years of Living the legacy

Annual Report 2018 The theme for this year’s annual report is a centenary celebration of Oliver Tambo, Nelson Mandela and Albertina Sisulu. We celebrate these historic icons who changed the course of our country through Passion, Patriotism, Integrity and Humility. We aspire to live their legacy through educating, informing and entertaining all audiences accessing SABC services. As a result the SABC will inspire change through enriching credible, relevant and compelling content that is accessible by all.

*Theme is not affiliate to any political party but rather based on the centenary celebrations of our nation during the reporting period. Vision The SABC inspires change through enriching, credible, relevant and compelling content that is accessible by all.

Mission To educate, inform and entertain all audiences accessing SABC services.

Values Conversations and partnerships. Restoration of human dignity. Building a common future. This is the 81st Annual Report of the South African Broadcasting Corporation (SOC) Limited, referred to as ‘SABC’, ‘the Corporation’ or ‘the Company’ (Registration Number: 2003/023915/30).

It is tabled in Parliament in terms of the Broadcasting Act No. 4 of 1999, as amended, and the Public Finance Management Act No. 1 of 1999, as amended.

REGISTERED OFFICE ADDRESS: Henley Road, Radio Park, Auckland Park, Gauteng, 2006

POSTAL ADDRESS: Private Bag X1, Auckland Park Johannesburg, Gauteng, 2006

CONTACT NUMBERS: Tel: +27 11 714 9111 | Fax: +27 11 714 3219

EMAIL: [email protected]

WEBSITE: www.sabc.co.za

EXTERNAL AUDITORS: Auditor-General SA, Lefika House, 300 Middel Street, Brooklyn Pretoria, 0001

BANKERS: ABSA Limited, Absa Towers East, 3rd Floor, 170 Main Street, Johannesburg

COMPANY SECRETARY: Ms Lindiwe Bayi, Group Company Secretary TEL: +27 (11) 714 2153 | Fax: +27 (11) 714 3219 MOBILE: +27 83 303 5945 POSTAL ADDRESS: Private Bag X1, Auckland Park, 2006, Gauteng, South Africa E MAIL: [email protected] List of Abbreviations 6

SABC at a Glance 9 Showcasing our Platforms 10 Organisational Structure 13 Chairperson’s Foreword 14 SABC Board 15 SABC Leadership 22 Provincial Offices and Leadership 23 Executive Director’s Overview 24 Strategic Overview 25 Legislative and Other Mandates 26

SABC Performance 29 Situational Analysis 30 Key Legislative Changes 31 Strategic Outcome Oriented Goals 32 Delivery on Predetermined Objectives 33 Summary of Financial Information 35 Commercial Revenue 37 Delivery on the Mandate 38 SABC Radio 38 SABC Television 40 SABC News and Current Affairs 44 SABC Sport 45 Universal Access 46 Transformation 46 SABC Technology 47 Marketing Initiatives: Building the SABC Brand 49 Broadcasting Complaints 49 Stakeholder Engagements 50 Contents Achievements and Awards 52

SABC Governance 55 Portfolio Committees on Communications 56 Standing Committee on Public Accounts 56 Executive Authority 56 The Accounting Authority: The SABC Board 56 Report of the SABC Board for the Year Ended 31 March 2018 58 Attendance of Board Meetings 59 Directors’ Remuneration 66 Company Secretarial Function 66 Reporting to Stakeholders 66 Stakeholder Relations 66 Risk Management 67 Internal Control 67 Internal Audit 68 Compliance with Laws and Regulations 69 Fraud and Corruption 70 Minimising Conflict of Interest 70 Code of Conduct 70 Health, Safety and Environmental Issues 71 Certificate by the Company Secretary 71 Social Responsibility 72 Audit and Risk Committee Report 75

SABC Human Resources 77 Human Resources Management 78

Annual Financial Statements 82 Statement of Responsibility by the Board of Directors 83 Report of the Auditor-General to Parliament on the SABC (SOC) Ltd 84 Statement of Financial Position as at 31 March 2018 88 Statement of Financial Performance for the Year Ended 31 March 2018 89 Statement of Other Comprehensive Income for the Year Ended 31 March 2018 90 Statement of Changes in Equity for the Year Ended 31 March 2018 91 Statement of Cash Flows for the Year Ended 31 March 2018 92 Notes to the Annual Financial Statements for the Year Ended 31 March 2018 93

Remembrance 139 Behind the scenes at SABC News.

List of abbreviations

15+ Over 15 years of age CTV Cape Town Television ACA Association for Communications and DA Democratic Alliance Advertisements DAB Digital Audio Broadcasting AFCON Africa Cup of Nations DAF Delegation of Authority Framework AFS Annual Financial Statements DoA Delegation of Authority AGM Annual General Meeting DoC Department of Communications

ABBREVIATIONS AGSA Auditor-General of South Africa DRM Digital Rights Management ALS African Language Stations DSAT Digital Satellite AMPS All Media Products Survey DStv Digital Satellite Television AR Audience Rating DTH Direct-to-Home ARA Association for Responsible Alcohol Use DTT Digital Terrestrial Television South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 ATKV Afrikaanse Taal en Kultuur Vereniging EAP Employee Assistance Programme ASA Athletics South Africa ECA Electronics Communications Act ASASA Advertising Standards of South Africa ED Economic Development AU African Union EE Employment Equity BA Broadcasting Act EFC Magazine from sport BAC Bid Adjudication Committee EMS Emergency Management Services BATSA British-American Tobacco Southern Africa EPG Electronic Programme Guide B-BBEE Broad-Based Black Economic Empowerment ENPS Electronic News Production System BCCSA Broadcasting Complaints Commission of South ESS Employee Self Service Africa EVP Employee Value Proposition BEE Black Economic Empowerment EXCO Executive Committee BRC Broadcast Research Council FAMSA Family and Marriage Society of South Africa BRICS Brazil, Russia, India, China and South Africa FCC Final Control Centre BYOD Bring Your Own Device FIFA Fédération Internationale de Football Association CAATS Computer Aided Audit Tools FM Frequency Modulation CAE Chief Audit Executive FPB Film and Publication Board CAF Confederation of African Football FTA free-to-air CAGR Compound Average Growth Rate GCEO Group Chief Executive Officer Capex Capital Expenditure GE Group Executive CCC Complaints Compliance Committee GIA Group Internal Audit CCMA Commission for Conciliation, Mediation and GIBS Gordon Institute of Business Science Arbitration HCT HIV Counseling and Testing CEO Chief Executive Officer HD High Definition CFO Chief Financial Officer HDTV High DefinitionTelevision CI Corporate Identity 6 HR Human Resources CoJ City of Johannesburg IAAF International Association of Athletics Federations COO Chief Operations Officer ICASA Independent Communications Authority of South CPRP Chartered Public Relations Practitioner (CPRP) Africa CSA Cricket South Africa ICC International Cricket Council CSI Corporate Social Investment ICMA Inkomati Catchment Management Agency ICT Information Communications and Technology PEB Public Election Broadcast IDZ Industrial Development Zone PFMA Public Finance Management Act No. 1 of 1999 IEC Independent Electoral Commission PGM Provincial General Manager IFRS International Financial Reporting Standards POWA People Opposing Women Abuse IIA Institute of Internal Auditors PPPF Preferential Procurement Policy Framework IMPRA Independent Music Performance Rights Association PR Public Relations IKB Information Knowledge Building PSA Public Service Announcement IOC International Olympic Committee PS Premier Soccer League IOD Institute of Directors PWD People with Disabilities IOD Injury on Duty QoS Quality of Service IP Internet Protocol QSE Qualifying Small Enterprises IRBA Independent Regulatory Board of Auditors RAMS Radio Audience Measurement Survey ISO International Organization for Standardization RBF Radio Broadcast Facilities ISP Internet Service Provider ROI Return-on-Investment IT Information Technology RSG Radio Sonder Grense ITIL Information Technology Infrastructure Library SAARF South African Audience Research Foundation ITSM Information Technology Service Management SABC South African Broadcasting Corporation SOC KPI Key Performance Indicator Limited LAN Local Area Network SADC Southern African Development Community LPT Low Power Transmitters SAFA South African Football Association

LTO Linear Tape Open SAFTA South African Film and Television Awards ABBREVIATIONS LSM Living Standards Measure SAICA South African Institute of Chartered Accountants MCC Media Credit Coordinators SALGA South African Local Government Association MCR Main Control Room SAN Storage Area Network MDM SANBS South African National Blood Services

Mobile Device Management South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 MEC Member of Executive Council SANYO South African National Youth Orchestra MEGA Mpumalanga Economic Growth Agency SAP System Application and Products in Data Processing MEX Music Exchange Conference SATMA South African Traditional Music Awards MGP Mpumalanga Gambling Board SCM Supply Chain Management MHz Megahertz SCOPA Standing Committee on Public Accounts MICT SETA Media, Information and Communication Technologies Sector Education and Training SEM Socio-Economic Measure Authority SITA State Information Technology Agency MMA METRO FM Music Awards SIU Special Investigating Unit MoI Memorandum of Incorporation SOC State Owned Company MoU Memorandum of Understanding SOE State Owned Enterprise MTEF Medium-Term Expenditure Framework SONA State of the Nation Address MTI Media, Technology and Infrastructure SOP’s Standard Operating Procedures MTPA Mpumalanga Tourism and Parks Authority SOPA State of the Province Address MWASA Media Workers’ Association of South Africa SRSA Sports and Recreation South Africa NBA National Basketball Association STB Set Top Box NCA National Credit Act TAMS Television Audience Measurement Survey NCC National Consumer Commission TGRP Total Guaranteed Remuneration Package NDP National Development Plan TOR Terms of Reference NEMISA National Electronic Media Institute of South Africa TV Television NFVF National Film and Video Foundation TVBMS Television Broadcast Management System NQF National Qualifications Framework UWC University of Western Cape OB Outside Broadcast VAT Value Added Tax ODA Optical Disk Archiving VHF Very High Frequency OTT Over-The-Top VOD Video on Demand 7 OVP Online Video Platform WAN Wide Area Network PAA Public Audit Act No. 25 of 2004 WASPA Wireless Application Service Providers Association PBS Public Broadcasting Services WIL Work Integrated Learning PCC Portfolio Committee on Communications WSP Workplace Skills Plan PCS Public Commercial Services Auckland Park in 1975. Auckland Park Afrikaans and Springbok radio. alues) TV. Africa is re-launched as SAfm. Air Time Outside Broadcast. Air Time 1 000 for 30 seconds by Lintas Agency advertising the ‘Big T Burgers’. 1 000 for 30 seconds by Lintas 1 August the SABC is established through the Act of Parliament and the first meeting of the SABC Board of Governors. and the first meeting of the Act of Parliament through the the SABC is established August 1 In line with ICASA regulations all PBS radio stations increase their local music quotas from 40% to 60% and PCS In line with ICASA African music. from 25% to 35%, which was hailed as great affirmation of South An Afrikaans radio service is established to run parallel to the English service as A and B programmes. The Broadcast House in The Broadcast House and B programmes. A the English service as to run parallel to Afrikaans radio service is established An it moves to of the SABC until is opened and remains the headquarters Johannesburg The launch of SABC News and SABC Enchore which are currently both being carried on subscription digital satellite network channel DStv 404 and 156 respectively. The Public Service Broadcaster successfully hosts the 2010 FIFA World Cup, the only world cup to be staged in the African Soil. Cup, the only world cup to be staged in the World The Public Service Broadcaster successfully hosts the 2010 FIFA The broadcaster tables its first Annual Report for the period 1 August 1936 to 31 December 1937. August 1936 to 31 December period 1 Annual Report for the tables its first The broadcaster 1936 The SABC is the first South African Broadcaster to launch a 24 hour news channel on television. The channel broadcasts on The SABC is the first South launched. platform across the continent and on regular SABC channels after midnight. The SABC Foundation is officially Vivid 2017 The SABC openly supports the World War two under the tutelage of René S Caprara, who was the Director General of the SABC. two under the tutelage of René S Caprara, War World The SABC openly supports the 1937 The SABC launches the revised Editorial Policy, concluding a unique process of consultations with the public and stakeholders The SABC launches the revised Editorial Policy, Africa. throughout South The first broadcast of isiZulu, isiXhosa and Sesotho are relayed for war support. The first broadcast of isiZulu, 2015 The SABC becomes SABC Ltd as prescribed in the Companies Act. The State holds 100% of the shares. Act. The State holds The SABC becomes SABC Ltd as prescribed in the Companies 1938 Direct broadcasts in African languages are introduced on medium wave. African languages are introduced Direct broadcasts in The Broadcasting Act comes into effect and changed the broadcasting landscape tremendously. Act comes into effect and changed the broadcasting landscape tremendously. The Broadcasting It brought with it three categories of broadcasting i.e. Public, Commercial and Community services. 2010 The ‘U Eie Keuse’ was first broadcast and until this day it’s still running on RSG. was first broadcast and until this day it’s The ‘U Eie Keuse’ 1939 2007 The successful story of Springbok Radio begins as the first commercial radio service, that ruled the airwaves for more than 35 years. Radio begins as the first commercial radio service, The successful story of Springbok 1940 The Broadcasting Act comes into effect and changed the broadcasting landscape tremendously. Act comes into effect and changed the broadcasting landscape tremendously. The Broadcasting It brought with it three categories of broadcasting i.e. Public, Commercial and Community services. The first market research survey is done and showed that Springbok had 632 000 adult listenership, bringing in a Million Rand worth of advertising revenue. listenership, bringing in a Million Rand worth of advertising is done and showed that Springbok had 632 000 adult The first market research survey 2004 A rediffusion service relaying the African language broadcasts is introduced to metropolitan areas and townships throughout South Africa. areas and townships throughout South language broadcasts is introduced to metropolitan African rediffusion service relaying the A The former TBVC Broadcasters are integrated into the SABC. 1942 The SABC announces to commercialise the Henley TV Facilities and 2002 African language service called Radio Bantu is launched and attracted massive listener reaction, leading to the creation of Radio Zulu, Radio Xhosa and Radio Sesotho. Bantu is launched and attracted massive listener reaction, leading to the creation of Radio Zulu, Radio Xhosa and African language service called Radio 1945 The SABC re-launches TV1, CCV-TV and NNTV as SABC1, 2 and 3 respectively. and NNTV as SABC1, 2 and 3 respectively. The SABC re-launches TV1, CCV-TV Radio Oranje, Highveld Stereo, Jacaranda Stereo, East Coast Radio and Kfm. Algoa, The corporation put up for sale Radio Afrikaans Stereo to Radio Sonder Grense. African Language Stations underwent name changes including All the 25 December the first FM transmission is made from the SABC tower in Johannesburg broadcasting in English, 25 December the first FM transmission is made from the 2000 The launch of an analogue sport TV channel broadcasting for six hours. The then Radio South 1950 The launch of Radio Lebowa and Radio Setswana. Launch of regional radio station, Radio Highveld. TSS is replaced by NN (National Network) TV. The SABC appoints its first black Group Chief Executive, Zwelakhe Sisulu. TSS is replaced by NN (National Network) TV. 1999 1952 Launch of Radio Tsonga and Radio Venda and the launch of Radio Good Hope a Cape Town regional radio station. of Radio Good Hope a Cape Town and the launch and Radio Venda Launch of Radio Tsonga The consolidation of TV2, TV3 and TV4 into one multi-cultural channel CCV (Contemporary Community V The official launch of the ‘Voice of South Africa’ which went on air as Radio RSA, to counties north of South Africa. In 1992 it was changed to Channel Africa. Africa. In 1992 it was changed to Channel which went on air as Radio RSA, to counties north of South Africa’ of South The official launch of the ‘Voice TSS (Topsport Surplus) was introduced as a supplementary service. TSS (Topsport 1998 Launch of Radio Port Natal later to be known as East Coast Radio. Launch of Radio Port Natal later to be known as East Coast 1953 Another regional Radio Station is called Radio Kontrei (later to be known as Kfm) established. Another regional Radio Station is called Radio Kontrei (later Launch of Radio South Africa (now SAfm), Radio 2000 and regional stations such as Radio Jacaranda, Radio Oranje and Radio Algoa. Radio Africa (now SAfm), Radio 2000 and regional stations such as Radio Jacaranda, Radio Oranje and Launch of Radio South transmission on TV and Radio. The introduction of Radio Metro the first black English station. This saw the introduction of simulcast and simultaneous The SABC takes over the Mozambique based LM Radio and launches it as Radio 5. The SABC takes over the Mozambique based LM Radio and Auckland Park. Johannesburg to current premises in and Troye, The SABC moves from Broadcast House, Corner Commissioner SABC TV aired their first advertisement by a winning bidder of R1 SABC TV aired their first advertisement by a winning bidder The SABC introduces Television services for the first time in South Africa. services for the first time in South The SABC introduces Television The introduction of TV4 which aired after the TV2 and 3 services at 21h00. The introduction of TV4 which aired after the TV2 and 3 services TV2 and TV3 were split into separate channels and the launch of Radio Lotus and Radio Ndebele. TV2 and TV3 were split into separate channels and the launch 1997 The launch of Radio Swazi, TV2 and TV3 sharing the same platform. The launch of Radio Swazi, TV2 and TV3 sharing the same 1960 1961 1996 1962 1995 1964 1994 1965 1992 1966 1991 1967 1990 1975 1986 1978 1976 1983 1985 1982

AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 8 1 August the SABC is established through the Act of Parliament and the first meeting of the SABC Board of Governors.

The successful story of Springbok Radio begins as the first commercial radio service, that ruled the airwaves for more than 35 years.

The first market research survey is done and showed that Springbok had 632 000 adult listenership, bringing in a Million Rand worth of advertising revenue.

African language service called Radio Bantu is launched and attracted massive listener reaction, leading to the creation of Radio Zulu, Radio Xhosa and Radio Sesotho.

25 December the first FM transmission is made from the SABC tower in Johannesburg broadcasting in English,Afrikaans and Springbok radio. AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18

9

The Public Service Broadcaster successfully hosts the 2010 FIFA World Cup, the only world cup to be staged in the African Soil. The launch of SABC News and SABC Enchore which are currently both being carried on subscription digital satellite SABC at a network channel DStv 404 and 156 respectively. In line with ICASA regulations all PBS radio stations increase their local music quotas from 40% to 60% and PCS from 25% to 35%, which was hailed as great affirmation of South African music. glance METRO FM DJ’s.

Showcasing our platforms SABC Radio stations the station has spill over listenership into Botswana. It broadcasts from Mahikeng in Setswana and its listeners, in 18 radio stations and Channel Africa. the hinterlands of the North West Province, depend on the station as their source of education and entertainment. SABC radio stations have remained relevant, widely accessible Average weekly audience: 2 464 000 million adults (15+) AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 and are a core platform for the Public Broadcaster to deliver on its public service mandate. SABC Radio commands a healthy Munghana Lonene FM broadcasts in XiTsonga and all-adult share (15+ years) of 70.5% which translates to 28 supports the aspirations of its listeners whilst ensuring 328 million South Africans. [Source: Broadcast Research promotion of traditional norms and values. The station Council (BRC) Radio Audience Measurement Survey (RAM) emphasizes listener participation and actively seeks expert July – December 2017]. opinion, commentary and advice on various topical issues, Public Broadcasting Services (PBS) to deliver true empowerment to its listeners. The station has played a key role in the development of traditional XiTsonga Ikwekwezi FM is a traditional but modern station that music genres. provides for the diverse needs and tastes of the IsiNdebele Average weekly audience: 914 000 adults (15+) speaking population. The station provides information, entertainment and news. The station caters for the young and Phalaphala FM’s programming inspires its listeners and old. Ikwekwezi FM works with its communities to preserve gives them a platform to share knowledge and expertise and grow Ndebele language and traditions. across a range of subjects and issues. The station broadcasts Average weekly audience: 1 188 000 million adults (15+) from Polokwane and talks to young aspirant and upwardly mobile Tshivenda speaking people living in the Limpopo Lesedi FM continues to deliver informative, educational Province and surrounded areas. and entertaining content to the majority of Sesotho speaking Average weekly audience: 901 000 adults (15+) South Africans, in their own language. It is a participatory radio station that delves deep into issues that have a direct Radio 2000 is a facility radio station that broadcasts bearing on developmental needs of its listeners. The station nationwide in English. It reflects and unites South Africa’s broadcasts from Bloemfontein in the Free State Province, diverse cultures through sport and events of national with one of its strongholds being the Gauteng Province. importance, thereby contributing towards the strengthening of Average weekly audience: 3 077 000 million adults (15+) democracy and nation-building. Its programming mix consists of adult crossover music, lifestyle and talk radio. Radio 2000 Ligwalagwala FM is an upbeat radio station that speaks provides quality content and engages audiences in healthy to the youth and the young at heart, motivated, and upwardly discussions and debates on a wide range of subjects, thus mobile siSwati speaking people. The station reflects an urban empowering and uplifting citizens of South Africa. and aspirational lifestyle, whilst serving the diverse needs of Average weekly audience: 442 000 adults (15+) its rural audiences. Average weekly audience: 1 146 000 million adults (15+) RSG is a contemporary radio station that represents the modern all-inclusive Afrikaans audience. RSG provides Lotus FM’s target market is the South African Indian for progressive, forward thinking, loyal and strong community catering for young and old, across three family‑orientated audiences that are proudly Afrikaans religious denominations (Hindu, Islam and Christianity) in six speaking South Africans. 10 languages. Lotus FM offers an engaging mix of informative, Average weekly audience: 1 339 000 million adults (15+) educational and entertaining programmes, which reflect the value systems of its dynamic audience and promotes a SAfm aims to engage the nation in robust but progressive proudly South African Indian radio brand. conversations about topical issues of the day, whilst delivering Average weekly audience: 187 000 adults (15+) credible up-to-the-minute news coverage. In accordance with its PBS mandate, SAfm also explores broader themes and Motsweding FM’s core philosophy is informed by the subjects relevant to its target market through a talk show personal empowerment and development of its listeners. An format that appeals to all South Africans. The station targets aspirational station that strives to be worldly and cosmopolitan, discerning, mature and sophisticated listeners nationally. CHANNEL AFRICA THE AFRICAN PERSPECTIVE

The focus is primarily on decision makers seeking insightful African media with more than a million Facebook and Twitter and enabling information to keep themselves educated and followers. informed. Average weekly audience: 645 000 adults (15+) Average weekly audience: 189 000 adults (15+) Good Hope FM encapsulates the fun, energy and Thobela FM dedicates its programming to promoting funkiness of urban Cape Town. It entertains and actively Showcasing our the personal growth of its listeners, preservation of culture engages Capetonians through music, relevant lifestyle news within a modern context, and enhancing individual economic and events. The station is well positioned to meet the lifestyle development. Programme offering includes news, current needs of its audience through showcasing high quality events affairs, drama, education, the latest music trends, religion and and highlighting public concerns. culture. The station broadcasts from Polokwane in Northern Average weekly audience: 490 000 adults (15+) Sotho and appeals to both young and old. METRO FM is the most influential radio brand for youthful Average weekly audience: 2 771 000 million adults (15+) urban adults that embrace a pragmatic and successful Tru FM views youth and youthfulness as an opportunity lifestyle. It is the largest commercial radio station in South and young people as a resource. The station broadcasts Africa with listeners in excess of 4 million. Though primarily in isiXhosa and English and creates a platform for young a music station, METRO FM also delivers credible and people of the Eastern Cape to express themselves. Tru FM impartial news reporting that keeps its listeners engaged and informed. Due to its reach, the station plays a critical role in empowers its listeners to improve their quality of life as well AT A GLANCE as to focus on self-development. the development of music talent in South Africa through its various initiatives. Average weekly audience: 184 000 adults (15+) Average weekly audience: 4 189 000 million adults (15+) Ukhozi FM is South Africa’s biggest radio station. It focuses Administered for Department of Communications on educational, informative and entertaining programming South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 (DoC) that prioritises personal development, economic growth and spiritual upliftment of its audiences. Broadcasting in isiZulu, CHANNEL AFRICA is a radio station managed by the Ukhozi FM is a leading African Language Station (ALS) SABC on behalf of the DoC. The station broadcasts on that stands for the preservation and development of South shortwave spectrum to the Southern, Eastern and Western African indigenous languages and culture. Traditional, choral African audiences. The broadcasts are done in English, and spiritual music genres set this station apart from its French, Chinyanja, Portuguese, Silozi and Swahili. competitors. The station has maintained audiences in excess of 6 million over the last decade. GRAPH: Summary of Weekly Listenership per Station Average weekly audience: 7 304 000 million adults (15+) Ukhozi FM 7 304 000 Umhlobo Wenene FM broadcasts in isiXhosa and seeks Umhlobo Wenene FM 5 571 000 to serve its listeners with honour and integrity by continuously providing quality information, education and entertainment METRO FM 4 189 000 that inspires positive thinking and personal growth for its 3 077 000 listeners. The station is widely known for its quality sports Lesedi FM coverage, riveting dramas and enthralling traditional music Thobela FM 2 771 000 genres, which inspire communities to excel. Broadcasting from Port Elizabeth in the Eastern Cape Province, the station Motsweding FM 2 464 000 also boast a national reach that makes it the second biggest RSG 1 339 000 radio station in the country. Average weekly audience: 5 571 000 million adults (15+) Ikwekwezi FM 1 188 000 XK-FM targets the San people of Platfontein in the Northern Ligwalagwala FM 1 146 000 Cape. The community, consists of the !Xu and the Khwe Munghana Lonene FM 914 000 people. The station currently plays a critical role of preserving some of the oldest indigenous languages and cultures in Phalaphala FM 901 000 Africa, by uplifting, developing and informing the community. 5FM 645 000 No audience measurement available due to the small size of the community the station serves. Good Hope FM 490 000 11 Public Commercial Services (PCS) Radio 2000 442 000

5FM is the entertainment powerhouse for South African SAfm 189 000 youth, offering the most popular contemporary hit music and entertainment on radio. Daring to walk on the wild side, whilst Lotus FM 187 000 inspiring personal development and encouraging freedom Tru FM 184 000 of expression of its listeners, is core to the station’s values. The station has the biggest social media following in South X-K FM Source: Broadcast Research Council (BRC) Radio Audience Measurement Survey (RAM) July – December 2017. 25 856 000 24 99324 000 21 14821 000 4 259 000 3 878 000 is retro a channel showcasing and is broadcast on DStv channel 404 and offers SABC1 SABC2 SABC3 SABC News SABC Encore SABC GRAPH: Summary of Weekly Audience per Channel per Audience Weekly Summary of GRAPH: SABC ENCORE SABC celebrating SABC programming from the 1980s and 1990s. The channel, which forms an integral part of the SABC’s strategy moving into a multi-channelenvironment, is currentlybeing carried on DStv channel subscriptiona 156, channel. network satellite digital All-adult prime time audience share: 4 259 million South African viewers in a typical month. SABC News breaking news and continuous news updates. The channel broadcasts in English and reaches African 51 countries as it aspires be to a Pan-African channel. It has the second highest number viewers of on the DStv news block and continues to display impressive growth. It offers a seamless fusion of rolling news and current affairs programming,hours of live boasting daily coverage. For the period 18 under the review, channel’s average ratings had viewers increased 401 11 by averageto daily viewership of 30 849. All-adult prime time audience share:3 878 million South African viewers in a typical month. (The channel is currently not able measure to other African audience numbers). viewership The stage is yours isfull a spectrum free-to-air channelwhich places is a full spectrum free-to-air channel, offering

is a full spectrum free-to-air channel that Behind the scenes at SABC1’s soapie Generations. family, communityfamily, and culture at the centre of its programming indigenous South channel broadcasts in The activities. and African languages and English. The coverage is via analogue andDTT network: covering theof population. 92.5% It is alsoavailable via satellite on the DStv and Vivid DTH digital satellite platforms. All-adult prime time audience share: 24 993 million South African viewers in a typical month. SABC3 SABC2 SABC1 SABCTV consists of three free-to-air channels and twoother channels carried on a subscription digital satellite network. top-quality channelsThe deliver international local and content inall South Africa’s languagesthrough-out the nation. SABC2 and SABC1, SABC3 attract on average 28 million South African viewers in a typical month. SABC Television Channels SABC Television multicultural viewers content that uplifts, challenges and entertains, presentinguniquea world Aimed view. at aspirant English, in primarily broadcasts Africans, South progressive and aims carry to of its programmes 10% in indigenous South DTT network: and analogue via Coverage languages. African theof population. It is also coveringavailable 82.1% via satelliteon the DStv and Vivid DTH digital satellite platforms. All-adult prime time audience share: 21 148 million South African viewers in a typical month. represents the youth, whether defined by age or theiraspirationsand motion reflectingand societyin a is attitude, that indigenous South channel broadcasts in The progressive. Africanlanguages and English. Its coverage is viaanalogue and digital terrestrial transmitter (DTT) network: covering of the population.91.2% It is also available via satellite on the DStv and Vivid Direct-to-Home (DTH) digital satellite platforms. All-adult prime time audience share: 25 856 million South African viewers in a typical month.

AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 12 Organisational structure Minister of Communications

Company Group Secretariat Internal SABC Audit Board Governance and Assurance AT A GLANCE

Group Chief Executive Officer South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18

Chief Financial Officer Chief Operating Officer

Logistical Services Corporate Affairs Television

Audience Services Human Resources Radio

Supply Chain SABC Foundation News and Management Current Affairs Legal Services Finance Sport

Media Technology Infrastructure

Commercial Enterprises

Policy and Regulatory Affairs

Market Intelligence 13 Chairperson’s foreword

The 2017/18 financial year was a demanding unsustainable cost base, built up over time without proper consideration for a workable operating model.

AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 one for the SABC, the Board, its employees and many of our stakeholders. We had to Total revenue for the full financial year was R6.6 billion against overcome some daunting challenges and the a budget of R7.3 billion resulting in an underperformance of R633 million (9%). While it is positive that the SABC managed pattern seems to continue with even greater to reduce the Corporation’s operating loss from R1.1 billion severity for the year ahead. in the prior year to R622 million in the year under review, the Board has approved a comprehensive turnaround strategy to However, these challenges must be overcome. The SABC is be led by the new team of executive directors. one of the key institutional pillars of our democracy, delivering essential content to millions of South Africans on multiple After rigorous and independent appointment processes, platforms and in 14 different languages, on a daily basis. the SABC Board was able to appoint a permanent team of executive directors by June 2018 - Mr Madoda Mxakwe (Group The SABC also remains one of South Africa’s national Chief Executive Officer), Mr Chris Maroleni (Chief Operations treasures. Despite its turbulent recent history, the Corporation Officer) and Ms Yolande van Biljon (Chief Financial Officer). must be aptly managed and restored to ensure fulfilment of its unique public mandate and adherence to the values that The Board is confident that, under the executive leadership of underpin our Constitution. Mr Mxakwe, SABC management will successfully implement the turnaround strategy and ensure the financial sustainability The period under review saw the transition from the interim of the Public Broadcaster. SABC Board appointed for six months (after a Parliamentary Ad Hoc Committee inquiry) to a permanent Board appointed It is clear, however, that the challenges to the SABC’s for a five-year term on 16 October 2017. sustainability will not just be financial. The Corporation must urgently ‘play catch-up’ on the technology front and embrace The reappointment of the five Interim Board members to rapidly evolving digital technology platforms that reach the current SABC Board made the transition seamless and audiences in new and exciting ways. ensured continuity in the actions taken to stem chronic failures in governance and ethics in the organisation. The SABC faces an increasingly competitive multiplatform, digital world that is driven primarily by commercial interests. The new SABC Board continued to implement measures to Therefore, the Corporation has to chart a course that ensures stabilise the Corporation at a governance level and stepped our audiences can access SABC content everywhere, whilst up actions to address the endemic levels of corruption and protecting the Public Broadcaster’s long-term sustainability. maladministration that had been prevalent at the SABC for many years. I am pleased to report that we have made The SABC is addressing the delay in the migration of significant headway in this regard and we remain firmly television and radio services to digital broadcasting platforms. committed to ensuring that the SABC roots out all forms of The Corporation is resolved to play a more central role in unethical conduct. achieving rapid migration to DTT and DTH platforms, working 14 closely together with the DoC and other key stakeholders. For the period under review, the SABC’s financial position remained under severe pressure. The Corporation is still The SABC needs additional television channels to be able to paying the price for years of ineffective leadership, failed fulfil its public mandate to broadcast more sport, education governance and prejudicial decision-making. Self-inflicted and entertainment programming. Our three analogue actions, like the arbitrary 90/10 decision, continue to impact television channels cannot sustain the impact on commercial on the SABC’s revenue. The Corporation sits on a huge and schedules from sport in particular. A successful digital migration is therefore vital to the Public Broadcaster’s future On 4 June 2018 SABC News relaunched a completely in many ways. rebranded, values-driven SABC News service, with the words ‘Independent. Impartial’ at the core of the new offering. This Another priority is to develop and expand the SABC’s digital marked an important moment in distancing the SABC from properties on the internet via social media and enhanced past perceptions about its news service. The Board is proud websites. With expansion of broadband networks and the of what the SABC News team has achieved so far in the increasing availability of free Wi-Fi, the SABC must ensure highly competitive 24-hour television news market. A vibrant, that its content can be accessed on all devices. High data independent and impartial SABC News is the cornerstone of costs are still an inhibitor for many South Africans and the what public broadcasting means to the SABC. SABC will explore innovative ways to deliver content to our audiences in affordable ways. The SABC Board thanks the public and all our stakeholders, in particular the independent producers, for their loyalty and But the key to a sustainable Public Broadcaster is not only understanding throughout some of the more difficult years in to be found in organisational efficiencies and technological the organisation’s history. change. The SABC operates within a regulatory framework that must take into account the legislative requirement to We thank the Minister of Communications for her support and protect the integrity and viability of the Public Broadcaster. championing of the SABC’s role as a Public Broadcaster. The There are several regulations, however, that inhibit the Public Board recognises the challenges ahead and looks forward to Broadcaster. further engagements with the Minister and the DoC on how AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | S ABC Annual Report 2017/18 best to create a sustainable Public Broadcaster. During the period under review, the SABC requested the Independent Communications Authority of South Africa The SABC Board will remain a robust platform from where (ICASA) to undertake an urgent regulatory review of the we provide leadership and direction to the organisation, while Must Carry Regulations, gazetted in 2008. These regulations working closely with all our key stakeholders. have had a negative, cumulative impact on the SABC from a potential revenue point of view. The SABC’s so called Must In closing, I would like to thank my colleagues on the Board Carry Channels are the three free-to-air (FTA) television for their dedication and input. channels, SABC1, SABC2 and SABC3, which are required by regulation to be carried by subscription broadcasters at no cost. The SABC has submitted to ICASA that this regulation was in conflict with the enabling legislation which envisaged ‘commercially negotiable terms’ being agreed to between the Mr B Makhathini SABC and subscription broadcasters. The SABC Must Carry Chairperson of the SABC Board Channels are some of the most watched channels on pay TV bouquets and therefore the Corporation should receive market value for its television content.

The SABC has also identified the Sports Broadcasting Regulations for urgent review by ICASA. These regulations SABC News re-branding. have inadvertently led to the SABC incurring huge sports rights costs in an attempt to fulfil its public mandate. The regulations should be reviewed in order to promote fair competition for sports rights and prevent unfair sub-licensing and hoarding practices. A thorough review of these regulations will ensure the Public Broadcaster is able to fulfil its legislative mandate to cover not just the big three sports of soccer, rugby and cricket, but also a range of developing sporting codes.

The Board is encouraged that a full policy review of broadcasting in South Africa will be conducted by the DoC in the 2018/19 financial year.

15 SABC board

Mr B Makhathini Ms F Potgieter-Gqubule Chairperson Deputy Chairperson AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18

Ms R Kalidass Ms K Kweyama Mr M Markovitz Mr J Matisonn

Mr D Mohuba Mr K Naidoo Mr J Phalane Mr V Rambau

Mr M Tsedu Mr M Mxakwe Ms Y van Biljon Mr C Maroleni 16 GCEO CFO COO (appointed 1 July 2018) (appointed 25 June 2018) (appointed 1 February 2018) AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 17

rdinator at the African o ‑

National Congress Headquarters, (ANC) on the Editorial Board of the journal Umrabulo and served as a member of the NEC of the ANC between 2007 and 2012. Master ofManagement (PublicPolicy and Development Management) (University of Witwatersrand). MsFébé Potgieter-Gqubule isa member ofthe Board of the Mapungubwe Institute the African City Alliance Board.She Think previously Tank for Strategic served Reflections on the Board ofthe Lejweleputswa Development and Agency; Deputy Chairperson of the Board of the State Informationthe Advisory TechnologyAgency (SITA); Board of the University of Witwatersrand’s Education Policy Unit; theWitwatersrand’s Board ofthe Education Unit and Training and is a member of Council of the Mangosuthu University she was Advisor: Between and 2017, of Technology. 2012 Strategic Planning and Deputy Chiefof Staff at the African Union Commission. Prior to joining the African Union, she served asSouth African Ambassadorand Head ofMission to Warsaw in Poland from 2005 to 2009. Ms Potgieter-Gqubule is a director and publisher for Khaloza Books, which publishes fictionchildren, teens and young adults. She worked as National and non-fiction booksExecutive Committee Co (NEC) for Ms Rachel Kalidass Appointed to the new Board October on 16 2017. Resigned November 15 2017. Certificate BCom(Hons); Theory Accountancy the (CTA) of in (University of Natal); BCompt (UNISA); CA (SA). Ms Rachel Kalidass years has of extensive 18 experience in internal and corporate external governanceand risk managementand iscurrently auditing, financialthe Managing management, Director of R Kalidass and Associates, a practice of Chartered Accountants and Business Consultants. She has experience within the public sector environment, and is a member ofthe South African Institute ofChartered Regulatory of Board Independent Accountants(SAICA), Auditors (IRBA), the Institute of Internal Auditors and (IIA) Institute of Directors (IOD). Herprevious audit committee positions include the MpumalangaMpumalanga Provincial Legislature, Provincial Department of Education, Mpumalanga Provincial Department ofHealth, Mpumalanga and Parks Tourism Agency (MTPA), MpumalangaGambling Board Inkomati (MGB), Catchment ManagementAgency (ICMA), Mpumalanga EconomicGrowth AgencyNEHAWU (MEGA), InvestmentCompany as well as the Ehlanzeni District Municipality. She previously served as the Chairperson ofthe Audit Committee of the Mpumalanga Shared-ServicesAudit Committee Cluster comprising Office of the Premier, DepartmentDepartment of Co-operative Governance,of Safety Department of and Security, Human Settlements and the Departmentof Culture, Sport and Recreation.

board Member of the Interim Board. Appointed to the new Board October on 16 as the 2017 Deputy Chairperson. Resigned with effect from 28 March 2018. Ms Fébé Charlene Potgieter-Gqubule Mr Bongumusa Emmanuel Makhathini Chairperson Appointed to the new Board October on 16 2017. MCom in Business Management and Economics (University of Johannesburg);Hon in Geography (University of Zululand); BEd (University of Zululand); Diploma in HR Management (University of Zululand); General Management Program(Harvard Business School); SABMiller Executive Development Programme (University of Cambridge). Mr Makhathini currently serves as the Chairperson of the SABC Boardand isBoarda memberofthe Ekurhuleni World Outreach Centre Advisory Board. Mr Bongumusa Makhathini has served and continues to serveon various bodies. These include being an Executive Board member of British American Southern Tobacco Africa Executive(BATSAA); Board member of the South African Breweries; member of the SAB Thrive Board Fund; member of the Sport Board member Trust; of the Industry Association for Responsible Alcohol Use (ARA) where he chaired the Board Committee on Responsible Drinking and Advocacy; the PresidentofConvocation theat University of Zululand and a Member ofthe University ofZululand Council.Mr Makhathini held a senior managementposition at Accenture,where he spent eight years in business consulting and strategy, business complex and handling IT transformation projects. Change in Directors in Change The Broadcasting Act No. 4 of 1999, as amended, provides thatthe SABC will be governed and controlled,in accordance with this Act, a Board by of Directors. The Non-Executive Directors are appointed the by President on the advice of the National Assembly and the Non-Executive Directors are requiredtoappoint the Executive Directors independently without involvement any of the Minister of Communications. The term of the Interim Board, appointed the by President On the expired on 26 September 2017. on March 27 2017, approval ofthe President,a permanent Board was appointed In terms of the Broadcasting Octoberon 16 Act, 2017. the Non-Executive Directors appointed to the new Board must holdofficeyears.Executive period five a Directors of for have standard employee service contracts and are subject to the SABC’s conditions of service.

The SABC has a unitary Board structure, which which structure, a unitary Board has SABC The 1999, of 4 No. Act Broadcasting the of terms in Non-Executive 12 comprise will amended, as Directors. Executive three and Directors Composition of the Composition Ms Khanyisile Thandiwe Kweyama In July 2018, Mr Markovitz was appointed by the Minister of Interim Board Chairperson Communications, to serve on the Digital Migration Advisory Appointed to the new Board on 16 October 2017. Council. Post Graduate Diploma in Management (Wits); Barloworld As an active angel investor, Mr Markovitz has taken investment Executive Development Programme. stakes in start-up digital businesses across South Africa. His other interests are in the hospitality industry where he is the Ms Khanyisile Kweyama’s wealth of experience and board chairperson of independent hotel group, V&A Hotel leadership is depicted in her current roles as the Chairperson (Pty) Ltd. of the Board for Brand South Africa; a Director at Telkom Ltd; the Chairperson of the SABC Interim Board; and Chairperson Mr John Matisonn of Telkom’s Social and Ethics Committee. This is after she Member of the Interim Board. held Directorships in Boards of various companies which Appointed to the new Board on 16 October 2017. include BMW SA (Pty) Ltd; Barloworld Logistics Africa Ltd; BA (Wits); William F Benton Fellow in Broadcast Journalism, Sovereign Foods Limited; Anglo American Platinum Ltd; (University of Chicago); Fellow in Stellenbosch Institute for Kumba Iron Ore; to mention but a few. Ms Kweyama served Advanced Studies; Broadcast training courses in Canada, in various positions at various national statutory bodies such Hong Kong and South Africa. as the Employment Equity Commission and the National Planning Commission amongst others. In March 2016, she Mr John Matisonn is a seasoned and senior newspaper, was appointed to Gauteng Eminent Persons Group. radio, television and online political journalist and foreign correspondent. He is a founder of the Public Broadcast She has held senior positions at many companies in South Initiative, which prepared for the transformation of the SABC Africa and abroad. She has received many accolades and from a state broadcaster to a Public Broadcaster in 1994. awards including the Most Influential Woman in the Mining, He was a Councillor on the first council of the Independent Resources and Extractive Sector and one of the 100 Most Broadcasting Authority and he chaired its Policy Committee. Inspiring Women in Mining in the World. He was appointed the United Nations’ Chairperson of the

AT A GLANCE Mr Michael Grant Markovitz Electoral Media Commission in Afghanistan. Mr Matisonn Appointed to the new Board on 16 October 2017. returned from a second tour to Afghanistan to write the well- LLB (Wits); MA in Southern African Studies (University of received book on South African media and politics; God, York); BA (Hons) in African Studies (Rhodes University); BA Spies and Lies: Finding South Africa’s future through its past. His work has been published in the New York Times,

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Journalism and Media Studies (Rhodes University). Financial Times, Washington Post and The Observer among Mr Michael Markovitz has over two decades of experience many others, as well as in most South African newspapers as an executive and consultant in the media, technology and a wide range of radio and TV channels. and entertainment sectors. During this period, he headed up Primedia’s Digital Division, served on the company’s Group He is the Executive Director of a book publishing company, Executive Committee and chaired five Group Company Ideas for Africa (Pty) Ltd. Before his appointment to the SABC Boards over a period of eight years. Interim Board, he was the presenter and producer of a TV programme called BETWEEN THE LINES for Cape Town Mr Markovitz has expertise in regulation and participated in Television (CTV). He is a recipient of various awards including drafting South Africa’s new broadcasting legislation in 1993 the National Association of Black Journalists’ Award (US) in at the Multi-Party Negotiation Process. He also served as the 1992 for a four part radio documentary series comparing race special adviser to the Independent Broadcasting Authority relations in the US and South Africa. (IBA) and thereafter to ICASA’s Chairperson, Mr Mandla Langa from 1999 to 2005. Mr Dinkwanyane Kgalema Mohuba Appointed to the new Board on 16 October 2017. BA Paed, BEd University of the North; MDP (UNISA SBL); SABC Education activation. HELM (Wits School of Governance); EMP (Turfloop Graduate School of Leadership); EDP (University of Stellenbosch Business School); MBA (Regenesys Business School). Mr Dinkwanyane Mohuba is Chartered Public Relations Practitioner (CPRP) of PRISA and is currently the Executive Director: Marketing and Communication and Acting Dean of Students at the University of Limpopo. He serves in various governance and management structures: amongst others the Council, Audit Committee of Council, Risk Management Committee, Senate, Executive Management Committee and Executive Committee Senate. He has a business interests in communications, public relations, marketing, the built environment and engineering 18 services. Mr Krish Naidoo Member of the Interim Board. Appointed to the new Board on 16 October 2017. BProc (Law) (University of Durban Westville); MLitt (Strategic Studies) (University of Aberdeen, UK); Attendance Certificate in Banking Law and Financial Markets (Nelson Mandela School of Law and the University of the Witwatersrand). AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 19 Mr is Mathatha a former Tsedu Adjunct Professor in the Journalism Department hasWits.at conductedMr Tsedu journalismtraining programmesboth in South Africa and on the continent. He also started the Media24 Journalism Academy which provided work based experience and theory for journalism graduates. He started his career as a freelancer in rural Limpopo and rose up the ranks to editseveral leading national newspapers.He was editor ofthe CityPress and SundayTimes, as well as deputising for the Head ofNews at the SABC. His distinguished career includes being an Executive Director ofSANEF; General Manager:Media24 News and Director ofthe Press Freedom Commission. has Mr Tsedu received number a of awards and accolades in recognition of his sterling work including an Honorary Doctorate the by University ofthe Western Cape for his work in the media;the Nieman Fellowship;the Nat Nakasa Award for Courageous Journalism; the Shanduka Lifetime Achiever Award as well as the the Print and Digital Media Fellow for 2012/13. EXECUTIVE MEMBERS OF THE BOARD OF THE MEMBERS EXECUTIVE Mr Madoda Theo Mxakwe Group Chief Executive Officer(GCEO) Appointed on 1 July 2018. MA(Global Political Economy)University, (Sussex UK); MA and BA (Hons) (University Executive of Cape Town); Leadership Development School); CertificatesPost Graduate Diploma in Business Administration (London(Gordon Institute of Business Science); Business BA (Education) (Central University of Technology). Mr Madoda Mxakwe is the Group Chief Executive Office for theSouth African BroadcastingCorporation. His extensive experience emanates from a broad combination of skills and expertise he derived from senior executive positions he held in business, communications and public affairs, both in the public service and the privateat national sector, and global levels, with evidence of turning businesses around. Mr Mxakwesuccessfully has managed businesses led and diverseteams in Southern Africa,East Africa, Africa West and Europe within the fastmoving consumergoods industry spanning more years. than Prior 13 to joining the SABC, he was Country Nestle’s Head responsible for Mozambique, Namibia, Botswana, Swaziland and Lesotho. In this role he providedstrategic, commercial financialand leadership the in five countries, with a focus on driving sustainable profitable growth. Mr Mxakwe’sstrong Between and2015, leadership 2013 and results-orienteddifficultgrowthsolidunderapproachensured economic conditions for Nestle Nigeria where he served as the Head of Sales in Lagos. he was promotedIn 2010, to the position of Deputy Vice Presidentof Corporate Affairs headquarters at Nestle’s in Switzerland, where he was responsible for strategically positioning Nestle, building global partnerships and reputation management. In 2005, he joined Nestle Corporate Affairs Directorfor Southern andEastern Africa, responsible for the company’s corporate communications and transformation programmes.He worked thein office of the Minister Public of Service and Administration, Mrs Geraldine Fraser-Moleketi, as Directora ofMedia Relationsand Communicationsand was subsequently appointed the Chief of Staff in the Minister’s office. Mr Mathatha Godfrey Tsedu Deputy Chairperson of the Interim Board. Appointed to the new Board October on 16 2017. Honoursdegree in Journalismand Media Studies(Wits); attendedJournalism courses in South Africa, UK, Kenya, Belgium, Zimbabwe and the USA. Mr Victor Rambau Appointed to the new Board October on 16 2017. MBA(Milpark Business in Operations School); BTech Management(University ofJohannesburg); Diploma in Management (Wits Technikon);; Management Operations Advancement Program (MAP 46) (Wits Business School); Six Sigma Black Belt (Vanguard Consulting UK). Mr Victor Rambau, is an eminent strategist and former Partnerofa Mining Consulting Firmand Director Technical of a Construction He has Company. vast experience and expertiseperformance strategicplanning, in management, banking and corporate management. Mr Rambau to 2016, has been 2012 workingFrom for Standard Bank South Africa Chain as Value Lead responsible for various strategic projects. Standard In 2016, Bank seconded him to National StudentFinancial Aid Scheme to (NSFAS) assist the institution with improving its operations. He also has extensive experience in infrastructural projects in mining and construction. In addition to his general corporate experience, he has vast experience in strategy and operations as well as a strong capability to drive innovation. Mr Jack Howard Phalane Appointed to the new Board October on 16 2017. BA,LLB, and LLM(Telecommunications Law) degrees and an MBA (Wits); MCom and (SA International (North Tax) Certificate University); West Advanced Corporatein and Law Securities (UNISA) Diploma and a Teachers (Dr CN Phatudi College Education). of MrJack Phalane hasbeen practising asa commercial attorney years, specialising for 14 over in Company Law. Heis experienced indrafting andadvising clients on various acquisitions, mergers and commercial including transactions, corporate governance, telecommunications and broadcasting law. Mr KrishNaidoo has practiced as an attorney years for 31 and is currently on the non-practising roll. He hasextensive experience in the fields of human rights, administrative law, mining and commercial law and conveyancing. MrNaidoo provideslegal advice to theANC’s National Disciplinary Committee.He worked forArmscor asthe Senior Manager of Corporate Communications and gained experience in liaising with the Diplomatic Corpsand the Parliamentary DefenceCommittee. He participated in programmes relating to defence andhas written articlesfor media anddefence journals. MrNaidoo wasa Non-Executive Director ofPeregrine solutionsTreasury and theManaging Director of Public Sector Consultants where he developed management strategies risk for municipalities.As the General and financial Manager and Acting of CEO Boxing South Africa, he settled theBoxing Actand Regulationsin consultation with the ChiefState LawHe Advisor. was a Founding Member of the National Association ofDemocratic Lawyers Steering Committee and a Founding Member of the National Sports Congress. He was part of the team that wrote the White Paper for the Department of Sport and Recreation. Ms Yolande van Biljon Ms Nomsa Priscilla Philiso Chief Financial Officer (CFO) Acting GCEO Appointed on 25 June 2018. From 21 July 2017 to 30 June 2018. MCom (Taxation); BCom (Hons) (University of Pretoria); National Diploma in Business Management (Cape Peninsula BCompt (Hons) (University of South Africa); BCom University of Technology); Leadership Development (Accounting) (Rand Afrikaans University); CA (SA). Programme (Gordon Institute of Business Sciences GIBS); Executive Development Programme (University of Ms Yolande van Biljon is the Chief Financial Officer of the Stellenbosch). South African Broadcasting Corporation. She gained in-depth and broad experience in Finance Departments of a number of Ms Nomsa Philiso was appointed Acting GCEO on 21 small, medium and larger companies she served in previous July 2017. She joined the SABC in 1994 in a management years. Her career which spans more than 20 years, depicts accounting role and has risen through the ranks. In 2005, her skills and contribution to transformation, turnaround and she was appointed as Senior Manager: Technology Special growth strategies and implementation thereof. Projects. In 2011, she became General Manager: Sales Operations. In April 2015, she joined Commercial Enterprises In 2014, Ms van Biljon was appointed as the Chief Financial as a Group Executive responsible for advertising and Officer of the Road Accident Fund where she contributed sponsorship revenue for the SABC. In August 2016 she to the successful turnaround of the organisation. This is assumed the role of Group Executive: Television responsible evident in the institution’s achievement of four consecutive for the management of four SABC TV channels. clean audits and the scores achieved against its Annual Performance Targets. Ms Philiso has a wealth of experience which spans over 22 years in the broadcast industry which she spent across Ms van Biljon’s career also includes seven years she spent in a spectrum of fields such as finance, broadcast technology, strategic positions at Denel Dynamics a division of Denel SOC project management, and operations. Prior to joining the Ltd. She joined this company as Manager: Finance Accounting SABC, Ms Philiso acquired financial management experience in 2007 before being appointed Chief Financial Officer in in the retail industry. AT A GLANCE 2008. As a member of the Executive team, she contributed to Mr Tseliso Ralitabo the transformation of Denel Dynamics from an organisation that was faced with insurmountable sustainability challenges Acting GCEO to being able to tick of all indicators of medium to long term From 22 May 2017 until 19 July 2017.

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 sustainability including, amongst others, industry acceptable General Management Programme (GIBS); Senior financial results, strong internal controls, exceptional client Management Development Programme (The Graduate relations and a healthy order book, in seven years. Following Institute of Management and Technician); Train the Trainer the completion of her articles, she had a brief stint at a Private (IPM); Human Resource Management (IPM); Industrial Investment Bank in London. Relations Course (IPM); Programme for Management Development (University of Cape Town Graduate School of Mr Bandlalenkosi Chris Maroleni Business). Chief Operations Officer (COO) Appointed on 1 February 2018. Mr Ralitabo was appointed as the SABC’s Acting GCEO from May 2017 till 19 July 2017. He was Group Executive: Media BA, (UCT); BA Hons (International and Comparative Politics), Technology Infrastructure till March 2018. He has immense (UCT); Master of Arts (UCT). experience at the SABC spanning for more than 35 years. During this period, he held the positions of: General Manager Mr Chris Maroleni has extensive experience in strategic Operations and Strategy: Corporate Affairs; General Manager leadership and providing direction and leadership to (Acting): Henley TV Facilities; Head Henley Production multifunctional teams during times of crisis and in driving and Facilities; Manager: Personnel Development (Henley); Studio coordination of engagements with stakeholders both locally Manager News; Journalist; and as a Camera Operator and internationally. Before joining the SABC, Mr Ralitabo worked for Western His success as the founding Africa Editor and Head of Deep Levels Ltd as a Chief Administration Clerk. His other Department of the highly successful eNews Africa Service involvement at the SABC was as the trade unionist of Media serves as a testimony. Mr Maroleni also has extensive Workers’ Association of South Africa (MWASA), which took experience in recruiting and training competent technical him to many labour related forums internationally. and editorial teams, establishment of content channels and development of comprehensive broadcast scheduling and Mr James Rogers Aguma distribution plans. He has an in depth knowledge of change CFO management, strategy, sound operational performance and Acting GCEO from 28 June 2016. pragmatic financial planning and execution. Resigned July 2017. His work in broadcasting, telecommunications and Public BCom (Hons) (Makerere University); BCom; PGDA (University Affairs, have led to an appreciation for nuance and the of Cape Town); PGCTA (Natal); CA (SA); ACMA; CGMA. sensitivities of the South African political discourse and Mr James Aguma joined the SABC in March 2013 as a 20 regional dynamics. In addition, his media experience (Head General Manager: Strategic Support and was appointed as of Department and Africa Editor of eNCA and Executive CFO on 5 January 2015. He was appointed as acting GCEO Producer, Anchor of the current affairs show Africa 360) has in June 2016 the position he held till his suspension in May given him a unique experience and insight into running the 2017 and resignation in July 2017, respectively. workings of an active broadcasting operation. Mr Aguma has extensive experience in the public and Ms Thabile Dlamini joined the SABC in November 2005 as private sectors. He spent eight years at the AGSA where a Financial Manager and has held various positions, which he was employed as a Senior Manager. He has led audits include Financial Analyst in the Office of the Chief Financial at numerous government departments and public entities. Officer and General Manager: Finance in the Commercial He also oversaw audits of several public entities. He trained Enterprises Division. and worked for PricewaterhouseCoopers, servicing local and Ms Dlamini completed her formal training with Anderson international clients including Rand Merchant Bank, USAID, thereafter she joined Ngubane and Company as an Audit Momentum Group, Gensec Bank, Imperial Bank, PSG, EU, Manager. She has also served as a member and Chairperson the World Bank, Swedish Development Agency, National of the Board of Media Credit Coordinators (MCC), which is a Roads Agency of Mozambique and Bristol Myers Squibb critical organisation in the Advertising industry. She served Foundation. as a member of the Audit Committee for Kungwini Local Ms Bessie Lillian Tugwana Municipality. Ms Dlamini is registered as a Training Officer Acting COO by the South African Institute for Chartered Accountants From 27 September 2016 to 30 January 2018. (SAICA). Certificates in Journalism and Advanced Journalism; Ms Audrey Raphela Public Relations Information and Communication Policy Acting CFO Development Management; Television Production. From 28 June 2016 to 27 June 2017. Ms Bessie Tugwana joined the SABC as a Schedule Co- BCom (former University of Bophuthatswana now University coordinator for SABC1 and held various positions including of North-West); Bcompt (Hons)/CTA (University of South General Manager for SABC1, General Manager for SABC Africa); CA (SA); Executive Development Programme, Gordon Africa Operations, General Manager for SABC2, General Institute of Business Science (GIBS). Manager: Operations SABC News Channel, Acting Group Ms Audrey Raphela was appointed as acting CFO on 28 June Executive: Television, Head of SABC Sport, and was Acting 2016. She joined the SABC in February 2016 as a General COO until 30 January 2018.

Manager: Financial and Management Reporting. She trained AT A GLANCE Prior to joining the SABC, she was a journalist for Bonanza at Ernst and Young in Mafikeng, where she serviced local, Magazine, and True Love Magazine, where she was later public and private entities including government departments. promoted to Associate Editor. She was employed as a Project After completion of her articles she joined the private sector. Manager for Nokusa Promotions doing sport promotions

Ms Raphela has extensive experience in the public sector South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 (African Cup of Nations) and events. which includes more than four years at Magalies Water where Ms Thabile Sylvia Dlamini she was employed as an Executive Manager (CFO) in Finance. Acting CFO She has also held a number of senior/executive management From 13 July 2017 to 24 June 2018. positions in the finance and auditing fields at Johannesburg Roads Agency, National Housing Development Corporation, BCom (Accounting) (RAU); BCompt (Hons)/CTA (UNISA); South African Post Office, South African Airways, Eskom and CA (SA); Executive Development Programme (University of other public entities. Stellenbosch).

