies in place at period–end. Except for facility and administration fees, the receipts from and payments against investment contracts are excluded from profit and loss and recognised directly against the liability or asset.

Investment contract liabilities are reflected at fair value. The fair value of the liability is set equal to the retrospectively accumulated fair value of the underlying assets. The profits or losses that accrue to shareholders are equal to fees received during the period. Fair value movements are reflected in profit and loss.




1.3 BIOLOGICAL ASSETS

An entity shall recognise a biological asset or agricultural produce when, and only when:

• the entity controls the asset as a result of past events;

• it is probable that future economic benefits associated with the asset will flow to the entity; and

• the fair value or cost of the asset can be measured reliably.

Biological assets are measured at their fair value less costs to sell.

A gain or loss, arising on initial recognition of agricultural produce at fair value less costs to sell, is included in profit or loss for the period in which it arises.

Where market-determined prices or values are not available, the present value of the expected net cash inflows from the asset, discounted at a current market-determined rate is used to determine fair value.

An unconditional government grant, related to a biological asset measured at its fair value less costs to sell, is recognised as income when the government grant becomes receivable.

Where fair value cannot be measured reliably, biological assets are measured at cost less any accumulated depreciation and any accumulated impairment losses.

1.4 INVESTMENT PROPERTY

Investment property is recognised as an asset when, and only when, it is probable that the future economic benefits that are associated with the investment property will flow to the enterprise, and the cost of the investment property can be measured reliably.

Investment property is initially recognised at cost. Transaction costs are included in the initial measurement.

Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of, or service a property. If a replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is derecognised.

On disposal of investment property, the difference between the net proceeds and the carrying amount is recognised in profit or loss

Cost model

Investment property is subsequently carried at cost less depreciation and any accumulated impairment losses.

Depreciation is provided to write down the cost, less estimated residual value by equal installments over the useful life of the property, which is as follows:

ITEM USEFUL LIFE

Property - land Indefinite

Property - buildings 50 years

Capitalised renovations and other components 5 to 50 years




1.5 PROPERTY, PLANT AND EQUIPMENT

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

• it is probable that future economic benefits associated with the item will flow to the agency; and

• the cost of the item can be measured reliably.

An item of property, plant and equipment is initially measured at cost.

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

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

Items of property, plant and equipment are carried at cost less accumulated depreciation and any impairment losses. The useful lives of items of property, plant and equipment have been assessed as follows:

ITEM AVERAGE USEFUL LIFE

Land Indefinite

Buildings 50 years

Communication equipment 5 years

IT equipment 2 to 6 years

Furniture and fittings 5 to 10 years

Leasehold improvements and temporary buildings 5 to 50 years

Motor vehicles and tractors 5 to 10 years

Office equipment 4 to 10 years

Plant and machinery

- For agricultural use 2 to 30 years

- For mining use 20 years

- For operational use 2 to 10 years

Mining asset Tonnages mined

Office equipment 5 years

Ancillary vehicles 200 000 kilometers

Sundry equipment 4 - 5 years

Security equipment 4 years

Workshop equipment 5 years

Operating equipment 4 years

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

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

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




Transfers to or from investment property can be made only when there has been a change in the use of the property rather than changes in intentions. Transfers between investment property and owner-occupied property do not affect the cost or the carrying amount of such property for measurement and disclosure purposes.

1.6 SITE RESTORATION AND DISMANTLING COST

The group has an obligation to dismantle, remove and restore items of contaminated land from mining activities. Such obligations are referred to as ‘decommissioning, restoration and similar liabilities’.

The cost of an item of property, plant and equipment includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.

1.7 INTANGIBLE ASSETS

An intangible asset is recognised when:

• it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and

• the cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost.

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

The amortisation period and the amortisation method for intangible assets are reviewed every period-end.

Exploration and evaluation expenditure asset

Exploration and evaluation expenditure is capitalised to the extent that the expenditure can be associated with finding specific mineral resources.

Exploration and evaluation expenditure is not amortised until proven reserves can be determined or when there is an indication of impairment. An impairment is recognised in profit or loss. Sales of proven and unproven reserves during the exploration and evaluation phase are accounted for as an adjustment to the exploration and evaluation asset.

Exploration and evaluation assets incurred to develop proven reserves are measured at cost and amortised on the unit of production method.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values. Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

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




The amortisation period and the amortisation method for intangible assets are reviewed every period-end.

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

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

ITEM USEFUL LIFE

Prospecting rights Not amortised

Bulk sampling selling Over the prospecting right period

Mining permits Tonnages mined

Computer software 3 to 5 years

Computer licences As per the licence agreement term

Rights to water usage 25 years

Broadband licence Not amortised until the licence terms are effective

Bus routes 10 years

1.8 INTERESTS IN SUBSIDIARIES

Agency’s annual financial statements

In the agency’s separate annual financial statements, investments in subsidiaries are carried at cost less any accumulated impairment.

The cost of an investment in a subsidiary is the aggregate of:

• the fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the agency; plus

• any costs directly attributable to the purchase of the subsidiary.

1.9 INVESTMENTS IN ASSOCIATES

Agency’s annual financial statements

An investment in an associate is carried at cost less any accumulated impairment in the separate financial statements of the Agency.

1.10 FINANCIAL INSTRUMENTS

Classification

The group classifies financial assets and financial liabilities into the following categories:

• Financial assets at fair value through profit or loss - held for trading

• Held-to-maturity investments

• Loans and receivables




• Available-for-sale financial assets

• Financial liabilities - Finance Linked Individual Subsidy Scheme (FLISP)

Classification depends on the purpose for which the financial instruments were obtained / incurred and takes place at initial recognition. Classification is re-assessed on an annual basis, except for derivatives and financial assets designated as at fair value through profit or loss, which shall not be classified out of the fair value through profit or loss category.

Financial assets and liabilities are offset and the amount reported in the Statement of Financial Position when there is a legally enforceable right to offset the recognised amounts; and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Initial recognition and measurement

Financial instruments are recognised initially when the group becomes a party to the contractual provisions of the instruments.

The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets.

For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.

Transaction costs on financial instruments at fair value through profit or loss are recognised in profit or loss.

Loans and receivables are accounted for per IAS 39.AG53-56 per the settlement date method of accounting and no derivative is created between the settlement and trade dates.

Subsequent measurement

Financial instruments at fair value through profit or loss are subsequently measured at fair value, with gains and losses arising from changes in fair value being included in profit or loss for the period.

Net gains or losses on the financial instruments at fair value through profit or loss exclude dividends and interest.

Dividend income is recognised in profit or loss as part of other income when the group’s right to receive payment is established.

Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Held-to-maturity investments are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Available-for-sale financial assets are subsequently measured at fair value. This excludes equity investments for which a fair value is not determinable, which are measured at cost less accumulated impairment losses.




Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in equity until the asset is disposed of or determined to be impaired. Interest on available-for-sale financial assets calculated using the effective interest method is recognised in profit or loss as part of other income. Dividends received on available-for-sale equity instruments are recognised in profit or loss as part of other income when the group’s right to receive payment is established.

Changes in fair value of available-for-sale financial assets denominated in a foreign currency are analysed between translation differences, resulting from changes in amortised cost and other changes in the carrying amount. Translation differences on monetary items are recognised in profit or loss, while translation differences on non-monetary items are recognised in other comprehensive income and accumulated in equity.

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

Fair value determination

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.

Impairment of financial assets

At each reporting date the group assesses all financial assets, other than those at fair value through profit or loss, to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired.

For amounts due to the group, significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy and default of payments are all considered indicators of impairment.

In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator of impairment. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity as a reclassification adjustment to other comprehensive income and recognised in profit or loss.

Impairment losses are recognised in profit or loss.

Impairment losses are reversed when an increase in the financial asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised.

Reversals of impairment losses are recognised in profit or loss, except for equity investments classified as available-for-sale.

Impairment losses are not subsequently reversed for available-for-sale equity investments which are held at cost, because fair value was not determinable.




Where financial assets are impaired through use of an allowance account, the amount of the loss is recognised in profit or loss within operating expenses. When such assets are written off, the write-off is made against the relevant allowance account.

Subsequent recoveries of amounts previously written off are credited against operating expenses.

Financial instruments designated at fair value through profit or loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so designated by management.

Financial assets at fair value through profit or loss are measured at fair value, and any changes therein are recognised in profit or loss.

Financial instruments designated as available-for-sale

Available-for-sale investments are non-derivative instruments that are not designated as another category of financial assets.

Available-for-sale investments are those intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices.

Subsequent to initial recognition, they are measured at fair value and changes therein other than impairment losses are recognised in other comprehensive income and presented within equity in the fair value reserve. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is transferred to profit or loss.

Loans to (from) group companies

These include loans to and from subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs.

Loans to group companies are classified as loans and receivables.

Loans from group companies are classified as financial liabilities, measured at amortised cost.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 90 days overdue) are considered indicators that the trade receivable is impaired. Debtors are considered for impairment individually and not on an overall basis. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate computed at initial recognition.




The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

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

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

Finance Linked Individual Subsidy Scheme (FLISP)

FLISP payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Bank overdraft and borrowings

Bank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs.

Held to maturity

These financial assets are initially measured at fair value plus direct transaction costs.

At subsequent reporting dates these are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts. An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the investment’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Impairment losses are reversed in subsequent periods when an increase in the investment’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the investment at the date the impairment is reversed shall not exceed what the amortised cost would have been, had the impairment not been recognised.




Financial assets that the group has the positive intention and ability to hold to maturity are classified as held to maturity.

Recognition and measurement of insurance contracts

Premiums, acquisition costs and policyholder benefits

Premiums

Group scheme premiums receivable in terms of policy contracts are accounted for as premium income when receivable and where there is reasonable assurance of collection in terms of the policy contracts. Where premiums are not determined in advance, they are accounted for upon receipt. Premiums are shown before the deduction of acquisition costs. Premiums written include adjustments to premiums written in prior accounting periods.

Outward reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct insurance

Acquisition costs

Expenses for the acquisition of insurance contracts consist of commission and marketing management costs paid by the company upon the acquisition of new and additional insurance business and are expensed in full when incurred.

The related reinsurance commission, which consist of commission received or earned on insurance premium ceded to reinsurers, is measured at fair value of the considerations received or receivable and represents the amount receivable for services provided in the normal course of business.

Policyholder benefits

Policyholder benefits comprise of insurance claims paid and claims events that have occurred but not yet reported to the company.

Insurance claims

Claims on insurance contracts include death payments that are charged to the statement of profit or loss when the company is notified of a claim by policyholders. The amount is based on the estimated liability for compensation owed to the policyholder. Claims also include claims that arise from death events that have occurred up to the reporting date, even if they have not been reported to the company.

Insurance claims are recorded as an expense gross of any reinsurance recovery when they are incurred. Claims incurred consist of claims paid during the financial period together with the movement in the provision for outstanding claims. The provision for outstanding claims comprise the company’s estimate of the undiscounted ultimate cost of settling all claims incurred but not paid at the reporting date whether reported or not

Reinsurance recoveries are recognised in profit or loss in the same period as the related gross claim at the undiscounted amount receivable in terms of the contract. Anticipated reinsurance recoveries are disclosed




separately as assets. These estimated reinsurance and other recoveries are assessed in a manner similar to the assessment of claims outstanding.

Policyholder liabilities

- Discounted liabilities

A liability for contractual benefits that are expected to be incurred in the future is recorded when the premiums are recognised. The liability is determined as the sum of the expected discounted value of the benefit payments and the future administration expenses that are directly related to the contract, less the expected discounted value of the theoretical premiums that would be required to meet the benefits and administration expenses based on the valuation assumptions used. The liability is based on assumptions as to mortality, persistency, maintenance expenses and investment income that are established at the time the contract is issued. A margin for adverse deviations is included in the assumptions.

Policyholder liabilities have been established in accordance with the Financial Soundness Valuation basis as set out in the guidelines issued by the Actuarial Society of South Africa in Prudential Guidance Note (SAP 104) (Version 8). Under this guideline, provisions are valued using realistic expectations of future experience, with prescribed margins for prudence and deferral of profit emergence.

- Undiscounted liabilities

The undiscounted portion of the policyholder liabilities consists of the incurred but not reported (IBNR) reserves. The IBNR reserves are determined using an estimate of office premium, by examining run–off triangles and claim patterns for the business and then setting up an IBNR reserve using the Bornheutter–Ferguson method.

Reinsurance contracts held

The company reinsures insurance risk in the normal course of business for the purpose of limiting its net loss potential through the diversification of its risks. Reinsurance arrangements do not relieve the company from its direct obligations to its policyholders.

Contracts entered into by the company with reinsurers under which the company is compensated for losses on one or more contracts issued by the company and that meet the classification requirements for insurance contracts are classified as reinsurance contracts held.

The benefits to which the company is entitled under reinsurance contracts held are recognised as reinsurance assets. These assets consist of short–term balances due from reinsurers (classified within receivables) as well as longer term receivables (classified as reinsurance assets) that are dependent on the expected claims and benefits arising under the related reinsured insurance contracts. Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the reinsured insurance contract and in accordance with the terms of each reinsurance contract.

The company assesses its reinsurance assets for impairment on an annual basis. If there is objective evidence that the reinsurance asset is impaired, the company reduces the carrying amount of the reinsurance asset to its recoverable amount and recognises the impairment loss in the statement of profit or loss.




Receivables and payables related to insurance contracts

Receivables and payables related to insurance contracts and reinsurance contracts are initially measured at fair value and subsequently at amortised cost. They are recognised when due. These include amounts due to and from agents, brokers and insurance contract holders.

Liabilities and related assets under liability adequacy tests

The net liability recognised for insurance contracts is tested for adequacy by discounting current best estimates of all future contractual cash flows, which comprise of future premiums, claims, claims handling and administration expenses, as well as investment income from the assets backing such liabilities. Where a shortfall is identified, an additional provision is made and the company recognises the deficiency in profit or loss for the period.

1.11 TAX

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Income tax on the profit or loss for the period comprises current and deferred tax. Income tax is recognised according to the five-fund method using the tax rates enacted or substantively enacted at the reporting date and any adjustment of tax payable for previous periods.

Deferred tax is accounted for using the balance sheet liability method, at current rates of taxation, in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively enacted at the reporting date.

Deferred tax is charged to profit or loss statement except to the extent that it relates to a transaction that is recognised directly in equity. The effect on deferred tax of any changes in tax rates is recognised in profit or loss, except to the extent that it relates to items previously charged or credited directly to equity.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the associated unused tax losses and deductible temporary differences can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).




