Annual Report 2017-18

Where cultures come alive...

Annual Report 2017-18 Where cultures come alive...

DITSONG Annual Report 2017 - 18 1 TABLE OF CONTENTS

page PART A: GENERAL INFORMATION 1. PUBLIC ENTITY’S GENERAL INFORMATION 5 2. LIST OF ABBREVIATIONS/ACRONYMS 6 3. FOREWORD BY THE CHAIRPERSON 8 4. CHIEF EXECUTIVE OFFICER’S OVERVIEW 12 5. STATEMENT OF RESPONSIBILITY 18 6. STRATEGIC OVERVIEW 19 6.1 Vision 19 6.2 Mission 19 6.3 Values 19 7 LEGISLATIVE AND OTHER MANDATES 20 7.1 Legislative Mandate 20 7.2 Constitutional Mandate 20 7.3 Other Mandates 21 7.4 Alignment to NDP and MTSF 21 7.5 Alignment to DAC Strategic Goals 21 7.6 Other Relevant Legislation 22 8 ORGANISATIONAL STRUCTURE 23 9. OVERVIEW OF DITSONG Museums 26 9.1 DITSONG: National Museum of Natural History 26 9.2 DITSONG: Tswaing Meteorite Crater 27 9.3 DITSONG: National Museum of Cultural History 27 9.4 DITSONG: Kruger Museum 29 9.5 DITSONG: Pioneer Museum 29 9.6 DITSONG: Willem Prinsloo Agricultural Museum 29 9.7 DITSONG: Sammy Marks Museum 30 9.8 DITSONG: National Museum of Military History 30

PART B: PERFORMANCE INFORMATION 1. AUDITOR-GENERAL’S REPORT: PREDETERMINED OBJECTIVES 33 2. SITUATIONAL ANALYSIS 33 2.1 Service Delivery Environment 33 2.2 Organisational Environment 34 2.3 Key Policy Developments and Legislative Changes 35 2.4 Strategic Outcome-Oriented Goals 35 3. PERFORMANCE INFORMATION BY PROGRAMME 36 3.1 Programme 1: Administration 36 3.2 Programme 2: Business Development 42 3.3 Programme 3: Public Engagement 45 4. REVENUE COLLECTION 47 4.1 Revenue Collection 47 4.2 Capital Investment 47

DITSONG Annual Report 2017 - 18 2 page PART C: GOVERNANCE 1. INTRODUCTION 50 2. PORTFOLIO COMMITTEE 50 3. EXECUTIVE AUTHORITY 50 4. THE ACCOUNTING AUTHORITY BOARD 51 5. RISK MANAGEMENT 55 6. INTERNAL CONTROL UNIT 55 7. INTERNAL AUDIT AND AUDIT COMMITTEE 56 8. COMPLIANCE WITH LAWS AND REGULATIONS 57 9. FRAUD AND CORRUPTION 57 10. MINIMISING CONFLICT OF INTEREST 58 11. CODE OF CONDUCT 58 12. HEALTH, SAFETY AND ENVIRONMENTAL ISSUES 59 13. COMPANY/BOARD SECRETARY 59 14. SOCIAL RESPONSIBILITY 59 15. AUDIT AND RISK AND INFORMATION COMMUNICATION TECHNOLOGY COMMITTEE REPORT 60

PART D: HUMAN RESOURCE MANAGEMENT 1. INTRODUCTION 63 2. HUMAN RESOURCES OVERSIGHT STATISTICS 66

PART E: FINANCIAL INFORMATION 1. REPORT OF THE EXTERNAL AUDITOR 72 2. ANNUAL FINANCIAL STATEMENTS 80

Annexures ANNEXURE A 147 DETAILED STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2018 ANNEXURE B 149 PUBLICATIONS ANNEXURE C 152 LECTURES AND TALKS

DITSONG Annual Report 2017 - 18 3 Part A General Information

DITSONG Annual Report 2017 - 18 4 PART A - General Information

1. PUBLIC ENTITY’S GENERAL INFORMATION

REGISTERED NAME: DITSONG: Museums of South Africa

REGISTRATION NUMBER (if applicable): Not Applicable

PHYSICAL ADDRESS: 70 WF Nkomo Street gaMohle Building Pretoria 0002

POSTAL ADDRESS: PO Box 4197 Pretoria 0001

TELEPHONE NUMBERS: +27 12 492 5744

FAX NUMBER: +27 12 323 6598

EMAIL ADDRESS: [email protected]

WEBSITE ADDRESS: https://www.ditsong.org.za

EXTERNAL AUDITORS: Auditor-General of South Africa

BANKERS: ABSA

COUNCIL SECRETARY: Mr F. Mashilo

DITSONG Annual Report 2017 - 18 5 PART A - General Information

2. LIST OF ABBREVIATIONS/ACRONYMS

ABET Adult Basic Education and Training ACH Arts, Culture and Heritage AFS Annual Financial Statements ARIC Audit, Risk and Information Communication Technology AGSA Auditor-General of South Africa ASAPA Association of South African Professional Archaeologists BBBEE Broad-Based Black Economic Empowerment CEO Chief Executive Officer CFO Chief Financial Officer CJMC City of Johannesburg Metropolitan Council CNRS Centre National de la Recherché Scientifique CPD Corporation for Public Deposits CTMC City of Tshwane Metropolitan Council DAC Department of Arts and Culture DEAT Department of Environmental Affairs and Tourism DIRCO Department of International Relations and Cooperation DKM DITSONG: Kruger Museum DMSA DITSONG: Museums of South Africa DNMCH DITSONG: National Museum of Cultural History DNMMH DITSONG: National Museum of Military History DNMNH DITSONG: National Museum of Natural History DPM DITSONG: Pioneer Museum DPW Department of Public Works DSMM DITSONG: Sammy Marks Museum DTMC DITSONG: Tswaing Meteorite Crater DWPAM DITSONG: Willem Prinsloo Agricultural Museum EE Employment Equity EPWP Extended Public Works Programme ESS Employee Self-Service EXCO Executive Committee FAR Fixed Asset Register GDARD Gauteng Department of Agriculture and Rural Development GDE Gauteng Department of Education GRAP Generally Recognised Accounting Practice HDI Historically Disadvantaged Individual HO Head Office HR Human Resources HRREMCO Human Resources and Remuneration Committee ICT Information and Communications Technology LTE Long Term Evolution

DITSONG Annual Report 2017 - 18 6 PART A - General Information

MANCO Management Committee MEC Member of Executive Council MMC Members of the Mayoral Committee MOA Memorandum of Agreement MOU Memorandum of Understanding MK Umkhonto we Sizwe MTEF Medium Term Expenditure Framework MTSF Medium Term Strategic Framework NDP National Development Plan NFI Northern Flagship Institution NRF National Research Foundation NSCF Natural Science Collections Facility NSRCP National Scientific Research Collections Platform OHS Occupational Health and Safety PAST Palaeontological Scientific Trust PFMA Public Finance Management Act POQO Later known as Azanian People’s Liberation Army (AZAPO) PPC Parliamentary Portfolio Committee PPE Property Plant and Equipment PPP Public Private Partnership PPPFA Preferential Procurement Policy Framework Act PSCGICTPF Public Service Corporate Governance Information and Communication Technology Policy Framework RAMP Repairs and Maintenance Programme RFQ Request for Quotation RPL Recognition of Prior Learning SAASTA South African Agency for Science and Technology Advancement SAMA South African Museums Association SANBI South African National Biodiversity Institute SARIR South African Research Infrastructure Roadmap SRAC Sports Recreation Arts and Culture SCM Supply Chain Management SITA State Information Technology Agency SDIP Service Delivery Improvement Plan SMART Specific, Measurable, Achievable, Relevant, Time-bound SMME Small, Medium and Micro Enterprises SRSA Sport and Recreation South Africa TR Treasury Regulations TUT Tshwane University of Technology UKZN University of KwaZulu-Natal UNISA University of South Africa UP University of Pretoria

DITSONG Annual Report 2017 - 18 7 3. FOREWORD BY THE CHAIRPERSON

Ms K. Rapoo Chairperson of Council

Introduction

DITSONG, a Sesotho word meaning “a point where cultures converge”, could not be more apt to describe the range and extent of specimens and artefacts that DITSONG: Museums of South Africa houses, both numerically and in diversity. DMSA develops, manages and administers some of the largest and most signiﬁcant Southern African heritage assets in the ﬁelds of fauna, palaeontology, cultural history, anthropology, archaeology and military history. These irreplaceable national heritage assets require constant monitoring to ensure their sustainable and responsible custodianship.

High level overview of DMSA strategy and performance

DITSONG: Museums of South Africa (DMSA) is a schedule 3A public entity, accountable to the Department of Arts and Culture (DAC) and Parliament in terms of ﬁnancial and performance management, as required by legislation.

As an accounting authority, the DMSA Council has fiduciary responsibilities towards the Institution. Council is accountable for the development of a five year Strategic and Annual Performance Plan in line with government’s five-year Medium Term Strategic Framework (MTSF). It is the Council’s responsibility to ensure that management implements the approved Strategic Plan and Annual Performance Plans in line with the annual Medium Term Expenditure Framework (MTEF) budgets. The Annual Performance Plan focuses on the implementation of the institution’s Strategic Goals, Strategic Objectives and Key Performance Areas, with clear targets and performance indicators. For the year under review, DMSA met 79% of their performance targets, an improvement of 15% from the previous year.

DMSA’s access to collections, research, exhibitions, education and public programmes promotes nation building, social cohesion and raises awareness of South Africa’s diverse history, culture and heritage. This is achieved through the presentation of public and outreach programmes, publications, exhibitions and the empowerment of young graduates.

The repositioning of DMSA has presented the institution with an opportunity to deliver transformation objectives

DITSONG Annual Report 2017 - 18 8 PART A - General Information

such as the fostering of constitutional values and presenting equal opportunities to all South Africans, while ensuring inclusion and redress.

In developing the 2017–2021 Strategic Plan, Council and senior management met to reposition the institution. In this regard, Council emphasised the following:

1. An urgent need to implement a comprehensive transformation strategy 2. Maintaining the personnel budget at below 60% over a three-year period 3. Refocussing eﬀorts and agenda towards the core mandate of DMSA 4. Financial sustainability and addressing post retirement obligations 5. A drive towards a clean audit and good governance 6. Collaborations and partnerships with private and public sector 7. A renewed focus on marketing and branding 8. Human capital development and building thought leadership capacity. 9. Enforcement of performance and consequence management 10. Embracing ICT modernisation

Compliance to the Generally Recognised Accounting Practice (GRAP) 103: Heritage Assets is considered a priority of DMSA with the aim of ensuring accountability of heritage assets entrusted to the institution. To this end, Council sought the assistance of an expert outsourced service provider to ensure not only compliance with the standard but to further ensure that the intent of this practice is embedded in the da-to-day operations and custodianship of heritage assets within DMSA. Given the magnitude and complexity of this project, contract employees with heritage, museum and information science qualiﬁcations were also brought in to assist with the implementation of the GRAP 103 project.

DMSA received a qualified audit opinion for the 2017/18 financial year. This is an improvement from the adverse audit opinion received in the past two financial years. The DMSA team put tireless effort into improving processes and procedures to ameliorate the 2016/17 audit findings. However, the implementation of the GRAP 103 project posed challenges with asset valuations because of lack of generally recognised asset valuation criteria as well as the volumes of assets in our custody. This negatively contributed to the audit outcome.

A turnaround programme has been adopted by Council with the following focus areas to strengthen the achievement of the strategic goals: building thought leadership capability; positioning DMSA as an employer of choice; increasing relevance to society; ﬁnancial sustainability; building an agile business model; using ICT to modernise the Institution; and building stakeholder and partnership management capability. These have been determined to be relevant in the execution of the current strategy.

In driving the achievement of the turnaround plan, Council also focused on stabilising leadership by ﬁlling a number of senior management positions. A new CEO and CFO as well as Directors of DNMCH, DNMMH, and DNMNH were appointed.

Strategic relationships

DMSA acknowledges partnerships with various diplomatic missions, for example, the Kuwaiti Embassy that hosted an art display at the DITSONG: National Museum of Cultural History. A school education programme was also developed to accompany the exhibition.

DITSONG Annual Report 2017 - 18 9 PART A - General Information

DMSA participated in a workshop, which took place in Russia, organised by the National Department of Arts and Culture. A collaboration has been established with the Moscow Cultural History Museum, particularly in the areas of conservation and restoration.

Local collaborations

A collaborative agreement was formed between the South African Biodiversity Institute (SANBI) and DITSONG: National Museum of Natural History (DNMNH) regarding the Natural Science Collections Facility (NSCF). The DNMNH is a member of the coordinating committee. The NSCF will see over 30 million preserved plant, animal and fossil specimens from more than 40 museums, science councils and universities in the country organised under a single coordinating hub. The NSCF is one of the 13 research infrastructure facilities identiﬁed as part of the South African Research Infrastructure Roadmap (SARIR). The collaboration will assist with the proper storage and digitisation of specimens as well as the donation of imaging equipment and a microscope to the DNMNH.

DMSA continued to work closely with the City of Tshwane to uplift and empower the communities in the municipality and collaborated with the City of Tshwane and Gauteng Tourism Authority to develop two heritage tourism routes.

A partnership was formed with the Steve Biko Foundation, which assisted with the successful opening and exhibition on Ahmed Timol, a struggle hero, who died in police custody in 1971. Partnerships were also formed with the Nelson Mandela Foundation, and Management is in the process of ﬁnalising a Memorandum of Agreement with the FW de Klerk Foundation, which will assist the DNMCH to realign itself and make the museum relevant and accessible to all. The Miriam Makeba Foundation, in collaboration with the DNMCH, hosted an exhibition in celebration of Miriam Makeba, during Women’s Month in August 2017.

DMSA, through the National Museum of Military History, forged close relationships with the Department of Military Veterans, the South African National Defence Force and the National Military archives for the purpose of research and the donation of objects.

Collaboration with the Department of Basic Education and schools across South Africa enables DMSA to provide education programmes that are aligned with school curricula.

The newly built Johannesburg Genocide and Holocaust Museum was opened this year (2018) in Jan Smuts Avenue (Johannesburg) and a MOU has been signed. Future plans for collaborative exhibitions and an exchange of contacts and researchers between the two museums, especially considering their close association with the Human Rights Department in the United Nations, have been concluded. The newly established Waterkloof Museum near Pretoria North, also signed an MOU with DNMMH. The emphasis in that museum is on trains and railways used in conﬂict. They are using DNMMH as a resource centre and a library for research purposes.

Partnerships with communities deserve mentioning, especially those in Mamelodi and in Soshanguve. DMSA collaborates with North Gauteng Mental Health Society to make Mandela Day Celebrations memorable at Uthando Primary School and Emansagweni Secondary School.

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Medium- to long-term strategic goals of the Institution

The medium to long-term strategic goals of the Institution drawn from the Strategic Framework outlined above include:

• DMSA’s Strategic Plan that proposes innovative ways of unlocking the potential of the heritage assets, and developing new audiences and market niches to ensure that DMSA’s museums and heritage sites are indeed accessible to all • Positioning DMSA to play a vital role in building an inclusive society by redressing skewed narratives of the history of the country and aiming to display the heritage of all the people of our country • Building a high-performance learning institution • Ensuring that DMSA becomes ﬁnancially sustainable with strict governance and a clean audit

Acknowledgements

I thank the DMSA Council members for their strategic thinking and the long hours put into building professionalism, excellence, integrity, accountability and Ubuntu within the DMSA. We thank the Acting Chief Executive Officer and his Executive Committee for their leadership and commitment to the organisational mandate. We also extend our deep gratitude to all DMSA staff for the hard work they put into making a difference in this financial year.

Warm appreciation is extended to the Department and Ministry of Arts and Culture for the sustained and steadfast support provided to Council and DMSA staﬀ during the course of a trying year. The oversight role by Parliament also ensured that DMSA strove to overcome faults of the past few years. We will continue to build on these partnerships to transform the DMSA into the premier institution envisaged in its vision.

We look forward to a more successful 2018/2019 ﬁnancial year leading to the ﬁnancial sustainability of the DMSA and a further improvement of our Audit outcome.

______Ms K. Rapoo Chairperson of Council DITSONG: Museums of South Africa 31 July 2018

DITSONG Annual Report 2017 - 18 11 4. CHIEF EXECUTIVE OFFICER’S OVERVIEW

Dr N Solani Acting Chief Executive Oﬃcer

4.1 Introduction

The government of the Republic of South Africa declared 2017 the centenary year of Oliver Reginald Tambo. Tambo strongly believed in the struggle for non-racialism, non-sexism and democracy in South Africa and led the struggle for nearly three decades as the President of the African National Congress. He was also a staunch advocate of education and championed this conviction both in deed and action. This notion is strongly captured in the clause of the Freedom Charter that states, “The doors of learning and culture shall be opened to all”. In celebrating his centenary, our government hosted memorial lectures on Oliver Tambo and in his honour, the Oliver Reginald Tambo International Airport unveiled a 2.5 metre statue of him on 19 October 2017.

As a cultural and heritage institution, DITSONG: Museums of South Africa also celebrated Oliver Tambo’s centenary through the opening of transformative exhibitions. The first exhibition was dedicated to Miriam Makeba, one of the leading musicians of the era of Oliver Tambo, who gladly obliged when asked by Tambo in the 1960s to address the United Nations on the national question in South Africa. Such an exhibition befitted the celebration of this “great giant who strode the globe like a colossus…the gentle voice whose major voice of reason shook the throne of tyrants…,” to adopt the words of Nelson Mandela on his description of Oliver Tambo on the day of his burial in 1993. Tambo, a cultural activist who loved choral music, believed that culture and heritage should be used in liberating the human condition, fulfilling the soul as well as being a weapon of the struggle. It was in this spirit that the DMSA choir performed choral and freedom songs at the opening of the Miriam Makeba exhibition. One of the songs was “Kule Lizwe Thuma Mina”.

The Ahmed Timol exhibition, which was opened at the DNMCH during the reopening of the Timol inquest, was another ﬁtting tribute. Ahmed Timol, a teacher like his mentor, had dedicated his life to the struggle of the oppressed in South Africa. The two exhibitions at the DNMCH could not have been a better way of paying tribute to the broad struggle of Oliver Tambo, demonstrating through his soldiers like Makeba and Timol that he lived by surrendering his very being to the people, and the people supported him in this struggle for total liberation. In essence, the centenary celebration of Oliver Tambo at DMSA went a long way to achieving the objectives of nation building, national reconciliation and social cohesion. These are also in line with the Ministers 10 point programme. Furthermore, it created a better understanding

DITSONG Annual Report 2017 - 18 12 PART A - General Information

of our past and the promotion of our diverse cultures and heritage.

Similar to the declaration of 2017 as the centenary of Oliver Tambo, South Africa also celebrated the centenary of the sinking of the SS Mendi. The Mendi tragedy is better captured by a poem that was penned by S E K Mqhayi entitled, the sinking of Mendi.

As part of the memorial of the sinking of the Mendi, the DITSONG: National Museum of Military History (DNMMH), in collaboration with South African Legion of Military Veterans, annually commemorates this tragedy.

4.2 Overview of the operations of the entity

In the past two financial years, DMSA’s annual performance has been steadily improving. In 2016/17, the DMSA’s overall performance was 64% and it improved to 79% in 2017/18. This improvement can be attributed to the change in management that DMSA is undergoing. In addition, the leadership of DMSA’s various museums are focussing on deliverables based on the Annual Performance Plan, approved by both the Council and the National Minister of Arts and Culture. This adherence to the shareholder’s compact between the Institution and the Ministry has helped in improving our deliverables. Since 2016, the Council has directed management to focus on improving its audit outcomes and systems were put in place to achieve this objective. A new CFO was appointed and started his responsibilities on 2 January 2018. The capacity being built in this office contributed to improving the audit outcome to a qualified audit opinion for 2017/18 and our wish is for a clean audit opinion for the 2018/19 financial year.

4.3 Performance highlights

The following were our outcomes for the current reporting year. They indicate an institution that has been constantly improving over the years. With the right capacity that is being developed by Council, during this year, which is dedicated to Nelson Mandela Centenary celebrations, DMSA is committed to taking its performance to new heights.

These are the general highlights for the year:

• The average debt collection days’ target was reduced by 46 days from 100 days to 54 days • Eighty Percent of contracts were awarded to SMMEs. This is an overachievement of twenty percent • DITSONG: Museums of South Africa (DMSA) has been included as part of the Tshwane Resistance and Liberation Heritage Route. The gaMohle Building, the former Native Pass Office, forms part of this route and is open for public viewing • DMSA recorded 3 916 603 hits on its website, exceeding the target by thirty-one percent • DMSA management began a two-year Leadership Development Programme • Ninety-five percent of 2016/17 audit findings were resolved • DMSA accessioned 2 752 objects and specimens exceeding the target • DMSA inventoried 4 476 338 objects and specimens during the GRAP 103 Project • DMSA employed new researchers and six additional peer reviewed articles were published • DMSA curators and collection managers produced 36 popular articles • DMSA hosted 14 public lectures • DMSA curators delivered 8 conference presentations • As part of developing strategic alliances for DMSA, five partnerships were established. • DMSA created 19 displays.

DITSONG Annual Report 2017 - 18 13 PART A - General Information

4.4 General financial review

The DMSA continues to struggle with increasing post-retirement medical beneﬁts, which stand at R52 million. As reported in previous years, the Institution has removed this beneﬁt from all new appointees. This legacy issue will take time to resolve. Old Mutual, Momentum and Sanlam proposed potential solutions, these are still being assessed for their suitability with DITSONG’s environment and budget.

4.4.1 Going concern

The Annual Financial Statements were prepared according to the Generally Recognised Accounting Practice (GRAP) Standards, taking into consideration that DMSA is a going concern. This year the entity’s ﬁnancial statements took into account GRAP 103, which deals with heritage assets. This revealed the true value of the entity’s assets, and at the same time exposed DMSA to many risks related to the security of its heritage assets which have been valued at R892.6m.

4.4.2 Spending Trends of the Public entity

The spending at DMSA is guided by the entity’s Strategic Plan and the Annual Performance Plan, which is a by-product of the 5-year Strategic Plan. The overall expenditure was 6% below budget in the 2017/18 ﬁnancial year. However, the total expenditure increased by 24% from R98 546 160 to R123 782 826, due to implementation of GRAP 103 project. Rental dropped from R1 216 875 in 2016/17 to R10 715 in 2017/18. Since the implementation of GRAP 103 project, DMSA’s security needs increased and as a result, expenditure on security services increased by 45% in 2017/18. Administrative expenses decreased by 29% through the implementation of cost containment measures on Water and Electricity. DMSA has committed R2 807 977 towards Infrastructure and R17 968 409 towards GRAP 103, cleaning and security tenders.

4.5. Capacity constraints

Some of the key challenges are:

• Inadequate ICT infrastructure • Achieving timeous implementation of the Realignment Project • Outdated existing permanent exhibitions need refurbishment • High vacancy rate for professional staﬀ • Ineﬀective revenue enhancement strategies and plans

Record management is the main challenge facing the Institution. The implementation of the realignment structure will resolve part of this challenge through the establishment of the Knowledge and Information Centre.

4.6 Human capital management

Human Resources focussed on filling a number of senior management vacancies at the entity. A CEO and directors for DNMCH and DNMMH were appointed. The focus on change management and leadership resulted in fifteen staff members being trained as part of the leadership training programme. This programme will continue in the new financial year. Visible results of the training have been observed in staff members participating in the programme. The longstanding issue of temporary workers at DITSONG: Tswaing Meteorite Crater has been positively resolved. These workers are now part of the DMSA family with all the rights and privileges of other staff members.

DITSONG Annual Report 2017 - 18 14 PART A - General Information

DMSA employed 11 interns in the year under review and additionally contracted 23 people to assist with the GRAP 103 project. This entailed documentation and valuation of DMSA’s heritage assets, thus allowing a unique opportunity for the youth to engage with and gain experience of unusual, rare and unique museum objects. In October 2017, these individuals were transferred to Grant Thornton, an outsourced service provider contracted to assist with the implementation of the GRAP 103 project.

4.7 Plans for the future to address financial change

The centenary of the late President Nelson Mandela will be commemorated during the 2018/19 ﬁnancial year. DMSA aims to develop multimedia exhibitions, of which some will focus on Nelson Mandela. The Institution will also work on developing strategic alliances with institutions with similar objectives. The DMSA is currently developing a ﬁnancial sustainability strategy to ensure that its own revenue is increased over time, thereby increasing sustainability of the Institution.