The SABC GCEO, Mr Madoda Mxakwe, interacts with SABC staff.

21 SABC leadership

Mr M Mxakwe Ms Y van Biljon Mr C Maroleni GCEO CFO COO (appointed 1 July 2018) (appointed 25 June 2018) (appointed 1 February 2018)

Ms L Bayi Mr H Jiyane Ms N Philiso Mr M Munlo Company Secretary GE: Corporate GE: Television Head: Legal (acting) AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Affairs (acting)

Mr J Thekiso Ms T Geldenhuys Ms N Wotshela Ms P Magopeni GE: Human Resources GE: Governance and GE: Radio GE: News Assurance

Mr T Mulaudzi Mr A Visser Mr P Moilwa Ms I Marutla GE: Commercial Enterprises GE: Media Technology GE: Sport (acting) Head: Supply Chain Infrastructure (acting) Management (acting)

22

Mr K Kganyago Ms I Cupido Head: Group CEO: SABC Foundation Communications Provincial Offices and leadership

Mr V Tsoenyane The Provincial Offices represent the PGM: Free State Corporation in all corners of the country and are managed by Provincial General Managers. The Provincial Offices are a mirror of the Head Office, although on a much smaller scale, and includes staff from radio stations, Logistics, Finance, Sales, Technology and Human Resources. These offices bring about provincial relevance in news and other programming, as well as playing the important role of reflecting the life and culture of people of different geographical areas. Mr P Mnci Mr J Shikwambana PGM: Eastern Cape PGM: Western Cape During the 2017/18 financial year, the main focus of the (acting) AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Provinces was centred around monthly themes such as Human Rights Day in March, Youth Month in June, Heritage Month in September, World Aids Day and International Day of No Violence against Women and Children in December. January was mainly about matric results announcements and back to school campaigns coverage. Provincial Offices were actively involved in a range of developmental and social projects across the country, aligning the SABC CSI activities with those of its core business. This allowed the Public Broadcaster to leverage its national footprint, resources and expertise, Mr B Mpanza Mr F de Villiers when partnering with NGO’s and other institutions. PGM: KwaZulu Natal PGM: Mpumalanga (acting) (acting)

Ms A Fourie Ms T Makuya PGM: Pretoria PGM: Limpopo (acting)

23

Mr R Makgopa Ms M Motaung PGM: North West PGM: Northern Cape (acting) Executive Director’s overview ‘It always seems impossible until it’s done’ – Nelson Mandela

Against the backdrop of a year filled with many challenges, including labour strike action, the SABC was able to significantly deliver, and in some cases exceed, its mandate from a local content, music and language perspective. The SABC, through its News and Current Affairs platform, covered numerous leading stories and events of national importance. As the national Public Broadcaster the SABC With the 2019 National Elections around the corner, the SABC must offer, in all of South Africa’s official will once again ensure that through its network of national languages, a range of informative, educational bureaus and cross media journalists, it provides unrivalled coverage of election events. Broadcasting of sporting events and entertainment programmes that showcases on the SABC’s platform remained an attraction for many

AT A GLANCE South African attitudes, opinions, ideas, values, viewers and listeners. The Corporation will endeavour to talent and artistic creativity. satisfy the public’s demand to showcase exciting sporting events, despite a shortfall in funding. Programming must also offer a plurality of views and a variety of news, information and analyses from a South African During the year under review, the SABC also embarked South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 perspective and advance the national and public interest. on reviewing its Editorial Policies with extensive public and stakeholder consultation. The 2018 Editorial Policies are set A task that, at times, seemed impossible to do! However, nd throughout the year, the SABC brought it all and much more for finalisation during the 2 Quarter of 2018/19 financial to South African audiences across its radio, television and year. A review of the Corporation’s operating model was also digital media services. necessary in order to keep up with a shifting competitive landscape, eg., customer needs, markets and competitive The SABC, once again had a demanding financial year threats. with cash resources stretched to the maximum to ensure continued business operations. Diminishing investment in Good progress was made in terms of leadership stability with areas such as content, technology and infrastructure not only the appointment of the permanent Board in October 2017 impacts on the Public Broadcaster’s mandate but also on its as well as the filling of a number of vacant Group Executive future sustainability and competitiveness. positions. The SABC also welcomed its Chief Operating Officer to the Corporation in February 2018. At the end of the financial year, the SABC posted a net loss of R622 million with its cash balance closing on R131 million. In a media environment which continues to be uncertain and Total revenue was R6.6 billion, representing a slight increase fast-changing, the SABC will continue, in partnership with of R42 million compared to the previous year. Expenses others in the sector, seek a new and sustainable funding base amounted to R7.3 billion which was within budget and R453 for public service broadcasting. The transformation of the million lower than 2016/17 financial year. organisation over the next few years will be in the context of a changing regulatory and commercial environment for At the end of the fiscal, the SABC’s going concern status once all media and the funding model, like the SABC itself, must again came under scrutiny owing to the Corporation not being continue to adapt to new challenges. able to service all outstanding debts. In order to mitigate the situation several short, medium and long-term strategies are I wish to acknowledge the Portfolio Committee on being engaged and implemented in order to return the SABC Communications, Minister of Communications and her team, on a path of renewal and sustainability. the Board, Executive Management and staff of the SABC for their unwavering commitment and support during the Despite the SABC’s financial challenges, the Public year. Gratitude is also extended to our external stakeholders Broadcaster is still, by far, the one with whom audiences and business partners for their continued support despite spend the most time. The SABC is a powerful provider of challenging circumstances. Lastly, thank you to the millions of local programming and services to all South African citizens. South African audiences around the globe who believe in the 24 Its five television channels reaches on average 28 million SABC as a first-class Public Broadcaster. viewers – 25 856 million for SABC1, 24 993 million for SABC2, 21 148 million for SABC3, 3 878 million for SABC News and 4 259 million for Encore. The SABC provides Radio services to all South Africans in their mother-tongue and the combined average number of listeners is 28 328 million per week – this Ms N Philiso makes the Corporation’s offering a unique one that no other Group Chief Executive Officer (acting) broadcaster can equal. (From 21 July 2017 to 30 June 2018) COO Chris Maroleni’s 100 days in office.

Strategic overview

For millions of South Africans, the SABC remains their primary source of news and information. The SABC has the capacity, through it’s television, radio entertainment options such as Video-on-Demand (VOD), and and digital media platforms, to provide live and in-depth the emergence of Over-The-Top (OTT) video entertainment information on important developments and events across the services. These technology upgrades are imperative for country. This enables the SABC to fulfil its mandate to inform,

the SABC to sustain viable broadcasting platforms and AT A GLANCE educate, and entertain its viewers nationally, regionally and multichannel content distribution in the digital age. locally. Various Human Resources strategies were deployed The SABC’s objectives and plans for the year under review during the year under review. For example, performance are derived from four strategic pillars: Financial Sustainability,

management for top and senior management was rolled-out South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Content and Platforms, Human Resources and Governance. during the period under review with the aim of contracting with Initiatives within each of the pillars are designed to restore the all staff in the 2018/19 financial year. While skills development integrity, credibility and to promote a culture of excellence in through learning interventions was a key objective for the the Public Broadcaster. SABC, due to the Corporation’s financial constraints delivery Sufficient revenue generation to fund the mandate and on the Workplace Skills Plan (WSP) was minimal. However, business operations of the SABC remained a severe challenge to mitigate this situation, alternative initiatives are being put in throughout the financial year. As a result, the Corporation place to ensure continued skills development, particularly in posted a net loss of R622 million at the end of March 2018. the digital media field. The SABC’s cash position of R131 million at the end of March During the year under review, the SABC made good progress 2018 improved marginally compared to the previous financial in reviewing its operating model, to keep up with the shifting year. However, the amount owed to trade creditors remained competitive landscape and ensure the SABC remains fit for above R500 million resulting in the SABC not being able to purpose. The operating model is earmarked for completion service all its outstanding debts. Global and local economic and review by the board in the second quarter of the 2018/19 pressures, client cut-backs on advertising budgets, the financial year. increasingly competitive broadcasting environment and a decline in audience share numbers contributed to revenue The SABC has emerged from an environment which targets not being met. saw chronic failures in corporate governance in previous years. Therefore the Corporation put considerable effort To meet its mandate, the SABC must offer a range of into strengthening its internal controls during the 2017/18 programmes that showcase South African attitudes, opinions, financial year. Progress was made in resolving internal and ideas, values, talents and artistic creativity in all official external audit findings, developing new policies and Standard languages. Programming must also offer a plurality of views Operating Procedures (SOP’s), reviewing out-dated policies and a variety of news, information and analyses from a South and mitigating risks through the implementation of risk African perspective, as well as advancing the public interest. management plans. During the period under review, SABC exceeded all its local content quotas on both television and radio, featuring more Going forward, the SABC’s priority is to ensure that it achieves programmes from Provinces outside Gauteng and ensuring financially sustainability. This will be achieved primarily through the broadcasting of programs with sign language and by addressing the Corporation’s cost base and by growing sub-titling, that people with disabilities are not left behind. The its revenue base from traditional media and commercial Public Broadcaster continues to play a critical role in nation- partnerships, as well as by improving the collection of TV building and the development of social cohesion. licence fees. Taking into account the current SABC’s cash 25 crisis, greater emphasis will be placed on immediate and The SABC continues to upgrade internal and external longer-term revenue generation and cost reduction strategies. broadcasting and production facilities and has plans in place to take advantage of the opportunities created by the following The SABC’s financial constraints are, however, impacting platforms: Digital Terrestrial Television (DTT), Direct-to- negatively on the roll-out of further critical technology and Home (DTH) satellite broadcasting, the rapid rollout of infrastructure projects. Funding is required to ensure business broadband Internet connectivity, the rise of alternative mobile continuity. TheSABC’s statutory

isplaysSouth African talent in education and ffers a plurality of views and a variety of news, information eflects South African attitudes, opinions, ideas, values dvances the national and public interest. D programmes; entertainment A  and artistic creativity; R O and analysis from a South African point of view; and roadcasting Act No. 4 of 1999 as amended; outh African National Regulations; Treasury asic Conditionsas ofEmployment Act of1997, No. 75 ublic Finance 1999 Management of, as Act (PFMA) No.1 mployment Equity Act No. 55 of 1998, asamended; heKing IVReport on Corporate Governancefor South he SABC’s Delegation of Authority Framework; he Preferential Procurement Policy Framework Act No. 5 of he Skills Development Act of 1998, No. 97 as amended. he Constitution ofthe RepublicofSouth Africa of1996 108 he Electronic Communications Act No. 36 of 2005 as he Companies of 2008 Act No. 71 as amended. abour Relations Act No. 66 of 1995, as amended; ndependent Communications Authority of South Africa Act No. 13 of 2000No. 13 as amended;    amended;  Africa™;    amended;    2000 as amended; and T T  amended; as B  I  T and amended; T P T S T B L E T (b) (b) • • • • • • • • • The Act Broadcasting core founding SABC’s the BroadcastingThe remains Act statute. The SABC’s obligations in terms of the Broadcasting Act are encapsulated in the ICASA Regulations and licence conditions for the Corporation’s fivetelevision channels and radio stations.18 The SABC Charter Section 6 of the Broadcasting Act outlines the Charter of the SABC. Subsection provides 6(3) that the Corporation, in pursuit of its objectives and in the exercise of its powers, enjoys freedomof expression and journalistic,creative and programming independence enshrined as the Constitution. in Subsection states that the 6(4) Corporation must encourage the development of South African expression providing, by in programming of range wide a official languages, AfricanSouth that: (a) (c) (d) In addition to its legislative and regulatory obligations, the SABC Board ischarged with control and direction of theaffairs of the Corporation asset out in the SABC’s Memorandum of Incorporation (MoI), as approved the by Shareholder, represented the by Minister of Communications. The relationship between the SABC,its Board and the Shareholder a Compact, by Shareholder governed is reviewed and renewed on an annual basis.The MoIand the Shareholder Compact ensure that the Corporation complies with the essential pillars of a governance framework, which includesthe Broadcasting Act,the CompaniesAct, the PFMA Constitution. the and Public Broadcasting Service Mandate Broadcasting Public The mandate ofthe SABC,as a Public Broadcaster,is embedded in range a ofstatues, regulations, policies, codes ofconduct and license conditions. framework includes: • • • • In executing its mandate, the SABC is also guided, among others, by: • mandate

and other mandates and other

The SABC was established through an Actof Parliament in 1936,which replaced theprevious state-controlled African Broadcasting Corporation,formed andin included 1927 the South African West Broadcasting Corporation,which later became the Namibia Broadcasting Corporation. Until 1993, the SABC Board was appointed unilaterally the by During Minister. the early 1990s, broad-baseda civil society Broadcasting Independent for coalition Campaign the – – made a strong(CIB) case forthe independentappointment of the SABC Board before the first democratic orderelections, to ensure a in free and fair, level playing field. During the negotiations process that brought about the South African democracy, the parties agreed that a panel of judges would conduct the firstan SABC independent Board. In appointment May 1993, process in official forany process appointment Southin Africa, the judicial a first for public interview panel received 700 over nominations and publicly interviewed a shortlist of 86 people in the full glare of the media. Although the final appointment of the boardwas still contestedby the apartheid government and was not without its problems, theappointment ofthe 1993 SABC Boardrepresented an important moment in the history of the SABC. With a democratic parliament in place from 1994, the SABC Board was appointed with the involvement of a multi-party parliamentary committee and this system remains to date. The Broadcasting Act No. 4 of 1999 (‘the Broadcasting Act’) was the next important milestone for the SABC. Section 7 of the Broadcasting Act established the incorporation of the SABC, as the successor to the Corporation, 1927 and provided that the affairs of the SABC would be run in accordance with the Companies as repealed Act of 1973 the by Companies of 2008,Act No. 71 as amended. The business of Broadcasting Act into two distinct services namely the the SABC Commercial Public and Services Broadcasting Public (PBS) is further Serviceswhich (PCS), are defined to beadministered separately. by the The SABC hasrequested forthis distinction to be removed because in practicalterms the SABC hasunitary model that governs its services and is consequentially unable to account separately for each group of services radio (PBS stations 15 and two TV channels;PCS three radio stations and two TV channels). Each SABC radio service and television channel is licensed separatelyICASA by and areall required to adheretotheir respective licence conditions and the provisions ofthe Broadcasting Act, including the SABC Charter. Founding, Current Legislation and Policies Founding, Current Legislation The South African Broadcasting Corporation African South The Broadcasting a Schedule is SABC’) (‘The Limited (SOC) the of terms in entity Entity) Public 2 (Major 1999, 1 of No. Act Management Finance Public as amended. Legislative

AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 26 AT A GLANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 27 of the SABC objectives The o carry outresearch and developmentwork in relation technology to any relevantto o provide to other bodies such by means and methods be as may convenient,services, o provide sound and television broadcasting services,whether analogue by or digital means o provide, in its public broadcasting services, radio and television programming that informs, o provide television and radio programmes and other any material to be transmitted or o nurture South African talentand train people in productionskills and carryout research o develop, produce, develop, o manufacture, purchase, acquire, sell, rent or use, display, dispose of o organise,o present, produce, provide or subsidise concerts, shows, variety performances, o be responsiveto audience needs,including the needsofthe deaf and the blind andaccount o acquire from time to time a licence or licences for such period and subject to such o provide other services,whether or notbroadcasting or programme supply services,such o establish and maintain libraries and archives containing materials relevant to the objects of theobjects ofthe Corporation and to acquireoperation by registration, oflaw, purchase, assignment, licence or otherwise copyright and designs, trade marks, trade names and any other intellectual, industrial and commercial property rights; T o collecto news and information part in any of the world and manner in any thatbe may thought o commission, compile, prepare, edit, print, make, publish, issue, circulate and distribute, T programmes and materials to be transmitted or distributed such by bodies and to receive from such other bodies services, programmes and materials to be transmitted stations by of the Corporation for reception as above; and to provide sound and television programmes of information, education and entertainment funded advertisements, by subscription, sponsorship, licence fees or other any means of finance; T educates and entertains; T distributed the by common carrier for free-to-air reception the by public subject to section 33 of this Act; T and development for the benefit of audiences; T T sound recordings and films and materials andsound recordings apparatus and films; and for use in connection with such T revues, musical and other productions and performances and other entertainment whether live or recorded in connection with the broadcasting and programme supply services of the Corporation or for purpose any incidental thereto; T on how to meet those needs; T regulations, provisions and licence conditions be as may prescribed the by Authority; services being ancillary services; T the Corporation and available to make to the public such libraries and archives with orwithout charge; T fit and to establish and subscribe to news agencies; T withor without charge, such books,magazines, periodicals, journals, printed records, matter, cassettes, compactdisks, video tapes,audio-visual and interactive material,whether analogue or digital and whether on media now known or hereafter be as invented, may conducive to any of the objects of the Corporation; T (n) (n) (o) develop and extend the To services(p) of the Corporation beyond the borders of South Africa. (m) (m) (k) (k) (l) (j) (g) (g) (h) ) (i (e) (e) (f) (c) (c) (d) The objectives of the Corporation, as set out in Section 8 of the Broadcasting Act are: its make services To available throughout(a) theRepublic; (b) and free peaceful - Oliver Tambo - Oliver and we cannot rest. fight for freedom must go on until it is won; must go on until happy until our country is The as part of man, of the community born in Nkantolo village, Eastern Cape. Dies 24 April. Dies 24 1993 Returns to SA folowing the unbanning of folowing Returns to SA ANC and release of political prisoners. the 1990 Becomes president of the ANC folowing Becomes president of the Albert Luthuli the death of Chief (re-elected in 1985). Oliver Reginald Kaizana Kaizana Oliver Reginald 1967 Exiled to London, England. 1960 Receives five-year banning order from apartheid government. 1959 Becomes Deputy President of the ANC. Becomes Deputy President of the 1917 1958 1940 27 October Marries Adelaide Tshukudu. Marries 1955 1956 1942 Studies law at Fort Hare University, meets Nelson Mandela and becomes involved in student politics. meets Nelson Studies law at Fort Hare University, Becomes Secretary-General of the ANC. Becomes Secretary-General of the 1948 Expelled from Fort Hare University for student activism and becomes a Expelled from Fort Hare University for student activism and maths and science teacher at St Peter’s School in Johannesburg. National Party comes to power. Tambo earns his Tambo National Party comes to power. law degree, and in 1951 starts a law firm with Mandela, while still involved in political activism.

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 28 PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18

29 SABC Performance Situational analysis

SABC staff behind Service Delivery the scenes. The SABC’s bouquet of services includes 18 radio stations, five television channels as well as a digital media offering. Organisational Environment Channel Africa, the 19th Radio Station, is managed by the The SABC, like every other Public Broadcaster, is facing a SABC on behalf of the DoC. world in transition and has to devise and implement a set of

PERFORMANCE The Public Broadcaster’s three terrestrial television channels strategic responses to the challenges facing the delivery of attract, on average, 28 million South Africans in a typical Public Service Broadcasting. Noting the rapidly changing month. The SABC’s News channel and SABC Encore broadcasting environment, the SABC, as a commercially- channel are delivered through DStv’s digital satellite platform funded, state-owned entity, must move with agility to compete and reach 3 878 million and 4 259 million viewers respectively with commercial competitors, meet its public service mandate and comply with public sector operating guidelines. South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 in a typical month. Seventeen of the nation’s top 20 television programmes are broadcast by the SABC’s television channels. The past two fiscals were particularly difficult for the SABC The SABC provides radio services to all South Africans in on many different levels. Against the backdrop of legacy their preferred language through its 18 radio stations. The governance and management failures that have impacted combined average of 28 328 million SABC radio listeners the SABC over many years, the Corporation was unable to per week is based on a richly diverse offering that no other successfully implement key strategies and continued to suffer broadcaster can equal. from reputation and credibility issues. The SABC also has a growing digital media presence across However the Board and management made great strides in the internet including social media, online video, podcasts reducing losses and continued to focus on the fundamental, and streaming platforms. SABC television channels and core issues at the SABC, including stabilising the organisation shows, radio stations and other brands have some of the by filling key vacancies, implementing consequence most popular and engaged audiences in the South African management and reviewing all commercial agreements, social media landscape. regulations and licence conditions that impact on the viability of the SABC. The Board is confident that the new Executive Behind the scenes of SABC3’s Director has a turnaround plan that will make a fundamental The Hostess with Lorna Maseko. impact on both costs and revenue in the second half of the next fiscal. During the year under review, various executive appointments were made including that of the Chief Audit Executive (CAE), Group Executive (GE): Radio, GE: News and Current Affairs, GE: Human Resources and Chief Operating Officer (COO). Positions of the Group Chief Executive Officer (GCEO) and Chief Financial Officer (CFO) were also filled by July 2018. Positions of GE: Media Technology Infrastructure, GE: Corporate Affairs and Head of Legal were all advertised prior to the end of the 2017/18 financial year and the recruitment process will be finalised in the next financial year. These appointments will go a long way in providing the necessary stability to the Corporation from a group executive leadership 30 perspective. PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 31 45% 65 % New quota 20% local content launch at 35% 55% Regulation of online content (this (this content online of Regulation currentlyspace is unregulated) Obligation for services Pay-TV to carry SABC TV channels for free Obligation to broadcast listed sports events in line with the regulations the prescripts of Impact alcohol the on Restrictions advertising terms air-time in of allocation The ban of unhealthy foods advertising Current quota Current view of the Must Carry view of Sports Broadcasting ilms and Publications Board Re Regulations Re Rights Regulations F Online(FPB) Content Regulation d) d) e) Policy/Legislation Nationala) Alcohol Bill Regulations Foods Unhealthy b) c) Broadcaster SABC Commercial Television New incentiveNew channels SABC Public Television SABC Public The Review of the SABC Editorial Policies the of SABC Review The The Editorial Policies were developed the by SABC in 2003 and in 2004 the final Editorial implementation.the SABCIn 2013, embarked on the review Policies were published for of the policies and conducted provincial workshops and thereafter a report was compiled but not translated into the finalEditorial Policies. the SABCIn 2016, revised the policies and submitted these policies to ICASA for approval. Thereafter, ICASA declared amendmentsthe 2016 and policies invalid because there was no proper consultation with the public with respect to the final policies. theIn 2017, Board revived the project with viewa toaligning the SABC EditorialPolicies with ICASA’s ruling as well as aligning the policies with the revised and new broadcasting legislation. The first public consultation process began in July and 2017 the second public consultation process will be carried out in fiscal. the 2018/19 Otherpolicies pending or legislationthat affect to are likely are: business the SABC For televisionFor services the increased quotas are asfollows: inquiry television subscription into ICASA broadcasting services ICASA published the GovernmentOn 25 August Gazette 2017, in respectNotice of the Discussion No. 41070 Document – Services Broadcasting Television Subscription Inquiryinto (‘Discussion Document’). The publication invited interested parties to submitwritten comments or representations on the Discussion The Discussion Document 4 December by 2017. Document sought to address the existing barriers to entry and other any anti-competitive practices in the The sector. SABC participated in the public consultation process with the view to influence balanced regulations that promote fair competition in the broadcasting sector. 70 year nd 60 year 2 st (applicable after (applicable months18 of the publication of the final regulations) 1 70 35 837 to R60 940. Whilst

New quota

25 40 094.

Current Current quota

changes SABC public radio SABC public SABC commercial radio Broadcaster On 23 MarchICASA 2016, published the revised television and radio local content regulations. The SABC participated in the public consultation process leading to the development ofthe local content regulations. These regulations have prescribed new local contentquotas. As a resultthe SABC Radio Services implemented increased local music quotas from whilst September SABC 2017 TV implemented the increased quota from 23 March The increased 2018. local music quotas for radio services are as follows:: ICASA Regulations on South on Regulations African ICASA Government Content, 2016, Television Gazette Regulations 39844 No. ICASA and Government Southon African 2016, Music, Gazette 39844 No. theapplication fee forthe renewal oflicences has increased from to R6 R5 787 On20 March ICASA published 2018, noticea toinform the industry about the increase of administrative fees in relation to service licences. The annual increases are a prerogative ofICASA and as such this incrementwas introduced withoutinstituting the publicconsultation process.The increase is effective as of1 April ICASA stated 2018. that alladministrative feesassociated with applicationsand registrations is increased 5,3% in by line with the average ConsumerPrice Thus the Index application (CPI). fee for the amendment oflicences and transfer oflicences for broadcasters has changed from R57 ICASA General Licence Fees Regulations Regulations General Fees Licence ICASA Gazette Government in as published Notice 20 March of 2018 41510 No. The SABC participated in the public consultation leading to thedevelopment ofthese regulations.Herewith are ICASA regulations which affect the business of the SABC.

During the period under review, ICASA ICASA review, under period the During discussion and regulations new published Electronic the by required as documents 2005. of Act Communications Key Legislative Key Legislative SABC management interacting with stakeholders.

Strategic Outcome oriented goals diverse cultures, languages, life experiences, interests and needs of its audiences. During the 2017/18 financial year, the Financial Sustainability Public Broadcaster commissioned content from Provinces outside Gauteng. Approximately 50 such programmes were Goal: To be a financially sustainable organisation broadcast during the year under review. An increase in the For the period under review, the SABC’s financial position hours of content broadcast in marginalised languages was remained under pressure. Total revenue for the full financial also noteworthy. year was R6.6 billion against a budget of R7.3 billion resulting One of the SABC’s 2017/18 financial year’s strategic objectives in an underperformance of R709 million (10%). However, a was to enhance its digital media platforms to attract more year-on-year performance showed an improvement of R56 audiences and increase universal access on a multiplatform

PERFORMANCE million (1%) driven mainly by commercial revenue. basis. In order to achieve this it was crucial to upgrade the Total expenditure incurred for the 2017/18 financial year Corporation’s websites resulting in increased consumer and amounted to R7.269 billion compared to the budget of R7.279 commercial appeal. The SABC was only able to upgrade two billion. The R11 million (1%) underspend is mainly owing to of its websites after the service provider responsible for this amortisation of content and other expenses. project was requested to suspend its services. Towards the

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 latter part of the year Board and management placed renewed As a result of the above performance, the SABC showed a focus on the SABC’s digital media strategy to ensure that the total net loss of R622 million, compared to the budgeted net Public Broadcaster is competitive in this space. profit of R32 million, which is a variance of R654 million. Human Resources As at 31 March 2018, the SABC’s cash position was R131 million. Net cash inflow of R49 million was generated since the Goal: To develop a dynamic and motivated fit-for-purpose beginning of the financial year. Although a slight improvement workforce that embraces learning and is sufficiently from the previous year, the Corporation was still unable to adaptable to migrate into the digital age. generate sufficient cash to meet all its financial obligations. People orientated strategies remained a key focus area for the At the end of the 2017/18 financial year, the SABC’s creditors’ SABC during the year under review. Attracting and retaining payment days stood at 205 days compared to the 93 days at staff through effective talent management, embedding a high the end of the previous financial year. The Corporation was performance culture and optimising learning and development unable to settle outstanding accounts within the prescribed were the main objectives during the period under review. period owing to insufficient funds. A Career Progression Framework, to enhance employee Debtors’ days of 39 days ensured that the cash flow position development, was developed and presented to the Executive was improved during the year. The reduction in collection Committee (EXCO). The proposed framework will be days was mainly achieved through early-settlement discount implemented once the review of the SABC’s operating model for advertising accounts. has been concluded. Content and Platforms Performance management was put in place for top and senior management with the majority of performance contracts Goal: To acquire and schedule compelling and quality having been signed off by the end of the financial year. programming, spanning a range of genres, in all official Performance contracting will be cascaded down to the rest of South African languages, across traditional and digital staff in the 2018/19 financial year. media platforms. The SABC remained committed to delivering on its Workplace During the year under review, the SABC performed very well Skills Plan (WSP). However, due to the financial constraints in its objective of contributing to nation building by acquiring experienced by the Corporation, the delivery on WSP training and scheduling content that reflects the South African story. was nominal. Training service providers could not be procured Local content quotas on all three television channels were or paid resulting in priority being placed on urgent and critical 32 exceeded. PBS radio stations also exceeded all their genre training needs only. quotas in terms of news, current affairs, informal knowledge building education, children and drama ensuring that the Competition for audiences and advertising revenue is nation is informed, educated and entertained in the language increasing with significant new players entering the market, of their choice. many of whom operate on a global scale. A fresh look was necessary from the inside (business processes, systems and The SABC continues to provide the South African public with staff) and from outside (market behaviour) in order to stay a wide range of high quality local programmes that reflect the relevant. Governance Goal: To ensure compliant governance practices In an effort to strengthen the Corporation’s internal controls, complemented by effective risk management and additional effort went into clearing previous internal and internal controls. external audit findings. Significant progress was made on both these deliverables, however, it should be noted that this For the period under review, the SABC’s aim was to deliver on is an on-going process that will continue in the new financial the highest standards of compliance with not only the letter, year. Strategic Outcome but also the spirit of relevant governance codes. To achieve this, processes and practices were reviewed to ensure The identification, assessment and mitigation of strategic, compliance with relevant legal requirements. There was a compliance, operational and fraud risks form the core of the renewed focus on the use of funds, to ensure spending in SABC’s enterprise-wide risk management. During the period an efficient and cost-effective manner, as well as adherence under review, 76 risk management plans were completed for to good corporate governance practices that are continually identified risks. The plans are monitored and evaluated on an benchmarked against the risk management framework issued on-going basis. by National Treasury.

Delivery on Predetermined Objectives SABC 2017/18 PERFORMANCE ON PREDETERMINED OBJECTIVES Performance Strategic Objective Key Activities Target FY2017/18 Performance Comments on Variance Indicator(s) FINANCIAL SUSTAINABILITY GOAL: To be a Financially Sustainable Organisation Ensure that the SABC is Manage revenue Achieve annual Net Profit R0 R622 million loss Not achieved. Revenue financially sustainable and expenditure in before Tax as per the targets were not met. PERFORMANCE through maintaining accordance with the approved budget. Expenditure was within profitability. approved budget. budget. Tough economic conditions, advertiser cut- backs, decline in audience share and households’ low disposable income South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 contributed to revenue targets bot being met. Ensure that the SABC Maintain a favourable Maintain favourable 60 average creditors 205 days Not Achieved. Owing to the is able to meet its cash position through creditors’ payment payment days. SABC’s financial situation financial obligations working capital average days ratio. and minimal cash resources through adequate cash management (financial creditors could not be paid management. ratios). within the target date. Maintain favourable 60 average debtors 39 days Achieved. Initiatives such as debtors collection collection days. early settlement discounts average days ratio. contributed to the lower debtors collection days. CONTENT AND PLATFORMS GOAL: to acquire and schedule compelling and quality content, spanning a range of genres, in all official South African languages, and exceeding mandate objectives across traditional and digital media platforms. Meet local content Contribute to nation- Achieve ICASA local SABC1 70% SABC1 73% Achieved. requirements of SABC building by acquiring and content quotas as per SABC2 60% SABC2 71% Local content quotas were licences as per the scheduling content that terrestrial television SABC3 40% SABC3 52% exceeded on all three ICASA regulations reflects the South African channel licence channels. story. conditions. Achieve ICASA PBS • N ews: 60 min/day; • N ews: 87 min/day; Achieved. Radio genre quotas as • Current Affairs: 60 • Current Affairs: 172 min/ PBS Radio genre quotas per SABC Broadcast min/day; day; exceeded. licence. • Informal Knowledge • Informal Knowledge building: 180 min/ building: 1 561 min/week; week; • Ed ucation: 359 min/week; • Education: 300 min/ • Children: 134 min/week week; • Drama: 207 min/week • C hildren: 60 min/week • Drama: 150 min/week Embrace diversity in Increase number of Number of provincial 8 programmes 57 programmes Achieved. The SABC television broadcasting provincial programmes. programmes. was able to commission through the production / procure more provincial of provincial content programmes than expected. 33 and marginalised Meet ICASA marginalised Hours of marginalised Ave 1hr 48min per week Ave 1hr 35 min per week Not achieved. language programming. language targets on PBS language content Corrective action strategies platforms broadcast to increase marginalised language content could not be implemented owing to a lack of funds. Performance Strategic Objective Key Activities Target FY2017/18 Performance Comments on Variance Indicator(s) Achieved. Targeted number plans risk management of exceeded. Not achieved. A total of findings146 were issued theby AGSA by on its final management letter dated 8 August - 69 findings 2017 have been resolved, 77 are still in progress and 7 findings have not been started. Achieved. On-going process Achieved. to clear audit findings. Not achieved. The SABC could not procure and pay service providers for training owing to Corporation’s financial situation. Not achieved. New individualsincumbents and in acting positions still concluded. be to needed The matter will be rectified in new financial year. Not achieved. A decision was taken to pause and further approval implementation until such time that the SABC’s operating model review was finalised. Not achieved. SABC’s old and out-dated websites are not attracting audiences. Not achieved. The service provider that was contracted for the project was handed over to SIU for investigation. Insufficient SABC capacity for website development and content delivery. METRO FM entertains its listeners at the All White Gospel Picnic. 40 49% 50% 1.3% training1.3% needs addressed. Over 70% of top and senior performancemanagement concluded. contracts were The Career Progression Progression Career The developed was Framework and presented to Group Exco. 24% decline 3 16 50% 50% 80% achievement of digital migration training needs as per the WSP. Performance Contracts in place for top and management. senior Developed Career Career Developed Framework Progression approved the by Board. 5% 7 Number of completed risk plans. management Percentage of previous previous of Percentage findings Auditor-General resolved. Percentage of previous previous of Percentage internal audit findings resolved. Digital migration training through addressed needs WSP. Signed-off performance contracts and reviews conducted. A developed Career Career developed A Framework Progression Policy. and Percentage audience growth on SABC Websites. Number of SABC websites upgraded and launched. Identification, assessment and mitigation of strategic, compliance, operational and fraud risks. Strengthen internal Strengthen internal controls Develop a Workplace Skills Plan (WSP) and operational training plan that is aligned to the digital migration requirements. Institutionalise Institutionalise Performance Management policy with revised tool for top and management. senior Develop and implement Progression Career a enhance to Framework development employee and improve employee retention. Upgrade SABC websites to increase consumer and commercial appeal. GOVERNANCE Goal: ensure compliant governance practices complemented effective by risk management and internal control framework. Effective risk management and internal sufficient environment control to ensure compliant governance practices. Optimise learning and development to ensure sustainability and digital the for readiness age. Embedding a high performance culture performance through management. HUMAN RESOURCES GOAL: develop a dynamic and motivated fit-for-purpose workforce that embraces learning and is sufficiently adaptable to migrate into the digital age. Attracting retaining and staff through effective management. talent CONTENT AND PLATFORMS continued... PLATFORMS AND CONTENT GOAL: to acquire and schedule compelling and quality content, spanning a range of genres, in all official South African languages, andexceeding mandate objectivesacross traditional digital media platforms. and Enhance digitalmedia platforms to attract audiences and more universal increase access

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 34 PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 35 % % 98 60 (6) (91) (52) (44) (40) (34) (54) (100) (106) (106) (230) 172 538 172 756 265 (80 663) 452 772 (13 995) (76 389) (588 681) Movement Movement 76 378 378 76 436 954 006 (1 954) (602 996) 31-Mar-17 (713 074) (321 180) (1 143 390) 143 (1 508 658 31-Mar-17 (11) R’000 R’000 13 067 13 27 062 R’000 R’000 81 742 742 81 107 881 (799 365) 43 191 43 191 48 775 (799 365) 848 140 130 517 517 130 742 81 48 775 (634 732) (570 000) (570 154 226 234 889 31-Mar-18 (148 642) 31-Mar-18 Income tax Loss for the year 676) (621 039 950) (1 274 418 Net cash inflows/ (outflows) from operating activities Cash and cash equivalents end at of year the Operating loss before finance costs and tax financing income/Net (expenses) Total revenue and incomeTotal expensesTotal 6 627 198 312 6 571 55 886 (7 930) 261 1 702) (7 714 Other comprehensive income/(loss) for the year net of tax Total comprehensive Total income/(loss) for the year 676) 191 (1 Net cash outflows from activitiesinvesting Net decrease in cash and cash equivalents Cash and cash beginning at equivalents of the year Net cash inflows from financingactivities Profitability Cash Flow Statement Flow Cash affect the business continuity. These been have outlined in detailtheinannual financial and statements1b) section (note theCorporation has embarked on a turnaround strategy to address these challenges.The approved three yearbudget depictspositivea outlook which will improve our liquidity position. TheCorporation contained itscash outflows the operatingon activities,compared tothe Notwithstanding previousyear. theincrease in the trade creditors (which reduced the cash outflow), the net losslower than the previous year which contributed to the slight for the currentimprovement in the cash position. financial year was Lesser investment took place in capital expenditure,compared to the previous financialresources year to fund the capital expenditure plan.This however due to constrainedresulted internal in delaysin the investmentson infrastructure projects which could expose the Corporation to various risks. perpetual governmentthe for million R7 instalmentfirst of The debt of R27 million was repaid to the DoC. The Corporation has held this debt since A further 1972. R6 million is scheduled financialyears.two next the instalmentstwo over in paid be to The Corporation also paid R12 million towards lease arrangement for fleet the of motor vehicles. finance TheCorporation recorded neta loss R622 million, lower than the previous financial year net losscomprehensive of billion loss of R1.2 was due to the R1 negative billion. The total actuarial valuations on post-employment benefitsservice and awards which amounted million. to R570 long The total revenue and income performed better than the whilst the Corporation previousR56 year by million (1%), contained its expenditure amounting to a reduction of R453 frommillion the prior The major (6%) year. savings were 31-Mar-16 1.21 1.68 31-Mar-17 1.25 1.75 1.85 0.86 R’000 R’000 R’000 881 346881 022 073 2 017 2 676 1 417 199 1 417 1 362 770 066 1 423 2 067 441 205 1 416 1 726 227 1 775 7981 775 042 1 716 2 902 116 2 590 188 955 3 135 2 923 194 4 365 986 997 4 851 5 825 310 3 484 640 2 778 975 293 3 149 31-Mar-18

Total liabilities Total Non-current liabilities Current liabilities Non-current assets assets Total Equity Current assets Total equityTotal and liabilitiesSolvency 4 365 986 997 4 851 5 825 310 Current ratio

information Summary of Financial Financial of Summary Going ConcernGoing The SABC continuesto operate asa going concern with the solvency ratio still favourable. It must be noted however thatthe Corporation isfaced with liquiditychallenges which Liquidity The shortterm liabilities and Other increased (Trade Payables) significantly in the course ofCorporation the beingunable tosettle all creditors financialtimeously. The year due to the liquiditychallenges resulted have in the Corporation being in a current exceed liabilities currentliability net (current situation The paymentassets). period exceeded the planned payment period stipulated of 60 (as days in the Annual Performance Report). This was offset however with outstanding debtors’ collection of 39 which days, assisted in working capital management. Solvency Solvency The SABC maintained itssolvency exceeded (assets liabilities) as at the March endThe of 31 solvency 2018. decreased the over past three years. This is due to the liquidityconstraints faced the by Corporation. The cash levels droppedsignificantly, liabilities. increases coupled with in The net losses experienced the over years also have negatively affected the equity of the Corporation. Solvency and Liquidity and Solvency The Corporation still faces tougheconomic conditions which sees expenses exceeding the revenue generated. Theaudience share and TV license collections not yet have stabilized to resultin a sustainable upswing in the revenue generation. There are resulted in the Corporation significant notbeing ableto settle all its liquiditycreditors and other payables timeously. thereforeTrade have challenges whichsignificantly increased by have 58% from though even cashyear, reserves grew R49 million by (60%). the previous financial The Corporation maintained declined itshowever solvency, into a net current liability position. The strategy Turnaround thatwas approved subsequent to the financial year end isCorporation designedfinancial sustainability. to to ultimately return the The Corporation reported a net loss of R622 R622 of loss reported a net Corporation The R1.2 of loss comprehensive (Total million year. the for billion) 3 188 484 3 099 781 2018 2017 1 950 084 1 714 0291 714 98 450 718 132 673 311 671 477 538 031 519 135 486 822 159 913 167 294 136 401 105 696 105 463 92 89 947 118 213 94 589 67 471 67 093 52 229 46 647 61 755 48 417 (3 061)(3 11 180 2 649 IA costs costs PFSR PFSR Signal Signal Employee Broadcast 622 million net losses and March as at 31 2018; urrentliabilities exceeded currentassets, meaning that the he inability ofthe Auditor-General to satisfy itselfof the he late submission of the estimated useful lives of fixed qualification) related a into (which findingsled prioryear he Impairment Impairment Impairment Impairment (personnel) linking costslinking (operational) Other lossesOther Amortisation Amortisation Depreciation R C Corporation was not able to meet allthe short term debts due. are they when T existence and completeness on assets under construction; T assets and the impairment review; and T totransfers ofassets, changes in estimated useful life assessmentsand thecompleteness ofthe assetregister were not resolved during the current financialyear. trade debtors trade GRAPH: Total Expenditure Total GRAPH: Direct revenue revenue Direct The Auditor-General could not satisfy itself of the reasonability of the Corporation’s cash supporting the going concern assumption flow used to prepare the projections andannual financial forecasts statements and management’s assessment of the viability of the entity in the foreseeable future. equipment and plant Property, Findings related mainly to: • • • These findings also impacted on the taxation calculations. Irregular expenditure The Corporation has a number of challenges with internal controlsystems, supply chain management and record- keeping. This impacts on its ability to prevent, identify, record and substantiate irregular expenditure. As a result the Auditor-Generalcould not satisfy itself with the completeness reportedof irregular expenditure. informationFor on other areas that contributed to the disclaimer ofopinion please refer to the reportof the Auditor- General on pages 84 to 87. Audit Outcome Audit The Auditor-General issued a disclaimer of audit opinion to the Corporation.The basis for a disclaimer ofopinion is mainly attributable to three core areas which are: Uncertainty of the going concern assumption used as basis for the preparation of the financial statements In preparation of Corporation used the going concern assumption but noted the annual the material uncertainties affecting the assessment financial being: statements,• the • consulting fees distribution and collection costs Marketing costs Other expenses expenses Other expenses Other Professional and Advertising exchanges Trade Business enterprise Sponsorships License fees* Mobuke Programme rights exploitation Channel carriage fees Government grants Other income Advertising exchanges Trade Business enterprise Sponsorships License fees* Mobuke Programme rights exploitation Channel carriage fees Government grants Other income 71% 71% 1% 1% 3% 4% 2% 2% 1% 1% 14% 14% 6% 6% 1% GRAPH: 2017 GRAPH: 2018 1% Total Expenditure Total The overall total expenses decreased R453 by million from the previous financial year. Amortisationmajor contributor of of this decrease. This is directly linked to content was a the liquidity constraints faced the by Corporation. These challenges resulted in delays/ difficulties in securing licensed and commissioned content. Heavy reliancewas therefore placed on repeat programs being broadcasted. Some of the sporting could events also not be broadcasted. In containing itscosts, the Corporation yielded savingsin other maintenance and expenses travelling (especially expenses Lowercosts). usage of consultants and legal services also resulted is some cost savings. Marketing campaigns/ initiatives were suspended due to low cash flows, resulting in savings as well. The employee cost still constitutes the major portion of the total expenses an average (exceeding of 40%). The composition of revenue streams performed streams The composition revenue of similarly in the comparativeThe advertisingyear. revenue still contributes a significant portion of the Corporations revenue mix (71%). The license fees comprised ofthe total revenue in 14% both financial years. In line with advertisingsponsorship generated revenue 6% in the revenue mix.Collectively trend, the commercial revenue generated 77% of the total revenue forthe Corporation.Government grant revenue slightly decreased a percent. by Total Revenue and Income and Revenue Total reported on amortization programme, film and sports andrights other expenses (operational).

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 36 PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 37 TheDigital Media projectis a cross-divisional responsibility ofMedia Technology Infrastructure, and Radio.Television The Digital Media strategyis to optimise SABC websites and social media initiatives to increase consumer and commercial appeal. potential Revenue will be realised once all the operational. platforms are digital envisaged Live entertainmentLive with Radio 2000’s Haibo.Planet SABC2 staff and interacts talent with mediaand stakeholders. Industry development Commercial Enterprises successfully migrated to Net Rate zero-based non-commission or as known (also Cards The frommove Gross bearing)from toNet RateApril1 2017. divisional strategyCardselement was a key ofthe 2017/18 and itinvolved reviewing commercial airtime inventoryand discounts prior to finalising the annual Pricing Strategy. Extensive planning was done to ensure a smooth transition Commercial by Enterprises increase implementing the VAT effective In addition from to 15%. 1 April to from 14% 2018 cross-divisional systems alignment,the advertising booking system was configured to apply rate tothe VAT all new order confirmations for bookings from 1 April 2018. All campaigns campaign and analysed were April into overlapping 2018 spots were moved to new campaigns to ensure accurate invoicing. Another focus area was to embed the Commercial Enterprises businessethos and values in the minds ofall staff. The objective was to cultivate a shared divisional understanding of ‘delivering business opportunities to clients’ and also entrenchingaccountability discipline.The businessand ethos is aligned with the broader SABC mission, vision and values.

ny legislativeny bans on advertising alcohol or regulation of ny ny fine arising from the Competition Commission finding A fast foods during peak audience times. A  that the SABC had engaged in collusive practices with other media owners in its granting of Agency Commission and and Early Settlement Discounts; Revenue GenerationRevenue The SABC mandate to deliver extensive public value is The purpose funded of primarily commercial by revenue. Commercial maximise Enterprises to is commercial airtime deliveringrevenue by business opportunities to clients in increasingly an competitive media advertising The market. revenue is generated through the sale ofclassic advertising, television, sport SABC across and sponsorships programme platforms. online and radio, The extent of conditions resulted in Commercial advertising Enterprises falling short cutbacks and of quarterly difficult revenue targets from trading Of thenote was that year. SABC1 and the portfolio ofALS start radio of the financial stations were consistent revenue flagships. In addition to efforts to maximise SABC commercial airtime revenue from the sale of classic advertising and programme andsport sponsorships, alternative revenue streams were identified and developed during the UnitAccordingly, was established the ‘Ad-Venture’ to period under review. generate revenue fromnon-traditional sources and return- on-investment based (ROI) initiatives. • Business Environment Againstthe backdrop ofthe depressed economyand unsettled political environmentin South Africa throughoutthe 2017/18 financialyear, the continued perception of SABC’s instability held most by of its trading partners led to a decline in revenue. Other factors contributing to revenue under-performance were the audience decline of SABC2 and especially SABC3. Further more, the audience and revenue recovery from the selfimposed 90/10 local contentquotas on radio stations address advertising takinglonger To thananticipated. cutbacks and concerns about the state of the organisation during the period under on-going review, high-level meetings wereheld with all major advertisers and agencies toassure them aboutbusiness continuity and the value offered the by extensive mix and depth of SABC’s audience reach. The appointment of the SABC Interim Board and subsequently the permanent signalled the Board beginning in October 2017, of a process to restore organisational stability. Attention was given to reviving unimplemented strategies, addressing the cashcrisis facing the SABC and dealing with leadership instabilityorderin rejuvenate to the SABC within theconfines of its funding model. Likewise, Commercial Enterprises engaged its trading partners advertising to stakeholders and create avenues for on-going restore the confidence of interaction with them. Significant business risks for CommercialEnterprises in the forthcomingfiscal are: • revenue revenue Commercial Commercial Delivery on mandate Public Service Mandate To many South Africans who have limited access to information Lesedi FM DJ technology and other media platforms, radio remains a critical in studio. source of information, education and entertainment. To that end, the SABC’s radio stations continue to serve this large section of the South African population and the PBS radio SABC RADIO stations remain core in the delivery of the Corporations’ public service mandate. The SABC boasts the top five most listened to radio stations in the country, based on All-Adult share performance. These This mandate is set out in the SABC’s founding legislation. are: Each station has licence conditions that cover a myriad of 1. Ukhozi FM: 16.7%; issues such as education, national development programme, 2. Umhlobo Wenene FM: 13.6%; social cohesion, sports and recreation, arts and culture and 3. Lesedi FM: 7.4%; much more. 4. Thobela FM: 7.2%; and 5. METRO FM: 5.3%. South African Music (PCS and PBS) PERFORMANCE Compliance with Licence Conditions SABC’s recent experience bears testimony to the fact that music is a key driver of radio listenership and it can also SABC Radio consists of 15 PBS radio stations and three PCS be a tune out factor. Therefore SABC Radio has strived to radio stations, as divined by the Broadcasting Act. The SABC meet listeners’ needs by playing a variety of music styles that is acutely aware that innovation and appealing content plays a resonate with different people from all walks of life. For the

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 crucial role in ensuring that SABC Radio platforms remain the year under review, the development of home grown artists stations of choice for South Africans. To this end, SABC radio and their music was promoted by different SABC radio stations continue to fulfil and in some instances surpass the stations through extensive airplay, interviews, inclusion in needs of listeners such as news, programming, information, performance line-ups at events and through music awards edutainment and music. ceremonies like the annual METRO FM, Tshivenda Music Awards and Xitsonga Music Awards. SABC Radio concluded the year under review with 27.9 million all adult (age 15+) listeners, which translates to a total During the financial year under review, the SABC radio share of 70.5% of national radio listening [Source: Broadcast stations far exceeded ICASA’s minimum requirements for Research Council (BRC) Radio Audience Measurement South African music. The current Regulations require that the Survey (RAM) July – December 2017]. The SABC’s PBS PBS radio stations broadcast a weekly average of 60% South radio stations contribute 63.8% towards the overall share African music while PCS has to broadcast a weekly average total, while the three PCS radio stations account for 6.7%. of 35% South African music.

TABLE: PBS and PCS performance on local music and ICASA quotas ICASA Week Cume Audiences Stations Year Ave. % Broadcast Language Quota * Jul 16 - Dec 16 Jul 17 - Dec 17 PBS Radio SAfm 67 60 English 148 000 230 000 Tru FM 78 60 Equally in isiXhosa and English 118 000 220 000 Lotus FM 50 60 Mainly English with daily broadcasts in Urdu, Tamil, Gujirathi and Hindi 293 000 171 000 RSG 79 60 Afrikaans 1 387 000 1 273 000 Munghana Lonene FM 84 60 Vernacular 1 027 000 861 000 Lesedi FM 82 60 Vernacular 3 404 000 3 119 000 Radio 2000 72 60 Primarily English 367 000 429 000 X-K FM 90 60 Equally in !Xintali and Khwedam Sample too small to measure Umhlobo Wenene FM 80 60 Vernacular 5 274 000 5 506 000 Ligwalagwala FM 87 60 Vernacular 935 000 1 105 000 Motsweding FM 76 60 Vernacular 2 510 000 2 363 000 Phalaphala FM 73 60 Vernacular 795 000 802 000 38 Thobela FM 85 60 Vernacular 2 802 000 2 789 000 Ukhozi FM 88 60 Vernacular 7 310 000 7 274 000 Ikwekwezi FM 93 60 Vernacular 1 371 000 1 109 000 PCS Radio 5FM 45 35 English 822 000 702 000 Good Hope FM 49 35 English 473 000 473 000 METRO FM 44 35 English 3 674 000 4 120 000 * New ICASA music quotas came into effect on 23 September 2017 (previous quotas were at 25% for PCS Radio and 40% for PBS Radio) PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 39 269 Drama 112 Children IKB Education Weekly Weekly Weekly Weekly Heritage Month was celebrated all the by Women’s Month Women’s commemorates women Sat Sun ugust 2017: ugust eptember 2017: uly 2017: July is Nelsonuly Mandela 2017: Month. In celebrating In August 2017, Good Hopein FM associationIn August2017, with GrandWest hosted the United which was born out of the need to alleviate the plight in Hope Benefitof communities Concert severely impacted the by Cape storms and Knysna fires. The initiative was Foundation and sister-stations 5FM and METRO supported FM. Local by SABC talentoffered their services for free and the station raised R300 over 000 which waspaid outin equal proportionsto the two beneficiaries, the Community Chest and the South Cross. African Red Off air activations included painting of schools, feeding of thehomeless and the destitute presenters by and station staffas well as partnershipswhere shoes,winter clothing and blankets were distributed to the needy.  SABC radio stations.Content and programming includeda variety of topics related to heritage. Stations promoted nation building through on air programming, digital platforms, as wellas through hosted events radio by brands as initiated theby stations or in partnership with other stakeholders. Heritage Month was given life on deploying air by a month long SABC radiocampaign themed #LoveSA. celebrate To the month all stations played 100% local music on Heritage Day.   stalwartswho marched to theUnion Buildings in 1956. Emphasis of stations’ content was on the celebration of women as community builders;women empowermentand success stories; health; women women’s with disabilities; mentoring young women; including dialogues with women from different walks of life. S 1976 youth riots1976 and contextualizing thisagainst the current challenges facing the youth of today. J Mandela Month underthe theme BitofGood ‘Do in Your HonourofMadiba’ #LiveHisLegacy,SABC radio stations focused on recordingfootage relating minutes to 67 of communities encouraging needy and empowering helping, in our country. A • • • Current Affairs (Daily) Current Mon-Fri 67 67 156 60 60 1450 346 Sat Sun News (Daily) 64 64 64 72 43 43 2378 299 93 - 60 60 60 30 30 30 60 120 30 - 69 45 45 126 55 55 210 576 480 - 30 30 30 30 30 30 180 300 15 - 60 60 60 60 60 60 180 - - 150 60 60 60 60 60 60 180 300 420 150 96 90 90 384 1412 518 109 215 60 60 60 60 180 240 60 150 93 65 65 106 63 63 3352 287 94 156 95 61 61 133 60 60 1660 364 238 205 84 75 75 165 62 62 895 380 310 180 87 65 65 196 64 64 565 319 100 226 91 65 65 158 60 60 2284 291 76 173 70 75 75 109 60 60 2301 329 144 167 93 63 63 125 71 71 1815 467 86 175 78 74 74 101 60 60 1199 335 99 203 60 60 60 60 60 60 180 300 60 150 116 123 65 65 96 62 62 615 - - 150 103 60 60 154 60 60 1107 314 421 305 Mon-Fri June is Youth Month, Junepaying is tribute Youth tolearners Freedom Month is observed annually in April Workers Month and also known as Africa Month is Station ay 2017: pril 2017: une 2017: une2017:  who lost their Soweto uprising. lives in June the 1976 16 Radio Month ushered tracing by in Youth the roots of the J M commemorated annually in mostAfrican Union member (AU) states. Radio promoted the Pan African Parliament and the African Union Anthem.Content and on-air messaging also focused on anti-Xenophobia campaigns and prevention of violence against women. Workers was Day also celebrated in May. A throughout South Africa to celebrate the dawn of freedom and democracy as well as building a common future. Radio tackled the fundamental meaning of democracy in South Africa, the lives lost freedom in and the differenthuman rights as stipulated in the fighting for the ultimateConstitution. prize of Tru FM Tru ICASA Quota ICASA X-K FM ICASA Quota ICASA Lotus FM ICASA Quota ICASA RSG ICASA Quota ICASA SAfm ICASA Quota ICASA Motsweding FM Ligwalagwala FM Umhlobo Wenene FM Umhlobo Wenene Lesedi FM Ukhozi FM Phalaphala FM Thobela FM Munghana Lonene FM Ikwekwezi FM ICASA Quota ICASA • • SABCradio stations delivered public broadcasting value by innovative programming that advocates for social cohesion, nation building,promotion ofdemocracy and empowerment of South African observe citizens. these To themes, stations utilisedvariety a ofpublic service programming genresthat incorporated drama, talk-back show format, pre-recorded inserts,interviews and magazines as well as highly entertaining but informative commercial programming and content. During the periodunder radio review, broadcast SABC mandate programming based on monthly themes that covered national importance. of days These included: • Delivery on Public Value by SABC Radio Radio SABC by Value Delivery Public on ICASA Genre Conditions License ICASA delivered stations radio PBS year, financial 2017/18 the During well above theminimum requirements as stated in theICASA license conditions. On the news front, PBS Radio delivered well against ICASA license conditions with the majority of the radio stations exceeding weekly targets of news and current affairs; drama, children’s programming, education as well as Information Knowledge Building (IKB). TABLE: On PerformanceTABLE: against ICASA genre quotas Africa. Human Rights Day is commemorated on 21 March every year. Radio content featured the meaning of this day, including a commemoration of the Sharpeville massacre as a key event in the history of our country. • 2018 is a significant year in South Africa’s history as it commemorates the centenary of the birth of the country’s revered former President Nelson Mandela. As a result, radio stations delivered content that celebrated the life and times of Nelson Mandela. This was done through promos, interviews and scheduling of relevant music genres as part of the build-up to his birthday in July 2018. Forward looking: The majority of South Africans from a diversity of backgrounds rely on at least one SABC radio station as their primary source of news, information, entertainment and inspiration. In the coming fiscal, SABC Radio will do everything in its power to continue serving the nation, and to defend its 71% audience share. A special focus will be given to talent attraction and Behind the scenes of SABC1’s Tjovitjo. retention, as well as audience research to ensure that all radio stations deliver content that is aligned with audience needs. Radio stations will continue to explore new digital media platforms, for audience engagement and growth purposes. PERFORMANCE • October 2017: Radio continued to play a leading on-air role in the countdown to the centenary celebrations of SABC Television OR Tambo. The countdown involved a number of stations participating in outside broadcasts on 20 October when Compliance with Licence Conditions a man size statue of OR Tambo was unveiled at the OR Local Content