A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction and affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses and unused STC credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused STC credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or

• a business combination.

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.12 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.

Finance leases - lessor

The group recognises finance lease receivables in the statement of financial position.

Finance income is recognised based on a pattern reflecting a constant periodic rate of return on the group’s net investment in the finance lease.

Finance leases – lessee

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




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

The 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.

Operating leases - lessor

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

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

Income for leases is disclosed under revenue in profit or loss.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments is recognised as an operating lease asset. This liability is not discounted.

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

1.13 INVENTORIES

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

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

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

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

The cost of inventories is assigned using the first-in, first-out (FIFO) and weighted average costs follow:

• Finished goods - Weighted average cost

• Raw materials - Weighted average cost

• Production supplies - Weighted average cost

• Consumables - Weighted average cost (Group) and first-in, first-out (Agency)

The same cost formula is used for all inventories having a similar nature and use to the entity and Group and considered separate inventory types and industries.




When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

1.14 CONSTRUCTION CONTRACTS AND RECEIVABLES

Inventory of reposessed properties are measured at the lower of cost and net realisable value.

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

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

When inventory of reposessed properties are sold, the carrying amount of those inventory of reposessed properties are recognised as an expense in the period in which the related revenue is recognised.

1.15 NON-CURRENT ASSETS HELD FOR SALE (AND DISPOSAL GROUPS)

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets held for sale (or disposal group) are measured at the lower of its carrying amount and fair value, less costs to sell.

A non-current asset is not depreciated (or amortised) while it is classified as held for sale, or while it is part of a disposal group classified as held for sale.

Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale are recognised in profit or loss.

1.16 IMPAIRMENT OF ASSETS

The group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the group also:

• tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period.

• tests goodwill acquired in a business combination for impairment annually.




If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

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

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

1.17 SHARE CAPITAL AND EQUITY

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

In terms of the Limpopo Development Corporation Act, Act No. 5 of 1999, all income and property and all profits of LEDA or any corporation shall be exclusively applied to the promotion and attainment of its objectives and no dividends shall be paid to the shareholder.

1.18 PROPERTIES IN POSESSION

Properties in possession comprise of assets that are expected to be recovered primarily through a sale transaction rather than through continuing use. Properties in possession are recognised at the lower of fair value less costs to sell and the carrying amount of the asset with which they are associated. The company is firmly committed to the sale of these assets with various initiatives implemented to ensure transfer of these properties. No depreciation is charged on these assets. Any subsequent write-down of the acquired asset to fair value less costs to sell is recognised in the statement of comprehensive income, as ‘Operating expenditure’.

Any subsequent increase in the fair value less costs to sell, to the extent that this does not exceed the cumulative write down is also recognised as ‘Credit impairment charge’, and any realised gains and losses on disposal recognised in ‘Fees and other income’.




1.19 EMPLOYEE BENEFITS

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), is recognised in the period in which the service is rendered and is not discounted.

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

The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance. Termination benefits are recognised as an expense when it is incurred.

Defined contribution plans

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.

Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined contribution plans where the group’s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.

Defined benefit plans

For defined benefit plans the cost of providing the benefits is determined using the projected unit credit method. Actuarial valuations are conducted on an annual basis by independent actuaries separately for each plan.

Consideration is given to any event that could impact the funds up to the end of the reporting period where the interim valuation is performed at an earlier date.

Past service costs are recognised immediately to the extent that the benefits are already vested, and are otherwise amortised on a straight-line basis over the average period until the amended benefits become vested.

To the extent that, at the beginning of the financial year, any cumulative unrecognised actuarial gain or loss exceeds ten percent of the greater of the present value of the projected benefit obligation and the fair value of the plan assets (the corridor), that portion is recognised in profit or loss over the expected average remaining service lives of participating employees. Actuarial gains or losses within the corridor are not recognised.

Actuarial gains and losses are recognised in the year in which they arise, in profit or loss.

Gains or losses on the curtailment or settlement of a defined benefit plan is recognised when the group is demonstrably committed to curtailment or settlement.

When it is virtually certain that another party will reimburse some or all of the expenditure required to settle a defined benefit obligation, the right to reimbursement is recognised as a separate asset. The asset is measured at fair value. In all other respects, the asset is treated in the same way as plan assets. In profit or loss, the expense relating to a defined benefit plan is presented as the net of the amount recognised for a reimbursement.

The amount recognised in the statement of financial position represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service costs, and reduces by the fair value of plan assets.




Any asset is limited to unrecognised actuarial losses and past service costs, plus the present value of available refunds and reduction in future contributions to the plan.

1.20 PROVISIONS, COMMITMENTS AND CONTINGENCIES

Provisions are recognised when:

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

• it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

• a reliable estimate can be made of the obligation.

The amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Provisions are not recognised for future operating losses.

If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

A constructive obligation to restructure arises only when an entity:

• has a detailed formal plan for the restructuring, identifying at least:

- the business or part of a business concerned;

- the principal locations affected;

- the location, function, and approximate number of employees who will be compensated for terminating their services;

- the expenditures that will be undertaken; and

- when the plan will be implemented; and

• has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.

After their initial recognition contingent liabilities recognised in business combinations that are recognised separately are subsequently measured at the higher of:

• the amount that would be recognised as a provision; and

• the amount initially recognised less cumulative amortisation.

Commitments are recorded at cost in the notes to the financial statements when there is a contractual arrangement or an approval by management in a manner that raises a valid expectation that the company will discharge its responsibilities, thereby incurring future expenditure that will result in the outflow of cash.

Contingent assets and contingent liabilities are not recognised. Contingencies and commitments are disclosed in note 37.

1.21 GOVERNMENT GRANTS

Government grants are recognised when there is reasonable assurance that:

• the group will comply with the conditions attached to them; and

• the grants will be received.




Government grants are recognised as income over the periods necessary to match them with the related costs that they are intended to compensate.

A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs is recognised as income of the period in which it becomes receivable.

Government grants related to assets, including non-monetary grants at fair value, are presented in the statement of financial position by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset.

Grants related to income are presented as a credit in the profit or loss (separately).

1.22 REVENUE

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• the group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the group retains neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the group; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the group;

• the stage of completion of the transaction at the end of the reporting period can be measured reliably; and

• the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.

Interest is recognised, in profit or loss, using the effective interest rate method.

Dividends are recognised, in profit or loss, when the Group’s right to receive payment has been established.

Rental income from investment property is recognised in profit or loss on a straightline basis over the term of the lease.




Service fees and other fees included in the price of the product are recognised as revenue over the period during which the service is performed.

1.23 COST OF SALES

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and alllosses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

The related cost of providing services recognised as revenue in the current period is included in cost of sales. Contract costs comprise:

• costs that relate directly to the specific contract;

• costs that are attributable to contract activity in general and can be allocated to the contract; and

• such other costs as are specifically chargeable to the customer under the terms of the contract.

1.24 BORROWING COSTS

All borrowing or finance costs are recognised as an expense in the period in which they are incurred.

1.25 TRANSLATION OF FOREIGN CURRENCIES FUNCTIONAL AND PRESENTATION CURRENCY

Items included in the financial statements of each of the group entities are measured using the currency of the primary economic environment in which the entity operates (functional currency).

The financial statements are presented in Rand which is the group functional and presentation currency.

Foreign currency transactions

A foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

At the end of the reporting period:

• foreign currency monetary items are translated using the closing rate;

• non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and

• non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in profit or loss in the period in which they arise.




When a gain or loss on a non-monetary item is recognised to other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised to other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss.

Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.

1.26 RELATED PARTIES

The Group operates in an economic environment currently dominated by entities directly or indirectly owned by the South African Government. As a result of the Constitutional independence of all three spheres of government in South Africa, only parties within the provincial sphere of government will be considered to be a related party.

Key management is defined as being individuals with the authority and responsibility for planning, directing and controlling the activities of the entities in the Group. We regard all individuals from the level of executive manager up to the Board of Directors as key management per the definition of the standard.

Close family members of key personnel are considered to be those family members who may be expected to influence, or be influenced by key management individuals in their dealings with the entities in the Group.

Other related party transactions are also disclosed in terms of the requirements of the standard. The objective of the standard and the financial statements is to provide relevant and reliable information and therefore materiality is considered in the disclosure of these transactions.

1.27 IRREGULAR AND FRUITLESS AND WASTEFUL EXPENDITURE

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

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including:

(a) this Act; or

(b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or

(c) any provincial legislation providing for procurement procedures in that provincial government.

National Treasury practice note no. 4 of 2008/2009 which was issued in terms of sections 76(1) to 76(4) of the PFMA requires the following (effective from 1 April 2008):

Irregular expenditure that was incurred and identified during the current financial period and which was condoned before the end of the year financial period and/or before finalisation of the financial statements must also be recorded appropriately in the irregular expenditure register. In such an instance, no further action is also required with the exception of updating the note to the financial statements.




Irregular expenditure that was incurred and identified during the current financial period and for which condonement is being awaited at period-end must be recorded in the irregular expenditure register. No further action is required with the exception of updating the note to the financial statements.

Where irregular expenditure was incurred in the previous financial year and is only condoned in the following financial period, the register and the disclosure note to the financial statements must be updated with the amount condoned.

Irregular expenditure that was incurred and identified during the current financial year and which was not condoned by the National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accounting officer or accounting authority may write off the amount as debt impairment and disclose such in the relevant note to the financial statements.

The irregular expenditure register must also be updated accordingly. If the irregular expenditure has not been condoned and no person is liable in law, the expenditure related thereto must remain against the relevant programme/expenditure item, be disclosed as such in the note to the financial statements and updated accordingly in the irregular expenditure register.




2. NEW STANDARDS AND INTERPRETATIONS

2.1 STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE AND ADOPTED IN THE CURRENT YEAR

In the current year, the group has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the group’s accounting periods beginning on or after later periods:

IFRS 1 – First time adoption of International Financial Reporting Standards

The standard on First Time Adoption of International Reporting Standards (IFRS 1) has not been adopted by the group as per the notice to all state-owned enterprises, previously on SA GAAP due to review by the South African Accounting Standards Board. The due date for conversion is 31 March 2018.

The effective date of the amendments is for future years.

The group does not envisage the adoption of the amendments until such time as it becomes applicable to the group’s operations.

It is unlikely that the amendment will have a material impact on the agency’s financial statements.

Consolidated Financial Statements, Joint Arrangements and Disclosures of Interests in Other Entities: Transition Guidance

Transitional guidance for the application of IFRS 10, IFRS 11 and IFRS 12. The amendment limits the requirement to provide adjusted comparative information to only the preceding comparative period.

The effective date of the amendment is for years beginning on or after 1 January 2015.

The group does not envisage the adoption of the amendment until such time as it becomes applicable to the group’s operations. It is unlikely that the amendment will have a material impact on the company’s financial statements.

IAS 36 – Recoverable Amount Disclosures for Non-Financial Assets

The amendment brings the disclosures for impaired assets whose recoverable amount is fair value less costs to sell in line with the disclosure requirements of IFRS 13 Fair Value Measurements.



NOTES TO THE ANNUAL FINANCIAL STATEMENTS



IFRS 13 – Fair Value Measurement

New standard setting out guidance on the measurement and disclosure of items measured at fair value or required to be disclosed at fair value in terms of other IFRSs.

The effective date of the standard is for years beginning on or after 1 January 2015.

The group does not envisage the adoption of the standard until such time as it becomes applicable to the group’s operations. It is unlikely that the standard will have a material impact on the company’s financial statements.

Disclosures – Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7)

The amendment requires additional disclosures for financial assets and liabilities which are offset and for financial instruments subject to master netting arrangements.



NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)



3. BIOLOGICAL ASSETS

GROUP

2017 2016

ValuationR

Accumulated impairment

RCarrying value

RValuation

R


RCarrying value

R

Laying hens 2 117 760 - 2 117 760 3 104 805 - 3 104 805

AGENCY

2017 2016

ValuationR


RCarrying value

RValuation

R


RCarrying value

R

Laying hens 2 117 760 - 2 117 760 3 104 805 - 3 104 805

Reconciliation of biological assets - Group and Agency - 2017

Opening balanceR

AdditionsR

DisposalsR

Price changeR

TotalR

Laying hens 3 104 805 2 093 964 (3 104 805) 23 796 2 117 760

Reconciliation of biological assets - Group and Agency - 2016

Opening balanceR

AdditionsR

DisposalsR

Gains orlosses arising

from changes in fair value

RPrice change

RTotal

R

Laying hens 2 091 059 2 118 969 (2 091 059) 644 610 341 226 3 104 805

METHODS AND ASSUMPTIONS USED IN DETERMINING FAIR VALUE

The tea plantation of 1 077 hectares has been valued on a discounted cash flow model. Based on the outcome of the discounted cash flow model, the tea plantations have been valued at R - (2016: R -). The discounted cash flow model was done over 20 years at a discount rate of 12%.

The tree plantation (timber) of 100 hectares has been valued on a discounted cash flow model. Based on the outcome of the discounted cash flow model the tree plantations have been valued at R - (2016: R -). The discounted cash flow model was done over 20 years at a discounted rate of 10%.

Limpopo Economic Development Agency and Group assumes for laying hens a lifespan of 56 weeks and is valued at fair value to the price at year-end based on an open, free market.




4. I

NV

ES

TM

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7 19

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187

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344

203

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7 42

4 96

6

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LIMPOPO ECONOMIC DEVELOPMENT AGENCY ANNUAL REPORT 2016/171224.