4.8 Financial sustainability

Heritage institutions like DMSA are focussed on promoting South African cultures and heritage through exhibitions and programmes that promote nation building and social cohesion. Their value is measured through the development of successful programmes that seek to promote these objectives. Admission fees in 2017/18 decreased by 4% to R4 264 212. This is in line with a decline in visitor numbers due to static exhibitions. However, a focused approach to the modernisation of DMSA exhibitions is aimed at increasing visitor numbers. Furthermore, leasing of DMSA assets in terms of rentals, markets, events and donor funding will increase organisational income.

4.9 Retention of surplus funds

DMSA will request a retention of surplus funds of R12 644 968 in terms of paragraph 3.2 of the National Treasury Instruction No 6 of 2017/2018.

4.10 Supply chain management

Supply chain management (SCM) processes are being reviewed to prevent irregular expenditure and transactions will now be subjected to the rigorous PFMA and National Treasury Regulations. The challenges experienced in SCM were mainly because of inadequate contract management. This resulted in irregular expenditure being incurred on expired contracts continuing on a month-to-month basis. Contract management has been improved in order to prevent irregular expenditure in the future. Challenges remain in the management of request for quotes (RFQs) and keeping of records. There were no unsolicited bids during the year under review.

4.11 SCM challenges and their resolutions

At the DITSONG: Tswaing Meteorite Crater (DTMC), a DMSA site museum near Soshanguve, about 45 km North-West of Pretoria, the community was insistent that all tenders for this site museum should be awarded to community members as part of their beneﬁciation. This resulted in community protests during the year under review. Negotiations between

DITSONG Annual Report 2017 - 18 15 PART A - General Information

the DMSA game fencing contractors, the community and DMSA resulted in the employment of 8 community members and the subcontracting of 14 community members. Going forward, each time a signiﬁcant tender is awarded, there will be interaction with community stakeholders and where possible, community beneﬁciation will be prioritised.

4.12 Audit matters for 2016/17 and their resolutions

Financial Statement Item 2016/17 Finding Resolution Revenue from exchange and Sufficient audit evidence was not pro- Prior year transactions could not be non-exchange transactions vided for audit resolved. The finding will be resolved going forward, resulting in no findings for 2017/18. Heritage assets In 2016/17 audit, valuation and com- A service provider was appointed to pleteness of heritage assets could not implement the GRAP 103 heritage assets be verified project according to the accounting standards. This project was completed and all heritage assets are verified and valued however, the valuation was challenged which led to a qualification Operating and administrative The accuracy and recording of expen- The accuracy and recording of all expenditure diture in the correct accounting period expenditure in 2016/17 was tested and could not be verified. Furthermore, material transactions were adjusted sufficient audit evidence could not be which resulted in restating 2016/17 bal- provided for audit and expenditure was ances on administrative and operating incorrectly classified expenses Trade and other receivables Existence of receivables could not be A report on trade and other receivables confirmed and sufficient audit evidence was submitted to DMSA Council was not provided for audit DMSA has debts dating back many years. Some of these did not have supporting evidence. As a result, DMSA Council approved the writing off of R1 039 513.54 of the following categories of debts: Uneconomical accounts; Prescribed debtors; Untraceable debtors, and Impaired debtors Trade and other payables Leave accrual was incorrectly calculated HR and Finance staff were trained on ESS, a leave management system used at DMSA to enable accurate leave accrual calculation Irregular expenditure Sufficient appropriate evidence could Northplan, an independent accounting not be obtained under procurement firm was appointed to investigate irreg- testing to determine whether irregular ular, fruitless and wasteful expenditure. expenditure is complete and recorded at The process of condoning the irregular the appropriate amounts expenditure is underway

DITSONG Annual Report 2017 - 18 16 PART A - General Information

Financial Statement Item 2016/17 Finding Resolution Commitments Sufficient appropriate evidence could A commitment register was introduced not be obtained and tested to ensure finding for 2015/16 was resolved. As a result there were no findings on 2016/17 and 2017/18 commitments

4.13 Events after the reporting year

The Supply Chain Manager terminated his contract on the 31 March 2018. An SCM specialist was contracted to commence in the 1st Quarter of 2018/19 financial year to address contract management in the SCM environment. The Chief Executive Officer was appointed on the 25th of June 2018 to fill the void in the leadership structure that was created when the then CEO resigned mid March 2018.

4.14 Economic viability

DMSA contributed to national imperatives such as nation building and social cohesion. The Institution’s economic contribution towards the South Africa’s economy in 2017/18 amounted to R123 531 774. Through Supply Chain Management, 80% of contracts below R30 000 were awarded to HDIs, for example restaurant services contracts at DNMCH and DNMNH and the curio shop at DNMCH.

Acknowledgement

I wish to express appreciation to Council, Management, colleagues and all staﬀ of DMSA for their hard work and dedication.

______Dr N Solani Acting Chief Executive Officer DITSONG: Museums of South Africa 31 July 2018

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5. STATEMENT OF RESPONSIBILITY

Statement of responsibility and conﬁrmation of accuracy for the Annual Report.

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

• All information and amounts disclosed in the Annual Report are consistent with the Annual Financial Statements audited by the Auditor-General. • The Annual Report is complete, accurate and is free from any omissions. • The Annual Report has been prepared in accordance with the guidelines on the Annual Report as issued by National Treasury. • The Annual Financial Statements (Part E) have been prepared in accordance with the GRAP standards applicable to the public entity. • The Accounting Authority is responsible for the preparation of the Annual Financial Statements, and for the judgements made on this information. • The Accounting Authority is responsible for establishing and implementing a system of internal control that has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the Annual Financial Statements. • External auditors are engaged to express an independent opinion on the Annual Financial Statements.

In our opinion, the Annual Report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the public entity for the financial year ended 31 March 2018.

Yours faithfully

______DrDNSl N. Solani i Acting Chief Executive Officer 31 July 2018

______Ms K. Rapoo Chairperson of the Council 31 July 2018

DITSONG Annual Report 2017 - 18 18 PART A - General Information

6. STRATEGIC OVERVIEW

6.1 Vision

Sustainable museums accessible to all.

6.2 Mission

To transform DITSONG into a catalyst for nation building, social cohesion, cultural diversity and socio-economic development.

6.3 Values

Within the Ubuntu philosophy, our values are the following:

6.3.1 Accountability

To ensure accountability by council, management and staﬀ in the running of the institution to avoid violation of all relevant legislation.

6.3.2 Excellence

To strive to be an institution of excellence that develops products and services that meet international standards.

6.3.3 Professionalism

To ensure professionalism in the execution of our duties to enhance productivity and the reputation of the Institution.

6.3.4 Integrity

Loyalty to the Institution and what it stands for in accordance with its mandate, and honesty of employees.

6.3.5 Teamwork

To be devoted to working as a team and supporting each other with a positive attitude to make DMSA eﬃcient at all times.

6.3.6 Ubuntu

Respect for oneself, fellow workers and the public in general.

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6.4 Strategic Goals

• Increased accessibility and relevance of museums • Well curated and preserved heritage assets • Increased research outputs • Financial sustainability • Eﬀective and eﬃcient organisation • Developed and retained workforce skills

7 LEGISLATIVE AND OTHER MANDATES

7.1 Legislative mandate

DITSONG: Museums of South Africa (DMSA) is a schedule 3A public entity, accountable to the Department of Arts and Culture (DAC) and Parliament, in terms of financial and performance management, as required by legislation. DMSA develops, manages and administers some of the largest and most significant Southern African heritage assets in the fields of fauna, palaeontology, cultural history, anthropology, archaeology and military history, which require constant monitoring to ensure the sustainable and responsible custodianship of these irreplaceable national heritage assets as required by policy and legislation.

The primary legislative mandate of DMSA is informed by the Cultural Institutions Act 1998 (Act No. 119 of 1998 as amended), promulgated by Parliament in furtherance of the constitutional mandate of the Department of Arts and Culture. In terms of section 8 of the Act, the DMSA’s mandate, through a Council appointed by the Minister of Arts and Culture, is:

• to formulate policy; • to hold, preserve and safeguard all movable and immovable property of whatever kind placed in the care of or loaned or belonging to the declared institution concerned; • to receive, hold, preserve and safeguard all specimens, collections or other movable property placed under its care and management under section 10(1); • to raise funds for the institution; • to manage and control the moneys received by the declared institution, and to utilise those moneys for defraying expenses in connection with the performance of its functions; • to keep a proper record of the property of the declared institution, to submit to the Director-General any returns required by him or her in regard thereto, and to cause proper books of account to be kept; and, • to determine, subject to this Act, and with the approval of the Minister, the objectives of the declared institution, and to generally carry out the objects of the declared institution.

7.2 Constitutional mandate

The constitutional mandate of DMSA is based on Chapter 2, Section 31, of the Constitution of South Africa (Act 108 of 1996), which states:

DITSONG Annual Report 2017 - 18 20 PART A - General Information

31. Cultural, religious and linguistic communities — (1) Persons belonging to a cultural, religious or linguistic community may not be denied the right, with other members of that community- (a) to enjoy their culture, practise their religion and use their language; and (b) to form, join and maintain cultural, religious and linguistic associations and other organs of civil society. (2) The rights in subsection (1) may not be exercised in a manner inconsistent with any provision of the Bill of Rights.

7.3 Other mandates

National Development Plan

The strategic outcome-oriented goals of DMSA are aligned to the Department of Arts and Culture’s strategic goals, which collectively support the National Development Plan and Outcome 14: Transforming Society and Uniting the Country; the nation building and social cohesion implementation framework as presented in the Medium Term Strategic Framework (MTSF) 2015–2020.

Shareholder mandate

In support of the government imperatives and DAC, the DMSA has embedded the implementation of the MTSF goals – to realise nation building and social cohesion – in the execution of its mandate.

7.4 Alignment to National Development Plan and Medium Term Strategic Framework

National Development Plan Chap- Medium Term Strategic Framework DMSA Strategic Goals ter 3 and 15 Outcome 14 Transforming society and uniting the Nation building and social cohesion Increased accessibility and relevance country of museums Well-curated and preserved heritage assets Increased research outputs Promoting social cohesion across Increased accessibility and relevance society of museums Well-curated and preserved heritage assets Structural features of the South Afri- Financial sustainability can economy Eﬀective and eﬃcient organisation Developed and retained workforce skills

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7.5 Alignment to Strategic Goals of the Department of Arts and Culture

DAC Shareholder Strategic Goals Description DMSA Strategic Goals A transformed, coherent and devel- To drive greater policy and planning Increased accessibility and relevance opment-focussed Arts, Culture and coherence in the sector, towards the of museums Heritage (ACH) sector achievement of sectorial development outcomes Nation building through effective To lead nation building and societal Increased accessibility and relevance social cohesion programme imple- transformation through effective of museums mentation social cohesion programmes that pro- Well-curated and preserved heritage mote cultural and linguistic diversity assets A productive, diverse and inclusive To protect, preserve, promote and Well-curated and preserved heritage ACH sector develop arts, culture and heritage, and assets advance the socio-economic inclusivi- Increased research outputs ty and contribution of the sector Sound governance and fiscal man- To forge sound governance and fiscal Effective and efficient organisation agement system management policies, systems and processes that enhance the capacity of the DAC and its entities to ensure Financial sustainability the effective and efficient utilisation and leveraging of ACH resources for the benefit of all South Africans A professional and capacitated ACH To build the skills and capacity of the Developed and retained workforce sector sector to ensure its ongoing develop- skills ment and responsiveness

7.6 Other relevant legislation

ACTS NUMBER Basic Conditions of Employment Act, 1997 Act 75 of 1997 Broad-Based Black Economic Empowerment Act, 2003 Act 53 of 2003 Employment Equity Act, 1998 Act 5 of 1998 Firearms Control Act, 2000 Act 60 of 2000 Government Immovable Asset Management Act, 2007 Act 19 of 2007 Labour Relations Act, 1995 Act 66 of 1995 Military Veterans Act, 2011 Act 18 of 2011 National Environmental Management Act 107, 1998 Act 107 of 1998 National Heritage Council Act, 1999 Act 11 of 1999 Occupational Health and Safety Act, 1993 Act 85 of 1993 Preferential Procurement Policy Framework Act, 2000 Act 5 of 2000 Promotion of Access to Information Act, 2000 Act 2 of 2000 Promotion of Equality and Elimination of Unfair Discrimination Act, 2000 Act 4 of 2000 Protected Areas Act 57, 2003 Act 57 of 2003 Public Finance Management Act, 1999 Act 1 of 1999 Skills Development Act, 1998 Act 97 of 1998 South African Heritage Resources Act, 1999 Act 25 of 1999

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8 ORGANISATIONAL STRUCTURE

COUNCIL COUNCIL SECRETARIAT

AUDIT, RISK AND INFOR- HUMAN RESOURCES CORE FUNCTIONS MATION COMMUNICA- & REMUNERATION COMMITTEE TION TECHNOLOGY COMMITTEE

OUTSOURCE CEO INTERNAL AUDIT

DIRECTOR DITSONG: DIRECTOR DITSONG: DIRECTOR DITSONG: NATIONAL MUSEUM NATIONAL MUSEUM NATIONAL MUSEUM CFO CORPORATE OF CULTURAL OF MILITARY OF NATURAL SERVICES HISTORY HISTORY HISTORY

DITSONG: KRUGER DITSONG: TSWAING FINANCE MUSEUM METEORITE CRATER

DITSONG: SAMMY SUPPLY CHAIN MARKS MUSEUM MANAGEMENT

DITSONG: WILLEM CORPORATE PRINSLOO COMMUNICATION AGRICULTURAL AND MARKETING MUSEUM

DITSONG: PIONEER HUMAN MUSEUM RESOURCES

SECURITY & FACILITIES MANAGEMENT

INFORMATION TECHNOLOGY

DITSONG Annual Report 2017 - 18 23 PART A - General Information

Council

From Left to Right (Front row): Dr. M. Matlou, Ms. Y. Mashilela, Ms. P. Khanyile, Mr. M. Ditlhake From Left to Right (Back row): Adv. M. Ralefatane, Dr. P. Bayliss, Mr. B. Daniels Not on the picture (Ms. K. Rapoo, Mr. B. Mgijima)

Executive Committee

From Left to Right: Dr. N. Solani (Acting CEO), Ms. Sandi Mackenzie (Director: DNMMH), Ms. Tersia Perregil (Acting Director DNMNH) & Mr. Kennedy Kaposa (CFO)

24 DITSONG Annual Report 2017 - 18 PART A - General Information

Council and Council Committees

Ms. K. Rapoo Dr. M. Matlou Chairperson of Council Deputy Chairperson of Council

Dr. P. Bayliss Mr. B. Mgijima Dr. M. Matlou Chairperson of Core Member of Core Member of Core Functions Committee Functions Committee Functions Committee

Adv. M. Ralefatane Ms. P. Khanyile Ms. Y. Mashilela Chairperson of HRREMCO Member of HRREMCO Member of HRREMCO

Ms. S. Mudau Mr. M. Ditlhake Mr. B. Daniels Independent Chairperson of ARIC Member of ARIC Member of ARIC

DITSONG Annual Report 2017 - 18 25 PART A - General Information

9. OVERVIEW OF DITSONG MUSEUMS

9.1 DITSONG: National Museum of Natural History (DNMNH)

The DITSONG: National Museum of Natural History (DNMNH) acts as a custodian and documentation centre of South Africa’s natural heritage. It is the only natural history museum in Gauteng and one of the largest in South Africa. The Museum’s collections and exhibits include hominid fossils, mammal-like reptiles, reptiles, skins, animal skeletons, birds, beetles, moths and butterﬂies, arachnids and other insects. The DNMNH curates more than two million specimens, and active research programmes investigate aspects of the biodiversity of southern Africa using these collections. DNMNH’s educational programmes, including guided tours and outreach, and temporary displays are based on these collections.

Some of the main highlights of work completed during the year include:

• Ten Peer reviewed papers, authored by curators of the Museum that appeared in national and international journals and were the total output for DMSA. The DNMNH continues to publish its accredited journal, the Annals of the Ditsong National Museum of Natural History. The collections of the Museum continue to be a major source of knowledge and reference material, with a large number of international researchers visiting and using these collections. • The GRAP 103 project was completed at DNMNH by the stipulated deadline; 2 358 523 heritage assets were veriﬁed, with those qualifying as per the accounting standard being valued by the deadline set by DMSA Council. • The Museums received more than 60 000 visitors during the year and numerous education programmes were presented mainly to school groups from previously disadvantaged communities around Gauteng. • One of the major events hosted by the Museum was Science Week, with over a thousand learners visiting the exhibitions, where they had an opportunity to interact with curators about the collections and research • A new director was appointed at the DNMNH in June 2017, but he subsequently resigned in October 2017. An acting director was appointed to preside over the museum until a new director can be appointed. Despite the changes in management, several milestones were achieved and new agreements entered into. • In September, DNMNH entered into an agreement with the Natural Sciences Collections Facility (NSCF).

The Natural Science Collections Facility is a network of South African institutions holding natural science collections, established as part of the Department of Science and Technology’s Research Infrastructure Roadmap and coordinated by the South African National Biodiversity Institute (SANBI). The facility committed R2 500 000 in grants, which will allow the DNMNH to purchase cabinets for the collections and an imaging microscope to conduct research, thereby contributing to the research output of DMSA.

Dr Miriam Tawane, curator of the Plio-Pleistocene Collection, was invited to chair the anthropology collections cluster in January 2018. The Department of Science and Technology formed overarching scientific collections called the National Scientific Research Platform (NSRCP) in order to address challenges in institutions housing these collections, such as infrastructure challenges, inaccessible collections and lack of human capital development. The NSRCP has six clusters that are set up to focus on scientific collections in the country. The Anthropology Cluster is one of six. It will focus on institutions housing archaeological, cultural, anthropological (including history and art) and paleo-anthropological collections. The cluster will serve as a central unit linking institutions housing these collections. It will also serve to identify challenges related to lack of infrastructure experienced by the institutions. The cluster will prioritise the preservation of collections, knowledge production, accessibility of collections by the research and general community, and human capital development.

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This links with the vision and mission of DMSA, as it creates a platform of learning for scholars as well as the general South African community, who will have access to the well preserved South African heritage collections and can appreciate their worth.

9.2 DITSONG: Tswaing Meteorite Crater (a satellite museum of the DNMNH)

Scientific research concluded that about 220 000 years ago, a meteorite the size of half a football field slammed into the Earth’s crust, forming an impact crater 1.4 km in diameter and 200 m deep. This crater is one of the best-preserved meteorite impact craters in the world. The name Tswaing means “Place of Salt” in Setswana and refers to the saline lake that covers the crater floor, a unique feature. Besides the crater, major attractions include an extensive wetland area, a large variety of plant species of Sourish-Mixed Bushveld, a variety of game and 240 species of birds. DTMC offers hiking trails, bird watching, overnight accommodation and a picnic site. The focus of the DTMC is the crater and surrounding environment, where educational programmes, particularly outreach to local communities, as well as various guided tours concentrating on topics such as geology and ecology, are offered.

DTMC is a popular site for research projects ranging from eco-tourism to geological impacts, and for the usee of new technologies to assess the age of the crater. Highlights for the year were:

• Careers Week that exposed more than 1 137 local learners to the variety of careers in natural history and conservation. The local community was also involved in Environmental and Wetlands Day programmes. • Completion of the game fence project, which included employing a large number of local workers to secure the area. • A partnership with the SNARE initiative to assist DTMC in clearing areas where snares had been laid before the erection of the fence. • The celebration of Arbour Day on 1 September 2017 where community members from Soutpan and Marikana (impoverished and previously disadvantaged societies close to the DTMC) attended the event. Lectures were presented explaining the importance of trees and the preservation of indigenous ﬂora and fauna. Ten trees were donated to the communities.

9.3 DITSONG: National Museum of Cultural History (DNMCH)

The National Museum of Cultural History (DNMCH) explores South Africa’s cultural diversity in various permanent and temporary exhibitions. These include rock paintings and engravings of the San people; thousand-year-old Iron Age ﬁgurines from Schroda in the Limpopo Province (described as “the best known artefacts indicating ritual behaviour in the Early Iron Age”); the Objects with Stories Exhibition, which presents objects and themes relating to the Museum’s collection; and an exhibition on Marabastad that is a true example of a cosmopolitan and fully integrated rainbow nation before apartheid. A number of temporary and travelling exhibitions can also be viewed on various diﬀerent themes and topics. DNMCH is the custodian of heritage objects and the collection can be considered one of the largest in South Africa.

Highlights of the year for the DITSONG: National Museum of Cultural History were:

• The Ahmed Timol Exhibition, opened during the ﬁrst quarter of last year in conjunction with the reopening of the inquest into Mr Timol’s death whilst in the custody of the then South African Police. The exhibition was a huge success because of interest ignited by the inquest.

DITSONG Annual Report 2017 - 18 27 PART A - General Information

• An exhibition on the awards and accolades of Miriam Makeba was hosted by the Miriam Makeba Foundation and the DNMCH during Women’s Month in August. In conjunction with this exhibition, a celebration was held on Women’s Day to honour Miriam Makeba and all the female staff of DMSA. The special guest on the day was the granddaughter of Miriam Makeba, Ms Zenzi Makeba Lee, Tu Nokwe and Mara Louw who in their right are part of South Africa’s leading musicians. • An International Museums Week programme where 4 165 learners were invited to attend. All DMSA museums offered free entrance during this week. In addition, a number of lectures were held at the University of Pretoria to introduce students to the world of museums and their different disciplines. • The Association of South African Professional Archaeologists’ (ASAPA) bi-annual conference held at the University of Pretoria where two papers were delivered by staff members showcasing the research that is being undertaken at DMSA in the field of archaeology. • The 1st Annual Limpopo Provincial Oral History Conference held in Ba-Phalaborwa where the Cultural History Museum’s anthropologist presented a paper on history and praise poems. • A conservation course hosted by the University of Pretoria that was attended by the Cultural History Museum’s conservator to learn more about new improved techniques and technologies could be incorporated into the Museum’s Conservation Department. • The collaboration between DMSA and Sport and Recreation SA (SRSA) during the 12th Annual Indigenous Games held in Limpopo at the Polokwane Seshego Stadium from 24-29 September 2017. This event included athletes from all nine provinces participating in nine indigenous codes, namely: Morabaraba, Jukskei, Dibeke, Diketo, Driestokkies, Lintonga, Kgati, Kho-Kho and Ncuve. Additionally, a celebration and sharing of South African indigenous cultures took place through a street carnival, arts and crafts, food stalls, traditional performances, ceremonies and exhibitions in five huts situated in an African village representing the five cultural groups in Limpopo. DMSA officials from the anthropology and education department curated and gave guided tours in the African village where DMSA artefacts were exhibited. • The Turupa Heritage Project, both a research and outreach project initiated by DMSA to record and document the heritage of turupa in the Nkangala district in Mpumalanga Province, where it is mainly concentrated. Turupa is a form of performance enacting troops of an army and originated in 1945/1946 after World War II. It is a Setswana word borrowed from the English word: troop. The Turupa Heritage Project commenced in November 2017 with interviews being conducted with members of various turupa groups followed by audio visual recordings of rehearsals and performances from December 2017 to January 2018. The annual Turupa Festival was held from 24 December to 2 January and attracted between 5000 and 8000 people, mainly from Mpumalanga, Limpopo and Gauteng. DMSA recorded and documented this event in the following areas: Seabe, Lefiso, Lefiswana, Marapyane, Nokaneng, Allemansdrift, and Senotlelo.

As a national institution, DMSA was the appropriate organisation to reach out to these communities by documenting this intangible heritage which, although being preserved over the years, has not been adequately documented. After completion of the collection, which includes documenting and recording of oral, audio and visual material, the outputs will be added to DMSA’s anthropology collection and archive, and at a later stage, will be presented to the respective communities.