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Tambo International Airport in Johannesburg. The event culminated in the coverage by most radio stations on 27 ICASA regulates local content quotas for all the SABC October 2017 in Nkantolo, Nbizana, the birth place of the channels. The primary differentiation of these quotas is stalwart, OR Tambo. between the PBS channels, SABC1 and SABC2 and the PCS, • November 2017: Content predominantly promoted SABC3. The PBS portfolio had to meet a 55% target and the awareness of ‘16 Days of Activism for No Violence against PCS 35%. Within these overarching targets, the regulatory Women and Children’, highlighting the horrid attacks on authority also stipulates quotas against different broadcast women and children that continue to mar our society. This genres. The graphs below illustrate SABC’s compliance per month was also dominated by matric revisions preparing genre. grade 12 learners for the exams while health programming The measurement of local content carried on SABC platforms focused on World Diabetes Day and the #H2OSlowtheflow is as per ICASA defined methodologies, meaning that Sport to raise awareness on the water crisis in Cape Town. is excluded from local content calculations and only the first • December 2017: SABC Radio successfully covered the 54th play-out of a local programme is fully accounted for. First ANC Elective conference which took place at Nasrec from repeats are counted as half and thereafter no recognition is 14 to 16 December 2017. Stations also actively supported given to local content repeats. World Aids Day and Arrive Alive Campaigns through creative For the period under review, all three channels exceeded on-air campaigns. the local content requirements, even when measured using • January 2018: For the back-to-school campaign, Radio the ICASA prescribed methodology. SABC1, in terms of stations launched various on-air and marketing campaigns full-day coverage, exceeded the target at 72.98%. About to provide assistance to less fortunate learners and 84% of content broadcast during SABC1’s prime time was schools. The annual School Shoe collection and distribution local content. SABC2, which shares SABC1’s 65% target, campaigns were prioritised during this period. SABC delivered 70.89% for full-day coverage and 90.62% on prime platforms also broadcast live the January 8 address by the time. SABC3, as the PCS channel has a local content quota of President of the African National Congress (ANC). 45%. The platform delivered 51.93% for full-day and 56.64% for prime time. • February 2018: World Radio Day is a day to commemorate radio as a medium and is celebrated annually on 13 Genre February. SABC radio stations supported the initiative by discussing various topics including the UNESCO theme of In terms of the SABC’s genre quotas, SABC2 fell short sports commentary in radio and its relevance today. on its children and educational genre mandates. These 40 shortfalls were primarily as a result of schedule disruptions S tations covered the resignation of former President Jacob to accommodate events of national importance and sports Zuma, the swearing in of the new President Cyril Ramaphosa, coverage. Due to the time at which these events take the State of Nation Address by President Ramaphosa, the place the impact was greatest on children and educational cabinet reshuffle and the budget speech by the Minister of programmes. SABC3 exceeded all its genre quotas for the Finance, Mr Malusi Gigaba. period under review. • March 2018: March is generally regarded as International The graph on the following page depicts the SABC’s Women’s Month. It is also Human Rights Month in South performance on genre: PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 41 22:51 20:58 SABC3 ICASA’s Quota ICASA’s ICASA’s Quota ICASA’s ICASA’s Quota ICASA’s Current Performance Current Performance 19:36 19:11 18:12 18:06 17:52 16:24 68:07:59 68:50:48 41:00 41:00 1:48 1:54 1:52 1:18 10:52:47 10% 8.63% Marginalised Marginalised ABC3 Language delivery during TV S performanceperiod L performanceperiod  Other than English English than Other English than Other (excl marginalised) (excl marginalised) (excl %

inimum number ofhours ofprogramming in languages inimum number ofhours ofprogramming in languages inimum number ofhours ofprogramming in languages inimum number of hours of programming in marginalised

Total other than English than other Total English than other Total

SABC1 SABC2 languages prime in time;  including marginalised otherthan English, languages, in andprime time;  including marginalised otherthan English, languages, in performance period. A m  marginalised languages, in excluding other than English, prime time; A m  A m A m Hours Current performance vs ICASA’s quota performanceCurrent ICASA’s vs week per hours/min Average English than Other NB. Mandate performance was affected by programming of national interest. Current performance vs ICASA’s quota performanceCurrent ICASA’s vs week per hours/min Average English than Other Source: Broadcast schedules 3 April - 1 April 2017 2018 Source: Broadcast schedules 3 April - 1 April 2017 2018 GRAPH: Current performance vs ICASA’s quota performanceCurrent ICASA’s vs week per hours/min Average interest. national of programming performance affected by Mandate was NB. Source: Broadcast schedules 3 April - 1 April 2017 2018 GRAPH: anguage delivery during TV GRAPH: Language delivery during Prime Time • • theFor period under despite review, challenges in terms of the schedule disruption,with the exception ofSABC3’s delivery onlanguages other than English, the SABC TV network either metor exceeded ICASA language mandate with regards to minority languages. Language SABC delivery Television on the language mandate is measured follows: as • • SABC1 SABC2 96.24 94.54 Full day Full Prime Time 90.62 Full day Full ICASA’s quota ICASA’s Full day Full ICASA’s quota ICASA’s 80 Full day Full ICASA’s quota ICASA’s 80 75.19 83.88 74.35 71.30 69.74 69.28 66.95 72.98 70.89 60 60 57.16 55 55.13 55.85 53.70 55 53.04 50 50.59 50 50 50 50 48.67 56.64 51.93 35 34.03 35 30.80 30 30 25 20 Affairs Affairs Drama Drama Current Current building Affairs building Drama Informal Informal Informal Informal Children Children Current building Informal Informal Children Education Education knowledge- knowledge- knowledge- Documentary Documentary ICASA’s overall quota amended to: 55% (new quota 65%) for PBS and 35% (new quota 45%) for PCS Source: Broadcast schedules 3 April - 1 April 2017 2018 % Local content per genre % Minutes % Local content per genre % Minutes Documentary GRAPH: SABC2 as PBS channel GRAPH: SABC Local content Source: Broadcast schedules 3 April - 1 April 2017 2018 GRAPH: SABC3 as PCS channel % Local content per genre % Minutes SABC1 SABC2 SABC3 GRAPH: SABC1 as PBS channel Source: Broadcast schedules 3 April - 1 April 2017 2018 Source: Broadcast schedules 3 April - 1 April 2017 2018 Non TV Other TV/ Actual Actual Actual Actual Actual** year, South Africa year, is taking part in the global SABC3 e.tv Mnet DStv th Target Anniversary death in detention, Biko’s of Steve including th eptember is HeritageMonth which culminates in the ABC provided live coverage of a range of of events national heSABC is committed toempowering South Africans living orthe 16 Actual T S importance,including coverage ofthe State ofthe Nation Address (SONA) and the Budget Speech. In addition, key national events, such as the ANC National Conference and the leading events to the resignation ofPresident Jacob Zuma and the inauguration of his successor, President Cyril Ramaphosa were also well covered. 16 Days ofActivism 16 for ‘No Violence againstWomen and joined SABC Television November, campaign. In Children’ hands with NGO People Opposing Women Abuse (POWA) to support Days of Activism the 16 for No Violence against Women andChildren holding by a Walkathon.This was in addition to programming dedicated to addressing this scourge.  with disabilities, both through the provision ofappropriate content and commissioning by content, where possible, from production houses where people with disabilities are (PWD) representedin ownership structures.In October,in addition special a on emphasis programming, there regular was to contentthemes related to this,with sign language extended to additional programmes such as ‘Op Pad’ on a temporary basisand features on the challengesfacing those dealing with albinism. In addition to of events national importance, World AIDS and Day the International ofPeople Day Living with Disabilities were celebrated all three by channels. Activities to honour these included days dedicated talk shows and other support programmes.   S ofHeritage celebration Day Public on September. 24 broadcasting contentacross the three channelswas aligned to the commemorations and celebrationswhere special emphasiswas on the celebrationofour heritage. On Heritage Day, SABC2 took a live broadcast ofheritage celebrations the as delivered the by Presidentin official Mpumalanga. South African culture was celebrated across rangea ofprogrammes as part ofSABC’s contribution to heritage month,including ‘Daily‘Selimathunzi’, Thetha’, ‘Expresso’,‘iDentity’, ‘Kulture ‘Sadhana’, Nur’, Kwest’, ‘An TV’ ‘YO ofInspiration’, ‘Journeys and ‘Izwi‘Aum’, la Bantu’, ‘Hectic Nine culminating 9, in the annual South African which MusicTraditional were broadcast Awards (SATMA), on thelast night ofthe month.SABC made furthercontributions to nation building through content that commemorated the 40 Joseph,Rahima Moosa andLillian Ngoyi played in the 1956 March. Women’s discussions Black about Consciousness. F • • • • SABC2 Target Actual SABC1 Target Actual 46 44.3 27 27.4 13 11.8 6 5.2 13.8 0.3 30.2 11.3 46 43 27 25.8 13 11.6 6 5.5 12.7 0.4 31.7 12.2 46 43.5 27 27.2 13 11.4 6 4.9 13.3 0.3 31.4 11.6 46 44.6 27 27.6 13 11.9 6 5.1 14.6 0.4 29.2 11.3 46 46.2 27 28.7 13 12.3 6 5.2 14.8 0.4 28.3 10.2 54 54 35 37 14 13 5 4 14.9 0.6 23 7.5 54 52.5 35 36 14 12.9 5 3.6 14.1 0.6 24.5 8.3 54 52.7 35 36.5 14 12.5 5 3.7 15.2 0.5 23.8 7.7 54 54.7 35 37.2 14 13.1 5 4.4 15.1 0.6 22.2 7.4 55 55.8 36 38.2 14 13.4 5 4.2 15.3 0.6 21.5 6.8 Network Target Freedom Day, Africa Freedom Day, Month,Workers and Day Performance Period uarter July’s 2: focus was Mandela month; with uarter 1: Q  programming across the network highlighting the role heplayed in the creation democraticofa country, and celebratinghis life, wisdom In and August legacy. the Divisional focus shifted to National Day; the three Women’s channels carried contentdealing with issues women’s especially concentrating on violence against women and young girls, The channel also took a live broadcast on 9 from theAugust Northern 2017 Cape, where the President delivered note address a key as part day of the women’s celebrations.Other highlights included TV’s’ ‘YO roll out ofthe ‘She’ campaign – comprising a setof inserts that feature young female celebrities and a group of fiveyoung girls who ‘hangout’ and chat about pertinent issues affecting them. ‘Hectic Nine 9’ celebrated ‘Women and in Science’, ‘Mostwako’ interviewed and ‘Real Talk’ women who are impacting society in variousSophia Williams-De Bruyn asstoryline integration to fields. ‘7de Laan’highlightthe crucial role that she, Frances Baard, Helen featured Q were areas of special Day, focusYouth for SABCThe TV. channels also carried one of South Africa’s iconic sports, with full-day coverage of the Comrades Marathon. SABC1 also got actively involved with the campaign against women abuse in the month of May as South Africa went through an upsurge of femicide. FY 17/18* FY Q4 of FY 17/18* Q4 of FY Q3 of FY 17/18* Q3 of FY Q2 of FY 17/18* Q2 of FY 05:00-23:00 17/18* Q1 of FY FY 17/18* FY Q4 of FY 17/18* Q4 of FY Q3 of FY 17/18* Q3 of FY Q2 of FY 17/18* Q2 of FY Prime Time 18:00-22::00 Prime Time 17/18* Q1 of FY TABLE: Performance TABLE: Period TV performance Quater (Adults FY17-18 15+) • In addition to delivering public value through meeting license conditions as outlined above, SABC service role through TV a number of initiatives and on-going fulfilled its public programmes. Duringthe period under public review, value was also placed at the centre of the Division’s activities, with strategic objectives dealing specifically with delivery ofcompanies contentowned People by with Disabilitiesand (PWD), from contentfrom the non-metropolitan provinces.With the broadcast of 58 programmes that regularly include content from those provinces, the network surpassed these targets. The Division also provided programming that met the needs of the deaf community through Deaf TV and sign language on three programmes. Nationbuilding and social cohesion were put theat core of activities,Division’sthe withsignificant schedules the time on being allocated to coverage ofnational of importance. days Additionally, plotlines were developed that incorporated these anddays provided accessible and educational information about them, some of the activities included: • Delivery on Public Value DeliveryPublic on

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 42

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 43

Generations the Legacy. the Generations The cast of SABC1’s castThe SABC1’s of evelopmentofSABC Education etain editorial rigor as a DNA towards Subtitling of wall to wall content on the  ensuring strong social impact.  D Virtual Academy with an aim of empowering high school learnerswith online support; R • • minority marginalized previously and and languages; • pgrade and innovate existing offerings to audiences; Audience Share nsure agnostic content to expand SABC’s digital offering; ncrease funding partnerships to drive contentinnovation cost effectively; cost C retain itsposition asthe broadcasterwith share the of lion’s the market (50%); U E I TV’s Business Mantra forthe coming fiscal Don’t look down look up and stay up. concentration Areas of Key • ontinuetodeliver against the competitive environment and • • • Looking Forward Looking looksTelevision forward to creating a portfolio of content that can live acrossplatforms, accessible to all South Africansand creatingdisruptiona in the market place as it seeks toremain audience-centric in an increasingly fragmented market. Its stable of brands will consciously connectwith existing and lapsed viewers on their terms as begin we to transform into a content media hub and not just a broadcaster. AR Audience Share All Adults 15+All 15+ LSM 7-10 AR Genre SABC1 Drama 24.4 8,505,872 65.1 16.5 2,460,603 44.3 SABC1 Soap opera 23.1 8,030,751 61.4 15.6 2,335,032 41.7 SABC2 Drama 13.2 4,599,062 40.7 9.7 1,443,092 28.4 e.tv Soap opera 12.7 4,410,283 34.7 10.3 1,536,313 27.6 SABC1 News 11.6 4,038,661 34.0 7.5 1,122,008 21.1 SABC1 News 11.6 4,029,054 34.6 7.6 1,134,519 21.6 SABC1 Variety 10.9 3,786,842 29.2 6.8 1,013,348 17.8 SABC1 Drama 10.6 3,703,627 31.6 5.7 854,884 15.8 SABC1 Music 10.1 3,526,790 28.9 5.9 878,174 16.4 SABC1 Drama 9.9 3,453,935 30.0 5.4 812,827 15.6 SABC1 Variety 9.7 3,391,252 26.7 5.8 866,635 15.6 SABC1 Music 9.5 3,315,693 26.5 5.9 888,149 16.1 SABC1 Sitcom 9.5 3,314,261 25.6 5.3 798,164 14.0 e.tv Drama 9.0 3,147,760 26.0 7.3 1,095,839 20.4 SABC1 Reality 8.8 3,058,640 33.1 6.6 987,150 21.4 e.tv Movies 7.9 2,745,155 28.1 7.8 1,157,468 25.1 SABC2 Drama 7.8 2,705,101 28.6 5.6 834,924 19.4 Programme Channel Generations The Legacy Live Amp The Vodacom ShowThe Vodacom SABC2 Competition 10.0 3,477,101 29.3 7.3 1,078,645 20.4 Throwback Thursday 1 Uzalo 2 3 Skeem Saam SABC1 Drama 17.5 6,096,476 55.5 12.8 1,904,778 37.5 4 Muvhango 5 Scandal 6 Zulu News 7 Xhosa News 8 Selimathunzi 9 Ingozi 10 11 12 Tjovitjo 13 Zaziwa 14 15 Single Galz 16 Rhythm City 17 Nyan Nyan 18 Psl: Pirates V Chiefs SABC1 Sport 8.2 2,851,825 35.5 4.7 703,028 18.7 19 3 Taken 20 Lesilo Rula TABLE: South TABLE: Africa’s most popular terrestrial TV programmes March 2018 Key achievements Key SABCTV remains the most popular television network in South Africa with more than half of all South Africans tuning intothe SABC during primetime. This was achieved despite the SABC’s serious financial challenges and tightening cash flows. official launch the markedquarter second the of beginning The of delivery of content in the SABC’s High-Definitionnew 16:9 standard.(HD) The successful delivery of digital formats and the realignment of workflows are criticalin the non-traditional to digital SABC’s space.The SABC will convert growth SABC2 and SABC3 from analogue to quarter of HD the new financial in year. SABC1was earmarked the for next first conversion World Cup. ahead FIFA of the 2018 There were a numberofspecial contenthighlights during the 2017/18 financial year including the Crown Gospelwhichcelebrates the Awardsbest in localGospel music. SABC1 also successfullypartnered with Cassper on Nyovest the ‘Fill Up FNBStadium’ campaign and also partnered with the South African Hip Hop Awards during the period under review. SABC2’s annual refresh took place February and there 2018 was great excitementregarding the launch ofthese new titles such ‘Abomzala’ and as ‘Botho’, ‘Guilt’, ‘Raising Babies The refresh also saw the return101’. of the much anticipated ‘Naruto’ which saw a huge outcry from viewers when it was off air. During the period under SABC1 remained review, the most popular television channel in the country, averaging 37% prime time audience share and 27% across the performance of share 13.0% a with financialperiod.year theSABC2ended prime time audiences, while SABC3 share. enjoyed 4% theFor period out of 20 of Southunder 17 Africa’s review, most watched television programmes were carried on SABC channelsand all were ofthe SABC top 15 a shows.‘Uzalo’, by followed show top flagshipSABC1 property, 2017/18’s was ‘Generations:‘Skeem Saam’, The Legacy’ and ‘Muvhango’. Programming HighlightsProgramming National Elective th Behind the scenes with SABC News presenters. eview ofthe schedule and line-up ofthe SABC News alancing mandate obligations with commercial viability he successful coverage of the ANC 54 he inquestinto thedeath ofanti-apartheid activist Ahmed he Life Esidimeni Inquiry; Matriche Class Results; of 2017 he drought in the Western Cape Water and the Cape Town he outbreak of listeriosis. he introduction ofa distinct news philosophy supported he renewal of the SABC News brand, imaging and ive broadcastive of memorial services and/or funerals of  T L T T T T T  high profile South Africans andMadikizela Mandela, jazz legend Hugh icons Masekela, and poet like Mama Winnie Kgositsile; Keorapetse Professor Timol;  Crisis; and  Conference in December 2017. This Conference story in catapulted December 2017. viewership on the SABC News channel to an unprecedented 000192 viewers during the conference; and The resignation ofPresident Jacob Zumaand the subsequent election and swearing in of President Ramaphosa. The coverage boosted February audience ratings on the 24- hour channel to an average of 50 854 viewers per in the day period. overview     T A r T B partnerships. innovative and streams revenue through new  transformation by ofthe business to achieveoperational efficiencies;  channel to deliver rolling news coverage; corporate identity; and • • • • • • The most significant editorial resource the politicalinternational front involved changes Zimbabwe in deployment on the former President of down stepping subsequent the and ofZimbabwe, Mr Robert Mugabe. This story was a lead contributor viewers to the 169 gains on of 13 the SABC News channel year on year. • included: broadcasts Special Other • Looking Forward The Division will roll-out its repositioning strategy based on the following pillars: • • • • Programming HighlightsProgramming Duringthe period under the Divisionreview, reviewed itsradio current affairs offerings to align with ICASA requirements. The move contributed to the achievement of efficiencies in a number of areas. Changes were made on the line-up of SABC3 and the SABC News channel.On SABC3, the evening English bulletin moved to a new slot to pursue competitive scheduling. In addition, 90 minutes news and current affairs block was introduced on Sundays,featuring a new programme ‘Frankly Preliminary data suggested positive performanceSpeaking’. attributed to the changes. The Division also participated in the process of reviewing editorial policies during process the contributed 2017/18 to financial renewing SABC brand as it positions year. public itself as trusted and independent. confidence This in the The review will be finalised in the next financial year. The Division pursueda range ofstories in keeping with its public mandate, with highlights such as: Digital Platforms Following downtime thatlasted formore than six months,due to procurementissues, the SABC News website launched on trafficfinancialyear, 2017/18 the of platform.endthe new At a on the website showed steady growth ending the year at 875 channel000 reached page views.The SABC NewsYouTube million10 views in March from an average 2018 monthly performance of 5 million views. the @sabcnewsonline OnTwitter, account broke through the 1 million followers ceiling, with Facebook likes also growing steadily to around 750 000 the by end ofthe period under review. SABC News broadcasting on terrestrial platforms contributed 60%ofthe top ten Newsbroadcasts on free-to-airTV in (FTA) SouthAfrica during the period Thisunder represented review. declinea 10% from the previous year due to the decline in popularityof one of the live properties. SABC News bulletins on terrestrial channels SABC2 SABC1, and SABC3 and across the commanded day of all between and 14% 12% audiences. viewingFTA by Performance ofCurrent Affairs programmingwas consistent of all8% at television viewing. SABC News and Current Affairs Current and News SABC Performance SABC NEWS AND NEWS SABC AFFAIRS CURRENT

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 44 PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 45 Soccer Cricket Inbound Rugby Marathons Awards EFC Boxing 49% 1% 3% 1% 4% 41% 1% This graph depicts the number ofminutes afforded to each sport/genre and the high percentage ofcricket is due to the five and ODI’s nine tests, nine of up made is which play of time T20’s, soccer however still dominates on all SABC platforms. Weekly magazine shows on television continued to fulfil their mandate. These include Soccerzone, a popular soccer review an informativepreview soccerSoccer show, show and411, Beyond Boundaries, a weekly Sport magazine show focusing specifically on athletes with disabilities, amongst others. Graph: Annual and Special Events Sport Genres The monthly live broadcast of Extreme Fighting Championships continues to enjoy popularity on SABC3. Although only three live boxingtournaments broadcast rights the weekly boxingwere secured magazine duringshow 2017, on SABC2 continued to promote and revive boxing to the statusit once Boxing held. SouthThe Africa 2017 Awardswas broadcast live on SABC2. NumerousSport Awards were broadcast including in 2017 thePSL Awards, the SA Sports Awards, the SA Cricket Awards, Gauteng Sports Awards and the GSport Awards. In ordertocelebrate the female athletes newa internal weekly programme waslaunched entitled The Ladiesa studio Club; based talk show honouring athletes’ achievements and excellence on and off the field of play. The sport radio magazine shows saw the revamp of The Ultimate SportShow onMETRO withFM ThomasMlambo as the new presenter and Sporton SAfm was launched on SAfm aligned with the to a more station’s move talk-orientated radio station. During the period under the SABCreview, experienced financial challenges and as a result all outbound Cricket and Rugby could events not be broadcast The on Super TV. Rugby and outbound rugby tests were only broadcast on Radio. all b and ‑ th y b ‑ , 4 , st trophy on tour. TM FIFA World Cup World FIFA , respectively in the world rugby rankings, were broadcast th 9 Compliance with Conditions Licence the For period under the SABC’s review, mandate tobroadcast sportsofnational interestwas realised with the continued broadcastexclusive FTA matches of SAFA which included home friendlies and away of the national teams as well as all AFCON World Cup and qualifiers. FIFA home CAF, The much anticipated disappointing yet loss of Bafana in the World Cup qualifying FIFA 2018 match against Senegal did not deter SABC audiences from viewing the broadcast of the Confederations FIFA customarily Cup, 2017 regarded as the World Cup dressFIFA rehearsal. The live crossing to Moscow, World Russia FIFA for the 2018 CupDraw launched TheRoad to Russiaweekly magazine seriesbuilding up to the world’smost widely viewed sporting World Other the Cup. event, FIFA matches covered during the period under reviewwere the Macufe Cup and Maize Cup. As the exclusive broadcaster Athletic of key SA in events South Africa, the SABC continued with extensive production andcoverage ofthe four major marathons, that is the Comrades, Oceans, the Mandela Two and Day the Cape City Marathons.Town Coverage of the Comrades Marathon, which is widely regarded as the world’s premier ultra- marathon,was broadcast on SABC2 hours. live for The 13 Cape Town City Marathon is Africa’sawarded International Association of Athletics first Federations marathon to be (IAAF) Gold Label Status. these productionComplementing the of broadcast and Marathons,the SABC produced a weeklymagazine show that showcased a variety ofathletic genres inclusive of national track and field events such asAfrica theSenior (ASA) and JuniorChampionship Athletics aswell asthe South Grand Prix. The Soweto Marathon has grown year on year and as host broadcaster, the SABC’s coverage has not only followed potential race winners buthas also showcased some of historicSoweto’s landmarks. RugbyInbound international testmatches played againstNew Argentina Australia and Zealand, currently 1 ranked SABC SPORT on both SABCradio and television platforms.Inbound Cricket matches against Bangladesh, Zimbabwe and India was broadcast on SABC3 and Radio 2000 with ball commentary. Basketball ranks among many low-profileAfrica but the acquisition of an exhibition game sports involving in South National Basketball Association World (NBA) stars in a Team Africaand Team game offered our viewers a taste ofNBA glitz and glamour as well as acknowledging the big many names that the African continent has given to the NBA. 12 11% 19.40 17.57 51.39 1 80%15% 112% 15% 19% 40%12% 41% 18% 20 25 50 12 100.36 Compliance Target Compliance Target Achievement Weighting Points Weighting Company Score access B-BBEE Procurement Spend from Suppli- ers that are at least 51% Black owned B-BBEE Element Indicator B-BBEE Procurement Spend from all Suppliers B-BBEE Procurement Spend from all Qualifying Small Enterprises B-BBEE Procurement Spend from all Exempted Micro-Enterprises B-BBEE Procurement Spend from Suppliers that are at least 30% Black owned Women Management Control Skills Development Enterprise and Supplier Development Socio-Economic Development Overall Score B-BBEE Level Universal Transformation TABLE: TheTABLE: SABC‘s Preferential Procurement Performance SABC’s ScorecardTABLE: against the ICT Sector B-BBEE Codes About 68% of households have radios through through radios have households of 68% About which access they communication services. increasing towards assist will trials DAB+ The services public. the to radio of availability the the For period under the Division review, successfully facilitatedthe Short with DRM ChannelTrial Wave Africa and Sentech to ensure digitisation of the short transmitter wave for Channel Africa. Broad-BasedSABC’s Black Economic (B-BBEE) Empowerment Compliance The SABC is committed to Black Economic Empowerment (BEE) and all its business activities are aligned with the national transformation agenda and thus complying with theB-BBEE Act 2003 and the Information Communications Technology (ICT) sector B-BBEE Codes. theFor period underthe SABC’s review, performance against theset targets on the B-BBEE ICT sector Codes resulted in an improvement of the B-BBEE status from 2 Contributor Level 1. to Level Strategic initiatives across the Corporation were implemented for each elementofthe scorecardand the resulted in the attainment of the highestBEE contribution 1. Level All SupplyChain Management activities (SCM) are subjected to the Preferential Procurement Policy Framework (PPPF) Act No.5 of2000. The latestPreferential ProcurementRegulation made it possible effective to pre-qualify2017 1 April 2017, for SCM opportunities where black owned,black women, andexempted qualifying small enterprises are earmarked. Minority and Development Collage of other Sport National Interest Other 25 Aug - 6 Sep 2020 25 24 Jul - 9 Aug 2020 24 Jul - 9 TBC TBC TBC TBC 20 Sept - 2 Nov 2019 Sept 2019 TBC TBC 30 May - 15 Jul 2019 14 - 15 Jun 018 39% Switzerland TBC Tokyo Tokyo TBC Australia TBC Switzerland 10 - 19 Jan 2020 TBC Japan TBC Cameroon 7 - 30 Jun 2019 Argentina - 23 Sep 2018 11 Russia 3% 28% 30% Special Events Host Country/City line Time Winter Youth Olympics Winter Youth Paralympics Summer Olympics FIFA U/17 World Cup (Men) U/17 World FIFA TBC FIFA U/20 World Cup (Men) U/20 World FIFA TBC 2019-2020 Beach Soccer FIFA ICC World T20 ICC World Winter Youth Olympics Winter Youth Africa National Championship (CHAN) Rugby World Cup Rugby World All Africa Games FIFA U/17 Women’s World Cup World U/17 Women’s FIFA TBC FIFA U/20 Women’s World Cup World U/20 Women’s FIFA TBC AFCON 2019-2020 Cup 2019ICC Cricket World England Summer Youth Olympics Summer Youth FIFA World Cup World FIFA 2018-2019 Commonwealth Games AustraliaApri2018 4 - 15 TABLE: Upcoming TABLE: events in 2019/2020 and 2020/21. Looking Forward The SABC successfully contracted the Rights from the International Olympic Committee and for 2022 (IOC) the 2018 Games, and 2022 the Youth 2018 Winter Games and the 2020 and 2024 Summer Games.The acquisition ofthese long termpremier rights will ensure that South Africa’s athletes are showcased and celebrated. The SABC will endeavour to acquirerights tobroadcast the listed coming events upin 2020/21. and 2019/20 Sports National of Interest Most of the programming on sports of national interest was carried onSoccerzone, and Athletics Alive. Other Soccer 411, Immortals, Race, Spar programmes included Durban July, Dreamand Team. Collage of other of SportsCollage Other sport programmes that were featured for the period underreview included SportLifestyle, Eita Diski,Sport @ 10, and The Ladies Club. Minority sports Developmental and Thebroadcast ofminority and developmental sports included programmes such as Sportbuzz,Nedbank yona, ke Boxing Magazine,National Basketball, Magazine,EFC and Swimming Magazine programmes. Graph: Sport Genres

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 46 PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 47 SABC security upgrades. current affairs and news stories. It provides ICASA compliant administrative reports as wellas music rights reporting. The hardware for Johannesburg based radio stations was procuredinstalledand firstthe in radio station, ‘Radio Sonder Grense’ (RSG). TheDivision facilitated the operational, technical, broadcast, post production, production studios and OB requirements for variousSABC Sportand SABC Newsspecial as events well as flagship dramas for SABC TV. The ‘Preservation ofLegacy Material’ production was operational and as from successfully June 2017 delivered formatmore for than Digital 300 Open Linear (LTO) Tape financialArchivingyear. the by end of the 2017/18 The Division in conjunction with the content management team worked onthe adaptation ofthe SABC HD Delivery Standard and Workflows. All stakeholdersincluding local producers on the commencement were of content consulted delivery in HD as of 1 July 2017. During the period under the Division review, put in place theinterim HD infrastructure setup forstudios 3, 4 and 5 with major changes to Control Room The installations and included IP Digital floor Video Switchers, HD equipment. Monitoringsystems and HD Camerachains for the studio floor as part ofStandard.The in-house productions ofGenerations the and adoption ofMuvhango started preparing the for transition of the recording of SABC HDtheir Delivery productions into full HD during the period under review. During financialthe 2017/18 year, the transmissiontechnical support team defined the best configuration for the Play-Out ofSD and HD content.This informed a decisionto also have allthe scheduled media ingestfor broadcast Aspect on 16:9 Ratio transmissions for Final Control Centre (FCC). Workstations and Play-out system for the Digital News productionwere upgraded and the drone technology infrastructure was introduced during the period under review. The workstations upgrade has improved the productions. The SABC3 was switched FCC from SD to HD as on 22 MarchThis is 2018. majora accomplishment in the Division’s efforts to improve the on air quality for SABC TV channels. The Division aims to convertthe rest to HDof the FCC’s concurrently with the implementation of the new Pebble Beach automation in the new financial year. Innovation Duringthe period under all radio review, studios were equipped with Social Media systems which integrate with services WhatsApp,like Skype, Facebook and theradio stations’ websites. cameras Web were placed in studios for

he successful facilitation ofthe Digital Audio Broadcasting he conclusionofthe DTTtariffs and DTTservice level n Februaryunder the 2018, leadership ofthe SABC Board’s T trial with(DAB+) NAB, Sentech and broadcasting industry players. T agreement for Multiplex 1 negotiations with Sentech SOC; and I Digital Technology Committee hosted a high workshop level on the SABC’s State of Readiness for digital migration. The focuswas on content, all the key technology and operational issues that will ensure a successful migration process;

technology SABC During the period underthe Divisionreview, successfully worked on the integration testing ofnew Radio Playout and Scheduling System for radio the stations 19 to current Landmark sales system and Electronic News Production (ENPS). The roll out of the Radio Playout and Production System (dira!) commenced in the 2017/18 financial year radio services. forThe dira!system is an end to end solution all the for radioproduction and radio broadcasting. It provides instant access to the three most important elements of radio production: namely the audio files, any accompanyingand the data broadcasting schedule.This also includesproduction, scheduling and playout of radio commercials, dramas, Milestones • • In preparation for the DTT migration, SABC Radio provided live audio feeds for each radio station Main to Television Control Centre formultiplexing into the Digital Terrestrial (DTT)Television platform. The Division also formulated the ContentDelivery Standards Document to incorporate latest digital formats, EBU R 128 audio loudness parameters and HD compliance requirements as well as facilitation Protocol ofFile Transfer Solution for SABC Content in order to improve content delivery in preparation for DTT. During the period under the TV review, Outside Broadcast unit upgraded (OB) all TV facilities todigital in the Provinces in preparation for DTT migration. Additional facilities such as Hybrid ENG vehicles were deployed to increase the number of live broadcasts from remote areas in the Provinces. In the next financialyear, the Division will roll out additional broadcastplay outinfrastructure to enable the SABC to effectivelycater for the proposed offering on the Digital DTT platform. Some of the successes on digital migration include: • Digital Terrestrial Television (DTT) Television Digital Terrestrial The Media Technology Infrastructure (MTI) (MTI) Infrastructure The Technology Media to approach integrated part is an of Strategy can SABC the which from platform a provide the including objectives key its all on deliver migration. digital access he requirement to introduce tapeless, file-based content he need to serve a growing number of delivery platforms, herequirement to accessSABC contentas and when   T  T processes;production management and T particularly DTT channels online/mobile and services, without significantly increasing complexity; costs and or adding process required post-production for packaging transmission. and and 12 replacement,and 12 replacement of Studio 1 and 2,and the acquisition of five vans. OB Thenew contract for the leasing 36MHzofa satellite segment to enable delivery of SABCcontent for SABC News, SABC Sport and SABC TV and radio stations (Sport) from locations within sub-Saharan Africa willbe concluded inthe next year. financial Preparationsfor News Coverage Electionsofthe 2019 in Pretoria, Provincial Centres IEC and other contribution points are on-going. TheDivision will also prioritise the digital migrationproject and to ensure stability of digital broadcasting services on DTTas well platforms; asDTH facilitation ofthe Digital Audio Broadcasting trial with (DAB+) NAB, Sentech and broadcasting industry players. The SABC’s financial constraintsnegativelyon the roll-out are,offurther critical technology however,and impacting infrastructureprojects. isFunding required toensure business continuity. The Media Asset Management system will be implemented in the next financialyear, and will address a number of critical businessissues the organisation is currently facing, including: • • • services (OTT) Over-the-Top and Broadcasting Digital The broadcasting industry is in the midstof a revolution as it migrates from analogue digital to broadcasting broadband and infrastructure isbecoming morewide spread and accessible. Therise ofdigital technologyhas allowed audiencesto consume content anywhere, anytime, and on device. any While the impactofdigital technologyis felt throughout the business,its effect is most profoundly felt on the technology and infrastructure of the SABC. With a reliable technology infrastructure suited to the digital age, the Corporation will competelead and digital with new broadcasting entrants. Consumers of audio-visual content no longer want to be limited toaccessing contentthrough the traditional radio and TV sets. Responding to the needs of consumers, SABC content has been made available online through audio streaming services available on all SABC radio websites.An audio podcast service is also available. Both platforms are currently offered service multiple through providers. The Online Video Platformservice (OVP) currentlyused platform,with the by SABC multiple is though the YouTube channels offered. TheSABC seeks toprovide compellinga value proposition to SABC fiscal the 2019 theadvertisers. audiencesandIn SABC will be pursuing an OTT strategy with the aim of offering a range of audio, video and text-base content. The aim of the SABC OTTis tooffer the contentcentrally the over internet throughmobile applications giving more options on how and when to consume the content. One of SABC’s TV Outside Broadcast vehicle. In the next financialyear, the Division will continue withroll outthe of the radio play-out and production system. The systemis extensive and will be installed in all the SABC radio stations.The project is earmarked for completion towards the end of 2019. TheDivision isalso upgradingthe radio drama facilitiesin Auckland Park, to ensure that radio meets its mandate on the production of local content and radio dramas. The Division will prioritise HD and Digitisation ofStudio 7, while Studio 6 structural restoration work is being carried out. This will be followed Studios by 3, and 4, 5 to facilitate business continuity. Other projects for the next Channel financial Play-outFacility to cater foradditional TVchannels year include: a Multi- and other Carriageon DTT, Agreements, News Studio 10 Looking Forward thepublic to view via the radio stations’ websites. TheDivision facilitated video streaming to Provincial studios to allow for off commentarytube from these areas. The Division tested and implemented IPsatellite over to reducethe SABC’s for reliance communication on Telkom infrastructure. The IP satellite over service is supplied to is unableRadio to supply when lines. Telkom The Division also providesfacilities to enhance and increase thefrequency oflive videostreaming for Digital News. Other awards, ceremonies elections as and such profileevents high were streamed live. PortfolioIP During the period underthe Division review, provided live audio feeds for each radio station fromthe Antfarm streaming audio services which are available on all SABC Radio websites through a streaming audio player. IP Communications IP based technology is in use to assist with communication between OB Points and SABC studios as well as facilitate internal communication betweenSABC Auckland ParkMCR, Studios. Production and Room Record Line News FCC,

PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 48 PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 49 Direct Complaints during the 2017/18 Direct Complaints during the 2017/18 Period Financial During the period under a total review, of 1684 direct complaints were received and all of them were satisfactorily addressed the by SABC. The table shows detailsof direct complaints report for the period. 2017/18 billboard, taxis, buses and innovative digitalbillboard, taxis, campaigns. buses innovative and RSG and SAfm took the lead in this particularly as they were celebrating 80 years in existence. relationsTransversal between TV and radio were strengthened during the period under Strategic review. partnerships like BuyeleKhaya Pan African Music Festival in East London, Break in Sun City5FM Mid-Year and the Mozart Requiem with SAfm, were instrumental in bringing the radio brands closer to the listeners. Broadcasting against complaints of two categories are There services, online and television radio, SABC’s the namely; direct complaints and complaints Regulators as parties such third by referred and Chapter Nine institutions. Allcomplaints are dealtwith centrallythe by Broadcast Compliance Unit of the SABC’s Policy and Regulatory Affairs Department. Client, marketing and Client, and marketing interaction.brand complaints

ABC3 entrenched its brand positioning in the market with ABC2implemented the ‘NewArrivals’ campaign which is ABC2 marketing campaign included a highlight of the ABC1ended the yearwith the launch ofthe S’Phethe ABC1 ran a series of seasonally themedcampaigns n second quarter ofthe period underSABC1 review, ‘The an aggressive Stage is Yours’ campaign which included radio,outdoor, on-air, PR and digital elements. S  annual family picnic aimed at entrenching the channel’s positioningas the family channel. Activities included on-air engagements; direct and digital elements, S aligned with the channel strategy in communicating the new offerings and new seasons that the channel is hosting; and S  Ezishisayo Campaign mid-quarter aimed at celebrating and promoting new seasons as well as schedule changes. The campaign comprised radio, of outdoor, on-air, PR (including a media and digital; launch)  launched new shows and new seasons with a campaign ‘Spring Burst’; S including the annual summercampaign themed ‘Izinto Ze Summa’ which was run on-air and digital from November to December; I S brand SABC Radio still maintained an audience share 70% ofover campaigns. the line Media used included above withexciting Radio MarketingRadio Highlights • • • • • The objective was to rebuildthe SABC brand and reposition someof the SABC sub-brands, thereby continuing tomeet targets. revenue audience and share theFor period under the SABC review, brand was promoted through marketing campaigns and a strongdigital media presence and brand experiences to position the Corporation internallyexternallyand restoreorderinto public confidence. The SABC continued on the drive to create awareness around the benefits of paying the TV licence fees. A campaign with continued driving #MadepossibleByYou SABCthe manifesto awareness featuring SABC talentincluding Thabile Ngwato, Stoan Seete, and the late Joe Mafela. The campaign yielded positive results and created a platform for engagement and feedback from the public. SABC focused Television on brand-building initiatives at channelnetwork level, and level across all platforms. The following brand activities television by network were implemented: • During During the financial 2017/18 year, work was accelerated on refining the SABC and favourably more organisation the position brand to reputation. corporate the brand restore building the building Marketing Initiatives: Initiatives: Marketing Broadcasting Complaints Commission of South Africa (BCCSA) Stakeholder During the 2017/18 financial year, 115 complaints against SABC services were finalised by the BCCSA. Of these complaints, 109 were dismissed and only six were upheld. Of those upheld, combined fine of R30 000 was imposed. Details of upheld cases are provided below. engagements BCCSA Upheld Cases 2017/18 The importance of a clear, focused and • SABC1 was fined R10 000 for airing a vulgar song during the integrated stakeholder engagement strategy for live broadcast of the METRO FM awards; the SABC in the modern day business climate • The SABC was reprimanded for two cases in which SABC2 is crucial for long term (financial) business did not put additional warnings when broadcasting sensitive episodes on 7de Laan; success and sustainability. • SAfm Current Affairs was reprimanded for airing a story that Building and managing robust stakeholder networks was a promoted illegal conduct. This was a clip wherein an SABC key focus for the period under review particularly in Africa at journalist stated that his late friend had committed insurance different levels. During the period under review the SABC’s fraud; stakeholder engagement activities continued to grow. This was evident in the heightened stakeholder interactions with • METRO FM News was warned not to repeat the offence the interest groups, community organisations, government after airing a misleading story that implied that a woman had bodies as well as international stakeholders. disrupted President Jacob Zuma’s speech in Kliptown; and In January 2018, the SABC in collaboration with the SABC • SABC1 was fined R20 000 for the broadcast of Casper Foundation, facilitated events around the announcement PERFORMANCE Nyovest’s concert without the appropriate on-screen of the 2017 matric results, including a breakfast, the live warnings. broadcast of results and post results Morning Live coverage. The BCCSA referred 11 matters to the SABC which were The SABC participated in inter-governmental preparatory outside their mandate. The matters have been referred to the meetings which culminated in the OR Tambo Centenary relevant services for considerations. celebration which took place on 27 October 2017 at Kantolo, South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Independent Communications Authority of Bizana in the Eastern Cape. Part of the build-up activities South Africa (ICASA) included the broadcast of the unveiling of the OR Tambo statue at the OR Tambo International Airport on 20 October During the period under review, ICASA referred complaints 2017. pertaining to TV licence accounts which were successfully resolved. International Relations Advertising Standards Authority of South The SABC engaged various international stakeholders during the period under review with an aim of fostering mutually Africa (ASASA) beneficial relationships. The following activities were carried The ASASA ruled against the SABC in a matter involving a out: television advertisement for TV Licences. The ASASA agreed • Radio 2000 visited the Rwanda Broadcasting Agency to with the complainant that the advertisement was sexist. foster cultural exchange, which culminated in a strategic engagement with Rwanda Broadcasting; TABLE: SABC direct complaints report for the 2017/18 financial year • A study visit to the SABC by the Public Media Alliance bursar from Lesotho National Broadcasting Services was Date TV Licence Reception Scheduling Prizes facilitated during the period under review; April 2017 14 4 71 1 • A media workshop that was conducted by the SABC for May 2017 12 4 44 - diplomats on behalf of the Department of International June 2017 22 3 66 - Relations and Corporations (DIRCO); July 2017 14 6 61 - rd August 2017 63 2 73 - • The SABC attended the 53 National day of the Republic September 2017 43 2 51 - of Zambia as per the invitation by the office of the High Commissioner accredited to the Republic of South Africa; October 2017 35 1 17 - November 2017 4 - 2 - • His Excellence Ambassador of the Kazakhstan Republic in December 2017 73 5 19 - South Africa Mr Kulayev Talgat held talks with the SABC January 2018 347 - 39 - which were preceded by the live interview of the Ambassador February 2018 288 3 6 - on Morning Live; March 2018 266 4 19 - 50 • T he SABC held a dialogue with a representative of the ANNUAL 1 181 34 468 1 Jiangsu Broadcasting Corporation with a view to establish areas of strategic cooperation; TABLE: BCCSA complaints report • The SABC facilitated a visit by a high profile delegation from Ethiopia Broadcasting Corporation (EBC) which was Year Complaints Dismissed Upheld headed by the EBC CEO in November 2017; 2017/18 115 109 6 • The SABC facilitated talks with the senior delegation from Deutsche Welle (DW) to finalise the envisaged MoU between DW and SABC; • The SABC hosted a high profile delegation from the Embassy of the Republic of Japan accredited to the Republic of South Africa; and • The SABC facilitated a visit by the Executive Members of the Southern African Broadcasters Association (SABA) regarding how the SABC can play a strategic role in the association. Other stakeholder engagement activities the SABC engaged in: • The engagement with the Swazi Television officials on matters pertinent to the proposed study visit to the SABC SABC stakeholders by Swazi TV; on tour of SABC facilities. • Facilitated a follow up study visit to the SABC by Zimbabwe Broadcasting Corporation; final polices emanating from the process are legitimate and • Facilitated a study visit to the SABC by the US based compliant with the law. Pennsylvania school of Journalism;

The Editorial Policy Public hearings commenced on 31 July PERFORMANCE • Facilitated a study visit to the SABC by Namibian 2017 and all Provinces were visited over a period of 30 Broadcasting Corporation; days with three to four villages, locations and towns visited • Facilitated talks with Liberia Broadcasting Corporation per Province. The initial closing date of submission was 29 in relation to a visit to the SABC intended to culminate in August 2017 but was extended 29 September 2017 due to discussions pertinent to possible areas of co-operation; and the requests from various stakeholders. The final round of South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 • Facilitated a meeting with the Secretary of the Embassy of public hearings and the publication of a revised draft for public the Arab Republic of Egypt. comment, is planned to take place in the next financial year. Memorandum of Understanding (MoU’s) Employees For the period under review, the following MoU’s were signed SABC employees engage with management on a regular with the SABC: basis through established internal communication platforms. During the period under review, the engagements were • MoU with the Vaal University of Technology (VUT); structured so that critical information on organisational • MoU with Econcetric in partnership with the Department of progress or challenges was shared empowering employees Public Enterprise for flighting of funded programme on the to be better brand ambassadors. SABC News channel; The SABC encourages its employees to participate in • M oU with People Opposing Women Abuse (POWA) for voluntary and civic activities which the Corporation sponsors Walkathon event in partnership with SABC2; from time to time. During the period under review, SABC employees participated in a myriad of activities including the • MoU with The African Cultural Development Foundation to following: partner on the hosting of World Choir Games 2018; and • National Days of Importance; • MoU with Telkom SA in partnership with Commercial Enterprises. • Fun sporting events; and • The Soweto, Two Oceans and Comrades Marathons. People with Disabilities (PWD) To commemorate International Disability Day, the SABC Foundation celebrated the first anniversary of its Disability 360 initiative in collaboration with the Department of Social Development. Government and Community Relations SABC Athletics team. In order to comply with the Broadcasting Act and an ICASA ruling on the matter, the SABC recommenced the review of its Editorial Policy. 51 The public consultation process was revived following the ruling by ICASA’s Complaints and Compliance Committee that the SABC did not comply with the requirements of section 6 (6) of the Broadcasting Act in reviewing or amending the 2004 Editorial Policies. The new process was intended to ensure that the public is properly consulted and that the Achievements and awards

 - Station of the Year (PBS) was also won by Umhlobo Wenene FM. • Tru FM’s afternoon programme, truAfternoon was named the Best Afternoon Drive Show (PBS) while the station’s Pabi Moloi scoops energetic presenter was nominated for the Bright Stars her award. Category. SABC Television During the reporting period, SABC TV amassed a number of awards which included: This section highlights awards, achievements SABC1’s YouTube channel started the year with a Special Google Award for surpassing 100,000 subscribers. The and recognition received by SABC platforms, channel was followed by SABC2 and SABC Education, while PERFORMANCE programmes and individuals. SABC1 managed to reach 270,000 subscribers by year end. SABC Radio SABC Television had a strong showing at the 13th Sunday Times Generation Next Awards with the following awards: A total of 24 awards were received by SABC Radio during the • ‘Khumbul’ekhaya’ was voted Coolest Community Programme period under review. These include:

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 2017; • METRO FM and Umhlobo Wenene FM won 1st place and 3rd • ‘Zaziwa’ was also awarded the Coolest Reality TV show place respectively in the Coolest Radio Station category at award; the Sunday Times Generation Next Awards in 2017. • ‘100% Youth’ was nominated in the Best Community TV SABC Radio scooped majority of the awards at the Liberty show category; Radio Awards as follows: • Skeem Saam won 3rd place; and • 5 FM’s Ms Cosmo received the Best Traffic Presenter Award from the Liberty Awards 2017; • ‘Uzalo’ won Coolest Soap 2017. • S Afm’s Johan Le Roux won the award for the Disappointment SABC1 received the Top TV Service Award in the Sunday of the Blitzbokke at the Rio Olympics. He was also joined by Times Top Brands Awards. Nomsa Mdhluli, SAfm’s newsreader who was awarded Best SABC3 was ranked October runner up by Africa Brand Index PBS Radio Newsreader; for Television Brands on social media • L igwalagwala FM’s Dumisa ‘Shabbisto’ Mavuso also SABC Television won a total of 20 Golden Horns at the 12th received Best Afternoon Drive Presenter award; South African Film and Television Awards: • T hobela FM’s Nkadimeng Kekana received The Best • O n the Drama front, SABC1’s Sunday night game- Breakfast Presenter award; changer, Tjovitjo scooped six out of the seven awards they • R adio 2000 was honoured for receiving most votes for the were nominated for including: Best TV Drama and Best My Station Listeners Choice category. Thami Ngubeni also Achievement in Cinematography categories, making it the won Best Night Time Show (PBS) award for the station; biggest winner of the night; • R SG’s Bloedlyn won the Best Daytime Show; • D rawing in almost nine million viewers daily, SABC1’s Uzalo bagged the Most Popular TV Soap or Telenovela as voted • L otus FM’s Walk The Talk show, presented by Alan Khan for by the public; won an award for News and Current Affairs; • T hemed ‘Our Stories Are Gold’, the awards also saw • U khozi FM scooped two awards for the Best Promotions SABC2’s longest serving presenter and producer, Johan Stunt/Event category as well as the Best Breakfast Show Stemmet honoured with a Lifetime Achievement Award for ward for the Station’s Vuka Mzansi Breakfast Show; and his contribution to the television industry over the past 38 • U mhlobo Wenene scooped awards in the following years; categories: • In the comedy category SABC1’s ‘Ses Top La’ won the Best - B est Content Producer award was received by Mpumelelo Achievement in Make-up and Hairstyling: TV Comedy; 52 Mali; • S ABC2’s ‘Gauteng Maboneng’ scooped the award for the - B est Daytime Show was won by SJL (Sijik’ Ilanga); Best Actor and Best Supporting Actress in the TV comedy; - B est Music Show was won by Ikwayala Eziphambili; • S ABC3’s High Rollers won Best Telenovela and Best - S tation Imaging was awarded to Umhlobo Wenene FM; Achievement in Post Production - TV Soap/Telenovela - B est Weekend Show was won by Ibuzwa Kwabaphambili; awards; and • Le rato Kganyago won the Best TV Presenter, for Live Amp; PERFORMANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 53 orth-West Radio Journalist Sisi Segalo Current and RSG’s eo Bodumela for Radio News in the Central region; and SGRadio CurrentAffairs Producer Hanri Wondergem conomiccategory for all media: Iviwe Poti and cameraman V NewsV category: Janine Lee,camera Gcobani Blom and FeaturesV category: Ntsiki Nohiya and three camera men usi Khumalo for both Radio News and the Radio Feature 017 Financial/Economic: Keith Sayster and Jabulani O-A Financial/Economic: Jabulani and Sayster Keith 017 017 Television News: Refilwe Gaeswe, TV News story Keith Feature: Sayster and Television Gerhard Botes017 017 Radio News:Neo Bodumela 017 forradio story ‘Negligence Sustainability:017 Keith Saysterand Eddie Stemmetfor n the Eastern for Funani Radio region, News; and Yanga CwengaMgubasi, top honours roadfor projectthe N2 Toll in the Wild coast; and  Afrika for TV News feature ‘SASSA uncertainty’;  for ‘Education denied for Northern Cape children with a disability’;  for television feature ‘Karretjie mense’;     Affairs Correspondent Darren Taylor were Discovery finalists Health Journalism Awards. The award went to in the theRSG Current Affairs Correspondent Darren and Taylor;   in KwaZulu-Natal;   Veronica Fourie, Jayed-Leigh Paulse and Iviwe Potijointly for the Radio Feature.  at Kimberley Hospital’ and ‘Elderly woman raped’;  TV feature ‘Vissers debakel’; 2 2 T Markus Brenner Run-awayEasternthethe firesfor Cape; in E T for a seriesof stories.Environmental Minoshni Award: Pillay. N R clinched both the national and northern regional Vodacom RadioNews Journalist Awards for her ofthe Year ‘outstanding’report on the dangers ofWhatsApp voice notes. V N I 2 2 2 • • • • • • In addition,the following SABC journalistswon awardstheat Central Regional Awards for the Vodacom Journalistof the which were held in October Awards 2017: for 2017, Year • • • • Six other Radio News and CurrentAffairs teammembers received five regionalVodacom JournalistAwards: • • • Sport The Sport a 48-minute @ 10, live talk show that showcases the freshest and most alternative view of the world of sport,won the award for Programme in this year’s Gauteng of the Year Sports Awards. The Ultimate SportShow on METROwonFM The BestSport Show in the Commercial Radio Station category.

The cast of SABC1’s Uzalo. adio News / Jayed-Leigh ‘Black Paulse: students Radio NewsJayed-Leigh/ drowning ‘Tragic Paulse: of TV ShugaIn – Real Life received the Best Youth ne of the Division’s investigative programmes broke the ur Moments also received Best Factual and Educational mhlobo Wenene Dikeledi Mbanga,Thandile and Skeyi SG Radio CAFF / Hanri Wondergem: ‘Die slag van ABC News Researcher, Thandeka Mabona was awarded Afm: Jwalane Thulo and Nomsa Mdhluli; and mmanuel Castis won BestSupporting Actor - TV Drama ive RSGive Radio CurrentAffairs team members and a otus Radio CAFF / Prabashini Naicker Newsbreak: AidsConference’;RSG Radio CAFFIzak/ du Plessis:  F former colleague won Mediaveertjies 3 ATKV at Gold Reef AnitaCity (12/05). Visser and Ivor Price won the Best Radio CurrentAffairs Presenter/InterviewerIzak award; du Plessis and Melissa Tighy won the Best Radio Current Affairs Insert while award; Suzanne Paxtonand Marlinée Fouché won the Best Radio Current Affairs Programme;  O story of the bogus pastor Omotoso which led to the rescue of many victims of human trafficking and the arrestsuspect; of the  S the prestigious Public Media Association Bursary Travel to share her expertise in educationnews with another member broadcaster of the organisation;  R Delville-bos [The Battle ofDeville SABC Wood]’. News won two awards in the competition;   U Zide. Bukiwe  children in a municipal sewage pit’. S ‘Gekaapte Geboue [Hijacked Buildings]’; Geboue [Hijacked ‘Gekaapte PE R protesting against hair issues at a Model C school’; and PE L ‘ E  for the SABC2 drama, Erfsondes and 4;  O SABC2. for Programme  M Programme recognition; S and Show‘Xcellerate’ nod SA’ for scopped ‘Trending an Programme; Children’s Best for award • • • • Liberty Radio Awards – News Reader: • Liberty Radio Awards – Radio Documentary: • • • The Division’s excellence in pursuitof its mandate was recognisedvarious by nominations and awardsincluding the following: Liberty Radio Awards – News and Actuality Shows • News • • • ABC3’s Pabi Moloi received the BestPresenter in aTalk • Achievements and Achievements

- Nelson Mandela I knew if I didn’t leave my I knew if I didn’t As I walked out the door As I walked toward the gate that would toward bitterness and hatred behind, bitterness and lead to my freedom, lead to I'd still be in prison. I'd still born in Mvezo,Transkei. birthday. th 5 December, passes away at home in Johannesburg at the age of 95. 5 December, 2013 Formally presented with the Fifa World Cup trophy before it embarks on a tour of South Africa. Cup trophy before it embarks on a tour of South Formally presented with the Fifa World Rolihlahla Mandela 2010 1918 Announces that he will be stepping down from public life. 2004 18 July Marries Graça Machel on his 80 1942 1998 Completes BA through the University of South Africa (UNISA) of South through the University Completes BA informally African National Congress (ANC) meetings Begins to attend Divorces Winnie Mandela. Divorces Winnie 1996 1943 Graduates with BA from Fort Hare; Enrols for an LLB at Wits University Wits from Fort Hare; Enrols for an LLB at Graduates with BA Establishes the Nelson Mandela Children’s Fund. Establishes the Nelson Mandela Children’s 1995 1944 ANCYL is established and Nelson Mandela appointed Secretary General; is established ANCYL (They had four children.) marries Evelyn Ntoko Mase. Votes for the first time in his life, he is elected by Parliament as first president for the Votes Africa and inaugurated as President of the Republic of a democratic South to Freedom. Africa. He launches his autobiography Long Walk of South 1951 1994 Elected President of the ANCYL Elected President of the Awarded the Nobel Peace Prize with President FW de Klerk. Awarded 1952 1993 The ANC is unbanned, he is released and elected ANC Deputy President. ANC is unbanned, he is released and elected The 1990 Defiance Campaign begins; Arrested and charged for violating the Suppression of of Arrested and charged for violating the Suppression Defiance Campaign begins; President; Convicted with J.S Moroka, ANC Act; Elected Transvaal Communism to Act; Sentenced Suppression of Communism Sisulu and 17 others under the Walter suspended for two years; Elected first of nine months imprisonment with hard labour, Tambo black law firm with Oliver first Africa’s ANC deputy presidents; Opens South 1953 South African President PW Botha’s offer to release him if he renounces violence. African President PW Botha’s South 1985 Devises the M-Plan for the ANC’s future underground operations. ANC’s Devises the M-Plan for the All except Rusty Bernstein are convicted and sentenced to life. Arrives on Robben Island. 1956 1964 1958 Arrested and later joins 155 others on trial for treason. 1960 1961 Divorces Evelyn Mase. Madikizela. (They had two daughters.) Marries Nomzamo Winnie Sent to Robben Island. Returned to Pretoria Local Prison. Appears in court Sent to Robben Island. Returned to Pretoria Local Prison. Trial, with for the first time in what becomes known as the Rivonia Ahmed Kathrada, Lionel Mbeki, Sisulu, Denis Goldberg, Govan Walter Elias Motsoaledi Bernstein, Raymond Mhlaba, James Kantor, ‘Rusty’ the Rivonia Trial. Andrew Mlangeni. Pleads not guilty to sabotage in and 1963 1962 Leaves the country for military training and to garner support for the Leaves the country for military training and to garner support Africa. ANC. Returns to South years in Arrested near Howick in KwaZulu-Natal. Sentenced to five prison for incitement and leaving the country without a passport. The ANC is banned. The Goes underground; Umkhonto weSizwe (MK) is formed.