IN

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GROU

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2017 R

2016 R

2017 R

2016 R

Fair

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Rev

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549

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turn

26%

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A re

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n re

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Reg

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1 is

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5. PROPERTY, PLANT AND EQUIPMENT

GROUP

2017 2016

CostR

Accumulated depreciation

RCarrying value

RCost

R


RCarrying value

R

Land 4 323 162 - 4 323 162 4 207 786 - 4 207 786

Buildings and leasehold improvements 75 762 040 (33 025 306) 42 736 734 75 289 999 (31 322 506) 43 967 493

Finance leased office equipment - - - 356 945 (356 941) 4

Plant and machinery 78 367 824 (49 889 282) 28 478 542 78 025 023 (44 429 826) 33 595 197

Furniture and fixtures 12 101 665 (9 818 404) 2 283 261 9 681 634 (7 290 464) 2 391 170

Motor vehicles 416 092 084 (158 297 683) 257 794 401 417 195 076 (141 793 227) 275 401 849

Office equipment 10 594 537 (9 113 974) 1 480 563 10 494 945 (8 922 445) 1 572 500

IT equipment 19 352 742 (15 105 617) 4 247 125 16 292 761 (12 696 870) 3 595 891

Environmental rehabilitation assets 54 776 295 (1 242 411) 53 533 884 31 772 937 - 31 772 937

Sundry equipment 595 537 (550 732) 44 805 595 537 (516 966) 78 571

Workshop equipment 10 363 584 (9 359 153) 1 004 431 13 419 374 (12 067 847) 1 351 527

Specialised equipment and infrastructure 10 438 314 (1 301 286) 9 137 028 6 402 548 (966 698) 5 435 850

Total 692 767 784 (287 703 848) 405 063 936 663 734 565 (260 363 790) 403 370 775

AGENCY

2017 2016

CostR


RCarrying value

RCost

R


RCarrying value

R

Land 1 067 376 - 1 067 376 952 000 - 952 000

Buildings and leasehold improvements 64 041 993 (27 171 067) 36 870 926 44 545 130 (16 533 063) 28 012 067

Finance leased office equipment - - - 356 945 (356 941) 4

Plant and machinery 78 367 824 (49 889 282) 28 478 542 1 366 641 (1 170 761) 195 880

Furniture and fixtures 6 672 603 (5 311 932) 1 360 671 6 463 240 (5 000 808) 1 462 432

Motor vehicles 20 867 440 (17 779 683) 3 087 757 8 271 860 (7 859 669) 412 191

Office equipment 6 406 047 (5 612 626) 793 421 5 296 352 (4 309 686) 986 666

IT equipment 14 544 296 (11 780 400) 2 763 896 13 565 950 (10 284 129) 3 281 821

Sundry equipment 387 569 (364 410) 23 159 387 569 (337 880) 49 689

Workshop equipment 2 629 171 (2 234 998) 394 173 2 629 171 (1 981 176) 647 995

Total 194 984 319 (120 144 398) 74 839 921 83 834 858 (47 834 113) 36 000 745




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5. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

GROUP AGENCY

2017R

2016R

2017R

2016R

Pledged as security (subject to finance lease)

Carrying value of assets pledged as security:

Buses 122 902 931 133 914 115 - -

Finance leased office equipment - 4 - 4

Great North Transport (SOC) Limited leases buses under a number of finance lease agreements. The leased bus fleet secures the lease obligations as per note 23 over which these assets are secured.

LEDA leases photocopying machines in terms of an operating lease. Substance over form of the contract requires in terms of the accounting policy to treat these leases as finance leases and the assets are capitalised. Refer to lease liability note 24 over which these assets are secured.The assets have come to the end of their useful lives and will be disposed of.

Great North Transport (SOC) Limited

Land with a cost price of R8 365 is registered in the name of the parent company, Limpopo Economic Development Agency. Limpopo Economic Development Agency has 100% shareholding in Great North Transport. Great North Transport is currently transferring these stands into its own name.

Land with a cost price of R829 781 is registered in the name of municipalities. Great North Transport is currently transferring these stands into its own name.

A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the company.

6. GOODWILL

2017 2016

CostR


RCarrying value

RCost

R


RCarrying value

R

Goodwill 31 649 157 - 31 649 157 - - -

Reconciliation of goodwill - Group - 2017

Opening balance

R

Additions through business

combinationsR

TotalR

Goodwill - 31 649 157 31 649 157

Goodwill on the purchase of a subsidiary

The purchase of New Era Life Insurance Co. Limited share investment of 100% (2016: 5%) contributed to goodwill on the group amounting to R 31 649 157. The loan has also been subordinated to the external creditors. A business plan was approved by the Financial Services Board (FSB) to recapitalise the subsidiary over a five-year period.




Reconciliation of intangible assets - Group - 2017

Opening balance

RAdditions

RTransfers

RAmortisation

RTotal

R

Broadband licence 100 000 - - - 100 000

Computer software 579 762 1 060 199 - (565 224) 1 074 737

Mining equipment - Lebalelo Water Project 2 278 660 - - (142 416) 2 136 244

Exploration and evaluation asset 38 308 889 668 123 (195 036) (267 611) 38 514 365

Environmental rehabilitation asset 51 884 988 145 000 - (420 613) 51 609 375

Bus routes 2 675 000 - - - 2 675 000

95 827 299 1 873 322 (195 036) (1 395 864) 96 109 721

Reconciliation of intangible assets - Group - 2016

Opening balance

RAdditions

RAmortisation

RTotal

R

Broadband licence 100 000 - - 100 000

Computer software 83 528 634 798 (138 564) 579 762

Mining equipment - Lebalelo Water Project 2 421 076 - (142 416) 2 278 660

Exploration and evaluation asset 37 931 111 377 778 - 38 308 889

Environmental rehabilitation asset 51 884 988 - - 51 884 988

Bus routes 2 675 000 - - 2 675 000

95 095 703 1 012 576 (280 980) 95 827 299


7. INTANGIBLE ASSETS

GROUP

2017 2016

ValuationR

Accumulated amortisation

RCarrying value

RValuation

R


RCarrying value

R

Broadband licence 100 000 - 100 000 100 000 - 100 000

Goodwill - - - - - -

Computer software 2 948 913 (1 874 175) 1 074 738 2 028 853 (1 449 091) 579 762

Mining equipment - Lebalelo water project 3 560 406 (1 424 162) 2 136 244 3 560 406 (1 281 746) 2 278 660

Exploration and evaluation asset 43 470 207 (4 955 843) 38 514 364 42 997 120 (4 688 231) 38 308 889

Environmental rehabilitation asset 52 941 408 (1 332 033) 51 609 375 52 796 408 (911 420) 51 884 988

Bus routes 2 675 000 - 2 675 000 100 000 2 575 000 2 675 000

Total 105 695 934 (9 586 213) 96 109 721 101 582 787 (5 755 488) 95 827 299

AGENCY

2017 2016

ValuationR


RCarrying value

RValuation

R


RCarrying value

R

Broadband licence 100 000 - 100 000 100 000 - 100 000

Computer software 581 039 (261 791) 319 248 1 379 355 (870 935) 508 420

Total 681 039 (261 791) 419 248 1 479 355 (870 935) 608 420



8. INTERESTS IN SUBSIDIARIES INCLUDING CONSOLIDATED STRUCTURED ENTITIES

The following table lists the entities which are controlled directly by the Agency:

Company

Name of companyListed/

Unlisted

% votingpower2017

% votingpower2016

%holding2017

%holding2016

Carryingamount 2017

Carryingamount 2016

Risima Housing Finance Corporation (SOC) Limited Unlisted 100.00 % 100.00 % 100.00 % 100.00 % 156 542 512 156 542 512

Mapulaneng Investment Enterprises (SOC) Limited Unlisted - % 100.00 % - % 100.00 % - 8 320 000

Venteco (SOC) Limited Unlisted - % 100.00 % - % 100.00 % - 7 139 802

Mununzwu Estate (SOC) Limited Unlisted - % 100.00 % - % 100.00 % - 1 477 318

Great North Transport (SOC) Limited Unlisted 100.00 % 100.00 % 100.00 % 100.00 % 500 000 500 000

VDC Investments (SOC) Limited Unlisted - % 100.00 % - % 100.00 % - 2 000

Capitol Hill Investments (SOC) Limited Unlisted - % 100.00 % - % 100.00 % - 1 820

Corridor Mining Resources (SOC) Limited Unlisted 100.00 % 100.00 % 100.00 % 100.00 % 100 100

Kulungisa (SOC) Limited Unlisted - % 100.00 % - % 100.00 % - 4

New Era Life Insurance Co Limited Unlisted 100.00 % 5.00 % 100.00 % 5.00 % 7 000 000 -

Musina-Makhado Special Economic Zone (SOC) Limited Unlisted 100.00 % - % 100.00 % - % 100 -

Makgaga Bakone Crossing (SOC) Limited Unlisted 51.00 % - % 51.00 % - % 51 -

Limpopo Connexion (SOC) Limited Unlisted 100.00 % - % 100.00 % - % 100 -

164 042 863 173 983 556

Impairment of investment in subsidiaries (100) (1 479 142)

164 042 763 172 504 414


7. INTANGIBLE ASSETS (CONTINUED)

Reconciliation of intangible assets - Agency - 2017

Opening balance

RAmortisation

RTotal

R

Broadband licence 100 000 - 100 000

Computer software 508 420 (189 172) 319 248

608 420 (189 172) 419 248

Reconciliation of intangible assets - Agency - 2016

Opening balance

RAmortisation

RTotal

R

Broadband licence 100 000 - 100 000

Computer software 1 379 355 (870 935) 508 420

1 479 355 (870 935) 608 420



8. INTERESTS IN SUBSIDIARIES INCLUDING CONSOLIDATED STRUCTURED ENTITIES (CONTINUED)

Reporting period

The end of the reporting period of all subsidiaries and sub-subsidiaries is 31 March 2017.

Refer to note 45 for net investment in sub-subsidiaries directly controlled by Corridor Mining Resources (SOC) Limited, a subsidiary of Limpopo Economic Development Agency (LEDA).

Subsidiary under curatorship

New Era Life Insurance Co Limited is a subsidiary of the group. The company is consolidated at Group level as a wholly-owned subsidiary. New Era Life Insurance Co Limited is still under curatorship in terms of the Companies Act and application to the Court to lift the curatorship after the purchase of a 95% shareholding in the Company has been made, is awaiting.

9. JOINT VENTURE

The following table lists all of the joint ventures in the group:

Group

Name of company Held by

% ownership intrest2017


Carrying amount 2017

R


R

Rock Island 17 (Proprietary) LimitedCorridor Mining Resources (SOC) Limited 45.00 % 45.00 % - -

Unrecognised losses

The group has discontinued recognising its share of the losses of Rock Island 17 (Proprietary) Limited, as the accumulated losses of the joint venture exceeds the initial investment of R600 000 (2016: R600 000) and the group has no legal obligation for any additional losses of the joint venture.

10. INVESTMENTS IN ASSOCIATES

The following table lists all of the associates in the group:

Group





R


R

AON Limpopo (Proprietary) Limited LEDA 48.48 % 48.48 % 1 821 524 1 678 524ASA Metals (Proprietary) Limited LEDA 40.00 % 40.00 % - -AttaClay (Proprietary) Limited LEDA 30.00 % 30.00 % 3 769 886 3 122 499Bopedi Shopping Centre (Proprietary) Limited LEDA 47.00 % 47.00 % 36 642 857 34 346 403Lebowa Advertising (Proprietary) Limited LEDA 50.00 % 50.00 % - -Makapan Mall (Proprietary) Limited trading as Mokopane Mall LEDA 50.00 % 50.00 % 42 219 486 39 310 782Mahube Mining (Proprietary) Limited LEDA 21.00 % 21.00 % - -The New Chuene Resort (Proprietary) Limited LEDA 30.00 % 30.00 % - -OK Bazaars Venda Limited LEDA 33.33 % 33.33 % 21 228 127 20 698 070Rent-a-sign Lebowa (Proprietary) Limited LEDA 50.00 % 50.00 % - -NTK Venda Roller Mills (Proprietary) Limited 36.36 % 36.36 % 1 544 219 3 470 219Vanadium & Magnetite Exploration & Development Co. (SA) (Proprietary) Limited

Corridor Mining Resources (SOC) Limited 33.33 % 33.33 % 300 000 300 000

107 526 099 102 926 497




10. INVESTMENTS IN ASSOCIATES (CONTINUED)

Company





R


R

AON Limpopo (Proprietary) Limited Unlisted 48.48 % 48.48 % 9 914 9 914

ASA Metals (Proprietary) Limited Unlisted 40.00 % 40.00 % 13 750 000 13 750 000

AttaClay (Proprietary) Limited Unlisted 30.00 % 30.00 % 30 30

Bopedi Shopping Centre (Proprietary) Limited Unlisted 47.00 % 47.00 % 13 999 997 13 999 997

Lebowa Advertising (Proprietary) Limited Unlisted 50.00 % 50.00 % - 2 500

Mahube Mining (Proprietary) Limited Unlisted 21.00 % 21.00 % 200 200

Makapan Mall (Proprietary) Limited trading as Mokopane Mall Unlisted 50.00 % 50.00 % 2 250 500 2 250 500

The New Chuene Resort (Proprietary) Limited Unlisted 30.00 % 30.00 % 1 000 000 1 000 000

OK Bazaars Venda Limited Unlisted 33.33 % 33.33 % 951 800 951 800

Rent-a-sign Lebowa (Proprietary) Limited Unlisted 50.00 % 50.00 % 500 500

NTK Venda Roller Mills (Proprietary) Limited Unlisted 36.36 % 36.36 % 290 850 290 850

Impairment of investments in associates (14 752 700) (14 752 700)

17 501 091 17 503 591

Summarised financial information of material associates

2017

Summarised statement of profit or loss and other comprehensive income

RevenueR

Profit (loss) from continuing

operationsR

Total comprehensive

incomeR

Dividend received from

associate R

ASA Metals (Proprietary) Limited - - - -Refer to significant events regarding an associate belowBopedi Shopping Centre (Proprietary) Limited 16 306 651 4 886 072 4 886 072 -AttaClay (Proprietary) Limited 24 515 987 7 400 637 7 400 637 1 572 804Makapan Mall (Proprietary) Limited 15 989 527 5 822 410 5 822 410 -Mahube Mining (Proprietary) Limited - (19 462 912) (19 462 912)OK Bazaars Venda Limited 160 395 000 10 221 000 10 221 000 3 255 436NTK Venda Roller Mills (Proprietary) Limited 227 641 000 (3 852 000) (3 852 000) -AON Limpopo (Proprietary) Limited 8 352 472 1 344 922 - 509 019Lebowa Advertising (Proprietary) Limited 419 130 419 130 419 130 209 565

453 619 767 26 242 171 24 897 249 3 465 001

2017 Summarised statement of financial position

Non-current assets

R

Currentassets

R

Non-currentliabilities

R

Current liabilities

RTotal net assets

R

AON Limpopo (Proprietary) Limited 402 484 13 117 626 - 8 411 781 5 108 329NTK Venda Roller Mills (Proprietary) Limited 4 376 000 30 209 000 4 489 000 26 789 000 3 307 000Makapan Mall (Proprietary) Limited 124 226 033 2 440 976 31 586 476 15 141 462 79 939 071OK Bazaars Venda Limited 4 266 374 79 748 130 166 649 18 141 019 65 706 836Bopedi Shopping Centre (Proprietary) Limited 99 961 006 1 215 062 37 872 621 6 126 298 57 177 149AttaClay (Proprietary) Limited 5 428 287 20 599 152 2 541 535 4 022 992 19 462 912VanMag 1 000 000 - - - 1 000 000