DNMCH is one of the main museums of DMSA and comprises – in addition to DNMCH – four satellite museums. These include:

DITSONG Annual Report 2017 - 18 28 PART A - General Information

9.4 DITSONG: Kruger Museum (DKM)

The Kruger house was built in 1884 and was the original home of Paul Kruger, President of the former Transvaal Boer Republic. The house has been refurbished to reﬂect the time when the President and his wife, Gezina Kruger, lived there. The two exhibition halls illustrate the international admiration for Paul Kruger, the ZAR’s struggle for freedom from British imperialism, and his journey to and exile in Europe. One of halls is dedicated to Kruger’s time in exile, and the Kruger Museum partners with the various countries that supported Kruger during the Kruger Day events. The two railway coaches on the site were originally the government on wheels when the British took over Pretoria and Kruger left for Machadodorp.

Main highlights for the year included:

Kruger Day, a traditional event held at Kruger Museum, and 2017 highlighted the German-South African relations at the time of Paul Kruger. Talks were delivered by Dr U Küsel who spoke about the contribution of the Hermannsburg Missionaries to acquiring land for the Tswana tribes in the Northwest Province; Prof T Dedering from the Department of History at UNISA presented a talk entitled “From President Kruger to Nelson Mandela: a brief history of German – South African relations”; and the Acting Director of DNMCH spoke on the German community in Pretoria followed by a tour highlighting German artefacts displayed in the Kruger Museum. The Queen Mother of the Royal Bafokeng, Dr Semane Bonolo Molotlegi and Council Member, Ms Yvunne Mashilela opened the new display, which comprised German donated documents, objects and artwork of the period.

9.5 DITSONG: Pioneer Museum (DPM)

The Pioneer Museum is an open-air site used for picnics and other outdoor activities. The historical pioneer house was built from clay and local materials by David Botha on the farm Hartebeestpoort in about 1848. The house has a thatched roof and earthen ﬂoors. It is the last remaining dwelling of this period in the Apies River region and is furnished in traditional 19th century rural style. The dwelling is surrounded by a traditional herb and vegetable garden, an orchard, furnished wagon house and a vine pergola. A stone building, dating back to 1875, was built by the last owner of Hartebeestpoort, Hans Mundt. The structure was used as overnight rooms and a place where tired horses could be changed for fresh ones when continuing on the postal route to Maputo. The Museum erected a historical mill on the site. The annual New Year’s festival at Pioneer Museum remains a great success.

Heritage Day (24 September) was hosted by DPM in conjunction with the City of Tshwane. The theme was “Cultural Diversity” and people from Eersterust, Mamelodi, Attridgeville, Bronkhorstspruit and Oliewenhoutbosch were sponsored by the City of Tshwane Metropolitan Council (DTMC) to attend. Groups were also transported by bus from Soshanguve and Winterveld, sponsored by DTMC. Approximately 1 500 people attended the event.

9.6 DITSONG: Willem Prinsloo Agricultural Museum (DWPAM)

The Willem Prinsloo Agricultural Museum (DWPAM) preserves and presents South African agricultural history in a unique manner. The Museum showcases the history of the development of agriculture in South Africa from the Stone Age until 1945. The Museum’s historic farmyard (1880-1920) hosts indigenous domesticated farm animals like Nguni and Afrikaner cattle, Colebrook pigs, Painted Persian sheep and indigenous chickens. The museum performs various demonstrations, including candle-making, cow-milking, roasting of coﬀee beans and baking of bread.

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The Museum hosted its annual Mampoer Festival in June 2017, which drew about 6 000 visitors from all walks of life.

9.7 DITSONG: Sammy Marks Museum (DSMM)

The Sammy Marks Museum (DSMM) is a heritage site on the farm Zwartkoppies, east of Pretoria and consists of the main house and formal gardens, a farmyard with buildings, four cottages on the site and a riverside area. Sammy Marks arrived in South Africa from England in 1868, with a case of silver knives as his only valuable possession, and became one of the country’s ﬁrst entrepreneurs, playing a signiﬁcant role in mining, industrial and agricultural development in South Africa. Of the household contents in the DSMM, 98% originally belonged to the Marks family.

Sammy Marks’ birthday celebration included a curatorial presentation about caring for antiques, as well as a display of hats worn by various people during the Victorian era.

9.8 DITSONG: National Museum of Military History (DNMMH)

The National Museum of Military History (DNMMH) is a memorial for all South Africans who have died in, or as a result of military actions and preserves military heritage for future generations. The Museum has diverse collections covering the Eastern Cape Cattle Wars in the 17th Century to the current role of South African troops in the United Nations Peace Keeping forces.

Highlights during the 2017/18 year included:

• Hosting or contributing to eight events in conjunction with stakeholders during the 2017/18 financial year. The events hosted at the Museum were the Arms Collectors Fair on 12 and 13 August; the Veterans Music Picnic Day on 20 August; the 61 Mechanised Battalion Veterans parade on 19 August; the Warsaw Flights Commemoration Ceremony on 9 September and Scopex, an astronomy and telescope expo, on 16 September. These annual events are popular with visitors and the Museum is indebted to the stakeholder organisations that organise them. • In addition, the Museum took part in the National Civic Remembrance Commemoration and Wreath Laying event held at the Cenotaph in Johannesburg on 12 November and contributed to the Commemoration of the 101st anniversary of the sinking of the SS Mendi at the Mendi Memorial at Avalon Cemetery in Soweto on 24 February. Ms Karabo Rapoo, Chairperson of the DMSA Council, laid a wreath on behalf of the DMSA at this event. • A tree planting ceremony was organised on 7 December in conjunction with Dr Francis Thackeray, who is a relation of Col E.F. Thackeray, the commander of the 3rd SA Infantry Regiment at the Battle of Delville Wood. After attending the centenary commemoration of the battle in 2016, Dr Thackeray brought a seed from a tree at Delville Wood back to South Africa. A small poignant ceremony was held to plant the tree in a flower bed at the Museum. • A memorandum of understanding (MOU) was signed with the Johannesburg Holocaust and Genocide Museum to establish new networks for the Museum, as the Museum works closely with the Human Rights Department in the United Nations. • A second MOU was signed with the newly established Wonderboom Military Museum. This museum’s emphasis is on rail transport and trains during wars and battles in South Africa. It is intended that any object offered to museum that is not wanted in the collection will be passed on to Adv Minnaar – the curator of the museum. • SAAACA (South African Arms and Ammunition Collectors’ Association) held their annual fair at the Museum and Scopex held their astronomical show over a weekend. • Exhibitions continued in line with the chronology of the First World War (1914-1918).

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• Conservation of the WW1 watercart and Bofors guns were completed. • A new temporary display was put up on the Salvation Army, German 75 – 27 Field Gun and Sea Mine which is looking for closer interaction and contact with the Museum. It has been interesting approaching war from the perspective of a religion and sobriety, rather than from the usual political approach. • DNMMH received the following interesting donations:

• The entire archives of the Women’s Staﬀ College in George. • The entire archives of the Durban Light Infantry Regiments. • Documents relating to POQO, later known as AZAPO. Deﬁnite arrangements still have to be made for transfer of the objects. • Discussions commenced for the transfer of the silver collection, including shooting trophies from the Rand Light Infantry.

Zebras grazing at DITSONG: Tswaing Meteorite Crater.

DITSONG Annual Report 2017 - 18 31 Part B Performance Information

DITSONG Annual Report 2017 - 18 32 PART B - Performance Information

1. PREDETERMINED OBJECTIVES

The Auditor-General of South Africa (AGSA) currently performs certain audit procedures on the performance information to provide reasonable assurance in the form of an audit opinion. The audit opinion on the performance against predetermined objectives is included in the report to management, with material ﬁndings being reported under the Predetermined Objectives heading in the report on other legal and regulatory requirements section of the auditor’s report.

Part B of this report should be read with page 72 of the Report of the Auditor-General, published as Part E: Financial Information.

2. SITUATIONAL ANALYSIS

2.1 Service delivery environment

The detailed reporting on DMSA’s predetermined objectives, including indicators, is outlined below. DMSA’s performance information reﬂects that out of the 33 planned indicators, 79% have been achieved and 21% have not been achieved. In 2016/17, 64% of 84 planned indicators were achieved with 36% non-achievement.

Programme Achievements 2017/18 Sub-Programme: Finance Debt to Equity Ratio (total liability / total assets) – 0.5 was the target. DMSA Achieved: 0,066 Average debt collection days – Achieved: 54 days Sub-Programme: Supply Chain % contracts awarded to SMMEs (R30 000 and above) – Achieved: 80% Sub-Programme: Marketing Number of heritage tourism routes established: 2 Updated Communication Plan with a programme of action. Implementation of the action plan Number of virtual visitors: 3 916 603, a 24% overachievement Sub programme: Human Resources Change Management Programme implemented Leadership Programme implemented 2 Developed business processes Sub: Programme: Governance Transformation strategy for DMSA developed Sub-Programme: ICT Upgraded the ICT Infrastructure

DITSONG Annual Report 2017 - 18 33 PART B - Performance Information

COLLECTIONS MANAGEMENT Sub-Programme: Collection Manage- 2 752 Accessioned objects and specimens ment 4 476 338 Objects and specimens inventoried for GRAP 103, with assistance from service provider, Grant Thornton 2 453 906 Objects and specimens valued for GRAP 103, with assistance from service provider, Grant Thornton. 8 572 objects digitised as part of the GRAP 103 Project Sub-Programme: Research 10 Peer reviewed publications 36 Popular articles produced 14 Public lectures oﬀered 8 Conference presentations Sub-Programme: Public Programmes 5 Partnerships established 14 Events held 16 Stakeholder events held 3 New educational programmes developed 19 Exhibitions and displays created

2.2 Organisational environment

In the 18th year of DMSA’s existence (formerly the NFI), the application of the DMSA strategy and structure was started in order to establish the impact of service delivery when executing the mandate of DMSA. The rationale for this was to establish the relevance of institutional strategy, synergy and alignment between DMSA functions and structure, the eﬀect of the operational framework, and an environmental analysis of DMSA.

DMSA has opportunities that have not been fully exploited, which could contribute to the sustainability of the Institution. While DMSA relies heavily on DAC’s annual grant, the need to explore alternative uses of its assets, rigorous fundraising strategies, and attraction of greater visitor numbers has been a priority.

The repositioning of DMSA has presented the Institution with an opportunity to deliver transformation objectives with regard to fostering of constitutional values, and presenting equal opportunities to all South Africans while ensuring inclusion and redress in discharging the institutional mandate. DMSA’s access to collections, research, exhibitions, education and public programmes promotes nation building, social cohesion and raises awareness of South Africa’s diverse history, culture and heritage. This is achieved through the presentation of public and outreach programmes, publications, exhibitions and empowering young graduates.

The mandate of DMSA is to collect, preserve, research, exhibit and present public programmes through its cultural, military and natural history collections. The GRAP 103 Project is a major project with the purpose of creating a comprehensive Heritage Assets Register and ends in 2018. Grant Thornton was appointed to assist the project team in inventorying and valuing the collections at the DMSA museums. The DMSA houses a large knowledge base and expertise about its unique national collections.

The challenges aﬀecting the performance delivery environment include the greater budget allocation set for personnel,

DITSONG Annual Report 2017 - 18 34 PART B - Performance Information

high staﬀ turnover and skills shortages, given the scope of the heritage assets entrusted to the DMSA. The impact of the declining economic conditions within the country also contributed to the declining museum visitor numbers. However, there was a considerable increase in museum website visitors and active participation on social media.

2.3 Key policy developments and legislative changes

There were no key policy developments and legislative changes during the reporting period.

2.4 Strategic outcome-oriented goals

The DMSA strategy is comprised of three programmes: Administration, Business Development (Core Business) and Public Engagement that are informed by the following Strategic Goals:

• Effective and efficient organisation • Properly preserved, well-curated, researched heritage assets accessible to the general public • Diversified funding base • Increased accessibility to the museums • Developed and retained skills and expanded specialised knowledge

The DMSA’s Annual Performance Plan is a road map and is aligned to Government’s National Development Plan 2030 vision. DMSA supports DAC in implementing the two outcomes of utmost importance that contribute to the economic growth and cohesiveness of the nation. These are: Outcome 4: Decent employment through inclusive economic growth, e.g. Mzansi’s Golden Economy strategy; and Outcome 14: Transforming Society and Uniting the Country; the nation building and social cohesion implementation framework as presented in the Medium Term Strategic Framework (MTSF) 2015–2020.

From Left to Right: Tebogo Kgari, Amos Mampheko, Ms Thembi Malao: Director: Entities Management Lemohang Zincume, Audrey Moshidi, Julia Roelofse DAC with Mr Ben Chapman: Ward Councilor. and guest at Pioneer Museum Heritage Day Celebrations.

DITSONG Annual Report 2017 - 18 35 PART B - Performance Information

3. PERFORMANCE INFORMATION BY PROGRAMME

DITSONG: Museums of South Africa (DMSA) has three programmes, namely Administration, Business Development and Public Engagement. In support of Government imperatives and the Department of Arts and Culture, the DMSA has embedded the implementation of Strategic Goals in the execution of its mandate through the following programmes:

3.1 Programme 1: Administration

Purpose: To support core function departments by providing an enabling environment to ensure that DMSA fulﬁls its core mandate

Sub-programmes: Finance, Supply Chain Management, Marketing and Communication, Human Resources, Governance, Information and Communication Technology

Strategic objective: To ensure an effective and efficient organisation and a diversified funding base

3.1.1 Programme performance information

Finance

In pursuit of the strategic objective, Finance has embarked on the optimisation of revenue and diversiﬁcation of income sources by:

• Charging market-related prices for products and services, which necessitated an increase of 25% on our prices, including entrance fees, which has resulted in own revenue generation increasing by 12.1% to R11 172 477. • Debt collection days were reduced to 54 days. • Debt to equity ratio (total liability/ total net assets) 0.066 – overachievement due to the high value of the heritage assets.

Marketing and communication

The Marketing and Communications Department develops and implements marketing and communication strategies to manage the Institution’s image and reputation, promote its brand and create awareness of DMSA’s products, services and activities. Furthermore, the activities are aimed at increasing DMSA visitor numbers.

DMSA achieved 87% of the visitor number target of 340 000 visitors. The Institution aims to increase visitor numbers through the implementation of market penetration and diversiﬁcation programmes in the 2018/19 ﬁnancial year. A brand revitalisation programme is underway to reposition the DMSA brand as a place where cultures come alive. A “Know Your Museum” campaign is an internal branding campaign aimed at developing DMSA employees into DMSA brand ambassadors.

DMSA exceeded the website hits target of 2 987 632 by 31%, obtaining 3 916 603 hits. This was achieved through an integrated communication programme on DMSA digital platforms.

DITSONG Annual Report 2017 - 18 36 PART B - Performance Information

DMSA VIRTUAL VISITORS

4 500 000 3 916 603 4 000 000 3 500 000 3 075 838 3 148 250 3 000 000 2 500 000 2 000 000 1 500 000 1 000 000 500 000 0 2015/16 2016/17 2017/18 DMSA Virtual Visit

The gaMohle building, the former Native Pass Oﬃce, is now used as DMSA Head Oﬃce and is part of the Tshwane Resistance Liberation Heritage Route. This project is being implemented in collaboration with the National Department of Tourism and the Department of Arts and Culture. The prison cells are available for public viewing. School tours and education programmes have been implemented at the site.

Human resources

Management’s plans for leadership and change management were implemented. Two business processes arising out of the talent culture were developed and will ensure that DMSA becomes a leader in the heritage sector. The period 2017/18 was dedicated to laying the foundation that would enable the implementation of the strategy, taking into consideration other processes that were supposed to be implemented in parallel with it. Such processes include the implementation of the Remedial Action Plan to address previous audit ﬁndings, Employer of Choice for Human Capital Management and Talent Management.

Nine policies were developed and reviewed.

Four programmes were developed, namely, Leadership Development, Change Management, Induction, and Employee Wellness and are in a process of being implemented.

DITSONG Annual Report 2017 - 18 37 PART B - Performance Information

Governance

There are still some challenges remaining in the area of risk management owing to the late institutionalisation of proper monitoring mechanisms. A risk register was drawn up in the last quarter and 39% of risks were mitigated, while 57% of risks were partially alleviated.

A concerted eﬀort by DMSA management led to 95% mitigation of audit ﬁndings.

A Transformation Strategy was developed and approved and will be implemented in 2018/19.

Information and Communications Technology (ICT)

ICT infrastructure upgrade

DMSA appointed Vodacom as communications provider. They have proliferated broadband across the country, with connectivity over ﬁxed wireless and LTE also reaching rural areas. This has enabled the Institution to service even the satellite sites such as Sammy Marks Museum and Tswaing Meteorite Crater. Through this broadband service, DMSA can now access services such as email, uniﬁed communications and products in the cloud.

3.1.2 Performance indicators

Programme: Administration Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/2017 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Sub-Programme: Finance Objective: Diversify own income resources % of own New Target 12,2% (R11 229 Not Achieved: 0,1% under The overall drop in expected revenue gen- 000) 12,1% (R11 172 visitor numbers affected the eration to total 477) achievement of targets in revenue rental, admission and sales income streams % compen- New Target 66% (60 870 Achieved: 23,5% over The overachievement was sation of 518/91 020 43.5% (53 695 realised due to vacancies not employees 343) 481/ 123 577 filled and the movement in expenditure / 103) employee benefits provision total expenses Average debt New Target 100 Achieved: 46 over The overachievement was collection days 54 realised because prescribed debt, which is uncollectable debt outstanding over three years, was removed

DITSONG Annual Report 2017 - 18 38 PART B - Performance Information

Programme: Administration Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/2017 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Debt to Equity New Target 0,5 Achieved: 4,4 over The high value of heritage Ratio (Total 0.066 assets (HA) resulted in this liability / total overachievement since net assets) liabilities are far less than the HA alone % growth New Target 5% or < R32 Not Achieved: 6,7% under The non-achievement was of non-core 739 965 R39 907 093, due to inﬂation and increases operational 2016/17: R35 increase of in actuarial loss expenses 739 932 Re- 11.7% duction – 8.1% Sub-Programme: Supply Chain Management Objective: Clean governance % contracts New Target 60% Achieved: 20% over Four out of the ﬁve contracts awarded to signed were with SMMEs SMMEs (R30 80% 000 and above) Sub-Programme: Marketing and Communication Objective: To increase visitors to Museums Number New Target 2 heritage Achieved: None n/a of heritage tourism routes Two heri- tourism routes developed tage tourism established with Tshwane routes were Tourism and developed Gauteng Tour- with Tshwane ism Agency Tourism and Gauteng Tour- ism Agency Updated com- New Target 1 Achieved: None n/a munication Updated a plan with a communica- programme of tion plan and action implemented the action programme

DITSONG Annual Report 2017 - 18 39 PART B - Performance Information

Programme: Administration Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/2017 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Number of 485 477 340 000 Not Achieved: 44 400 under The Pretoria “Farmers Market” total visitors 295 600 contract came to an end in July 2017 and the newly appointed service provider withdrew from the contract, which resulted in a loss of 30 000 visitors per quarter at Pioneer Museum Number of 3 147 250 2 987 631 Achieved: 928 972 hits Events were promoted on virtual visitors 3 916 603 hits over the DMSA website

Sub Programme: Human Resources Objective: Functional Organisation % WSP imple- New Target 100% Not Achieved: 19% under Five training sessions were mented not completed. Two did not 81% take place because the relevant employees resigned. The other three training sessions did not commence, because of late approvals Change New Target Implement Achieved: None n/a Management 50% of the Implemented programme organisa- 50% of the implemented tional survey organisa- improvement tional survey plan improvement plan Leadership 0% Implement Achieved: None n/a management a leadership Implemented programme management a leadership implemented programme management programme Number of New Target Develop 2 of Achieved: None n/a developed the business Developed business pro- processes two business cesses processes

DITSONG Annual Report 2017 - 18 40 PART B - Performance Information

Programme: Administration Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/2017 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Sub Programme: Governance Objective: Clean Governance % of identified Risk mitiga- 80% Not Achieved: 41% under The risk register was complet- risks mitigated tion was not ed late achieved 39% % of audit find- 48% 90% Achieved: 5% over DMSA management put in a ings resolved lot of effort to resolve most of 95% the audit findings Transformation Transformation Achieved: None n/a Strategy for Strategy for A developed DMSA devel- DMSA and approved oped Transformation Strategy Sub Programme: Information and Communication Technology Objective: ICT Modernisation Upgraded the Conduct a Upgrading the Achieved: None n/a ICT infrastruc- study to de- ICT infrastruc- ICT Infra- ture termine best ture structure was hardware to upgraded achieve targeted quality of service. Number of New Target 2 Document Not Achieved: No systems Service providers present- functional and per- Document and were devel- ed various systems but no systems formance performance oped appointment was made. The developed and management management quote was way above the maintained systems systems were approved budget not developed and maintained

DITSONG Annual Report 2017 - 18 41 PART B - Performance Information

3.2 Programme 2: Business Development

Purpose: To strengthen the research capacity of DMSA by maintaining and providing quality through research, management, maintenance and restoration of museum collections

Sub-programmes: Collection Management, Conservation and Restoration and Research

Strategic objective: Preserved Heritage and Disseminated Knowledge

3.2.1 Programme performance information

Collection Management

The focus of Collection Management was to complete the GRAP 103 project. After discovering that DMSA did not have all the resources to complete the project, it was decided to outsource the project to Grant Thornton. The service provider inventoried 4 850 546 and valued 2 453 906 heritage assets. DMSA also continued with accessioning 2 770 heritage objects and digitising 8 241 of its heritage assets.

Research

DMSA published 10 peer reviewed articles and produced 36 popular articles. DMSA also presented 8 papers at various conferences and hosted 14 public lectures.

3.2.2 Performance indicators

Programme: Business Development Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/2017 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Sub Programme: Collection Management Objective: Preserved Heritage Number of New Target 800 Achieved: 1 970 over The backlogs were acces- accessioned sioned at the Museums objects and 2 770 specimens

DITSONG Annual Report 2017 - 18 42 PART B - Performance Information

Programme: Business Development Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/2017 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Number of 201 660 560 000 Achieved: 4 290 546 over DMSA employed service objects and provider, Grant Thornton, specimens 4 850 546 to create an inventory of all inventoried for the heritage assets in DMSA GRAP 103 according to the GRAP 103 standard

Number of 43 727 800 000 Achieved: 1 653 906 over At 31 March, the GRAP 103 objects and project was still in progress specimens val- 2 453 906 ued for GRAP 103

Number of ob- New target 5 000 Achieved: 3 241 over Due to the GRAP 103 project jects digitised more objects have been 8 241 photographed

Sub Programme: Conservation and Restoration Objective: Preserved Heritage Number of 3 plans devel- 3 conserva- Not Achieved: One plan was DMSA focused on complet- conservation oped but not tion plans not imple- ing the GRAP 103 project plans devel- fully imple- developed and Three plans mented oped and mented implemented were devel- implemented oped but only two plans were implemented Sub Programme: Research Objective: Disseminated Knowledge Number of 12 4 Achieved: 6 over Increase in research staﬀ peer-reviewed resulted in more articles publications 10 published published Number of 11 18 Achieved: 18 over Increase in research staﬀ popular arti- resulted in more articles cles produced 36 published

DITSONG Annual Report 2017 - 18 43 PART B - Performance Information

Programme: Business Development Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/2017 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Number of New Target 8 Achieved: 6 over Additional public lectures public lectures were presented on an ad oﬀered 14 hoc basis as the museums received requests

Number of 12 2 Achieved: 6 over Additional conferences were conference attended as the museums presentations 8 received requests

From Left to Right: Prof. Tim Dedering of UNISA, Dr Semane Bonolo Molotlegi, the Queen Mother of the Royal Bafokeng, Khumo Molobye and Council member Yvunne Mashilela.

DITSONG Annual Report 2017 - 18 44 PART B - Performance Information

3.3 Programme 3: Public Engagement

Purpose: To develop and maintain public programmes and exhibitions for public consumption. This includes strengthening partnerships with government and other relevant key stakeholders, involving embarking on conducting in-service training programmes for interns and experiential trainees

Sub-programmes: Public Engagement

Strategic objective: Increased Awareness and Knowledge of Heritage

3.3.1 Programme performance information

It is the Institution’s responsibility to ensure access to all its museums for children, the youth, students, tourists (local and foreign), researchers and the public in general.

Public Engagement

DMSA museums hosted 30 events and established 5 partnerships during the past ﬁnancial year. The Institution developed and hosted 19 exhibitions and displays.