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 54 GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18

55 SABC Governance Governance and Accountability

• 2 4 November 2017; Mr Tshedu on • 23 January 2018; Radio 2000. • 1 3 February 2018; and • 2 0 March 2018 Standing Committee on Public Accounts

GOVERNANCE (SCOPA) The Directors of the South African Broadcasting During the year under review, SCOPA visited the SABC on Corporation SOC Limited (SABC) regard 27 June 2017. Select Committee on Public Enterprises

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 corporate governance as fundamental to the success of the business and are fully committed During the year under review, the Select Committee on Public to ensuring that good governance is practised Enterprises visited the SABC on 16 August 2017. in order that the SABC remains a sustainable Executive Authority and viable business. Shareholding This commitment is embraced at all levels of the SABC. The The Government of the Republic of South Africa is the sole SABC ensures that its processes and practices are reviewed shareholder of the SABC. The shareholder representative is on an ongoing basis to ensure compliance with relevant legal the Minister of Communications. requirements, the use of funds in an economic, efficient Shareholder Compact and effective manner, and adherence to good corporate governance practices that are continually benchmarked. In terms of the Treasury Regulations issued in accordance Processes and practices are underpinned by the principles with the PFMA, the SABC must, in consultation with its of openness, integrity, and accountability and an inclusive Executive Authority (the Minister of Communications), approach that recognises the importance of all stakeholders annually conclude a Shareholder Compact documenting the with respect to the viability and sustainability of the SABC. mandated key performance measures and indicators to be attained by the SABC as agreed between the Board and the Compliance, with not only the letter, but also the spirit Executive Authority. of relevant governance codes remains a priority for the Corporation. As a state owned company, the SABC is The Compact is not intended to interfere in any way with guided by the principles of King IV Report on Corporate normal company law principles. The relationship between Governance for South Africa™ (King IV™), as well as the the Shareholder and the Board is preserved, as the Board is Protocol on Corporate Governance in the Public Sector 2002. responsible for ensuring that proper internal controls are in In keeping with these principles, the SABC will implement place and that the SABC is effectively managed. the requirements of King IV™, which came into effect on 1 The SABC Board attended three meetings with the Ministry of April 2017. Furthermore, the statutory duties, responsibilities Communications during the 2017/18 financial year, as follows: and liabilities imposed on the Directors of the SABC by the • 6 April 2017; Companies Act No. 71 of 2008, as amended, are augmented • 31 October 2017; and by those contained in the Public Finance Management Act • 8 March 2018. (PFMA), No. 1 of 1999, as amended. The Accounting Authority/Board 56 Portfolio Committee on Communications Role and Function of the Board During the year under review, the SABC Board appeared eight times before the Portfolio Committee on Communications: The Board is the Accounting Authority of the SABC in • 1 0 May 2017; terms of the PFMA and constitutes the fundamental base of • 1 August 2017; corporate governance in the SABC. Accordingly, the SABC • 1 0 October 2017; must be headed and controlled by an effective and efficient • 7 November 2017; Board, comprising Executive and Non-Executive Directors, of whom the majority must be Non-Executive Directors in • L iaising with and reporting to the Shareholder; order to ensure independence and objectivity in decision- • G uiding key initiatives; making. The Board of the SABC has absolute responsibility • R etaining full and effective control over the SABC and for the performance of the entity and is accountable for such monitor management in implementing Board decisions, performance. plans and strategies; and On 16 October 2017, Judge Matojane handed a seminal • A pproving transactions beyond the authority of management; judgement in the matter between the Minister the Communication vs. SOS; Support Public Broadcasting The President approved the appointment of an Interim Board Coalition and others. The Judge held that the non-executive with effect from 27 March 2017 to 26 September 2017. directors of the SABC Board are required to appoint the Subsequent to the interviews of the nominated candidates, executive directors independently, without any involvement the President approved the appointment of the permanent of the Minister. As such, all of the new executive directors of Board with effect from 16 October 2017 for a period of five the SABC Board were appointed independently by the non- years. executive directors in compliance with this judgement. Delegation of Authority (DoA) The Board Charter sets out the roles, duties and The Board has the authority to lead and control the business of and Accountability responsibilities of the Board as well as salient corporate the SABC including the authority to delegate its powers. The governance principles. Board’s aim is to ensure that the SABC remains a sustainable The role of the Board includes the following activities: and viable business. • T he independent appointment of the three executive directors The Board’s responsibilities are supported by a well- of the Board namely Group Chief Executive Officer (GCEO), developed governance structure of Board Committees and a Chief Operations Officer (COO) and Chief Financial Officer clear and comprehensive Delegation of Authority Framework. (CFO); The Board delegates the management of the day-to-day operations of the Corporation to the GCEO. The GCEO is • Providing strategic direction and leadership; assisted by the Group Executive Committee (Group EXCO). • Determining the goals and objectives of the company; The Delegation of Authority Framework, which annually GOVERNANCE • Approving key policies including investment and risk undergoes an extensive review, assists in the control of the management; decision-making process and does not dilute the duties and • Reviewing the company’s goals and strategies for achieving responsibilities of the Directors.

its objectives; Director Induction and Orientation South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 • Approving and monitoring compliance with corporate plans, All new Directors are taken through an induction programme financial plans and budgets; that is designed to enhance their understanding of the • R eviewing and approving the company’s financial objectives, SABC’s legislative framework, its governance processes and plans and expenditure; the nature and operations of its business. Members of the • C onsidering and approving the annual financial statements Board that were appointed in October 2017, were inducted on and notices to the shareholder; 29 October and 31 October 2017. • Ensuring good corporate governance and ethics; Continuous training is also provided on request to meet the needs of Directors. Directors are made aware of new laws • Ensuring that the Shareholder’s performance objectives and regulations on an ongoing basis. are achieved and that this can be measured in terms of the performance of the SABC; Board Evaluation • E nsuring that the SABC complies with and is operating in The performance of the Board and individual Directors is accordance with all applicable laws, regulations, government evaluated annually. The performance of Board Committees is policies and codes of business practice, regulations and evaluated against their Terms of Reference (TOR). However, instructions prescribed in terms of legislation; during the period under review the evaluation of the Board • Monitoring and reviewing performance and effectiveness of was not conducted. Performance Contracts were finalised controls; with Executive and Senior Management. The Governance and Nomination Committee is responsible for the evaluation • Ensuring effective, prompt and open communication with of Executive Management. Performance Contracting will be the Shareholder and relevant stakeholders with substance implemented throughout the SABC in the next financial year. prevailing over form;

Staff introduction to the new Board.

57 Report of the SABC Board for the Financial Year Ending on 31 March, 2018 The Board of Directors is pleased to present the 81st Annual Report of the South African Broadcasting Corporation SOC Limited for the financial year ended 31 March, 2018. The Annual Financial Statements comprise the consolidated annual financial statements of the Corporation and its subsidiaries, (together referred to as the group), and of the Company for the year ended 31 March 2018. These Annual Financial Statements are presented in accordance with the Companies Act No. 71 of 2008 (as amended), the Broadcasting Act No. 4 of 1999 (as amended), the Public Finance Management Act. No. 1 of 1999 (as amended), and in accordance with International Financial Reporting Standards. It is important to register that during the 2017/18 year the following changes were made to the Board: • The term of the Interim Board ended on 26 September 2017 and the new Board was appointed by the President with effect from 16 October 2017; • Mr J R Aguma, the Chief Financial Officer (CFO), was appointed as the Acting Group CEO from 28 June 2016, resigned in July 2017;

GOVERNANCE • Mr T E Ralitabo, the Group Executive: Media Technology Infrastructure, was appointed as the Acting Group CEO from 22 May 2017 until 19 July 2017; • Ms N P Philiso, the Group Executive: Television was appointed as the Acting Group CEO from 20 July 2017; South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 • Ms M A Raphela was appointed as the Acting CFO from 28 June 2016 until 30 June 2017; • Ms T S Dlamini, the General Manager Finance: Commercial Enterprises, was appointed as the Acting Group CFO from 13 July 2017; • Ms B L Tugwana, the Group Executive: Corporate Affairs, was appointed as the Acting Chief Operations Officer (COO), from 13 July 2017 until 30 January 2018; • Mr C B Maroleni was appointed as the COO from 1 February 2018; • Ms R Kalidass resigned from the SABC Board on 15 November 2017; and • The resignation of the Deputy Chairperson, Ms F C Potgieter-Gqubule, was accepted by the President on 28 March 2018. The contribution of the Interim Board in bringing the SABC through a difficult time is acknowledged and we, as the new Board and everyone at the SABC thank them for their accomplishments. During their tenure, they continued to eliminate those actions, which led to the financial crisis and ensuring that the lapses of the past do not recur. The Board will continue to ensure that the following, among other things, are achieved: • Corporate governance is maintained at the SABC; • Financial and internal controls and risk measures are entrenched and maintained; • The culture of fruitless and wasteful expenditure is totally eradicated within the Corporation; • The cost-to-income ratio is reversed as cost growth has far outpaced revenue growth; and • Content procurement practices are aligned to the attraction of advertising spend.

58 Mr B E Makhathini Chairperson of the SABC Board GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 59 onitoring that management and administration of the onitoring the internal control system to protectthe SABC’s onitoringthe SABC’s compliance withstatutory and btaining assurance for information technology (IT) as it onfirming that the SABC has appropriate controls in eviewing significant breaches, or potential breaches, of eviewing the SABC’srisk appetite and future risk strategy, ecommending the appointmentofthe External Auditors financial credibility of reliabilityand accuracy, the eviewing eviewingaccounting any and auditing concerns raised by eviewing the activities ofthe Internal AuditDepartment, ssistingin identifying, evaluating, mitigating, and monitoring erving asthe audit and riskcommittee for the SABC Group; nsuring that an effective Internal Auditfunction is in nsuring that the Corporation has implemented an effective nsuring that a combined assurance model is applied; valuating the independence, objectivity independence, the effectiveness and valuating   products and servicesare conducted in accordance with relevant legislation, regulation, governing rules and within the terms delegation; of any  regulation and the steps taken to ensure that the underlying rootcauses regulatory ofany control failures are being addressed;   particularly capital, risk-based) economic for liquidity (i.e. and reputation,but also for operational risk,and to make recommendations on risk appetite to the Board; to review the principal risk policies for consistency with the Group’s risk appetite and to approve material any changes to these policies; place to identify, and implement legislative and regulatory changes, which will affect its operations; the business risks that the Group faces during the course of its operations, its exposure to adequacy of the identification significant of risk; risk, and the R   and overseeing the external audit process;  interests and assets;  reporting and recommends the annual financial statements and the Annual Report, as presented management,by together with the External Auditors’ report, for approval by Board; the  Internal and External Audit, the annual financial statements and the various reports to Shareholder;  placeand that the roles and functions ofExternal Audit and Internal Audit are clear and co-ordinated to provide an objective overview ofthe operational effectivenessofthe Corporation’s systems of internal control,risk management, governance reporting; and  the effectiveness thereof and the adequacy of available resources; Audit Internal E of the External Auditors; E policyand plan forrisk management that will protectthe Corporation’s ability to achieve its strategic objectives;  E  O relatestothe management ofIT assets, governance and controls, risks and disaster recovery; M legislative obligations and fiduciary responsibilities; C M R A S R M R R E R • • • • • • • • • • • • • • duties and have sufficient understanding of financial reporting; financial sufficient understanding of have and duties internal financial controls; external auditprocess; corporate law and audit information technology process; internal governance. The roles and responsibilities of the Committee include: • • • 4 2 8 5 9 9 7 11 13 12 31 21 32 32 32 20 26 33 Attendance (Deputy (Chairperson) (Chairperson of the 6 9 10 8 4 (Deputy Chairperson of 2; 3 7 5 Members 1 ppointed as Acting COO effective 27 September 2016 until 31 January 2018 ppointed as Acting GCEO effective 22 May 2016 until July 19 2017 ppointed as Acting GCEOeffective 28 June 2016 until May 2017 ppointed as Acting CFO effective 28 June 2016 until 27 June 2017  A A  A A  Interim Board) F C Potgieter-Gqubule M G Markovitz C B Maroleni J Matisonn D K Mohuba Naidoo K J H Phalane N P Philiso M A Raphela Rambau V B L Tugwana T S Dlamini S T 27 Board meetings, 5 Inductions and 1 Strategy Session were convened. B E Makhathini K T Kweyama K T Kweyama M G Tsedu Chairperson) the Interim Board)the T E Ralitabo J R Aguma R Kalidass R Audit and Risk Committee Risk and Audit With regard to the legislative and governance requirements forthe compulsory establishmentofAudit Committees forState Owned Entities,the responsibilities ofthe Audit Committee are briefly set out below. The SABCelected to combine Board the roles of the Risk Committee has with the Audit Committee. The Committee comprises three independentNon-Executive Directors,who are appointed theby Shareholder in terms of the requirements of Section 94 of the Companies Act. The Committee is chaired an by Members collectively Non-Executive Director. independent have sufficient qualifications and experience to fulfil their A number of Board Committees exist in order to assist the Boarddischarging in its responsibilities. This assistance isrendered inthe formofrecommendations, reports and minutes submitted to Board meetings whereby transparency and full disclosure ofCommittee activities are ensured. Each Committee operates within ofReference Terms that setout the composition, the role, and ambit of its responsibilities, defined delegated authority and meeting requirements of each Committee. 10. Board Committees 3. Resigned effective May 2017 4. Appointed as Acting CFO effective July 13 2017 5. Resigned November 15 2017 6. Appointed as COO 1 February 2018 Appointed7. as Acting GCEO effective 20 July 2017 8. 9. 1. Resigned1. effective 28 March 2018 2. Board Special meetings scheduled are advance. in annually meetings are convened as necessaryissues. Directors or external committee members to who, on address specific anexceptional basis, cannot physically attend meetings may communicate electronically. The record of attendance of the 33 Board meetings during the reporting below including period meetings of the Interim Board: is reflected BOARD Attendance Meetings at Board ecommend to the Board the approval of policies, which fall eporting to the Board on progress ofall Digital Technology ssessingand evaluating the adequacy ofthe Corporation’s nsuring digital transformation in the SABC workplace so nsurethat the technology employed the by Corporationis nsuring that the Corporation employs innovative digital nsuring thatthe Corporationliaises with all the relevant nsuring that the Corporation employs technology,which he achievementof a successful migration from analogue hedevelopment multi-channelofa multi-platform / SABC he development of a technical infrastructure digitisation  that SABC management and staff access have to innovative technology and an information systems platform that will enable the Corporationto deliver on its mandate and enable major enhancing such business as improvements audience experience,streamlining operations or creating business models; new  appropriateand able tosupport the strategic objectives of and Corporation; the  within its mandate.   digital technology and related systems and necessary make recommendations to the Board to consider and resolve;      Corporation; the within projects  R technology and information systems that enables the SABC to deliver on its statutory mandate; terrestrial televisionbroadcasting toDTT and platforms, DTH including oversight of the roll-out and distribution of STBs and associated viewer awareness campaigns,platform managementand all related strategic and technology matters; T contentstrategy acrossall digital technology platforms and oversight of the implementation of such strategy; T strategy; E stakeholders industry and key bodies with respectto all SABC Digital Technology projects, where necessary, including but notlimited ICASA, DoC,Sentech, USSASA, the SA Post Office and the NAB; R E enables it to fulfil both its commercial and public mandates in line with its statutory mandate; E E E A T • • Three Committee meetings were held These were attendedyear. COO the CFO, and by GCEO, during the financial Memberscorporate attendanceofficials. of relevant The other at Committee meetings was as follows: • • • • • • • • of the Board through its mandate, on mattersrelating to digital technology. ‘Digital Committee Technology’ to mean all known to be yet developed (and and is defined by commercialised) digital technology platforms, including but the not limited Digital to, (DTT), Terrestrial Television direct to home digital satellite broadcasting and mobile (DTH) and web channels,with strategic a focus on the successful distribution of all SABC content such over platforms. The Committee’s formation has been motivated the by massiveimpact of digital technology on all ofthe SABC’s coreservices and how the successful implementation of strategies in this regardwill impact on the sustainability of the Corporation in the future. The roles and responsibilities of the Committee are as follows: • 2 8 1 2 3 6 1 11 12 12 14 10 Attendance 1 2 2 2 2 2; 3 2 (members during the (Chairperson) (Chairperson during the (advisor during the Interim Members

4 ith input from the Audit and Risk Committee, as appropriate, eveloping and refining the SABC’s enterprise-wide appetite SABC’s the refining and eveloping eviewing the adequacy and quality of the risk management eviewing thedesign, completeness, and effectivenessof valuating the risk of exposure to fraud, review policies, and D E  for risk, in conjunction with the full Board; and R function andthe effectiveness ofrisk reporting (including timeliness risk and events);  procedures in place to minimise,or detectfraud, and make recommendationsto the Board to enhance suchpolicies procedures; and  R  the risk management framework relative to the enterprise- widerisk management and plans policy, for management of the significant risks activities; W  reviewing the adequacyofthe processes Group’s and the effectivenessof controls theover determination of thecompliance with the requirements ofthe Government Guarantee; R strategy and review the drivers ofthe changes, in if any, the risk profile and their implications for liquidity and going concern status; V Rambau V K Naidoo Interim Board) B L Tugwana Malele J K T Kweyama J Matisonn N P Philiso Dlamini S T M A Raphela 14 Meetings14 were convened. F C Potgieter-Gqubule Board) T E Ralitabo Interim Board) J R Aguma The Digital Technology Committee comprises three independentNon-Executive Directorsand ischaired an by independent Non-Executive Director. The Committee was fulfilling in Board the advise and assist to 2017 in established itsobligations and, in certain instances, acting by on behalf Digital Technology Committee Digital Technology 1. Resigned1. effective 28 March 2018 2. Attends by invitation 3. Resigned effective May 2017 4. Appointed as Advisor effective 1 August 2015 until 26 September 2017 • • Refer to page for the 75 report of the Audit and Risk Committee detailing how it carried out its functions. Fourteen Committee meetings were held during the financial These were attendedyear. External by Auditors,the GCEO, COO, Chief AuditCFO, Executive and other relevant corporate officials. The Chief Audit Executive and the External Auditors unrestrictedhave access to the Chairperson ofthe Committee and to the Chairperson of the Board. The attendance of Members at Committee meetings was as follows: • • • eviewing the risk profile against its risk appetite and •

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 60 GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 61 verseeing the development ofthe disaster recovery plan onsidering and approving the write-off resulting from the eviewing and recommending to the Board for approval the eviewing and recommendingto the Board forapproval ecommendingtothe Board the approval ofpolicies, eviewing disposalsmade EXCO by in accordance with the eviewing and recommendingto the Board forapproval eviewing and recommendingto the Board forapproval eviewing and recommending to the Board for approval the eviewing the budgetary processes adopted management by eviewing the procurement Group’s policies for alignment eviewing the Bid Adjudication Committee processes eviewing theappropriateness ofthe Bid Adjudication eviewing the effectiveness of the Bid Adjudication ubjecttothe provisions ofthe Public Finance Management dvising the Boarddvising purchasing decisions generally on nsuring that the reporting andbudget submission deadlines putin place the by Corporation and advise the Board on the suitability and adequacy thereof;  reviewingAct and approving (PMFA), sale any or disposal of assets, the cost of which shall not exceed R50 million per item;  write-off resulting from the impairment of assets, up to an amount of R20 million;  the entering agreement into any for the lease/hire/rental ofproperty, where the cumulative value and the term are above R25 million per annum/5 years;  which fall within its mandate and identifying,evaluating and reporting to the Board on risks any associated with the technology of the Corporation; O  A involving the acquisition of technology or systems; impairmentof assets, up to an amountof R20 million,and recommending for approval the by Board amount of any over R20 million; R  authority granted the to it by Board; R  the writing off to million book of assets value) (at above R15 remove them from the asset register; R  the writing million off to above R15 book of stock value) (at remove them from the asset register; R sale of moveable assets at book million value from to R10 million andR16 for Board to recommend approvalthe by Shareholder million; for assets R16 above S R R R R  for effectiveness, integrity and adherence to the objectives of theBoard and thePublic Finance Management Act (PFMA); E  theset by SABC are complied with; R  with the B-BBEE Charter and procurement policy guidelines Governmentset by from time to time; R  for effectiveness and integrity and ensuring group-wide adherence thereto having regard to the principles ofthe policies; procurement Group’s R  Committee’s processesto the needsof the individual entities withinthe Group having due regard tothe operational dynamicsofeach entity and to implementsuch measures as are deemed necessary to ensure the functional effectiveness of these processes; R  Committee and implementsuch measuresas are deemed necessary to ensure that this structure is functionally effective; C  • • • • • • • • • • • • • • • • • 2 1 1 1 1 3 1 2 3 3 3 3 Attendance 1 (formerly the Finance,Investment, 2 (Chairperson) 2 2 2 2 2 2 Members onitoring the current funding plan of the Corporation to eviewing the performance of all investments and of opening the Board the recommending to and eviewing eviewing and making recommendations to the Board eviewing and recommending to the Board the the Board the recommending to and eviewing eviewing funding and solvency implications of transactions eviewing the capital investment process, monitoring total eviewing and approving capital any project,or the eviewing and recommending and eviewing capital the annual and ecommending the limits applicable to counter-parties to eviewing the long-term and short-term funding plan, for pproving the criteria and guidelines for investments and valuating and making recommendations to the Board   regarding business cases for new ventures or projects; A approving investments within its delegated authority;    E acquisitions made; R new offices or new regional offices within the borders of the Republic of South Africa; R regarding the SABC’s investment strategy;  R R commencement capital ofany project or the procurement capitalof any item the cost of which exceeds R200 million;   R and recommendations make to the Board; R Group capital expenditure; procurement capital of any or the commencement of any capital project item included in the approved budget of the SABC, million R100 above up to R200 million;   R operating budget to the Board for approval; R theBoard, and monitoring andreviewing all borrowings made the by Corporation, and the guarantees and sureties issued on behalf of the Corporation;  M  R R submission to the Board; enablefulfilto it both its commercial and public mandates in line with the corporate goals; B E Makhathini K T Kweyama D K Mohuba M G Tsedu N P Philiso C B Maroleni Dlamini S T B L Tugwana J Matisonn Phalane J F C Potgieter-Gqubule Three Meetings (which included a workshop) were convened. M G Markovitz • • • • • • • • • • • • Procurement andCommittee) Technology The Finance,Investment and Procurement Committee comprisesthree independent Non-Executive Directors and is Non-Executive independent an chaired by Director. The roles and responsibilities of the Committee include: • 1. Resigned1. effective 28 March 2018 2. Attends by invitation and Procurement Investment Finance, Committee hen appropriate,the Committee shall requestand consider aking recommendations to the Board for the continuation eveloping,evaluating and reviewing the corporate eviewing and evaluating regularly the balance evaluating and of eviewing esponsible forpreparing a descriptionof the role and eviewing and, where appropriate, making recommendations pproving a performance and evaluation measurement pproving conditions of employment and all benefits ssisting the Group Chief Executive Officer in the selection upervising the administration of the Corporation’s policies stablishing and ensuring the implementation of an induction heCommittee shallrecommendations make in respect of he Committee will recommend to the Board for its approval, heCommittee will determine and agree with the Board the n consultation with the Board, and subject to the approval relating to actual or potential conflicts of interestMembers of the Board; affecting  programmefor new appointees to the Board;      reports and presentations the by Audit and Risk Committee; or the Social and Ethics Committee;   skills, knowledge experience and performance and and effectiveness ofthe Board and its Committees, recommendationsmake to the Board with regard to any adjustments that it considers appropriate, and approve the section in the Annual Reportdealing with the performance of the Board; E A framework to monitor the effectiveness ofthe Board,Board Committees,individual Directors,the and CFO GCEO, COO;  capabilitiesrequired particular for appointments Executive of Directorsto the Boardand for identifying andnominating candidates for the approval of the Board;   to the Board about proposed appointments to the Boards and Committees of Subsidiary Businesses including the exercise of shareholder rights to remove a Director, the nomination of Group representatives to sit on the Boards of subsidiaries;   of the Chief Financial Officer and Chiefwhen vacancies Operating occur provided that the appointment Officer of such persons would remain the decision of the Minister;  of the determining Minister, the remuneration for the Executive Directors, on appointment, having regard to the remuneration policy; T the fees and/or remuneration of the Non-Executive Directors to the Board from time to time, which Directors’ fees and/or remuneration shall be subject to the approval of the Minister; T appropriate Performance Key Indicators for the (KPIs) Executive Directors at the beginning of each Financial Year; T policy for the remuneration of the Executive Directors. No Directoror Executive shall be involveddecisions in any as to remuneration; own their W D governance structures, policies, practices and procedures ofthe Corporation and implementsuch structures,policies, practices and procedures as the Committee deems to be in keeping with the tenets of good corporate governance; R S  R M in servicenot) (or Director ofany as an Executive orNon- Director;Executive R A applicable to the Financial Group Officer, Chief Chief Executive Operatingand conditions Officer Officer, of the severance of employment of such and Chief the terms individuals; A I • • • • • • • • • • • • • • • 5 6 1 2 1 3 3 3 2 3 4 3 Attendance (Chairperson during during (Chairperson 2

2 2 2 2 (Chairperson) 2 (members during the 2 2 (members during the

Members 2 etermining whether the proposal before the Committee etermining whether the financial implications of the eterminingwhether the proposed transaction is in line with etermining whetherthe proposed transaction has been egularlyreviewing the size,structure and compositionsof nnually reviewing data the indicators key oflisted nsuring that appropriate succession planning is in place for valuating succession-planningvaluating arrangements Executive for  successorsfor direct reports of the Group ChiefExecutive Officer determine to their status successionthe on plan and readiness to assume a role as the need arises. Such data should include the performance evaluation outcomesand outputs of management conversations; A E both Executive and Non-Executive Directors of the Board; E Directors to ensure that these are orderly and calculated skills, appropriate maintain an to balance diversity, of experience; and knowledge the Committees ofthe Board,with due regard to the legal expertise and skills requirements, effective for required performance of each Committee; R D  contains all relevant information in sufficientthe detail Committee and is satisfied that it hasinformation to enable it to thoroughly sufficient, probe the decision and appropriate a recommendationmake to the Board.  D thepublic broadcasting mandate setout in Section ofthe 10 Broadcasting Act and the corporate goals;  D budgeted for and whether the business aspects of the decision fundamentally sound; are transaction will be and how much money will the Corporation make/stand to lose supporting/rejecting by the proposal; and  D D with the strategic objectives approved theby Board for the generally; SABC the and Division Technology B L Tugwana J R Aguma M A Raphela T E Ralitabo B E Makhathini K T Kweyama M G Markovitz M G Tsedu Naidoo K N P Philiso Dlamini S T 7 Meetings were convened. J H Phalane the Interim Board)the Interim Board) Interim Board) • • • The Governance and Nominations Committee comprises three independent Non-Executive Directors and is chaired by an Independent Non-Executive Director (Chairperson of the Board). The roles and responsibilities of the Committee include: • 1. Resigned1. effective 28 March 2018 2. Attends by invitation Nominations and CommitteeGovernance Seven Seven Committee meetings were held The and COO, CFO duringGCEO, other relevant year. corporate the financial officials attended the meetingsby invitation. The attendance of Members at the Committee meetings was as follows: • • • • etermining whether the proposed transactionis in line •

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 62 GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 63 9 9 4 2 6 3 3 1 10 Attendance (Chairperson) 1 1 1 1 1 1 Members onsidering and recommending the Human Capital Policies Policies Capital recommending onsideringHuman the and eviewing the specific application of the Remuneration pproving general retirementpolicies of the Group and any pproving conditions of employment and all benefits pprovingthe general material termsand conditionsof ssistingthe Board in its oversight ofthe Remuneration nsuring that the structure, size, composition, skill sets and valuating succession-planningvaluating arrangements Group for valuating succession-planningvaluating arrangements Group for he remuneration of the General Managers and Heads Policy and its specific application to the Group Executives andits general application toall Group employees, the reviewofthe remuneration philosophy ofthe Group, the adoptionof annual and longer-termincentive plans,the determination and approval of levels of reward to the Group Executives;     Policy withregard to Group Executives and a make recommendation to the Board for approval;    changes in such policies or to the rules of the retirement and funds; C  E A A R T of Business Units will be determined the by Group Chief Executive Officer, withinCommittee and recommended the to the Committeefor ranges laidapproval; down by the A A and reviewing the prevailing industrial relationspolicies and the Corporation’s strategies in respectthereof in order to ensure that the appropriate policies are applied. Executives, to ensure that these are orderly and calculated skills, appropriate maintain an to balance diversity, of experience; and knowledge applicable to the Group Executives of the Corporation; and theterms and conditions ofthe severanceofemployment of such individuals; employment to be applied for all employees of the Group; E performance ofthe Corporationis regularly reviewed and maintained at levels which are appropriate; E   Executives, to ensure that these are orderly and calculated skills, appropriate maintain an to balance diversity, of experience; and knowledge M G Tsedu J Matisonn T E Ralitabo B L Tugwana Dlamini S T M A Raphela J R Aguma N P Philiso 10 meetings10 were convened. K T Kweyama • • • • • CommitteeTen meetings were held during the financial year. The GCEO, COO, CFO and other relevant corporate officials attendedthe meetings invitation. by The attendance of Members at the Committee meetings was as follows: • • • • 1. Attends1. by Invitation 2. Resigned effective 28 March 2018 Remuneration and Resources Human Committee The Human Resources and Remuneration Committee comprisesthree independent Non-Executive Directors and is Non-Executive Independent an chaired by Director. The roles and responsibilities of the Committee include: • 1 1 1 2 2 2 2 Attendance 1 (Chairperson) 2 2 2 Members eventing Human any Capital practices that will result in stituting regular and formal Board strategy reviews formal and reviews regular Boardstituting strategy esponsiblefor the oversight and monitoring ofthe Human nsuring that the structure, size, composition, skill sets and nsuringthat the strategies are aligned with the purpose nsuring that a proper strategic planning process is nsuring that there is rigorous probing of strategic plans nsuring compliance applicable and with labour the relevant n conjunction with the Board, setting parameters within E performance ofthe Corporationis regularly reviewed and maintained at levels which are appropriate; In or strategy audits and examine progress towards the predetermined objectives and current evaluate performance in the light of these predetermined objectives.  E of the business, the prevailing culture and ethics and the interests of the SABC’s stakeholders; and I which Managementdevelops which strategy, include may ensuringthat short-term and longer-termstrategies are balanced platform provides a it that and for sustainability; E implemented;  E and investmentproposals, asking by ‘whatif’ and ‘whynot’ underlying assumptions the challenging by and questions, strategy; Capital management strategies and implementation within SABC, and ensuring that these are beneficial to the Corporation and employees, the continued existence of the Corporation, and to ensure a return on investment for the Shareholder; R   E related legislation;  Pr unauthorised, irregular, fruitless and wasteful expenditure and losses from criminal conductand expenditure not complying with legislation; R to the Board about actual or potential affecting conflicts Member any of the Board, carry out of an annual interest review of declarations Board, and approve a report to the Shareholder on how of conflictsthe Corporation’s of Policy on Conflicts interest of Interestapplied during has the year; by been the R Kalidass R M G Markovitz F C Potgieter-Gqubule M G Tsedu J H Phalane K T Kweyama B E Makhathini 2 Meetings were convened. The Human Resources, Governance and Nominations Committee was established the by Interim Board. The Non-Executive independent comprisedCommittee three Directorsand was chaired an independent by Non-Executive Director. The roles and responsibilities of the Committee include: • 1. Resigned1. effective 28 March 2018 2. Attends by invitation and Governance Resources, Human Nominations Committee • Two Committee meetings were The attendanceyear. ofmembers at the Governance and held during the Nominations Committee meetings financial was as follows: • • • • • • • eviewingand, where appropriate, recommendations make • 5 4 1 2 7 2 2 5 5 5 1 Attendance (Chairperson) 2 2 2 2 1 2 Members evelop proposed policies for consideration by the Board Board the by consideration for policies proposed evelop eview the Sports Broadcasting Rights; eport to the Board on the extent to which the News division eview the editorial policies of the Corporation from time to ssist the Board to preserve the Corporation’s editorial trive to provide a broad range of services targeting, nrich the cultural heritage ofSouth Africaproviding by nclude programmes made the by Corporation as well as nclude national sports programmingas well as nclude significant amounts of educational programming, particularly, children, women, the youth and the disabled;  artistic expression; contemporary and traditional support for   production independent the from commissioned those sector;  minority and developmental sports;   has achieved its objectives during the relevant period;  A independence and integrity and to ensure that the Corporationdoes not allow commercial, political or personal considerations to influence its editorial decisions; and R  time to ensure that they remain appropriate to the operational needs of the corporation and the fulfilment of the statutory and regulatory obligations and mandates of the corporation. as fair and unbiased coverage, impartiality, balance unbiased coverage, and fair and as commercial other independence and from government, interests; I  both curriculum-based and informal educativetopics fromwide a range ofsocial, political and economic issues, including, but not limited human to, rights, health, science,early agriculture, culture, childhood development, religion, justice commerce and technology, contributing and South Africanshared a to consciousness identity; and E S I I R R D onnews and current affairs programming, which ensure that SABC’s news and current affairs content balanced, is fair, accessible, accurate, compelling, professional, authoritative and in line with the Constitution ofSouth Africa,the Broadcasting Act and other relevant legislation; T S Dlamini S T M A Raphela J Matisonn J R Aguma M G Markovitz F C Potgieter-Gqubule M G Tsedu N P Philiso T E Ralitabo B L Tugwana 7 Meetings were convened. D K Mohuba Interim Board)(Chairperson during the • • • • • • • Seven Committee meetings were held The and COO, CFO duringGCEO, other relevant year. corporate the financial officials attended the meetingsby invitation. The attendance of Members at these meetings is reflected below: • • • 1. Resigned1. effective July 2017 2. Attends by invitation Commercial ServicesPublic Committee The Public Commercial Services Committee comprises three independent Non-Executive Directors. The Committee is Non-Executive independent an chaired by Director. 4 0 4 4 1 4 1 3 4 1 Attendance (Chairperson) 2 2 2 2 2 1 Members onsidering and recommending the Human Capital Policies Policies Capital recommending onsideringHuman the and eflect both the unity and diverse cultural and multilingual eviewing the specific application of the Remuneration pproving the general retirement policies of the Group and pprovingthe general material termsand conditionsof e made available to South Africans in all the official trive to be of high quality in all of the languages served; rovide rovide significant news and public affairs programming, he Committee will assist the Board in its oversight of the he remuneration of the General Managers and Heads P  which meets thehighest standards of journalism, as well nature ofSouth Africaand all ofits cultures and regionsto audiences; S   languages; R B and reviewing the prevailing industrial relationspolicies and the Corporation’s strategies in respectthereof in order to ensure that the appropriate policies are applied. A C  changesany in such policies or to the rules ofthe retirement and funds; T  Remuneration Policy and its Group Executivesand itsgeneral applicationto all Group specific application of philosophy remuneration the of review the toemployees, the the Group, the adoption of annual and longer-term incentive plans,the determination and approval oflevels ofreward to the Group Executives; T  of Business Units will be determined the by Group Chief Executive Officer, withinCommittee and recommended the to the Committeefor ranges laidapproval; down by the  R Policy with regard to Group Executives and making a recommendation to the Board for approval; A  employment to be applied for all employeesof the Group; A applicabletothe Group Executives ofthe Corporation and theterms and conditions ofthe severance ofemployment of such individuals; R Kalidass R D K Mohuba Naidoo K M G Tsedu N P Philiso C B Maroleni B L Tugwana Dlamini S T J Matisonn K T Kweyama K T Kweyama 4 Meetings were convened. • • • The Public Broadcasting Services Committee comprises three independent Non-Executive Directors. The Committee is chaired an independent by Non-Executive Director. The roleof the Committee isto ensure thatthe SABC delivers on its obligations as provided for in the Public Broadcasting Service Charter of the Corporation. Public Services must: • 1. Resigned1. effective 28 March 2018 invitation 2.Attends by Broadcasting ServicesPublic Committee Four Four Committee meetings were The and COO, CFO GCEO, other relevant year. corporate held during the officials financial attended the meetingsby invitation. The attendance of Members at the Committee meetings was as follows: • • • • • • pproving conditions of employment and all benefits •

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 64 GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 65 3 2 3 1 1 1 1 2 3 3 Attendance whether the business aspects ofthe 1

and

1 1 1 1 (Chairperson) 1 Members verseeing the review of editorial policies of the Corporation verseeing a consultative process to develop policies for eportingto the Boardon the extentto which the News ssisting the Board to guide the editorial direction of the ssisting the Board to preserve the Corporation’s editorial he United NationsGlobal CompactPrinciples are he Social and Economic Development goals of the Corporation and to set editorial policies in line with the corporate goals; independence and integrity and ensure that the Corporation does not allow advertising, commercial, political or personal considerations to influence its editorial decisions; and from time to time to ensurethat they remain appropriate to the operational needs of the Corporation and fulfilmentthe statutory and regulatory of obligations and mandates of Corporation; the decision are aligned with the Corporation’s operational plan.  Division hasachieved itsobjectives during therelevant period;     R O consideration the by Board on news and current affairs, programming,which aimto ensure thatthe newsand current affairs programming, presented in all promotes the values of democracy, non-racialism, nation official languages, building, and empowerment, for approval the by Board; A A O T T incorporated in the decision-making processes of the Board; Corporation,including the Corporation’s standing in terms ofthe goalsand purposesofthe ten principles set out in the United NationsGlobal CompactPrinciples are an integral partofthe businessday-to-day strategy, operations, and organisational culture; K T Kweyama J Matisonn D K Mohuba B E Makhathini F C Potgieter-Gqubule M G Markovitz N P Philiso B L Tugwana Dlamini S T 3 Meetings were convened. M G Tsedu • • Three Committee meetings were held The and COO, CFO GCEO, other relevant year. corporate during the financial officials attended the meetingsby invitation. The attendance of Members at these meetings is reflected below: • and in line with its editorial policies and regulations. Defend the Division encourage and News the independenceeditorial of thepursuit of excellence ofthe highest professionalstandards. The duties and responsibilities of the Committee are: • • 1. Attends1. by Invitation Ethics and Social Committee The Social and Ethics Committee comprises four independent Non-Executive Directorsand ischaired an independent by Non-Executive Director. The role and function ofthe Committee is to monitor/oversee the Corporation’s activities,having regard relevant to any legislation, other legal requirements, or prevailing codes of best practice, with regard to matters relating to the following functions: • • 5 4 1 7 2 2 2 5 5 5 1 Attendance 2 2 2 2 (Chairperson) 1 2 Members ommission a significant amount of their programming from programming their of amount significant a ommission omply with the values of public broadcasting service in the evelop proposed policies for consideration by the Board Board the by consideration for policies proposed evelop eview the editorial policies of the Corporation from time to eport to the Board on the extent to which the News division ssist the Board to preserve the Corporation’s editorial e operated in an efficient manner to maximise the revenues the maximise to efficient manner an in operated e e subject to the same policy and regulatory structures as ubsidise the public services to the extentrecommended by time to ensure that they remain appropriate to the operational needs of the corporation and the fulfilment of the statutory and regulatory obligations and mandates of the corporation.  R A independence and integrity and to ensure that the Corporationdoes not allow commercial, political or personal considerations to influence its editorial decisions; and onnews and current affairs programming, which ensure that SABC’s news and current affairs content balanced, is fair, accessible, accurate, compelling, professional, authoritative and in line with the Constitution ofSouth Africa,the Broadcasting Act and other relevant legislation; R has achieved its objectives during the relevant period;  D the Board and approved the by Minister;  B Shareholder; the to provided  C sector;independent the S   C service; and programmes of provision  B  outlined in the Act for commercial broadcasting services; T S Dlamini S T M A Raphela J R Aguma D K Mohuba M G Markovitz F C Potgieter-Gqubule M G Tsedu N P Philiso T E Ralitabo B L Tugwana 7 Meetings were convened. J Matisonn News and Editorial and CommitteeNews The Newsand Editorial Committee comprisesfour independentNon-Executive Directorsand ischaired an by Non-ExecutiveIndependent Director. The primary role of the Committee is to assist the Board in setting the editorial policies of the Corporation, having regard to the need to ensure the editorial integrity of news and current affairs programming presented the by Corporation. The Committee must ensure that the SABC produces accessible, accurate, compelling, professional and authoritative news, current affairs and other programming balanced that is fair, 1. Resigned1. effective July 2017 2. Attends by invitation Seven Seven Committee meetings were held The and COO, CFO duringGCEO, other relevant year. corporate the financial officials attended the meetingsby invitation. The attendance of Members at these meetings is reflected below: • • • • • • • • The roleof the Committee isto ensure thatthe SABC delivers on its obligations as provided for in thePublic Commercial Service Charter ofthe Corporation.Commercial Services must: • • The Corporation advances the United Nations Global Five Committee meetings were held during the financial Compact Principles and the case for responsible business year. The GCEO, COO, CFO and other relevant corporate practices through advocacy and outreach to peers, partners, officials attended the meetings by invitation. The attendance clients, consumers, and the public at large; of Members at these meetings is reflected below: • Reviewing and making recommendations to the Board with Members Attendance respect to the Corporation’s Social Economic Development; 5 Meetings were convened • Monitoring Social Economic Development Initiatives; M G Tsedu (Chairperson during the 4 1 • The Committee has the mandate to assist the Board in Interim Board) discharging its responsibility to ensure that Broad-Based F C Potgieter-Gqubule 2 2; 3 Black Economic Empowerment (B-BBEE) is pursued and (Chairperson) implemented throughout the SABC; K Naidoo (Chairperson)4 6 • The Committee shall review the Corporation’s standing in J Phalane 2 terms of the goals and purposes of the promotion of equality V Rambau 1 and the prevention of unfair discrimination; N P Philiso5 3 5 • T he Committee will review the SABC’s standing in terms of T E Ralitabo 1 5 its support of the four strategic objectives in respect of the B L Tugwana 4 International Labour Organization Protocol on decent work T S Dlamini5 4 and working conditions; M A Raphela5 2 1. Chairperson during Interim Board • Monitoring the SABC’s employment relationships, and 2. Chairperson during new Board its contribution toward the educational development of its 3. Resigned Effective 28 March 2018 4. Appointed as Chairperson March 2018 employees; 5. Attends by invitation • Reviewing recommendations on ethical matters made by Management or other external sources and to make Directors’ Remuneration GOVERNANCE recommendations to the Board whether, and if so, to what Non-Executive Directors receive fees for their contribution extent, these should be applied to the SABC; to the Board and the Committees on which they serve. The • In conjunction with the Audit and Risk Committee, the Shareholder determines the rate in consultation with National Committee oversees and reviews the anti-corruption and Treasury. Non-Executive Directors are also reimbursed for

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 bribery practices; out-of-pocket expenses incurred on the Corporation’s behalf. • Reviewing the policies and processes for managing Further information on Directors’ remuneration appears on non-financial risks affecting the business, including pages 135 to 136. relationships with stakeholders (principally colleagues, Company Secretarial Function partners, customers, local communities, non-governmental organisations, regulators, shareholders and suppliers), and Directors have unrestricted access to the advice and the impact of the SABC’s activities on its general business services of the Company Secretary as well as the Secretariat reputation; Department. The Directors are entitled to obtain independent professional advice at the SABC’s expense should they deem • The Committee shall promote environmental policies this necessary. that relate to the activities where the SABC has its most significant environmental impacts in respect of energy The Company Secretary together with other assurance management and climate change, water quality, resource functions monitors the SABC’s compliance with the productivity (including leakage and waste); and requirements of the PFMA, Companies Act and other relevant legislations. • In conjunction with the Audit and Risk Committee review and make recommendations to the Board with respect to the Reporting to Stakeholders SABC’s Health and Safety Policies and review the procedure In order to present a balanced and understandable for reporting and investigating accidents, incidents and assessment of its position, the SABC is continuously striving accidents at work. to ensure that reporting and disclosure to stakeholders are relevant, clear and effective. It places great emphasis on COO interaction with staff. addressing both positive and negative aspects in order to demonstrate the long-term sustainability of the organisation. The King IV™, Report is used in compiling the annual report. Stakeholder Relations In addition to the interests of the government as shareholder, the SABC recognises the legitimate interest of specific government departments, employees, consumers, suppliers, the media, policy and regulatory bodies, trade unions, non- 66 governmental groups and local communities in its affairs. Communication and interaction with stakeholders are ongoing during the year and are addressed through various channels depending on the different needs of the various stakeholders. GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 67

Internal The Board has the ultimate responsibility for for responsibility ultimate the has Board The establishing a framework for internal control, includingan appropriate procurement and system. provisioning SABC Foundation partners with Africa Geeks. Teen The Board has the ultimate responsibility for establishing a framework for internal control, including an appropriate procurement and provisioning system. The controls throughout the SABC focus on those critical risk areas identifiedby operational risk management, confirmed executiveby management and endorsed the by internal auditors.The controlsare designed to provide cost-effective assurance that assets are safeguarded and that liabilities and working capital are efficiently managed. Organisational policies,procedures, structure and approval frameworks provide direction, accountability and segregation responsibilitiesof contain and self-monitoring mechanisms. Management with the assistance of the Internal Audit Department closely monitor the controls and actions that are taken to correct deficiencies as they are identified. control Risk

The Public Finance Management Act (PFMA) was enacted in 1999 with the primary purpose ofsecuring soundand government of affairs financial the of management sustainable bodies.Responsibilities ofthe SABC’s Group ChiefExecutive Officer, as the Accounting Officerresponsible specifies,for managing thatthe financial he/she administration is of the SABC. Included in this duty is the maintenance ofan effective, efficient and transparentsystem of risk management. Furthermore, the King IV Code of Corporate Governance for South (King Africa™ states IV™) that risk management should be practised throughout the organisation all staff by in their day-to-day activities. Risk Management is about identifying and assessing key risks, designing and implementing strategies and processes by which those risks can be managed, and finally, continual review of processes to ensure that risks identified have been mitigated acceptable to a level to the relevant stakeholders. In accordance with the the above, methodology of the SABC employs an eight-phased approach, which incorporates the principles mentioned as paragraph. the previous in By establishing and working from a set model, the SABC has ensured a consistent and logical approach to risk management. Risks been have assessed in context with the achievement ofthe SABC objectives,as contained in the Strategic Imperatives. Strategic risks and their mitigation strategies are evaluated and monitoredboth at Board and ExecutiveWhere level. applicable,strategic risks been have rolled down toan operationaland level, collectively each Business Unit throughoutthe SABC hasa role to playin managing and these risks. mitigating management compliant effort a fully attain to a continuing In has SABC the initiatives, other amongst status, a risk methodologyimplemented management and practice business best on based is that framework management risk the with line in Treasury. National by issued 92 9% 171 261 23 (8%) 60(34%) 32 (58%)

140 81% 91% 19% 2016/17 2017/18 2016/17 2017/18 41 41 204 10% 90% 2015/16 41 (91%) 41 (91%) 2015/16

Year Details Internal Audit Report Issued as per audit plan Rating 3 and 4 Audit Opinions (Negative Opinions) No. of report issued No. of Significant Findings Follow Up Reviews (Unresolved Findings) Audit Internal Repeat and 1 and 2 Audit Opinions (Positive Opinions) Planned Audits (Deferred) Audits Planned 4(9%) 4(9%) Follow up audit reports and requests* management other Internal Audit PerformanceInternal Audit GroupInternal Audit played pivotal(GIA) role in the governance pillar executing by audit projects against the Risk Based Annual AuditPlan asapproved the by Audit and RiskCommittee and reporting the findingsto managementaccordingly. GIA also executed continuous business monitoring projects to provide management with an alternative view on business risks and controls thereby assisting in proactively monitoring risk key areas within the organisation to ensure the achievement of the business objectives. Data analysis through Computer Aided was conducted (CAATS) onAudit criticalTools transactions within Human Resource, Procurement and Payroll. The following table presents the summary of performance for year: the Internal Audit Overall Assessment of the Internal Environment Control GIA executed auditprojects based on the auditcoverage from Risk Based Annual Auditthe Plan. See approved the 2017/18 statusofperformance against the approved plan contained in the Internal Audit Performance above. In ouropinion, foundwe thatthe internal controlsthe over most focus areas were inadequate and ineffective and required significant improvements. Internal Audit completed 92 audit reportsofwhich 58 related tothe follow up reviews performed at the special request of the Audit and Risk Committee. The results and the audit opinions are reflected in the below: table * As per the Auditand Risk Committee special requestto GIA and other Management requests GIA adopted a continuous audit approach in the review of the supply chain managementprocesses. There was also a refocus ofour auditefforts to assistManagement in providing assurance on the resolution oflong outstanding internal audit findings.

audit ovideassurance on the adequacy and effectiveness of

vestigations of possible of misconduct/irregularities;vestigations and onsulting serviceson corporate governance mattersand elements impacting on the control environment. control the on impacting elements risk managementprocesses, system ofinternal controls and governance processes; In  C Pr • • The mandate of the SABC Group Internal Audit is determined of the PFMA which requiresin terms the of Section 51(1)(ii) SABC Board of Directors (Accounting Authority) to ensure that the SABC has and maintains system of internal ‘a auditunder the control and direction ofan Audit Committee complying with and operating in accordancewith regulations and instructions prescribed in terms of sections and 76 77’ ofthe Act.Internal Auditis an independent,objective assurance and consulting activity designed to add value and improve on organisational operations, in order to ensure that the organisation accomplish its objectives bringing by a systematic, disciplined approach and to evaluate improve the effectiveness of risk management,control and governance processes. The Internal Audit Charter which is approved the by SABC Auditand Risk Committee informs the purpose, scope independence and accountability, work, responsibility, of authority conferred Board by on SABC Internal Auditunit in terms of the PFMA as well as the International Standards for Professional Practice of Internal Auditing (Standards). In line with the approved SABC Internal Audit Charter, the PFMA, the Internal Auditing Standards and the King IV™, following are incorporated in the activities of Group Internal Audit: • Activities Internal Group of Audit Mandate and Purpose of Internal Audit This is achieved means by of an independent objective appraisal and evaluation of the risk management processes, internal controls and governance processes as well as recommendingby corrective actions and suggested enhancements to the controls and processes. The risk based Internal Audit Plan is based on the major risks emanating from the SABC’s internal risk managementprocess. The Internal AuditPlan is responsive to changes in the SABC’s TheInternal risk AuditDepartment is fully supported profile. the by Board and the AuditCommittee and has full and unrestricted access property records, Corporation activities, personnel. all and to The External Auditors are responsible for independently auditing and reporting on the financial statements in conformity with International Standards on Auditing.

In line with the PFMA and the King IV™ IV™ King the and PFMA the with line In Department Audit Internal the requirements, management and Committee Audit the provides are controls internal the that assurance the with effective. and appropriate Internal

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 68 GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 69 Material/Significant Individual transactions in excess of R8 million arising from irregular expenditureand fruitless andwasteful expenditurewill be considered to be material and will be dealt with in accordance with the provisions sectionof theof55(2) PFMA. This figure is based on of 2% the surplus or deficit. All losses arising from criminal conduct are considered, their by nature, to be material and will be reported in accordance with the provisions of section 55(2) of the PFMA. The SABC submits quarterly reports to the Executive Authority, which includes all relevant information, which may influence the decisions or actions of the Executive Authority. These reports coverall information that is considered relevant to the Executive Authority. The SABC will inform the National Treasury of individual transactions covered this by section which are in excess of R50 million. he definition of objectives and the allocation of resources T working capital; and T  in an economic, efficient,effective and transparent manner. • he economic and efficient• management of available In terms ofthe Regulations, Treasury the SABC’s Accounting Authority must, for purposes of ‘material’ and ‘significant’ in terms of sections of the and PFMA, 54(2) 55(2) develop and agreeframework a of acceptable levels of materiality and significance with the relevant Executive Authority. Interms ofSection ofthe 52 PFMA the Accounting Authority for a public entity must submit to the Accounting Officera Departmentdesignated for the by Executive Authorityfor thatpublic and entity, to the relevanttreasury, leastat one month, or another period agreed with the National Treasury, before the start of its financialyear, a corporate prescribedplan format in covering the affairs the of the public entity for the following three financialyears. Interms ofsuch TR (f) 29.1.1 a corporate plan must include a framework. materiality/significant Theprinciples ofthe King IV Code ofCorporate Governance for South (King Africa™ require IV™), that disclosure be made on matters of to shareholders and a wide range of stakeholders. The significance, interest andAccounting Authorityshould establish guidelines relevanceof materiality for disclosure the by Corporation. This framework will be reviewed and updated annually. Requirement rticipation in a significant partnership, trust, unincorporated joint significant change in the nature or extent of its interest in a n request, disclose to the executive authority responsible for for authority responsible executive the to disclose request, n ny materialny losses throughcriminal conductand irregularany Pa  arrangement; similar or venture O that public entity or the legislature to which the public entity accountable,is material facts, all including those reasonably discoverable, which in any way actions of the may executive authority. influence the decisions or  A significant partnership, trust, unincorporated jointventure or similar arrangement. A expenditure and fruitless and wasteful expenditure that occurred during the financialyear; The annual report and financial statements referred to must – 55(1)(d) in subsection (b) Include(b) particulars of – (i) (c) Acquisition(c) or disposal of a significant shareholding in a company; Acquisition(d) or disposal of a significant asset; Commencement(e) or cessation of a significant business activity; and (f) Before a public entity concludes of any the following transactions, the accounting authority for the public entity must promptly and in writing inform the relevant treasury ofthe transaction and submit relevant particulars of the transaction toits executiveauthority forapproval of : transaction the (a) Establishment(a) or participation in the establishment of a company; (b) The accounting authority for a public entity must – (c)

ystem is maintained for properly evaluating all major

Section ll revenues due to the SABC are collected; conomic, efficient, effective and transparent systems of he implementation of appropriate and effective measures financial and risk management and internal controls are in place;  A  T toprevent unauthorised, irregular or fruitless and wasteful expenditure, expenditure not complying with legislation, or losses from criminal conduct; and  A s capital projects prior to final a decision on each project; E Section 55(2) Section Section 54(2) Section

Section 50(1) Section Compliance with Laws and and with Laws Compliance • • • The PFMA focuses on financialoutputs and responsibilities. managementThe Directors,as the Accounting with related Authority, comply with their fiduciary duties as set out in the PFMA. In terms of the PFMA, the responsibilities of the Board include taking appropriate action to ensure that: •

Public Finance Management (PFMA) Act Finance Public regulations sound to adherence entity, As a public governance principles is of utmost importance. against measurement effect, regular this To the Public Finance Management Act and King IV™ is carried out to ensure that deficiencies are identified and correctiveimplemented. measures are The materiality and significance framework for the financial year underreview, which isdetermined management, follows: as is and annuallyreviewed by conduct Code of Minimising Conflict of Minimising Conflict Fraud and Investigations Forensic The Board is responsible for ensuring that an integrated crime prevention plan isimplemented in orderto minimise the risk opportunity and crime for irregularities, and particular, in fraud. In order to support the strategic intent and business objectives ofthe SABC, the Board or its Committees, itsat discretion, request a forensicmay, audit where there is prima facie evidence that this is justified. A revised Conflicts This Policy isthe in the Board process on 30 June 2017. of Interest Policy of being rolled out throughout the Corporation. was As part of approved by the improvements in this regard, an electronic system was developed and all employees are required to complete their declarations of interest on line, which is forwarded to their line manager for approval. The SABC Board approved a revised Code of Business Conductand Ethicson 26 AprilThe aimthereof2018. is to ensure thatevery employee ofthe Corporation sharesin the same values and levelsof accountability. This policy isin the process of being rolled out throughout the Corporation. interest corruption Explanation Consideration is being given given Consideration being is to the preparation of the integrated report Consideration is being given given Consideration being is to the preparation of the integrated report Consideration is being given given Consideration being is to the preparation of the integrated report Consideration is being given given Consideration being is to the preparation of the integrated report The internal controls are in the process of being reviewed the Board on 30 May 2017 Policy will be developed be will Policy Register in the process of finalisedbeing Framework in the process of finalisedbeing Charter in the process of finalisedbeing Practice being updated Practice being Draft Framework in place Policy in place The Audit and Risk Committee is tasked with Governance IT overseeing and is awaiting the IT Governance Framework Determined the by President in conjunction with the Assembly National Determined by Shareholder Determined by in conjunction with the Board Determined by the President the Determined by TM Sustainability reporting be should disclosure and assured independently Sustainability reporting be should disclosure and integrated with the company’s financial reporting The Board should ensure the integrity of the company’s integrated report The audit committee should committee should audit The reporting integrated oversee The Board should report should Board The on the effectiveness of the company’s system of internal controls Internal control framework Framework was approved by Internal financial control policy Compliance register IT GovernanceIT Framework IT CharterIT Combined assurance model Subsidiary governance framework Remuneration policyRemuneration The Board should be information for responsible technology (IT) governance Board should be able to without director any remove shareholder approval Board should appoint a Chief Executive Board should elect a Chairperson annual an on basis principle or practice not in place Number and description of King III 9.3 9.2 9.1 3.4 2.1 5.3 3.8.2.2 6.1.1 5.3 5.1.2 3.5.1 2.24 2.27 2.8 2.18.10 2.17.1 2.16.1 KING IV The SABC has applied the King IV™ principles and practices. As a state owned some company, of thesecannot be applied. In otherinstances, the SABC hasadopted alternative practices to those recommendedExplanations King by IV™. are presented in the table Where below. there are not approved policies, processes or procedures yet, these are reflected as areasfor improvement. Draft documents do exist, and these willbe approved the by relevant governance structures in the next reporting cycle. practices: principles and IV™ King Applying the

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 70 GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 71

Call Outs 2 1 1 1 1 1 Health, Safety and and Safety Health, Environmental issues 0 0 0 0 0 0 July May April June March August ater quality tests are conducted periodically to ensure that aste managementin the SABC buildings is being October January oise, air quality and light surveys were conducted in most of moking in SABC buildings is restricted to designated February November December N  the SABC offices to determine compliance with legislation. Shortcomings were identified andwere corrected; W  the tap water inthe SABC buildings is free from harmful bacteria. All results of tests conducted during the 2017/18 financialwere negative; year, W  addressed accordingly and waste is disposed according to classification includingappropriate certificate of disposal is obtained; and hazardous chemicals where S  areas bringing the SABC in line with the requirements of the ProductsTobacco Control Amendment Act No. 83 of 1993. September secretary In my opinion, as that, in terms of the Companies of 2008, Act Company No. 71 for the Secretary, I year March ended the hereby 31 South 2018, African Broadcasting confirm Corporation SOC Limited, has lodged with the Registrar of Companies all such returns as required of a public company in terms of the Companies Act, and all such returns are true, correct and up to date. Johannesburg July 2018 Report by the Company • • • GRAPH: Injuries on Duty 2017-18 • Health and Safety Expo held at SABC Auckland Park. The SABC is committed to creating a healthy environment for all its employees.During the year underthe SABC review, embarked on a biological programme to reduce the ‘sick building syndrome’ effecton the workforce.The following implemented: were initiatives The Environment The During the period underthe Occupationalreview, Health and Safety and Wellness Unit held regular workshops and expos where facilities were provided for employees their to have cholesterol, glucose levels and blood pressure checked, as wellas other health assessments. Health Safety The SABC’s vision for occupational health and safety of the workforce is zero tolerance to on-the-job fatalities, injuriesand diseases. The effective implementation of theOccupational Healthand Safety Programme, Storage and Stacking Programme,Fire Safety Programme,health and safety policies and awareness programmes assisted in keeping injuries on duty as low as possible. Combined, these initiatives resulted in the creation of a conducive work environment. During the 2017/18 significantlyis fatalities.This financial no with duty, oninjuries disabling year, the SABC hadlow compared to the total workforce of3 444. the However, seven target is zero and, with concerted effort from all parties involved, it is achievable.The SABC was issued with a Letter of Good Standing from the Compensation Commissioner for effectively managingfor the these year 2017/18 injuries occurring as required on duty, the by Compensation for Occupational Injuries and Diseases Act of 1997. No. 61 Legal Safety Compliance Audits were conducted in all Provinces to ensure that our broadcast facilities comply with the Occupational Health and Safety Act. TheSABC is committed tosafeguarding all employees, contractors and visitors against injuryany and risk to their health and safety arising from operations any associated with the SABC. The Corporation enforces health, safety and environmental standards in the workplace, as prescribed by the Occupational Health and Safety Act No. 85 of 1993, its regulations and related safe work practices. SABC Foundation Chair Mr Tshedu hosted a breakfast to engage and inspire SABC bursaryFoundation holders.