239 660 184 147 329 946 76 656 281 78 632 552 231 701 297





2017 Reconciliation of net assets to equity accounted investments in associates

Total net assets R

Interest in associate at %

ownershipR

Investment in associate

R

AON Limpopo (Proprietary) Limited 5 108 329 1 821 524 1 821 524

VanMag 1 000 000 300 000 300 000

Lebowa Advertising (Proprietary) Limited - - -

Makapan Mall (Proprietary) Limited 79 939 071 42 219 486 42 219 486

OK Bazaars Venda Limited 65 706 836 21 228 127 21 228 127

Bopedi Shopping Centre (Proprietary) Limited 57 177 149 36 642 857 36 642 858

AttaClay (Proprietary) Limited 19 462 912 3 769 886 3 769 886

Mahube Mining (Proprietary) Limited - - -

NTK Venda Roller Mills Proprietary) Limited 3 307 000 1 544 219 1 544 219

231 701 297 107 526 099 107 526 099

2016 Summarised statement of profit or loss and other comprehensive income

Revenue R

Profit (loss)from continuing

operationsR

Total comprehensive

incomeR



OK Bazaars Venda Limited 167 190 000 24 308 804 24 308 804

Mahube Mining (Proprietary) Limited - (9 375 097) (9 375 097)



Rent-a-sign Lebowa (Proprietary) Limited 241 629 17 526 17 526

NTK Venda Roller Mills (Proprietary) Limited 184 438 000 4 130 000 4 130 000

408 118 950 28 618 076 28 618 076

2016 Summarised statement of financial position

Non-current assets

RCurrent assets

R

Non-current liabilities

R

Current liabilities

RTotal net assets

R

NTK Venda Roller Mills (Proprietary) Limited 4 678 000 38 278 000 2 606 000 18 388 000 21 962 000

AON Limpopo (Proprietary) Limited 324 625 13 571 540 - 9 082 787 4 813 378

Makapan Mall (Proprietary) Limited 124 113 249 1 190 159 44 816 056 7 157 408 73 329 944

OK Bazaars Venda Limited 4 936 702 78 816 645 458 353 22 782 141 60 512 853

Vanadium & Magnetite Exploration & Development Co. (SA) (Proprietary) Limited 1 000 000 - - - 1 000 000

Bopedi Shopping Centre (Proprietary) Limited 93 598 865 984 843 36 168 364 6 124 267 52 291 077

AttaClay (Proprietary) Limited 3 268 404 4 852 609 2 344 730 1 346 557 4 429 726

231 919 845 137 693 796 86 393 503 64 881 160 218 338 978





2016 Reconciliation of movement in investments in associates

Total net assets R

Interest inassociate at %

ownershipR

Investment in associate

R





Vanadium & Magnetite Exploration & Development Co. (SA) (Proprietary) Limited 1 000 000 300 000 300 000

OK Bazaars Venda (Propriatary) Limited 60 512 853 20 698 070 20 698 070

NTK Venda Roller Mills (Proprietary) Limited 21 962 000 3 470 219 3 470 219

218 338 978 102 926 497 102 926 497

Associates with different reporting dates

The end of the reporting year of Limpopo Economic Development Agency and its subsidiaries is 31 March 2017. The associates with year-ends three months and less than the group’s reporting period were equity accounted. The Group scrutinises the period from the most recent year-end to 31 March 2016 for significant transactions and adjusts the audited financial statements where necessary.

Associates with year-ends greater than three months compared to the Group’s financial year-end’s management accounts were applied up to and including 31 March 2017. The adjustments to the year ending 31 March 2017 were not significant to the group.

Associates with different year-ends equity accounted (with consideration to significant transactions) are:

ASA Metals (Proprietary) Limited 31 December 2016

Bopedi Shopping Centre (Proprietary) Limited 28 February 2017

Makapan Mall (Proprietary) Limited 28 February 2017

OK Bazaars Venda Limited 30 June 2016 (All transactions included up to 31 March 2017)

AttaClay (Proprietary) Limited 30 June 2016 (All transactions included up to 31 March 2017)

AON Limpopo (Proprietary) Limited 31 December 2016

Significant events regarding associates

ASA Metals (Proprietary) Limited has been placed under Business Rescue on 29 February 2016 in terms of the Companies Act. A business rescue practitioner has been appointed as required by the Act. The registered appointed auditors of ASA Metals (Proprietary) Limited was instructed by the business rescue practitioner to pause the audit for ASA Metals (Proprietary) Limited until further notice.

The investment in Vanadium & Magnetite Exploration & Development Co. (SA) (Proprietary) Limited represented by 33.33% shares in Vanadium & Magnetite Exploration & Development Co. (SA) (Proprietary) Limited, a company whose main activities include obtaining mining rights and concessions and to explore such grants towards the mining and marketing of mineral products. Negotiations to transfer a percentage of the shareholding to the effected community is in progress. CMR will then have a remainder of 24.67%.




11. LOANS TO (FROM) GROUP COMPANIES

GROUP AGENCY

2017R

2016R

2017R

2016R

Subsidiaries

Corridor Mining Resources (SOC) Limited - - 142 636 007 113 683 476

Capitol Hill Investments (SOC) Limited - - - 50 160 073

Kulungisa (SOC) Limited - - - 10 218 863

Great North Transport (SOC) Limited - - 6 249 034 5 712 583

Risima Housing Finance Corporation (SOC) Limited - - 51 870 614 15 399 726

VDC Investments (SOC) Limited - - - (25 362 351)

Mapulaneng Investments (SOC) Limited - - - (45 311 136)

Musina-Makhado Special Economic Zone (SOC) Limited - - (100) -

Limpopo Connexion (SOC) Limited - - (8 933 332) -

Venteco (SOC) Limited - - - 47 244 706

Mununzwu Estate (SOC) Limited - - - 23 609 822

Bakgaga-Bakone Crossing (SOC) Limited - - (51) -

New Era Life Insurance Co Limited - - 30 000 000 -

- - 221 822 172 195 355 762

Impairment of loans to subsidiaries - - (142 636 007) (88 356 136)

- - 79 186 165 106 999 626

Limpopo Economic Development Agency (LEDA) has deferred its right to claim payment of debts owing to it by the subsidiaries until their assets, fairly valued, exceed their liabilities. Loans to subsidiaries where their liabilities are exceeding their assets, have been subordinated in favour of the other creditors. The Agency also issued letters of financial support to these subsidiaries for them to meet their liabilities as they become due in normal course of business on an ongoing basis.

These loans are unsecured and have no fixed repayment terms and are by intent of a long-term nature. The loans bear no interest, except for the following loans:

Capitol Hill Investments (SOC) Limited

In the current year no interest was charged on the loan as the company was deregistered on 1 April 2016. In the prior year interest was charged on a portion of the loan at prime plus 0.5% on a capital amount of R14 509 110.

VDC Investments (SOC) Limited

In the current year no interest was charged on the loan as the company was deregistered on 1 April 2016. In the prior year interest was charged on a portion of the loan at prime plus 2.5%. The remaining portion of the loan carried no interest with a capital amount of R501 000.

Corridor Mining Resources (Proprietary) Limited

Limpopo Economic Development Agency (LEDA) has subordinated the right to claim or accept payments of the loan to them in favour of other creditors until the assets of the company, fairly valued, exceed its liabilities.

New Era Life Insurance Co. Limited

The loan from the sole shareholder, Limpopo Economic Development Agency (LEDA), has been fully subordinated in favour of the company’s creditors and has been approved by the Registrar of Long-term Insurance in terms of section 34(1)(c) of the Long-term Insurance Act of South Africa for solvency determination. No alteration to the shareholder loan agreement may be made and no dividend may be declared and paid without the prior written approval of the Registrar of Long-term Insurance.




11. LOANS TO (FROM) GROUP COMPANIES (CONTINUED)

GROUP AGENCY

2017R

2016R

2017R

2016R

Joint venture

Rock Island Trading 17 (Proprietary) Limited 18 886 561 16 711 436 - -

The loan is unsecured, has no fixed terms of repayment and is by intent of a long-term nature and bears interest at prime plus 1%.

Associates

ASA Metals (Proprietary) Limited 114 695 897 114 695 897 114 695 897 114 695 897

Mahube Mining (Proprietary) Limited 54 857 821 48 198 282 54 857 821 48 198 282

Makapan Mall (Proprietary) Limited t/a Mokopane Mall 5 118 653 8 547 839 5 118 653 8 547 839

Vanadium & Magnetite Exploration & Development Co. (SA) (Proprietary) Limited 7 661 088 7 061 804 - -

Bopedi Shopping Centre (Proprietary) Limited 437 503 87 499 437 503

Rent-a-sign Lebowa (Proprietary) Limited 87 499 1 510 713 1 549 348 1 510 713

Lebowa Advertising (Proprietary) Limited 1 549 348 1 055 789 - 1 055 789

The New Chuene Resort (Proprietary) Limited - 339 218 339 218 339 218

339 218 181 847 045 176 648 436 174 785 241

Impairment of loans to associates 184 309 524 (165 516 561) (171 529 783) (165 516 561)

(171 529 783) 16 330 484 5 118 653 9 268 68012 779 741

Except for the loans below the above loans bear no interest. No securities are in place for the loans and no fixed terms of repayment have been negotiated.

Interest bearing loans to associates are:

• Makapan Mall (Proprietary) Limited t/a Mokopane Mall which carries interest at the prime lending rate;

• Mahube Mining (Proprietary) Limited which carries interest at prime less 0.5%; and

• Vanadium & Magnetite Exploration & Development Co. (SA) (Proprietary) Limited which carries interest at JIBAR plus 1%.

Non-current assets 31 666 302 33 041 920 35 118 653 165 829 484

Current assets - - 58 119 648 21 112 309

Non-current liabilities - - (8 933 483) (70 673 487)

31 666 302 33 041 920 84 304 818 116 268 306

Fair value of loans to and from group companies

Loans to group companies 31 666 302 33 041 920 93 238 301 186 941 793

Loans from group companies - - (8 933 483) (70 673 487)

Loans to group companies impaired

As of 31 March 2017 for the Group, loans to associates and a joint venture of R171 529 783 (2016: R165 516 561) were impaired and provided for. For the Agency the loans to subsidiaries and associates of R336 523 363 (2016: R253 872 697 were impaired and provided for.

The ageing of these loans is as follows:

Over six months 31 666 302 33 041 920 89 011 551 116 268 306




12. LOANS TO (FROM) RELATED PARTIES

GROUP AGENCY

2017R

2016R

2017R

2016R

Bolepu Holdings (Proprietary) Limited (38 004 000) (33 732 050) - -

BEE Partners - Autumn Star Trading 65 (Proprietary) Limited 1 500 006 1 500 000 - -

(36 503 994) (32 232 050) - -

Bolepu Holdings (Proprietary) Limited is a minority shareholder of Sefateng Chrome Mine (Proprietary) Limited, a subsidiary of Corridor Mining Resources (Proprietary) Limited and a sub-subsidiary of the Agency. The loan to Batho Panda Mining and Trading CC is to a minority shareholder of Bakgaga Bakone Crossing (SOC) Limited, a susbidiary of Limpopo Economic Development Agency.

The loans bear no interest and has no fixed repayment terms and is by intent of a long-term nature.

Current assets 1 500 006 1 500 000 - -

Non-current liabilities (38 004 000) (28 146 442) - -

Current liabilities - (5 585 608) - -

(36 503 994) (32 232 050) - -

Fair value of loans from related party

Loans to related parties 1 500 006 1 500 000 - -

Loans from related parties (38 004 000) (33 732 050) - -

13. OTHER FINANCIAL ASSETS

At fair value through profit or loss - designated

Reposessed properties 424 584 441 284 - -

Available-for-sale

Listed shares 88 472 013 74 702 724 88 472 013 74 702 724

Unlisted shares 2 610 644 2 462 656 2 610 644 2 414 276

91 082 657 77 165 380 91 082 657 77 117 000

Held to maturity

VBS Mutual Bank Investment 79 347 79 347 79 347 79 347

Liberty Endowment Policy 484 208 454 464 484 208 454 464

Collective Investments 11 335 478 - - -

Term deposits 5 002 636 4 394 199 5 002 636 4 394 199

16 901 669 4 928 010 5 566 191 4 928 010

Loans and receivables

Business loans 118 823 077 189 266 404 118 823 077 189 266 404

Housing loans 460 173 641 391 087 695 25 645 885 25 931 184

Reinsurance assets 390 000 - - -

Other loans receivable 445 188 275 188 445 188 275 188

579 831 906 580 629 287 144 914 150 215 472 776

Loans and receivables (impairments) (120 504 040) (183 334 534) (117 969 478) (176 709 995)

459 327 866 397 294 753 26 944 672 38 762 781

Total other financial assets 567 736 776 479 829 427 123 593 520 120 807 791




13. OTHER FINANCIAL ASSETS (CONTINUED)

GROUP AGENCY

2017R

2016R

2017R

2016R

Non-current assets

Designated as at fair value through profit or loss (fair value through income) 424 584 441 284 - -

Available-for-sale 91 082 657 77 117 000 91 082 657 77 117 000

Held to maturity 16 901 669 4 928 010 5 566 191 4 928 010

Loans and receivables 423 644 153 360 237 155 17 867 309 26 500 242

532 053 063 442 723 449 114 516 157 108 545 252

Current assets

Available-for-sale - 48 380 - -


35 683 713 37 105 978 9 077 363 12 262 539

567 736 776 479 829 427 123 593 520 120 807 791

Fair value information

Financial assets at fair value through profit or loss are recognised at fair value, which is therefore equal to their carrying amounts.

Available-for-sale financial assets are recognised at fair value, unless they are unlisted equity instruments and the fair value cannot be determined using other means, in which case they are measured at cost. Fair value information is not provided for these financial assets.

The valuation of the unitised funds in the collective investment scheme on the re-insurance assets is based on quoted market prices of the underlying investments, held by these entities. The valuation technique used is classified as a Level 1 – assets measured using unadjusted, quoted prices of the products/investments.