3.3.2 Performance indicators

Programme: Public Engagement Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/17 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Sub programme: Public Engagement Objective: Increased Awareness and Knowledge of Heritage Number of 1 4 Achieved: 1 over The SAHB agreement was partnerships not planned. However, due established 5 to infrastructure issues at the Natural History Mu- seum, an agreement was signed with SAHB to host a database of Natural History Number of New Target 11 Achieved: 3 over Additional events were events held hosted as the DMSA re- 14 ceived requests

DITSONG Annual Report 2017 - 18 45 PART B - Performance Information

Programme: Public Engagement Performance Actual Planned Actual Deviation Comment on deviations Indicator Achievement Target Achievement from planned 2016/17 2017/2018 2017/2018 target to Actual Achievement 2017/2018 Number of New Target 10 Achieved: 6 over Additional stakeholder stakeholder events were hosted on events held 16 an ad hoc basis as DMSA received requests Number of 4 2 Achieved: 1 over An additional programme new ed- was developed. ucational 3 programmes developed Number of 23 13 Achieved: 6 over Additional exhibitions took exhibitions place on an ad hoc basis and displays 19 as the museums received created requests

Linking performance with budgets

2017/2018 2016/2017 Programme/activity/ Budget Actual (Over)/Un- Budget Actual (Over)/ objective Expendi- der Expen- Expendi- Under Ex- ture diture ture penditure R’000 R’000 R’000 R’000 R’000 R’000 Programme 1 – 37 121 34 166 2 955 26 853 28 673 (1 820) Administration Programme 2 – 48 057 63 398 (15 341) 53 561 60 316 (6 755) Business Development Programme 3 – 4 450 1 555 2 895 3 490 2 946 544 Public Engagement Total 89 628 99 119 (9 491) 83 904 91 935 (8 031)

DITSONG Annual Report 2017 - 18 46 PART B - Performance Information

4. REVENUE COLLECTION

4.1 Revenue Collection

2017/2018 2016/2017 Sources of revenue Estimate Actual (Over)/Un- Estimate Actual (Over)/Un- Amount der Collec- Amount der Collec- Collected tion Collected tion R’000 R’000 R’000 R’000 R’000 R’000 Rental of facilities 3 186 3 015 (171) 4 950 2 780 (2170) Entrance fees 4 445 4 264 (181) 5 500 4 444 (1 056) Fundraising and 13 8 (5) 3 680 425 (3 255) research grants Interest received 2 727 3 043 316 1 986 2 674 688 Business ventures 978 876 (102) 1 612 1 064 (548) TOTAL 11 349 11 206 (143) 17 728 11 387 (6 341)

4.2 CAPITAL INVESTMENT

The infrastructure at some of the museums is in a fair condition, with maintenance and repairs regularly taking place. Other museums and sites, however, require more urgent interventions. The maintenance projects during 2017/18 included the following:

• Painting of various areas at DPM and DNMCH • Complying with Health and Safety regulations in terms of electricity at DKM • Repairing and maintaining air conditioners and buildings at DNMCH • Fixing leaking roofs at DWPAM and DNMNH • Major security upgrades of the three national museums • Repairing a collapsed roof at DNMMH

In this regard, funding received from DAC was carried over from the previous ﬁnancial year to be utilised for upgrades to infrastructure and security. A number of upgrades to facility infrastructure are planned for the new ﬁnancial year. Some of the major priorities include:

• Repairing the library building at the DNMMH • Maintenance of exhibitions at the DNMNH • Installation of a new game fence at DTMC • Reconstruction of a new exhibition building at DTMC • Maintenance of the Ndebele homestead at DWPAM • Installation of an alarm system at DSMM

DITSONG Annual Report 2017 - 18 47 PART B - Performance Information

2017/2018 2016/2017 Actual Cumu- (Over)/ (Over)/ Infrastructure lative Under Cumu- Under Budget Actual Budget projects Expendi- Expendi- lative Expendi- ture ture Expendi- ture ture R’000 R’000 R’000 R’000 R’000 R’000 R’000 DNMNH air condition- 500 0 0 500 500 0 500 ers DKM gaMohle 200 0 214 (14) 200 214 (14) DNMMH hangars 1 000 0 624 376 1 000 624 376 DNMMH security 350 0 65 285 350 65 285 DNMMH Cling shield 300 0 54 246 300 54 246 Security infrastructure 8 000 2 078 6 062 1 939 8 000 3 984 4 016 Total 10 350 2 078 7 019 3 331 10 350 4 941 5 409

DITSONG Annual Report 2017 - 18 48 Part C Governance

DITSONG Annual Report 2017 - 18 49 PART C - Governance

1. INTRODUCTION

Corporate governance embodies processes and systems by which public entities are directed, controlled and held to account. In addition to legislative requirements based on a public entity’s enabling legislation and the Companies Act, corporate governance with regard to public entities is applied through the precepts of the Public Finance Management Act (PFMA) and read together with the principles contained in the King IV Report on Corporate Governance.

The Accounting Authority of the public entity is responsible for corporate governance.

2. PORTFOLIO COMMITTEES

The Portfolio Committee called a meeting with all the Chairs and Deputy Chairs of all DAC entities in November 2018.

3. EXECUTIVE AUTHORITY

The following table provides commentary on reports submitted to the Executive Authority, Department of Arts and Culture (DAC): SUBMISSION DATE DOCUMENT ISSUES RAISED BY DAC DMSA QUARTERLY PERFORMANCE REPORTS 31 April 2017 1st Quarter Performance Report None 31 July 2017 2nd Quarter Performance Report None 31 October 2017 3rd Quarter Performance Report None 31 January 2018 4th Quarter Performance Report None ANNUAL PERFORMANCE PLANS (APP) 2018/19 31 August 2017 1st Draft APP (inclusive of the draft None budget and revised 2017/18 to 2021/22 Strategic Plan) 30 November 2017 2nd Draft APP (inclusive of the draft None budget and revised 2017/18 to 2021/22 Strategic Plan) 31 January 2018 Final APP revised 2017/18 to 2021/22 None Strategic Plan) PROGRESS REPORT ON THE OBSERVATION BY DAC FOLLOWING THE OVERSIGHT VISIT AT DMSA ON 2 FEBRUARY 2017 02 November 2017 Status Report None DAC STRATEGIC PLANNING SESSION 13 November 2017 DMSA Presentation None DMSA STRATEGIC RISK REGISTER 31 January 2018 DMSA Strategic Register: Final approved None draft submitted with ﬁnal APP

DITSONG Annual Report 2017 - 18 50 PART C - Governance

SUBMISSION DATE DOCUMENT ISSUES RAISED BY DAC 2018/19 FRAUD PREVENTION PLAN 31 January 2018 DMSA Fraud Prevention Plan: Final ap- None proved draft submitted with Final APP 2018/19 MATERIALITY AND SIGNIFICANCE FRAMEWORK 31 January 2018 DMSA Materiality Framework: Final ap- None proved draft submitted with ﬁnal APP 2018/19 SHAREHOLDER`S COMPACT 13 February 2018 1st Draft None 2018/19 ANNUAL PROCUREMENT PLAN 31 March 2018 Final approved None ANNUAL REPORT 2017/2018 31 July 2018 Final approved, including Annual Finan- None cial Statements (AFS)

The Minister/Department had meetings with Chairs and Deputy Chairs of Public Entities in March 2018.

4. THE ACCOUNTING AUTHORITY BOARD

The Council is constituted in terms of the Cultural Institutions Act (No 119 of 1998), and is appointed by the Minister of Arts and Culture.

The term of oﬃce for the Council is from 01 August 2016 to 31 July 2019.

The role of the Council is as follows:

In terms of the Cultural Institutions Act, Council has the following responsibilities:

• to formulate policy; • to hold, preserve and safeguard all movable and immovable property of whatever kind placed in the care of or loaned or belonging to the declared institution concerned; • to receive, hold, preserve and safeguard all specimens, collections or other movable property placed under its care and management under section 10(1); • to raise funds for the DMSA; • to manage and control the moneys received by the declared institution, and to utilise those moneys for defraying expenses in connection with the performance of its functions; • to keep a proper record of the property of the declared institution, to submit to the Director-General any returns required by him or her in regard thereto, and to cause proper books of account to be kept; • to determine, subject to this Act and with the approval of the Minister, the objects of the declared institution; and, • to generally carry out the objectives of the declared institution.

DITSONG Annual Report 2017 - 18 51 PART C - Governance

Council Charter

The Council operated in accordance with an approved Charter. In addition, Council entered into an annual Shareholder`s Compact agreement with the Executive Authority.

Composition of the DMSA Council DATE DATE NAME OTHER OTHER AREA OF EXPERTISE APPOINTED COMMITTEES NO. OF MEET- NO. THE ENTITIES) TORSHIP (LIST TORSHIP DESIG-NATION DESIG-NATION DATE RESIGNED DATE INGS ATTENDED COUNCIL DIREC- COUNCIL QUALIFICATIONS Ms K. Chairper- 01-Aug- To date Articles of Traineeship, Risk Manage- • Council 15 Rapoo son 16 KPMG; Executive Devel- ment and opment Programme, Governance GIBS; Project Manage- ment, Executive Educa- tion; Advanced Project Management, Executive Education

Dr M. Deputy 01-Aug- To date BA Political Science Knowledge • Core 16 Matlou Chairper- 16 with Geography; MA Management Func- son International Relations, Specialist in tions University of Kent, Can- Research and Com- terbury, England; Fundraising mittee Ph.D. Sociology, Univer- (4) sity of Essex, Colchester, • Council England; (12) BPhil in Knowledge Management, University of Stellenbosch Adv. M. Council 27-Feb-15 To date B. Proc. Degree, Universi- Legal, Labour • HRREM- 23 Ralefa- Member ty of the North (UNIN); Relations, CO (4) tane and Chair- LLB Degree, UNIN; LLM Human • ARIC (4) person of (Interpretation and Resources and • Council Human Drafting of Contracts), Governance (15) Resources University of Johannes- and Remu- burg; Admitted Advo- neration cate to the Supreme Committee Court of SA; Certificate (HRREMCO) in Audit Committee, Certificate in Corporate Governance, Certifi- cate in Land Reform, Certificate in Human Rights and Certificate in Labour Relations, University of Pretoria

DITSONG Annual Report 2017 - 18 52 PART C - Governance DATE DATE NAME OTHER OTHER AREA OF EXPERTISE APPOINTED COMMITTEES NO. OF MEET- NO. THE ENTITIES) TORSHIP (LIST TORSHIP DESIG-NATION DESIG-NATION DATE RESIGNED DATE INGS ATTENDED COUNCIL DIREC- COUNCIL QUALIFICATIONS Dr P. Council 01-Aug- To date DPhil (Entomology), Museum • Core 18 Bayliss Member 13 UKZN. Management Func- and B.Sc. (Hons) and Heritage tions (4) Chairper- B.Sc. specialist • Council son of Core (14) Functions Committee Mr B. Council 01-Aug- To date SAP Sybase Adaptive Information • ARIC (6) 19 Daniels Member 16 Server 15; and Com- • Council and Acting MBA munication (13) Chairper- Business Analysis Technology son of Au- Sybase; dit and Risk Sybase Learning Con- Committee nection SQL Remote (ARIC) Replication (Theory/ Practical/ Design) Mr M. Council 01-Feb-16 To date Executive Development Commerce • ARIC (5) 17 Ditlhake Member Programme, UNISA; B. and Account- • Council Com Honours (Account- ing (12) ing) and Certificate in Theory of Accounting (CTA), UKZN. Certificate in Corporate Finance Analysis Ms Z. Council 01-Feb-16 To date Certificate Course in Oc- Serving • HRREM- 13 Khanyile Member cupational Health and on several CO (4) Safety, UNISA; Doctorate governance • Council in Business Adminis- structures (9) tration (DBA), current studies, UKZN; Master of Business Administration (MBA), UNISA; BCOM (Business Man- agement); Diploma in Human Resources Man- agement, UKZN; and Certificate in Local Gov. Admin and Manage- ment, UNISA Financial Management

DITSONG Annual Report 2017 - 18 53 PART C - Governance DATE DATE NAME OTHER OTHER AREA OF EXPERTISE APPOINTED COMMITTEES NO. OF MEET- NO. THE ENTITIES) TORSHIP (LIST TORSHIP DESIG-NATION DESIG-NATION DATE RESIGNED DATE INGS ATTENDED COUNCIL DIREC- COUNCIL QUALIFICATIONS Mr B. Council 01-Aug- To date BA, PG Dip Museology, Museum • Core 11 Mgijima Member 16 UWC; BPA Hons; MPhil, Governance Func- US and Manage- tions ment, Tourism Com- and Heritage mittee Management, (3) Scenario and • Council Long-Term (8) Planning, Public and Development Management Ms Y. Council 01-Aug- To date BA Social Sciences, Human Re- • HRREM- 17 Mashilela Member 16 University of the North; sources exper- CO (4) DPLR (post graduate tise including • Council qualiﬁcation), UNISA; recruitment (13) IR Skills Development and retention, Programme; MBA, conﬂict reso- MANCOSA. lution, change management, administration, manpow- er planning, performance management and training and development

Council Committees

NO. OF MEET- NO. OF MEM- COMMITTEE NAMES OF MEMBERS INGS HELD BERS Audit, Risk and Information Commu- Adv. M. Ralefatane*, Ms M. Mudau**, nication 84 Mr M. Ditlhake and Mr B. Daniels Technology Committee (ARIC) Dr P. Bayliss, Mr B. Mgijima, and Dr M. Core Functions Committee 4 3 Matlou Human Resources and Remunera- Adv. M.J. Ralefatane, Ms Z. Khanyile 43 tion Committee and Ms Y. Mashilela * Adv. M. Ralefatane was appointed as additional member of ARIC by Council in May 2017 until November 2017. ** Ms M. Mudau was appointed as Independent Chairperson of ARIC in November 2017.

DITSONG Annual Report 2017 - 18 54 PART C - Governance

Remuneration of Council members

Other Subcom- Other reimburse- Name Remuneration Total (R) mittee allowance ments Ms K. Rapoo 53 687 50 364 104 051 Dr M. Matlou 41 520 13 840 25 446 80 806 Adv. M Ralefatane 41 904 21 560 61 063 124 487 Dr P. Bayliss 37 248 14 510 28 890 80 648 Mr B Daniels 32 592 15 132 33 748 81 472 Mr M Ditlhake 29 100 13 968 9 421 52 489 Ms Z Khanyile 26 772 9 312 34 560 70 644 Mr B Mgijima 16 296 7 112 2 833 26 241 Ms Y Mashilela 29 100 6 984 37 290 73 374 Total 308 219 102 418 283 575 694 212

5. RISK MANAGEMENT

The Institution conducted two Risk Management Workshops facilitated by internal and external service providers.

Following the two workshops, DMSA developed the Organisational Strategic Risk Register, which was approved by Council on 31 January 2018 and submitted to the Executive Authority.

In an eﬀort to improve governance, management has implemented the following: • Risk Management Plan • Organisational Risk Register

The Risk Register is a standing agenda item in all Operational and Management Committee (MANCO) meetings to monitor compliance.

Progress made is reported to the Audit, Risk and Information Communication Technology Committee and Council on a quarterly basis to indicate progress with regard to risk mitigation in terms of a pre-determined timeframe and to add new and emerging risks.

As at 31 March 2018, 39% of the risks were mitigated, 57% partially mitigated and 4% not mitigated at all.

The remedial plan to address external and internal audit ﬁndings was developed and is continually monitored.

6. INTERNAL CONTROL UNIT

The DMSA does not have a formally instituted Internal Audit Unit but has outsourced the audit function.

DITSONG Annual Report 2017 - 18 55 PART C - Governance

7. INTERNAL AUDIT AND AUDIT COMMITTEES

The following internal audit work was completed during the year under review:

• DMSA Operations: (Collection Management, Accessioning and Inventory, Conservation and Restoration Management, Public Engagement and Research) • Supply Chain Management • Assets Management • Revenue and Debtors Management • Human Resources and Payroll Management • Audit of Performance Information • Information Technology • Corporate Governance • Follow-up reviews

The following Audit Committee work was completed during the year under review:

• Advised Management on Risk Management • Assessed Internal Controls • Reviewed Internal Audit Plan/Scope • Reviewed Three Year Rolling Plan • Reviewed Internal Audit Performance • Reviewed Risk Mitigation Implementation • Reviewed Interim Management Report with Management’s Comments • Reviewed Final Management Report with Management’s Comments • Reviewed Annual Performance Plan • Reviewed Annual Financial Statements • Reviewed Quarterly Management Accounts • Reviewed new Accounting Policies/Changes in Accounting Standards • Reviewed Annual Procurement Plan • Reviewed Contract Register • Reviewed Irregular, Fruitless Expenditure Register • Reviewed Financial and Supply Chain Management Policies and Recommendations for Approval by Council

The table below discloses relevant information on the Audit Committee members:

Internal No. of Date ap- Date Re- Name Qualifications or exter- Meetings pointed signed nal attended Ms S.F. Mudau CA (SA), SAICA; Master`s in Business Adminis- External 01-Nov- To date 3 (Chairperson) tration (MBA) WITS; Senior Executive Devel- 17 opment Programme, WITS; Management Advanced Programme, WITS; B.Com (Honours) Accounting, UKZN; B.Com Financial Account- ing, UP Mr B. Daniels SAP Sybase Adaptive Server 15; External 01-Aug- To date 6 (Member) MBA Business Analysis Sybase; 16 Sybase Learning Connection SQL Remote Replication (Theory/Practical/ Design)

DITSONG Annual Report 2017 - 18 56 PART C - Governance

Internal No. of Date ap- Date Re- Name Qualifications or exter- Meetings pointed signed nal attended Mr M. Ditlhake Executive Development Programme, UNISA; External 01-Feb-16 To date 5 (Member) B.Com Honours (Accounting) and Certiﬁcate in Theory of Accounting (CTA), UKZN; Certiﬁ- cate in Corporate Finance Analysis

8. COMPLIANCE WITH LAWS AND REGULATIONS

The DMSA has developed and reviewed a number of policies and regulations in order to ensure compliance.

A total of 33 policies were developed, reviewed and approved, in part responding to audit ﬁndings and enabling the realisation of the strategic imperatives of the Institution. Furthermore, a central policy repository was developed to enhance governance and employee socialisation.

The DMSA endeavours to adhere to the PFMA, the Cultural Institutions Act, Treasury Regulations, Supply Chain Practice Notes, and other relevant prescripts.

DMSA appointed Internal Auditors to test compliance with laws and regulations.

9. FRAUD AND CORRUPTION

The DMSA’s Fraud Prevention Plan and the progress made in implementing the plan include the following:

• Fraud Prevention Plan with hotline number • Hotline number emailed to all employees and posted on notice boards • Alarm system and/or cameras installed at some museums • Motor vehicles, handbags, etc. searched • All employees signed forms to declare their business interests • SCM officials are bound by the SCM Code of Conduct • Internal controls implemented to ensure that there is sufficient segregation of duties • A book on entry for visitors/vehicles control was introduced at the museums • Regular meetings held with various contracted security companies • Clocking systems • Regular fixed assets verification (as per the policy) • Various tender committees established • New system introduced for quotations above R30 000. These have to be submitted in sealed envelopes

DITSONG Annual Report 2017 - 18 57 PART C - Governance

It is the responsibility of employees of DMSA to report all incidents of fraud, corruption, theft, maladministration or any other dishonest activities of a similar nature to their supervisors. If the employee or oﬃcial is not comfortable with reporting such matters to the supervisor, he or she could report the matter to the supervisor’s superior, with ﬁnal recourse to the CEO. Employees may also report incidents by using the hotline if they wish to remain anonymous or for any other reason.

Fraudulent activities are reported through the hotline and if there are any disciplinary actions to be taken, they are instituted in terms of the Disciplinary Code.

10. MINIMISING CONFLICT OF INTEREST

All Supply Chain Management personnel have formally signed the Code of Conduct as prescribed by Practice Note 7 of 2009/10, par 4.4.1. The Supplier Bidding Document (SBD) 4 is also provided by the prospective bidders to declare their interest in the organisation. All DMSA employees are required to declare their interests in private companies annually. The employees’ declaration of interest forms are kept in the employees’ ﬁles and are properly monitored.

11. CODE OF CONDUCT

The revised policy for Code of Conduct and Ethics was approved. A Declaration of Interest policy and form were developed and approved by Council in January 2017 and signed by staﬀ members. Forward planning continues to ensure that all staﬀ are informed and that the Code of Conduct is carried out.

A Disciplinary Code and Grievance Procedure are in place and are applied for any breach of the Code of Conduct or other disciplinary matters.

DMSA is guided by the Code of Conduct for Public Servants published in Part 2 of the Public Service Regulations, 1999, which gives clear guidelines on expected behaviour and guidelines to reinforce appropriate behaviour in the organisation. The Code of Conduct is also available to suppliers and stakeholders on request.

12. HEALTH, SAFETY AND ENVIRONMENTAL ISSUES

Fire extinguishers and ﬁre detectors are serviced and maintained at all museums by the Department of Public Works (DPW). Elevators are in good working condition.

When challenges occur, some issues are addressed by the Repairs and Maintenance Programme (RAMP), which is funded by the DAC and work is undertaken by the Department of Public Works.

The Health and Safety Committee has been established and meets regularly to address Health and Safety issues.

DITSONG Annual Report 2017 - 18 58 PART C - Governance

13. COMPANY/BOARD SECRETARY

The role and responsibilities of the Council Secretary are as follows:

• To ensure that the relevant governance structures and committees are in place • To arrange Council Member induction and training • To formulate of Terms of Reference (TOR) for Council and Council sub-committees • Developing and updating of the organisational Code of Conduct and Ethics • Establishing and monitoring the organisational compliance universe • Continuous reviewing of the state of compliance of the Institution • Establishing and monitoring of the central Policies Register and Repository • Managing DMSA Policy Register and Repository; ensuring that the policies are signed and ﬁled manually and electronically • To coordinate performance assessment of Council and Committees • Stakeholder Management • Council and Committees Administrative Support

14. SOCIAL RESPONSIBILITY

DMSA embarked on a number of social responsibility programmes in 2017/18. Amongst these were:

• Opening of the Nelson Mandela Exhibition • Collaboration with a local choir to compose a musical on Nelson Mandela 67 Minutes: A life of service, celebrating the life of a world icon • Heritage Day held at DPM included a number of people from disadvantaged communities who were transported to the venue and engaged in a traditional day of dance, poetry and food • World Aids Day on 01 December 2017

15. REPORT OF THE AUDIT RISK AND INFORMATION TECHNOLOGY COMMITTEE

Report of the Public Finance Management Act of 1999 (as amended) and some of the requirements of King IV Code of Governance.

BACKGROUND

The Audit, Risk and Information Technology Committee (ARIC) assists Council in fulfilling its oversight responsibilities, in particular with regard to the evaluation of the adequacy and efficiency of accounting policies, internal controls, risk management and financial reporting processes. In addition, the ARIC assesses the effectiveness of the internal auditors and the independence and effectiveness of the external auditors.

DITSONG Annual Report 2017 - 18 59 PART C - Governance

RESPONSIBILITIES, COMPOSITION AND FUNCTIONS OF THE COMMITTEE

The Committee’s roles and responsibilities include its statutory duties as per the PFMA, the requirements of the King IV Codes of Governance and the responsibilities assigned to it by Council. The Committee therefore reports that it has adopted appropriate formal terms of reference as approved by Council, and is satisﬁed that it has discharged its responsibilities as per the PFMA.

The Committee has carried out its functions through attendance of ARIC meetings and discussions with Executive Management, Internal Audit and external advisers where appropriate. ARIC meets at least four times per annum, with authority to convene additional meetings as circumstances require. Invitees to the meetings of the Committee include the CEO, CFO, internal and external auditors, as well as Museum directors, and any other managers as may be required.

To execute its key functions and discharge its responsibilities as outlined in its Terms of Reference, during the period under review, the committee performed the following:

• Assisted the Council in its evaluation of the adequacy and efficiency of the internal control systems, accounting practices, information systems, risk management and auditing processes applied within the entity in the day-to-day management of its business; • Facilitated and promoted communication between the Council, management, the external auditors and internal auditors on matters which are the responsibility of the Committee; • Introduced measures that, in the opinion of the Committee, may enhance the credibility and objectivity of the annual financial statements and reports prepared with reference to the affairs of the entity; • Approved the fees to be paid to the external auditors as well as the audit strategy;

INTERNAL CONTROL

The ARIC monitored the eﬀectiveness of the internal controls and risk management activities. There were material ﬁndings noted on the internal and external audit reports which highlighted a breakdown of internal controls which should be addressed. Below are some of the areas of concerns as noted from internal auditors and external auditor’s reports:

• Inadequate management of remedial actions on external and internal audit ﬁndings; • Unavailability of adequate audit evidence; and • Measures put in place to review reported performance information proved to be inadequate.