GoodHope FM GoodHope 1000Woman Voice1 Lunch The- was supported event to raise awarenessand funds for women impacted gender by based violence and human trafficking. Radio Age Home in Daveyton and Mmamohau Children Living with Disability Home Care Centre in Mappleton. The aim ofthese two initiatives was to give back to the less privileged in the paint, nappies,form blankets, adult wheelchairs, of stoves, linen, curtains and a treat of lunch and breakfast. Channel programmes ‘Expressions’ ‘YOTV’, like and ‘Selimathunzi’ broughttheir teams to show supportand cover the minutes 67 initiatives for broadcast purposes. SABC2 SABC2 and Fluorrefurbished a science laboratorya Sowetoat school A CSI to celebrate collaboration Mandela Month 2017. thatkicked offculminated in 2016, in the handoverof a newly refurbished science laboratorytheat Diepsdale Secondary Soweto. in School The refurbished laboratory Mathematicsand Science learners ofDiepsdale will directly, and benefit Gradeother educational facilities will be able to conduct science 10 to learning experience. students’ their enhance to experiments 12

udzinga Primaryin Makhado and Rivoni School for the

fataSchool for the deaf and blind and Zwelibango orth Province West 16 in15 MafikengMarchand - 2018 astern Cape Province in Mthatha - 7 and 8 March 2018 impopo March Province and 13 2018 – 12 tshokeng Learning Centre and Mogase. E H Blind in Elim; and Elim; Blind in I  Combined School; M E   N  L E responsibility Mandela Month SABC1 staff and SABC talent visited two homes for their minutes67 Old namely;campaign the July Tau 2017 on 18 • - • - - Gives Back campaign Back Gives SABC1 had a very successful back-to-school campaign which involved giving back to deserving communities and schools. Below isa list ofschools where SABC talentaccompanied SABC channels on the #SABC1GIVESBACK drive: • Television During the period under review, SABC SABC review, under period the During SABC the with partnership in platforms Foundation participated in various nation initiatives. building Social

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 72 The Western Cape was hit by the worst storm the City has seen XK-FM in 30 years, which impacted on the Province severely where The SABC featured a female group from the !Xun and 1000’s of people were displaced, property was damaged and Khwedam Community. SABC Foundation, in support of destruction around the city impacted most communities. Over XK‑FM, approached Asanda Empires to collaborate with this 172 schools were damaged by the storms. community to come up with a song in !Xun and Khwedam. GoodHope FM partnered with Grand West Casino and Entertainment World on 5 August 2017 to host the GoodHope Highlights FM United in Hope Benefit Concert to raise funds for the flood Mandela Day in partnership with Habitat for Humanity, victims in partnership with the SABC Foundation. Orange Farm SAfm The SABC Foundation entered into a transversal agreement SAfm in partnership with Gift of the Givers supported all those with Habitat for Humanity for the ‘Nelson Mandela International who were affected as Western Cape battled fires, winds and Build’ which took place from 17 to 21 July 2017 in Orange GOVERNANCE massive wave, by distributing blankets, food parcels, sanitary Farm, Gauteng. packs and bottled water. The campaign was run online and The event saw a total of 67 houses being built by SABC was supported by the on-air element, from 9 to 16 June. employees, Habitat for Humanity and other local civic Ikwekwezi FM organisations/NGO who donated their time to build houses

for the beneficiaries. South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Abaphole Baphile Outreach Programme is a monthly prayer and praise programme that the station takes to the people. Wanga from Burns to Beauty The station attended the School’s memorial service for the 18 SABC Foundation has been assisting Wanga, an 8 year old car crash victims at Verena Sports Ground in Mpumalanga on little girl from Thembisa who was burnt at four months old in 4 May 2017. The deceased pupils were from Refano Primary her mother’s shack. Doctors performed the laser treatment School and Mahlenga High School. Pro-Bono for Wanga. The ‘Wanga from Burns to Beauty’ METRO FM campaign is ongoing and doctors at the Red Cross Hospital will continue with laser procedures to her face. The campaign METRO FM and McCain joined forces and hosted a cook-off at created awareness around the sad statistics of shack fires. the Frieda Hartley Shelter in Bellevue Johannesburg. METRO FM personalities were channeled to motivate the women and People Living with Cancer: Cancervive Ride children in order for them to regain their confidence and their The campaign started off in September 2017 with the aim of independence. The personalities cook and entertain them, bringing awareness to Cancer survivors or those affected refurbish their facilities and gave them a sense of hope. There by cancer. The bikers launched their ride from the SABC are 22 women and 17 children that are accomodated at the Auckland Park offices. On the route shelters and schools shelter. The ladies are accommodated for approximately 3 to were identified and provided with early detection resources, 12 months and during this time they receive counseling, life educational tips and they created awareness on breaking the skills, work skills and are motivated to excel. stigma of Cancer. The SABC Foundation has supported this Phalaphala FM worthy campaign for the past two years. Phalaphala FM continues with ‘Ri a Luvha’ Road shows. This is an initiative where the station visits various chieftaincies in Vhembe District with the objective of building strong relationship with the listeners under those royal/local SABC Foundation assisting needy communities. chieftaincies. The station visited Thovhele Gole Mphaphuli at Nweli village under the leadership of Khosi Vho Ramukumba on the 9 to 10 June 2017. Ligwalagwala FM

Ligwalagwala FM’s Sitasive Project took place during 73 Disability Month at Siviwe Stimulation Centre. The project was led by Lender Malope, an SABC employee with a disability. Clothes was donated to 23 children with disabilities in celebration of International Day of Persons with Disabilities. Live crossings were done for kiddies hour and Tfokomala Namishow broadcast at the venue. SAfm minutes; - 1 153 and Lotus FM - 435 minutes. XK-FM - 1 892 minutes; : RSG - 1 261 minutes;: RSG - 1 261 and place place: place: SAfm minutes. 153 - 1 place: place: place: minutes; RSG - 1 261 place: rd rd nd nd st st 2   2 1   1  3 3  • • The Top 3 brands thatTheboth Top aired and podcast disability content are as follows: • Dialogue Disability The Deputy Minister of Social Development Ms Hendrietta Bogopane-Zulu and Chairperson of the SABC Foundation Mr hosted Mathatha a dialogue Tsedu themed: ‘Economic opportunities forpeople with Disabilities’ with a particular focus on the Youth. SABC Disability 360 Awards Aspart ofthe Disability Rights Awareness Dialogue on 30 the SABCNovember, hosted the Disability360 awards for the top performing stations in terms of disability content delivery. The Disability 360 project was launched on 30 November January From the to OctoberSABC 2016. 2017 2017 measured disability content churned on SABC platforms. 3 brands thatThe aired Top the most disabilitycontent between are as Jan follows: – Oct 2017 • SABC EE CommitteeSABC The SABC’scommitteeEE and Procurementdepartment hostedtheongroundopen an day floor auditorium,young for disabledentrepreneurs tosell their products, as part of economically. them empowering • • SABC Foundation assisting with the Wanga from Burns to Beauty campaign. Talk Sign DayTalk The was month dedicated of November 2017 to the Disability RightsAwareness Month which commenced with the launch of Disability All brands hosted Month on November 3 2017. activations as well as interviews with the PWD sector during this period. The activations ended on 3 December which is the International of Persons Day with Disability. Disability360 Programme Quellin Manillier, StrabismusQuellin Procedure Manillier, Strabismusrefers conditiontoa ofmisalignment ofthe eyes thatcan be present on the horizontal, vertical or oblique level. Quellin has been in and out of Government Hospitals for theyears, past 10 hoping that corrective surgery would be done.Dr Jhetam (Ophtalmologist) performed the procedure at the Ahmed Kathrada Hospital in Lenasia on 4 December The Ear Institute in Rosebank provided Quellin2017. with hearing aids,as his hearing in both earswas impaired. Both procedureswere done Pro-Bono with theassistance ofthe SABC Foundation. South African National Orchestra Youth Concert SABCFoundation partnered with the South African National Orchestra SANYOheld Youth a concert (SANYO). on 16 December Studio at M1 which turned out to be a wonderful ‘red carpet’ experience for the young musicians and the audience. SABC Foundation arranged for all percussion instruments from the SABC Music Library. SANYO also partnered with the Academy of Sound Engineering (which was a mutually beneficial agreement for both institutions). Christmas Hampers Wepener is an area plagued with high levels of unemployment, poverty anda high prevalence of the HIV and AIDS pandemic. In the hope of uplifting families who are less fortunate, 1000 Christmas hampers were distributed in Wepener, Johannesburg in December and Cape Town 2017.

GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 74 GOVERNANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 75

Audit and Risk Committee Committee and Risk Audit Mr Victor Rambau Chairperson of the Audit and Risk Committee Evaluation of Financial Statements Financial of Evaluation The Committee oversaw and supported the process used the by executive team to assess going concern and the viability of the Group, the stress testing trading of key assumptions and the preparation of the viability statement. sources accountingkey Committee disclosuresrelation to approachsatisfied The and the also in itself that of estimation uncertainty were appropriate made. Management present reports to the Committee setting out the basis for the assumptions used and these reports are then discussed and challenged the by Committee. All the issues were also discussed with the external auditor and their views considered. The Committee is satisfiedreasonable that and appropriate assumptions disclosures been have included made in the accounts. are The Auditand Risk Committee accepts the conclusions ofthe Auditor-General on the Annual Financial Statements and believes the audited annual financial statements be accepted and read together with the report of the Auditor-General. Risk Management The implementation of appropriate risk management activities to ensure that regular risk assessments, including consideration of IT risks and fraud prevention, are conducted and that a risk strategy to address the risks isdeveloped and monitored had areasof improvement with a roadmap in place to address shortcoming.The processestoensure thatthe Auditand RiskCommittee promotes accountability and service delivery through evaluating and monitoring responses to risks and providing oversight the over effectiveness of the internal control compliance environment, with laws and regulations had shortcomings, including due to overwhelming pressure financial to redress and performanceprevious’ s years organisational reporting challenges. and The EffectivenessThe Internal of Controls The Committee assessed whether suitable accounting policies had been adopted and whether management had made appropriate estimates and judgements. The Committee also reviewed reports from the external auditor on the half year and full year results, which provided an overview of the audit work undertaken and highlighted issues any for discussion The various reports of the Internal Auditors and the Audit Reports on the Annual Financial Statements and Management Letter of the Auditor-General indicate that the system of internal control has shortcomings. Audit and Risk Committee Risk and Audit Responsibility The Auditand Risk Committee reportsthat it has complied with itsresponsibilities arising fromSection 51 ofthe (ii) PFMA, and Section the (a) requirements 94 ofthe Companies Regulation ofTreasury 27.1 Act 71 of 2008. The Audit and Risk Committee has adopted an appropriate formal ofReference Terms and has attempted to discharge its responsibilities as contained therein. Section 94 ofthe Companies of2008 Act amended),No. 71 requires (as that the Members ofthe Audit Committee must be appointed the by Shareholder at every AGM. During the year under the review, ShareholderheldAGM CommitteeRisk confirmedthe and Audit at the Members appointmentthe of the of Subsequently, Augustthe 2016. SABC Boardon 11 was dissolved,which leftthe SABC withoutan Audit and Risk Committee until the appointment of the Interim Board on 27 March 2017. We present our report for the financial year ended 31 March 2018. 31 March ended year financial report the our for present We Committee Risk and Audit Members report - Albertina Sisulu who are going to Albertina oppression and depression. Women are the people relieve us from all this

born in the village Camama, Transkei. born in the village

’s two children. ’s 2 June, Albertina Sisulu dies at the age of 92. 2 June, birthday. Nontsikelelo Thethiwe th 2011

wedding anniversary. th Walter collapsed and dies in Albertina’s arms. Albertina’s collapsed and dies in Walter 1918 2003 21 October 1944 Walter and Albertina Sisulu: In Our Lifetime, a biography by Sisulu’s daughter-in-law Albertina Sisulu: In Our Lifetime, a biography by Sisulu’s and Walter is launched by the Nigerian poet Ben Okri, who also wrote a tribute for Elinor, 90 Walter’s 2002 Albertina married Walter Sisulu. Walter Albertina married League. ANC youth husband at the founding conference of the Albertina joins her 1947 At the end of this year, Albertina and Walter left parliament for the last time and retired from Albertina and Walter At the end of this year, politics completely. 1999 Albertina accepted the responsibility of supporting the family as the sole bread winner, winner, the responsibility of supporting the family as the sole bread Albertina accepted African National Congress (ANC) full time. decided to quit his job and join the after Walter The Sisulu’s observed the transition of their country in its first democratic election. The Sisulu’s 50 Albertina’s and Walter 1948 1994 Albertina was elected to serve on the ANC’s national executive committee. ANC’s Albertina was elected to serve on the Walter, Albertina and other ANC members sought new ways to fight injustice and oppression. ANC members sought Albertina and other Walter, League. ANC Women’s Albertina joined the 1954 1991 When the ANC was unbanned in 1990, Albertina worked on a committee that re-established the ANC re-established the Albertina worked on a committee that ANC was unbanned in 1990, When the At the time she was the deputy President. League. Women’s 1955 The Federation of South African Women (FEDSAW) was established and was (FEDSAW) African Women The Federation of South Albertina was a founding member. 1990 1956 formed part of a delegation that met the mayor of Soweto to put an end to the raids. Following the rent crisis, where homes were being raided to persecute non-ratepayers in Soweto, The ANC’s boycott of Bantu Education and Albertina leads a campaign. boycott of Bantu Education and ANC’s The 1988 FEDSAW organized the anti-pass women’s march to the union buildings. organized the anti-pass women’s FEDSAW police stops. Albertina had to ensure that women bypassed the reported 1958 Albertina demonstrated as part of the Nurses’ protest that started Albertina demonstrated as part of the Nurses’ for at Baragwanath against passes. Over 2000 women were jailed Albertina. participating in these demonstrations including 1983 August, Albertina was arrested and held without bail for more than six months on the charge of Albertina was arrested and held without bail August, ANC songs at the funeral of a woman leader of the movement. singing Albertina was elected president of the newly formed United Democratic Front (UDF). Whilst incarcerated 1959 Albertina succeeded Lillian Ngoyi as president of FEDSAW. 1981 1964 Albertina is elected to be the treasurer of the ANC Women’s League. ANC Women’s Albertina is elected to be the treasurer of the 1977 Albertina facilitated the departure of many young people into exile post-1976 and Albertina facilitated the departure of many young people but also women. there were many opportunities to mobilise not only the youth 1969 Albertina obtained her matric certificate through an adult education course. Albertina obtained her matric certificate through an adult Walter along with other struggle icons were sentenced to life imprisonment on along with other struggle Walter formed a guard of honour for them but Albertina and other supporters Robben Island. in solidarity and mourning. they were turned away and sang ‘Nkosi Sikele i’Afrika’ sister Albertina was left to raise their five children plus her late in exile. ANC leaders in jail and those Albertina functioned as a link between the

HUMAN RESOURCES South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 76 HUMAN RESOURCES South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18

77 SABC Human Resources Human Resources

SABC employees celebrate Women’s overview Day in style. HUMAN RESOURCES South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18

The fourth Industrial Revolution has brought conducted with the assistance of professional search about change within business, the broader agencies. These vacancies included: • Chief Operations Officer (COO); economy and society. • GE: Radio; One of the main features of this new era is not merely change, • GE: News and Current Affairs; but fast-paced change, which creates new rules for both • Chief Audit Executive (CAE); and business and HR. The SABC faces a shift in the framework of • GE: Human Resources. the workforce, the workplace and the world of work. The shift The SABC operating model and structure has undergone an in these areas has changed the rules for nearly every human intensive review at both organisational and divisional level resource practice, from learning to leadership to the meaning with a new operating model having been approved during of work. Innovation is the key for the future success of the the period under review. The next step is to translate the SABC as well as our audiences. The HR strategy has therefore operating model into specific divisional structures and this been to create value for our shareholder and audiences by part of the process is earmarked for completion in the next developing and implementing innovative initiatives to ensure financial year. delivery on the organisational strategic goals. Leading companies are also moving to revamp their career The business environment requires organisations to focus models. During the 2017/18 financial year, the SABC on performance and efficiency, while building capacity for developed an integrated Career Progression Framework and the future. In light of this, HR has embarked on a drive to Policy to ensure that all employees have career direction and embed a performance culture within the organisation with the opportunities for progression within the organisation. This support of the Acting Group Chief Executive Officer who took initiative is dependent on the operating model of the SABC the initiative to ensure performance contracts are in place being implemented in the next financial year. for all her direct reports. This process was cascaded down to management level and will continue into the new financial During the period under review, the issue of transforming year. corporate learning came under the spotlight. As a result the Learning and Development Department rolled out a drive to As the broadcasting landscape evolves employee skills are develop and present in-house training programmes as well as becoming more specialised, making engagement and culture e-learning. These initiatives also contributed to cost saving in priorities for HR. Every organisation’s culture should support this area. technology and the ensuing digital transformation. During the 2017/18 financial year, the division conducted a culture In order to improve service delivery to internal clients and climate survey to provide employees with an opportunity an e-recruitment system was developed and tested for to voice their opinions regarding important aspects of the implementation in the next financial year. The e-recruitment SABC’s working environment. The results of the survey process is a transparent process and will improve record were translated into division specific interventions which keeping within HR. 78 were communicated to employees and are currently being To ensure that the division remains relevant from a governance implemented in the organisation. and legislative perspective, HR policies are reviewed and With digitisation becoming a priority, a new set of skills is updated periodically. Benchmarking exercises are also required. This is not simply one of reskilling, instead, HR conducted to ensure adherence to best practice in the market. is looking at leadership, operating models and structures. The process of reviewing policies includes consultation with During the period under review, various executive vacancies all relevant stakeholders ahead of socialising them within the were filled through a transparent executive search process SABC community. During the period under review, SABC employees who The SABC continued to implement employment equity are participants in the Total Guaranteed Remuneration in line with relevant legislation to ensure that diversity and Package (TGRP) were empowered to structure their own inclusion is managed in a non-discriminatory manner. The salary packages with the implementation of an Employee Corporation’s diversity and inclusion programmes were Self Service (ESS) tool on SAP. This tool allows the said elevated from the traditional way of creating awareness to employees to structure their remuneration packages within innovative programmes that sensitise, challenge and create specified guidelines. understanding. Employee wellness is a priority for the organisation. Wellness Women empowerment is central to achieving gender equality. Centres have therefore been established in all the SABC To support women empowerment the SABC implemented a offices across the country. These centres provide wellness number of initiatives such as sexual harassment campaigns, services including Primary Health Care, Employee Assistance the SABC Women of Worth Awards, holistic women’s health Programme (EAP), HIV Counseling and Testing (HCT), drives, Women’s month, 16 days of activism, 365 days of Chronic Disease Management, Wellness Screening and no violence against women and children and establishing a Occupational Health. These services are utilised regularly by women empowerment portal that offers women a place to SABC employees and contractors. connect, share experiences, get advice and insights. From the above it is clear that Human Resources has Employees with disabilities are an integral part of the contributed in many ways to ensure an effective and efficient organisation and represent 2% of the workforce. Disability workforce and workplace within the SABC. declaration campaigns were conducted to encourage declarations and to ensure that reasonable accommodation Performance against Corporate Plan: is provided so that these employees are able to perform the HR Priorities for the Year under Review inherent requirements of their positions. The SABC intends to increase the representation of these employees to 5% by 2019

Career Progression and has therefore adopted a targeted recruitment approach. HUMAN RESOURCES An integrated Career Progression framework and policy was Employee Relations developed and presented to the relevant stakeholders for approval. Planning is currently underway to conduct a pilot During the reporting period, one of the priorities of the SABC exercise within HR. This will provide an opportunity to identify Board was to reduce the number of disciplinary cases and gaps in the process and to address these before Career grievances within the Corporation. It is for this reason that HR Progression is launched throughout the organisation. focused on the finalisation of outstanding disciplinary cases

Performance Management and also reduced the number of disciplinary cases within the South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 organisation to a manageable number. During the period under review, performance contracting commenced with the Acting Group CEO signing her On the collective bargaining front, Employee Relations performance contract with the Chairperson of the SABC facilitated wage negotiations under the auspices of the CCMA. Board. Contracting with her direct reports and other executives The negotiations were characterised by two strike actions. then followed. Performance contracting only took place at The first round of the strike action was unprotected whilst the management level. Further contracting will take place during second round was protected and led to the conclusion of a the new financial year. wage agreement. After constructive engagements between Workplace Skills Plan (WSP) the parties, a wage deal was struck and the wage dispute was resolved. Delivery on the WSP was slow due to financial constraints. However, during the year under review, new ways of training Challenges were developed and this yielded cost savings within this Financial constraints hampered the execution of training environment whilst addressing the skills needs of the programmes, which will be addressed within the new financial organisation. year, should budget allow. Other Priorities The SABC Board also indicated dissatisfaction with the services provided by the Recruitment Agencies on the SABC Employment Equity Supply Chain Management database during the recruitment The SABC reflected a strong employment equity profile when of executives. This was addressed with the appointment of a measured against its employment equity targets during the specialist Executive Search Agency. period under review. The organisation met all its targets except for females which improved since the last reporting Creating awareness around disability. period to 49.82% of the entire workforce.

GRAPH: % Progress against Employment Equity Corporate Targets

60 Black Staff 96.10

50 Female Staff 49.82 79 50 Black Management 79.22

40 Female management 45.95

2 Targets Disabilities 2.34 Actuals Future HR Plans The HR Division future plans include the following • Establishing the approved operating model for the SABC and structuring the organisation in accordance with the operating model; • Implementation of Career Progression across the Corporation; • A focused drive to establish performance management at all levels within the organisation; • Implement Talent Boards and related interventions to ensure that the SABC pays more attention to its talent; • Implementing TGRP at bargaining unit level; • Providing focused learning and development opportunities for all employees; and • Regular meetings with organised labour to give effect to Management participating in the launch of SABC Collective Bargaining ideals. #mywellbeing for Television.

Human Resource Oversight Statistics HUMAN RESOURCES

Personnel Cost by Division Permanent Employee Total Permanent Employee Average Employee Compensation and Benefits Number of Division Expenditure Compensation and Benefits Compensation and Benefits Expenditure as a % of Total Employees (R'000) Expenditure (R'000) Expenditure per Employee Expenditure Commercial Enterprises 205 784 182 398 88,6% 221 825

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Group Services* 1 319 563 664 996 50,4% 727 915 News 829 984 459 659 55,4% 695 661 MTI 817 988 643 397 78,7% 941 684 Provincial Operations 221 861 107 659 48,5% 161 669 Radio 938 761 247 419 26,4% 348 711 SABC Sport 657 731 54 961 8,4% 67 820 Television 2 258 945 179 555 7,9% 254 707 Grand Total 7 250 616 2 540 043 35,0% 3 414 744 *Leave and Past Retirement Medical Aid (PRMA) are reflected under Group Services for total company

Personnel Cost Level Performance Rewards Permanent Average Employee % of Performance Employee Permanent Employee Employee Compensation Rewards vs Compensation Compensation and Number of Performance Level Compensation Level and Benefits Total Employee and Benefits Benefits Expenditure Employees Rewards and Benefits Expenditure Compensation and Expenditure as % of Total per Employee (R'000) benefits expenses (R'000) Top Management 25 113 1,0% 9 2 790 Top Management - 25 113 0,0% Senior Management 94 495 3,7% 48 1 969 Senior Management - 94 495 0,0% Middle Management 518 045 20,4% 443 1 169 Middle Management - 518 045 0,0% Junior Management 519 879 20,5% 571 910 Junior Management - 519 879 0,0% Supervisory Levels 1 177 598 46,4% 1872 629 Supervisory Levels - 1 177 598 0,0% Rest of Staff 204 913 8,1% 471 435 Rest of Staff - 204 913 0,0% Grand Total 2 540 043 100,0% 3414 744 Grand Total - 2 540 043 0,0%

Training Costs by Division Permanent Employee Training Expenditure as % Compensation and Training Expenditure of Permanent Employee Number of Average Training Cost Division Benefits Expenditure (R'000) Compensation and Employees Trained per Employee (R’000) (R'000) Benefits Expenses Commercial Enterprises 182 398 387 0,2% 19 20 Group Services 664 996 1 934 0,3% 95 20 80 News 459 659 2 687 0,6% 132 20 Provincial Operations 643 397 651 0,1% 32 20 Radio 107 659 631 0,6% 31 20 SABC Sport 247 419 41 0,0% 2 20 MTI 54 961 3 501 6,4% 172 20 Television 179 555 651 0,4% 32 20 Grand Total 2 540 043 10 482 0,4% 515 20 Employment and Vacancies by Division Employment and Vacancies by Level

2016/17 2017/18 2016/17 2016/17 2017/18 2016/17 2017/18 % of 2017/18 % of Division Number of Number of Division Number of Approved Number of Vacancies Vacancies Vacancies Vacancies Vacancies Employees Employees Employees Posts Employees Commercial Enterprises 240 8 221 12 5,2% Top Management 11 4 9 3 25,0% Group Services 771 31 727 31 4,1% Senior Management 59 16 48 18 27,3% MTI 849 36 695 31 4,3% Middle Management 465 47 443 55 11,0% News 883 14 941 23 2,4% Junior Management 622 11 571 21 3,5% Provincial Operations 173 6 161 6 3,6% Supervisory Levels 1957 30 1872 25 1,3% Radio 372 9 348 14 3,9% Rest of Staff 499 7 471 5 1,1% SABC Sport 67 2 67 1 1,5% Grand Total 3613 115 3414 127 3,6% Television 258 9 254 9 3,4% Grand Total 3613 115 3414 127 3,6%

Employment Changes Reasons for Staff Leaving

Employment at Employment at Level Number of % of Total number of Division Beginning of Appointments Terminations Beginning of Reason Movements Employees staff leaving Period Period

Top Management 11 4 6 9 -2 Death 14 6,0% Senior Management 59 3 12 48 -11 Resignation 78 33,6% Middle Management 465 4 31 443 -22 Dismissal 9 3,9% Junior Management 622 2 48 571 -51 Retirement 92 39,7% Supervisory Levels 1957 18 100 1872 -85 Ill Health 6 2,6% HUMAN RESOURCES Rest of Staff 499 2 35 471 -28 Expiry of Contract 33 14,2% Grand Total 3613 33 232 3414 -199 Other 0 0,0% Grand Total 232 100,0% Employment Equity Targets and Status The highest number of staff leave the SABC on African Coloured Indian White Disabled Staff the grounds of normal and early retirements. The Level SABC currently has an aging workforce, therefore Current Target Current Target Current Target Current Target Current Target the number of retirements. These positions are MALE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 Top Management - 1 ------filled with emerging talent. Senior Management 3 6 - 1 - - - 1 - - Professional Qualified 196 212 20 24 22 28 44 44 4 5 Skilled 1 057 1 191 106 120 52 57 179 226 30 33 Semi-Skilled 30 56 3 5 - - - - 2 2 Unskilled ------Grand Total 1 286 1 466 129 150 74 85 223 271 36 40 FEMALE Top Management ------Senior Management 5 5 1 2 - 1 - - - - Professional Qualified 134 149 15 24 16 17 44 55 4 5 Skilled 1 056 1 112 151 171 68 83 192 249 40 61 Semi-Skilled 17 31 2 5 - 2 1 1 1 3 Unskilled ------Grand Total 1 212 1 297 169 202 84 103 237 305 45 69

Creating awareness around Cancer.

81 Annual Financial StatementsFinancial

FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 82 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 83 r M Mxakwe Group Chief Executive Officer M (Appointed 1 July 2018) July 1 (Appointed

Chairperson of the SABC Board In presenting the accompanying financial statements, International Financial Reporting Statements and applicable accounting policies have been used, while prudent judgements and estimates have been made. In order for the Directors to discharge their responsibilities, management is in the process of developing and will continue to maintain a system of internal controls, which is aimed at reducing the risk of erroror loss, in a cost effective Such manner. systems can provide reasonable, but not absolute, assurance against material misstatement or loss. The Directors meet periodically, primarily through the Audit and Risk Committee,with the external and internal auditors and executive management to evaluate matters concerning accounting policies, internal controls, auditing and financial reporting. The SABC’s internal auditors independently evaluate the internal controls and coordinate their audit coverageexternalthewithauditors. Auditor-General The responsibleis reportingfor financial the on statements. Both external and internal auditors have unrestricted access to all records, property, personnel and systems as well as to the Audit and Risk Committee. Based on the information and explanations given management by and the internal auditors, and on comment the by external auditors on the results of their audit conducted for expressing their opinion, the Directors are of the opinion that the internal accounting controls are inadequate. The recordsfinancial were relied on for preparing the liabilities. and financialassets statements and maintaining accountability for As the Directors have reviewed the 2018, and in the Corporation’s light of the current financial financial position, budgets they consider for it the going-concern the audited on prepared has be appropriateAuditor-General statements The financial basis. the that the year annual to 31 March annual financial statements of the Corporation and his report appears on pages this84 to Against87. background, the Directors of the statements, Corporation which were approved the by Board of Directors July and are 2018 on accept 17 signed on its responsibility for the annual by: behalf financial Mr B E Makhathini by the Boardof Directors SOC Corporation African Broadcasting South the of Directors The financial annual the of preparationthe forresponsible are (SABC) Limited internal of system a sound maintain to Corporation, the of statements SABC’s the and investment shareholder’s the safeguard to and control assets. Statement of Responsibility Statement Report of the Auditor-General to Parliament on the South African Broadcasting Corporation SOC Ltd (SABC)

REPORT ON THE AUDIT OF THE CONSOLIDATED revenue recognised from government grants and the related deferred grant liability amounting to R186 830 000 and included in notes 19 and 25 to the AND SEPARATE FINANCIAL STATEMENTS consolidated and separate financial statements are accurate. Disclaimer of opinion 7. The entity did not assess property, plant and equipment for impairment in 1. I was engaged to audit the consolidated and separate financial statements of accordance with IAS 36, Impairment of assets. There was no system in place the SABC and its subsidiaries (the group) set out on pages 88 to 138, which on which I could rely for the purpose of the audit, and there were no satisfactory comprise the consolidated and separate statement of financial position as at audit procedures that I could perform to obtain reasonable assurance that no 31 March 2018, the consolidated and separate statement of profit or loss and assets should have been impaired. Because of the nature of the assets, I other comprehensive income, statement of changes in equity and statement was unable to confirm or verify by alternative means the value of property, of cash flows for the year then ended, as well as the notes to these financial plant and equipment. As a result, I was unable to determine the correct statements, including a summary of significant accounting policies. net carrying amount of property, plant and equipment; depreciation; and impairment stated at R1 582 476 000 (2017: R1 615 102 000); R167 294 000 2. I do not express an opinion on the consolidated and separate financial (2017: R159 912 000); and R0 (2017: R6 813 000), respectively, in note 5 to statements of the public entity. Because of the significance of the matters the consolidated and separate financial statements, as it was impracticable described in the basis for disclaimer of opinion section of this auditor’s report, to do so. I was unable to obtain sufficient appropriate audit evidence to provide a basis 8. In the prior year, I was unable to obtain sufficient appropriate evidence to for an audit opinion on these consolidated and separate financial statements. confirm transfers between asset classes amounting to R212 072 000, as Basis for disclaimer of opinion there was no adequate system of internal control to substantiate the transfers between asset classes. Consequently, I was unable to determine whether Going Concern

FINANCIALS any adjustments were necessary to property, plant and equipment disclosed 3. A s indicated in note 1(b) to the consolidated and separate financial in note 5 at R1 615 102 000 for the prior year for transfers between asset statements, the entity incurred a net loss of R621 676 000 as at 31 March categories. I could not confirm the transfers by alternative means. 2018 and at that date, its current liabilities exceeded current assets by 9. In the prior year, I was unable to obtain sufficient appropriate audit evidence R291 643 000. The entity was therefore commercially insolvent because South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 for the change in accounting estimates relating to the review of the useful it was not able to pay its debts as and when they were due, even though its lives of property, plant and equipment disclosed in note 5 amounting to assets exceeded its liabilities. Additionally, I was unable to obtain sufficient R68 089 000. I was unable to confirm the change in accounting estimates appropriate audit evidence to confirm the reasonableness of the cash flows by alternative means. Consequently, I was unable to determine whether any forecasted and the related assumptions, conditions and events to support adjustments were necessary to property, plant and equipment as stated management’s assessment of the entity’s viability in the foreseeable future. at R1 615 102 000 in note 5 to the consolidated and separate financial The solvency of the public entity and the reasonability of the cash flow statements relating to the prior year. forecast is also impacted by my further qualifications on property, plant and equipment and programme, film and sports rights as these assets may 10. In the prior year, the SABC did not include all items of property, plant not be properly valued. Consequently, I was unable to confirm or dispel and equipment in the entity’s accounting records, as required by IAS 16, whether it is appropriate to prepare the consolidated and separate financial Property, plant and equipment. The entity did not implement adequate statements using the going concern assumption. internal control systems in the prior year to ensure that all items of property, plant and equipment owned by the entity were recorded in the asset register. Property Plant and Equipment This resulted in property, plant and equipment being understated in the prior 4. Capital work in progress amounting to R106 427 627 included in note 5 to year. I was unable to confirm the amount of property, plant and equipment the consolidated and separate financial statements was incorrectly classified to be disclosed in the prior year by alternative means. Consequently, I was as capital work in progress, while it was available for use in terms of IAS 16, unable to determine whether any further adjustments were necessary to Property, plant and equipment. This resulted in capital work in progress being property, plant and equipment stated at R1 615 102 000 in the consolidated overstated and the related classes of completed assets being understated and separate financial statements relating to the prior year. by R106 427 627. Programme, film and sports rights 5. The public entity did not assign unique identifying codes to assets classified 11. The entity did not adequately review the amortisation method and the as capital work in progress in the asset register. As a result, I was unable amortisation period at year-end to properly account for the pattern of to obtain sufficient appropriate audit evidence relating to the existence and usage of originated programme, film and sports rights that are currently completeness of these assets. Consequently, I was unable to determine being used to generate exploited revenue and carriage fees, as required whether any further adjustments were necessary to capital work in progress by IAS 38, Intangible assets. These assets were recorded at a zero stated at R184 038 000 in note 5 to the consolidated and separate financial value. Consequently, I was unable to satisfy myself that the originated statements. I was unable to verify these assets by alternative means. programme, film and sports rights were recorded at the correct value. I was 6. Management did not provide the useful lives of property, plant and further unable to determine the amount of any adjustments that may be equipment as part of the asset register, stated in note 5 to the consolidated necessary to the programme, film and sports rights stated at R756 473 000 and separate financial statements at R1 582 476 000. I was unable to (2017: R768 500 000) in note 7 to the consolidated and separate financial recompute the depreciation charge for the year of R167 294 000 reflected statements, as it was impracticable to do so. 84 in note 5. I was therefore unable to confirm the accuracy of the accumulated Trade and other Payables depreciation of R1 839 556 000 also reflected in note 5. I was unable to determine the amount of the misstatement of depreciation and accumulated 12. In the prior year, the entity did not completely accrue for all goods and depreciation, as it was impracticable to do so. Due to the limitation on the services received prior to the year-end but not paid for at year-end, which depreciation charge I was unable to determine whether revenue amounting resulted in the understatement of the prior year trade and other payables, to R43 280 000 relating to the depreciation of technology assets acquired disclosed in note 22 at an amount of R706 617 000, and related prior in terms of the deferred technology grant and the related deferred grant year expenditure for broadcast costs of R519 135 000, marketing costs of liability was accurate. As a result, I was unable to determine whether R136 401 000, direct revenue collection costs of R67 471 000, professional FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 85 (continued) (IESBA code) and the ethical requirements that are relevant m independent of the group in accordance with the International procedures address the reported the performance must address procedures which information, valuated the usefulness and reliability of the reported performance n preparing the consolidated and separate financial statements, the I  to ability group’s the assessing for responsible authority is accounting continue as a going concern, disclosing, as applicable, matters relating to goingconcern 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. financial statements in accordance with the International Auditing and to issue an Standards auditor’s report. because However, on of the matters described in the basis for disclaimer of opinion section of this auditor’s report, I was unable to provide obtain a basis for an audit opinion on these financial sufficient statements. appropriate audit evidence to M My be based on the approved performance planning documents of the public entity. I have not evaluated the completeness and appropriateness of the performance indicators/measures included the planning documents. in My procedures also did not extend to disclosures any or assertions relating to periods future of respect in information performance and planned strategies that may be included as part of the reported performance information. Accordingly, findings my do extendnot to these matters. I 25 of 2004) (PAA) and the general notice issued in terms thereof, I have a responsibility to report material findingson the reported objectives selected for objectives predetermined against performance information presented in the annual performance report. I performed procedures to identify findings but not to gatherevidence express to assurance. determined currently, and no provision for liability any that may result was provided for in the financial statements. I a Ethics Standards Board for Accountants’ Code of ethics for professional accountants to my audit of the consolidated and separate financial statements in South Africa. I have fulfilledmy other ethical responsibilities inaccordance with these requirements and the IESBA code. T and consolidated the of presentation fair and preparation the for responsible Financial International the accordance with in statements financial separate Reporting Standards (IFRS) and the requirements of the PFMA and the Companies Act of South Africa, 2008 of (Act 2008) No. 71 (Companies andAct), for such internal control as the accounting authority determines is necessaryenableto the preparation consolidatedof andseparate financial statements that are free from material misstatement, whether due to fraud error. or information in accordance with the criteria developed from the performance management and reporting framework, as defined performance in annual the in presented objectives selected following the for the general notice, report of the public entityfor the year ended March 31 2018: I e 24. 24. 23. y responsibility is to conduct an audit of the consolidated and separate OF ANNUAL THE ON AUDIT REPORT THE REPORT PERFORMANCE Introduction and scope 25. accordancen with the Public Audit Act of South Africa, 2004 (Act No. 26. 27. Responsibilities of the board of directors for the consolidated consolidated the for directors of board the of Responsibilities and separate financial statements 21. he board of directors, which constitutes the accounting authority, is 22. Auditor-General’s responsibilities for the audit of the statements financial separate and consolidated

436 780 000 (2017: R1 016 541 000). 541 436 In 016 management’s R1 780 000 judgement, (2017: it is

uetothe impact theof above qualification matters, was I unable to obtain s disclosed in note 39 to the financial statements, the SABC is a defendant a financial the statements, is SABC tothe 39 notedisclosed in s s disclosed in notes 4.5 to 4.7 to the financial statements, the corresponding the statements, financial the to 4.7 to 4.5 notes in disclosed s was unable to obtain sufficient appropriate auditevidence toverify the s disclosed in note 25 to the consolidated and separate financial he SABCdid not include particulars of all irregular expenditure in the

n the prior year, I was unable to obtain sufficient appropriateevidence to A innumbera of lawsuits. The ultimate outcomeof these matters cannot be D adequate assurance that the deferred tax disclosures in note 20 to the consolidated and separate financial statements were fairlyunable to determine stated. whether adjustments any were necessary, as it was I was impracticable to do so. A werefigures restated31 March result a for as 2017 errors of in the financial statements of the public entity at, and for the year ended, March 31 2018.  I confirm irregularexpenditure amounting toR192 998 000, as thereno adequate record were keeping controls to ensure that complete, relevant and accurate information was accessible and available to support the irregular expenditure disclosed. I could not confirmalternative means. Consequently, I was unable to determine the whether any irregular expenditure by further adjustments were necessary to irregular expenditure of R4 405 804 000 as disclosed in note relating 42 to the prior year.   I prior year restated tradeand other payables balances 563 of R378 000 included in note 22 to the consolidated and separate financial statements. This was due to management not reconciling trade creditor balances to creditor statements. Consequently, I was unable to determine whether the trade and other payables balances were stated at the correct amount. I was unableto determinewhether adjustments any were necessary to the trade and other payables balances for the prior as it was impracticable year, to do so. notprobable thatthe economic benefits associated with these transactions will flow to the entity in order to meet the recognition criteria.  A statements, the entity did not recognise licence fees to the amount of R2 and consulting fees696 of R105 000, and other operational expenses 000. Thisof R673 311 was due to inadequate systems and processes in the prior year to properly accrue for expenses. I was unable to determine the amount of adjustment any to trade and other payables and related expenses, as it was impracticable to do so. T notes to the consolidated and separate financial statements, as sectionby of the 55(2)(b)(i) Publicrequired Financial Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA). The entity did not implement adequate internal control systems to identify and record all instances of irregularexpenditure in both the currentand prioryears. This resulted in the irregularexpenditure disclosure being understated.The full extent of the misstatement identified could not be quantifiedconfirm and the amount of irregular I wasexpenditure unable to be to disclosedby alternative means. Consequently, I was unable to determine whether further any adjustments were necessary to the irregular expenditure disclosure stated at R4 997 300 R4 405 000 804 000) (2017: in note to the 42 consolidated and separate financial statements.  of these matters. I Significant uncertainties Significant 20. Restatement of corresponding figures 18. Significant judgement 19. Emphasis of matters 17. draw attention to the matters below. My opinion is not modified in respect Taxation Taxation 16. 15. 15. Irregular expenditure expenditure Irregular 14. 13. 13. South African Broadcasting African CorporationSouth SOC Ltd (SABC) Report of the Auditor-General to Parliament on the to Parliament Auditor-General of the Report Report of the Auditor-General to Parliament on the South African Broadcasting Corporation SOC Ltd (SABC) (continued)

Objectives Pages in annual Strategic Goal 4 – Governance performance report Indicator 2 – Percentage of previous Auditor-General findings resolved Strategic Goal 1 - Financial sustainability 33 Strategic Goal 2 - Content and platforms 33-34 34. The achievement for the target of 50% reported in the annual performance Strategic Goal 4 - Governance 34 report was 49%. However, the supporting evidence provided did not agree 28. I performed procedures to determine whether the reported performance to the reported achievement and indicated an achievement of 12,5%. information was properly presented and whether performance was Other matters consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets 35. I draw attention to the matter below. were measurable and relevant, and assessed the reliability of the reported Achievement of planned targets performance information to determine whether it was valid, accurate and 36. Refer to the annual performance report on pages 33 to 34 for information complete. on the achievement of planned targets for the year. This information should 29. The material findings in respect of the usefulness and reliability of the be considered in the context of the material findings on the usefulness and selected objectives are as follows: reliability of the reported performance information in paragraphs 30 to 34 of this report. Strategic Goal 1 – Financial Sustainability Adjustment of material misstatements Indicator 1 – A chieve annual net profit before tax as per the approved budget 37. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported 30. The reported achievement of a R622 million loss for the target of R0 was performance information of the financial sustainability strategic goal. As not reliable, due to the matters reported under the basis for disclaimer of management subsequently corrected only some of the misstatements, FINANCIALS opinion related to property, plant and equipment and programme, film and I raised material findings on the usefulness and reliability of the reported sports rights. performance information. Those that were not corrected are reported Strategic Goal 2 – Content and Platform above. Indicator 1 – A chieve ICASA local content quotas as per terrestrial South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 television channel licence conditions REPORT ON THE AUDIT OF COMPLIANCE WITH 31. I was unable to obtain sufficient appropriate audit evidence to support the reported achievement of the targets listed below. This was due to inadequate LEGISLATION technical indicator descriptions and proper performance management Introduction and scope systems and processes that predetermined how the achievement would be measured, monitored and reported. I was unable to confirm the 38. In accordance with the PAA and the general notice issued in terms thereof, reported achievement of the indicator by alternative means. Consequently, I have a responsibility to report material findings on the compliance of the I was unable to determine whether any adjustments were required to the public entity with specific matters in key legislation. I performed procedures achievement listed below as reported in the annual performance report. to identify findings but not to gather evidence to express assurance. 39. The material findings on compliance with specific matters in key legislation Description Target Actual Achievement are as follows: SABC1 70% 73% SABC2 60% 71% Annual financial statements, performance report and annual report SABC3 40% 52% 40. The financial statements submitted for auditing were not prepared in Indicator 2 – A chieve ICASA PBS radio genre as per SABC broadcast accordance with the prescribed financial reporting framework and were not licence supported by full and proper records, as required by section 55(1)(a) and (b) 32. I was unable to obtain sufficient appropriate audit evidence to support the of the PFMA and section 29(1)(a) of the Companies Act. reported achievement of the targets listed below: This was due to inadequate 41. Material misstatements of revenue; expenditure; taxation; property, plant technical indicator descriptions and proper performance management and equipment; and programme, film and sports rights identified by the systems and processes that predetermined how the achievement would be auditors in the submitted consolidated and separate financial statements measured, monitored and reported. I was unable to confirm the reported were corrected subsequently, but the uncorrected material misstatements achievement of the indicator by alternative means. Consequently, I and supporting records that could not be provided resulted in these financial was unable to determine whether any adjustments were required to the statements receiving a disclaimer of opinion. achievement listed below as reported in the annual performance report. Procurement and contract management Description Target Actual Achievement News 60 min/day 87 min/day 42. Goods, works or services were not procured through a procurement Current Affairs 60 min/day 172 min/day process which is fair, equitable, transparent and competitive, as required by Informal Knowledge 180 min/week 1 561 min/week section 51(1)(a)(iii) of the PFMA. Similar non-compliance was also reported building in the prior year. Education 300 min/week 359 min/week 43. Some contracts and quotations were awarded to bidders based on Children 60 min/week 134 min/week preference points that were not allocated and/or calculated in accordance Drama 150 min/week 207 min/week with the requirements of the Preferential Procurement Policy Framework 86 Indicator 3 – Number of provincial programmes Act of South Africa, 2000 (Act No. 5 of 2000) and its regulations. Similar 33. I was unable to obtain sufficient appropriate audit evidence for the reported non-compliance was also reported in the prior year. achievement of 57 against the target of 8 programmes. This was due to Expenditure management limitations placed on the scope of my work. I was unable to confirm the reported achievement by alternative means. Consequently, I was unable to 44. Effective and appropriate steps were not taken to prevent irregular determine whether any adjustments were required to the achievement of 57 expenditure, as required by section 51(1)(b)(ii) of the PFMA. The value programmes as reported in the annual performance report. as disclosed in note 42 is not complete, as management was still in the FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 87 (continued) anagement did not implement adequate review procedures to ensure anagement did not adequately implement review and monitoring controls espite weaknesses identified in the supply chain management control s the Public Broadcaster, the SABC has a public communications mandate he Special Investigations Unit and the forensic unit of the SABC were here was a lack of appropriate risk management activities to ensure he property, plant and equipment registerwas not properly maintained to n addition, where the controls did not prevent non-compliance with supply that indicators and targets included in the corporate plan were useful and that information reported in the annual performance report was adequately supported evidence. appropriate with M A and serves the large majority of citizens in this country. The entity is in the process of negotiating for additional support from the DoC and the National Treasuryaswell asvarious financial institutions. the publicHowever, entity did not prepare reliable cash flow forecasts. critical leadership positions were filled afterhave started year developing a turn-around end strategy. Theimpact of this strategy and management will be assessed with the next audit. D  environment, the entity did not implement adequate consequence policies, applicable against transgressions processes for management regulations. and laws in the process of conducting several investigations related to various instances and allegations of financial misconduct and possible fraud. The investigations were ongoing at the date of this report or may and may, disciplinary in result not, criminal and/or proceedings the parties against concerned. T I chainmanagement legislation, detection controls deficientalsowere not as all irregular expenditure was disclosed. I d that had, or could an have, impact on the matters reported in the entity’s financial statements, reported performance information, complianceapplicable withlegislation and otherrelated matters. These reports did not form part of my opinion on the financial statements ormy findings onreported performance legislation.. compliance with or information the M to prevent non-compliance with applicable laws and regulations relating to supply chain management. that threats affecting the entity were effectively identified,responded monitored to on a strategic level. and T ensure that all assets were recorded at the correct value. T Pretoria August 2018 17 OTHER REPORTS REPORTS OTHER 62. raw attention to the following engagements conducted various by parties Investigations 63. 58. 59. 55. 57. 60. Financial and performance and management Financial 56. Governance 61. ave noave matters to report in this respect. y opinion on the financial statements and findings on the reported n annual shareholders’ compact was not concluded prior to the start of ction plans developed to address the pooraudit outcomes ofprior years ffective steps were not taken to prevent fruitless and wasteful expenditure s a result of the disclaimer of opinion expressed on the financial s a result of the above, the performance key measures and indicators n connection with audit, my responsibility my is to read the other information A were not effectively implemented and monitored during However the year. I c separate financial statements,compliance reported with applicable legislation; objective my however, was not to performance informationexpress form any of assurance and on it. The matters reported below are limited to the significant internal control deficiencies that resulted in the basis for the disclaimer of opinion, the findings on the annualand the findingsperformance on compliance with legislation report included in this report. T report, annual the in included comprises information the information other which includes the directors’ report, the audit committee’s report and the company secretary’s certificate, as requiredby the Companiesother information Act.does not include The the consolidated and separate financial in presented objectives selected report those and auditor’s the statements, the annual performance report that have been specifically reported in this report. auditor’s the financialyear in consultation with theexecutive authority, as required treasury by regulationThe compact29.2.1. was submitted to the executive authority prior to the start of February in 2018. approved the financial year, however this was only A E amounting to R84 021 000, as disclosed in note 42 to the annual financial statements, in contravention of the PFMA. of section The 51(1)(b)(ii) majority of the fruitless and wasteful expenditure was caused interest by on overdue accounts and unauthorised compensation identified conducted. audits forensic through process of quantifying the fullextent of the irregular expenditure. The majority of the irregular expenditure disclosed in the financial statementswas caused deviations by from processes prescribed in the supply chain policy of the entity. and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements performance annual the report, in and or presented objectives selected the knowledgemy obtained in the audit, orotherwise appears to be materially misstated. I performance information and compliance with legislation do not cover cover not do performance legislation compliance with and information the other information and I do not express an audit opinion or form any of assurance conclusion thereon. M I h A statements,do I not conclude onmaterial misstatements ofthe other informationrelating theto financial statements. based If, on the work have I performed relating to the audit of performance information and compliance with legislation, I conclude that there is a material misstatement of this other information, I am required to report that fact. A included in the shareholders’ compact were notagreed between the accounting authority and the executive authority priorto the start ofthe financial as requiredyear, by treasury regulation 29.2.2. INTERNAL CONTROL DEFICIENCIES CONTROL INTERNAL 53. onsidered internal control relevant to audit my of the consolidated and Leadership 54. 52. 51. 51. 50. 49. 48. he accounting authority is responsible for the other information. The OTHER INFORMATION OTHER Report of the Auditor-General to Parliament on the to Parliament Auditor-General of the Report Broadcasting African CorporationSouth SOC Ltd (SABC) 47. 47. Strategic planning Strategic 46. 45. - 1 119 119 611 611 812 812 614 761 761 541 541 376 376 767 767 420 921 257 927 032 207 248 166 732 652 794 682 567 955 298 636 308 598 343 566 530 390 298 090 066 666

624

114 479 146 924 679 086 423 687 723 834 834 909

168

31-Mar-16 - 428 - 8 1 716 716 2 815 815 189 316 316 1 761 761 1 161 161 3 133 133 8 102 102 1 231 231 736 672 805 047 1 661 209 077 2 301 4 199 94 652 9 793 5 770 1 760 874 391 1 632 2 837 353 793 5 798 27 938 9 754 257 288 2 592 498 2 469 134 802 788 936 43 368 306 500 772 396 17 644 115

1 8 4 5 9 8 6 13 19 85 77 15 20 43 38 68 137 414 615 055 777 730 333 867 362 867 082 090

163

281 218

840

243 704

768

3 1 1 31-Mar-17 1 2 *Restated *Restated 1 1 4 1 4 2 2 COMPANY - - - 1 60 411 411 512 512 416 416 476 476 216 761 761 126 216 216 473 473 575 575 231 231 872 821 199 401 572 847 267 807 362 397 852 682 220 953 555 335 400 949 650 068 965 648 534

1 5 3 9 16 31 10 13 17 12 65 82 96 417 117 582 398 398 164 591 806 067 484

834 110 116 218 913 756

203 852

127

903

440

1 1 1 4 4 1 2 1 2 3 - - 1 112 112 119 119 611 611 116 812 812 017 017 310 310 614 213 213 310 310 541 541 107 376 376 767 767 420 759 921 194 257 927 207 032 248 794 682 227 567 408 293 636 530 390 066

624

676 902 825 825 479 149 923 667 726 086 100 423

168

31-Mar-16 31-Mar-18 - - 428 - 8 1 742 742 881 617 617 789 815 815 189 316 316 1 133 133 8 102 102 1 231 231 736 975 975 3 672 805 661 209 301 4 199 94 652 9 770 1 042 2 997 5 798 27 938 9 022 2 754 257 288 2 592 997 5 030 1 469 134 955 2 205 1 936 43 888 2 368 306 500 772 836 355 396 17 644 115

8 4 5 9 8 6 81 13 19 85 15 20 43 38 68 615 716 416 851 055 851 778 073 135 333 362 064

163

706

281

218

243 822 768

1 31-Mar-17 1 1 4 1 4 2 2 *Restated *Restated 3 1 1 2 GROUP - - - - 1 60 512 512 416 416 516 516 476 476 219 219 746 746 126 126 473 473 575 575 975 975 188 231 231 872 199 821 441 401 847 572 807 397 362 798 852 220 953 986 400 494 346 986 648 640

5 3 9 16 31 10 13 17 12 96 65 82 117 417 582 775 164 067 590 365 365 484

130 871 110 116 218 756

203 852

881

440

800

1 1 31-Mar-18 1 1 1 2 2 4 4 3 8 5 7 6 9 7 11 11 12 13 14 17 15 18 16 17 10 18 19 19 24 21 21 20 25 23 22 34 Note R’000 R’000 R’000 R’000 R’000 R’000

Defined benefit asset ASSETS Property, plant and equipment Computer software Prepayments Available-for-sale financial assets Investment property Investment subsidiaries in Investment Deferred Tax leases Operating Total non-current assets Total Programme, film and sports rights LIABILITIES Government debt instrument Consumables equityTotal Property sale for held receivables other and Trade earningsRetained Prepayments assets current Total assetsTotal reserve adjustment value Fair Interest bearing loans and borrowings and bearing loans Interest Cash and cash equivalents EQUITY capitalShare Deferred government grant Deferred government Employee benefits obligation benefits Employee Total non-current liabilities Total Trade and otherTrade payables Deferred income Current portion of loans and borrowings Contract liabilities Contract benefits Employee Current portion of government debt instrument Tax payable Tax Current portion of deferred government grant Provisions Total currentTotal liabilities Total liabilities Total

Total equityTotal and liabilities Statement Position of Financial 2018 31 March as at

FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 88 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 89 711 711 471) 139 139 913) 591) 147) 401) 061 135) 992 368 944 463) 484) 229) 084) 450) 430) 649) 599) 446) 888) 809)

3 74 (2 40 26 34 (13 (67 135 188 108 536 033 (52 950 (92 (98

(159 (519 (136 (105 (667 (669 31-Mar-17 *Restated 6 (1 (1 (3 (1 (1 - 011 011 417) 781) 213) 163 132) 152) 961) 243 180) 454 755) 822) 029) 093) 647) 950) 950) 294) 264) 589) 442)

COMPANY 13 46 47 (11 714 099 (48 578 (33 (61 (67 (46 (94 (73

(118 (718 (619 (167 (486 (538 (606 (606 31-Mar-18 6 (1 (3 311) 471) 378 378 913) 147) 401) 061 135) 209 062 368 328) 477) 944 463) 484) 229) 084) 450) 649) 950) 390) 696)

3 (2 76 27 40 34 116 (13 (67 188 143 536 039 (52 950 (92 (98

(673 (159 (519 (136 (671 (105 31-Mar-17 *Restated 6 (1 (1 (3 (1 (1 GROUP 219 219 (11) 744 744 417) 781) 031) 213) 132) 152) 067 180) 732) 454 676) 755) 822) 029) 093) 947) 647) 294) 589) 665)

R’000 R’000 R’000 R’000 13 46 48 (11 714 099 (48 578 (33 (61 (67 (46 (89 (94

(118 (718 (538 (167 (621 (634 (486 (621 31-Mar-18 6 (1 (3 7 7 7 5 31 31 31 25 28 26 32 30 27 Note

Revenue Amortisation of programme, film and sports rights Other income Net impairment (raised)/reversed of programme,film and sports rights Amortisation and impairment of computer software Net impairment and reversed/(raised) of trade and other receivables operational- Other lossesOther Broadcast costs Depreciation and impairment of property, plant and equipment Net financing income/(expenses) Net Marketing costs Other expenses - personnel costs other than employee compensation Operating loss before finance costs and tax Employee and director compensation and benefitexpenses Professional consulting and fees Finance income Signal distribution costs linking and Income tax Direct revenue collection costs revenue Direct Finance expenses Loss for the year

Loss before income tax Statement of Profit or Loss March 2018 31 year ended for the 012 012 126 126 894 646 954 730) 934) 940) 888)

(160) 3 033 982 105 436 606

(169 (483 (596 31-Mar-17 *Restated (1 810 810 568 520) 425) 950) 950) 639) 000) 644)