The group has not reclassified any financial assets from cost or amortised cost to fair value, or from fair value to cost or amortised cost during the current or prior year.

There were no gains or losses realised on the disposal of held to maturity financial assets in 2017 and 2016, as all the financial assets were disposed of at their redemption date.

Reconciliation of reinsurance assets

Reinsurance assets - 2017

Opening balance

R

Purchases through business

combinationR

Transfer to comprehensive

incomeR

TotalR

Reinsurers’ share of policyholder liabilities for insurance contracts - 364 000 26 000 390 000

GROUP AGENCY

Fair values of loans and receivables2017

R2016

R2017

R2016

R


Loans and receivables past due, but not impaired

As at year end loans and receivables listed below were classified as fully performing loans and receivables and loans and receivables past due and not impaired. These relate to independent customers with no history of recent default.




13. OTHER FINANCIAL ASSETS (CONTINUED)

GROUP AGENCY

2017R

2016R

2017R

2016R

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

Current (not past due) 35 683 713 37 105 978 9 077 363 12 262 539

Past due 423 644 153 360 237 155 26 944 672 26 500 242

Reconciliation of provision for impairment of loans and receivables

Provision for doubtful debts

Opening balance (183 334 534) (181 113 335) (176 709 995) (174 852 896)

Increase in provision (4 492 991) (2 407 326) (4 492 991) (2 020 522)

Bad debts written off 67 323 485 186 127 63 233 508 163 423

(120 504 040) (183 334 534) (117 969 478) (176 709 995)

14. DEFERRED TAX

Deferred tax liability

Property plant and equipment (7 133 722) (7 926 814) - -

The deferred tax assets and the deferred tax liability relate to income tax in the same jurisdiction, and the law allows net settlement. Therefore, they have been offset in the statement of financial position as follows:

Deferred tax liability (7 133 722) (7 926 814) - -

Reconciliation of deferred tax asset / (liability)

At beginning of year (7 926 814) (3 858 024) - -

Originating temporary differences on tangible fixed assets 793 092 (4 068 790) - -

(7 133 722) (7 926 814) - -

15. RETIREMENT BENEFITS

Defined benefit plan

The defined benefit plan is governed by the Pension Funds Act of 1956.

Group

Former employees of the Limpopo Economic Development Agency and subsidiary Great North Transport (SOC) Limited, participate in Bonitas Medical Aid Fund, administered by Medscheme (Pty) Ltd, Kwazulu Natal Medical Scheme, Resolution Heath, Sizwe Medical Fund and Community Medical Aid Scheme, administered by Medscheme (Pty) Ltd, Sizwe Medical Services and AllCare Administrators (Pty) Ltd, respectively.

The post-employment subsidy policy value is summarised below:

Members and their dependants are entitled to a 60% subsidy of medical aid contributions for LEDA and 70% contribution for GNT, including savings and retirement.

Great North Transport (SOC) Ltd subsidise 100% of AdmedGap contributions in retirement.

Dependants of members who die while in service are entitled to a 60% subsidy of medical aid contributions. This subsidy does not include any elected savings.

LEDA and Great North Transport (SOC) Ltd embarked on a reduction exercise to better manage their post-employment health care liability. A consultative process was entered into with retired members who are currently in receipt of the benefit and negotiations are still ongoing. Further, as mentioned above, a resolution was passed by the Board of Directors confirming that future retirees will no longer qualify for post-employment health care subsidisation.

The plan is a post-employment medical benefit plan.




15. RETIREMENT BENEFITS (CONTINUED)

GROUP AGENCY

2017R

2016R

2017R

2016R

Agency

Retired employees of Limpopo Economic Development Agency participate in Bonitas Medical Aid Fund administered by Medscheme (Pty) Ltd.

The post-employment subsidy policy value is summarised below.

Members are entitled to a 60% subsidy of medical aid risk contributions in retirement. This subsidy does not include any elected savings.

Dependants of members who die while in service are entitled to a 60% subsidy of medical aid risk contributions. This subsidy does not include any selected savings.

The plan is a post employment medical benefit plan.

Carrying value

Present value of the defined benefit obligation – wholly unfunded (30 843 000) (30 193 000) (15 985 000) (15 619 000)

Non-current liabilities (28 078 000) (27 409 000) (14 573 000) (14 207 000)Current liabilities (2 765 000) (2 784 000) (1 412 000) (1 412 000)

(30 843 000) (30 193 000) (15 985 000) (15 619 000)

Movements for the year

(30 193 000) (28 657 000) (15 619 000) (15 926 000)Net expense recognised in profit or loss (650 000) (1 536 000) (366 000) 307 000

(30 843 000) (30 193 000) (15 985 000) (15 619 000)

Net expense recognised in profit or loss

Interest cost (2 654 000) (2 651 000) (1 378 000) (1 203 000)Actuarial (gains) losses (75 000) (1 458 000) 1 000 195 000Curtailment or settlement 2 079 000 2 573 000 1 011 000 1 315 000

(650 000) (1 536 000) (366 000) 307 000

Key assumptions used

Assumptions used on last valuation on .

Subsidy-weighted average age 77 76 77 76Discount rates used 9.00 % 9.17 % 9.00 % 9.17 %Inflation rate used 8.02 % 8.25 % 8.02 % 8.25 %Expected rate of return on reimbursement rights 100.00 % 100.00 % 100.00 % 100.00 %Expected increase in salaries 7.00 % 7.00 % 7.00 % 7.00 %

Employer’s Share

The liabilities shown above are in respect of the employer’s share of medical scheme contributions.

Accrued Contractual Liability

The contractual liability (contributions liability) is the present value of the employer’s share of the total expected future post- employment contributions that will become payable in accordance with the assumptions.

Sensitivity Analysis

Health Care Cost Inflation:

A variation of +1% will result in an increase of 7.6% in past service contractual liabilities and a 8.0% increase in service costs. A variation of -1% will result in a decrease of 6.8% in past service contractual liabilities and a 7.2% decrease in service costs.

Mortality

A variation of +1% will result in a decrease of 7.4% in past service contractual liabilities and an 7.8% decrease in service costs. A variation of -1% will result in an increase of 8.4% in past service contractual liabilities and a 8.8% increase in service costs.




16. PREPAID EXPENSES

GROUP AGENCY

2017R

2016R

2017R

2016R

Details on pre-paid expenses of a long-term nature are as per Great North Transport (SOC) Limited:

Scania Finance (Proprietary) Limited – Deposit on busses (operating lease)

Non-current asset - - - -

Current asset 5 659 336 6 089 437 - -

Total prepaid expenses 5 659 336 6 089 437 - -

17. ENVIRONMENTAL REHABILITATION DEPOSIT

Details on the environmental rehabilitation deposit are as per Corridor Mining Resources (SOC) Limited. The environmental rehabilitation deposit comprises of three components:

1) All entities - An amount of cash paid to the Department of Mineral Resources for rehabilitation activities on the prospecting areas.

2) Sefateng Chrome Mine (Pty) Ltd - A guarantee with the value of R3 757 112 invested at GuardRisk for rehabilitation activities for the mining permit areas.

3) Sefateng Chrome Mine (Pty) Ltd - A guarantee with the cost of R19 811 500 invested at Lombard Insurance Company with a future value of R48 758 580 for rehabilitation activities over the whole mining right area.

Opening balance 30 110 169 22 580 835 - -

Increase during the year 3 624 054 7 529 334 - -

33 734 223 30 110 169 - -

18. INVENTORIES

Raw materials, components 9 562 281 9 328 527 9 562 281 -

Finished goods and consumables 10 889 751 12 198 028 10 889 751 1 528 596

Production supplies 28 418 631 23 168 911 95 671 132 253

48 870 663 44 695 466 20 547 703 1 660 849

19. TRADE AND OTHER RECEIVABLES

Trade receivables - rental debtors 154 123 847 144 183 581 154 123 847 143 523 281

Trade receivables - student debtors 3 143 732 3 194 749 3 143 732 3 446 391

Trade receivables - other 21 172 640 19 624 503 11 961 932 2 449 183

Deposits 1 085 201 1 015 541 1 018 701 674 230

VAT 9 585 330 337 729 4 812 929 -

Other receivable 3 034 667 13 454 846 1 375 995 9 261 884

Provision for bad debts (111 510 739) (92 866 096) (106 324 101) (68 707 368)

Prepayments 51 709 - - -

Private hire receivables 4 042 888 - - -

Sundry receivables 315 567 - - -

85 044 842 88 944 853 70 113 035 90 647 601




GROUP AGENCY

19. TRADE AND OTHER RECEIVABLES (CONTINUED)

2017R

2016R

2017R

2016R

Fair value of trade and other receivables

Trade and other receivables 85 044 842 88 944 853 70 113 035 90 647 601

Reconciliation of provision for impairment of trade and other receivables

Opening balance (92 866 096) (86 459 107) (68 707 368) (63 368 023)

Provision for impairment (45 706 942) (6 695 509) (45 706 977) (5 339 345)

Amounts written off as uncollectable 27 062 299 288 520 8 090 244 -

(111 510 739) (92 866 096) (106 324 101) (68 707 368)

20. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of:

Cash on hand 41 505 40 909 23 338 17 161

Bank balances 99 684 335 97 667 065 24 408 914 43 933 256

Short-term deposits 51 954 271 57 859 388 5 203 016 21 318 434

Other cash and cash equivalents 1 100 886 - - -

152 780 997 155 567 362 29 635 268 65 268 851

The Agency has provided the following guarantees to the value of R553 161:

Contract number Guarantee amount Beneficiery

31160703105 R261 800 Eskom31160703106 R336 361 Eskom

Limited cession and guarantee and limited general cession of investment account to the value of R2 760 000.

A guarantee was issued to the value of R2 434 000 in favour of the subsidiary Bakgaga Bakone Crossing (SOC) Limited for the purchase of the land on behalf of the company.

A subsidiary, Risima Housing Finance Corporation (SOC) Limited has been appointed to administer and implement Finance Linked Individual Subsidy Programme (FLISP) by COGHSTA up to 2019.

21. SHARE CAPITAL

Authorised

409 216 005 ordinary shares 409 216 005 409 216 005 409 216 005 409 216 005

Issued

Ordinary 409 216 005 409 216 005 409 216 005 409 216 005

22. OTHER RESERVES

The reserve consists of changes in the fair value for available-for-sale investments, directly attributable to other comprehensive income and business combination reserve.

Available-for-sale financial instruments 78 250 715 64 411 432 78 250 715 64 481 426

Business combination reserve 3 115 355 - - -

81 366 070 64 411 432 78 250 715 64 481 426




GROUP AGENCY

23. OTHER FINANCIAL LIABILITIES2017

R2016

R2017

R2016

R

At fair value through profit or loss

Insurance contracts 18 351 557 - - -

Investment contracts 5 655 411 - - -

24 006 968 - - -

Held at amortised cost

FLISP Fund liability 23 642 902 23 935 863 - -

Risima Housing Finance Corporation (SOC) Limited has been appointed to administer and implement Finance Linked Individual Subsidy Programme (FLISP) by COGHSTA up to 2019.

47 649 870 23 935 863 - -

Non-current liabilities

Fair value through profit or loss 13 792 165 - - -

Current liabilities

Fair value through profit or loss 10 214 657 - - -

At amortised cost 23 642 902 23 935 863 - -

33 857 559 23 935 863 - -

47 649 724 23 935 863 - -

A subsidiary, Risima Housing Finance Corporation (SOC) Limited, is acting as an agent in the administration and implementation of the FLISP programme within the Limpopo Province on behalf of COGHSTA. The monies are to be utilised as subsidies to qualifying beneficiaries.

New Era Life Insurance Co. Limited has a life fund, valued through actuarial valuations and insurance contracts (savings schemes), measured at actuarial valuations performed.

Insurance contracts

Policyholder liabilities for insurance contracts 17 119 000 - - -

Outstanding claims 1 232 557 - - -

18 351 557 - - -

The movement in the policyholder liabilities for insurance contracts during the year is as follows:

Balance at beginning of year 18 742 000 - - -

Transfer to profit or loss (1 623 000) - - -

17 119 000 - - -

The movement in outstanding claims during the year is as follows:

Balance at beginning of year 1 232 557 - - -

Balance at end of year 1 232 557 - - -




GROUP AGENCY

23. OTHER FINANCIAL LIABILITIES (CONTINUED)

2017R

2016R

2017R

2016R

Net policyholder liabilities for insurance contracts:

Policyholder liabilities for insurance contracts 17 119 000 - - -

Reinsurers’ share of policyholder liabilities for insurance contracts (390 000) - - -

16 729 000 - - -

The net policyholder liabilities for insurance contracts are split between discounted and undiscounted liabilities as follows:

Discounted liabilities 15 827 233 - - -

Undiscounted liabilities 901 767 - - -

16 729 000 - - -

Maturity profile

Current policyholder liabilities 9 781 843 - - -

Non-current policyholder liabilities 6 947 157 - - -

16 729 000 - - -

The compulsory margins used for the discounted policyholder liabilities were as follows:

ASSUMPTIONS MARGINS

Investment return 0.25% increase / decrease*

Mortality 7.5% increase

Expenses 10.0% increase

Expenses inflation 10.0% increase

Lapses (where relevant) 25.0% increase / decrease*

Surrenders (where relevant) 10.0% increase / decrease*

* Depending on which change increases the liability

Investment contracts

Opening balance 6 016 089 - - -

Proceeds on investment contracts 5 372 - - -

Benefit payments (460 417) - - -

Investment returns 94 367 - - -

5 655 411 - - -

Maturity profile

In the ordinary course of business, the above liabilities are not expected to mature within the next twelve months, however, benefits due to death, surrender and paid-up transfers are expected. The estimated outflow is as follows:

Benefits expected to be paid within 12 months 432 814 - - -

Benefits expected to be paid after 12 months 5 222 597 - - -

5 655 411 - - -

The fair value of the liability is set equal to the retrospectively accumulated fair value of the underlying assets which are classified as Level 1 fair value assets.