ARIC is of the opinion that the internal controls of the entity have been partially eﬀective during the year under review. This opinion is based on the assessment of internal audit reports, assessment of reports or submission tabled by Management and explanations given by management regarding some of the challenges, discussions with Internal Audit, and with the independent external auditors, on the results of their audits. There are currently processes underway to enhance the control environment of the entity which includes appointments of key personnel such as the CEO and the CFO.

EXTERNAL AUDITORS

The Auditor General of South Africa (AGSA) is the auditor of Ditsong Museums. The committee was satisﬁed that the audit team is independent. The Committee, in consultation with Management, agreed to the engagement letter, terms, audit plan and audit fees for the ﬁnancial year ended 31 March 2018.

DITSONG Annual Report 2017 - 18 60 PART C - Governance

The Committee:

• Approved the external auditors’ annual plan and related scope of work; • Monitored the eﬀectiveness of the external auditors in terms of their skills, independence, execution of the audit plan, reporting and overall performance; and • Considered whether the extent of reliance placed on internal audit by the external auditors was appropriate and whether there were any signiﬁcant gaps between the internal and external audits

EXPERTISE AND EXPERIENCE OF THE FINANCE FUNCTION

The Committee has considered, and is concerned the overall appropriateness of the expertise and adequacy of resources of the Finance function. The Committee has made recommendations to Council in this regard which have been adopted.

DUTIES ASSIGNED BY THE COUNCIL

GOING CONCERN

After having reviewed all submissions by Management and the Annual Financial Statements, the Committee concurs that the adoption of the going concern assumption in the preparation of the ﬁnancial statements is appropriate and sound.

INTERNAL AUDIT

During the ﬁnancial year, the Internal Audit function was outsourced to Outsourced Risk and Compliance Assessment (ORCA). The internal auditors have a functional reporting line to the Committee Chairperson and an administrative reporting line to the CEO.

The Committee assesses the effectiveness of the internal audit function, and reviews and approves the Internal Audit Plan and Budget. The Committee monitored and challenged, where appropriate, the action taken by Management with regard to adverse Internal Audit findings. The Committee is satisfied with the independence and effectiveness of the Internal Audit function.

Following its review of the annual ﬁnancial statements for the year ended 31 March 2018, this Annual Report and Annual Financial Statements were recommended by the ARIC to Council for approval.

On behalf of the Audit Committee.

______Sedzani F. Mudau ARIC Chairperson 31 July 2018

DITSONG Annual Report 2017 - 18 61 Part D Human resource management

DITSONG Annual Report 2017 - 18 62 PART D - Human resource management

1. INTRODUCTION

One of DMSA’s five strategic goals is Developed and Retained Skills and Expanded Specialised Knowledge. Human Capital Management has been central in the realisation of this goal. For the first time in the history of DMSA, Human Resources (HR) adopted a different approach which aspires to manage the department as a business with objectives, rather than as a compliance structure. As a result, HR had a strategic planning session where its vision and mission were outlined. The main focus of the Human Capital Strategy for the next three years has been defined as building a talent culture that will ensure that DMSA becomes a leader in the heritage sector. 2017/18 was dedicated to laying the foundation that would enable the implementation of the strategy, taking into consideration other processes that were supposed to be implemented parallel with it. Such processes include the implementation of the Remedial Action Plan to address previous audit findings, going back to 2015/16.

During the year under review, HR prioritised the following initiatives:

• Continuing with the establishing of DMSA thought leadership capability by implementing various training and development interventions • Overseeing the approval and implementation of the Human Capital Strategy for DMSA • Overseeing the approval and implementation of the Talent Management Strategy • Implementing the ﬁrst stage of the Organisational Change Management Programme • Developing an Integrated Performance Management Framework • Reviewing and developing policies • Resuscitating the Employee Wellness Programme

The workforce planning framework and key strategies to attract, recruit and retain a skilled and capable workforce include:

• Approaching relevant educational institutions for collaboration • Establishing an internship programme in core business • Continuing with the implementation of bursary schemes • Increasing the already established momentum on training and development • Continuing to put more emphasis on improved conditions of service • Continuing with an employee wellness programme

The following were the highlights for the year under review:

• Achievement of 75% of the APP deliverables regarding the training plan, 95% has been implemented with the remaining 2 out of the 25 interventions planned for implementation in April and May 2018 • Leadership Development Programme commenced with 15 employees enrolled for the programme for a year. Employees will be attending for three days every month.

Development of the following strategies:

• Human Capital Strategy • Talent Management Strategy • Employer of Choice Strategy

DITSONG Annual Report 2017 - 18 63 PART D - Human resource management

Development and review of the following policies:

• Leave Policy. • Declaration of Interest Policy • Code of Conduct Policy • Acting Policy • Integrated Performance Management Policy • Recognition and Reward Policy • Recruitment and Selection Policy • Overtime Policy • Job Evaluation Policy

The following programmes were developed, and are in a process of being implemented:

• Leadership Development Programme • Induction Programme • Change Management Programme • Employee Wellness Programme

Probationary Assessment Process

This process was introduced in the fourth quarter of 2017/18 and will be implemented in the future. It is closely managed by all divisions of DMSA.

Employee Recognition Award

An Employee Recognition Award Policy was developed during the year under review in order to shift DMSA towards becoming a centre of excellence in the heritage sector. The programme is aimed at recognising and rewarding those employees who demonstrate high performance, as well as employees with long service with the intention to promote retention.

All DMSA employees are eligible to receive recognition and to be rewarded. DMSA will identify and recognise outstanding performance that supports among others:

• Outstanding teamwork and collaboration • Enhancing the employee experience • Striving for excellence in performance • Promoting inclusivity and culture • Leadership excellence • Demonstrating service in solidarity • Innovative solutions and creativity • Beyond call of duty recognition

DITSONG Annual Report 2017 - 18 64 PART D - Human resource management

Policy Awareness and Accessibility

The DMSA’s policies are now accessible on DMSA’s intranet. This is considered an achievement because every employee is now able to access the policies. Policies are also being socialised across the Institution, with managers ensuring that policy awareness sessions are held on a monthly basis.

GRAP 103 Project Employees

This project employed 24 contractors who were taken over by the service provider, Grant Thornton, that was appointed to deliver on the project. The takeover was completed successfully with the assistance of a legal representative appointed to advise on the correctness of the process.

Tswaing Labour Unrest

This is one of the areas that has been troubled by various disputes and unhappiness over time, including the involvement of the Tswaing community that demonstrated threatening behaviour towards DMSA management.

During the year under review, DMSA experienced the following challenges as far as HR was concerned:

• The number of CCMA cases against the Institution, because of a class action case brought by Fixed Term Contractors whose contracts were not renewed • A number of resignations, especially at senior level • The departure of the CEO (appointed on 1 November 2017 and resigned on 16 January 2018) • Slow progress in the implementation of the Realignment Project • Lack of resources in HR • Inadequacies with HR records management

Future goals for 2018/19

• Implement the second-year deliverables of the Human Capital Strategic three-year plan • Implement the second-year deliverables of the Talent Management Strategy • Implement the Employer of Choice Strategy • Implement the Integrated Performance Management Policy • Implement the Recognition and Rewards Policy • Develop and implement the Remuneration Policy • Develop and implement the Integrated Human Resources Development Strategy • Continue with the implementation of the Leadership Development Programme • Continue with the implementation of the Change Management Programme • Implement the Induction Programme • Develop HR technological systems to alleviate capacity constraints

DITSONG Annual Report 2017 - 18 65 PART D - Human resource management

2. HUMAN RESOURCE OVERSIGHT STATISTICS

Personnel Cost by programme/ activity/ objective

Programme/activity/ob- Total Expen- Personnel Personnel No. of Average jective diture for the Expenditure exp. as a % employees personnel entity (R’000) of total exp. cost per (R’000) (R’000) employee (R’000) Programme 1: Administration 29 980 14 702 12.8% 66 222 Programme 2: Business De- 82 268 38 989 33.8% 73 534 velopment Programme 3: Public Engage- 2 944 2 515 2.2% 15 168 ment Total 115 192 56 206 48.8% 154 365

Personnel cost by salary band

Level Personnel % of person- No. of Average Expenditure nel exp. to to- employees personnel (R’000) tal personnel cost per cost (R’000) employee (R’000) Top management (15-16) 1 698 3 1 1 698 Senior management (13-14) 1 783 3 3 594 Professional qualiﬁed ( 10-12) 9 466 17 16 592 Skilled (8-9) 18 711 33 35 534 Semi-skilled (5-7) 19 687 35 84 234 Unskilled (2-4) 2 598 5 15 173 Contract 2 263 4 39 58 TOTAL 56 206 100 193 291

Training Costs

Programme//activity/ Personnel Training Training No. of Avg training objective Expenditure Expenditure Expenditure employees cost per (R’000) (R’000) as a % of trained employee Personnel Cost Programme 1: Administration 14 702 164 1.69 89 6 Programme 2: Business De- 38 989 105 0.2 2 3.2 velopment Programme 3: Public Engage- 2 515 8 0.01 2 2 ment Total 56 206 455 0.5 93 11.2

DITSONG Annual Report 2017 - 18 66 PART D - Human resource management

Employment and vacancies

Programme/activity/ 201/62017 2017/2018 2017/2018 2017/2018 % of objective No. of Approved No. of Em- Vacancies vacancies Employees Posts ployees Programme 1: Administration 62 71 66 5 2 Programme 2: Business De- 86 135 73 62 28 velopment Programme 3: Public Engage- 17 18 15 3 1 ment Total 165 224 154 70 31

Programme/activity/ 2016/2017 2017/2018 2017/2018 2017/2018 % of objective No. of Approved No. of Vacancies vacancies Employees Posts Employees Top management 33120.9 Senior management 66331.3 Professional qualiﬁed 17 21 16 5 2.2 Skilled 37 56 35 21 9.4 Semi-skilled 82 106 84 22 9.8 Unskilled 20 32 15 17 7.6 TOTAL 165 224 154 70 31.2

The Director of the DITSONG: National Museum of Cultural History was appointed in January 2018, during the last quarter of the 2017/18 ﬁnancial year. There had been no Chief Financial Oﬃcer (CFO) since September 2016, forcing the Institution to appoint an interim CFO, while the disciplinary process for the CFO was underway. A new CFO was appointed and commenced employment in January 2018.

DMSA saw the resignation of two CEOs (Adv Mushwana and Dr Ndhlovu) in the ﬁnancial year under review. As a result, an Acting CEO was appointed in March 2018 to lead the organisation while the recruitment processes for a new CEO are underway.

Employment changes

Salary Band Employment Appoint- Terminations Employment at beginning ments at end of the of period period Top management 2111 Senior management 7233 Professional qualiﬁed 8 2 1 16 Skilled 37 2 4 35 Semi-skilled 91 1 10 84 Unskilled 20 0 1 15 Total 165 8 20 154

DITSONG Annual Report 2017 - 18 67 PART D - Human resource management

Provides information on changes in employment over the ﬁnancial year. Turnover rates provide an indication of trends in the employment proﬁle of the public entity.

Reasons for staff leaving

Reason Number % of total no. of staff leaving Death 1 5 Resignation 7 35 Expiry of contract 1 5 Dismissal- operational changes 0 0 Dismissal – misconduct 0 0 Dismissal – ineﬃciency 0 0 Ill health 0 0 Retirement 11 55 Expiry of contract 0 0 Other 0 0 Total 20 100

Labour Relations: Misconduct and disciplinary action

Nature of disciplinary Action Number Verbal Warning 2 Written Warning 0 Final Written warning 1 Dismissal 0

Equity Target and Employment Equity Status

Levels MALE

African Coloured Indian White Current Target Current Target Current Target Current Target Top Management 10000000 Senior Management 20000000 Professional qualiﬁed 20000040 Skilled 600010110 Semi-skilled 44 1000030 Unskilled 14 0000010 TOTAL 6810010190

DITSONG Annual Report 2017 - 18 68 PART D - Human resource management

Levels FEMALE

AFRICAN COLOURED INDIAN WHITE Current Target Current Target Current Target Current Target Top management 00000100 Senior management 00000010 Professional qualiﬁed 40000030 Skilled 600000111 Semi-skilled 36 0010010 Unskilled 40000000 TOTAL 5000101161

Employees with disabilities – none

Mampoer Festival.

DITSONG Annual Report 2017 - 18 69 Part E Financial Information

DITSONG Annual Report 2017 - 18 70 PART E: FINANCIAL INFORMATION

1. REPORT OF THE EXTERNAL AUDITOR 72

2. ANNUAL FINANCIAL STATEMENTS 80

STATEMENT OF FINANCIAL PERFORMANCE 80 STATEMENT OF FINANCIAL POSITION 81 STATEMENT OF CHANGES IN NET ASSETS 82 CASH FLOW STATEMENT 83 STATEMENT OF BUDGET INFORMATION 84 INFORMATION ABOUT SURPLUS OR DEFICITS, ASSETS AND LIABILITIES AND RECONCILIATIONS 87 NOTES TO THE FINANCIAL STATEMENTS 89

DITSONG Annual Report 2017 - 18 71 PART E - Financial Information

Report of the auditor-general to Parliament on Ditsong: Museum of South Africa

Report on the audit of the financial statements

Qualified opinion

1. I have audited the financial statements of the Ditsong Museum of South Africa set out on pages 80 to 149, which comprise statement of financial position as at 31 March 2018, the statement of financial performance, statement of changes in net assets, cash flow statement and the statement of budget information for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies.

2. In my opinion, except for the possible effects of the matters described in the basis for qualified opinion the financial statements present fairly, in all material respects, the financial position of Ditsong Museum of South Africa as at 31 March 2018, and its financial performance and cash flows for the year ended in accordance with the South African Standards of Generally recognised accounting practices (SA standards of GRAP) and the requirements of the Public Finance Management Act of South African, 1999 (Act No.1 of 1999)( PFMA).

Basis for qualified opinion

Heritage assets

3. I was unable to obtain sufficient appropriate audit evidence for valuation of Heritage assets, as the entity did not maintain complete records of the information used to determine values of Heritage assets. I could not confirm the amounts by alternative means. Consequently, I was unable to determine whether any adjustment was necessary to heritage assets stated at R899 755 007 in the financial statements. Furthermore, I was unable to obtain sufficient appropriate audit evidence for the amount disclosed in the prior period error for the adjustment of R385 586 518 on Heritage Assets. I was unable to confirm the restatement by alternative means.

Prior period error

4. I was unable to obtain sufficient appropriate audit evidence for the amount disclosed in the prior period error for the adjustment of R1 726 354 on fruitless and wasteful expenditure, R1 287 291 for irregular expenditure, R1 628 245 for trade and other payables and R8 237 189 for revenue from exchange transaction. I was unable to confirm the restatement by alternative means.

Context for the opinion

5. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities under those standards are further described in the auditor-general’s responsibilities for the audit of the financial statements section of this auditor’s report.

DITSONG Annual Report 2017 - 18 72 PART E - Financial Information

6. I am independent of the [type of auditee/ group] in accordance with the International Ethics Standards Board for Accountants’ Code of ethics for professional accountants (IESBA code) and the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA code.

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

Emphasis of matters

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

Restatement of corresponding figures

9. As disclosed in note 22 to the financial statements, the corresponding figures for 31 March 2017 have been restated as a result of an error in the financial statements of the public entity at, for the year ended, 31 March 2018.

Responsibilities of accounting authority for the financial statements

10. The accounting authority is responsible for the preparation and fair presentation of the financial statements in accordance with South African Standards of Generally Recognised Accounting Practice and the requirements of the Public Finance Management Act of South Africa ,1999 ( Act No.1 of 1999), and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

12. My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

DITSONG Annual Report 2017 - 18 73 PART E - Financial Information

Report on the audit of the annual performance report

Introduction and scope

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

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

16. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected programmes presented in the annual performance report of the entity for the year ended 31 March 2018:

Programmes Pages in the annual performance report

Programme 2: Business Development 42 – 44

Programme 3: Public Engagement 45 – 46

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

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

• Programme 2: Business Development

• Programme 3: Public Engagement

Other matter

19. I draw attention to the matters.

DITSONG Annual Report 2017 - 18 74 PART E - Financial Information

Achievement of planned targets

20. Refer to the annual performance report on pages 36 to 46 for information on the achievement of planned targets for the year and explanations provided for the over achievement of a number of targets.

Adjustment of material misstatements

21. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information Programme 2: Business Development, as management subsequently corrected the misstatements, I did not raise any material findings on the usefulness and reliability of the reported performance information.

Report on the audit of compliance with legislation

Introduction and scope

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

23. The material findings on compliance with specific matters in key legislations are as follows:

Annual financial statements, performance and annual report

24. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by section 55(1) (a) and (b) of the PFMA.

25. Material misstatement of revenue from revenue from non-exchange, irregular expenditure, fruitless and wasteful expenditure and commitments identified by the auditors in the submitted financial statements were corrected

Expenditure management

26. Effective steps were not taken to prevent irregular expenditure, as required by section 51(1) (b) (ii) of the PFMA. The majority of the irregular expenditure was caused by the non-compliance with the procurement process in terms on the treasury guidelines

27. Effective steps were not taken to prevent fruitless and wasteful expenditure, as required by section 51(1) (b) (ii) of the PFMA. The majority of the fruitless and wasteful expenditure was caused by interest and penalties incurred on late payment to SARS.

Procurement and contract management

28. Some of the invitations for competitive bidding were not advertised for a required minimum period, as required by treasury regulations 16A6.3(c). This non-compliance was identified in the procurement processes for the GRAP 103 project.

DITSONG Annual Report 2017 - 18 75 PART E - Financial Information

29. Some of the contracts were awarded to bidders based on evaluation criteria that were different from those stipulated in the original invitation for bidding and quotations, in contravention of treasury regulations 16A6.3 (a).

Consequence management

30. I was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred irregular expenditure as required by section 51(1)(e)(iii) of the PFMA. This was due to proper and complete records that were not maintained as evidence to support the investigations into irregular expenditure.

31. Disciplinary steps were not taken against some of the officials who had incurred irregular expenditure, as required by section 51(1)(e)(iii) of the PFMA.

32. I was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred fruitless and wasteful expenditure as required by section 51(1)(e)(iii) of the PFMA. This was due to proper and complete records that were not maintained as evidence to support the investigations into fruitless and wasteful expenditure.

33. Disciplinary steps were not taken against some of the officials who had incurred fruitless and wasteful expenditure, as required by section 51(1)(e)(iii) of the PFMA.

Other information

34. The accounting authority is responsible for the other information. The other information comprises the information included in the annual report, which includes the Council’ report, the audit committee’s report. The other information does not include the financial statements, the auditor’s report and those selected programmes presented in the annual performance report that have been specifically reported in this auditor’s report.

35. My opinion on the financial statements and findings on the reported performance information and compliance with legislation do not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon.

36. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements and the selected programmes presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

37. If, based on the work I have performed, I conclude that there is a material misstatement in this other information; I am required to report that fact.

Internal control deficiencies

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

DITSONG Annual Report 2017 - 18 76 PART E - Financial Information

Leadership

39. Leadership did not exercise sufficient oversight responsibility regarding financial reporting and compliance with laws and regulations as well as related internal controls.

Financial and performance management

40. Management did not prepare regular, accurate and complete financial reports that are supported and evidenced by reliable information. 41. Management did not implement adequate controls to review and monitor compliance all applicable laws and regulations.

Pretoria

31 July 2018

DITSONG Annual Report 2017 - 18 77 PART E - Financial Information

Annexure – Auditor-general’s responsibility for the audit 1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my audit of the financial statements, and the procedures performed on reported performance information for selected programmes and on the entity’s compliance with respect to the selected subject matters.

Financial statements 2. In addition to my responsibility for the audit of the financial statements as described in this auditor’s report, I also:

• identify and assess the risks of material misstatement of the financial statements whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the accounting authority.

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

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

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

Communication with those charged with governance 3. I communicate with the accounting authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. 4. I also confirm to the accounting authority that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters

DITSONG Annual Report 2017 - 18 78 PART E - Financial Information

that may reasonably be thought to have a bearing on my independence and, where applicable, related safeguards.

DITSONG Annual Report 2017 - 18 79 PART E - Financial Information

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2018

Notes 2018 2017 RR

REVENUE Non- Exchange Revenue Grants and donations 2.1 108 514 034 82 257 855

Exchange Revenue 11 125 151 10 950 833 Gross income from trading operations 5 007 991 5 451 723 - Trading revenue 2.2.1 5 089 209 5 528 377 - Cost of Sales ( 81 218) ( 76 654) Interest received 3 3 042 755 2 674 458 Other Revenue 2.2.2 3 074 404 2 824 651

Total revenue 119 639 185 93 208 687

EXPENSES Employee costs 2.3.2 (53 031 670) (52 486 968) Administrative 2.3.1 (11 718 729) (16 611 164) Depreciation 7.1 (3 192 001) (3 596 883) Amortisation 7.3 ( 41 113) ( 6 140) Impairment of assets ( 208 640) ( 34 711) Operating expenses 2.3.3 (48 586 985) (20 524 508) Interest service cost 8.2 (4 521 000) (4 598 000) Current service cost 8.2 (1 291 000) (1 334 000) Finance costs 20.2 ( 307 507) ( 64 201) Total expenses (122 898 645) (99 256 574) Proﬁt / (Loss) on sale of assets ( 66 658) - Actuarial Gain / (Loss) 8.2 (1 383 000) 3 312 000 (124 348 303) (95 944 574)

Surplus / (Deficit) for the year (4 709 118) (2 735 887) Attributable to: Net assets holder of the controlling entity (4 709 118) (2 735 887)

DITSONG Annual Report 2017 - 18 80 PART E - Financial Information

STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 MARCH 2018

Notes 2018 2017 RR

ASSETS

Current assets 58 328 451 38 426 801 Cash and cash equivalents 4 56 081 492 35 525 161 Trade and other receivables 5 2 106 810 2 747 829 Inventories 6 140 149 153 810

Non-current assets 913 330 683 914 908 795 Property, plant and equipment 7.1 20 266 420 22 232 567 Heritage assets 7.2 892 648 475 892 516 745 Intangible assets 7.3 415 788 159 483

Total Assets 971 659 134 953 335 596

NET ASSETS

Capital and reserves 894 827 954 899 803 865 Accumulated surplus / (deﬁcits) 894 827 954 899 803 865

LIABILITIES

Non-current liabilities 52 238 000 46 482 000 Employee beneﬁts 8 52 238 000 46 482 000

Current liabilities 24 593 180 7 049 731 Trade and other payables 9 23 740 139 6 643 340 Provisions 10 853 041 406 391

Total Net Assets and Liabilities 971 659 134 953 335 596

DITSONG Annual Report 2017 - 18 81 PART E - Financial Information

STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 31 MARCH 2018

Notes Accumulated Revaluation Total Surplus/(Loss) Surplus/(Loss) R R R

Balance 1 April 2016 515 813 370 515 813 370 Prior period error: Property, plant and equipment 7.1 1 206 588 1 206 588 Trade and other receivables 22.4 ( 66 724) ( 66 724) Heritage Assets 7.2 385 586 518 385 586 518 Restated balance 1 April 2016 902 539 752 902 539 752

Surplus for the year 14 (2 735 887) (2 735 887)

Balance as at 31 March 2017 SCI 899 803 865 899 803 865

Balance 1 April 2017 899 803 865 899 803 865 Property, Plant and Equipment 16 000 16 000 Heritage Assets 131 730 131 730 Prior years SARS liability ( 414 523) ( 414 523) Deﬁcit for the year 14 (4 709 118) (4 709 118)

Balance as at 31 March 2018 894 827 954 894 827 954

DITSONG Annual Report 2017 - 18 82 PART E - Financial Information

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2018

Notes 2018 2017 RR

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts Sale of goods and services 5 730 228 5 089 993 Grants and donations 125 798 363 73 516 653 Interest received 3 042 755 2 666 306 Other receipts 24.2 3 029 910 2 779 751