COMPANY (575) 3 2 41 176 ( 570 569 606 (84 449

( ( ( ( 31-Mar-18 (1 012 012 126 126 894 646 954 730) 950) 940) 995)

(160) 3 039 982 105 436 606

(169 (483 (602 31-Mar-17 *Restated (1 GROUP 810 810 676) 568 676) 520) 425) 639) 000) 644)

(575) R’000 R’000 R’000 R’000 3 2 191 (41 569 (84

(621 (570 ( (449 31-Mar-18 (1 8 8 10 21 21 32 Note

otal comprehensive income/(loss) for the year tems that may be reclassified to profit and loss tems that will never be reclassified to profit and loss Loss for the year I I Post -employment medical benefits Pension fund Pension Actuarial gain/(loss) Expected return on plan assets Actuarial gain/ (loss) (Loss)/ gain in changes in fair value of available-for-sale financial assets Income tax relating to the above items Actuarial gain/ (loss) Long service awards Other comprehensive income/(loss) for the year net of tax

T Statement Income of Comprehensive March 2018 31 year ended for the

FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 90 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 91 022 017 017

676) 346 566 995)

Total Total Total Total R’000 R’000 073 676

191 687

881

913 682 913 (596 934) (596 888 2 871) (602 219 219 759 2

308 2 669) (1

R’000 R’000 064 667 679 193

871

(602 (596 810) Retained earnings GROUP 133 133 126 2 257 2 257 2 993 (1

COMPANY (124) (124) R’000 R’000 8 8 8 1 8 133 8 133 2 082 498 2 090 632 1 993 943) 178 (1 950) 176 (1 10 10 126 126 10 903 555 ment reserve Retained earnings ment reserve Fair value adjust- Fair value adjust- 1 1 1 1 1 1 R’000 R’000 Share capital Share capital

Balance at March 31 2018 Balance at 1 April - restated 2016 Balance at March 31 - restated 2017 year the for (loss)/income comprehensive Total Balance at 1 April - restated 2016 Total comprehensive (loss)/income for the year the for (loss)/income comprehensive Total Balance at March 31 - restated 2017 year the for (loss)/income comprehensive Total Balance at March 31 2018

Total comprehensive (loss)/income for the year the for (loss)/income comprehensive Total Statement Equity in of Changes March 2018 31 year ended for the - 742 742 147 147 801) 601) 760 652 907 255 878) 702) 180) 889 334 286) 892) 368)

390

1 (7 53 37 77 (12 841 581 181 874

234 (710 (310 (321 (740 (796 31-Mar-17 *Restated 7 (8 724 097 66 818 818 310 310 721)

760 226 308 690 068 872) 106) 592) 642) 699) 009)

423

COMPANY 53 43 (1 (6 22 77 49 (11 649 596 (32 172

127 154

(147 (148 31-Mar-18 6 (6 - 911) 742 742 742 147 147 074) 107 107 325 801) 907 878) 180) 889 669 286) 580) 365)

390

1 (7 81 53 37 (12 845 588 181 881 234

(742 (713 (310 (321 (799 31-Mar-17 *Restated 7 (8 190 66 GROUP 742 742 516 774 774

742) 507 226 366 249 690 872) 106) 592) 642) 699) 009)

423

43 (1 (6 81 48 52 22 (11 577 630 (32 130 172

154

(147 (148 31-Mar-18 6 (6 7 5 14 17 18 19 31 31 31 35 33 Note R’000 R’000 R’000 R’000

Acquisition of computer software Cash flows from financing activities Instalment sale and finance leases advanced/(paid) during theyear Acquisition of property, plant and equipment Repayment of government debt government of Repayment Net cash inflows/(outflows) from operating activities Cash flows from investing activities Proceeds from disposal of property, plant and equipment Net cash outflows from investing activities Interest paid Interest Cash generated / (utilised) by operations Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Proceeds from government grant Net decrease in cash and cash equivalents Cash paid to suppliers and employees Net cash inflows from financing activities Dividends receivedDividends Cash flows from operating activities Cash receipts from customers

Interest received Interest Statement Flows of Cash March 2018 31 year ended for the

FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 92 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 93 overnment guarantee is still in the process of being motivated for. ash management plan was developed and implemented to ensure ubmission has been made to the Executive Authority for a special etter of Support from the Ministers of Finance and Communications irect engagement with Financial Institutions to provide assets (current submission in terms of the ENE – Request for Funding for perational expenditure is being closely monitored and managed; and monitored closely being is expenditure perational ommercial banks have shown interest in financing the production ommunication takes placeto suppliers and service providers in the ost savings initiatives have been identified and are in various stages arrowing our approach to business cases towards profitable cases business and towards approach to arrowingcash our ash flow forecasts on a daily, weekly and monthly basis takes place apital investments in the capital expenditure projects is being delayed eview of the operating model in order to identify cost efficiencies and o for example the Corporation has concluded payments arrangements upply Chain Management is practicing rigorous negotiationin contract arious initiatives are on-going in TV Licenses (Audience Services here are direct contractualare here relationships with the advertisingagencies he Accounting Authority and Executive closely monitors the expenditure ruitless and Wasteful expenditure is showing a trend in the right synergies and ensure a fit for purpose staff complement; houses and allowing the production houses to service the debt once their content has been flightedby the Corporation. This will then allow interest of transparency, predictability and building trust; direction and will receive renewed focus and attention at Executive level future. foreseeable the in entirely negate hopefully but limit only not to This will then be used to secure long term funding (especially to fund long term capital expenditure plan); A d A s request to fund the long term capital expenditure plan, the sports elections; general and mandate  R C of implementation. A Cost Containment Directive is expected to be implemented; which ensure that the payments turnaround time averages 45 days. This effectiveensures working capital management; the Corporation remains operational in the immediate and short term while the medium to longer term initiatives gain momentum and start results; yield to or revised payment arrangements with government key and other suppliers to defer the outstanding forecasts and amounts thus ensuring we can honour commitments; to within our cash flow and available fundingis matched to requirements in terms of the priorities per the plan. and payment status of the Corporation through various reporting and oversight mechanisms, including reporting to relevant sub-committees of the Board; C with the focus mainly broadcast on key related critical projects. C N under-performing platforms being see will that cases business positive enhanced; A A L will be pursued for purposes of the finalization Annual and Financial Statements; audit of the FY18year-end V Division) to increase collection both in the short and medium term; S conclusion to maximize benefit for the Corporationfinancial implications; while and minimizing F A G or fixed) as collateral is also showing early positive indications; O  C  T A c S C T Unforeseeable and Unavoidable expenditure through the Adjustment Adjustment the through expenditure Unavoidable and Unforeseeable financialBudget forthe FY19 will submitted - year be adviseon from the Department Communication; of • • Below are the long term solutions which the Group is exploring: • • • • • • • • • • • • • • • • • • wned company, and holding company of the Group. It is o ‑ ermanent Board of non-executive Directors and Executive Directors

mortisation of programme, film and sports billion.rightsR1.7 of mployee and director compensation and benefit expense of R3.1 here is an earlysettlementan ishere programplacesignificantseen whichinhas have been appointed. This ensures accountability and ownership;  successes in ensuring effective working capital management (and alleviating short term liquidity challenges). This costs about 2% of the collected revenue; T A p   and billion; A E • • The Group’s balance sheet has been negatively impacted the by loss realised from operations. At year-end, the Group’s current liabilities (R2.07 billion) exceeded current assets billion) (R1.8 and the Group’s cash was as low as million. R130.5 assets Total at R4.4 billion still exceed economic conditions R900 Tough by million. billion R3.5 at liabilities total and poor public perceptions have negatively impacted the commercial revenue as well as the license fee collections. The instabilities in the governance structures have contributed to the negative perception of the Group. The above events, coupled with the increasing cost of our mandate, have therefore resulted into the recurring net losses and liquidity constraints experienced. As a result the Corporation is in a net current liability position, which creates difficulties in meeting short term obligations. The financial support from the financial institutions, until recently,affected hasthis by situation.There been is alsoan inability to implement an asset management plan (long term capital expenditure which plan), might further negativelyfutureimpact inflowsoneconomic of benefits. The constrained uncertainties general have and short obligations term meet to resources seen some of the creditors exploring upfront payments, instead of 30 days payment term. This further exacerbating the financial constraints on the organisation. There is thus a material uncertainty in the timing of cash flows. This may cast significant doubt on the Group and Company’s ability to continue as a going concern and, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. The cash flows and projections (under current trading conditions) however indicate that the Group will be operational in the foreseeable period and will continue to have cash resources to meet its short term obligations. Management’s assessment of going concern In order to ensure the future sustainability of the Corporation, the following initiatives are being/ have been implemented in the immediate andshort term: • The financial statements have been prepared on a going concern basis. In determining the appropriate statements, the Accounting basis Authority is required to consider whether of preparation of The future. foreseeable the for operating Corporationthe continue can the financial Corporation, in the current year and previous years, has been faced with settle short to term (inability challenges liquidity and losses recurring net financial amountedyear R622 to obligations).loss2017/18 thefornetThe million, whilst the trade and billion. other payables The amounted to R1.12 following are significant items included in the loss for theyear: • incorporated and domiciled in South Africa. The statementsconsolidated of theCompany as at,and forthe yearended Marchfinancial 31 2018 comprise the Company and its subsidiaries (together referred to as the ‘Group’ and individually as ‘Group entities’). The Group is South Africa’s national Public Broadcaster providing a free-to-air service. Information on group entities of the Group is provided in note 9. The SouthAfrican Broadcasting Corporation SOCLimited is a state

1(b) GOING CONCERN1(b)

1(a) CORPORATE INFORMATION 1(a) Notes Statements Annual to the Financial March 2018 31 year ended for the 213 213 786

573)

336 370

034

31-Mar-14 021 2 584 5

563) (3

919 935

984

31-Mar-15 017 017 1 310 310 4

293) (2

676 825

149

31-Mar-16 997 5 022 2

975) (3

851 073

778

31-Mar-17 4 2 (2 986 346

640)

R’000 R’000 R’000 R’000 R’000 365 881

484

31-Mar-18 4 (3

he Corporation will continue to engage National Treasury and the he Corporation will continue to operate with the initiatives which have he current commercial revenue and license fees will sustain the he Educational programmes will be funded the by DoC; T commercial funding institutions. T been mentioned above; and T Corporation; T he preparation of the Group’s consolidatedpreparationGroup’shethe of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies, reported amounts of revenues, and disclosures, accompanying the and liabilities, and assets expenses, the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. in result could estimates and Uncertainty assumptions these about outcomes that require a material adjustment to the carrying amount of assets orliabilities affected in futureperiods. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the The consolidated and separate annual financial statements accordanceprepared in have with International Financial Reporting Standards been (IFRS) as issued the by International Accounting Standards Board, and in the manner required the by Companies Act of South Africa, 2008, the Public Finance Management Act, No. 1 of 1999, as amended, and the Broadcasting Act, No. 4 of 1999, as amended. The SABC has early adopted Directive - The Selection 12 of an Appropriate Reporting Framework Public by Entities issued the by Accounting Standards Board Managementin 2015. made the assessment that applying IFRS is the appropriate reporting framework as the group provides services on a commercial basis in a competitive market. The group also receives insignificant funding from the government and has limitedon government funding. dependence consolidatedThe separatefinancialannualand statements presented are in South African Rands, rounded to the nearest thousand, and have been prepared on the historical cost basis, except instrumentsfor and defined benefit certainasset and liability which are measured at financial fair value. T iii) iv) Though the Corporation is facing recurring losses, material it is believed that, based on the initiatives cash implemented flow constraints and to date and the support from its stakeholders, no indication exists that the Corporation shall no longer be able to execute its mandate and will no longer be able to meet its obligations in the months. next 12 Based on the above assessment, management’s conclusion is that the going concern assumption is the appropriate basis of the preparation of the financial financialstatements year. for 2017/18 The following table depicts the total assets and total liabilities of the SABC over the past fiveyears. The table below it is clear that the Corporation has been solvent for a number of years. i) ii) Net Assets Total Assets Total Liabilities Total 2 SUMMARY OF SIGNIFICANTACCOUNTING POLICIES Basis of preparation2.1 (continued) party.The cost associated rd

roperty expert has been appointed to assess the property portfolio of

acility billion of up to R1,2 may be made available the by Financial evenue related initiatives that will include conversations that have include will that conversations initiatives related have that evenue Supplier finance facility will establish a direct relationship between here is no management’s intention to dissolve or liquidate the here is also no Parliamentary intention to dissolve or liquidate the actively implemented and pursued. It may take up to 2 years for full return to financial sustainability for the Corporation in the medium to anagement has further commenced with the following holistic any ofany the measures listed undershort term initiatives will continue he Corporation,as the only Public Broadcasteris a strategic asset of onsideration is being given to the factoring of long outstanding TV his will also result in additional cash in the form of a saving in Early he Turnaround Plan will also include a turnaround of the culture in he Turnaround Plan developed a year ago will be refreshed and hence th commenced with ICASA to reviewthe Must Carry Regulations. If successful, they will provide a new revenue stream for the SABC. R T T and Corporation; Corporation. ndustry practice of debt factoring may see the receipt of up to 60% of T the public sector/ government; a production house and the bank thus relieving the requirement for prepayments. The estimated investment from the bank for this initiative is R800 million. After the related revenue is generated, the Corporation will then have to repay the capital invested in the production; and  long term while managing the immediate future in line with the values of the Corporation and bearing the interest and concerns of those dependent on the Corporation in mind. A Settlement Discount currently million; budgeted at R113 the value factored upfront;  A Institutions which can be used as bridging finance. Finance Costs offwill course be attracted; T I A f initiatives: the Corporation – cost consciousness, ownership and accountability, responsible custodianships of the assets under our control; and M and effective implementation; and T C license debt years (3 and to a 3 above) the Corporation to align cash inflowspayments forthe content coming after from revenue has been generated; advertising revenue with also into the long term; typically withthis kind of an arrangement is normally 40% of the value though; 4 T M A P the Corporation. The scope of the appointment will entail doing property valuation, a property management strategy and to determine whether properties must be disposed; leased orretained. The outcome of this exercise may positively contribute to the liquidity of the Corporation (either throughrental income or proceeds from sale); • • • • Success of these initiatives will be: • i) Seeking alternative funding models for Sports Rights; and ii) • • • ii) Cash flow forecasts for the next12 months sufficient indicatecash be also will There that(solvency). liabilities the net the exceed netwill assets levels to able to meet the short term obligations, even though creditors’ payments days would have been extended. ii) Assumptions In the context of the above and consistent with the reporting in previous financial years, managementconsideration takes in its assessment of the threat to the going concern of the the followingSABC: assumptions into i) • • •

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 94 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 95 eld primarily for thepurpose of trading; ash or cash equivalent unless restricted from being exchanged or used here is no unconditional right to defer the settlement of the liability for t is expected to be settled in the normal operating cycle; t is held primarily for the purpose of trading; t is due to be settled within twelve months after the reporting period; H C I I I T at least twelve months after the reporting period. The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.  to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.    Owned assets Items of property, plant and equipment are initially measured at cost. Subsequently, they are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includesexpenditure that is directly attributable to the acquisition of the items. The cost of self- constructed assets includes the cost of materials, direct labour, and otherany costs directly attributable to bringing the asset to a working condition in the manner intended management. by Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Artwork decorative their primarily for held Office are artwork that represents assets use in the business. Artwork is considered to have an infinite useful life and are held at cost less impairment costs. Leased assets Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. An asset acquired byway financea of lease is recognised at an amount equal to the lower of its fair value and the present value of minimum lease payments at inception of thelease on initial recognition.The assetis accounted forin accordance with the accounting policy applicable to that asset. Lease payments are accounted for as described in accounting policy (2.24). Capital work in progress Capital work in progress includes cost of materials and direct labour and other any directly attributable costs incurred in bringing an item of property, plant and equipment to its present location and condition. costs Subsequent Subsequent costs are included in the asset’s carrying amount or recognisedas separate a asset, as appropriate,only when itis probable that future economic benefits associated with theGroup and the cost of the item item can be measured reliably. The carrying will flow to the amount of the replaced part is derecognised. All other costs are charged to profit or loss during the financial period in which they are incurred. Depreciation Depreciation is calculated on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less residual value. Depreciation is recognised in profit or loss on a straight-linethe estimated basis useful lives of eachover part of an item of property, plant and equipment, from the datethat they are available for use. Leased assets are depreciated over the shorter of the lease term or their useful lives unless it is reasonably certain that the Group will obtain ownership the by end of the lease term. Land is not depreciated. The estimated useful lives for the current andcomparative periods are as follows: • Expected to be realised within twelve months after the reporting period; Or • A liability is current when: • • • Or • 2.5 Property, plant and equipment (continued)

xpected to be realised or intended to be sold or consumed in the ew and amended standards adopted by the company E normal operating cycle; operating normal The Group presents assets and liabilities in position the based statementon current/non-current of financialclassification. An asset is current when it is: • Functional and presentation currency presentation and Functional Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment whichin the entity The Annual Financial operates (functional currency). Statements are presented in South African Rands, which is the Company’s currency. presentation and functional Group’s and transactions currency Foreign Transactions in foreign currencies are translated into the functional currency at the foreign exchange rate ruling at the date of the transaction. the currencies at foreign in denominated liabilities Monetary and assets reporting date are translated at the foreign exchange rate ruling at that recognised are translation differences on arising exchange Foreign date. in profit or loss. Non-monetary assets and liabilities thatin terms of historical are cost in a foreign measured currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the date the fair value was determined. Subsidiaries The consolidated financial statements consist of financial statements of the Group and its subsidiaries March as at 31 Subsidiaries 2018. are all entities (including structured entities)over which the group has control. The Group controls an entity when the Group is exposed or to, has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power results over of subsidiaries the are entity.included in Thethe consolidated financial annual financial statements of the Group from the date that it obtains control. They are deconsolidated from the date that the Group loses control of the investee. The Group owns 100% issued share capital of all its subsidiaries. consolidation on eliminated Transactions Intra-group balances and unrealised any gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the annual eliminated financial in the same as way unrealised gains, but only to the extent that statements. Unrealised lossesthere is no evidence of impairment. are N The group has chosen to early adopted Revenue IFRS from 15 Contracts with Customers as issued In accordance in May 2014. with the transition provisions in the IFRS 15 newrules have been adopted retrospectively and comparatives for the 2017 financial period have been restated. See note 4.3 for further details on the impact of the change in accounting policy. revision and future periods if the revision affects both current and future periods. Judgements made management by in the application of IFRS that have a significant effect on thesignificant financial risk of material adjustment are discussed in note statements3. and estimates with a The financial statements have been prepared on a going concern basis that assumes the Group would be able tocontinue operating asa going out set policies accounting The future. concern foreseeable the for below have been applied consistently for all periods presented in the consolidated annual financial statements,except where an amendment was required as a result of a change in IFRS.

2.4 Current versus non-current classification 2.3 Foreign currency translation 2.2 Basis of consolidation

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial ow the intangible asset will generate probable future economic he technical feasibility of completing the intangible asset so that it will he intention to complete the intangible asset and use or sell it; he availability of adequate technical, financial and other resources to he ability to use or sell the intangible asset; he ability to measure reliably the expenditure attributable to the evel 2 — Valuation techniques for which the lowest level input that evel 3 — Valuation techniques for which the lowest level input that is H benefits; be available for use or sale; T complete the development and to use or sell the intangible asset; and T T  T intangible asset during its development. T L is significant to the fairobservable; and value measurement is directly or indirectlyL significant to the fair value measurement is unobservable. f) b) b) c) d) e) Acquired programme, film and sports rights arefinite intangible useful lives assets and withare stated at cost less accumulated(refer to note 7) and accumulated amortisation impairment losses. Cost comprises actual acquisition where cost applicable. language dubbing, plus Acquired programme, film and sports rightswhen the license period begins, are the cost of the right is known or reasonably generally recognised 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. Originated programme, commissioned from independent producers, film are intangible assets with andfinite useful lives sports and are stated at cost less rights,accumulatedand accumulated impairment amortisation losses. Cost comprises direct costs, includingincluding cost of materials, work artist fees and production overheads. The amount initially recognised for originated asset is recognised from the date when the intangible asset first meets the recognition criteria below. listed Subsequent to initial recognition, originated assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. the in expense an as recognised is activities research on Expenditure period in which it is incurred. An originated asset arising from the development phase of an internal project is recognised and if, only all if, the following have been demonstrated: a) • Rental income from investment property is accounted for as described in accounting policy 2.23 on other revenue. Where an item of property, plant and equipment is transferred to/from investment property following a change in its use, the cost and related reclassificationof date the at carrying value) depreciationaccumulated(i.e. recording. subsequent and purposes accounting for cost becomes its assumedthat whenever rent reviews orlease renewals are pending with anticipated revisionary increases,all notices and,where appropriate, counter notices have been served validly and within the appropriate time. All assets and liabilities for which fair value is measured ordisclosed in the financial statements are categorised within the fair valuedescribed hierarchy, as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1 — Quoted (unadjusted) market prices in active markets for liabilities; or assets identical • 2.7.2 Acquired2.7.2 programme, film and sports rights 2.7.1 Originated2.7.1 programme, film and sports rights 2.7 Intangibleassets 2.7 (continued)

ears 0 years 0 years 0 years 0 years 5 years 0 years 0 p to 60 years p to 30 years nfinite useful life 5 3 - 4 3 - 2 3 - 5 y u 5 - 1 5 - 1 5 - 2 I u

otor vehicles usical equipment vestment properties vestment ffice equipment omputer equipment rtwork ecurity equipment roadcast equipment urniture and fittings aluations reflect, where appropriate, the type of tenants actually in In  A O S  M  F C  M   B B  

occupation or responsible for meeting lease commitments or likely likely or commitments lease meeting for responsible or occupation to be in occupation after letting of vacant accommodation and the market’s general perception of theircredit worthiness; the allocation of maintenance and insurance responsibilities between the lessor and lessee; and the remaining economic life of the property. It has been V An external, independent valuation company, having appropriate recognised professional qualificationlocation and category of property, and has been involved in determining recent experience the fairvalue of the properties fordisclosure in purposes. The values are the based on market values, being the estimated amount for which a property could be exchanged onthe date of valuationbetween a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The useful lives, depreciation methods and residual values, if significant annually. reassessed are Depreciation is charged to profit or loss on a straight line basisover the estimated useful lives of each of the investment properties. The estimated useful lives for the current and comparative periods are as follows: • Investment properties are properties which are held either to earn rental properties Investment both. for or capital appreciation for or income are initially carried at cost or deemed cost including transaction costs. Subsequent to initial recognition, investments properties are measured at cost or deemed cost less accumulated depreciation and impairment. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from disposal. derecognitionarising on property the difference the of as (calculated Any gains and losses between the net disposal proceeds and the carrying amount of the asset) are included in the profit and loss in the period in which thederecognised. property is • The useful lives, depreciation methods and current residual values, if significant, are reassessed annually and adjusted if appropriate. The depreciation charge which constitutes part of the cost of programme, film and sports rights is included in the carrying amount of the respective programme, film and sports rights assets. Derecognition Assets arederecognised when disposed ofor scrapped, orwhen no future economic benefit isexpected from the assets. The gain or loss on the disposal or scrapping of property, plant and equipment is recognised in profit or loss,(refer to note 35). Gains anditem of property,losses plant and equipment on are determined comparing by disposal the of an proceeds from disposal with the carrying amount of property, plant and equipment. • • uildings • • • • • •

2.6.3 Fair value 2.6.2Depreciation 2.6 Investment properties Cost2.6.1 method

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 96 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 97 Non-derivative financial assets comprisefinancial instruments of with group companies, investment trade and other receivables in securities, and cash and cash equivalents. Loans and receivables are initially recognised when they are originated. All other financial assets are initially recognised on trade date. The group classifies its financial assets fair in value the following through categories: profit at and loss, ‘held-to-maturity’and receivables, investments, and loans available for sale. The classificationthe purpose dependsfor which on the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Loans and receivables Loans and receivables are non-derivative financial assets withdeterminable fixed payments that are not quoted or in an active market. Loans and receivables are measured at amortised cost using effective interest rate method, less impairment. any They are includedin current assets, except where they have maturities greater months than 12 after the reporting date. These are classified as non-current assets. Held-to-maturity investments Held-to-maturity investments are non-derivative fixed or financial determinable assets payments with and fixed maturities that the Group’s Subsidiariesare all entities (includingspecial-purpose entities)over which the group has the power to policies governto obtain benefits the from the financial activities of andthe entity. The operatingexistence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. Investments in subsidiaries are accounted for at cost less impairment losses in the separate financial statements of the company. The carrying amount of the Group’s assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an its asset cash-generating or, unit, exceeds its recoverable amount. Impairment losses are recognised in profit or loss. impairment of Calculation The recoverable amount of non-financial assets is the greater of their fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-taxdiscount thatreflectsrate current market assessments the timeof value of money and the risks specific to the asset.For an asset that does not generate largely independent cash inflows, the recoverable amount is determined forthe cash-generating unit to which the asset belongs. A cash generating unit is the smallest group of assets that generates cashinflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. Impairment losses in respect of cash generating units are allocated first to reduce the carrying amount of goodwill allocated to the unit and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis. Reversals of impairment respectIn non-financial of assets, impairment an loss reversed if thereis has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 2.11 Financial assets 2.11 Classification 2.11.1 2.9 Investments in subsidiaries Impairment2.10 of non-financial assets (continued)

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of their carrying amount and fair value less costs to sell. determinable, the material has been accepted the by Group in accordance with conditions of the license agreement, and the material is available for its first transmission. Ifat the date ofof uncertainty signing, exists about the availability a of the material, particularly substantial if degree a license agreement is signed for programme material that does not yet exist, the asset is only recorded once the uncertainties are eliminated and the programme is received and available for broadcast. Payments made to negotiate and secure the broadcasting of sports events are expensed as incurred. Commitments Wherearrangements have been executed forthe futurepurchase of programme, film and sports rights,have not been met but or broadcasting commenced, the the arrangements are recognition criteria above disclosed as Commitments (refer to note Where 38). payments have already been made, these are disclosed as prepayments. Classification Programme, sports and film rights are classified current as they assets as are expected to be realised in the Group’s normal operating cycle. Derecognition of programme, film and sports rights Cost and accumulated amortisation of originated programme,sports rights are film derecognised after and the estimated number of showings. Cost and accumulated amortisation of sports acquired rights are derecognised at the programme, earlier of the expiry of the license film and period or allowed number of showings. assets intangible Other Otherintangible assets,including computersoftware not considered an integral part of property, plant and equipment, are initially measured at cost and subsequently measured at cost less accumulated amortisation (refer to note 7) and impairment losses. Expenditure on internally generated brands isrecognised in profit or loss expenseas an as incurred. expenditure Subsequent future the increases it when only capitalised is expenditure Subsequent economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. Derecognition Other intangible assets are retired when are expected from no theassets. The gain or loss on future retirement of other economic benefits intangible assets is recognised in profit or loss,(refer to note 35). Gains and losses on the retirement of items of other intangible assets are determined comparing by the proceeds on retirement with the carrying amount of the other intangible assets retired. Amortisation Amortisationprogramme,of film and sports rights is charged profit to and loss on an accelerated basis where the first transmission isexpected to be more valuable than subsequent transmissions and on a straight-line basis based on the estimated numberof future showings if each showing audiences. similar generate to expected is Amortisation of other intangible assets is charged to profit and loss on a straight-line based on the estimated useful lives of such assets from the date that they are available for use. The estimated useful life of computer software for the current and comparative period is between 2 and 10 years. reassessed values residual and lives Amortisation useful methods, appropriate. if adjusted and annually,

2.8 Property held for sale

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial securitiesassessedare specificfor impairment. individuallyAll significant be to not securities found held-to-maturity and receivables investment specifically impaired are then collectively assessed for anythat impairmenthas been incurred but not yet identified. Receivablesmaturity and investmentheld-to- securities that are receivables together grouping by impairment for assessed collectively not individually significant are and held-to-maturity investment securities with similar risk characteristics. In assessing collective impairment the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or trends. historical by suggested than less Animpairment loss in respect offinancial a asset measured at amortised cost is calculated as the difference between its carryingamount and the presenttheestimatedvalueof future cash flows discounted asset’sthe at original effective interest rates. Losses are recognised and in reflectedprofit or in loss an allowance account against receivables.the impaired asset continues Interest to be recognised through on the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss. securities are investment available-for-sale on losses Impairment recognised transferring by the cumulative loss thathas been recognised in other comprehensive income, and presented in the fair value reserve in equity, to profit or loss.other The cumulative comprehensive loss income that and is removed recogniseddifference between from the acquisition in cost, net of principal any repayment profit or lossand amortisation, is and the current fairvalue, less the impairment any loss previously recognised in profit or loss. Changes in impairment provision attributable reflectedcomponent are a interesttimevalue income. of toas in If, a subsequent period, thefair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognisedin profit or loss. subsequentany However, recovery in the fair value of an impairedavailable-for-sale equity security is recognised in income. comprehensive other Financial assets and liabilities are offset and the net amount presented in the statement of financial position only when the Group has a legal right to offset the amount and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously. The Group’s investments are recognised at amortised cost which is estimated futurediscountedflows, cashof presentcalculatedvalue the as at the original effective interest rate (i.e. the effective interest computed at initial recognition of these financial assets). Receivables with a shortduration are not discounted where the effect is not material. impairment of Calculation Impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the impairment is the difference between the asset’s carrying amount and its fair value, being the present value discounted at the original of effective interest rate. estimated The amount of the future cash flows, impairment is recognised in profit or loss. Reversals of impairment An impairment loss in respect of financialcost assets is reversed if the subsequent increase carried in recoverable amount can at amortised be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured atavailable-for-sale amortised financial assets costthat are debt securities, and the reversal is recognised in profit or loss. An impairment loss in respect of an investment in an equity instrument classified available-for-saleas is not reversed through profit or loss. (continued)

n initial recognition it is part of a portfolio of identified financial uchdesignation eliminates significantlyor reduces measurement a of he financialhe asset forms part group a of of financial assets or financial

t has been acquired principally for the purpose of selling it in the near t forms part of a contract containing one or more embedded derivatives t is a derivative that is not designated and effective as a hedging S or otherwise arise; would that recognition inconsistency I term; or T liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy and information about the grouping is provided internally on that basis; and instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or O and IAS39 permits the entire combined contract to be designated as at fair value through profit and loss. I I instruments. inancial assets are classified as fair value through profit and loss when A financial A asset carriednot value throughfair assessed is profit at loss or at each reporting date to determine whether there is objective evidence that it is impaired. A financialindicates asset that a loss has occurred after the is initial recognition of the impaired asset, if objective evidence and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financialassets (including equity securities) are impaired can include default ordelinquency restructuring a debtor, by of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy or the disappearance of an active market for a security. In addition, for an investment in equity security, a significant or prolonged decline in its fair value below itscost is objective evidence of impairment. The Group considers evidence of impairment for receivables and held-to- maturityinvestmentspecificsecurities a collective and both asset at level. All individually significant receivables and held-to-maturity investment Financial assets are derecognised when the contractual rights to the cash flow from the financial asset expire or when the Groupsubstantially has all transferred the risks and rewards of ownership assets. of those financial Financial assets at fair value through profit value, and with gains any or losses arising loss on remeasurement recognised are in stated at fair profit or loss. The net gain or loss recognised incorporates any dividend interestorearned financialthe on included ‘other is asset and gainsthe in and losses’ line item. b) b) c) b) b) c) A financial asset other than a financialdesignatedfairvalueat asthrough profit loss assetor upon initial recognition if: held for trading may be a) F the asset is held for trading or it is designated through profit and loss. A financial asset is classified as held for trading if: a) management has the positive intention and ability to hold to maturity. If the Group were to sell a significant amount of held-to-maturity financialassets,wholecategorythe reclassifiedtaintedandbewould available- as for-sale and prevent the Group from classifying investment securities as held-to-maturity for the current and the following two financialyears. Available-for-sale financial assets Available-for-sale financial assets aredesignatedcategorythis other non-derivativesin the classifiedcategories. of not or any in that are either They are included in non-current assets unless management intends to dispose of the investment within months 12 of thereporting date. Financial assets at fair value through profit and loss

2.12 Impairment2.12 of financial assets 2.11.2 Derecognition 2.11.2

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 98 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 99 Trade receivablesTrade comprise receivables in respect of advertising, sponsorships facilities and recognised and are value fair initially at subsequently measured at amortised cost using the effective interest method, less impairment losses. The fair value of trade receivables is net of agency commissions, and where applicable net of trade discounts, which are granted when payment is made in accordance with agreed payment terms. Ordinary shares are classifiedattributable to the issue of new as shares are shown in equity as a deduction equity. Incremental costsfrom the proceeds, net of tax. directly Defined benefit pension plans The net obligation in respect of present value definedof the defined benefit benefit obligation pension (calculated by plans estimating the amountis the of future benefits that employees have earned intheir service return in the current for and prior periods) at the end of the reporting periodless thefair valueplan onassets. Thepresent thevaluedefinedof benefit obligation is determinedcash by flows using an discounting appropriate discount the rate. The discount estimated rates used are the following:- yield future on Government Stock, the zero-coupon yield curve provided the by South African Bond Exchange (member of the Johannesburg Stock of Exchange) that have maturity dates approximating the terms of the Company’s obligations. The definedis calculated benefit annually independent by obligation actuaries. Refer to Note 8 on the plan. pension benefit defined Past service costs are recognised immediately in profit and loss. obligations benefit post-employment Other The Group provides a subsidy for medical aid contributions payable thoseby employees who elect to remain on the medical aid scheme after retirement. The entitlement to these benefits is usually conditional on the employee remaining in service up to normal retirement age or the completion of a minimum service period in the event of early retirement. The expected costs of these benefits areperiod accrued ofemployment using an accountingover methodology similar the to that Perpetual debt instrument relates to a non-repayable loan from the shareholder. On 1 February the 1972, Company’s shareholder converted a long-term loan into permanent capital. The permanent capital is not repayable. In terms of the Exchequer Act, No. 66 as amended, of 1975, interest will be payable, in perpetuity, at a rate of 6.5% per annum on the capitalamount. The instrument represents financiala liability (in the form of perpetual debt) under IAS32 Financial - Instruments: Presentation, because of the underlying obligation to deliver cash in the form of future shareholder. Company’s the to payments Loans and borrowings arerecognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, loans and borrowings are stated at amortised cost using the effective interest rate method. Merchandise and consumables are stated 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 selling expenses. Cost is determined on a weighted average basis and includes other costs incurred in bringing the consumables to their present location and condition. Any write-down and impairment of obsolete inventory to net realisable value are recognised as an expense in the period in which the write-down occurs. Any reversal are recognised in profit and loss in the period in which the reversal occurs. 2.18 Trade receivables Trade 2.18 Share capital2.19 2.20 Employee benefit obligations 2.15 Government debt2.15 instrument Loans and borrowings2.16 Inventories 2.17 (continued)

n initial recognition it is part of a portfolio of identified financial uch designation eliminates or significantly reduces a measurement

t has been principally acquired for the purpose of repurchasing it in t forms part ofa contract containing one ormore embedded derivatives, t is a derivative that is not designated and effective as a hedging or or recognition inconsistency that would otherwise arise, the financial liabilityforms part groupa offinancial of assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordancewith the Group’s documented risk management or investment strategy; or S  I the near term; O  instruments that the Group manages together and has a recent actual pattern of short term profit-taking; or I and IAS39 permits the entire combinedcontract to be designated as ‘fair value through profit or loss’. I instrument. financial liability other than a financial liability held for tradingmay be The Group uses derivative financial instruments to economically hedge its exposure to foreign exchange risks arising from the purchase of foreign programme, film and sports rights, capital equipment and certain operational expenses. In accordance with its treasury policy, the Group purposes. trading instruments for financial derivativeissue or hold not does sinceHowever, the Group has elected not to apply hedge accounting, all derivative financial instruments are accounted for as trading instruments. Derivative financialinstruments are recognisedand attributable initially transaction costs are fair at recognised in value profit recognition,orinitialincurred.Subsequentderivative to financial instruments loss when are measured at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss. c) c) Financial liabilities at ‘fair value through profit or loss’ value,are with gains any or losses stated arising on remeasurement at recognised fair in loss profit recognisedor gain loss. net or The profit loss in or incorporates financialtheinterest on ‘other liabilitypaid gainsincluded any the is in and and losses’ line item. Other financial liabilities Other financial liabilities are subsequently measured at amortisedusing the effective interest rate cost method. The effective interest rate method is a method of calculating the amortised cost of a financial liability and of allocatingover the relevant period. The effective interest interest rate is theexpense rate that exactly discounts estimated future cash payments, through the life of the liability or a shorter period, to the net carrying amount on initial recognition. Derecognition Financial liabilities are derecognised when the obligation is discharged, expires. cancelled or A designated as ‘fair value through profit or loss’ upon initial recognition if a) b) b) c) Non-derivative financial liabilities comprise of financial loans instruments and with group borrowings, companies, financial trading liabilities, finance lease liabilities and trade and other payables. Loans anddebt securities are initially recognisedwhen they areoriginated. All other financial liabilities are initially recognised on trade date. value at ‘fair liabilities financial either classifiedas are liabilities Financial through profit or loss’ ‘otheror financial liabilities’. Financial liabilities at ‘fair value through profit or loss A financial liability is classified as at ‘fair through valuedesignated or trading for held either liabilityis financial the when through profit and loss’ category. this A financial liability is classified as held for trading if: a)

2.14 Derivative financial2.14 instruments 2.13 Financial liabilities2.13

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial Advertising revenue is recognised at the time the related advertisement related recognised the time the is at Advertising revenue or commercial is broadcast on our television and/or radio platforms to the public. The amount recognised is net of Value-Added and trade Tax discounts. When broadcasting airtime is exchanged for dissimilargoods orservices, the exchange is regarded as a transaction which generates revenue. The revenue is measured at the fair value of the goods or services received, adjusted the by amount of cash any orcash equivalents transferred. When the fair value of the goods or services received cannot be measured reliably, the revenue is measured at the estimated stand-alone selling price of the services subject to the specific customer contract. Sponsorship revenue is recognised at the time sponsored programmes are aired, net of Value-Added and trade Tax discounts. The consideration in sponsorship agreements component, promotional such as advertising sponsorships, time and is containing more thanallocated to underlying components based on theirstand-alone one prices identifiable and accounted forin accordance with the substance ofthe underlying component. TV licence fees revenue arises when television licence fees are due in accordancewith legislation ateach renewal date.As the SABChas no performanceremaining revenue obligations after remaining date, renewal isrecognised whenit is probablethat the SABCwill collect thelicence fees to which it is entitled to. Where it is assessed that the collection of television licence fees will not be probable based on predefined criteria, suchare not recognised. television Probability is assessed licence on a monthly basis for all fees active television licence holders user accounts registered on the SABC’s database. Government grants are recognised in the statement of financial position initiallyas deferred income (deferred government grant) when there is reasonable assurance that they will be received and that the Group will comply with the conditions attached to them. Grants that compensate the Group for expenses incurred are recognised as revenue in profit or loss on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate the Group for the cost of an asset are recognised in profit or loss as revenue on auseful life of thesystematic asset. basisover the The SABC obligation in terms of the contract is to provide a broadcasting licence on agreed conditions for the customer to access the content material in its current state. Revenue from commercial licences for specific rights associated with televisionrecognised programmes when there has been technical acceptance and of the content licences is material the by customer and collection of the receivable is probable, and the revenue associated with delivered and undelivered elements can be measured. reliably Channel carriage fees licence presents a performance obligation that is satisfied over time within the contractedmeasured licence based on time the SABC channels period. are carried on the contracted Progress is platforms and billed on a monthly basis on accrual basis. Revenue is measured based on the consideration specified in a contract withcustomer a and excludes amounts collected on behalfof third parties. The group recognises revenue when it satisfies its performance obligations and transfers control over services to a customer. Nature of services i Advertising revenue ii Trade exchanges (non-monetary exchanges exchanges) Trade ii revenue Sponsorship iii iv Licence fee revenue grants Government v Programmevi rights carriage channel exploitation and fees 2.23 Revenue (continued)

Cashand cash equivalents includes cash on hand, deposits held on short-term other call with banks, with original investments liquid highly maturities of three months or less, and bank overdrafts shown within the loans and receivables category of financial instruments. Bankoverdrafts are shown within borrowings in current liabilities in the statement of financial position. Bank overdrafts that areform an repayable integral part of the Group’s cash management on are included as a demand and component of cash and cash equivalents for the purpose of the statement of cash flows. Restricted cash Cashwhich is subjectto restrictions onits use is stated separately at carrying value in the statement of financial position. Government grants capital relating projects to restricted are capital expenditure for received to the migration of analogue infrastructure to digital. Given that the cash has specific conditions of use it has been separately disclosed in note14. Trade and otherTrade payables are initially recognisedatfair value less any directly attributable transaction costs. and other Trade payables are subsequently measured at amortised cost, using the effective interest rate method. used for the defined benefit pension plan. This liability relatingemploymentmedical benefits to valuedis annually by independent post- qualified actuaries. This practice of post-retirement medical aid contributions was discontinued for all new employees after 1 July 2002. Actuarial gains and losses arising from experience adjustments, and changes in actuarial income. comprehensive other recognised in are assumptions, Short-termbenefits Short-term employee benefitmeasuredon an undiscounted obligations basis and are expensed as the related relating toservice provided. is leave pay are A liability is recognised for the amount expected to be paid under short- term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service reliably. estimated be can obligation the and employee the by provided Long-term benefits The Group’s net obligation in respect relating of to old leave pay and bonuses other than long-term pension plans is the employee benefits amount of future benefits that employees have earned in return for their service in the current and prior determine its present periods; value. that benefit is discounted to serviceLong awards The Group provides long service awards to its employees on 5 year continuous service intervals; it starts from 5 years of service to 45 years of service. The awards consists of a cash portion as well as a gift portion, where continuous service reaches 30 years then an additional 5 days of long service leave is also determine granted. To the present value of the obligation the Projected Unit Credit Method is used. The liability is valued annually independent by qualified actuaries. Provision A provision is recognised in the the Group has a present statement legal or constructive obligation of as a result of financial position when a past event, and it is probable will be required that to settle the obligation and an a reliable estimate can be outflow of economic benefits measured. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect isdetermined arematerial,discounting by expectedthe pre-tax future a cash flows at provisions rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

2.22 Cash and cash equivalents 2.21 and other Trade payables

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 100 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 101

lose family members of key management personnel considered are management key members family lose of C General and specificacquisition, construction or production borrowing of qualifying assets that costsnecessarily directly take a substantial period of time to get ready for their intended attributable use or sale, are added to the cost of those assets, until such time as the to the assets are substantially ready for their intended use or sale. Investment income earned on borrowings pending the their expenditure on qualifying assets is temporary deducted investment of capitalisation. for costs eligible borrowing the from specific Allother borrowing costs arerecognised profitin and loss in the period in which they are incurred. IrregularExpenditure Irregular expenditure: means expenditure, incurred in contravention of or that is not in accordance withthe requirement of applicable any legislation. Such expenditure is recorded in the notes to the annual irregularexpenditure the of value the recorded at financialis statements. It incurred unless it is impracticable to determine the value thereof. Where such impracticality exists, the reasons therefore are provided in the notes. Irregularexpenditure is removed from the notes when it is either condoned(a) the by National Treasury or the relevant authority;it is (b) transferred to receivables for recovery; it is not condoned or (c) and is irrecoverable. A receivable related to irregular expenditure is measured at the amount that is expected to be recovered and is de-recognised when the receivable is settled or subsequently written off as irrecoverable. The Group operates in an environment currently dominated entities by directly or indirectly owned the by South African government. As a result of the constitutional independence of all the three spheres of government inSouth Africa, only parties within the national sphere of government will parties. related be to considered be Key management is definedresponsibility for planning, directing and controlling as the activities of the individuals withCompany. All individuals from thelevel of Executive Management the up to authority and managementDirectorsdefinitiontheBoardper of theregardedkey are as of IFRS. to be those family members Group the with dealings who their in may individuals management be key by expectedinfluenced to influence, or be Other related party transactions are also disclosed in terms of the requirements of IFRS. The objective of IFRS statements and is to providerelevant and reliable the information and therefore annual financial materiality is considered in the disclosure of these transactions. they will not reverse in the foreseeable future. In addition, deferred tax deferred addition, In future. foreseeable the in reverse not will they is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted the by reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied the by same tax authority on the same taxable entity, or on different tax entities, but they intend to settle currenttax liabilities and assets on the net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised only to the extent that it is probable that futuretaxable profits or reversing temporary differences will available be against which the asset can be utilised. Additional income taxes that arise from the distribution ofdividends are recognised at the same time as the liability to pay the related dividend is recognised. 2.28 Borrowing costs 2.29 Irregular, Fruitless and Wasteful Expenditure 2.27 Related parties (continued)

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives are recognised in profit or lossexpense, over the term of the lease. as The difference between anthe amounts integral part of therecognised as an expense and the total contractual payments to straight- (due lease lining of lease payments), is recognised as an operating lease asset or liability. Minimum lease payments are apportioned between the financeand charge the reduction of the also allocated to each outstanding period during the lease term so as to produce a liability. The financeconstant periodic charge rate of interest on the remaining balance of the is liability. The capital portion of future obligations under the leases is included as a liability in the statement of financial position. Initialdirect costs incurred innegotiating and securing lease arrangements are added to the amount recognised as an asset. Income tax expense comprises current and deferred tax. Income tax is recognised in profit or loss,except to theextent thatrecognised it directly in equityrelates or other comprehensive to income, items in which case it is recognised there. Currenttax is the expected tax payableon the taxable income forthe usingyear, tax rates enacted or substantively enacted at the reporting date, and adjustment any to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of tax Deferred taxation purposes. for used amounts the and purposes assets and liabilities for is not recognised financial forthe following differences: the initial reporting recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating toinvestments in subsidiaries to the extent thatit is probable that Financing income includes interest receivable on funds invested, dividendFinancing income receivable includes funds interest on invested, losses. and gains exchange foreign and income Interest payable on borrowings is calculated using the effective interest rate method. Interest income is recognised in profit or loss as it accrues, using the effective interestrate method. Dividend income is recognised in Group’s right to receive profit payment is established, which in the case or of loss on the securitiesquoted the ex-dividend date date. usually is that the interestexpensecomponent Thefinancerecognised payments lease is of in profit or loss using the effective interest rate method. Otherrevenue associatedwith the sale of goods,use ofSABC media facilities and services such as mobile revenue is recognised in profitloss when performance or obligations are met and the goods or services are transferred to the Other buyer. revenue associated with the provision of services is recognised in profit or lossperformed in to date as a percentage proportion of total services to be performed. to the services Other revenue/income includes also rental income, which recognised is in profit or loss on a straight-line basisover the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Other income includes rental income, which loss on a straight-line is basis over the term recognised of the lease. Lease incentives in profit or granted are recognised as an integral part of the total rental income, over the term of the lease.

ii Finance leaseii payments i Operating lease payments vii Othervii revenue viii Otherviii income 2.26 Income tax 2.25 Net financing income 2.24 Lease payments

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

he Group’s pension fund is a funded defined benefit pension fund The Group believes that the accounting estimates relating to the amortisation and impairment of programme, film andsignificant sports accounting rights estimates are because they requiremake assumptions management about future audiences and to revenues, and a change in the pattern of amortisation or potential impairment in programme, film and sports rights may have a material impact on the valueof these assets financial statementCompany’s position.accountingreportedof the See in policies The recoverable and 2.7 note 7. amount of the rights is considered zero once the licence period is expired. The Groupprovides a subsidy of medical aid contributions payable by those employees who elect to remain on the medical aid scheme after medical post-employment these for provides Group The retirement. aid benefits using the Projected Unit Credit method 19 prescribed - by IAS Employee Benefits. Future specific actuarial benefits assumptions and the liability valued for in-service are members is projectedaccrued over their expected using working lifetime. The liability is calculated consideringby some actuarial key assumptions such as the rate of healthcare cost inflation, discount rate, percentage members continuing after retirement and average retirement age of members. The key actuarial assumptions made are disclosed in note 21. The Group believes that the accounting estimates relating to the amortisation and impairment accounting estimates becausethey require of management to make computer softwareassumptions about the useful life of anasset. The useful life of an asset are significant other or legal technical ageing, economic and existing on determined is limitations on the use of the asset and obsolescence. If some of these factors were to deteriorate materially, impairing the ability of the asset to generate future cash flows, the Group may accelerate the amortisationcharge to reflect the remainingimpairment useful loss. See accounting policy and 2.7 note 7. life of the asset or record an T that provides pension fund benefitsemployees. for The latest statutory valuation all of the fund was performed of the Group’s permanent Decemberat31 in which 2014, the valuator reported that the fund was in a sound financial position subject to contribution the rates, and its continuation assets exceed its liabilities. of the current Annually the defined benefit pension plan is valued on 31the Projected March Unit Creditusing Method for the financial statements certified by the actuaries. The cost of the defined benefitthe present value of the pension pension obligation is determined plan using actuarial as well as making assumptions about The actuarial involve valuations. valuations discount rates, expected rates of return of assets, future salary increases, mortality rates of in-service members and pensioner mortality rates and future pension increases, withdrawal of members in the service and familystatistics. All assumptions arereviewed ateach reporting date. In determining the appropriate discount rate, management considers the interest rates of quality corporate bonds in the respective country, (i.e. yield on South African Government The Bonds). mortality rate is based on public available mortality tables for the specific country based are increases pension and salary increases Future (i.e.mortalityPA table). (90) on expected future inflation rates.Further details about the assumptions used are given in note 8. The residual value has in most cases been taken as zero, as the SABC economical their beyond assets their utilising of approach the adopted has useful live, considering the environment in which the SABC functions where technological advancements can render certain assets obsolete and also on the assertion that none of the assets have material residual values at the end of the expecteduseful life. v Pension assumptions Pension v iv Amortisation and impairment of programme, film and sports rights Post-employmentvi assumptions medical aid iii Amortisationiii impairment and computer of software ii Residualii Values (continued)

he expected useful lives of assets is determined considering by the seful lives seful seful lives and residual values of property, plant and equipment T components identified in the assetinputs from knowledgeable hierarchy representatives within the departments and within by considering and experiences past their on based identified component the per SABC the knowledge. In determining the expected useful lives of the assets, the current asset register was analysed to determine the average age of the assets per component where applicable. The remaining useful life of assets is informed two by parameters, Age condition and The useful life remaining based useful life. remaining based final remaining usefullife is determined with referenceto an algorithm, which takes into account both parameters. The Group calculates depreciation of property, plant and equipment on a straight-line basis soas to writeoff thecost of the assets overtheir expecteduseful lives.The useful lifeof an assetis determinedon existing other or legal technical ageing, economic and tear, and wear physical limits on the use of the asset and obsolescence. If some of these factors were to deteriorate materially, impairing the ability of the asset to generate future cash flows, the Group mayreflect accelerate the depreciation remaining charges useful to life ofloss. the asset or record an impairment Thepreparation ofthe annual financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting uncertainty date. However, about these assumptions and estimates could result in significant adjustments results. actual the definition, equal seldom accountingby estimateswill,as The estimates and assumptions that have a significant risk of causing a material adjustmentto thecarrying amounts ofassets and liabilities within the next financialyear are discussed below. Management discusses with the Audit Committee the development, selection and disclosure of the Group’s critical accounting policies and estimates. policies these and application of the and estimates Expenses are decreases in economic benefits during the financial year in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions equityto participants A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed onlyby the occurrenceoccurrenceof one ormore uncertain or future non- events notwholly within the control of the entity, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or obligationtheamountthe of cannotmeasuredbe withsufficient reliability. If the likelihood of an obligation is neither a provision nor a contingent outflow liability and no disclosure of resources made. is is remote, the possible Fruitless and Wasteful Expenditure Fruitless and wasteful expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised. When confirmed, fruitless and wasteful expenditure notes is recorded to the in financial the statements. This includesand wasteful expenditure particulars that occurred during ofthe financialyear fruitless and any disciplinary steps taken as a consequence of such fruitless and wasteful expenditure. U U 

i 3.1 Critical3.1 accounting estimates and assumptions 3 ACCOUNTING AND ESTIMATES JUDGEMENTS 2.31 Expenses 2.30 Contingent liabilities

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 102 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 103 1-Jan-18 1-Jan-19 1-Jan-18 1-Jan-19 1-Jan-18 indefinite of Standard of Effective date - -

mendments Income to IAS 12 Recognition Taxes: of Deferred Tax he amendments clarify that an entity needs to consider whether tax A losses Unrealised for Assets The amendmentsto IAS Statement 7 of Cash Flows are part of the IASB’s Disclosure Initiative and require an entity to provide disclosures liabilities in changes evaluate to statements financial of users enable that cash from arising changes both including activities, financing from arising flows and non-cash changes. On initial application preceding for information comparative provide to required not are entities of the amendment, periods. Application of amendments has not resultedin additional Group. the by provided disclosure law restricts the sources of taxable profitsdeductions on the against reversal of that deductible temporary whichdifference. it may make Furthermore, the amendments provide guidance on how an entity should determine future taxable profits andexplain the circumstances in which taxable profit may include the recovery oftheir carrying some amount. Entities assets are required to apply the amendments for more than retrospectively.on initial However, applicationof the amendments, the change in the opening equity ofthe earliest comparative period may be recognised in opening retained earnings in another (or component of equity,as appropriate), withoutallocating the change betweenopening retained earnings and other components of equity. Entities applying this relief mustdisclose thatfact. These amendments arenot expected to impacthave any on theGroup. The standards and interpretations that are issued, but not effective, yet up to the date of issuance of the Group’s financial statements are disclosed below.The Group intends toadopt these standards, if applicable, when become effective. they The Corporation has applied for the first time certain amendments to the standards whichare effectivefor periods beginning The January1 2017. Corporation has also early adopted on IFRS Revenue 15 from Contracts with Customers. The nature and impact of each of the amendment is below; described T IFRS 9, ‘Financial instruments’, addresses the classification, measurementtheaddresses instruments’, ‘Financial 9, IFRS and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in It July replaces 2014. the guidance in IAS 39 that relates to the classificationinstruments. and measurement IFRS of financial 9 retains categories for primary three measurement establishes and model but simplifies thefinancial assets: mixed amortised cost, fair value measurement through other comprehensive income and fair value through profit and loss. The basis of classification depends on the entity’s business model and the characteristicscontractual of cash the flow financial asset. Investments in equity instrumentsare required to be measured at fair value through profit and loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now new expected credit losses model that replaces theincurred lossimpairment modelfinancial IASForused39. in liabilities IFRS 9 - Financial Instruments Amendments to IFRS and 10 IASSale 28: orContribu tion of Assets between an Investorand its Associate or Joint Venture IFRS - Leases 16 IFRIC22 Foreign Currency Transactions and Advance Consideration IFRC 23 - Uncertainty over income tax treatments Amendments to IAS 40 - Transfers of Investment Prop erty C ii i Amendments to IAS7 Statement of Cash Flows: Disclosure Initiative i IFRS 9 Financial Instruments i) ii) v) iii) iv) vi) 4.2 New and revised IFRSs in issue but not yet effective 4 New and amended4.1 standards and interpretations HANGES IN ACCOUNTING POLICY AND DISCLOSURES (continued) point decrease point One percentage R1 242 million 242 R1 R968 million point increase point One percentage

Effect on the post-employment medical liability: aid Any change in these assumptions could result in a material adjustment to the post-employment medical liability stated on the Group’sstatement of financial position material a well as as impact on the profit.Group’s A one percentage point change in the rate of health care have the followingcost effects. inflation would The Group is involved in legal disputes throughits normal course of business. The outcome of these legal claims may have material a impact on the Group’s financial position and results of operations. Management estimates the potential outcome of these legal claims based on the most objective evidence on hand from internal and external legal advisors until such time that ultimate legal resolution has based estimates these in changes any beenissues, these of uncertainnature finalised. Due to the on additional information as it becomes available could result in material changes to the financial statements in subsequent periods. See note24 and 39. Where the fair value of the financialthe assets statement and of liabilities financial recorded position in techniques determined valuation are including using cannot the they markets, be derived from the active discounted cash flow model (Level 2) The inputstaken fromobservable of markets where possible, these but where this is not models are possible, a degree of judgment is required in establishing fair values. The judgements include consideration of inputs such as liquidity risk, credit risk, and volatility. Changes in assumptions about the facts could affect the reported fair value of the affected financial instrument. The different valuation levels are identified as follows13: by IFRS Quotedidenticalprices,marketsactive(unadjusted)for- assets in 1 Level or liabilities; Level 2 - Inputs other than quoted observable prices for the includedasset or withinliability, either level directly 1 (that is, that indirectlyas (that is,prices) derived from prices); andor Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). Doubtful accounts are reported at the amount likely to be recoverable based on the historical experience of customer default. As soon as it islearned that a particular account is subjectto a risk overand above the normal credit risk lower creditworthiness (e.g. of customer, dispute as to the existence of the amount of the claim, no enforceability of the claim for legal reasons the account etc.), is analysed and written down if uncollectable. is receivable circumstances the indicate The Group believes the probability assessment used as a basis for estimating the licence fee revenue judgement. It requires management to to make professional judgements be recognised is and a assumptions about the probability significant of receiving licence fees from TV licence holders on renewal date. The probability of receiving licence fee revenue from licence holders is based on assessed ability to pay the TVlicence fees andthe assessed willingness ofthe licence holderto paythe statutory annual TV licence fee (refer to note Where 25). such a probability assessment cannot be reliably made, as in the case with the first anniversary renewal for new TV licence holders, the revenue is only recognised when the uncertainty is removed on receipt. ix Impairment of trade and other receivables and credit notes x Probability of licence fee revenue vii Legal matters Legal vii viii Determining the fair value of financial instruments