GROUP AGENCY

24. FINANCE LEASE OBLIGATION2017

R2016

R2017

R2016

R

Minimum lease payments due- within one year 30 776 018 30 606 477 10 389 59 323- in second to fifth year inclusive 78 071 275 106 804 854 1 357 217 -

108 847 293 137 411 331 1 367 606 59 323less: future finance charges (15 056 066) (25 498 630) (112 922) (1 773)Present value of minimum lease payments 93 791 227 111 912 701 1 254 684 57 550

Present value of minimum lease payments due- within one year 21 423 945 19 714 874 9 531 57 550- in second to fifth year inclusive 72 367 282 92 197 827 1 245 153 -

93 791 227 111 912 701 1 254 684 57 550

Non-current liabilities 72 367 282 92 197 827 1 245 153 -Current liabilities 21 423 945 19 714 874 9 531 57 550

93 791 227 111 912 701 1 254 684 57 550

Finance leases represent financing obtained by the subsidiary, Great North Transport (SOC) Limited from MAN Financial Services for the purchase of buses. Interest rates are linked to prime throughout the period. The average interest rate during the period was 9.5%. All leases have fixed repayments and no arrangements have been entered into for contingent rent. Leases are repayable in monthly installments of R2 543 764. The loans are to mature between 2019 and 2020.

Finance leases for LEDA represent photocopiers. The interest rate is at prime and is repayable in monthly instalments of R51 461 over 60 months, maturing in the 2017 financial year.

Interest rates are linked to prime on average rates throughout the period. All leases have fixed repayments and no arrangements have been entered into for contingent rent.

The group’s obligations under finance leases are secured by the lessor’s charge over the leased assets. Refer note 5.

25. DEFERRED INCOME

Special Economic Zone - Musina (Department of Trade and Industry) 8 905 146 13 419 225 8 905 146 13 419 225

Special Economic Zone - Tubatse (Department of Trade and Industry) 6 077 208 8 266 001 6 077 208 8 266 001

Transnet Project 1 392 000 1 500 000 1 392 000 1 500 000

Technology Innovation Agency Project 2 761 121 2 761 121 2 761 121 2 761 121

Sanitation Project (Department of Education) 4 356 799 4 303 090 4 356 799 4 303 090

MTN Project - 1 187 - 1 187

Department of Science and Technology Project 574 650 574 650 574 650 574 650

Experimental Plant Project (Department of Agriculture) 4 891 845 6 146 529 4 891 845 -

Heritage Project Fund 816 000 - - -

29 774 769 36 971 803 28 958 769 30 825 274

Opening balance 30 825 274 34 661 797 30 825 274 28 422 016

Funds received per cashbook 12 932 199 41 740 651 11 952 938 18 750 546

Expenses matched to projects (19 965 973) (39 430 645) (19 965 973) (16 347 288)

Projects closed out/Transferred 5 983 269 - 6 146 530 -

Closing balance - 31 March 29 774 769 36 971 803 28 958 769 30 825 274

Non-current liabilities 1 891 845 6 136 998 1 891 845 -

Current liabilities 27 882 924 30 834 805 27 066 924 30 825 274

29 774 769 36 971 803 28 958 769 30 825 274




26. PROVISIONS

Reconciliation of provisions - Group - 2017

Opening balance

RAdditions

R

Utilised during the year

R

Reversed during the year

RTotal

R

Environmental rehabilitation 31 723 293 24 268 350 (11 528 060) - 44 463 583

Legal proceedings 787 482 277 000 - (1 064 482) -

Long service awards 6 894 000 1 788 000 (1 328 000) 32 000 7 386 000

Incentive bonus provision 27 003 442 26 664 175 (28 063 536) 2 304 834 27 908 915

66 408 217 52 997 525 (40 919 596) 1 272 352 79 758 498

Reconciliation of provisions - Group - 2016

Opening balance

RAdditions

R


R


RTotal

R

Environmental rehabilitation 12 361 844 31 723 293 - (12 361 844) 31 723 293

Legal proceedings 503 944 787 482 (37 896) (466 048) 787 482

Long service awards 7 060 000 22 000 (53 500) (134 500) 6 894 000

Incentive bonus provision 26 951 498 29 883 240 (24 887 222) (4 944 074) 27 003 442

46 877 286 62 416 015 (24 978 618) (17 906 466) 66 408 217

Reconciliation of provisions - Agency - 2017

Opening balance

RAdditions

R


R


RTotal

R

Legal proceedings 787 482 277 000 - (1 064 482) -

Long service awards 655 000 583 000 (95 500) 31 500 1 174 000

Incentive bonus provision 23 949 709 21 736 522 (25 615 828) 3 065 550 23 135 953

25 392 191 22 596 522 (25 711 328) 2 032 568 24 309 953

Reconciliation of provisions - Agency - 2017

Opening balance

RAdditions

R


R


RTotal

R

Legal proceedings 503 944 787 482 (37 896) (466 048) 787 482

Long service awards 447 000 416 000 (208 000) - 655 000

Incentive bonus provision 24 531 353 23 949 709 (21 664 817) (2 866 536) 23 949 709

25 482 297 25 153 191 (21 910 713) (3 332 584) 25 392 191

Non-current liabilities 50 470 583 37 228 793 987 000 574 500

Current liabilities 29 287 915 29 179 424 23 322 953 24 817 691

79 758 498 66 408 217 24 309 953 25 392 191

The environmental rehabilitation provision is raised on the estimated future discounted cash flow value of rehabilitating the full mining for the sub-subsidiaries of LEDA held by Corridor Mining Resources (SOC) Limited.

The provision for legal proceedings are claims provided for as a reliable estimate regarding the cost and can be determined but where the timing of the outflow is still pending, the court case determines finalisation.

Long service awards are valued at a discounted cash flow basis by external valuators and the assumptions used are based on a discount rate of 9.20% (2016: 9.20% ) and a retirement age of 65 and are based on the long service awards as per the human resources policies of the Group and Agency respectively.

A provision for incentive bonuses are calculated annually, based on short-term employee benefits which are based on the performance contract of individual employees entered into with the Agency and Group.




GROUP AGENCY

27. TRADE AND OTHER PAYABLES

2017R

2016R

2017R

2016R

Trade payables 120 762 882 131 558 299 40 277 853 30 576 282

VAT 3 200 194 7 121 188 84 041 3 411 841

Accrued leave pay 39 591 368 41 829 517 15 041 790 12 967 150

Accrued bonus (13th cheques) 7 421 516 7 546 079 2 719 421 3 043 210

Accruals 17 952 557 16 758 537 1 920 638 5 850 337

Deposits received 11 966 873 11 547 943 11 966 873 10 204 052

Other payables 18 186 453 9 543 659 8 413 606 1 113 778

Amounts received in advance 11 550 151 50 930 - -

Employee-related accruals 6 463 476 - - 956 485

Accounts receivable in advance 16 962 155 - - -

254 057 625 225 956 152 80 424 222 68 123 135

Fair value of trade and other payables

Trade payables 254 057 625 225 956 152 80 424 222 68 123 135

28. REVENUE

Private hire revenue 36 317 504 35 777 475 - -

Sale of goods 435 112 506 429 373 397 12 313 971 12 060 493

Rendering of services 111 883 673 128 186 233 253 676 245 366

Subsidies - Department of Transport 295 188 906 277 388 935 - -

Interest received (trading) 46 681 399 37 718 568 6 845 858 5 037 987

Rental income 98 549 484 96 716 948 98 325 051 96 631 625

Student training revenue 3 927 720 4 431 050 3 927 720 4 431 050

1 027 661 192 1 009 592 606 121 666 276 118 406 521

29. COST OF SALES

Sale of goods

Cost of goods sold 280 361 825 242 423 646 16 662 105 12 276 928

Write down of inventories to net realisable value 5 777 165 1 968 750 - -

286 138 990 244 392 396 16 662 105 12 276 928

Rendering of services

Life insurance underwriting costs of services 1 710 306 - - -

287 849 296 244 392 396 16 662 105 12 276 928




GROUP AGENCY

30. OTHER INCOME2017

R2016

R2017

R2016

R

Profit on sale of assets and liabilities 3 019 754 25 422 457 180 000 1 647 746

Loan implementation and application fees 1 235 460 289 275 319 349 289 275

Fees earned 2 726 583 1 843 473 27 000 12 650

Commissions received and sundry income 300 487 57 381 40 876 44 519

Other rental income received 339 847 2 972 644 40 773 -

Recoveries 8 228 076 22 373 509 8 750 821 18 791 628

Other income 5 047 864 - 326 550 13 759

Sponsorships and sundry income 3 861 199 8 034 132 3 940 437 3 845 157

24 759 270 60 992 871 13 625 806 24 644 734

31. OPERATING PROFIT (LOSS)

Operating profit (loss) for the year is stated after accounting for the following disclosable items:

Income from subsidiaries

Divid - - 70 673 407 -

Operating lease charges

Premises

Contractual amounts 6 740 130 7 104 619 3 444 958 4 918 894

Equipment

Contractual amounts 1 739 487 1 407 163 1 739 065 1 406 733

Lease rentals on operating lease - Other

Contractual amounts 14 369 680 18 932 521 - -

22 849 297 27 444 303 5 184 023 6 325 627

Property, plant and equipment 2 839 754 - - -

Investment property - 47 549 422 - -

Impairments/(Impairment reversed) 1 182 296 (2 526 884) 1 182 296 (2 793 170)

Reversal of impairment on loans to group companies - - 22 356 573 -

Amortisation on intangible assets 157 958 674 666 189 172 11 137

Depreciation on property, plant and equipment 30 336 822 38 433 261 3 061 778 2 820 119

Depreciation on investment properties 7 669 397 4 998 409 7 660 343 4 998 409

Employee costs 529 784 907 500 432 638 210 950 291 206 575 958

32. INVESTMENT REVENUE

Dividend revenue

Subsidiaries - Local - - 70 673 407 -

Associates - Local - - 5 337 259 7 993 240

Unlisted financial assets - Local 2 125 976 1 129 234 2 125 976 1 129 234

2 125 976 1 129 234 78 136 642 9 122 474

Interest revenue

Bank 3 714 605 3 584 931 1 453 903 1 517 729

Related parties 9 557 793 3 111 162 6 730 353 9 975 337

13 272 398 6 696 093 8 184 256 11 493 066

15 398 374 7 825 327 86 320 898 20 615 540




GROUP AGENCY

33. FINANCE COSTS2017

R2016

R2017

R2016

R

Group companies - - - 4 397 171

Trade and other payables 3 171 085 123 - -

Finance leases 11 461 889 12 665 388 8 439 -

Bank 47 800 25 991 28 392 11 283

14 680 774 12 691 502 36 831 4 408 454

34. TAXATION

Major components of the tax expense (income)

Current

Local income tax - current period 1 422 296 - - -

Deferred

Originating and reversing temporary differences (793 092) 11 692 597 - -

629 204 11 692 597 - -

Reconciliation of the tax expense

The Group, including Limpopo Economic Development Agency and its subsidiaries are exempt from income tax in terms of section 10(1)(cA)(ii) of the Income Tax Act, however, the subsidiaries of Corridor Mining Resources (Proprietary) Limited are not exempt from income tax.

Reconciliation between applicable tax rate and average effective tax rate is applicable to the subsidiaries of Corridor Mining Resources (Proprietary) Limited.

New Era Life Insurance Co. Limited have calculated tax losses arising in policyholder funds. No deferred tax assets have been raised in respect of these estimated tax losses.

A tax rate reconciliation has not been presented as the taxation is calculated in terms of section 29A of the Income Tax Act.

Accounting loss (11 342 257) 10 415 204 - -

Tax at the applicable tax rate of 28% (2016: 28%) (3 175 832) 3 104 344 - -

Tax effect of adjustments on taxable income

Temporary differences (499 133) (1 730 968) - -

Tax losses not recognised 4 304 169 10 319 221 - -

629 204 11 692 597 - -

35. AUDITOR REMUNERATION

Fees 12 734 470 12 447 157 5 519 440 4 876 222




GROUP AGENCY

36. CASH GENERATED FROM (USED IN) OPERATIONS

2017R

2016R

2017R

2016R

Profit (loss) before taxation 51 826 136 106 059 426 (66 470 250) 30 157 702

Adjustments for:

Depreciation and amortisation 39 402 083 40 375 675 10 911 293 9 609 888

Profit/(Loss) on sale of assets (3 019 754) (23 829 767) (180 000) (1 592 690)

Fair value adjustment on biological assets - (644 610) - (644 610)

Income from equity accounted investments (9 939 361) (9 610 543) - -

Dividends received (2 125 976) (1 129 234) (78 136 642) (9 122 474)

Interest received - investment (13 272 398) (6 696 092) (8 184 256) (11 493 066)

Finance costs 14 680 774 12 691 502 36 831 4 408 454

Impairment loss/(reversals) 2 215 793 (32 702 496) 28 147 504 (1 383 920)

Movements in retirement benefit assets and liabilities 650 000 1 536 000 366 000 (307 000)

Movements in provisions and impairments 13 350 281 (28 171 280) (1 082 238) (90 106)

Movements in fair value on available for sale assets - 20 831 028 13 769 289 19 882 271

Movement in loan impairment associates 6 013 222 - - -

Inventories (4 175 197) 1 708 821 (18 886 854) (938 388)

Trade and other receivables 4 194 010 8 378 125 2 027 275 (21 409 046)

Trade and other payables 21 809 170 6 852 332 12 301 087 (7 797 894)

Deferred income (7 197 034) 2 310 006 (1 866 505) 2 403 258

Movement in environmental rehabilitation deposit (3 624 054) - - -

110 787 695 97 958 893 (107 247 466) 11 682 379

37. BUSINESS COMBINATIONS

37.1 SUBSIDIARIES ACQUIRED

Aggregated business combinations

Property, plant and equipment 30 427 - - -

Other financial assets 14 186 732 - - -

Loans payable (7 000 000) - - -

Trade and other receivables 293 999 - - -

Cash and cash equivalents 311 007 - - -

Other financial liabilities (25 109 011) - - -

Trade and other payables (7 362 311) - - -

Total identifiable net assets (24 649 157) - - -

Goodwill 31 649 157 - - -

7 000 000 - - -

Net cash outflow on acquisition

Cash consideration paid (7 000 000) - - -

Cash acquired 311 007 - - -

(6 688 993) - - -




GROUP AGENCY

37. BUSINESS COMBINATIONS (CONTINUED)

2017R

2016R

2017R

2016R

New Era Life Insurance Company Limited

On 25 October 2016, Limpopo Economic Development Agency acquired 95% of the voting equity interest of New Era Life Insurance Company Limited which resulted in the Agency obtaining control over its business. This was in addition to an existing interest of 5% which was obtained during 2006. The company is principally involved in the life insurance industry. The business was acquired as part of the agency’s strategic business plan to provide life insurance and short-term insurance to its current and future customer base.