Payments Employee costs (54 024 020) (54 357 331) Suppliers (60 560 802) (28 520 350) Interest paid 20.2 ( 307 507) ( 64 201)

Net cash flows from operating activities 14 22 708 928 1 110 821

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment (1 303 420) (1 117 115) Purchases of intangible assets ( 301 807) ( 114 000) Proceeds from disposal of property, plant and equipment 44 495 44 900 Net cash outflow from investing activities (1 560 733) (1 186 215)

Net increase/(decrease) in cash and cash equivalents 20 556 331 ( 75 394) Cash and cash equivalents at the beginning of year 35 525 161 35 600 555 Cash and cash equivalents at the end of year 4 56 081 492 35 525 161

DITSONG Annual Report 2017 - 18 83 PART E - Financial Information

- -100% - 3 312 000 (3 312 000) -100% 4 240 33% 2 080 000 - 2 080 000 100% 9 938 11% 197 000 76 654 120 346 61% 2 500 0% 73 080 000 73 080 000 - 0% 92 703 11% 1 181 420 947 740 233 680 20% 15 946 12% 360 230 181 958 178 272 49% ( 6 088) 0% - - - -100% 170 951 5% 4 950 440 2 779 751 2 170 689 44% 181 242 4% 5 499 754 4 443 579 1 056 175 19% ( 11 378) -114% 70 000 11 484 58 516 84% ( 315 605) -12% 1 985 534 2 666 306 ( 680 772) -34% 17 284 329 38% 1 600 000 9 166 371 (7 566 371) -473% 2018 2017

- 6 088 - - RRR%R R R% 9 985 21 363 12 719 8 479 91 156 81 218 Budget Actual Variance Variance Budget Actual Variance Variance 841 353 748 650 136 788 120 842 3 186 294 3 015 343 4 445 454 4 264 212 2 727 151 3 042 755 45 000 27 715 671 80 779 500 80 777 000 2018 streams revenue Alternative Bursary recovered and training fees

Sundry income Other income grant

Rental income Actuarial gain Income Donations Gross salesGross Total incomeTotal 137 048 088 119 639 185 17 408 902 12,70% 90 610 378 96 512 535 (5 902 156) -6,51% Less: Cost of sales Cost Less:

Trading gross profit gross Trading 45 632 39 624 6 008 13% 163 230 105 304 57 926 35% Government GrantGovernment Admission feesAdmission Interest receivedInterest FOR THE YEAR ENDED 31 MARCH MARCH 31 ENDED YEAR THE FOR STATEMENT OF BUDGET INFORMATION OF BUDGET INFORMATION STATEMENT

DITSONG Annual Report 2017 - 18 84 PART E - Financial Information

- 0% 115 000 86 027 28 973 25% 2 822 21% 2 500 1 216 875 (1 214 375) -48575% 28 284 68% 84 000 18 043 65 957 79% 56 076 4% 1 533 937 1 339 779 194 158 13% 26 502 3% 1 001 000 716 543 284 457 28% 57 713 37% 340 000 79 969 260 031 76% 281 829 83% 505 750 145 128 360 622 71% 102 399 42% 1 520 000 87 372 1 432 628 94% ( 66 658) -100% - - - 0% ( 18 100) -80% 1 640 000 431 269 1 208 731 74% ( 629 087) -28% 822 000 2 639 642 (1 817 642) -221% ( 221 222) -8% 1 824 000 2 248 846 ( 424 846) -23% ( 296 435) -100% - ( 520 121) 520 121 -100% ( 208 640) -100% - 34 711 ( 34 711) -100% 1 505 295 3% 63 388 531 52 486 968 10 901 562 17% 15 483 187 33% 2 950 871 6 399 595 (3 448 724) -117% (3 192 001) 0% - 3 596 883 (3 596 883) -100% (4 521 000) -100% - 4 598 000 (4 598 000) -100% (1 291 000) -100% - 1 334 000 (1 334 000) -100% (1 708 414) -26% 5 190 066 5 635 542 ( 445 477) -9% 2018 2017

- 66 658 - 3 192 001 - 4 521 000 - 1 291 000 - 296 435 - - - 208 640 RRR%R R R% 41 712 13 428 13 536 10 715 22 566 40 666 Budget Actual Variance Variance Budget Actual Variance Variance 337 966 56 137 859 850 833 348 241 524 139 125 155 294 97 582 2 228 801 2 857 888 1 482 920 1 426 844 6 454 157 8 162 570 2 800 000 3 021 222 54 536 965 53 031 670 47 114 212 31 631 025 (Proﬁt) /Loss on sale of assets /Loss (Proﬁt)

Professional servicesProfessional

Library Depreciation

Consumable storesConsumable Interest serviceInterest cost Total expenditureTotal 130 610 141 124 348 303 6 261 838 4,79% 89 628 418 99 256 574 (9 628 156) -10,74% Rental of equipment Current serviceCurrent cost Employee costsEmployee Security services External audit fees Repairs and maintenance Bad debts written oﬀ Other 24.1 expenses - Note Exhibition maintenance Exhibition expense Restoration expenseRestoration Research expenseResearch Impairement of assets Consumable furniture and equipment furniture Consumable

DITSONG Annual Report 2017 - 18 85 PART E - Financial Information

(3 725 999) -100% in the statement and detailed explanations in the statement as spent on this grant. Non-cashas spent on this grant. expenses of R3,2m s includes the savings from GRAP103 which was slightly from s includes the savings 981 960 (2 744 039)

( 41 113) -100% - 6 140 ( 6 140) -100% 2 601 909 18% 8 710 764 16 611 164 (7 900 400) -91% ( 307 507) -100% - 64 201 ( 64 201) -100% (11 147 064) -173% 2018 2017

- 307 507 - 41 113 RRR%R R R% Budget Actual Variance Variance Budget Actual Variance Variance 6 437 946 (4 709 118) 14 320 639 11 718 729

Net Surplus/(Deﬁcit) for the yearNet Surplus/(Deﬁcit) for

Finance costsFinance Amortization Administrative expensesAdministrative

The ﬁnancial statements have been prepared on the same basis as budget. A comparison of the actual and budget has been done been prepared have The ﬁnancial statements GRAP103, only R28m w for on R45m grant realised is mainly attributable savings the year to The surplus for 21. included in note service service current interest cost and R1,3m for R4,6m for cost. Other depreciation, of R15m thi for expenses show a savings on projects utilising surplus reserves. by expenditure depleted

DITSONG Annual Report 2017 - 18 86 PART E - Financial Information 4) 507) 6 374 2 132 787) 9 5 194 952 82 257 855

(12 578 039) (7 890 676) (9 260 446) (2 171 231) (3 263 940) (2 820 971) (3 350 124) (51 883 868)

Services KM NMCH NMMH NMNH PM SMM TCM WPAM TOTAL Corporate Corporate 33 917 096 2 738 065 16 941 173 8 631 557 11 967 878 3 459 659 3 721 021 2 881 725 6 145 664 90 534 228 (27 801 969) (1 429 874) (21 414 077) (10 257 960) (15 991 093) (2 849 172) (3 927 484) (3 568 609) (5 376 183) (92 616 422) 2018 Current serviceCurrent cost (1 334 000) ------(1 334 000) Interest expenseInterest (4 662 201) ------(4 662 201) Salaries and wages (9 491 143) (1 057 299) Impairment (34 711) (34 711) Impairment(34 711) (34 EXPENSES 140) Amortisation(6 140) (6 Actuarial gain 3 312 000 ------3 312 000

Operating expenses (8 575 083) (227 647) (2 822 162) (1 144 836) (5 043 833) (338 755) (234 568) (630 747) (1 506 877) (20 524 Total segment revenue Total Interest revenueInterest 2 674 458 ------2 674 458

Administrative (6 138 861) (144 928) (6 013 877) (1 222 448) (1 686 814) (339 187) (428 976) (116 890) (519 183) (16 611 164) Total segment surplusTotal 6 115 126 1 308 191 (4 472 904) (1 626 403) (4 023 215) 610 487 (206 463) (686 884) 769 480 (2 082 19 REVENUE Inter-segment transfers Inter-segment 2017 non-exchange transactions from Revenue 33 990 317 1 555 594 15 741 429 6 931 572 10 454 898 2 569 788 3 182 945 2 636 35 and amortisationDepreciation (3 596 883) (3 596 883) Revenue from exchange transactions exchange from Revenue 57 170 1 182 471 1 199 744 1 699 985 1 512 979 889 871 538 076 segment expenses Total 245 365 950 712 8 27 Surplus/(Loss) for the period for Surplus/(Loss) 6 064 533 1 308 191 (4 472 904) (1 626 403) (4 023 215) 610 487 (206 463) (686 884) 769 480 ( FOR THE YEAR ENDED 31 MARCH MARCH 31 ENDED YEAR THE FOR INFORMATION ABOUT SURPLUS OR DEFICITS, ASSETS AND LIABILITIES AND RECONCILIATIONS ASSETS OR DEFICITS, AND LIABILITIES RECONCILIATIONS ABOUT SURPLUS INFORMATION

DITSONG Annual Report 2017 - 18 87 PART E - Financial Information 51 977 11 852 392 8 4 135 856 80 777 000 (4 129 931) (959 908) (20 935 241) ) (349 877) (389 221) (11 718 729)

(11 885 331) (7 364 952) (9 210 144) (2 204 492) (3 151 452) (3 222 929) (3 307 842) (53 735 693)

Services KM NMCH NMMH NMNH PM SMM TCM WPAM TOTAL Corporate Corporate 32 421 297 2 487 247 57 953 203 11 601 809 15 406 207 2 354 658 3 576 915 3 204 199 4 956 442 133 961 977 (28 604 525) (1 223 739) (43 841 299) (8 852 950) (11 928 341) (2 964 293) (4 347 770) (7 702 736) (4 656 971) (114 122 626 Actuarial loss (1 383 000) ------(1 383 000) Salaries and wages (12 454 178) (934 375) Impairment of assets (208 640) (208 640) EXPENSES Depreciation (3 192 001) (3 192 001)

Amortisation (41 113) (41 113) Amortisation(41 113) (41 Total segment revenue Total Current serviceCurrent cost (1 291 000) ------(1 291 000) Interest receivedInterest 2 917 181 741 28 084 32 763 18 635 624 1 891 349 23 691 3 023 960 Inter-segment transfers Inter-segment GRAP103GRAP103 45 000 (27 732 962 45 000 (27 732 962) Total segment surplusTotal 3 816 772 1 263 507 14 111 904 2 748 859 3 477 866 (609 635) (770 855) (4 498 537) 299 470 19 839 3 REVENUE Interest expenseInterest (4 828 507) ------(4 828 507) 2018 non-exchange transactions from Revenue 32 129 796 1 494 264 11 373 011 9 972 400 13 861 366 1 759 638 3 074 321 2 976 34 A Annexure Administrative (5 939 177) (130 384) (2 424 936) (129 261) (1 769 315) (77 700) (508 858 Operating expenses 2.3.1 (10 211 170) (158 980) (1 798 070) (1 358 738) (948 882) (682 101) (687 461) Revenue from exchange transactions exchange from Revenue 291 501 992 983 1 580 192 1 629 410 1 544 841 595 020 502 594 segment expenses Total 227 851 820 586 8 184 on sale of assets / (Loss) Proﬁt the period for Surplus/(Loss) (66 658) (4 276 966) 1 264 248 14 139 988 2 781 623 3 496 500 (609 011) (768 964) (4 498 188) - 323 162 ------(66 658)

DITSONG Annual Report 2017 - 18 88 PART E - Financial Information

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018

1. Accounting policy

BASIS OF ACCOUNTING

1.1 Basis of preparation

The annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention as the basis of measurement, unless specified otherwise. Management has, where appropriate used estimates and assessments in preparing the annual financial statements. Accounting policies for material transactions, events or conditions not covered by GRAP reporting framework, have been developed in accordance with paragraphs 7, 11 and 12 of GRAP 3 and hierarchy approved in Directive 5 issued by the Accounting Standard Board. In the absence of an issued and effective Standard of GRAP, accounting policies for material transactions, events or conditions were developed in accordance with paragraphs 8, 10 and 11 of GRAP 3 as read with Directive 5.

1.2 Statement of compliance

The annual ﬁnancial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act (Act 1 of 1999).

1.3 Going concern assumption

The Council has reviewed Ditsong’s budgets and cash flow forecasts for the year ended 31 March 2018. On the basis of the review, and in view of the current financial position, the Council believes that Ditsong will be a going concern in the year ahead, and has continued to adopt the going concern basis in preparing these financial statements.

1.4 Functional and presentation currency

The financial statements are presented in South African Rand, which is the entity’s functional currency. The figures have been rounded off to the nearest Rand.

1.5 Offsetting

Assets, liabilities, revenues and expenses have not been offset. These items have been reported separately. Offsetting is only allowed if the entity has the intention (it reflects the substance of the transaction or event) to settle on a net basis or a legal enforceable right to set off the amounts either on a net basis or to realise the financial asset (gross basis) and settle the financial liability simultaneously.

1.6 Standards, amendments to standards and interpretations issued but not yet effective

The following Standards of GRAP and / or amendments thereto and interpretations have been issued by the Accounting Standards Board, but will only become eﬀective in future periods or have not been given an eﬀective date by the Minister of Finance. The entity has not early-adopted any of these new Standards or amendments, but has referred to them for guidance in the development of accounting policies in accordance with GRAP 3 as read with Directive 5:

DITSONG Annual Report 2017 - 18 89 PART E - Financial Information

Standard Standard name Effect of adopting the standard Effective date (if applica- number ble) IGRAP 17 Interpretation of the Stan- The Standard of GRAP on Service Concession No effective date yet dard of GRAP on Service Arrangements: Grantor (GRAP 32) requires Concession Arrangements the grantor to recognise a service conces- Where Grantor Controls a sion asset provided by the operator and an Significant Residual Interest upgrade to an existing asset of the grantor if: in an Asset (a) the grantor controls or regulates what services the operator must provide with the asset, to whom it must provide them, and at what price; and (b) the grantor controls— through ownership, beneficial entitlement or otherwise—any significant residual interest in the asset at the end of the term of the arrangement. Not expected to have any impact due to entity not engaging in such activities IGRAP 18 Interpretation of the Stan- This Interpretation provides guidance An entity shall apply this dard of GRAP on Recogni- on when an entity should recognise and Interpretation for annual tion and Derecognition of derecognise land as an asset in its finan- financial statements cover- Land cial statements. Not expected to have any ing periods beginning on impact due to entity not engaging in such or after 1 April 2019. Earlier activities application is permitted IGRAP 19 Liabilities to Pay Levies This Interpretation provides guidance on the An entity shall apply this accounting for levies in the financial state- Interpretation for annual ments of the entity that is paying the levy. It financial statements cover- clarifies when entities need to recognise a ing periods beginning on liability to pay a levy that is accounted for in or after 1 April 2019. Earlier accordance with GRAP 19. The provisions of application is encouraged. If the standard will be applied once effective an entity applies this Inter- pretation for a period beginning before 1 April 2019, it shall disclose that fact GRAP 20 Related Party Disclosures The objective of this Standard is to ensure This Standard of GRAP is ef- that a reporting entity’s financial statements fective for reporting periods contain the disclosures necessary to draw beginning on or after 1 April attention to the possibility that its financial 2019. position and surplus or deficit may have been affected by the existence of related parties and by transactions and outstanding balances with such parties. Expected to only result in additional disclosure GRAP 32 Service Concession Ar- The objective of this Standard is to prescribe This Standard of GRAP is ef- rangements: Grantor the accounting for service concession fective for reporting periods arrangements by the grantor, a public sector beginning on or after 1 April entity. Not expected to have any impact due 2019. to entity not engaging in such activities

DITSONG Annual Report 2017 - 18 90 PART E - Financial Information

Standard Standard name Effect of adopting the standard Effective date (if applica- number ble) GRAP 34 Separate Financial State- The objective of this Standard is to prescribe No effective date has been ments the accounting and disclosure requirements determined by the Minister for investments in controlled entities, joint of Finance ventures and associates when an entity prepares separate financial statements. Not expected to have any impact due to entity not engaging in such activities GRAP 35 Consolidated Financial The objective of this Standard is to establish No effective date has been Statements principles for the presentation and prepa- determined by the Minister ration of consolidated financial statements of Finance when an entity controls one or more other entities. Not expected to have any impact due to entity not engaging in such activities GRAP 36 Investments in Associates The objective of this Standard is to prescribe No effective date has been and Joint Ventures the accounting for investments in associates determined by the Minister and joint ventures and to set out the re- of Finance. quirements for the application of the equity method when accounting for investments in associates and joint ventures. Not expected to have any impact due to entity not engaging in such activities GRAP 37 Joint Arrangements The objective of this Standard is to establish No effective date has been principles for financial reporting by entities determined by the Minister that have an interest in arrangements that of Finance. are controlled jointly (i.e. joint arrangements. Not expected to have any impact due to entity not engaging in such activities GRAP 38 Disclosure of Interests in The objective of this Standard is to require an No effective date has been Other Entities entity to disclose information that enables determined by the Minister users of its financial statements to evaluate: of Finance (a) the nature of, and risks associated with, its interests in controlled entities, unconsoli- dated controlled entities, joint arrangements and associates, and structured entities that are not consolidated; and (b) the effects of those interests on its financial position, financial performance and cash flows. Not expected to have any impact due to entity not engaging in such activities GRAP 108 Statutory Receivables The objective of this Standard is to prescribe This Standard of GRAP is ef- accounting requirements for the recognition, fective for reporting periods measurement, presentation and disclosure beginning on or after 1 April of statutory receivables. The provisions of the 2019. standard will be applied once effective

DITSONG Annual Report 2017 - 18 91 PART E - Financial Information

Standard Standard name Effect of adopting the standard Effective date (if applica- number ble) GRAP 109 Accounting by Principals The objective of this Standard is to outline This Standard of GRAP is ef- and Agents principles to be used by an entity to assess fective for reporting periods whether it is party to a principal-agent beginning on or after 1 April arrangement, and whether it is a principal 2019. or an agent in undertaking transactions in terms of such an arrangement. Not expected to have any impact due to entity not engaging in such activities GRAP 110 Living and Non-Living The objective of this Standard is to prescribe This Standard of GRAP is ef- Resources the: fective for reporting periods beginning on or after 1 April (a) recognition, measurement, presenta- 2020. tion and disclosure requirements for living resources; and (b) disclosure requirements for non-living resources. The provisions of the standard will be applied once eﬀective

1.7 Significant judgements

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

Trade and other receivables - The entity assesses its trade and other receivables for impairment at each reporting date. In determining whether an impairment loss should be recorded in the statement of financial performance, the entity makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

Fair value estimation - The carrying value, less impairment provision of trade receivables, is assumed to approximate their fair value.

Impairment testing - The entity reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. The following are considered to be indicators of impairment for the various classes of assets:

Property, plant and equipment - Deterioration in the condition of the asset, increased repairs and maintenance of the asset and changes in the manner in which the asset can be utilised.

Intangible assets - Deterioration in the condition of the asset, increased repairs and maintenance of the asset and changes in the manner in which the asset can be utilised.

Financial assets - The credit quality of ﬁnancial assets that are neither past due nor impaired are monitored by reference to historical information about counterparty default rates. The following are the criteria and indicators that are applied

DITSONG Annual Report 2017 - 18 92 PART E - Financial Information

to assess whether or not ﬁnancial assets may be impaired:

• financial difficulties identified from an analysis of the counter party’s financial position that would indicate that the recoverability of the outstanding balance of cash and cash equivalents are doubtful. • counter party has evidenced a trend of defaults that indicates that the recoverability of the outstanding balance of financial assets are doubtful.

Useful lives and residual values - The entity re-assess the useful lives and residual values of property, plant an equipment on an annual basis.

These assessments require judgements and assumptions to be made by management, related to the condition and expected use of the asset.

Effective interest rate -An impairment loss in respect of trade debtors measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.

Provisions - Provisions are measured at the present value at the reporting date. In arriving at the present value management estimates the period over which it expects the provision to be settled and discounts the provision using the eﬀective interest rate.

The eﬀective interest rate applied uses the risk free rate as the base of the rate, which is then adjusted for the risks related to the speciﬁc provision. This rate is a pre-tax rate.

1.8 Revenue recognition

Revenue is measured at the fair value of the consideration received/receivable.

1.8.1 Revenue from exchange transactions

Revenue from exchange transactions refers to revenue that accrued to the entity directly in return for services rendered or goods sold, the value of which approximates the fair value of the consideration received or receivable. At the time of initial recognition, the full amount of revenue is recognized.

When goods or services are exchanged or swapped for goods or services that are of a similar nature and value, the exchange is not regarded as a transaction that generates revenue. When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is regarded as a transaction that generates revenue. The revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred. When the fair value of the goods or services received cannot be measured reliably, the revenue is measured at the fair value of the goods or services given up, adjusted by the amount of any cash or cash equivalents transferred.

Admission fees and sales have been classified as revenue from the sale of goods. Revenue from the sale of goods is recognised when all the following conditions have been satisfied: (a) the entity has transferred to the buyer the significant risks and rewards of ownership of the goods; (b) the entity does not retain: (i) effective control over the goods sold; or (ii) continuing managerial involvement to the degree usually associated with ownership;

DITSONG Annual Report 2017 - 18 93 PART E - Financial Information

(c) the amount of revenue can be measured reliably; and (d) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from admission fees is recognised when the event takes place. When a subscription to a number of events is sold, the fee is allocated to the event that has the most services performed.

Contract income, exhibition income, restoration income and venue rentals for functions have been classiﬁed as revenue from the rendering of services.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisﬁed: (a) the amount of revenue can be measured reliably; (b) the stage of completion of the transaction at the end of the reporting period can be measured reliably; and (c) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably

Interest revenue, arising from the use by others of the entity’s assets, is recognised using the eﬀective interest method when the amount of the revenue can be measured reliably.

Revenue from the rental of facilities and equipment is recognised on a straight-line basis over the term of the lease agreement.

1.8.2 Revenue from non-exchange transactions

Revenue from non-exchange transactions refers to transactions where the Entity receives revenue from another entity without directly giving approximately equal value in exchange.

Revenue from non-exchange transactions consist of public donations and government grants. Revenue from public contributions and donations is recognised when all conditions associated with the contribution have been met or, where the contribution is to finance property, plant and equipment, when such items of property, plant and equipment qualifies for recognition and first becomes available for use by the entity. Where public contributions have been received but the entity has not met the related conditions that would entitle it to the revenue, a liability is recognised.

Grants, transfers and donations received or receivable are recognised when the resources that have been transferred meet the criteria for recognition as an asset and there is not a corresponding liability in respect of related conditions.

An asset that is recognised as a result of a non-exchange transaction is recognised at its fair value at the date of the transfer. Consequently, revenue arising from a non-exchange transaction is measured at the fair value of the asset received, less the amount of any liabilities that are also recognised due to conditions that must still be satisﬁed.

Where there are conditions attached to a grant, transfer or donation that gave rise to a liability at initial recognition, that liability is transferred to revenue as and when the conditions attached to the grant are met.

Grants without any conditions attached are recognised as revenue in full when the asset is recognised, at an amount equalling the fair value of the asset received.

The accounting policy for expenditure arising from non-exchange transactions is similar to policy for non-exchange revenue.

DITSONG Annual Report 2017 - 18 94 PART E - Financial Information

1.9 Employment benefit cost

Ditsong Museums of South Africa offers post-employment benefits, comprising retirement benefits and post-retirement medical aid to their employees and their dependants in terms of defined-benefit and defined-contribution plans.

1.9.1 Short-term employee benefits

The cost of short-term employee beneﬁts, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary beneﬁts such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of proﬁt sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

1.9.2 Defined contribution plans

Payments to deﬁned contribution retirement beneﬁt plans are charged as an expense as they fall due.

Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined contribution plans where the company’s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.

1.9.3 Defined benefit plans

For defined benefit plans the cost of providing the benefits is determined using the projected credit method.

Actuarial valuations are conducted on an annual basis by independent actuaries separately for each plan.

Consideration is given to any event that could impact the funds up to balance sheet date where the interim valuation is performed at an earlier date.

Past service costs are recognised immediately to the extent that the beneﬁts are already vested, and are otherwise amortised on a straight line basis over the average period until the amended beneﬁts become vested.