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial ontract liabilities in relation to prepaid TVlicences were previously previously receivables trade prepaid to relation in liabilities ontract disclosed under deferred income million (R31.58 as at 1 April and 2016 R40.85 million March and at 31 2017); disclosed under trade million and other payables as at 1 April (R11.67 and R28.082017 million March at 31 2017). C C Except for changes below, the Group has consistently applied the accountingpolicies presented thesein consolidated financial statements. The group has early adopted on Revenue IFRS15 from Contracts with Customers. The date of initial application As a result is 1 April 2017. the group has changed its accounting policy for revenue recognition as below. detailed As indicated the group has in note adopted 2.1, as IFRS issued 15 in May which2014, resulted in changes in accounting policies and adjustments amountsthetorecognised financialthein statements. group appliedThe retrospectivelyIFRS 15 using thepractical expedient in paragraph C5 under and c) ( (b) which the(a), groupdoes notrestate contracts that begin and end within the same financial period, neither does it disclose the amount of consideration allocated to the remaining performance obligations nor an explanation of when the group expects to recognise the amount as revenue for all reporting periods presented before the date of initial application. The use of thepractical expedients is assessed to have an immaterial impact on the reported amounts as most of our contracts within the same and months financial period. Other less 12 are than than price discounts at contract inception, most of ourcontracts with customers for our revenue streams will have no variable considerations dependent of performancefuture events. or This change in accounting policy has led to adjustments to the amounts recognised in the financial statements and the main impact on previously described below: are reported results i) Revenue There has been no material changes in the recognition of revenue under fromIFRS 15 IAS Revenue. There 18 has been no material changes to reported profit and loss, statement of financialstatements. position and cash flow The SABC has changed the presentation of certain amounts in the statement of financial position to reflect theIFRS terminology 15: introduced by Paragraph 57 has been amended to state that an entity shall transfer a property or to, from, investment property when, and only when, there is evidenceof a change in use.changeA of use occurs if property meets, or ceases to meet, the definition ofmanagement’s intentions investment for the use of a property property. itself by does not A change in constitute evidence of a change in use. The amendment will be applied prospectively. The Interpretation requires an entity to determine whether uncertain tax positions are assessed separately or as a group; and assess whether it isprobable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, an by entity in its income tax filings. Ifyes, the entity should determine its accounting tax position consistently with the tax treatment used or planned to be used in its income tax filings. If no, the entity should reflect the effect ofaccountingmodifiedapply taxuncertaintyposition. to entityretrospectiveelet Thewill in determining its comparatives of restatement without application therelated asset, expenseor income part (or of is it) thespot rate on the date on which the advance consideration is received or paid. If there is more than one advance payment or receipt, a date of transaction must be determined for each payment or receipt b b a vi Amendments to IAS 40 - Transfers ofInvestment Property v IFRC 23 - Uncertainty over income tax treatments ii) Presentation of contract assets and contract liabilities 4.3 Changes in accounting policies (continued)

mendments to IFRS and 10 IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture A IFRS was issued 16 in January and 2016 it replaces Leases, IAS 17 IFRIC 4 Determining whether an Arrangement contains a Lease, SIC- Operating15 Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS sets 16 out the disclosure and presentation measurement, recognition, the for principles on- single a under leases all for account to lessees requires and leases of balance sheet model similar to the accounting for finance leases The standard includes IASunder 17. two recognition personal (e.g., assets ’low-value’ of leases – lessees for exemptions computers) and short-term leases leases (i.e., with a lease term of 12 months or At the less). commencement date of a lease, a lessee will recognise a liability to makelease payments the (i.e., lease liability) and an asset representing the right to use the underlying asset during the lease term the (i.e., right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be also required to remeasure the lease liability upon the occurrence of certain a change events (e.g., in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. Lessor accounting under IFRS is substantially 16 unchanged from today’s accounting Lessors under will IAS continue 17. to classify all leases using the same classification principle as inrequires also 16 IFRS IASleases. finance and 17operating leases: twotypes of and distinguish between under than disclosures extensive more make lessors to and lessees IFRS is effective 16 IAS for 17. annual periods beginning on or after 1 January Early 2019. application is permitted, but not before an entity applies IFRS A lessee 15. can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. The Group plans to assess the potential effect of IFRS on its 16 consolidated financial statements. IFRIC 22 provides guidance applicable when an entity receives or pays consideration in advance in a foreign currency. In this case a non-monetary asset or liability prepayment (a or deferred income) is derecognised asset, subsequently recognised. related the is when This expense orincome is recognised.The exchangerate appliedto recognise the advance consideration and to determine the initial measurement of The amendments address the conflict between IFRS10 anddealing IAS with the loss of control 28 of a subsidiary in that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3, between an investoror joint venture, isand recognised in full. itsAny gain orloss resulting associate from the sale or contribution of assets that do not constitute a business, however, is recognised only to the extent of unrelated investors’ interests in the associate or joint venture. The IASB has deferred the effective date of these amendments indefinitely, but an prospectively. them apply must amendments entity that early adopts the there were no changes to classification and measurementexcept for the recognition of changes in own credit riskin other comprehensive income, forliabilities designated fairvalueat through profit loss.or relaxes 9 IFRS therequirements for hedge effectiveness replacing by the bright line between economic relationship an requires It effectiveness test. hedge the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The group is to yet assess IFRS full 9’s impact.. iv IFRIC 22 Foreign Currency Transactions and Advance Consideration iii IFRS Leases 16: ii

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 104 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 105 641 641 368 574) 471) 047

248) 166) 090 936) 209) 530) 396) 567) 177)

976 amount amount 536 114

(17 (67 (15 (87

Restated Restated Restated (281 (257 (788 (655 6 1 April 2016 31 March31 2017 31 March31 2017 31 March31 2016 Restated amount Restated - 1 - - 840 - - - 576 576 672 082 248) (43 854 936) (68

835 200

200) 6 835)

11 31 28 40 R’000 R’000 R’000 R’000 (43 (68 002 988 002

(988 (1 COMPANY COMPANY Reclassification Reclassification Reclassification -

574) 047 291) 106) 090 250) 838) 567)

GROUP AND COMPANY 41 41 03 amount amount 8 2 114 (49

(56

377) 1

306)

(281 (683 (799 R’000 R’000 78 25 9 5

089 056

7 7 IAS carrying 18 IAS carrying 18 (1 (1 Previously 31 March31 2017 31 March31 2016 reportedamount 213) 024) 030 840 408 1 754) 248) 936) 530) 396) 567) (257

amount amount (17 100 (15

822 Restated Restated Restated (281 (789 (657 (257 1 April 2016 March 31 2016 31 March31 2017 March 31 2017 - - 1 - 576 576 672 082 248) (43 854 936) (68

(continued) 11 31 28 40 (43 (68 GROUP GROUP Reclassification Reclassification

- - 08 30 0 4 754) 106) 106) 250) 567) 885)

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 00 amount amount 1 (49 (56

822 (281 (257 (685 (800 1 31 March31 2017 31 March31 2016 IAS carrying 18 IAS carrying 18

Net impact on income statement Trade and otherTrade payables Contract liabilities liabilities Contract Provisions Revenue collection costs Revenue Revenue Revenue Deferred revenue Deferred revenue Trade and otherTrade receivables Contract liabilities liabilities Contract Revenue Revenue Net impact on income statement Revenue collection costs Revenue Trade and otherTrade receivables Deferred income Provisions Provisions Trade and otherTrade payables In terms of IAS the1 paragraph SABCdecided 41, to reclassify direct revenue collection costs from operating costs to be a direct charge against revenue. Direct revenue collection costs representnegotiated volume and early settlement discount costs with customers to increase their advertising spend on our media platforms. It is believed that this reclassification will provide businessbettermodel.presentedThe financialour userschange morerelevantof to statementsis presentation revised the and structure continue, to likely that comparability so is and classification and is more appropriate consideringis not impaired.our The reclassification changed will not an have impact on the reported profit figures and its impact on comparative financial statements is shown below. Impact of reclassification of revenue collection costs: Impact of changes in accounting policy:

4.4 Reclassification of revenue collection costs 4.3 Changes in accounting policies (continued) for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial - 611 611 112) 119) 614) 376 376 213) 759 794 530)

479 667 (17

(168 (355 (306 (789 Restated 1 2 - - - - - 421) 421) 144) 499 772 776) 499 144) 776)

15 (11 (11 (11 (15 (11 (15 2016 Adjustments 112 112 15 112) 119) 376 376 - 428 213) 570 570 470) 180 530)

679 495

(157 (355 (306 (789 Reported

- GROUP 311) 102 102 1 378 378 913) 617) 401) 061 135) 477) 500 757 888 2 484) 084) 836) 368) 644) 396) (17 696) 996)

76 amount amount 615 (19 (15 188 064 950

(673 (159 (136 (519 (671 (218 (706 (105 (243 Restated Previously (602 2 (3 (1 ------112) 514) 514) 197 197 3 421) 907 335 335 1 593) 256) 392) 093) 499) 646) 057) 849)

(693) (798) 7 9 5 (1 (6 (19 (11 (74 (74 (15 (49 (30 (63 (36 (79 2017

Adjustment Restated Adjustments - - - 428

378 378 767 767 5 831) 024) 372) 402 136) 500 - 768 442) 820) 254) 603) 304) 903) 388) 836) 368) 396) 585)

R’000 R’000 R’000 R’000 R’000 R’000 (continued) (4 76 139 169 609 (19 (15 934 (99

reported

768

(518 (135 (169 Reported (188 (657 (669 (637 (243 (539 2 1 (3 (1 Previously As previously (i) (i) (i) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (iii) (ii), (iii) (ii),

he amortisationhe adjust million.reversalimpairmentthe for to financialof was This impairmentR15 increased and was provision year by 2017 the for which had

Property, plant and equipment Programme, film and sports rights Impact on non-current assets Impact on current assets Deferred tax asset Statement of Financial Position Financial of Statement Current Employee benefits Deferred Government Grants Impact on non-current liabilities Marketing costs Depreciation and impairment of PPE Trade and OtherTrade Payables Tax Payable Tax Position Financial of Statement the on impact Total Professional consulting and fees Other operating costs Deferred income Impact on Deferred Liability Tax liabilities current Total Statement of Comprehensive Income Items included in total comprehensive income Other losses - loss on disposal of PPE Impact Opening on retained earnings Broadcast costs Signal distribution linking costs and compensation director and Employee comprehensiveTotal (loss)/income for the year Retained earnings restated* Amortisation of programme, film and sports rights Income tax expense The correction of prior period error note has been prepared restatementto is afteraddress the adjustmentsthe required for thequalified adoption of in IFRS note 15 4.4 audit opinion issued in Where 2017. applicable, the prior period error T

In 2017 accrualsIn 2017 were understated an by amount of R49.593 million. million). LeaveThe accrual understatement was also understated R30.256by (2016:R11.114 million) arose as a result of the Group changing million its remuneration (2016:R11.114 of leave accrual structure of R19.112 to a total guaranteed remuneration structure. The adjustments relate to operating expenditure incurred before the financial reporting date. Included in depreciationIn 2017 for the year was adjusted R9.907 by million. The adjustment arose as from the misstatement of the carrying amount of property, plant and equipment in prior financial periods. been accounted for in error financial in the 2017 period instead of thefinancial 2016 period.

i) Restatements in respect of amortisation of programme, film and sports rights ( ii) Restatement in respect of understatement of accruals iii) Restatement in respect of depreciation of property, plant and equipment ( ( 4.5 Restatements in respect of Prior Period Errors for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 106 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 107 376 376 794 611 611 119) 614)

166) 308 598) 530)

479

(17 679

(168 (306 (788 (353 Restated 1 2 - - - - 428 - - - 421) 144) 421) 499 499 772 776) 144) 776)

15 (11 (11 (11 (15 (11 (15 2016 Adjustments - - - 112 112 15 119) 376 376 570 570 470) 729 166) 598) 530)

495 690

(157 (306 Reported (353 - 711 711 061

102 102 1 913) 047 401)

498 2 135) 500 757 802) (788 484) 837) 430) 602) 084) 368) 644) 446) 396) (17 809)

COMPANY 74 amount amount 615 (19 (15 082 188 950

(159 (136 (519 (218 (105 (243 (704 Restated Previously (667 (598 (669 2 (3 (1 ------112) 514) 197 197 3 421) 514) 907 335 335 1 593) 256) 392) 093) 499) 057) 646) 849)

(693) (798) 7 9 5 (1 (6 (19 (11 (74 (74 (15 (49 (30 (63 (36 (79 2017 Adjustment Restated Adjustments - - - 428 711 711

767 767 5 047 - 840 372) 373) 136) 163) 500 - 768 442) 820) 344 603) 209) 837) 054) 388) 368) 396) 509) 585)

R’000 R’000 R’000 R’000 R’000 R’000 74 (continued) (4 169 609 155 (19 (15 934 (99

reported

840

768

(518 (135 (169 (631 Reported (188 (243 (668 (655 (535 1 2 (3 Previously (1 As previously (i) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (iii) (ii), (iii) (ii),

estatement in respect of depreciation of property, plant and equipment estatement in respect of understatement of accruals

Trade and OtherTrade Payables Statement of Financial Position Financial of Statement Deferred tax asset Impact on non-current liabilities Property, plant and equipment - restated Trade and other receivables other and Trade Impact on non-current assets Programme, film and sports rights Impact on current assets Deferred Government Grants Current Employee benefits Marketing costs Depreciation and impairment of PPE Deferred income Other operating costs Tax Payable Tax Impact on retained earnings impactTotal on the Statement of Financial Position Other losses - loss on disposal of PPE Professional consulting and fees Impact on Deferred Liability Tax currentTotal liabilities Statement of Comprehensive Income Items included in total comprehensive income Employee and director compensation director and Employee Income tax expense comprehensiveTotal (loss)/income for the year Retained earnings restated Amortisation of programme, film and sports rights Broadcast costs Impact Opening on retained earnings Signal distribution linking costs and The correction of priorperiod error note has been prepared to address the qualified audit opinionWhere applicable, issued in 2017. the prior period error restatement is after the adjustments required for the adoption of in IFRS note 15 4.3 In 2017 depreciationIn 2017 for the year was adjusted R9.907 by million. The adjustment arose as from the misstatement of thecarrying amount of property, plant and equipment in prior financial periods. In 2017 accrualsIn 2017 were understated an by amount of R49.593 million. million). LeaveThe accrual understatement was also understated R30.256by (2016:R11.114 million) arose as a result of the Group changing million its remuneration (2016:R11.114 of leave accrual structure of R19.112 to a total guaranteed remuneration structure. The adjustments relate to operating expenditure incurred before the financial reporting date. Included in The amortisation and impairment for financial the 2017 year was increased million.R15 by This was to adjust for the reversal of impairment provision which had been accounted for in error financial in the 2017 period instead of thefinancial 2016 period. R R

(i)Restatements in respect of amortisation of programme, film and sports rights (iii) (ii) 4.6 Restatements in respect of Prior Period Errors for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial - 188 33 178 178 161 476 476 476 476 102 102 102 102 102

776 032 794 009 341 341 931 931 619) 429 776) 898) 205) 808)

2016

720

368

(811) (532) Total Total R’000 8 6 2 7 50 (6 813) (1 663) (2 763) (2 (6 51 (1 (14 751) 615 615 615 479 582 582 (52 841) 325 (14 785) 422 (11 809) (11 (15 (61 997) (61 (16

(23

(159 912) 310 286 310 (167 294) (167 (1 710 674) 710 (1 (1 839 (1 556) ------914 914 1 914 914 1 038 1 038 1

98 914 98 914 3 61 361 (212 072) (212 (212 072) (212 311 311 715 715 812) 672 298 449 336 962) 098)

2017

628 283

(812) R’000 1 4 3 5 in-progress** in-progress** (5 Capital-work- 22 28 (21 (22 GROUP AND COMPANY - (2) (5) (14) 829 98 829 98 283 184 283 184 989 (43 578)

(436) (247) (16 472) (16 (87 332) 181 161 - 751 751 93 751 751 93 850 79 850 79 888 5

(217) (1 116) 2 367 (1 869) (13 561) (1 915) (523 493) (523 GROUP AND COMPANY Other assets* Vehicles - 756 291 756 291 336 248 839 7 336 248

283 (4 741) (1 715) (1 (2 452) (11 196) (11 (366) (67 487) (62 535) (36 902) (22 998) (38 589) (386) (671 088) equipment equipment Broadcasting (continued) - 852 538 852 538 330 22 969 483 969 483 (24)

24 802 11 38 223 139 69 185 37 445 12 1 479

(198) (463) (394) (829) 133 R’000 R’000 R’000 R’000 R’000 R’000 6 8 161 7 159 24 554 8 105 5 991 (43 578) 2 231 2 636 7 800 5 218 2 653 702 128 147 (13 418) 35 919 35 919 603 145 540 13 2 225 36 052 151 143 907 15 2 211 23 339 106 279 45 481 73 826 (13 850) (13 862) (74 (55 641) (22 941) 591 591 586 586 546 471 546 471 361271 295 883 34 705 249 625 1 487 955 538 310 361 271 295 883 34 705 249 625 1 591 852 538 756 291 751 93 829 98 914 1 (428 759) buildings buildings (443 407) 492) (745 (540 521) 136) (110 Land and 1 020 611 1 020 611 1 209 846 244 815 1 030 376 1 228 828 789 371 189 419 184 038 3 - -

Impairment loss for the year Depreciation charge for the year the Depreciation for charge Carrying amount March - restated at 31 2017 Cost losses depreciationAccumulated impairment and Accumulated depreciation and impairment losses depreciationAccumulated impairment and Cost Opening balance re-presented Disposals Transfers from/(to) computer software and other catego ries Transfers from property held for sale to property, plant and equipment For the year ended March 31 2017 Carrying amount at 1 April - restated 2016 Additions Accumulated depreciation and impairment losses depreciationAccumulated impairment and Transfers from/(to) computer software and other catego ries Additions Disposals Cost year the Depreciation for charge Carrying amount at March 31 2018 Cost Accumulated depreciation and impairment losses depreciationAccumulated impairment and Accumulated depreciation and impairment losses impairment and depreciation Accumulated Accumulated depreciation and impairment losses depreciationAccumulated impairment and Carrying amount At 31 MarchAt 31 2017 Cost For the year ended March 31 2018 Carrying amount at 1 April - restated 2017 Carryingamount At 31 MarAt 31 2018 Cost Decrease/(increase) in accumulated depreciation of other equipment other of depreciation accumulated in Decrease/(increase) Decrease/(increase) in accumulated depreciation of broadcasting equipment broadcasting of depreciation accumulated in Decrease/(increase) vehicles of depreciation accumulated in Decrease/(increase) Increase/(decrease) in cost of vehicles of cost in Increase/(decrease) impactTotal of errors on property plant and equipment Prior Period Restatement: This provides the detail breakdown to the priorperiod error adjustment to property, plant and equipment Property Plant and Equipment Cost - property, plant and equipment buildings and land cost of in Increase/(decrease) equipment broadcasting cost of in Increase/(decrease) Increase/(decrease) in cost of other equipment capital-work-in-progress of cost in Increase/(decrease) Accumulated depreciation - property, plant and equipment buildings and land of depreciation accumulated in Decrease/(increase) * Other assets comprises computers, office furniture and fittings, musical and security equipment. **Capital work-in-progress consists ofproperty, plant and equipment that hasbeen received orconstructed, but isnot yetavailable for use in the location and management. by intended manner

4.7 Restatements4.7 in respect of prior period errors for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 5 Property, plant and equipment

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 108 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 109 ------1 9 3 3 914 925 925 089 846 2017 18 14 52 57 50 22

110 110 888 888 270 201 268 393 617 180 390 693 6 R’000 8 247 4 173 2 416 4 535 4 832 3 874 3 517 1 341 4 386 9 966 68 98 63 18 816 14 221 23 429 11 537 11 39 740 39 740 estimate 2017 estimate Effect of change in 038 140 140 63 2018 18

23

R’000 R’000 695 393 496 463 623 904 380 919 763 727 389 172 692 - 1 811 1 811 3 446 2 482 1 386 1 347 3 607 1 030 1 103 1 010 1 702 3 272 3 754 1 812 4 173 2 099 3 517 3 794 2 895 3 615 4 451 51 51 13 183 38 630 10 433 35 283 26 545 115 188 237 690 184

2 1 R’000 GROUP AND COMPANY GROUP estimate 2018 estimate Effect of change in - 65 104 835 666 R’000 Depreciation after change in estimate in change - 341 253 950 356

2 2 R’000 (continued) change in estimate in change Depreciation before

ange in Accounting Estimate nformation in respect of land and buildings is contained in the fixed property register, which is available for inspection at the registered office of the KwaZulu Natal lifts upgrade Polokwane chiller coils replacement Henley media integration Henley multi purpose set and studio Other Henley fire detection system replacement - part fire claim Drama studio d3 upgrade Auckland Park M1 studio organ upgrade Mpumalanga drama studio and Edit facilities upgrade UPS dual supply solution (rp and tvc) Henley digital operations centre for DTT TVOB office block upgrade security upgrade - Hatfield Tshwane Thohoyandou studios upgrade Corporate storage area network Western Cape power supply (UPS) upgrade Western Henley studio 6 reinstatement - pre-implementation Henley graphics playout machine upgrade laboratory Upgrade of DTT TV news weather system upgrade Polokwane diesel tank replacement Henley broadcast automation inter Enterprise web security solution Nelspruit broadcast centre phase II Mpumalanga refurbishment of television studios Radio Digital production system Banking host-to-host solution Self deploying satellite terminals replacement Polokwane parking space upgrade Motsweding studio upgrade H/O lifts and escalators replacement SABC access control and cctv upgrade TVOB provinces studio upgrade - 24hr news awareness campaign DTT Lotus FM and Ukhozi FM outside broadcast vans Western Cape studio refurbishment Western TVOB installation and certification of aerial eq Western Cape Foyer upgrade to national key point requirements Cape Foyer upgrade to national key point Western KwaZulu Natal ablution facilities upgrade Included in capital work-in-progress are the following major projects: Included in capital work-in-progress are the following Limpopo security system upgrade Carrying amount of property, plant and equipment ceded as security Carrying amount of property, Motor Vehicles instalment sale ABSA Motor vehicles financed through Total Assets Class Assets Technical equipment Technical Vehicles Land and buildings and Land assets Other IAS 16 onIASProperty, 16 Plant and Equipment requires the review theof residual value and the useful life anassetof leastat eachat financial year end. The Group revised the estimated residual values of its assets with effect This from resulted 1 April in changes 2017. in the expected usage of certain items of property, plant and equipment. This was accounted for as a change in estimate in terms of the IAS 8. The net increase in asset useful lives had the effectof reducing the annual depreciation charge in the current and future periods as follows; I company. Ch Information on land and buildings

5 Property, plant and equipment (continued) for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 150 970 648 827 938 938 648 032 938 631

983) 889) (94) (94)

804

Total Total R’000 R’000 8 9 9 8 9 8 68 (9 (9 18 19 128 2018 2018 2017 R’000 R’000 GROUP AND COMPANY AND COMPANY GROUP Fair value at 31 March 2018 (continued)

fair values of investment properties are determined by a registered independent appraiser having an appropriate recognised professional qualification and

Direct operating expenses (including repairs and maintenance) arising from investment property that generated rental income during the period. At 31 March 2017 Cost Accumulated depreciation For the year ended 31 March 2018 April 2017 Carrying amount at 1 Depreciation charge for the year For the year ended 31 March 2017 April 2016 Carrying amount at 1 Depreciation charge for the year Carrying amount Carrying amount Assets Under Construction from Transfer Carrying amount at 31 March 2018 Carrying amount at 31 March 2017 At 31 March 2018 Cost Accumulated depreciation Fair value of investment properties Additional Disclosures recent experience in the location and category of the property being valued. These fair values are determined having regard to recent market transactions These fair values are determined having regard to recent market transactions for the property being valued. recent experience in the location and category of investment properties similar properties in the same location as the Group’s Ltd, in May 2018. Advisory Services (Pty) and Broll Valuation valuator, The fair values were determined by a professional as at 31 March 2018 are as follows investment properties and information about the hierarchy Details of the Group’s Fair value of investment properties The These fair valuations are considered level 3 valuations in terms of the fair value hierarchy These fair valuations are considered level 3 valuations characteristics In determining the appropriate classes of investment property the Company has considered the nature, and risks of its properties as well as the level of the fair value hierarchy within which the fair value measurements are categorised. Management have considered the real estate segment (land, residential, and office building) and the level of the fair value hierarchy. Information on investment properties vacant buildings in respect of investment and vacant land. Information properties is Investment properties comprise a commercial property leased to a third party, the Group contained in the register of fixed property which is available for inspection at the registered office of Rental income earned on investment property and direct operating expenses such as maintenance and repairs relating investment properties are disclosed under operating leases Note 37.

6 Investment properties for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 110 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 111 - 290

763 576 400 927 801 485 530 292 815 246 004 815 815 699 400 229) 196) 772) 647) 342) 229) 846) 189) 034) (45) (50)

3 (119) Total Total (271) R’000 R’000 1 2 2 (2 (2 (3 24 12 13 13 (26 (46 (52 estimate 116 116 163 189 163 430 459 163 (313 (295 Effect of change in 647) (52 2018 2017

R’000 R’000 GROUP AND COMPANY AND COMPANY GROUP (46 221

GROUP AND COMPANY GROUP 1 R’000 Amortisation after change in estimate 511

4 R’000 change in estimate Amortisation before (continued) assets with effect from 1 April 2017. This resulted in changes in the expected usage of certain computer software. This resulted in changes in the expected usage of certain computer April 2017. from 1 assets with effect

Software Assets Class Amortisation charge for the year as stated in the Note (above) Retirements Cost Retirements Amortisation charge for the year For the year ended 31 March 2017 April 2016 Carrying amount at 1 Additions in Transfers Cost Accumulated amortisation Amortisation and impairment charge for the year Cost Accumulated amortisation Impairment charge for the year Carrying amount at 31 March 2018 Accumulated amortisation brought onto the asset register Adjustments identified during clean-up project and Carrying amount at 31 March 2017 Accumulated amortisation and impairment losses Accumulated amortisation Accumulated amortisation and impairment losses For the year ended 31 March 2018 April 2017 Carrying amount at 1 Additions in Transfers Cost At 31 March 2018 Cost Carrying amount At 31 March 2017 Cost Carrying amount Accumulated amortisation Amortisation reconciliation to profit and loss This was accounted for as a change in estimate in terms of the IAS 8 in 2018. The net increase in asset useful lives had the effect of reducing the annual depre- The net increase in asset useful lives had the effect 8 in 2018. as a change in estimate in terms of the IAS This was accounted for ciation charge in the current and future periods as follows; Change in Accounting Estimate Change in estimated the revised Group The end. year financial each at least at asset an of life useful the and value residual the of review the requires Intangibles on 36 IAS residual values of its

(i) Computer software 7 Intangible assets for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

- - - 611 611 500 392 473 304 327 500 500 035 473 464 649) 084) 770) 029) 755) 547) 327) 535) 991)

960 774 039 671 950 714 270 914

(1 (1 (3 (4

- (131 - (2 - - (11 - - - (10 - 131 - 829 768 926 1 838 772 986 756 170 1 829 768 829 768 829 4 986 756 820 5 935) 180) 833) (61 834)

177 036 059 081

progress Total Work-in- (1 (1 - 1 - - 1 311) 949 471 935 351 353 180 406 640 380 949 471 949 471 273 471 640 380 498 426 299) 547) 647) 295)406) (45 324) 858) (45

273

rights and film 048 059 081 976 997 093 936 994

Originated programme GROUP AND COMPANY AND COMPANY GROUP

- 1 - - - (14 (49 - (10 - 49 - 1 198 39 556 683 34 557 2 901 198 39 198 39 989 1 557 2 891 2 471)266) (6 (1 542) (1 791) (1 334) (2

Rights Sports 519 292

Acquired (1 - (5 - - - - 911 911 596 524 109 739 83 921 290 227 233 522 pro- 524 109 524 109 944 996 290 227 255 1 618) (304) 508) (565 627) 921) 840) (404 420) (887 965)

(continued) rights R’000 R’000 R’000 R’000 R’000 (2 (1 81 and film gramme (81 185 147 300 145 215 147 147 593 145 727 (336 (215 (446 (581 Acquired

. level of benefits provideddepends on members’ length of service and their final salary in the final years leading up to retirement. Pension increases are

Carrying amount at 31 March 2017 Impairment charge for the year Cost adjustment relating to derecognised assets Transfers Amortisation charge for the year Additions Impairment charge for the year Derecognition Cost adjustment relating to derecognised assets Cost For the year ended 31 March 2017 April 2016 Carrying amount at 1 Transfers Carrying amount at 30 March 2018 Amortisation charge for the year Accumulated amortisation and impairment Additions For the year ended 31 March 2018 April 2017 Carrying amount at 1 Provision for programme, film and sports rights Carrying amount Accumulated amortisation and impairment losses At 31 March 2017 Cost Carrying amount Accumulated amortisation and impairment losses At 31 March 2018 Cost The SABC has an archive of original commissioned content that has been These fully assets amortised were and produced carried at at a nil cost value. of R2.4 billion The defined in the rules of the fund where increases will be the lesser of 100% of Headline inflation to the preceding 31 March; or the percentage increase that can be can that increase percentage the or March; 31 preceding the to inflation Headline of 100% of lesser the be will increases where fund the of rules the in defined Account Pensions may grant increases in excess of the above mentioned provided that the funding level in the Trustees The out of investmentearnings. afforded must be Trustees The Board of and the Group. Trustees The governance is a joint of the Fund responsibility of the Board of does not reduce to below 114%. rules of the Fund. composed of representatives of the Group and Fund members in accordance with regulations and the The Group’s Pension Fund is a funded defined benefit payable pension pension of level guaranteed fund, a of form that the in members is its all for benefits registeredfund pension provides andIt 2001. of governed39 No. Act, inAmendment termsSecond ofFunds Pension the Pension Funds Act, No. 24 of 1956 and valuation statutory last The years. three exceeding not intervals at valuator Fund’s the by upon reported and examined is fund the of position financial The life. for the of continuation the to subject position financial sound a in was Fund the that reported valuator the which in 2014, December 31 at performed was Fund the of current contribution rates, and that its assets exceeded its liabilities.

(ii) Programme, film and sports rights (ii) Programme, film and 8 Defined benefit asset 7 Intangible assets (continued) for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 112 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 113 % 913 412 970 672 049 511) 511)

952 377 390 952 367 814 049 901 396 126 885 6,89 8,39 6,89 420 396 367 672 126) 744) 744) 730) 276) 136) 730) 377)

10,04 099 345 333 286 93 93

367

952 151 238 286 333 952 (25 258 138 498 982 269 805 258 498

(228 (228 (982 (972 (972 (483 (342 (483 1 1 1 1 11 12 12 12 10 (10 % 309 349 377 872 663

644 9,18 7,55 6,05 049 835 044 097 663 788 6,05 835 791 672 044 872 723) 639) 561) 718) 631) 283) 644) 639) 844) 723) 283) 561) 791)

2018 2017

2018 2017 R’000 R’000 121 952 460

340

852

607 286 235 460 333 357 357 607 (84 (32 (84 113 449 101 280 101 280 852

(226 (534 (307 (449 (760 (534 (226 1 1 1 GROUP AND COMPANY GROUP GROUP AND COMPANY GROUP 10 12 (1 (1 11 12 12 (11 (continued)

Current service cost Expenses Interest income / (cost) Actuarial gain/ (loss) Expected return on plan assets Net periodic pension charge Actuarial (gain)/loss Closing defined benefit obligation follows: Changes in the fair value of plan assets are as Fair value of plan assets at the beginning of the year Employee contributions Employer contributions Benefit payments Fair value of plan assets at the end of the year as follows: The amounts recognised in profit or loss are determined Items recognised in a statement of other comprehensive income are determined as follows: Benefits paid Employee contributions Expected return on plan assets Interest income Interest cost Current service cost Changes in the present value of the defined benefit obligation are as follows: Changes in the present value of the defined benefit Opening defined benefit obligation Asset recognised in the statement of financial position Fair value of plan assets Actuarial gain/(loss) recognised in other comprehensive income Actuarial gain/(loss) recognised or loss Amounts recognised in profit Employer contributions Closing balance position are determined as follows: The amounts recognised in the statement of financial Present value of funded obligations Opening balance Discount rate at 31 March Future salary increases Future pension increases Inflation The principal actuarial assumptions at the reporting date (expressed as weighted averages) are as follows: The defined benefit pension plan is actuarially valued annuallyat year end usingthe Projected Unit Credit Method for the These financial valuations statements. and the results are as follows: are performed by actuaries

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 8 Defined benefit (continued)asset - % 2,5 663 872

717) 403) 366) 657 058 791) 401) 59,3 16,2 22,0

100,0 460

858 436 527 037 607 881

. (9 1% increase 1% increase (11 (12 2017 - 435 155 651 10 216) (9

627 340 151 931 049 726 872 12 852

854) (11

R’000 R’000 643 568

285 990 702 286 582

307

852 729

7 1 2 12 12 (11 791) 791) 791)

31 Dec 2016 Data Updated 2017 % R’000 607 607 607 420 75 390 11 970) (11

2017 Original/using (11 (11 (11 151 345 Base (6.05%) Base (9.18%)

GROUP AND COMPANY GROUP 2018 672 805 049 12 377) (11

309 52,6 459 17,9 887 4,1 123 3,5 885 21,9 663 100,0

R’000 333 286 952

1 554 230 728 460

510 436

12 (10 6 2 2 12 911) 068) 664)

537 014 041 872 663 791)

2018 2017 2016 2015 2014

R’000 R’000 R’000 R’000 R’000 (9 (11 (13 460 607 1% decrease 1% decrease 852

12 (11 no improvement Base (0.5% improvement) 1% improvement (continued) The risk that ineligible employees perceive themselves to be excluded unfairly from the post-retirement defined scheme. benefits and demand to be inclusion in the benefit The risk that the growth and proceeds from plan assets not match do of the obligation the nature and terms pay- required to fund shortfall, increasing overall costs. ments required, and therefore that the Group will be assets being exposed to negative movements, currency and therefore increases the overall The risk that offshore actuarial risk of the Group not being able to meet the liability. The risk that discount rates determined from the market is lower in the future and therefore a higher pension benefit obligation impacts the balance. The risk that future CPI inflation is higher than assumed and that it is sporadic and uncontrolled. Such increased uncertainties make the qualification of the inflation risk premium more difficult, leading to a greater uncertainty around the long-term value of the obligation The risk that the pensioners live longer than expected exposing the Group to pay the obligation for longer than the obligation. anticipated increasing the actual long-term cost of The risk that the eligibility criteria and benefit rules set out by the Group are not strictly adhered to, leading to a intended. greater and wider contractual obligation, and cost than 19R) IAS (specifically practice accounting accepted generally and regulations legislation, in changes that risk The may lead to an increase in the value of the liability and the methodology prescribed to value the benefit

Sensitivity of the Net Position to actual membership exits between 1 January 2018 and 31 March 2018 (R’000) Sensitivity of the Net Position to actual membership exits between 1 January 2018 and 31 March 2018 Defined Benefit Obligation Plan Assets Net Position Inflation (pension and salary increase rates) Discount rate Post-retirement mortality improvements Industrial and labour relation risks from dissatisfied non-eligible employees Mismatch risk Currency risk Market discount rate risk Inflation risk Longevity risk Risk on non-enforcement of eligibility cri- teria and rules Risk of future changes in legislation and regulation Surplus Plan assets Defined benefit obligation Domestic equity Plan assets comprise: Bonds Cash Property Foreign assets The defined benefit pension plan typically exposes the Group to actuarial risks such as: The defined benefit pension plan typically exposes Although the plan does not take into full account the distribution of the cash flows expected under the plan, itdoes provide an approximation of the sensitivity of the assumptions shown. This assumption was set in line with the last statutory valuation of has The SABC assumed that all the active members will have eligible spouses at retirement. the fund. Sensitivity Analysis Sensitivity Reasonable possible changes in one of the significant actuarial assumptions at the end of the reporting period, keeping all other assumptions constant, would on the defined benefit obligation as displayed below: have the following effect

8 Defined benefit (continued)asset for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 114 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 115 - * 117) 047 137 760 910 600 234 027 719 812 652 239 984 907 130 661 469)

207

(160) 301 570 8

9 9 3 4 (269) 1 761 1 761 24 77 37 11 31 27 43 5 5 (64 (38 840 815 880 - * COMPANY COMPANY 2018 2017 1 761 1 761 411 411 466 068 945 000 233 477 627 532) 652 568 220 444 245 776 465 512 953) COMPANY

208

2018 2017 362 608 R’000 R’000 8

2 9 9 2018 2017 (246) 90 28 12 16 79 10 99 R’000 R’000 5 5 (30 (82 834 152 127 681 712 100 GROUP AND COMPANY GROUP 100 GROUP AND COMPANY GROUP

117) 030 120 742 910 600 234 027 701

207

6 8 81 37 35 (64 822 815 880 2 GROUP GROUP 494 549 516 945 000 233 477 075 532)

208

2018 2017 2018 2017 R’000 R’000 R’000 R’000 8 90 32 (30 118 800 130 681 712 (continued) Travel agency Travel Nature of business (number) Issued share capital % Held R’000 R’000 Corporation Social Investment Corporation Social Investment

Other receivables Trade receivables - net Trade Shares at cost SABC Community Radio bank balances (iii) Short term deposits Less: allowance for doubtful debts Provision for obsolescence Merchandise and consumables SABC Foundation (Non-profit organisation) SABC Foundation (Non-profit SABC Airwave Travel (Proprietary) Limited * Travel Airwave SABC Government Grant restricted cash (ii) Trade receivables - gross Trade Shares at cost Fair value adjustment recognised in the statement of other comprehensive income Fair value adjustment recognised in the statement (a) Fair value hierarchy (refer to note 2.6.3) by hierarchy levels defined as follows: The available for sale assets listed below are analysed assets Level 1: Quoted prices in active markets for identical Level 1 Sanlam shares Listed - 143 257 (2017 : 143 257) Sanlam Limited April Balance on 1 Bank balances Non-current portion Programme, film and sports rights Software licences Other - commercial utilities Less: Current portion The Government Grant is related to the technology plan for the migration of the SABC from analogue to digital technology (refer to note 19). (i) The Government Grant is related to the technology plan for the migration of the SABC from analogue stations. (ii) The SABC Community Radio bank account relates to funds received from the DoC for Community Radio *Shares at cost of R1

*SABC Airwave Travel (Pty) Limited is in the process of being liquidated. The regulatory approvals are being finalised by the National Treasury National The regulatory approvals are being finalised by the Limited is in the process of being liquidated. (Pty) Travel Airwave *SABC 14 Cash and cash14 equivalents 13 Trade and other Trade receivables13 12 Consumables12 11 Prepayments11 10 Available-for-sale10 financial assets 9 Investments in subsidiaries for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 1 519 288 231

519 288 231) 257 133 390

2017 (124) R’000 8 8 6 592 5 885 27 20 798 14 913 Balance - (13 105 56 562 43 543 13

872) 56 872) 43 1

133 993 126 798

2018 2017 R’000 R’000 (11 (11 8 1 3 397 2 488 2017 20 10 17 401 14 913 Cash flows GROUP AND COMPANY GROUP

GROUP AND COMPANY AND COMPANY GROUP 624 11 850 6 774 4

647 416 231) lease

2018 R’000 44 31 (13 Balance Minimum payments Interest Principal 647 67 416 49 231 17

GROUP AND COMPANY AND COMPANY GROUP 347 44 105 31 242 13

2018 (continued) 994 6 521 3 473 3

lease R’000 R’000 R’000 R’000 R’000 R’000 50 34 16 Minimum payments Interest Principal Non-current portion

Total Later than one year but not later than five years Finance lease liabilities: Instalment sale liabilities: Less than one year 1 000 ordinary shares of R 1 each 1 000 ordinary shares of R Share capital - Authorised and issued Authorised Share capital - Permanent capital non-redeemable debt Closing balance at 31 March Current portion Non-current portion Opening balance at 1 April Opening balance at 1 Gain / (Loss) on revaluation of available-for-sale financial asset Gain / (Loss) on revaluation Perpetual debt Redeemable long-term portion ABSA instalment sale facility for vehicles payable over ABSA five years bearing interest at 9.00% per annum. The The contract was entered into on 20 October 2015. instalment sale is repayable in monthly payments of R1,1million with a final balloon payment due in July 2021. Lease liabilities Secured* Less: Current portion transferred to current liabilities * secured assets are reflected on note 5 The fair value adjustment reserve relates to fair value adjustments of available-for-sale financial assets until The fair value adjustment reserve relates to fair value the assets are derecognised. The permanent capital was previously not repayable. shareholder converted a long-term loan into non redeemable capital. On 1 February 1972, the Company’s on 7 November 2016 provided the SABC with an approval to redeem a portion of the perpetual debt amounting to R12.477 million over Treasury The National R2.488 of instalment final scheduled a and 2018/19 in redeemed be will million R3.397 redeemed, was million R6.592 2017/18, the of beginning the At years. three million in 2019/20 financial period. The instrument rate of 6.5% per annum on the outstanding capital amount. 66 of 1975, as amended, interest is payable, at a Act, No. the Exchequer In terms of represents a financial liability (in the form of perpetual debt) under IAS 32 - Financial Instruments: Presentation, because of the underlying obligation to deliver shareholder. Company’s cash in the form of future interest payments to the

18 Loans18 and borrowings 17 Government17 debt instrument 16 Fair value Fair adjustment16 reserve 15 Share15 capital for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 116 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 117 - - - - 851) 701) 749) 567 368 166 552 428) 939 465 655 449 569 530 501) 199) 564 725) 968 755) 920) 902) 836) 655) 317

(284) (438) 6 (1 (3 (2 40 66 426 873 52 271 10 324 259 431 (47 (16 (85 141

328 243

169 276 295 385 119 147 147 119 400 326 181 742 (259 (373 (253 (295 2 1 (1 (1 ------712 712 148 148 427 575 927 816) 784 692 503 501) 130) 478) 542 406 968 830) 852) 424) 622) 804) 989) 066) 968)

338

2018 2017 2018 2017 (412) (242) R’000 R’000 R’000 R’000 9 (1 (2 (2 61 41 48 145 128 125 243 (67 459 (23 314 203 153

783 306

543

328 567 124 545 172 690 (110 (239 (186 (238 (543 2 3 GROUP AND COMPANY AND COMPANY GROUP (2 (2 GROUP AND COMPANY AND COMPANY GROUP - (continued) Total deferred tax Total Total assets Total Total liabilities Total Non-current portion

Other payables and provisions Amounts accrued not received-TV licences future in deductible Donations Loss Tax Variable remuneration Variable Deferred income Straight-lining operating leases of PRMA Inventory Deferred tax assets Programme, film and sports rights Prior year - TV licences Doubtful licences allowance -TV debt Amounts accrued not received-TV licences - prior year Prepayments receivable lease Operating Section 24C The Grouphas notrecognised a deferred tax assetas managementconsiders that itis notprobable thatthe Group will profita to returns Group the that event the In tax asset. deferred the utilise to future near the in taxable income generate bility, it will have a deferred tax asset of R 783m available for future utilisation. Deferred tax not recognised is attributable to the following: liabilities tax Deferred Property, plant and equipment Programme, film and sports rights Available-for-sale financial assets Defined benefit asset Doubtful debt allowance - non TV licences Amounts received during the year for Channel Africa projects the year for Channel Amounts received during 25). note (see grant) the with acquired assets of depreciation and amortisation (including loss or profit in recognised Amount Balance on 1 April Balance on 1 the year for Education projects Amounts received during Balance on 31 March Less: Current portion Amounts received during the year: Amounts received during year for community radio stations Amount received during the Timing differences - other comprehensive income differences comprehensive Timing other - Deferred tax attributable to: Cumulative tax loss not recognised Timing differences - profit or loss deferred tax balance of Closing recognised In February 2005, the DoC and National Treasury committed an amount of R700 million to including the VAT Company over a period of five (R150 years, were contributed by the Departments during 2010/11 Additional amounts in from analogue to digital technical migration infrastructure. facilitate the Company’s order to funding for digital technical infra- The total amount of grant million and 2014/15 (R62 including VAT). million 2013/14 (R76 including VAT) million including VAT), structure received to date is R988 million since 2005.

20 Deferred tax

19 Deferred19 government grant Notes Statements Annual to the Financial for the year ended 31 March 2018 31 March year ended for the - - - - 910 910 375 375 749) 644 960 175 649 039 863 173 746 397 316 648 634 362 246 872) 939 655 563 939) 655)

7 8 346 63 11 58 35 36 53

055 273 055 428 989 174 218 121 168

169 295 899 (259 (221 (169 (295 1 1 1 156 - - - - - 512 512 172 172 616 616 910 910 169 476 162 807 070 238 512 821 627 519 847 869 235 526 720 142) 808 430 720) 808)

2018 2018 2017 2018 2017 R’000 R’000 R’000 R’000 6 6 6 83 10 62 37 383 096 164 943 055 517 112 126 207 218 175

103 370 144 (133 (103 (144 1 1 1 1 1 GROUP AND COMPANY AND COMPANY GROUP GROUP AND COMPANY (continued)

Prior year end adjustment-assessed loss Un-utilised prior periods from Available for utilisation in future years Over/under current year created (income)/loss balance includes an amount of R2.9 million, which arose as a result of an ex employee instituting a claim against the SABC for post employment medical employment subsidy namely; staff who retired between 1979 and 31 March 1990 with past service greater than 5 years, receive a 100% medical aid subsidy employment subsidy namely; staff ‑

Current year loss Total Statement of Financial Position obligations for employee benefits Total Statement of Profit and Loss (See also note 27): Post-employment medical benefits Leave pay Long service awards Non-current statement of financial position obligations for: Non-current statement of financial position obligations Post-employment medical benefits* Leave pay Long service awards Current statement of financial position obligations for: Employee incentive Leave pay Long service award Timing differencesTiming recognised- not comprehensive income other Deferred Tax loss not recognised not loss Tax Deferred Deferred on prior Tax year loss Deferred tax on prior year loss not recognised Deferred tax recognised in the statement of other comprehensive income Timing differences not recognised - profit or loss Deferred tax March on 31 Opening tax loss Deferred tax liability on 1 April Deferred tax recognised in profit and loss Post-employment medical benefits from SABC; staff who retired between 1979 and 31 March 1990 with past service of less than 5 years receives a 75% medical aid subsidy from SABC; staff who staff retired between 1979 and 31 March 1990 with past service of less than 5 years receives a 75% medical aid subsidy from SABC; who staff from SABC; Pension Fund; there are a all in receipt of a post-employment Not subsidy are retired on SABC April 1990 and thereafter receives a 60% subsidy. retired from 1 select group of Non-Pensioner Retirees whom qualified The method for of post-employment accounting, subsidies. significant assumptions and the frequency of of the Healthcare cost inflation of 7,68%. the valuation are similar to those used for the defined benefit pension scheme as set out with the addition benefits. The Group provides a varying subsidy towards medical aid contributions payable by employees who elect to remain on the medical aid scheme after retirement. The valuation assumes a varying subsidy of 60%; 75% and This subsidy is unfunded and is provided for based on actuarial valuations performed annually. levels of There are different The plan is only open to employees who joined SABC before 1 June 2002. 100% consistent with the 2016 valuation scenario. post *This The deferred tax asset in relation to TV licence gross income (section 1 of the Income Act No. 58 Tax of 1962) and the deferred tax liability in relation to the application of section of the Income 11(j) Act No. 58 Tax of 1962 ) is based on the best estimate March as at 31 and is 2018 subject to South African Revenue Service approval. The Group has not recognised a deferred tax asset in respect of assessed loss as management considers that it is no longer probable that the Group will generate taxable income to utilise the deferred tax asset. In the event that the Group returns to profitability, utilisation. future for it will have a deferred tax asset of R 546 million All movements in the temporary differences described above, have been recognised in profit or loss and other comprehensive income, as follows:

21 Employee21 benefits obligation 20 Deferred tax (continued) for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 118 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 119 g 451) 215) 332) 766)

2014

ratin 241 129

283 629 173 912 283 629 266 173 088 (927 181) 646) (968

646)

2 year age (1 (1 8,77% 1% increase1% increase1% 10,35% 30,00% 20 18 20 016 (45 989 123 103 103 989 (105 1 (105 812) 169) 169) 169)

2015

074 096 096 096

520 169 519 914 605 520 039 914 605 169 173 043)

2018 2017 9,35% 7,68% (1 (1 (1 R’000 R’000 30,00% 15 96 15 96 41 41 Base (7.68%) Base (9.35%) 096 096 (47 112 154 989

1 1 GROUP AND COMPANY AND COMPANY GROUP 088) (1 2016

Base year (1 age rating) 016

(1 GROUP AND COMPANY 311) 173) 749) 610)

2017

240 052

(965 (989 (1 (1

1% decrease1% 1% decrease1% no age rating no age rating 169) 2018

R’000 R’000 R’000 R’000 R’000 096

(1 (continued)

Post employment medical benefits obligation mortality Post-retirement improvements Discount rate rate Discount Sensitivity Analysis Sensitivity Healthcare cost inflation Current service cost Interest cost Subsidy payments Closing defined benefit obligation as follows: The amount recognised in profit or loss is determined Current service cost Interest cost income is determined as follows: The amount recognised in other comprehensive Actuarial gain/(loss) on post employment medical benefits date (expressed as weighted averages) are as follows: The principal actuarial assumptions at the reporting Discount rate at 31 March Actuarial gain/loss included Total, in employee compensation and benefit expenses, including items recognised in other comprehensive income Medical inflation rate per annum Take-up rate by retired employees rate by retired Take-up Changes in the present value of the defined benefit obligation are as follows: value of the defined benefit obligation are as Changes in the present obligation Opening defined benefit Present value of unfunded obligations Present value of unfunded benefits Post-employment medical The above sensitivity analysis is based on a change in one of the significant actuarial assumptions at the end of the reporting date, keeping all other assumptions other keeping all reporting the date, of significant theend actuarial the ofassumptions at one inchange a onsensitivity basedabove isanalysis The constant.Whencalculating sensitivitythe employeethebenefits of obligation significantthe to actuarial assumptions projectedthe unit credit method beenhas applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. serviceLong awards The Group provides long service awards to its employees on 5 year continuous service intervals; it starts from 5 years of service to 45 years of service. These awards are unfunded and are provided for based on actuarial valuations performed annually. These awards consists of a cash portion as well as a gift portion, where continuous service reach 30 years and more; 5 days of long service leave is also granted and for each subsequent 5 year interval. determine To the present value of the obligation the Projected Unit Credit Method is used. The amount recognised in the Statement of Financial Position is determined as follows: in the Statement of Financial Position is determined The amount recognised

21 Employee 21 benefits obligation(continued)

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial % % 802

055) 862) 874 874 983) 132 132 132 012) 012) 758 758 027 143) 907 907 039

890

8,2% 7,1% 8,13% 9,79% 6 6 4 4 (3 (3 (9 67 11 66 66 117 738 117 704 210 184 152 338 223 652 (63 (71 (70 1% increase 1% increase

% % 650

874) 674 674 674 674 103 103 103 758 766 810) 766 810) 059 8 143) 869 COMPANY COMPANY

8,9% 7,4% 2018 2018 2017 2018 2017 7,35% 8,90% R’000 R’000 6 6 4 4 7 13 158 (3 (3 (5 117 68 68 10 66

109 174 415 924 191 345 388 048 (67 1 GROUP AND COMPANY GROUP GROUP AND COMPANY

617

758) 890

674) 674)

117 738 117 706 210 316 152 338 225 335 (66 GROUP AND COMPANY GROUP (68 (68 Base (CPI + 2%) Base (CPI + 2%) GROUP 746

674) 2018 2017 2016 2015

2018 2017 2018 2017 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 13 158 117

109 174 416 055 191 310 388 048 (68 1 333) 075)

(74 (65 1% decrease 1% decrease (continued)

Discount rate Sensitivity Analysis Sensitivity Salary Inflation Programme, film and sports rights related trade accruals Accruals Other payables* - foreign Long service award obligation Trade payables Trade - local Changes in the present value of the defined benefit obligation are as follows: Opening defined benefit obligation Present value of unfunded obligations serviceLong awards Discount rate at 31 March Rate of salary increase Current service cost Current service cost Interest cost Interest cost Interest Closing defined benefit obligation benefit defined Closing includedemployeecompensation in Total, benefitexpenses, and including recogniseditems other comprehensive in income Benefit payments Benefit loss Actuarial (gain)/ The amount recognised in profit or loss is determined as follows: The amount recognised in other comprehensive income is determined as follows: Actuarial gain Rate of salary increase The principal actuarial assumptions in respect of long service awards at the reporting date (expressed as weightedaverages)principalreportingThe as theserviceactuarial (expressed longdateat assumptionsrespectawards of in are as follows: Discount March rate at 31 *included in other payables is VAT and payroll related payables. *included in other payables is VAT The above sensitivity analysis are based on a change in one of the significant actuarial assumptions at the end of the reporting date, showing how the defined date. by changes in the relevant actuarial assumption at the valuation benefit obligation would have been affected Employee long-term leave pay the after months twelve within wholly payable not benefits for provide arrangements leave employee and programmes incentive employee Group’s the of Certain same the on measured are thereof respect in liabilities the and benefits’ employee long-term ‘other as classified therefore are arrangements These date. reporting incentives employee of respect in liability The assumptions. simplified certain with plans, benefit post-employment its of respect in obligations Group’s the as basis future performance. also requires certain assumptions regarding the Group’s as weighted averages) are as follows: The principal actuarial assumptions in respect of long-term leave pay at the reporting date (expressed The amount recognised in the Statement of Financial Position is determined as follows:

22 Trade and22 other Trade payables 21 Employee 21 benefits(continued) for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 120 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 121 - 119 119 412 412 814 814 814 814 531 531 396 396 246 224 631 631 100 531 531 867 246 501 224 862 100 867 862 090 368 090

541)

572 924 754

2017 2017

106)

4 4 78 15 15 23 97 23 97 710 632 710 931 282 282 536

016 383

148 383 915 148

915 253

4 4 4 1 Restated* 6 6 6 Restated* (1 - - - 175 175 757 757 478 478 876 570 757 757 103 103 478 952 876 597 570 395 624 772 952 597 395 624 830 454

615 440 130 163 591 281

780) 2018 2018

106) (5 2018 2017

6 6 R’000 R’000 R’000 R’000 R’000 R’000 92 27 92 69 27 711 378 780 780 391 391 94 578 (5

149 941 149

941 392 186

392

436

4 3 4 4 6 6 6 GROUP AND COMPANY GROUP (2 GROUP AND COMPANY - - - 830 98 830 9

125 125 - -

127 964 163

28 216 187 Legal Claims* Employee benefits** Other*** Total (continued) include provisions for royalties of R38.7million. A dispute exist with a supplier over contravention of software licence agreements and the supplier A include provisions for royalties of R38.7million. , a group of employees had been suspended from their duties for alleged fraudulent actions relating to medical aid claims. The process to suspend duties for alleged fraudulent actions relating to medical aid claims. , a group of employees had been suspended from their

claims against the SABC were instituted by various individuals/institutions and a provision has been raised in that regard. Certain of these matters are

Advertising (non-monetary exchanges) exchanges Trade Business enterprise facilities and revenue Balance at 31 March 2018 Revenue from external customers Advertising fees* License revenue exploitation rights Programme mobile platforms including Other revenue Business enterprise facilities revenue and Sponsorships Income and programme sponsorships received in advance Income and programme sponsorships Sponsorships fees* License licenceTotal fees billed during the year Total advertisingTotal revenue Less fees that do not meet the recognition criteria Programme rights exploitation revenue exploitation rights Programme Provisions reversed during the year Provisions reversed during Provisions raised during the year Provisions utilised during the year Provisions utilised during Channel carriageChannel revenue fees

Mobile and other revenue Mobile other and carriageChannel revenue fees Revenue from contracts with customers Revenue recognised grants from government Revenue RevenueTotal Balance at 1 April 2017 Balance at 1 *At each*At annual renewal date, a licence holder is billed their prescribed annual licence fee in terms of legislation. Due to the high levels of fee payment evasion licenceby holders, the Group assesses the probability of receiving the licence fees on an individual account basis. Where the timing and amount of receipt cannot be reliably measured and receipt is not considered probable, the revenue is not recognised. All the revenue earned the by Group derives from the transfer of services at a point in time in the following major service lines:  to settle out of court. Management estimates the potential outcome of these legal claims based on the most before the courts and others the Group is attempting of basis for 3.1 note to Refer finalised. been has resolution legal ultimate that time such until advisors legal external and internal from hand on evidence objective raised. estimates and assumptions in determining any provision Legal them was subsequently deemed procedurally unfair and the provision relates to compensation that may be due to them. The cost is expected to be incurred in the them was subsequently compensation that may be due to them. deemed procedurally unfair and the provision relates to of discounting is immaterial. The provision has not been discounted as the effect next 12 months. During the year  is seeking damages of R53 million. The remaining other provisions The remaining expenditures that is expected to be incurred in the totalling R5,7 million relate to operating is seeking damages of R53 million. next 12 months.  other provisions *

** *** 25 Revenue 23 Deferred income 25.1 Disaggregation25.1 of revenue from contracts with customers 24 Provisions

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 510 510 851 851 767 767 907 944 909

82 58

96 936 688 2017

248) 0 936 4 3 2017

511 511

110 110

175 175 730 039 430 649 484 2017

012) 126)

054) 646) R’000 2017

25 68 15 28 25 68 76 76 72 48 (43 11 (3 36 791 581 188 5 6 2 121

228

483

* Restated 2017 Restated* (982 (105 (607 2 2 3 11 31 43 * Restated - 1 478 478 13 243 34 577 3 305 6 884 8

2018 COMPANY 318 318 189 189 847 340 340

511 511

774 774 519 519 781 781 847 520 035 993 639 869 644 2018

810)

2018

R’000 R’000 16 23 65 26 R’000 R’000 41 10 83 (3 84 671 099 664 847 936 936 082 082 396 396 458 458 112

228 571

449 936) 089) 2018 2018

3 3 2 R’000 R’000 R’000 15 65 28 68 25 (3 GROUP AND COMPANY (68 GROUP AND COMPANY 510 510 20 851 851 2 767 767 14 907 944 47 909 9

2017 6 3 1 8 13 34 Contract liabilities Contract liabilities - GROUP 744 744 478 478 577 806 884

2018 2 9 R’000 R’000 R’000 R’000 14 48

21 (continued)