Goodwill of R31 649 157, arising from the acquisition, consists largely of the synergies and economies of scale expected from combining the operations of the entities. Goodwill is not deductible for income tax purposes.

Fair value of assets acquired and liabilities assumed

Property, plant and equipment 30 427 - - -

Other financial assets 14 186 732 - - -

Loans payable (7 000 000) - - -

Trade and other receivables 293 999 - - -

Cash and cash equivalents 311 007 - - -

Other financial liabilities (25 109 011) - - -

Trade and other payables (7 362 311) - - -

Total identifiable net assets (24 649 157) - - -

Goodwill 31 649 157 - - -

7 000 000 - - -

Acquisition date fair value of consideration paid

Cash (7 000 000) - - -

37.2 ACQUISITIONS OF BUSINESS COMBINATION UNDER COMMON CONTROL

Aggregated business combinations

Property, plant and equipment 3 115 355 - - -

Consideration paid

Direct contribution to equity from business unit transferred under same common control Limpopo Department of Economic Development, Environment and Tourism (ICT Provincial Broadband Programme) - - - -

Transfer from Limpopo Department of Economic Development, Environment and Tourism

On 1 April 2016 the Department of Economic Development, Environment and Tourism transferred the business unit that forms Limpopo Connexion (SOC) Limited to Limpopo Economic Development Agency (LEDA) with its assets and liabilities. This is considered a business combination under common control.




GROUP AGENCY

38. COMMITMENTS2017

R2016

R2017

R2016

R

Operating leases (as lessee) and other contractual obligations

Minimum payments due

- within one year 17 885 817 33 495 035 7 133 314 20 722 813

- in second to fifth year inclusive 20 615 652 22 558 248 5 275 471 369 901

- later than five years 38 400 - 38 400 -

38 539 869 56 053 283 12 447 185 21 092 714

The group’s operating lease payments represent rentals payable by the company for certain of its properties, offices equipment and sleeping grounds. Leases are negotiated for an average term of five years and rentals are fixed for an average of three years.

No contingent rent is payable.

Other contractual obligations meeting the requirements as commitments, are payments payable by the group for service level agreements (SLAs) entered into with various service providers such as security services, subscriptions or software licences, cash collections, bus repairs and maintenance with an average term of five years.

Operating leases – as lessor (income)

Minimum lease payments due

- within one year (86 755 271) (97 271 831) (86 755 271) (97 271 831)

- in second to fifth year inclusive (210 461 347) (24 155 426) (210 461 347) (24 155 426)

(297 216 618) (121 427 257) (297 216 618) (121 427 257)

Other commitments - Service Level Agreements

Other commitments are payments payable by the group for service level agreements (SLAs) entered into with various service providers such as security services, cash collections, bus repairs and maintenance with an average term of five years.

Minimum payments due

- within one year 25 808 828 24 358 748 - -

- in second to fifth year inclusive 7 510 997 33 319 825 - -

33 319 825 57 678 573 - -

Loan funding commitments

Risima Housing Finance Corporation (SOC) Limited has incurred commitments to provide housing loan financing amounting to R10 749 797 at year-end (2016: R21 308 159).




39. CONTINGENCIES

The following contingencies are in place, and are disclosed in the financial statements of the Group and its subsidiaries,

namely:

Contingent liabilities:

Limpopo Economic Development Agency

Litigation is in process against LEDA due to claims of unjust enrichment and damages due to a claim from a client. No

provision for the claim has been made as LEDA is confident in successfully defending the claim.

Litigation is in process against LEDA due to repairs of vandalised property before transferring to the owner who bought

the property. The current owner has since passed away and we are waiting for the appointment of an executor in order to

substitute the deceased in the litigation proceedings. No provision has been made for the claim as the outcome and final

amount cannot be confirmed.

The Hoxane traditional authority is demanding payment for alleged outstanding rental on land utilised by LEDA. The land is

however registered in the name of the South African Government as government owned land and LEDA is confident that the

claim will be successfully defended.

Litigation is in process by Mr SM Mudau amounting to R29 000 on the refund of a loan to purchase a property that could

not be transferred. The Agency’s lawyers and management consider the likelihood of the action against the Agency being

successful as unlikely, as the matter will be settled.

Litigation is underway by Mr SN Tshimange on behalf of his daughter for damages occurred on a vacant stand next to LEDA’s

owned property. No provision has been made as LEDA is confident in successfully defending the claim.

LEDA is currently being sued by the Polokwane Municipality for debts of LEDA’s tenants that, in accordance with municipal

bylaws may be fully recovered from the owner. LEDA is confident that the claim will successfully be defended and recovered

from the tenants in question.


Litigation is in process against the company by 11 former employees, relating to labour disputes. The details are as follows:

PARTIES DESCRIPTION AMOUNT OF THE CLAIM

MI Mohlatlole Dismissal Cannot be estimated reliably

TJ Sekgobela Dismissal Cannot be estimated reliably

P Motshane Dismissal Cannot be estimated reliably

R Kabini Dismissal Cannot be estimated reliably

MT Nonyane Dismissal Cannot be estimated reliably

S Makgakga DIsmissal Cannot be estimated reliably

VF Maluleke Dismissal Estimated at R51 766

S Makgakga & N Hlungwane Dispute over acting allowance Cannot be estimated reliably

V Rikhotso Dismissal Cannot be estimated reliably

L. Notley Dispute over settlement award Cannot be estimated reliably




39. CONTINGENCIES (CONTINUED)

Litigation is in process against the company relating to the loss of income, suffering/trauma and medical expenses, after an

employee was shot at by another employee on company premises. The amount of the claim is R3.5 million.

The company is being sued by Mr Maila for R900 000 vicariously for defamatory emails sent to his employer. The company

is being sued by Mr MM Seakamela for R100 000 for negligent driving.

Litigation is in process against the company by Kgaphola Investments. The dispute is for bus routes. The amount of the claim

is R29 million.

GNT is being sued jointly and severally together with Sanlam by a former employee’s daughter on behalf of whom a trust was

established and administered. The amount of the claim is R2.2m.

Management is of the opinion that, after consultation with the company’s legal advisors, the above claims, which amount

to an estimated total of R35,8 million against the company, will not succeed and has therefore not provided for any losses.

Corridor Mining Resources (SOC) Limited

A service provider has instituted a claim of R7 834 000 against the company for services rendered. Management is of the

opinion that the claim will be unsuccessful, and therefore no provision was made for this amount.

An ex-partner in one of the projects has claimed that CMR owes him R10m. Management is of the opinion that this claim will

be unsuccessful and therefore no provision nor contingency was made or disclosed for this amount.

The joint venture partner in Rock Island 17 (Pty) Ltd has a claim to the amount of R2.8m against CMR for expenditure incurred

on the project. CMR is of the opinion that the expenditure was incurred before the section 11 was approved by the DMR.

The matter is still under dispute. No legal actions have been enforced by any of the parties as yet.

Contingent assets


Litigation is in the process by GNT against Nnyofu Attorneys. The company is suing for services paid for but not provided by

the supplier. The company is yet to estimate to the total claim against the attorney.




40. RELATED PARTIES

Relationships

Holding company (Group and Agency) Limpopo Department of Economic Development, Environment and Tourism (LEDET)

Subsidiaries (Group and Agency) Refer to note 11 and 8

Joint venture (Group) Refer to note 11 and 9

Associates (Group and Agency) Refer to note 11 and 10

Sub-subsidiaries (Group and Agency) Refer to note 46

Directors and executive managers holding key management positions (Group and Agency)

Refer to note 41

Subsidies received (Group - Great North Transport (SOC) Limited)

Limpopo Department of Roads and Transport

Permission to occupy land for agricultural purposes and project revenue (Group)

Limpopo Department of AgricultureLimpopo Department of Education

Special Economic Zone - Funding Department of Trade and Industry

Post-employment benefit plan for employees (Group and Agency)

MultikorSouthern Life Metropolitan Life MedschemeRefer to note 14 for further details

GROUP AGENCY

Related party balances2017

R2016

R2017

R2016

R

Loan accounts - Owing (to) by related parties

Bolepo Holdings (Proprietary) Limited (38 004 000) (28 146 442) - -

BEE Partners - Autumn Star Trading 65 (Proprietary) Limited 1 500 006 1 500 000 - -

Related party transactions

Subsidies received

Limpopo Department of Roads and Transport 271 332 604 259 212 451 - -

Mpumalanga Department of Roads and Transport 23 825 702 18 176 485 - -

Interest paid / (received) - related parties

Capitol Hill Investments (SOC) Limited - - - (6 203 095)

VDC Investments (SOC) Limited - - - 2 820 555

VDC Investments (SOC) Limited - - - (1 453 298)

Mahube Mining (Proprietary) Limited - - - (4 523 671)

Mokopane Mall (Proprietary) Limited - - - (959 970)

Grant received in cash from shareholder

Limpopo Department of Economic Development, Environment and Tourism 345 533 787 286 699 129 330 616 000 302 176 495

Grant received

Limpopo Department of Education 3 549 814 4 199 295 3 549 814 4 199 295

Grant funding receipts

Department of Trade and Industry 23 890 995 5 057 141 23 890 995 5 057 141




40. RELATED PARTIES (CONTINUED)

Shared services and resources at no fee rendered by LEDA to the companies in the Group include:

• Internal audit resources from LEDA to its subsidiaries or associates

• Audit Committee resources from LEDA to its subsidiaries or associates

• Information System Resouces from LEDA to its subsidiaries or associates

• Human Resources (HR) function from LEDA to its subsidiaries or associates

• Financial assistance from LEDA to its subsidiaries and associates

• Supply Chain Management resources from LEDA to its subsidiaries or associates

• Legal services from LEDA to its subsidiary or associates

• Key management notes disclosure for LEDA.

• Secretariat services from LEDA to its subsidiary or associates

Key management of New Era Life Insurance Company Ltd comprises of the joint curators and business rescue practitioner. There were no significant transactions between New Era Life Insurance Company Ltd and key management, other than their contractual remuneration as determined by the Registrar of Long-term Insurance and the Minister of Trade and Industry, respectively of R2 747 658.

41. PUBLIC PRIVATE PARTNERSHIP


The company was required to give 10% of its business on the signing of three negotiated contracts (Mokopane, Seshego and Hoedspruit) to small operators.

Certain routes were given to small operators (Mathole Bus Service, Madodi and Kopano) in the province as part of empowerment. Kopano was further given the Lebowakgomo corridor as a sub-contractor to GNT under the Seshego depot. Permits were transferred to Kopano to operate these routes.

Subsidies relating to these routes are claimed by GNT on behalf of Kopano and is paid over to them. The total amount claimed on behalf of Kopano in the current financial year was R9.2m (2016: R 9.0m). This agreement will expire with the expiry of the negotiated contracts held by the company or by mutual agreement of both parties.

42. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS

Executive director: 2017Salary

RTotal

R

Mr MB Mphahlele 2 503 637 2 503 637

Executive director: 2016Emoluments

RTravel

RBonus

RTotal

R

Mr STM Phetla (Acting Managing Director until 30 November 2015) 2 582 317 61 506 403 464 3 047 287

Mr MB Mphahlele (Managing director from 1 December 2016) 787 509 - - 787 509

3 369 826 61 506 403 464 3 834 796




42. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS (CONTINUED)

Non-executive directors: 2017Directors’ fees

R

Travel and subsistence

ROther fees

RTotal

R

Mr M Lekota (Chairperson) 921 051 41 345 - 962 396

Mr D Kourtoumbellides (Deputy Chairperson) 1 519 464 8 284 501 050 2 028 798

Mr SV Chepape 909 996 106 274 - 1 016 270

Ms K Maroga 937 703 56 398 496 814 1 490 915

Mr SC Nkadimeng 954 905 16 115 - 971 020

Mr M Maphutha 317 505 37 118 - 354 623

Ms MA Mphahlele 1 037 782 14 928 499 478 1 552 188

Ms MM Ntsaba 191 570 22 275 - 213 845

Ms SM Maleka 198 751 16 499 - 215 250

Ms TS Phendla 246 199 11 944 - 258 143

Mrs DE Tshivhase 246 199 11 070 - 257 269

Mr RA Ramaano 246 199 2 033 - 248 232

Mr IW Modisha 213 066 6 486 - 219 552

Mr T Nkoana 59 037 1 794 - 60 831

Mr TA Mokone 327 626 3 414 - 331 040

Mr TL Makunyane 428 079 5 113 - 433 192

Mr S Lediga 466 583 74 703 - 541 286

Mr NI Masekwameng 264 672 18 090 - 282 762

Ms ML Matlala 59 037 366 - 59 403

Mr MW Ramoshaba 132 533 28 849 - 161 382

Mr MS Ralebipi 191 570 15 079 - 206 649

Mr LS Morallane 34 438 - - 34 438

Prof. R Howard 204 817 - - 204 817

Mr A Kale 44 178 - - 44 178

Mr SHM Nokaneng 70 983 - - 70 983

10 223 943 498 177 1 497 342 12 219 462

Other fees paid to directors are remuneration for positions held as deputy chairpersons of subsidiary boards for prior financial years. The Board resolved that deputy chairpersons of subsidiary boards be paid this emolument in the current financial year.