To the extent that, at the beginning of the ﬁnancial year, any cumulative unrecognised actuarial gain or loss exceeds ten percent of the greater of the present value of the projected beneﬁt obligation and the fair value of the plan assets (the corridor), that portion is recognised in the income statement over the expected average remaining service lives of participating employees. Actuarial gains or losses within the corridor are not recognised.

Gains or losses on the curtailment or settlement of a deﬁned beneﬁt plan is recognised when the company is demonstrably committed to curtailment or settlement.

When it is virtually certain that another party will reimburse some or all of the expenditure required to settle a deﬁned beneﬁt obligation, the right to reimbursement is recognised as a separate asset. The asset is measured at fair value. In

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all other respects, the asset is treated in the same way as plan assets. In the income statement, the expense relating to a deﬁned beneﬁt plan is presented as the net of the amount recognised for a reimbursement.

The amount recognised in the balance sheet represents the present value of the deﬁned beneﬁt obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service costs, and reduces by the fair value of plan assets.

Any asset is limited to unrecognised actuarial losses, plus the present value of available refunds and reduction in future contributions to the plan.

1.10 Government grants

Grants received from statutory bodies are recognised as income as and when the entity complies with the conditions of the grant. Grants received without any conditions attached are recognised as revenue when the asset is recognised. Revenue from a grant is measured at the amount of the increase in net assets recognised by the entity.

An asset, e.g. property, plant and equipment, investment property and inventory acquired through a grant is initially measured at its fair value as at the date of acquisition.

Monetary assets that would otherwise meet the definition of a financial instrument, e.g. cash and transfers receivable, will also be measured at fair value as at the date of acquisition. These assets are subsequently measured, derecognised and disclosed in accordance with the standards on financial instruments.

1.11 Property, plant and equipment

1.11.1 Property, plant and equipment are tangible assets that are held for use in the production or supply of goods and services or for administrative purposes, and are expected to be used during more than one ﬁnancial period.

1.11.2 Items of property, plant and equipment are initially recognised as assets on acquisition date and are initially recorded at cost. The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the entity. Trade discounts and rebates are deducted in arriving at the cost. The cost, if any, also includes the necessary costs of dismantling and removing the asset and restoring the site on which it is located.

1.11.3 Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, it’s deemed cost is the carrying amount of the asset(s) given up.

1.11.4 Items of property, plant and equipment are recognised as assets when it is probable that: 1.11.4.1 The future economic beneﬁts or service potential associated with the asset will ﬂow to the entity and 1.11.4.2 The cost of the asset can be measured reliably.

1.11.5 Land and buildings are made available to Ditsong Museums of South Africa (DMSA) under section 9 of the Cultural Institutions Act and are therefore not included under ﬁxed assets.

1.11.6 DMSA occupies and controls economic beneﬁts arising from certain properties which are owned by other

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The residual value and the useful life of DMSA assets shall be reviewed at least at each ﬁnancial year-end and, if expectations diﬀer from previous estimates, the change(s) shall be accounted for as a change in an accounting estimate.

1.12 Heritage Assets

Heritage assets are assets that have cultural, enviromental, historical, natural, scientific, technological or artistic significance and are held indefinitely for the benefit of the present and future generations.

1.12.1 Recognition

The museum recognises a heritage asset as an asset if it is probable that future economic beneﬁts or service potential associated with the asset will ﬂow to the entity and where cost or fair value of the asset can be reliably measured.

The Museum will assess the degree of certainty attached to the flow of future service potential or economic benefits: (a) If the entity holds an asset that might be regarded as a heritage asset but which, on initial recognition, does not meet the recognition criteria of heritage assets because of the need to analyse the proposed collection items to determine if they conform to the set collection criteria through evaluation and research. (b) For recognition of heritage assets, the asset needs to be controlled by the Museum as a result of past events. Such events may include: Purchase, donation, bequeath, loan or transfer. (c) Particularly within the Natural History Collection, material is often retrieved in a fragmentary state – finding a completely articulated specimen is the exception rather than the rule. A great deal of knowledge is thus required to identify and systematise the collections. (d) The research required to identify, analyse and classify heritage items is often a collaborative effort between local and international experts that span several months, even years. These items cannot be recognised in the financial statements, but will be recorded and controlled in the register. Relevant and useful information about them shall be disclosed in the notes to the financial statements.

1.12.2 Measurement

The value of assets have been determined using either cost or fair value.

Values have been assigned to the heritage assets, which are considered to be appreciating in value, and which values are to be reviewed from time to time. Wherever possible, the appraisers have adopted the discipline of ‘Open Market’ principles in determining value, however values derived are largely determined by the skill and experience applied by the appraiser at the date of valuation.

1.12.3 Directive 7 - Use of deemed cost for heritage assets upon initial recognition and adoption of a standard.

The following terms are used in this Directive with the meanings speciﬁed: (a) Acquisition cost: When an entity initially recognises assets such as items of property, plant and equipment, investment properties, intangible assets and heritage assets using the Standards of GRAP, it measures those assets using either cost (if the asset is acquired in an exchange transaction) or at fair value (if the asset is acquired in a non-exchange transaction). This cost or fair value on initial acquisition of an asset is the acquisition cost. (b) Deemed cost: Deemed cost is a surrogate value for the cost or fair value of an asset at its initial acquisition, and is determined by reference to the fair value of the asset at the date of adopting the Standards of GRAP measurement date). (c) Measurement date (for purposes of this Directive): Measurement date is the date that an entity adopts the

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Standards of GRAP and is the beginning of the earliest period for which an entity presents full comparative information, in its ﬁrst ﬁnancial statements prepared using Standards of GRAP.

For the purposes of this Directive, the measurement of assets at fair value on the adoption of the Standards of GRAP, does not constitute: (a) a revaluation in accordance with the Standards of GRAP on Property, Plant and Equipment, Intangible Assets or Heritage Assets; or (b) the application of the fair value model in the Standard of GRAP on Investment Property, paragraph A4, which states that subsequent depreciation, if applicable, is based on that deemed cost, and starts from the measurement date.

1.12.4 Initial entries using deemed cost

When an entity initially measures assets using the deemed cost approach in this Directive, it recognises the effect: (a) as an adjustment to the opening balance of accumulated surpluses or deficits in the opening statement of financial position prepared using Standards of GRAP; or (b) in revaluation surplus if an entity adopts the revaluation model in the Standards of GRAP on Property, Plant and Equipment, Intangible Assets or Heritage Assets.

The Museum has adopted the cost model for Heritage Assets.

Heritage assets shall not be depreciated but the Museum shall assess at each reporting date whether there is an indication that it may be impaired. If any such indication exists, the entity shall estimate the recoverable amount or the recoverable service amount of the heritage asset.

1.12.5 Valuation of heritage assets

The existence of published price quotations in an active market is the best evidence of the fair value, such as the quoted price from recent auctions published in local newspapers; however if the fair value cannot readily be ascertained by reference to quoted prices in an active and liquid market; the fair value of a heritage asset can be determined from market- based evidence arrived at by appraisal. An appraisal of the value of the asset is normally undertaken by a member of the valuation profession, who holds a recognised and relevant professional qualiﬁcation. The fair value will be ascertained by reference to quoted prices in an active and liquid market. (GRAP 103.46).

The valuation of heritage assets was performed by a member of the valuation profession.

1.12.6 Valuation of heritage assets

(a) Valuation Techniques

Where the fair value of an asset cannot be determined, and where no evidence is available to determine the market value in an active market of a heritage asset; a valuation technique may be used to determine its fair value. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, and reference to the current fair value of other heritage assets that have substantially similar characteristics in similar circumstances and locations, adjusted for any speciﬁc diﬀerences in circumstances. If there is a valuation technique commonly used by market participants to price such an asset, and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the entity may use that technique in determining the fair value (GRAP 103.47).

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(b) Inability to Value

Where no value can be placed on an item, it will not be recognised, but information should be disclosed about such items and the reason why such items cannot be valued (GRAP 103.17). Where the entity holds an asset that might be regarded as a heritage asset but which, on initial recognition, does not meet the recognition criteria of heritage assets because it cannot be reliably measured, relevant and useful information about it shall is disclosed in the notes to the ﬁnancial statements. These items are controlled in the asset register.

In determining the fair value of a collection, the entity has considered where appropriate, whether the entire collection has a higher value than the sum of the values of the individual items making up that collection. Under such circumstances, the carrying value of the entire collection may need to be reassessed, when a group of individual heritage assets constitutes a collection. If items are removed from the collection, the value of the collection may also need to be reassessed. (GRAP 103.45)

1.12.7 Heritage Asset Classification

A class of heritage assets is a grouping of heritage assets of a similar nature or function in the museums operations, that is shown as a single item for the purpose of disclosure in the ﬁnancial statements. The museum has recognised the following classes of heritage assets: • Natural History • Cultural History • Military History

Object collections in the Cultural History Collection consist of tangible artefacts that reﬂect the cultural and artistic knowledge, expressions, and behaviour of their makers and users, and comprise archaeological, historical and contemporary cultural artefacts and artworks. The Library Collections consists of both published and unpublished material, as well as research material.

1.12.8 Heritage assets on loan to other institutions

The ﬁnancial statement shall also disclose information on heritage assets that are borrowed from, or on loan to other entities.

1.12.9 Retrospective Application

Although the Museum adopted the accounting standard on 1 April 2012, it has taken advantage of the transitional period of three (3) years to fully implement GRAP 103 in terms of Directive 2. The three year period in which entities were not required to measure heritage assets for reporting periods beginning on or after a date within three years following the date of initial adoption of the Standard of GRAP on Heritage Assets has ended.

Where entities have not yet determined the deemed cost of those assets within the scope of Directive 7, they should consider GRAP 3 Accounting Policies, Changes in Accounting Estimates and Errors, and consider whether this change in accounting policy can be applied retrospectively from this date, or whether it is impracticable to do so.

GRAP 3 states that: “When it is impracticable to determine the period-speciﬁc eﬀects of changing an accounting policy

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on comparative information for one or more prior periods presented, the entity shall apply the new accounting policy to the carrying amounts of assets and liabilities as at the beginning of the earliest period for which retrospective application is practicable….”

It may be impracticable to determine the deemed cost retrospectively if, for example, the following circumstances exist: (a) Relevant data may not have been collected in the prior period and cannot be obtained by alternative means that allows for retrospective application. (b) The entity is required to make signiﬁcant estimates and assumptions about conditions that existed at a point in time in the past and cannot do so objectively without using hind-sight.

1.12.10 Impairment

At each reporting date, the entity assesses whether there is an indication that it may be impaired. If any such indication exists, the entity shall estimate the recoverable amount or the recoverable service amount of the heritage asset.

1.12.11 Transfers

Transfers from heritage assets are made when, and only when, the particular asset no longer meets the deﬁnition of a heritage asset. Transfers to heritage assets are made when, and only when, the particular asset meets the deﬁnition of a heritage asset.

1.12.12 De-recognition

The carrying amount of a heritage asset is de-recognised: • on disposal, or • when no future economic beneﬁts or service potential are expected from its use or disposal.

The gain or loss arising from the de-recognition of a heritage asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the heritage asset. Such difference is recognised in surplus or deficit when the heritage asset is de-recognised.

1.13 Intangible assets

Intangible asset is an identiﬁable non-monetary asset without physical substance.

After initial recognition, an intangible asset shall be carried at its cost less any accumulated amortisation and any accumulated impairment losses. Where an intangible asset is acquired at no or for a nominal cost, the cost shall be its fair value as at the date of acquisition.

An intangible asset shall be recognised if, and only if: (a) it is probable that the expected future economic beneﬁts or service potential that are attributable to the asset will ﬂow to the entity; and (b) the cost or fair value of the asset can be measured reliably.

Expenditure on an intangible item shall be recognised as an expense when it is incurred unless it forms part of the cost of an intangible asset that meets the recognition criteria.

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1.15 Financial Instruments

Initial recognition

A financial instrument is any contract that gives rise to a financial asset of an entity and a financial liability or a residual interest of another.

A financial asset is: (a) cash; (b) a residual interest of another entity; or (c) a contractual right to: (i) receive cash or another financial asset from another entity; or (ii) exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity

A financial liability is any liability that is a contractual obligation to: (a) deliver cash or another financial asset to another entity; or (b) exchange financial assets or financial liabilities under conditions that are potentially unfavourable to the entity

Financial assets and ﬁnancial liabilities are recognised on the Statement of Financial Position when the DMSA becomes a party to the contractual provisions of the instrument.

All “regular way” purchases and sales of ﬁnancial liabilities are recognised using trade date accounting.

Classification

Financial instruments include cash and bank balances, receivables and trade payables. These ﬁnancial instruments are generally carried at their estimated fair value, which is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable and willing parties in an arm’s length transaction.

Initial measurement

Financial instruments are initially measured at fair value, which includes transaction costs when the entity is a party to contractual arrangement.

Gains and losses

Gains and losses arising from a change in the fair value of ﬁnancial instruments are included in net surplus or deﬁcit in the period in which they arise.

Impairment and uncollectibility of financial assets

At the end of the reporting period, the entity assesses all financial assets, other than those carried at fair value, to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired. For amounts due to the entity, significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy and default of payments are all considered indicators of impairment. Impairment losses are recognised as a reduction to

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

Derecognition

The DMSA derecognises a financial asset (or where applicable part thereof) only when: the right to receive cash flows from the asset have expired, the DMSA retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a “pass through” arrangement; or the DMSA has transferred its rights to receive cash flows from the asset and has either (a) has transferred substantially all the risks and rewards of the asset or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

A ﬁnancial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

Where an existing financial liability is replaced by another from the same customer on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability, and the difference in the respective carrying amounts is recognised in the surplus or deficit for the year.

Offset of financial assets and liabilities

Financial assets and liabilities are oﬀset and the net amount reported in the Statement of Financial Position only when the DMSA has a legally enforceable right to set oﬀ recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Subsequent measurement

Receivables from exchange transactions Receivables from exchange transactions are stated at the nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. The carrying amount of these receivables approximate fair value due to the short period to maturity of these instruments.

Payables from exchange transactions

Accounts and other payables are stated at their nominal value. Short-term payables with no interest rate are measured at the original invoice amount if the eﬀect of discounting on individual transactions is immaterial. All payables are settled within 30 days. Where there is a delay in payment it is usually due to a dispute on the transaction. Under such circumstances the time delay is not regarded as being material. The obligation to pay goods and services that have been acquired in the ordinary course of business from suppliers are classiﬁed as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Cash and cash equivalents

Cash and cash equivalents are measured at fair value. The carrying amount approximates fair value due to the short period to maturity. Cash and cash equivalents comprise cash on hand and deposits held with banks, all of which are available for use by the DMSA unless otherwise stated.

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1.16 Provisions and contingencies

Provisions

Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that it will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

• The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash ﬂows estimated to settle the present obligation, its carrying amount is the present value of those cash ﬂows.

When some or all of the economic beneﬁts required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation.

Contingent liability

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or no-occurrence of one or more uncertain future events not wholly 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 or service potential will be required to settle the obligation; or an amount of the obligation cannot be measured with sufficient reliability.

1.16.1 Leave and bonus provisions

The liability for accumulated leave and bonus is recognised and measured at the estimated future cash ﬂows to be made in respect of all employees at the reporting date.

1.17 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

1.17.1 Operating leases - lessor

Operating lease income is recognised as income on a straight-line basis over the lease term.

Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income.

Income for leases is disclosed under revenue in the statement of ﬁnancial performance.

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1.17.2 Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The diﬀerence between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability. This liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.18 Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are incurred.

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows:

• Actual borrowing costs on funds speciﬁcally borrowed for the purpose of obtaining a qualifying asset less any temporary investment of those borrowings. • Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of speciﬁc borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

The capitalisation of borrowing costs commences when: • expenditures for the asset have occurred; • borrowing costs have been incurred, and • activities that are necessary to prepare the asset for its intended use or sale are in progress.

Capitalisation is suspended during extended periods in which active development is interrupted.

Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.19 Impairment of assets

The museum assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the entity estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the entity also: • tests intangible assets with an indeﬁnite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed

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during the annual year and at the same time every year. • tests goodwill acquired in a business combination for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash- generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in surplus or deﬁcit. Any impairment loss of a revalued asset is treated as a revaluation decrease.

An impairment loss is recognised for cash-generating units if the recoverable amount of the unit is less than the carrying amount of the units. The impairment loss is allocated to reduce the carrying amount of the assets of the unit in the following order: • ﬁrst, to reduce the carrying amount of any goodwill allocated to the cash-generating unit and • then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.

The museum assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

Where the asset is a non-cash generating asset the value in use is determined through one of the following approaches: • Depreciated replacement cost approach – The current replacement cost of the asset is used as the basis for this value. This current replacement cost is depreciated for a period equal to the period that the asset has been in use so that the ﬁnal depreciated replacement cost is representative of the age of the asset. • Restoration cost approach - Under this approach, the present value of the remaining service potential of the asset is determined by subtracting the estimated restoration cost of the asset from the current cost of replacing the remaining service potential of the asset before impairment. • Service units approach - the present value of the remaining service potential of the asset is determined by reducing the current cost of the remaining service potential of the asset before impairment, to conform with the reduced number of service units expected from the asset in its impaired state.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in surplus or deﬁcit. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

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1.20 Fruitless and wasteful expenditure

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

1.21 Irregular expenditure

Irregular expenditure means expenditure, other than unauthorised expenditure, incurred in contravention of, or that is not in accordance with, a requirement of any applicable legislation, including the Public Finance Management Act. Irregular expenditure is recognised as expenditure in the statement of ﬁnancial performance. If the expenditure is not condoned by the relevant authority, it is treated as an asset until it is recovered or written oﬀ as irrecoverable.

1.22 Events after the reporting date

Recognised amounts in the ﬁnancial statements are adjusted to reﬂect events arising after the Statement of Financial Position date that provide evidence of conditions that existed at Statement of Financial Position date. Events after the Statement of Financial Position date that are indicative of conditions that arose after the Statement of Financial Position date are dealt with by way of a note.

1.23 Related parties

Related parties are considered to be related if one party has the ability to (a) control the other party, or (b) exercise significant influence over the other party in making financial and operating decisions, or if the related party entity and another entity are subject to common control.

(a) DMSA operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of three spheres of government in South Africa, only entities within the national/provincial/local spheres of government are considered to be related parties. This includes the Department of Arts and Culture, all the entities of DAC, the Auditor-General of South Africa, the Department of Public Works, City of Tswane, the Parliament of South Africa, (b) Individuals owning, directly or indirectly, an interest in the DMSA that gives them significant influence, and close members of the family of any such individual; (c) Key management personnel, and close members of the family of key management personnel. DMSA regards all individuals from the level of Executive Director and Council Members as key management per the definition of the financial reporting standard. (d) Entities in which a substantial ownership interest is held, directly or indirectly, by any person described in (c) above or over which such a person is able to exercise significant influence.

A related party transaction is a transfer of resources or obligations between related parties, regardless of whether a price is charged. Related party transactions exclude transactions with any other entity that is a related party solely because of its economic dependence on the reporting entity or the government of which it forms part. Where related party transactions occur, these are disclosed. Related party transactions are not disclosed if that transaction occurs within: normal supplier and/or client/recipient relationships on terms and conditions no more or less favourable than those which it is reasonable to expect the entity to have adopted if dealing with that individual entity or person in the same

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circumstances; and terms and conditions within the normal operating parameters established by that reporting entity’s legal mandate.

1.24 Segment reporting

The entity is organised and reports to management on the basis of two major functional areas: corporate services and museum operations. The segments were organised around the type of museological history specialisation. Management uses these same segments for determining strategic objectives. Segments were aggregated as per 1.25.2 below.

Information reported about these segments is used by management as a basis for evaluating the segments’ performances and for making decisions about the allocation of resources. The disclosure of information about these segments is also considered appropriate for external reporting purposes.

1.24.1 Measurement of segment surplus or deficit, assets and liabilities

The accounting policies of the segments are the same as those described in these signiﬁcant accounting policies, except that pension expense for each segment is recognised and measured on the basis of cash payments to the pension plan.

1.24.2 Aggregation criteria

The entity has elected not to aggregate the operations of the site museums into the ﬂagship museums operations. Each heritage site, consisting of Tswaing Mateorite Crater, Natural History Museum, Military History Museum, Kruger House Museum, Pioneer Museum, Sammy Marks Museum, Willem Prinsloo Agricultural Museum and Cultural History museum, is reported separately.

Corporate services is also segmented.

1.25 Commitments

Items are classified as commitments when an entity has committed itself to future transactions that will normally result in the outflow of cash. Commitments for which disclosure is necessary to achieve a fair presentation should be disclosed in a note to the financial statements, if both the following criteria are met: • Contracts should be non-cancellable or only cancellable at significant cost • Contracts should relate to something other than the routine, steady, state business of the entity – therefore salary commitments relating to employment contracts or social security benefit commitments are excluded.

1.25.1 Disclosure

The following should be disclosed in the notes to the ﬁnancial statements for commitments: • Distinction between operational and capital commitments; • The aggregate amount of operational and capital expenditure contracted for at the reporting date, to the extent that the amount has not been recorded in the ﬁnancial statements; and • If a commitment is for a period longer than a year, it should be stated in the note.

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2018 2017 RR 2. Revenue Revenue comprises income received from the following sources:

2.1 From non-exchange transactions Grants and donations 108 514 034 82 257 855

Reconciliation of grants and donations: Balance Current year Conditions Conditions unspent at receipts met - trans- still to be Movement in grant 2018 beginning of ferred to met - remain year revenue liabilities RRRR Equitable share - 80 777 000 80 777 000 - Other grants - 45 000 000 27 715 671 17 284 329 Donations - 21 363 21 363 - - 125 798 363 108 514 034 17 284 329

Balance Current year Conditions Conditions unspent at receipts met - trans- still to be Movement in grant 2017 beginning of ferred to met - remain year revenue liabilities RRRR Equitable share - 73 080 000 73 080 000 - Other grants - 9 166 371 9 166 371 - Donations - 11 484 11 484 - - 82 257 855 82 257 855 -

Other grants relate to a grant awarded by the Department of Arts and Culture for implementation of GRAP 103 of R45m

2.2 From exchange transactions 2.2.1 Sale of goods and services 5 089 209 5 528 377 Admission Fees 4 264 212 4 443 579 Income Sales/Services 388 557 485 314 Sales curios, refreshments and festivals 436 440 599 484

2.2.2 Other revenue 3 074 404 2 824 651 Other Revenue Streams 8 479 - Rental income 3 015 343 2 779 751 Proceeds from insurance claims 44 495 44 900 Bursary and training fees recovered 6 088 -

DITSONG Annual Report 2017 - 18 110 PART E - Financial Information

2018 2017 RR 2.3 Surplus or deficit from Operations includes the following Income items: Admission fees 4 264 212 4 443 579 Bursary and training fees recovered 6 088 - Cost of Sales ( 81 218) ( 76 654) Grants and donations 108 514 034 82 257 855 Income Sales/Services 388 557 485 314 Interest received 3 042 755 2 674 458 Other Revenue Streams 8 479 - Proceeds from insurance claims 44 495 44 900 Rental income 3 015 343 2 779 751 Sales curios, refreshments and festivals 436 440 599 484 Total Revenue 119 639 185 93 208 687

Expense items: 2.3.1 Administrative costs ( 11 718 729) ( 16 611 164) Advertising and marketing ( 900 017) ( 975 911) Bank charges ( 325 160) ( 276 821) Insurance ( 631 178) ( 612 159) Legal fees ( 1 290 282) ( 624 927) Licence fees ( 201 966) ( 165 486) Postage and stationery ( 366 530) ( 306 145) Staﬀ training ( 472 738) ( 409 108) Telephone and internet ( 1 625 149) ( 2 079 149) Travelling costs ( 1 191 544) ( 815 278) Water and electricity ( 4 714 167) ( 10 346 179)

Amortisation ( 41 113) ( 6 140) Current service cost ( 1 291 000) ( 1 334 000) Depreciation ( 3 192 001) ( 3 596 883) Finance cost ( 307 507) ( 64 201) Interest service cost ( 4 521 000) ( 4 598 000) Impairement ( 208 640) ( 34 711)

DITSONG Annual Report 2017 - 18 111 PART E - Financial Information

2018 2017 RR 2.3.2 Employee costs - normal cost ( 53 031 670) ( 52 486 968) Basic salary ( 34 759 979) ( 35 900 919) Overtime ( 1 016 415) ( 662 644) Bonus ( 2 697 729) ( 2 732 653) CCMA settlement ( 332 174) - Pension fund benefit ( 5 783 595) ( 6 151 252) Housing benefit ( 1 521 585) ( 951 300) Medical aid benefit ( 3 550 760) ( 3 620 937) Cellphone allowance ( 868 739) ( 96 840) UIF ( 294 126) ( 308 120) Casual employees ( 2 263 159) ( 1 392 621) Other employee benefits 330 729 ( 154 444) Workmens Compensation - ( 97 689) Movement in Accumulated Leave provision 861 440 23 733 Movement in performance bonus provision ( 446 650) Pensioners Medical Aid contribution 86 341 154 213 Board remuneration ( 775 268) ( 595 496)

2.3.3 Operating expenses ( 48 586 985) ( 20 524 508) Bad debts ( 296 435) 520 121 Consulting services ( 2 857 888) ( 2 639 642) Consumable furniture and equipment ( 13 428) ( 18 043) Consumable stores ( 1 426 844) ( 1 339 779) Deferred project expenses ( 138 248) ( 511 238) Exhibition maintenance - ( 86 027) Exhibition expense ( 139 125) ( 87 372) External audit fees ( 3 021 222) ( 2 248 846) Library ( 56 137) ( 145 128) Other expenses Note: 24.1 ( 31 631 025) ( 6 399 595) Rental expense ( 10 715) ( 1 216 875) Repairs and maintenance ( 833 348) ( 716 543) Security services ( 8 162 570) ( 5 635 542)

Total expenses ( 122 898 645) ( 99 256 574)

DITSONG Annual Report 2017 - 18 112 PART E - Financial Information

2018 2017 RR 3 Interest received Interest received 3 042 755 2 674 458 Interest from CPD Account 2 595 721 Interest from Current Account 337 664 Interest from outstanding debtors 109 370

Interest received comprises interest received from funds invested at the CPD account at interest rates ranging between 4.95% and 6.5% over the reporting period and interest on credit balance in the current account and interest charged on outstanding debtors at a rate of 10% per annum.