Actuarial (gain)/ loss- Post-retirement medicalActuarial liability aid (gain)/ Actuarial(gain)/ loss - Long service awards Actuarial loss (gain)/ - Pension fund defined benefit Expected return on plan assets Event sponsorshipsEvent and other Management fees Management : Sponsorship revenue received Sponsorship advance: in revenue No revenue was recognised from performance obligations satisfied in previous periods. Post-employment medical benefits medical Post-employment Items recognised in other comprehensive income: Total amountsTotal recognised in profit or loss Rental income Travel commission Travel Insurance pay-outs Contract liability - TV licences received in advance Contract liability - Sponsorship revenue received in advance Contract liability - advertising contracts in advance Revenue recognised that was included in the contract liability balance at the beginning of the period: Advertising: revenue : Licence fees Long-service Awards Defined benefit pension fund recognised in profit or loss Cost of Employment Leave pay Total contractTotal liabilities The following table below shows how much of the revenue recognised inthe current period relates to carried-forward contract liabilities and how much relates to performance obligations that were satisfied in the prioryear. Revenue recognised included contract in was that Revenue period liability beginning of at Increase due to cash received, excluding amounts recognised as revenue during the period Included in these amounts are directors’ emoluments which are disclosed in more detail in note 40. Contract liability relates to payments received in advance of performance under a contract. Contract liabilities are recognised as revenue when) the as (or SABC fulfils performance obligations under the contract All consideration from contracts with customers is included in the amounts of contract liabilities presented above. Contract liabilities are all expected to recognised in revenue months in 12 succeeding the financialyear end. The group applies the practical expedient in paragraph of and IFRS does 15 121 not disclose information about remaining performance obligations that have original expected durations of one year or less The group applies the practical expedient in paragraph of and IFRS C5 does ( c) 15 not disclose the amount of the transaction price allocated to the remaining performance obligations and when revenue is expected to be recognised as revenue for in 2016 initial application. IFRS 15

27 Employee and directors compensation and benefitexpense 25.2 Contract liabilities for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 26 Other income (i) Significant change in contract assets and liabilities (ii) Revenue recognised in relation to contract liabilities

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 122 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 123 - 311 311 116 116 187 267 578 178 178 152 152 061 294 446

108

992 139 749 494 255

878) 780) 466) 269) 147)

2017

390

(632) 6 3 2 42 24 47 15 21 16 89 (7 (1 (5 (5 26 40 39 37 105 (13 65 130 323 277 665 116 116 323

011 011 163 740 430 310

(23) 106) 946) 352) 808) 046) 152) 180)

2018

423

COMPANY 9 2 49 119 17 003 17 73 442 17 19 32 24 (1 (5 (1 13 46 45 23 22 (11 (32 (24 (33 - 311 311 187 267 578 177 177 153 153 061 543 366 696

108

062

209 819 494 325 878) 780) 466) 269) 147)

2017

390

(632) 6 3 2 24 15 21 47 16 42 89 (7 (1 (5 (5 27 40 39 37 105 (13 65 GROUP 115 130 323 277 665 323

067

219 796 430 366

106) 946) 352) 808) 046) 152) 180) (23) 2018

423

9 2 R’000 R’000 R’000 R’000 89 947 65 624 33 509 32 17 19 24 (1 (5 (1 13 46 45 23 22 (11 (32 (24 (33 (continued) Shareholder - permanent capital Independent third parties Finance leases Finance expenses Net financing gain Finance income Managerial Vehicles Equipment Interest income Technical Buildings

Interest paid Foreign exchange gain/ (loss) Consumables - (reversal) / write down to net realisable value Consumables - (reversal) / write down to net realisable Legal claim provision raised / (reversed) Dividend received Consulting fees Audit feesAudit Net foreign exchange gain on monetary items Interest received from banking institutions Loss on sale of property, plant and equipment (refer to note 35) Loss on sale of property, Other expenses include the following charges: Operating lease charges

31 Net financing31 gain 30 Other losses 29 Other expenses 28 Professional and consulting fees

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial ------9 458 810 600 551 581 711)

904 777 655 810 940 894 930 939 761) 387) 076) 761) 878) 436) 246) 820) 888) (36)

844

89 29 40 89 221 178 (74 033 (53 (23 (53 (74 139 295 295 169 606 169 169

(333 (333 (251 (312 (1 ------616 720 808 674 899 899 527 720 808 067 008 583 720) 899) 616) 008) 527) 946) 899) 808) 720) 950) 527) 599) 626) 425) 439)

COMPANY COMPANY 575

575

(144) 6 1 (6 (6 50 10 10 (11 (10 (19 (10 126 103 144 103 144 159 159 (103 (126 (169 (144 (103 (606 (149 (569 (159 ------9 600

458 821 777 810 810 655 551 581 940 894 930 939 378) 761) 246) 878) 076) 346) 246) 405) 161) 950) (36)

844

40 89 89 29 178 039 (76 (53 (23 (53 (76 221 295 295 139 169 606 169 169

(333 (251 (314 (335 (1 ------GROUP GROUP 11 11 11 615 720 899 809 685 899 274 720 809 008 067 583 720) 899) 527) 616) 889) 899) 720) 066) 665) 809) 274) 599) 626) 425) 439)

2018 2017 2018 2017

575 575

(144) R’000 R’000 R’000 R’000 1 (6 11 10 50 10 (11 (11 (10 (10 (14 103 126 144 103 144 159 159 (103 (126 (174 (103 (144 (621 (149 (569 (159 (continued)

Effective tax expense Effective Deferred tax asset not recognised - prior year assessed loss Deferred tax asset not recognised - prior year assessed Prior year-assessed loss tax rate change CGT Deferred tax asset not recognised - prior year deferred tax Deferred tax asset not recognised - prior year deferred Over (Under) -prior year income Deferred tax asset not recognised - other comprehensive Deferred tax asset not recognised - assessed loss Over (Under) derecognised Tax Prior year adjustment-deferred Prior year adjustment-tax expense differences Deferred tax asset not recognised - other temporary Over (Under) -prior year Non-taxable income Non-deductible expenses Deferred tax changes due to restated balances Prior year adjustment - other Prior year adjustment Income tax using the company tax rate Prior year adjustment Over (Under) derecognised Current year-temporary difference Prior year adjustment - assessed loss loss Deferred tax asset not recognised - prior year assessed AVFS Rate change in Income tax recognised in profit or loss Income tax recognised Current tax expense Assessed loss current year differences Deferred tax asset not recognised - other temporary income Deferred tax asset not recognised - other comprehensive Reconciliation of effective tax expense: Profit/(loss) before income tax Deferred tax asset not recognised - assessed loss Pension fund Comprehensive income/(loss) before income tax Post-employment medical benefits Income tax using the company tax rate Available-for-sale financial assets financial Available-for-sale Deferred tax not recognised -OCI Reduction in tax rate Deferred tax derecognised -OCI Effective tax expense Effective Long service awards Prior year adjustment from 66% to 80% relating to current period rate (CGT-rate) Tax Change in from 66% to 80% relating to prior periods rate (CGT-rate) Tax Change in on available for sale assets Rate differences Income tax recognised in other comprehensive income: Income tax recognised in other comprehensive ***The Capital Gains Tax (CGT) inclusion rate changed from 66.6% to 80% effective from the 2017 year of assessment. from 66.6% to 80% effective (CGT) inclusion rate changed Tax ***The Capital Gains

32 Income32 tax expense for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 124 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 125 - - 345 94 711) 425 104 688 108 187 846 213 147 450 913 649 229 084 907 598 043 368) 134) 364) 831) 179) 392) 255) 501) 888) 136) 761) 837)

509

061)

(619) (390) 2 1 6 17 (2 (4 18 25 24 91 13 98 52 (3 950 (74 069 960 033 (83 (22 (37 (19 277 891 159

353

(740 (253 (333 1 (1 (1 (1 11 097 849 221 55 94 66 113 113

668 818 999 106 589 200 755 647 029 990 246 965 160 396) 328) 089) 305) 335) 304) 585) 310) 830) 950) 180) 837) 958) (61) (23) COMPANY

(423) 53 39 (3 11 11 32 94 46 61 12 96 76 412 276 714 774 (11 (15 (95 (56 (33 (22 (19 (13 109 158

167

(497 (186 (606 1 1 (1 - - 112 112 439 94

911)

425 688 187 846 920 147 345 450 913 229 649 084 907 043 134) 596) 184) 472) 392) 378) 061) 819) 501) 950) 136) 276) 836)

509

108

(619) (390) 2 1 6 (2 (3 (4 18 25 91 24 13 17 98 52 355 281 950 079 960 039 (82 (20 (76 (39 (19 880 159

(742 (253 (335 1 (1 (1 (1 GROUP 11 507 121 55 94 66

129 668 818 707 106 180 589 200 755 647 029 990 975 246 171 396) 089) 806) 335) 597) 304) 366) 830) 676) 958) 180) 836) (61) (23)

585)

2018 2017 2018 2017

(423) 52 55 (3 11 11 32 94 46 61 12 96 76 262 714 774 (11 (15 (95 (56 (22 (13 (19 411 109 158

167

(33 (511 (186 (621 1 1 (1 7 5 7 7 7 6 11 21 22 13 23 12 31 31 13 29 31 28 31 19 Note R’000 R’000 R’000 R’000 . (continued) Decrease/(Increase) in non-current operating leases Increase /(Decrease)in trade and other payables Increase/(Decrease) in deferred income (Decrease)/Increase in employee benefits obligation Decrease/(Increase) in contract liabilities (Decrease)/Increase in defined benefit asset (Increase)/Decrease in prepayments Decrease/(Increase) in trade and other receivables Provisions raised Increase / (increase) in inventories Income tax raised/reversed Interest paid Increase/(decrease) of provision on trade receivables plant and equipment Loss on disposal of property, Dividends received Impairment (reversed)/raised on trade receivables Depreciation of Investment Property (Reversal)/provision for consumables obsolescence Interest received Depreciation and impairment of property, plant and equipment of property, Depreciation and impairment Amount of revenue recognised in profit or loss for government grant. Amount of revenue recognised Amortisation of computer software Amortisation of computer Impairment/Reversal of impairment of programme, film and sports rights Impairment/Reversal of impairment Amortisation and impairment of programme, film and sports rights Amortisation and impairment

Cash generated from operations Net acquisitions of programme, film and sports rights Operating cash outflow before changes in working capital, employee benefits Operating cash outflow before changes in working Operating cash inflow before payment for acquisitionsports rights of programme, film and Adjustments for: Proceeds Loss for the year Tax refund Tax - prior year tax adjustment Taxation plant and equipment Loss on sale of property, Net book value of disposals and asset verification adjustment Balance at 1 April Balance at 1 Balance at 31 March Reduction in tax liability The closing tax liability is based on the best estimate as at 31 March 2018 and it is (j) allowances. subject to SARS approval of the ruling on section 11 estimate as at 31 March 2018 and The closing tax liability is management’s management believes that the amount will be further reduced (subject to SARS approval) by the allowances not claimed in prior year in respect of: Programmes and fixed assets amounting to R 171m and R 84m respectively The Group has exposure to credit risk, liquidity risk and market risk, that consists of of interest rate risk and currency risk that arise out of the normal course objectives, policies and processes for measuring and exposure to each of the above risks, the Group’s information about the Group’s This note presents business. management of capital. managing risk, and the Group’s policies and procedures and the reviews of the management monitors compliance with the Group’s Audit Committee is tasked with overseeing how The Group both regular and ad-hoc reviews of risk management controls and Audit undertakes monitoring of these risks. Internal adequacy of the internal audit function’s Audit Committee. procedures, the results of which are reported to the Group Reconciliation of profit/(loss) for the year to cash generated from/(utilised by) operations: for the year to cash generated from/(utilised by) Reconciliation of profit/(loss)

35 Proceeds from disposal of property, plant and equipment 34 Income taxes refund 36 Financial instruments Overview36.1 33 Cash generated fromoperations for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial - 117 652 459 047 760 859 470 788

117 117 117

880 450 330 845 820 474 644 783 627 624 421 806 772 440

639 905 9 3 1 1 2 3 77 64 64 13 20 13 43 46 16 927 840 170 473 644 Impaired

1 2 3 - 783 64 525 18 234 26

411 411 220 220 699 068 068

117 117 711) 255 004 134 867 404 627 624 421 221 532 126 532 500 500 COMPANY

144 639

2018 2017 R’000 R’000 1 1 3 2 12 64 52 12 67 13 10 30 24 30 834 973 127 181 181 (57

2017 R’000 1 1 GROUP AND COMPANY GROUP Past due but not impaired 832 20 776 24 18 826 16 230 4

652 030 424 742

34 69 9 770 666 81 822 913 Performing 532 596 026 910

GROUP 220 220 494 230 516 516

2018 2017 2018 2017 R’000 R’000 R’000 R’000 12 Impaired Fully 800 943 130 GROUP AND COMPANY GROUP - 22 404 30 223 4 181 3

2018 R’000 Past due but not impaired (continued) 169 67 404 13 288 477 54

Fully 67 23 687 596 Performing

rade and other receivables (note 13) rade receivables: Direct clients Available-for-sale financial assets (note 10) Available-for-sale T Agencies Government Cash and cash equivalents (note 14) MCC Security Age analysis of past due but not impaired is the following: Past due 0 to 30 days Past due 31 to 90 days 91 to 120 days 121 days to 1 year Over 1 year Age analysis of the impaired trade receivables is the following: Past due 0 to 30 days 91 to 120 days 121 days and older Over 1 year as not recoverable (impaired) Amounts written off Past due 31 to 90 days Movements on the impairment of trade receivables are as follows: April Opening balance - 1 Allowance (reversed) / raised during the year The Group holds collateral as security. The nature and fair value of this collateral is as follows: Coface

T Credit risk is the risk of financial loss to the Group if a customer or counter-party to a from customers and investment securities. receivables principally from the Group’s financial instrument fails to meet its contractual obligations, and arises receivables and other Trade The Group has established customer is analysed Policy under which each new a Credit base to reduce credit concentration. The group has a large customer individually for creditworthiness before credit is extended. worthiness Credit reviews are also performed on existing debtors with long-overdue accounts. In limits monitored to ensure they do not exceed their credit addition, current debtors are Allowance for impairment or insurance receivables for which the Group hold security, Trade the debt is irrecoverable. are impaired when there is objective evidence that receivables Trade are not considered to be impaired. any other types of collateral and largely comprise of amounts receivable from advertising agencies. trade receivables are due for maturity within 45 days The majority of the Group’s Cash and cash equivalents These investments are only placed The group is exposed to a certain amount of concentrations its cash deposits of credit risk relating to investments. and current Policy is designed to limit exposure to any one institution and Treasury The with local major banking groups and stable institutions that have high credit ratings. financial instruments are with counter parties with sound credit ratings. involving derivative Transactions to invest excess cash in low-risk investment accounts. Guarantees behalf on million R0.016 of guarantee a issued has Company The subsidiaries. owned wholly its of behalf on guarantees financial provide to is policy Group’s The related Technology amounts of R26.630 million for were travel agency licence. Other guarantees issued by the Company the IATA for Ltd (Pty) Travel Airwave of housing scheme. projects and R0.249 million relating to the employee risk to be as follows: The Group considers its maximum exposure to credit

36.2 Credit risk

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 126 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 127 ------021 050 971 429 458 971

------439 26 560 22 879 3 439 19 560 15 879 3

years Thereafter years Thereafter 1 year to 3 1 year to 3 ------622 49 732 45 622 49 732 45 year year

6 months to 1 6 months to 1 - 2017 2018 037 9 042 8 738 887 315 338 824 453 9 042 8 174 055 310 158 824

Up to 6 Up to 6 months months 064

GROUP AND COMPANY GROUP - 2 - 119 119 575 390 890 890 3 624 9 738 117 315 210 338 152 824 83 966 823 798 890 890 3 647 9 174 109 055 416 310 191 158 13 824 83

cash flow cash flow Contractual Contractual (continued) 526 660 390 27 519 67 738 117 909 210 256 152 824 83 537 878 798 20 994 44 174 109 055 416 310 191 158 13 048 83

890 890 890

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 amount 27 56 20 amount 50 13 189 117 Carrying Carrying 790 259 124 203

109 416 191 388 1

Government debt instrument Loan obtained with government guarantee Loans and borrowings Programme, film and sports rights related trade and other payables Accruals Other payables* Trade payables - Foreign Trade Non-derivative financial liabilities payables - Local Trade Government debt instrument Loans and borrowings Loan obtained with government guarantee Programme, film and sports rights related trade and other payables Accruals Other payables* Trade payables - Foreign Trade Non-derivative financial liabilities payables - Local Trade * excludes statutory accruals and payables Market risk is the probable changes in market prices, such as foreign exchange rates and interest rates, that will affect the Group’s income or the value of its the Group’s Market risk is the probable changes in market prices, such foreign exchange as rates and interest rates, that will affect of statement the of performance the enhance and protect to is framework management risk market Group’s the of objective The instruments. financial of holdings the funding of capital projects. financial position and profit or loss by managing and controlling market risk exposures and to optimise Currency risk Foreign currency risk arises primarily from international implementation programming rights that are procured in foreign currency and the procurement, and maintenance of the broadcasting infrastructure. Foreign currency risk arises commercial when future transactions and recognised assets and liabilities are denom- contracts to manage foreign currency risk arising from future commercial The Group uses forward currency. functional inated in a currency that is not the entity’s each foreign currency. transactions and recognised assets and liabilities and is responsible for managing the net position in The Group’s Risk Management policy is to economically hedge between 35% to 75% of firm commitments for aThe rollingThe Group only covers known commitments and does not speculate in foreign currency. applied hedge accounting for these forward currency contracts. 12 month period. The Group has not minimum percentage cover for less than one year is 35%. require- the alleviated This suppliers. foreign some with renegotiated were terms payment Group, the by experienced constraints flow cash significant the to Due the month of July 2017, foreign payments were made at the prevailing spot rate on the date of payment. thus, from ment to hedge as per the policy, Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due or can only doapproach soto at managing excessiveliquidity highis to costs.ensure, Theas Group’s far as possible, that it always has sufficient cash, marketable securities and credit facilities to meet its liabilities reputation. Where internal funding when due, under both normal and stressed conditions, incurring without unacceptable losses or risking damage to the Group’s of funding are explored. is constrained, external sources The Group manages its cash flow requirements by forecasting for both the short term ( three months) and the long term (one to 3 years) cash requirements of The Group has borrowing facilities amounting to R95 million R130 million) (2017: which include short-term banking facilities as well as asset-based the Group. finance facilities. The following analysis details the contractual maturity of the Group’s non-derivative financial liabilities. The analysis is based on the undiscountedof financial cash liabilities based flows on the earliest date on which the Group can be required to settle The the analysis liability. includes both interest and principal cash flows.

36.4 Market risk 36 Financial instruments (continued) 36.3 Liquidity risk

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 89 048 760 288 390 995 390

158) 158) 158) ‘000 ‘000

4 14,30 13,42 (890) (890) (890) Rand Rand 77 43 27 27 121 (13 (13 (13 484 068 416 798 316 798 398

COMPANY COMPANY COMPANY 11,90 11,90 1 1 14,67 2017 2018 31 20 20 158 127 106) 106) 106) (66) (66) (66) ‘000 ‘000

(1 (1 (1 US Dollar US Dollar GROUP AND COMPANY GROUP 89 030 742 288 390 048 390

5 15,38 14,03 81 43 27 27 125 GROUP AND COMPANY GROUP Average Rate Average Reporting date spot rate GROUP GROUP GROUP 932 516 416 798 435 316 798

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 1 1 15,21 13,02 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 31 20 20 161 130

(continued)

Cash and cash equivalents Variable rate instruments Variable Instalment sale liabilities USD Fixed rate instruments Government debt instrument rate instruments Variable EUR 1 USD 1 Trade payables Trade Gross financial position exposure Net financial position exposure Net financial position exposure Trade payables Trade exposure Gross financial position Profit or (loss) Carrying amount Profit/loss 100 bp increase Fair value sensitivity analysis for fixed rate instruments The Group does not account for any fixed rates financial assets and liabilities at fair value through profit Therefore or loss. a change in interest rates at reporting profit or loss. date would not affect Cash flow sensitivity analysis for variable rate instruments An increase of 100 basis points in interest rates at the reporting date would have increased profit or decreased loss by This the analysis amounts shown below. assumes that all other variables, in particular foreign currency rates, remain constant. The analysis was performed on the same basis for the 2016/17 financial on equity. reporting period. Due to the nature of the transactions, there is no effect A decrease of 100 basis points in interest rates at the reporting date would have had the equal but opposite effect on the above amounts, on the basis that all 100 basis points in interest rates at the reporting date would have had the equal but opposite effect decrease of A other variables remain constant. A 10% weakening of the Rand against the above currency at 31 March would have had the equal but opposite effect on the above currencies to the amounts 10% weakening of the Rand against the above currency at 31 March would have had the equal opposite but effect A constant. shown above, on the basis that all other variables remain Interest rate risk The income Group’s and operating cash flows are substantially dependent on changes in market interest The rates. interest rates of finance leases to which the expose the Group to fair value interest rate risk. Group is a lessee are fixed at inception of the lease or variable over the term of the lease, and therefore interest bearing financial instruments was: At reporting date the interest rate profile of the Group’s Sensitivity analysis anal- This below. shown amounts the by loss profit/decreased increased have would March 31 at currency following the against Rand the of strengthening 10% A reporting financial 2016/17 the for basis same the on performed is analysis This constant. remain rates, interest particular in variables, other all that assumes ysis on equity. is no effect period. Due to the nature of the transactions, there The Group’s exposure to foreign currency risk based on notional amounts was as follows: currency risk based on notional amounts was exposure to foreign The Group’s The following significant exchange rates applied during the year: The following significant exchange rates applied during

36 Financial instruments (continued) (continued) 36.4 risk Market

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 128 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 129 112 112 - 047 - 030 - 030 - 047 - 519) - 519) - 782)437) - - 782)617) - - 918) - 738) - 691) -

2017 2017 394 39 760 - - 742 - - 652 - 412 840 - 652 - 394 822 - 412 (31

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Fair value Fair value 113 113 87 742 81 898 91 760 77 652 9 047 459 - 87 840 652 9 030 424 - 91 822 519)437) - - (56 (795 519)617) - - (56 (706 390)346) - (19 - (871 390)526) - (19 - (782

9 9 48 amount amount 77 81 (56 (56 (27 (27 122 822 913 840 927 Carrying Carrying (795 (706 (879 (790 GROUP COMPANY The different valuation levels are identified as follows by IFRS 13: valuation levels The different 411 411 411 - - 650 - 221 - 494 494 - - 632 - 647)745) - - 647) - 798) 190)696) - - 782) -

117 117 053 887 183

(continued) 2018 2018 736 (382 068 288 834 - - 516 736 800 - - 220 - - 288 1 220 - -

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Fair value Fair value 411 411 - 834 650 - 1 613 - 1 068 699 127 139 516 230 130 142 312 139 220 12 220 12 494 - 800 745) - (1 647) - (44 647)190) - (44 - (1 390) - (19 798) - 960) (20 142

R’000 R000 R’000 000 R’ R’000 R000 R’000 000 R’ R’000 R000 R’000 000 R’ R’000 R000 R’000 000 R’ amount amount 12 12 117 117 045 019 183 (44 (44 (20 (27

834

127 130 973 943

800

Carrying Carrying (239 1 1 2 (1 (1 Trade and other payables* Trade Trade and other payables* Trade Loans and borrowings Loans and borrowings financial assets Total Total financial assets Total Available-for-sale financial assets financial Available-for-sale Available-for-sale financial assets Available-for-sale Government debt instrument Government debt instrument Net financial liabilities Trade and other receivables Trade Trade and other receivables Trade

Cash and cash equivalents Cash and cash equivalents financial liabilities Total Total financial liabilities Total Financial assets Available-for-sale Financial assets Available-for-sale Financial liabilities Financial liabilities measured at amortised costs Financial liabilities Financial liabilities measured at amortised costs Loans and receivables Net financial liabilities Loans and receivables Fair value of financial instruments Fair value of financial instruments method. financial instruments carried at fair value, by valuation The table below analyses Level 1 - Quoted prices (unadjusted) in active ,markets for identical assets or liabilities. in active ,markets for identical assets or Level 1 - Quoted prices (unadjusted) either directly (that is, as prices) or indirectly is, (that Level 2 - Inputs other than quoted prices included within level 1 that observable for the asset or liability, derived from prices) data (that is, unobservable inputs) or liability that are not based on observable market Level 3 - Inputs for the asset would be received to sell Fair value is the price that an asset liability or paid to transfer a in an orderly transaction in the principal measurement market at the date instruments: to estimate the fair value of each class of financial The following methods and assumptions are used under current market conditions. without and maturities, similar with instruments financial for rates interest market-related to reference by determined is instruments financial these of value fair The deducting any transaction costs. (Level 2) 2 (Level instruments. financial these of maturity term short relative the to due value fair approximates liabilities and assets financial these of amount carrying The The fair values of trade and other receivables and trade and other payables are determined with reference to their carrying amounts as the impact of discounting is not significant. *excludes statutory accruals and payables

(i) Loans and receivables, perpetual debt instrument and loans and borrowings (i) Loans and receivables, (ii) Trade and other receivables, cash and cash equivalents and trade and other payables Trade (ii) 36 Financial instruments (continued) 36 Financial instruments

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial - 633 325 958 000 274 000 000 000 540 983 463 637 920 557

726) 520)

1 3 4 95 93 35 13 43 57 118 146 130 195 139 (27 (56 - - 911 911 833 609 442 000 954 000 000 928 983 090 006 096

046) 072)

2018 2017 2018 2017 1 3 1 R’000 R’000 R’000 R’000 11 95 95 51 20 31 121 103 131 164 (27 (43 GROUP AND COMPANY GROUP GROUP AND COMPANY GROUP

(continued) Unutilised Provided Utilised FNB/ Rand Merchant Bank Nedbank Provided Absa Corporate and Merchant Bank Total Unutilised Utilised Unutilised

Between one and five years Guarantees Less than one year General short-term banking facilities (available for future operating activities) General short-term banking facilities (available for Asset finance (available to settle capital commitments) Between one and five years Leases as lessee as follows: Non-cancel-able operating lease rentals are payable Less than one year During the year ended 31 March 2018, R8.9 million was recognised as rental income in the Statement of Profit and Loss (2017: R8.9 million) and R128,000 in (2017: R3.9 million). respect of repairs and maintenance was recognised as an expense in the Statement of Profit and Loss The Group has various lease agreements for equipment and premises. Some of these lease agreements contain renewal and/or purchase options. None of the lease agreements include contingent rentals. During the year ended 31 March 2018, R17.3 million was recognised as an expense in the Statement of Profit and Loss in respect of operating leasesR15.3 million). (2017: Leases as lessor The future minimum lease receipts under non-cancel-able leases are as follows: The Group leases out certain of its property under operating leases. Capital management There are no changes expected in the The Group does not hold any other form of share capital. share capital is 100% owned by the Government. The Group’s The Group manages its Capital is not subject The Group to any externally imposed capital requirements. year. approach to capital management during the Group’s minimum specified the is reserve liquidity minimum The reserve. liquidity minimum a maintaining by concern going a as continue to able is entity the that ensure to currently set at R700 million. This level is net debt levels for the next 12 months. facilities or cash holdings over projected acceptable surplus of uncommitted Borrowing facilities facilities. asset-based finance facilities as well as guarantee facilities include general short-term banking facilities, The unutilised borrowing Airwave the Group has guarantees against the employee Included in normal guarantees, housing scheme to the value of R0.249 million, and guarantees for with banks totalling R26.6 million. travel agency licence and other guarantees IATA Travel’s

37 Operating leases 36 Financial instruments (continued) 36 Financial instruments

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 130 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 131 - 844 352 844 525 778 068 016 948 217 196 979 577 518 941 996 786 782 996 786 782

253

Total Total 67 111 594 012 702 849 702 849

293

146 146 1 1 1 1 1 578 352 930 578 352 930 - - - - -

2018 2017 R’000 R’000 844 231 61 1 844 61 525 20 525 20 068 19 068 87 217 19 217 313 577 1 577 98

594 720 594 720 126 126 GROUP AND COMPANY GROUP 1 1 1 1 . - - - - - 198 425 61 219 198 61 725 20 725 20 603 19 603 19 615 19 615 19 284 284 98 98

5 5 1 1 1 8 Foreign commitments ------121 18 948 948 1 979 979 1 941 941 8

253 253 1

Local R’000 USD’000 R’000 R’000 67 67 375 012 012

293 293

1 1 1 Commitments (continued) Total commitments Total Foreign - US Dollar Local Local Foreign - US Dollar Local Foreign - US Dollar Local Foreign - US Dollar Local currency Foreign - US Dollar Total purchase commitments Total

From Year ending 31 March 2023 Year From From Year ending 31 March 2022 Year From Year ending 31 March 2021 Year Year ending 31 March 2020 Year Year ending 31 March 2019 Year Capital commitments - relating to property plant and equipment contracted for Capital commitments - relating rights Programme, film and sports Foreign exchange contracts to be financed as follows: The capital commitment is Internally generated funds Internally generated funds Unless the outflow of economic resources is considered remote, contingent liabilities are disclosed when there is a possible obligation that arises from past events events past from arises that obligation possible a is there when disclosed are liabilities contingent remote, considered is resources economic of outflow the Unless entity. the of control the within wholly not events future uncertain more or one of non-occurrence or occurrence the by only confirmed be will existence whose and embodying resources of outflow an that probable not is it because recognised not is but events past from arises that obligation present a be may it cases some In measured with sufficient reliability economic benefits will be required to settle the obligation or the amount of the obligation cannot be The disclosed contingent liabilities all arise from claims lodged by third parties against the Group and Company where judgement by a competent court of law is The claims active as at 31 claims. has a high probability of success in defending these legal pending, and management has obtained legal advise that the SABC March 2018 and giving rise to contingent liabilities are detailed as follows: Commitments for programme, film The and local sports commitments rights andwill the be currency funded exposure internally. on foreign programme, film and sports rights at 31 March 2018 is as follows:

39 Contingencies 38 Commitments

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 97 76 017 000 300 519 000 000 488 560 427 722 037 994 80 224

447

000 2018

5 1 1 1 R’000 76 25 38 845 185 600 150

760 1 Possible Losses for the Group Possible Losses for the Tribunal for alleged price fixing; Tribunal (continued)

The Group has been advised by its legal counsel that it is only possible, but not probable, that the action will succeed. Accordingly, no provision Accordingly, probable, that the action will succeed. by its legal counsel that it is only possible, but not The Group has been advised in the financial statements; for any liability has been made The internal cli- defending the matter. is The SABC fees. for alleged non-payment of repeat the SABC third party has issued summons against A approached The SABC is currently in prison. as he on the Plaintiff cannot serve any paper The SABC was paid. ent has advised that the Plaintiff the court did not concede to our dismissal application; the court with an application to dismiss the matter but revives it; time that the plaintiff succeeding and the matter is in abeyance until such There is little chance of plaintiff After receiving an upfront payment 042.44 the of R61 The Claimant was chosen as the preferred supplier of corporate clothing to the SABC. The matter was set down refused to pay the balance and claimant then sued the SABC. supplier failed to deliver in terms of the contract. SABC for the 05 October 2010 to have Plaintiff’s claim dismissed for failure to deliver Affidavit. Thethe plaintiffDiscovery requested that we remove the matter from the roll and they will tender costs; date set and no provision is necessary; The matter was then postponed with no resumption claim against the SABC is based on a commissioning agreement entered into on 25 March 2010 for the production of a television plaintiff’s A avers that an invoice for the amount of R224 063.58 was sent to the SABC on 1 June The plaintiff programme called Music Lounge Series 3. 2012 which the SABC allegedly acknowledged and agreed to pay, by no later than 30 July 2012. The in processing the claim ignored the fact that the claim was ceded The SABC SABC third party. production company who then ceded its claim to the was contracted to a specified and paid the specified party instead of the plaintiff. In an attempt to resolve the matter the SABC’s attorneys in terms of High Court Rules 23 attorneys have have received a return of non-service The SABC and the SABC’s relied on. and 30(1) have requested the Cession agreement claim to be dismissed; the plaintiff’s advised that they will be setting the matter down for The Government by the Public Investment Employee Pension Fund (GEPF) represented Corporation (PIC) instituted a claim of approximately R550 million including interest against the SABC for the cancellation of a purported lease agreement for certain assets previously leased by - be charged, the possible loss is R760m. Legal proceed the maximum interest that can Accruing for Corporation. Bophuthatswana Broadcasting of the parties 2013 but had to be removed from the roll as some matter was set down for hearing from 15 to 26 July ings are on-going and the of set down timeously; did not receive the notice An ex-employ of the former TBVC state Radio which was then absorbed by the SABC alleges TBVC state Radio which was then absorbed by the SABC that he was promised to be re- employed by the An ex-employ of the former The SABC SABC which never transpired. He claims damages as a result. He has gone to every forum to claim such damages from the SABC. state TBVC The ex-employee of been served on him. Application to declare the ex-employee a vexatious litigant which has has launched an application; radio has not filed answering papers to the SABC’s believe our prospects of is suing for commission payment on the basis that he secured a sponsorship for the METRO FM awards. We Plaintiff succeeding any attorney to act against the SABC. in the matter are good after one of the directors of claimant advised that they did not instruct further correspondence from our attorney; await We instructed our attorney to pursue the dismissal of the matter. We have good prospects of for R76 250. We is suing the SABC to poor performance. Plaintiff freelance contract was terminated due The plaintiffs The matter is still proceeding and we await a court date; success. A freelancer is claimingincome which he could have is claiming a for loss of damages for the unlawful termination of his freelance contract. He A August 22 trial on for down set is matter The matter. the defend intention to notice of filed its SABC The his contract. of duration the for earned 2018; SABC received summons from the Plaintiff who avers that his contract of employment was terminated unfairly. The Plaintiff was appointed as The Plaintiff who avers that his contract of employment was terminated unfairly. received summons from the Plaintiff SABC an Independent contractor in March The 2009. contravened Plaintiff the contract by disclosing confidential information. The matter was partly attorney to make an application a trial for date The SABC has instructed it’s heard on 23, 24 and 26 October 2012 in the Free State High Court. has not set the matter down again. as the plaintiff This matter results from a security tender awarded at a total cost of R185 519 425.61. On 15 December 2017, the SABC was served with a be set aside and that the applicant be Notice of Motion from a losing bidder requesting among others that the appointment of winning bidder The applicant Should the applicant succeed in this litigation, the SABC will be liable for the full contract amount. substituted as the bid winner. might also institute a claim for damages to the same value; The SABC and other Media Houses have being referred to the Competition have paid him revealed that his claims are unfounded because we for alleged breach of contract. Our research is suing the SABC The plaintiff the matter is proceeding; all monies due to him and there are contracts to support that. Parties are still exchanging pleadings and The matter has been referred to arbitration and applicant is claiming payment The SABC terminated an agreement with a certain broadcaster. will be SABC has resolved to approach the Courts to review and set aside the agreement. The SABC for loss of income and damages. Attorneys to prepare the application; consulting with our amounting for work done and damages thereof for termination of agreement wherein the Plaintiff claims damages from the SABC The Plaintiff was to develop and design competency based job profiles which would be conducted Notice of Intention to Defend; The SABC filed its November 2015 to 30 March 2016. over a period of 4 (four) months commencing on 1 certain disclose to failed plaintiff the that finding audit an to due terminated was agreement freelance whose freelancer former a is Plaintiff The interests from which the plaintiff’s company benefited from doing business with the SABC. The plaintiff now claims payment of the balance of the freelance contract amounting and damages; Six cases against the SABC relating to termination of fixed term contracts with freelances who argue to be permanent employees based on length of period of engagement with the SABC. contingent liabilities Total There are 25 cases of alleged unfair dismissal laid against the SABC by former employees. These cases are at various stages of conciliation There are 25 cases of alleged unfair dismissal laid against the SABC by former employees. or hearing at the courts; and

(ii) (iii) (iv) (i) (vi) (vii) (viii) (v) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) (xvii) (xvi) 39 Contingencies (continued) 39 Contingencies

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 132 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 133 - 666 595 214 679 212 065 853

567 567

6 468 balance 132 134 866 731 126 211 126 211 Amounts subsidiary owed (to)/by Outstanding 2017 - 5 2017 - 328 337 127 464 715 13 19 809 657

501 501 328 2018 2017

R’000 R’000 6 8 2 91 241 25 800 179 872 781 416 154 009 253 253 Amount of GROUP AND COMPANY GROUP Amount of transactions transactions 3 - 264) 780) COMPANY

636 636

balance Amounts subsidiary owed (to)/by Outstanding 2018 2018 - 316 211) 930)375) (14 (13

697 697 316 (234) 481

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 (5 (27 (33 185 185 Amount of Amount of transactions transactions (continued)

Loan to Airwave Travel (Proprietary) Limited Travel Airwave Loan to Receivables from SABC Foundation NPC Receivables from/ (payables to) SABC Airwave Travel (Proprietary) Limited trading as Travel Airwave Receivables from/ (payables to) SABC Airwave Travel Government grants recognised in revenue Deferred government grant Aggregate Sales to other government related entities not listed above Aggregate Sales to other government related entities Aggregate of all transactions that are collectively significant Government Communication and Information Services Aggregate Purchases from other government related entities Included in Revenue are the following: Aggregate of all transactions that are collectively significant Sentech (SOC) Limited Related party relationships exists between the Company and its wholly-owned subsidiaries, Airwave Travel and SABC Foundation NPC. The Company has en- The NPC. Foundation and SABC Travel Airwave subsidiaries, the Company and its wholly-owned Related party relationships exists between entered into are in the normal course of Transactions for bookings and accommodation for business trips. Travel Airwave tered into a number of transactions with due and owing are settled accordingly. Amounts length basis. business and on an arm’s Goods and services are sold to related parties on an arm’s length basis at market related prices. length basis at market related arm’s Goods and services are sold to related parties on an Goods and Services are purchases from related parties on an arm’s length basis at market related prices. Goods and Services are purchases from related parties on an arm’s Goods and services are purchased from related parties on an arms length basis at market related prices. Goods and services are purchased from related parties on an arms length basis at market related prices. The Group is 100% controlled by its Shareholder, the Government, represented by the DoC. the Government, represented by its Shareholder, The Group is 100% controlled amended. Act, No. 1 of 1999 as 2 public entity in terms of the Public Finance Management The Group is a Schedule The related parties of the Group consist mainly of government departments, State-Owned Companies other (SOC), public entities in the national sphere of govern- The related parties of the Company ment and key management personnel of the Company or its shareholder and close family members these of related parties. on their website www. Treasury was provided by National public entities in the national sphere of government The list of also include its subsidiaries (see note 9). treasury.gov.za. The Group with regards to government related entities is required to disclose the nature and amount of each or qualitative indication of their extent. but not individually significant, a quantitative transactions that are collectively individually significant transaction and for other

(ii) Significant transactions with government related entities (ii) Significant transactions with government related (iii) Grants and sponsorships 40 Related parties 40 Related (i) Transactions with subsidiaries Transactions (i)

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial - 672 672 390 986) 857)

207 208 333 333 balance balance Closing

2 months Maroleni BC Outstanding 1 February 2018 31 December 2022 - (16 - (18 698) - (17 194) 2017 885 529 1 414 1 780 27

4 Years and 10 Months Years 4 208 1 15 R’000 R’000 2 018 2 017 accrued Interest 269 285 Amount of transactions - - - - (1) (1) 391 391 (10 159) (28 872 872 798

assets balance GROUP AND COMPANY AND COMPANY GROUP Outstanding Applied to net 2018 143 044 187 852 852 352 20 853) 873) 726)

5 1 R’000 R’000 R’000 R’000 285 280 Applied to GROUP AND COMPANY GROUP Amount of expenditure transactions - 10 367 271 324 595 (61 (20 (82

Funds 10 received (continued) 116)116) 52 62

R’000 R’000 R’000 R’000 R’000 R’000 (9 (9 balance (28 857) 54 885 (43 014) (18 698) (10 159) 54 885 (53 381) Opening

SABC Medical aid scheme For the year ended 31 March 2017 Channel Africa Community Radio Project Employee benefit payments Employee benefit payments SABC Pension fund For the year ended 31 March 2018 Channel Africa Community Radio Project Shareholder - permanent capital Shareholder - permanent Service contract - start date - end date Service period Remaining Bank balances of Community Radio Project The Group has been delegated with the responsibility by the DoC to administer the Channel Africa Project (the Community Radio project previously administered Africa Project (the administer the Channel to the responsibility delegated with has been by the DoC Group The The balance of R0.208 million is still re- Agency), are sub-divisions which of the DoC. by the Group has been transferred to Media Development and Diversity million) is included in trade and Africa of R17 million (2017: R11 The net amount of administered projects for Channel payable to Department of Communication. other payables and or trade and other receivables.

(v) (iv) Interest payments (vi) Administered projects (vi) (vii) Administered funds (vii) (viii) Service contracts for permanent executive directors 40 Related parties (continued) 40 Related parties

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 134 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 135 59 91 71 117 117 511 511 507 936 655 180 439 957 123 065 394 560 338 988 533 149 507 285 265 030 039 343

496 182 851

643 172 148

739 844

689

737

279 193 230 294

928 447

Total Total 1 1 2 2 1 1 1 1 1 1 2 2 2 1 3 2 1 1 1 1 1 45 ------8 525

to pension Employer’s Employer’s contribution fund, medical aid and other~

th 45 20 13 63 21 39 19 91 71 225 4 108 280 086 335 265 030 039 343

261 36 197 112 700 351 145 85 326 125 350 130 547 167 343 163 459 275 375 131 342 138 379 191 663 320 267 80 252 115 528 315 158 94

652 131 225 95

620 327 461 123 279 193 230 294

13

928 447

1 1 1 1 1 1 Cheque, and other Expenses allowances ------commissions Bonuses and ------412 345 18 885 560 345 413 338 223 577 495 600 728 560

Basic R’000 R’000 R’000 R’000 R’000 salary* 22 2 200 5 116 4 542 4 413 1 38 1 89 6 666 1 90 8 700 8 933 7 617 6 585 8 824 5 391 7 477 2 437 8 750 4 417 8 1 1 1 4 701 5 5 5 5 5 1 5 11 12 1 12 1 10 797 12 1 12 1 12 1 10 1 12 Service months period in (continued) Remuneration paid to the person in any capacity Remuneration paid to the Group Executive Group Executive Group Executive Group Executive Group Executive Group Executive Acting Group Executive Acting Group Executive Acting Group Executive Group Executive Acting Group Executive Acting Group Executive Acting Group Executive Group Executive Acting Group Executive Acting Group Executive Acting Group Executive Group Executive Acting Group Executive Acting Group Executive Company Secretary Group Executive Chief Operating Officer Group Executive (Acting Chief Operating Officer) Acting Group Chief Financial Officer Acting Group Chief Financial Officer Group Chief Financial Officer (Acting Group Chief Executive Officer) Group Executive (Acting Group Chief Executive Officer) Group Chief Financial Officer (Acting Group Chief Executive Officer) Board Member Board Member Board Member Board Member (Interim Board Member) 12 Board Member (Interim Board Member) 12 Independent Interim Board Advisor Independent Interim Board Board Member (Interim Board Member) 12 Board Member Member) Board Member (Interim Board Chairper- son) Service as

Total remuneration Total Lephaka M Magopeni PP Zikode TP Geldenhuys TV Wotshela NN Wotshela Thekiso J Sefolo L Mosweu KE Ndlovu M Mulaudzi T Williams RV Jiyane HM Yunus Z Yunus Kganyago MK Moilwa MP Ramakgolo LE Mathebula SJ Motsweni SM Maseko N Makatees KJ Senior Management Bayi LV Maroleni BC Tugwana BL Tugwana Dlamini TS Raphela MA Philiso NP Ralitabo TE Executive directors Aguma JR Markovitz Michael Grant Rambau Victor Mohuba Dinkwanyane Kgalema Board Member Phalane Jack Howard Tsedu Mathatha Godfrey Tsedu Matisonn Jonathan Malele Jabu Adolf Naidoo Krish Kalidass Rachel Potgieter-Gqubule Fébé Charlene Board Deputy Chairperson (Interim Board Makhathini Bongumusa Emmanuel Chairperson Board Members of the Accounting Authority Accounting Members of the Non-executive directors Kweyama Khanyisile Thandiwe Year ended 31 March 2018 ended 31 Year ~ - including contributions on employer variable pension contribution of office. * - included in basic salary and expenses and other allowances is compensation paid in respect of loss (ix) Directors’ and key management personnel compensation and key (ix) Directors’

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 40 Related parties (continued) 40 Related parties 1 - - - - - 51 706 706 078 261 669 554 659 728 662 699 920 516 039 441 815 992 453 067 841 358 291 171

362 778

427 330 520 305 943 316 Total Total 4 2 1 2 3 1 1 1 4 4 1 2 2 2 4 1 2 2 7 4 15 ------82 59 18 32 88 68 716 716 79

155 347 222 212 216 160 148 273 317 170 333 154 518 273 279 186 406 to pension Employer’s Employer’s contribution fund, medical aid and other~

th - - - - - 41 833 833 4 001 436

268 358 606 185 397 476 406 760 523 578 547 174 538 283 755 946 693 636

827 557

427 13 330 520 305 943 316 1 1 Cheque, and other Expenses allowances ------

- -

- -

- -

------509 509 15 509

11 commissions Bonuses and

------649 649 11 728 716 310 040 040 040 640 000 188 577 803 727 892 733 567 252 548 329

748

845

156

407

363

Basic

1 1

3 1 1

1 4 4 1

1 3

1

3

2 1

1

6 2 R’000 R’000 R’000 R’000 R’000 salary* 47 3 8 8 8 1 5 6 6 2 6 5 6 3 9 4 1 1 1 1 7 8 8 7 9 7 3 12 12 12 12 12 12 12 12 Service months period in (continued) Remuneration paid to the person in any capacity Remuneration paid to the Group Executive Company Secretary Group Executive Group Executive Group Executive Group Executive Group Executive Group Executive Group Executive Group Executive Group Executive Acting Group Executive Group Executive Acting Group Executive Group Executive Acting Group Executive Group Executive Group Executive Group Executive (Chief Operating Officer 6 months, Group Executive for 6 months) Acting Group Chief Executive Officer Group Executive (Acting Chief Operating Officer 6 months, Group Executive for 6 months) Acting Group Chief Financial Officer Group Chief Executive Officer Group Chief Financial Officer (Acting Group Chief Executive Officer 9 months) Board Member Board Chairperson Board Vice Chairperson Board Vice Board Vice Chairperson Board Vice Board Member Board Member Board Chairperson Service as TV T

V

ugwana BL ugwana BL otal remuneration seisi IF* ebele MS T Mabaso J* Bayi L Geldenhuys Nepfumbada M* Mulaudzi T Ralitabo TE Masinga SM* Molaudzi S T Lephaka M Mathebula SJ Motsweni SM Maseko N Ntloko BL* Buthelezi PD Philiso NP Senior Management Duwarkah V* Motsoeneng GH Matthews JB T Raphela MA Matlala FL* Executive directors Aguma JR Potgieter-Gqubule Fébé Charlene** Board Member Matisonn John** Kweyama Khanyisile Thandiwe** Tsedu Mathata Godfrey** Tsedu Khumalo Leah Thabisile Mhlakaza Nomvuyo Memory Board Member Tshidzumba Ndivhoniswani Aaron Tshidzumba Naidoo Krish Maguvhe Mbulaheni Obert Members of the Accounting Authority Accounting Members of the Non-executive directors Goodman MosesMavuso Vusumuzi Board Member Year ended 31 March 2017 ended 31 Year ~ - including contributions on employer variable pension contribution of office. * - included in basic salary and expenses and other allowances is compensation paid in respect of loss (x) Directors’ and key management personnel compensation and key management personnel (x) Directors’

for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial 40 Related parties (continued) 40 Related parties

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 136 FINANCIALS South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 137

------949 391 957 783 818 968 006 923 923 804 881 526 645)

. 71 52 33 79 92 405 718 148 429 514 356 686 686

4 3 5 (1 A.

- 504 789 135 355 649 759 372 405 526 364 545 531 968 898 831 496 496 300 804 804 delayed, in some instances

2018 2017 1 8 8 7 1 5 GROUP AND COMPANY AND COMPANY GROUP 34 27 25 35 977 405 405 146 101 135 571 121 571

4 4 4 i jl 55 f c a c e k b h g d Notes R’000 R’000

in terms of section 55(2)(b)(i) of the Public Finance Management Act, No. 1 of 1999, Management in terms of section 55(2)(b)(i) of the Public Finance (continued)

All system do not follow procurement process. Goods and services procured through this system

Public Sound Broadcasting Licences by ICASA for the period 18 December 2008 to 18 December 2018: SAFM, RSG, 2008 to 18 December 2018: SAFM, RSG, for the period 18 December Public Sound Broadcasting Licences by ICASA Commercial Sound Broadcasting Licences by ICASA for the period 2018: 5FM, METRO 18 December 2008 to 18 December Commercial Sound Broadcasting Licences by ICASA and services through quotation process and as per the SCM manual any goods and services above R2ml should follow com-

appointed suppliers through a closed bid/deviation process, extended and/or paid several expired contracts with existing suppliers without follow-

area for all of the licences above is the Republic of South Africa. The Licences were granted at no consideration Group and the is required to comply Africa. area for all of the licences above is the Republic of South 1 of the Public Finance Management Act, No. 1 of 1999, as amended, defines irregular expenditure as expenditure, other than unauthorised expenditure, unauthorised than other expenditure, as expenditure irregular defines amended, as 1999, of 1 No. Act, Management Finance Public the of 1

Corporation awarded contracts to suppliers without obtaining original tax clearance certificates or confirming the tax matters of the suppliers prior to awarding to prior suppliers the of matters tax the confirming or certificates clearance tax original obtaining without suppliers to contracts awarded Corporation

Deviations of prior disclosure) Procurement policy/process not followed (As a result Minimum number of quotations not obtained days Bids advertised for less than minimum number of Incorrect evaluation criteria applied to bids Irregular awards due to lack of planning Procurement through quotation process versus competitive order in excess of 15% Variation Irregular Expenditure Under Investigation Authority Framework contravened Delegation of Certificates Clearance Tax without obtaining valid made to suppliers Awards Schedule All Insufficient Documentation Non Compliance to CIDB Current year Payments without contracts Add: Irregular expenditure in the current year Irregular Expenditure awaiting condonation subject to further investigation Irregular Expenditure awaiting condonation subject Irregular Expenditure not validated Balance as restated Opening balance

Key The following amounts have been determined as being irregular expenditure, The following amounts have been determined as being Section accordance with a requirement of any applicable legislation. incurred in contravention of or that is not incurred in In trying to resolve the audit qualification, the SABC performed a detailed investigative process on 100% of payments or expenditure incurred since the 2012/13 financial prior and current the for expenditure irregular of list complete and accurate an detecting identifying/ at aimed was exercise extensive This period. financial below. of contraventions which resulted into the irregular expenditure have been categorized and disclosed The incidents/ instances years. The licence The Group was granted the following The Group was granted the to time. No subsequent expenditure has been incurred on these licences. with the applicable regulations as amended from time The Group was granted the following The Group was granted FM, LONENE FM, MUNGHANA FM, IKWEKWEZI FM, LIGWALAGWALA THOBELA FM, FM, MOTSWEDING FM, LESEDI FM, UKHOZI UMHLOBO WENENE TRU FM. FM, LOTUS FM, RADIO 2000, X-K FM and PHALAPHALA FM and GOOD HOPE FM. as amended: The Group was granted the following Public Television Broadcasting Licences by the Independent Communications Authority of South Africa (ICASA) for the Africa (ICASA) Authority of South by the Independent Communications Broadcasting Licences Television the following Public The Group was granted to 18 December 2023: SABC1 and SABC2. period 18 December 2008 2023: the period 18 December 2008 to 18 December for ICASA Broadcasting Licences by Television was granted the following Commercial The Group SABC3. Quotations were not awarded at appropriate management level as per DAF requirements due to weaknesses in the implementation of the SCM policy Quotations were not awarded at appropriate management level as per DAF requirements due to weaknesses  The Corporation procured goods petitive bid process. ing normal procurement processes in line with the SCM policy and Treasury Regulations. Treasury ing normal procurement processes in line with the SCM policy and  The Corporation such bids. The Corporation made payment to contractors without valid contract. Some instance contracts expired and process of renewal was The Corporation made payment to contractors without valid contract. Some instance contracts expired The contract was not signed yet. The Corporation awarded bids without advertising for the minimum number of days as required by the SCM policy. The Corporation awarded bids without advertising for the minimum number of days as required by the

Insufficient Documentation  are relating to Outside Broadcasting (TVOB). The Corporation awarded contracts without following Construction Industry Development Board processes. The Corporation procured goods and services through Schedule



 f j d Treasury order in excess of 15% as prescribed by National g Variation i k h e l The Corporation awarded quotations without obtaining the minimum number of quotations as required by the SCM policy a The Corporation awarded quotations without obtaining the minimum number of quotations as required set out in the policy and the PPPF b The bid evaluation and/or adjudication processes did not follow the pre-approved evaluation criteria as c (i) All losses through any irregular expenditure (i) 42 Expenditure and losses through criminal conduct, irregular, fruitless and wasteful expenditures conduct, irregular, 42 Expenditure and losses through criminal 41 Licence agreements for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial - - - 673 126 257 706 994 461 322 672 006 666 994 139) 111

473

6 2 4 74 65 92 71 74 70 (21 145 145 - - - 216 021 437 769 577 235 677 015 994 994 021 562 459 015 110 110

2018 2017 R’000 R’000 5 1 17 84 24 20 14 84 54 29 230 145 230 145 GROUP AND COMPANY AND COMPANY GROUP (continued) new process was entered into to investigate and validate Irregular Expenditure and that a

Management review in progress Management review in progress SIU Investigation Forensic investigations in progress Timeous payments to avoid penalties Timeous Timeous payments to avoid penalties or renegotiated payment payments Timeous Reported to recover value Remedial action implemented Reconciliation of broadcast schedule to reduce impairments

at R 177 million were in the process of being condoned subsequent to year end. An amount relating to R215million An amount relating to for one supplier at R 177 million were in the process of being condoned subsequent to year end.

will now commence with implementing requirements of Sections 51(1)( e)(iii) of the PFMA which require that appropriate disciplinary which require steps, where the PFMA e)(iii) of implementing requirements of Sections 51(1)( commence with will now

PAYE for employees fringe benefit not withheld PAYE Settlements Legal fees Unauthorised payments on overtime SARS penalties Interest, penalties and fines on late payments Travel cancellation fees and penalties Travel Impairment of foreign and sports content Fruitless and wasteful expenditure awaiting condonation Details of fruitless and wasteful expenditure Incident Opening balance Less: Reversal of incorrectly disclosed prior year amount Current year movements in the current Add: Fruitless and wasteful expenditure - incurred year Add: Fruitless and wasteful expenditure - relating to prior years identified in the current year Fruitless and wasteful expenditure not condoned Less: Amounts recoverable Restated opening balance There is a potential material loss of R60 million relating to a provision of impairment on commissioned programme rights as at year-end There is a potential material loss of R60 million relating to a provision of impairment on commissioned No material events have occurred between the date of these financial statements and the date of approval, the knowledge of which would affect the ability of the No material events have occurred between the date of these financial statements and the date of approval, the knowledge of which would affect users of the financial statements to make proper evaluations and decisions. Section 1 of the Public Finance Management Act, No. 1 of 1999, as amended, defines fruitless and wasteful expenditure as expenditure which were made in vain in made were which expenditure as expenditure wasteful and fruitless defines amended, as 1999, of 1 No. Act, Management Finance Public the of 1 Section been exercised. and could have been avoided had reasonable care approved framework materiality the of terms in reportable being as identified been have expenditure wasteful and fruitless through losses, material following The review: by the Minister of Communications for the year under Irregular Expenditure amounting to R2.1 billion was approved by the board for submission to National Treasury for condonation in line with legislative with line in condonation for Treasury National to submission for board the by approved was billion R2.1 to amounting Expenditure Irregular requirements resulted in a value of R3,7 billion as disclosed above. resulted in a value of R3,7 to a qualification by the auditors. During the fiscal year ending 2017 During  Four material contracts valued Four material contracts valued will be submitted to National Treasury for condonation. Treasury will be submitted to National  The SABC or permitting irregular expenditure. who are personally responsible for incurring necessary be taken on employees

** (ii) Material losses through fruitless and wasteful expenditures (ii) Material losses through fruitless and wasteful

*** lead then which validated never was Expenditure Irregular this However reported. was billion R5,1 of value the to Expenditure Irregular 2016 ending fiscal ***** 43 Subsequent Events 42 Expenditure and losses through criminal conduct, irregular, fruitless and wasteful expenditures (continued) fruitless losses through criminal conduct, irregular, 42 Expenditure and for the year ended 31 March 2018 31 March year ended for the Notes Statements Annual to the Financial

South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18 FINANCIALS 138

SABCHonouring Employees and Media Icons In honour of all our fallen heroes who have contributed immensely to the SABC operations and the nation, with our deepest gratitude.

17 April 2017 Mr Rothwell Christians - TV Licences: Call Centre Agent

28 April 2017 Mr Robert Mnguni - News: Senior Producer

13 May 2017 Mr Mohlolo Lephaka - Group Executive: Human Resources

29 June 2017 Miss Zama Mbalo - News: Camera person

29 June 2017 Ms Suna Venter - News: Producer/Presenter REMEMBRANCE South African Broadcasting Corporation [SOC] Ltd | SABC Annual Report 2017/18

20 August 2017 Mr Zola Ntutu - News: Assignment Editor

28 August 2017 Mr Tumelo Kwakwa - Corporate Affairs: Assistant

28 October 2017 Miss Mpho Manzini - Radio: Marketing Assistant

4 November 2017 Mr Sizwe Vilakazi - Head: Legal Services 4 December 2017 Mr Frank Phoshoko - News: Camera person

19 December 2017 Mr Gert Hamman - News: Specialist News Operator

25 December 2017 Mr Horatius Mtiki - News: Producer 23 January 2018 Mr Vusi Mthonti - News: Journalist/Presenter

23 January 2018 Mr Hugh Ramapolo Masekela - Musician 5 February 2018 Mrs Saira Ismail - Supply Chain Management: Administrator - Vendor

26 February 2018 Mr Steve Kleynhans - Media Technology Infrastructure: Video Cameraman

12 March 2018 Mr Alf Modiba - News: Assignment Editor 139 2 April 2018 Ms Winnie Madikizela-Mandela - Anti-Apartheid Activist In Remembrance

Publication detail This publication is available from SABC Corporate Publications Private Bag X1, Auckland Park 2006 Tel: +27 11 714 4117 Fax: +27 11 714 3514 Visit the SABC: www.sabc.co.za

Compiled and edited: Iris Cupido, Thokozani Zitha and Errol Motsoene. Concept, illustrations, design and layout: Johanna Nieuwenhuys. Photography: Nolwazi Shange, Lungelo Mbulwana, SABC divisional submissions, Gallo/Getty Images and Clips from broadcast on SABC platforms. #LiveHisLegacy