Non-executive directors: 2016Directors’ fees

R

Travel and subsistence

RTotal

R

Mr M Lekota (Chairperson) 883 401 28 364 911 765

Mr D Kourtoumbellides (Deputy Chairperson) 913 991 15 724 929 715

Mr SV Chepape 914 916 98 554 1 013 470

Mr SC Nkadimeng 979 994 15 288 995 282

Ms K Maroga 523 528 71 993 595 521

Mr M Maphutha 294 740 47 386 342 126

Mr MA Mphahlele 484 001 13 934 497 935

Mr NM Matlala 60 142 23 709 83 851

Mr T Nkoana 59 037 13 319 72 356

Mr T Mhlari 7 065 1 198 8 263

Mr LS Morallane 68 877 1 968 70 845

Mr TL Makunyane 294 081 11 889 305 970

Ms MM Ntsaba 166 971 8 173 175 144

Mr NI Masekwameng 112 344 4 896 117 240

Ms ML Matlala 34 438 249 34 687

Mr S Lediga 312 353 13 157 325 510

Mr MW Ramoshaba 77 311 10 994 88 305

Mr TA Mokone 231 295 12 010 243 305

Mr T Petje 24 599 - 24 599

Mr MS Ralebipi 161 968 13 475 175 443

Ms SM Maleka 191 570 17 029 208 599

Ms TS Phendla 55 044 23 926 78 970

Ms DE Tshivase 55 044 23 732 78 776

Mr RA Ramaano 55 044 7 874 62 918

Mr IW Modisha 55 044 9 047 64 091

7 016 798 487 888 7 504 686

Members of executive management: 2017

SalaryR

TravelR

BonusR

Compensation for loss of office

RTotal

R

Mr STM Phetla 2 474 315 48 364 - - 2 522 679

Mr GJ Roux 1 943 230 15 758 145 392 - 2 104 380

Ms MC Mokoma 1 723 775 1 575 217 831 - 1 943 181

Mr MP Ngoasheng 1 372 270 69 218 206 797 - 1 648 285

Mr SH Maphutha 1 858 259 39 151 177 507 - 2 074 917

Ms SN Maponya 1 768 888 34 352 223 170 - 2 026 410

Mr MD Matshamba 1 225 683 - - - 1 225 683

Mr RB Ramasobane 1 471 283 26 062 - - 1 497 345

Mr KR Nkadimeng 2 251 826 - - - 2 251 826

Mr MJ Shirinda - - - 307 031 307 031

Dr SHM Nokaneng 230 974 - - - 230 974

Mr ZW Mthethwa 1 931 767 - - - 1 931 767

Mr SJ Keswa 1 473 440 - - - 1 473 440

19 725 710 234 480 970 697 307 031 21 237 918





Members of executive management: 2016Salary

RTravel

RBonus

RTotal

R

Mr LP Kekana (until 31 August) 1 307 346 7 807 369 548 1 684 701

Ms ML Kekana 595 660 1 178 230 275 827 113

Mr SH Maphutha 1 158 796 73 242 180 532 1 412 570

Ms SN Maponya 1 304 560 31 173 209 638 1 545 371

Ms MC Mokoma 1 125 122 2 097 192 215 1 319 434

Mr RR Mpe 1 725 415 9 333 290 039 2 024 787

Mr ZM Mthethwa 808 707 44 882 117 734 971 323

Mr KR Nkadimeng 1 979 359 33 758 - 2 013 117

Adv TI Rakgoale 2 301 183 32 819 339 984 2 673 986

Mr GJ Roux 1 396 350 22 144 143 128 1 561 622

Mr MJ Shirinda 2 153 365 40 986 431 801 2 626 152

15 855 863 299 419 2 504 894 18 660 176

43. PRIOR PERIOD ERRORS AND COMPARATIVE FIGURES

Limpopo Economic Development Agency (LEDA)

The share of profit or losses of associates to the amount of R9 576 049 was not accounted for in the consolidated financial statements of the agency for financial years prior to 2016.

Corridor Mining Resources (SOC) Limited

The prior period’s consolidated financial statements have not taken into account expenditure ammounting to R344 890, incurred by Corridor Mining Resources (SOC) Limited.

Risima Housing Finance Corporation (SOC) Limited

The settlement of the former Chief Executive Officer (CEO), Mr MJ Shirinda, comprised of leave days paid out of R266 525 and an incentive bonus of R37 467.

The entity previously did not pay directors’ fees in accordance with the Board’s Remunertations Policy for the Deputy Chairperson. In the current year, the Deputy Chairperson was remunerated according to the Board Remuneration Policy from the date of appointment.


Long service awards to the amount of R19 000 and post-employment benefits’ obligation to the amount of R1 000 were under provided in the prior year as a result of a change in the actuaries’ valuation report. The comparative figures have been corrected in the 2017 financial year.

Provision for management fees was over-provided, with R677 429 in the prior year. The transaction has been corrected in the 2017 financial year.

The total amount of corrections relating to the prior period is R657 429. Certain comparative figures have been restated and reclassified.




43. PRIOR PERIOD ERRORS AND COMPARATIVE FIGURES (CONTINUED)

GROUP AGENCY

2017R

2016R

2017R

2016R

The effects of the reclassification are as follows:

Statement of Financial Position

Provisions - (19 000) - -

Trade and other payables - 1 735 037 - -

Retirement benefit obligation - (1 000) - -

Operating retained earnings - 1 755 037 - -

Investment in associates - (9 576 049) - -

Profit or Loss

Profit - (1 755 037) - -

Profit - (1 755 037) - -

44. RISK MANAGEMENT

Financial risk management

The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the group’s financial performance.

Risk management is carried out by the Group’s chief risk officer under policies approved by the LEDA Board.

Risk management identifies,evaluates and manages certain financial risks. The Board of Directors provides overall oversight on risk management activities.

Liquidity risk

The group’s risk to liquidity is a result of the funds available to cover future commitments. The group manages liquidity risk through an ongoing review of future commitments and credit facilities.

Cash flow forecasts are prepared and adequate borrowing facilities are monitored. Surplus cash is invested in short-term investment call accounts. At the reporting date, the Group and Agency’s held liquid assets as per note 19.

The Group determines the liquidity risk and cash flow forecasts monthly to meet these commitments. The following table analyses the group’s non-derivative financial liabilities into relevant maturity groupings:

Group

At 31 March 2017Less than 1 year

R

Between 1 and 2 years

R

Finance lease liability (21 423 945) (72 367 282)

Other financial liabilities (33 857 506) (13 792 218)

Trade and other payables (254 057 625) -

Agency

At 31 March 2017Less than 1 year

R

Between 1 and 2 years

ROver 5 years

R

Loans from group companies - - (8 933 483)

Finance lease liability (9 531) (1 245 153) -

Trade and other payables (80 424 222) - -




44. RISK MANAGEMENT (CONTINUED)

Price risk from biological assets

The company is exposed to financial risks arising from changes in egg prices. The group does not anticipate that egg prices will decline significantly in the future. The group has not entered into derivative contracts to manage the risk of a decline in egg prices. The company reviews its outlook on egg prices regularly in considering the need for active financial risk management. Refer to note 3.

Interest rate risk

The group has significant interest-bearing assets.

The interest rate risk arises from interest rates charged on the loans to group companies. Loans are issued at a variable rate that exposes the Group to a fair value interest rate risk.

The Group’s exposure to interest rate risk is managed by Risk Management and Credit Risk. It is a policy of the Group to charge its related parties a rate linked to the prime interest rate as determined by the Reserve Bank. The prime rate increased in the current year from 9% to 9,25%. This policy has not changed since the prior year. Refer to notes 11, 12, 13, 19 and 24 for details of loans and interest rates.

At 31 March 2017, if interest rates on interest bearing borrowings had been 1% higher/lower with all other variables held constant, post-tax profit for the year would have been R9 379 123 (2016: R11 191 270) lower/higher, mainly as a result of higher/lower interest revenue on loans advanced.

Cash flow interest rate risk - Group

Financial instrument

Due in less than a year

R

Due in one to two years

R

Trade and other receivables 85 044 842 -

Cash in current banking institutions 152 780 997 -

Loans to group companies 35 683 713 31 666 302

Finance lease obligation (5 465 664) (72 367 282)

Cash flow interest rate risk - Agency

Financial instrument

Due in lessthan a year

R

Due in one to two years

R

Due after five years

R

Trade and other receivable 70 113 035 - -

Loans to group companies 58 119 648 - 35 118 653

Cash in current banking institution 29 635 268 - -

Finance lease obligation (9 531) (1 245 153) -

There is no change in the policy from the prior year. Risks are managed on Group level by the Risk Management division quarterly and annually.

Credit risk

Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments, loans and receivables, and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Trade receivables and loans receivable comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Credit guarantee insurance is purchased when deemed appropriate.

Assets subject to credit risk relating to loans advanced to customers include bonds over properties, cession over life assurance and deed of suretyships.

No credit limits were exceeded during the reporting period and management does not expect any losses from non-performance by these counterparties, except those impaired at year-end. Refer to note 12 and 18 for collateral held as security and other credit enhancements




44. RISK MANAGEMENT (CONTINUED)

Financial assets exposed to credit risk at year end were as follows:

Financial instrumentGroup - 2017

RGroup - 2016

RAgency - 2017

RAgency - 20176

R

Cash and cash equivalents 152 780 997 155 567 362 29 635 268 65 268 851

Trade and other receivables 85 044 842 88 944 853 70 113 035 90 647 601

Other financial assets 35 683 713 37 105 978 9 077 363 12 262 539

There is no change in the policy from the prior year. Risks are managed on Group level by the Risk Management division quarterly and annually.

Price risk

The group is exposed to equity securities’ price risk because of investments held by the group and classified on the consolidated statement of financial position, either as available-for-sale or at fair value through profit or loss. The group is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the group diversifies its portfolio.

Diversification of the portfolio is done in accordance with the limits set by the group.

45. GOING CONCERN

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

The ability of the Group to continue as a going concern is dependent on a number of factors. The most significant of these is that the directors continue to procure funding for the ongoing operations of the Group with the continued support of the shareholder, Limpopo Department of Economic Development, Environment and Tourism.



The company is still trading in a very difficult financial environment. An amount of R25 million was ringfenced for use by Limpopo Provincial Department of Economic Development, Environment and Tourism for GNT’s operations in the current year. In order to save costs and get the company back into a profitable position, the Board of Directors have approved a detailed turnaround strategy, aimed at reducing costs and improving the cash flow position of the company.

The company is currently operating in terms of negotiated subsidy contracts. These contracts are subject to renewal on an annual basis. The financial statements have been prepared on the going concern basis which assumes that the company is successful in renewing the contracts from time to time. The financial statements do not include any adjustments which may be necessary should this assumption not be valid. Limpopo Economic Development Agency has agreed to assist the company by subordinating, subject to certain terms and conditions, its claims against the company and in favour and for the benefit of other creditors of the company, as well as issue a letter of financial assistance to be provided to the company.

Based on the information, above the Board of Directors of the Group are of the opinion that the company will be able to continue trading as a going concern in future.





45. GOING CONCERN (CONTINUED)

Corridor Mining Resources (Proprietary) Limited


The company’s assets fairly valued are axceeded by their liabilities. The shareholder, LEDA has subordinated their loan in favour of the other creditors and have cofnirmed the sustained financial support and financial assistance to ensure CMR as a going concern.

New Era Life Insurance Company Limited

As at the date of approval of the company’s financial statements, the curatorship over the company, which was applied for by the Registrar of Long-term Insurance and granted in the High Court of South Africa Gauteng Division, Pretoria, in 2009, and the subsequent decision to place the company under business rescue in December 2012, which is supported by the certificate of registration issued by the Companies and Intellectual Properties Commission, remain in place.

The Registrar has authorised New Era Life Insurance Company Limited to carry on new long-term insurance business once the business rescue proceedings have been terminated and the appointment of the curators set aside in terms of the order issued by the Northern Gauteng High Court, Pretoria, in August 2014. The termination of business rescue and the setting aside of the curatorship will automatically come into effect once the Business Rescue Practitioner files their substantial implementation report, which is envisaged to occur within a month after the date of this report.

New Era Life Insurance Company Limited is considered to be a going concern as a consequence of the Limpopo Economic Development Agency being authorised to increase its shareholding from 5% to 100% in November 20 I 6. This in tum resulted in the injection by the sole shareholder of R23 million into the company in January 2017, the approval granted by the Registrar in February 2017 to treat the R30 million shareholder loan as a subordinated loan in order to enhance the capital adequacy of the company, and the authorisation by the Registrar in March 2017 that enables the company to carry on new long-term insurance business, once business rescue is terminated and the curatorship is subsequently automatically set aside.

46. IRREGULAR AND FRUITLESS AND WASTEFUL EXPENDITURE

GROUP AGENCY

2017R

2016R

2017R

2016R

46.1 Irregular expenditure

Opening balance 485 719 234 347 668 406 27 241 060 8 973 694

Add irregular expenditure - prior year 2 009 408 - 814 107 -

Add irregular expenditure - current year 107 134 848 141 214 094 13 638 728 18 267 366

Less amounts approved by the board (509 050 015) (3 163 266) (10 009 015) -

Amounts reversed (30 921 726) - - -

54 891 749 485 719 234 31 684 880 27 241 060

A detailed register of the Agency and its subsidiaries irregular expenditure is available in respect of all irregular expenses incurred.

Details of irregular expenditure - Current year

GroupCurrent year

R

AgencyCurrent year

R

Payments made while service level agreements have expired - Month to month continuation 4 806 461 13 638 728

Non-compliance to the procurement policy 102 328 387 -

Total irregular expenditure for the current year 107 134 848 13 638 728



46. IRREGULAR AND FRUITLESS AND WASTEFUL EXPENDITURE (CONTINUED)

GROUP AGENCY

2017R

2016R

2017R

2016R

46.2 Fruitless and wasteful expenditure

Opening balance 10 282 690 12 492 912 183 520 -

Identified relating to prior year added/(reversed) (146 574) 81 (43 569) 81

Add fruitless and wasteful expenditure - current year 5 840 186 6 870 073 424 010 183 439

Less amounts condoned by the Board (10 572 794) (9 080 376) (563 961) -

5 403 508 10 282 690 - 183 520


47. NET INVESTMENT IN SUB-SUBSIDIARIES

% shareholding Share Investment Loan Account Total Investment

2017 2016 2017 2016 2017 2016 2017 2016

Mokopane Kodumela Mining (Proprietary) Limited 65% 65% 65 65 4 621 731 4 613 321 4 621 796 4 613 386

Sefateng Chrome Mine (Proprietary) Limited 55% 55% 55 55 58 081 582 46 343 374 58 081 637 46 343 429

Khumong Chrome Mine (Proprietary) Limited 65% 65% 65 65 6 089 739 6 075 449 6 089 804 6 075 514

Fumani Green Stone (Proprietary) Limited 55% 55% 55 55 43 815 443 42 344 983 43 815 498 42 345 038

Tshepong Chrome Mine (Proprietary) Limited 65% 65% 65 65 4 196 188 3 681 574 4 196 253 3 681 639

Autumn Star Trading 625 (Proprietary) Limited 70% 70% 70 70 (3 960 098) (3 971 448) (3 960 028) (3 971 378)

375 375 112 844 585 99 087 253 112 844 960 99 087 628

Less impairments (65) (65) (10 711 470) (10 688 770) (10 711 535) (10 688 835)

Net investment in sub-subsidiaries 310 310 102 133 115 88 398 483 102 133 425 88 398 793

The above sub-subsidiaries of Limpopo Economic Developmetn Agency are subsidiaries of Corridor Mining Resources

(SOC) Limited.


NOTES

contents annual... · successful proposal and compliance with key regulatory ... on the creation of...

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