Prior Period Error During the year, interest of R8 152 that should have been accrued in the prior year was received. The comparative amount has been restated from R2 666 306.

4 Cash and cash equivalents Cash and cash equivalents consist of cash on hand and balances with banks. Cash and cash equivalents included in the cash ﬂow statement comprise the following balance sheet amounts: Bank balances (Current account) 19 470 883 1 491 479 Petty cash 18 500 18 500 Cash ﬂoat 19 000 19 000 Corporation for Public Deposits Account 36 573 108 33 996 182 56 081 492 35 525 161 4.1 Pledged as security None of the cash and cash equivalents have been pledged as security and are therefore not encumbered. Furthermore, none of the cash and cash equivalents are denominated in foreign currency.

4.2 Credit quality cash and cash equivalents The credit quality of cash and cash equivalents are ensured by only contracting with highly reputable ﬁnancial institutions, as endorsed by National Treasury.

The credit quality rating of these cash and bank balances are as follows:

Class 2018 2017 Rating R Rating R Bank balances High grade 19 470 883 High grade 1 491 479 Short term deposits High grade 36 573 108 High grade 33 996 182 Petty cash and ﬂoats Not rated 37 500 Not rated 37 500

High credit grade – The counter party has evidenced no or minimal instances of defaults and / or re-negotiations of contractual terms in prior periods. As such the counter parties included in the high credit grade category pose a low credit risk to the entity.

DITSONG Annual Report 2017 - 18 113 PART E - Financial Information

2018 2017 RR 4.3 Fair value of cash and cash equivalents The carrying value, which the cash and cash equivalents are disclosed, approximate their fair values. The maximum exposure to credit risk, as a result of carrying cash and cash equivalents is limited to the carrying value of the cash as disclosed above.

4.4 Impairment of cash and cash equivalents None of the cash and cash equivalents are considered to be impaired and consequently no provision was raised for the irrecoverability of these ﬁnancial assets.

4.5 Restriction on the use of cash and cash equivalents The cash and cash equivalents held by the entity may only be used in accordance with its mandate, as such no restrictions have been placed on the use of cash and cash equivalents for the operations of the entity.

5 Trade and other receivables from exchange transactions Trade and other receivables from exchange transactions 2 106 810 2 747 829 Trade receivable 1 215 078 1 218 242 Provision for bad debts ( 696 458) ( 545 288) Sundry receivables 1 588 190 2 074 875 Pre-payments - -

Opening Amounts Receivables Closing 2018 balance received / used raised balance RRRR Gross accounts receivable 1 218 242 ( 232 787) 229 623 1 215 078 Sundry receivables 2 074 875 ( 486 685) - 1 588 190 Pre-payments - - - - Less: Provision for doubtful debts ( 545 288) 297 501 ( 448 671) ( 696 458) 2 747 829 ( 421 971) ( 219 048) 2 106 810

Opening Amounts Receivables Closing 2017 balance received / used raised balance RRRR Gross accounts receivable * 2 031 505 ( 980 888) 167 625 1 218 242 Sundry receivables 1 333 453 ( 26 952) 768 374 2 074 875 Pre-payments 59 699 ( 59 699) - - Less: Provision for doubtful debts (1 705 436) 578 076 582 071 ( 545 288) 1 719 221 ( 489 463) 1 518 071 2 747 829

* Prior year error - during the year, debtors that were settled in prior year were identiﬁed to the value of R66 724. The opening balance previously stated as R2 098 229 has been restated. During the year, interest accrued for prior period of R8 153 was identiﬁed. The comparative balance has been restated from R2 066 723.

DITSONG Annual Report 2017 - 18 114 PART E - Financial Information

5.1 Pledged as security None of the trade and other receivables have been pledged as security and are therefore not encumbered. Furthermore, none of the receivables are denominated in foreign currency. Also, no security is held for any of the receivables.

5.2 Credit quality & aging analysis of trade and other receivables

The credit quality of trade and other receivables that are neither past due nor impaired are assessed / monitored by reference to historical information about counterparty default rates. The credit quality rating of each of these ﬁnancial instruments are as follows:

2018 2017 Rating R Rating R Class - Aging Trade receivables (Net) 518 620 672 954 Current to 30 days High grade 474 103 High grade 646 703 Gross receivable 474 103 646 703 Provision for bad debt - - 31 days to 60 days $ High grade 34 652 High grade 20 132 Gross receivable 68 601 40 264 Provision for bad debt ( 33 949) ( 20 132) 61 days to 90 days $ Medium grade 9 865 Medium grade 6 119 Gross receivable 39 459 24 477 Provision for bad debt ( 29 595) ( 18 358) Over 91 days $ Medium grade - Medium grade - Gross receivable 632 915 506 798 Provision for bad debt ( 632 915) ( 506 798)

DITSONG Annual Report 2017 - 18 115 PART E - Financial Information

2018 2017 Rating R Rating R Class - Aging Other receivables - Current 1 588 190 2 074 875 Current to 30 days High grade 607 558 High grade 432 803 Gross receivable 607 558 432 803 Provision for bad debt - - 31 days to 60 days High grade - High grade 156 210 Gross receivable - 156 210 Provision for bad debt - - 61 days to 90 days Medium grade - Medium grade 88 560 Gross receivable - 88 560 Provision for bad debt - - Over 91 days & Medium grade 980 633 Medium grade 1 397 303 Gross receivable 980 633 1 397 303 Provision for bad debt - -

2 106 810 2 747 829

$ These debtors are past due but are not considered to be impaired.

& These debtors are past due and may be impaired according to management’s assessment.

Low credit grade – The counter party has evidenced high occurrences of defaults and / or re-negotiations of contractual terms in prior periods. As such the counter parties included in the low credit grade category pose a high credit risk to the entity.

Medium credit grade – The counter party has evidenced instances of defaults and / or re-negotiations of contractual terms in prior periods on the repayment of outstanding amounts. As such the counter parties included in the medium credit grade category pose a medium credit risk to the entity

5.3 Fair value of trade and other receivables

The carrying value, which the trade and other receivables are disclosed, approximate their fair values. The maximum exposure to credit risk, as a result of carrying receivables is limited to the carrying value of the receivables as disclosed above.

DITSONG Annual Report 2017 - 18 116 PART E - Financial Information

5.4 Impairment of trade and other receivables None of the trade and other receivables were re-negotiated.

Process for impairment of trade receivables at DMSA

In assessing whether there is an indication that trade receivables may be impaired, the DMSA shall consider, as a minimum, the following indications in line with Instruments: GRAP 104 – Financial Instruments:

(a) An impairment loss shall be recognised on receivables only when they are incurred. This means that there has to be objective evidence that a ‘loss event’ has occurred. (b) Loss events can be considered to be events that crystallise to form objective evidence of impairment; and examples include: i Death of the debtor (individual) ii Bankruptcy of the debtor iii Reports of an accident on a customer’s major factory iv Significant financial difficulty of the parties involved

Group Assets In this case, trade receivables are assessed on a group basis.

Individual assessment It is necessary to consider whether there is objective evidence of an impairment for financial assets that are ‘individually significant’. Assets that are not individually significant may be assessed either individually or collectively.

Collective assessment When assessing a group of trade receivables collectively for impairment, asset groups used should include receivables with similar credit risk characteristics.

2018 2017 RR 5.5 Reconciliation of provision for bad debts

Opening balance ( 545 288) (1 705 436) Amounts used 297 501 578 076 Amounts (raised) reversed ( 448 671) 582 071 Closing balance ( 696 458) ( 545 288)

6 Inventories Inventories comprises the following: Merchandise 140 149 153 810

During the year goods to the value of R67 557 (2017: R99 197) were purchased.

DITSONG Annual Report 2017 - 18 117 PART E - Financial Information

Year ended 31/03/18 Year Movements during the year Movements Movements during the year Movements Accumulated depreciation on restatements depreciation Accumulated 21 53 2 46 122 Opening accumulated depreciationOpening accumulated ( 1 185 813) ( 47 914) ( 2 499 900) ( 2 706 318) ( 4 352 355) depreciationOpening accumulated ( 10 792 299) (1 552 107) ( 71 968) (3 599 862) (3 006 625) (6 158 498) (14 389 060) RRRRRR Assets Vehicles Fittings amount Equipment Biological Computer Motor & Furniture Carrying

Opening cost 3 736 486 378 730 7 720 204 3 926 246 20 859 961 36 621 628 Opening net carrying amount 2 184 379 306 762 4 120 342 919 620 14 701 463 22 232 567

depreciation Accumulated ( 1 552 107) ( 71 968) ( 3 599 862) ( 3 006 625) ( 6 158 498) (14 389 060) carrying Gross amount 3 736 486 378 730 7 720 204 3 926 246 20 859 961 36 621 628

Close net carrying amount 2 184 379 306 762 4 120 342 919 620 14 701 463 22 232 567 Restatement 250 707 271 062 10 000 674 696 1 206 466

Opening cost 3 039 216 378 730 6 784 132 3 916 246 20 175 012 34 293 337 Depreciation ( 366 315) ( 24 054) ( 1 100 015) ( 300 310) (1 806 189) ( 3 596 883) Opening net carrying amount 2 104 132 330 816 4 555 348 1 219 930 16 497 400 24 707 625

ended 31/03/17 Year Additions 243 418 16 000 647 686 444 949 17 742 1 369 795 Additions 446 563 665 010 10 253 1 121 825

7 Assets7.1 Plant and Equipment Property,

DITSONG Annual Report 2017 - 18 118 PART E - Financial Information re authorised for issue there were no no were issue there authorised for re he delivery of goods and services of the entity 3 928 874 342 030 8 359 961 4 371 195 20 877 195 37 879 255 1 964 887 254 881 3 917 294 1 227 512 12 901 845 20 266 420 ( 1 963 986) ( 87 149) ( 4 442 666) ( 3 143 683) ( 7 975 350) ( 17 612 835) Disposals - Accumulated DepreciationDisposals - Accumulated 29 990 8 603 6 787 131 45 510 RRRRRR Assets Vehicles Fittings amount Equipment Biological Computer Motor & Furniture Carrying Accumulated depreciation Accumulated carrying Gross amount Close net carrying amount

Depreciation ( 409 596) ( 23 784) ( 835 783) ( 137 057) (1 785 780) ( 3 192 001) Disposals - Cost ( 51 031) ( 52 700) ( 7 930) ( 508) ( 112 168)

Impairment (32 273) (13 807) - (31 203) ( 77 283) Other information period of time during any the reporting plant and equipment that was not used for impacted period t that significantly Property, (carrying amount) contractual commitments for the acquisition of property, plant and equipment. plant and equipment. the acquisition of property, contractual commitments for During the year no items of property, plant and equipment were pledged as security. By the date that the financial statements we By that the financial statements the date pledged as security. plant and equipment were of property, During no items the year

DITSONG Annual Report 2017 - 18 119 PART E - Financial Information

2018 2017 RR Deemed cost Aggregate of items valued using deemed cost 712 712 Aggregate adjustment to the carrying amounts previously reported - 1 206 466 Deemed cost was determined using fair value and depreciated replacement cost

During the year the following adjustments occurred:

Life spans were streamlined and review of useful lives performed 227 564 Assets with an aggregate remaining lifespan of 62 months were revised to an aggregate remaining useful lifespan of 92,4 months at the beginning of the financial year. The effect of this revision has increased the depreciation charge for current and future periods by R227 564.

Assets added at Deemed Cost 1 206 466 Assets Written Oﬀ -66 658 Assets impaired -77 283 Correction to Prior Depreciation (143 966)

Prior Period Errors

The Comparitive amount has been restated as follows: Restated As previously amount reported

Statement of Financial Position Property, Plant and Equipment 22 232 567 21 169 946

Statement of Financial Performance Depreciation 3 596 883 3 452 917

Net Effect on Accumulated surplus opening balance Retained Earnings (1 206 588) (20 589 590)

DITSONG Annual Report 2017 - 18 120 PART E - Financial Information

7.2 Heritage assets Cultural Natural Military 2018 History History History Total RRRR Opening Balance 356 995 516 10 538 194 524 983 035 892 516 745 Change in Estimates - - - - Additions Purchases 111 485 13 306 6 939 131 730 Non-cash Additions - - - - Closing Balance 357 107 001 10 551 500 524 989 974 892 648 475

Cultural Natural Military 2017 History History History Total RRRR Opening Balance 462 640 218 673 860 287 793 727 506 930 227 Movement - - - - Prior Period Error 356 532 876 (208 135 666) 237 189 308 385 586 518 Additions Purchases - - - - Closing Balance 356 995 516 10 538 194 524 983 035 892 516 745

Additions

For recognition of heritage assets, the asset needs to be controlled by the Museum as a result of past events. Such events may include: Purchase, donation, bequest, loan or transfer. Additions disclosed in respect of the 2017/18 ﬁnancial period, include Donations received.

Prior Period Error

“The museum disclosed heritage assets for the Financial Period 2016/17 at R506 930 227, after a valuation was performed by internal staﬀ not suitably qualiﬁed in the valuation of heritage assets. As a result, the valuation could not be supported by evidence. The Prior Period Error follows the appointment of an external service provider to perform the valuation of all heritage assets in accordance with the requirements of GRAP 103 for the 2017/2018 Financial Period.

Loans

Valid and duly authorised Loan Agreements have been concluded with all entities in accordance with the Museums Heritage Asset Management Policy.

Impairment

At each reporting date, the entity assesses its heritage assets to determine whether there is an indication that they may be impaired. If any such indication exists, the entity shall estimate the recoverable amount or the recoverable service amount of the heritage asset: • Where acquisitions have been fair valued and assessed, the valuation surplus/ loss has been disclosed accordingly.

DITSONG Annual Report 2017 - 18 121 PART E - Financial Information

• Where acquisitions have been assessed with no signiﬁcant change in fair value for the period under review, they are disclosed at cost or fair value. • All remaining items valued and disclosed have been assessed and fair valued as at the date of recognition.

Inability to Value

Where no value can be placed on an item, it will not be recognised, but information should be disclosed about such items and the reason why such items cannot be valued (GRAP 103.17). Where the Museum holds an asset that might be regarded as a heritage asset but which, on initial recognition, does not meet the recognition criteria of heritage assets because it cannot be reliably measured, relevant and useful information about it shall be disclosed in the notes to the ﬁnancial statements.

Assets Not Valued and Not Affecting the AFS • Natural History. This collection comprises of a diverse collection of material including: Marine Biology, Invertebrates and Terrestrial Vertebrates, Palaeontology, Rocks and Minerals, and Fossils. The collection is primarily of research significance. While the majority of the collection has been assessed as having no commercial value all specimens have been physically verified.

Particularly within the Natural History Collection, material is often retrieved in a fragmentary state – ﬁnding a completely articulated specimen is the exception rather than the rule. A great deal of knowledge is thus required to identify and systematise the collections.

The research required to identify, analyse and classify heritage items is often a collaborative effort between local and international experts that span several months, even years. These items cannot be recognised in the financial statements, but will be recorded and controlled in the register. Relevant and useful information about them shall be disclosed in the notes to the financial statements.

• Replicas and copies. These items are intended to be used freely and replaced as needed, and therefore will not be recognised for accounting purposes. These items are expensed.

Inability to determine Service Potential

The museum has assessed the degree of certainty attached to the flow of future service potential or economic benefits. The service potential of the following heritage items are undetermined until they are subjected to evaluation and research to determine if they conform to the set collection criteria. These items cannot be recognised in the financial statements, but will be recorded and controlled in the register. The items below include the items verified, but research is still being undertaken to determine what they are, and if the objects meet the recognition criteria of heritage assets: • Unknown, unassembled or fragmented artefacts. These items cannot be recognised in the financial statements, but are recorded and controlled in the register.

DITSONG Annual Report 2017 - 18 122 PART E - Financial Information

7.3 Intangible assets Computer Software Website Computer Total Operating Licences Software System RRRRR Year ended 31/03/17 Opening net carrying amount 56 334 56 334 Opening cost 134 647 134 647 Opening accumulated depreciation ( 78 314) ( 78 314)

Movements during the year Additions 144 000 - 144 000 Amortisation ( 6 140) ( 6 140) Impairment ( 34 711) ( 34 711)

Close net carrying amount - - 144 000 15 483 159 483 Gross carrying amount - - 144 000 134 647 278 647 Accumulated depreciation - - - ( 119 165) ( 119 165)

Computer Software Website Computer Total Operating Licences Software System RRRRR Year ended 31/03/18 Opening net carrying amount - - 144 000 15 483 159 483 Opening cost - - 144 000 134 647 278 647 Opening accumulated depreciation - - - ( 119 165) ( 119 165)

Movements during the year Additions 21 155 92 703 23 400 164 550 301 807 Disposals - Cost ( 52 665) ( 52 665) Disposals - Accumulated Amortisation 52 665 52 665 Amortisation ( 91) ( 2 032) ( 32 700) ( 6 290) ( 41 113) Impairment ( 4 389) ( 4 389)

Close net carrying amount 21 064 90 671 134 700 169 354 415 788 Gross carrying amount 21 155 92 703 167 400 246 533 527 790 Accumulated depreciation ( 91) ( 2 032) ( 32 700) ( 77 179) ( 112 002)

DITSONG Annual Report 2017 - 18 123 PART E - Financial Information

2018 2017 RR 8 Post-employment benefit costs Post-employment benefit costs 52238 000 46 482 000

8.1 Pension fund

Expenditure recognised during the year 5 783 595 6 151 252

Ditsong Museums of South Africa employees are members of a Museum Pension Fund which covers employees on both defined benefit and defined contribution plans. The Museum Pension Fund is administered on behalf of DMSA by pension fund administrators and is governed by the Pensions Fund Act, 1956 (Act No 24 of 1956), as amended. An independent Board of Trustees manages the fund.

The Museums Pension Fund is a multi-employer plan. The actuarial valuation is done for the plan in its entirety and does not specify, as a separate entity, DMSA’s obligation, plan assets or liability in terms of the fund.

The following rates of contribution are applied: • Defined Benefit category: Employee contribution is 7.5% of pensionable salary (basic salary plus annual bonus) and the employer contributes 20%. • Defined Contribution category: Employee contribution is 7.5% of pensionable salary (basic salary plus annual bonus) and the employer contributes 15%. The employer contribution rates can fluctuate as a result of changes to the insured benefit rate. The Museums Pension Fund requires an actuarial valuation every three years. The defined benefit contribution plan fund was actuarially valued, using the projected unit credit method at 31 March 2015 and it revealed that the assets of the fund represented a funding position of 100% for the Museum Pension Fund. Any deficit advised by the actuaries is funded through increased contributions to ensure the on-going soundness of the pension fund.

At the time of the valuation, the actuary reported that he was satisﬁed that the current composition

of the investments of the Fund can be considered reasonable for the purpose of matching it assets and liabilities DMSA is fully funded and therefore has no liability

8.2 Health Care costs

The assets are generally held in separate trustee-administered medical aid funds, namely Bestmed, Bonitas, Medshield, Medihelp, Fedhealth, Key Health and Discovery Health.

The liabilities for the DMSA with regard to subsidies in respect of continuation member health care costs can reasonably be regarded as the following: • Total liability in respect of existing continuation members • Total liability in respect of members in active employment

The DMSA ‘s contributions to the medical schemes are charged to the income statement

DITSONG Annual Report 2017 - 18 124 PART E - Financial Information

in the year to which they relate. Provision is made for future liability in the financial statements. The defined benefit obligation is determined by making use of the projected unit credit method. All actuarial profits and losses are recognised immediately.

The actuarial valuation was as at 31 March 2018.

2018 2017 RR Accrued Liabilities Liabilities in respect of: Members in active employment 37 383 000 33 356 000 Current continuation members 14 855 000 13 126 000 Total Liability Recognised in Balance Sheet 52 238 000 46 482 000

The reconciliation of the opening and closing balances is as follows Liability as at 1 April 46 482 000 45 201 000 Interest service cost 4 521 000 4 598 000 Current service cost 1 291 000 1 334 000 Disbursements (beneﬁts paid) (1 439 000) (1 339 000) Actuarial (gain)/loss 1 383 000 (3 312 000) Liability as at 31 March 52 238 000 46 482 000

Projections The projections of the expected change in the obligation over the period 1 April 2018 to 31 March 2019 is as follows:

Benefit Projection R’000 PBO at start of period (1 April 2018) 52 238 Interest Service Cost 4 695 Current Service Cost 1 415 Beneﬁt payments (1 587) PBO at end of period (31 March 2019) 56 761

DITSONG Annual Report 2017 - 18 125 PART E - Financial Information

2018 2017 RR Interest and Inflation Rate The actuary took into account the following assumptions in their calculation:

Discount Rate 8.88% pa 9.74% pa Expected Investment Return N/A N/A Long - term Price Inﬂation 6.40% pa 6.69% pa Medical Inﬂation Rate 7.90% pa 8.19% pa

Average longevity for current pensioners (77,3 years) Males 8,4 8,7 Females 10,5 10,9 Average longevity at retirement age for current employees (future pensioners) (Age 63 years) Males 16,6 - Females 20,8 -

Benefit Cost in Profit and Loss Net Interest cost 4 521 000 4 598 000 Service cost 1 291 000 1 334 000 Profit and loss expense 5 812 000 5 932 000

Other Comprehensive Income Remeasurement on the net defined benefit liability: Return on plan assets (excluding amounts included in net interest expense) Actuarial gains and losses arising from changes in demographic assumptions - - Actuarial gains and (losses) arising from changes in financial assumptions 3 751 000 2 633 000 Actuarial gains and (losses) arising from experience adjustments (2 367 000) 679 000 Other (describe) Adjustments for restrictions on the defined benefit asset Components of defined benefit costs recognised in other comprehensive income

Total gain / (loss) on liability 1 383 000 (3 312 000)

DITSONG Annual Report 2017 - 18 126 PART E - Financial Information

Sensitivity analysis The following changes were made: a) A 1% increase/decrease in the medical inﬂation assumption; and b) A 1-year increase / reduction in the post-retirement mortality.

Current 1% decrease 1% increase Medical Inflation Rate Assumption 6,90% 8.90% 7,90% Liability (R’000) 52 238 45 840 59 985 Cost / (Saving) (R’000) -6 398 7 747

Current 1 year 1 year Mortality Assumption reduction Pa enhancement Pa (90) -1 (90)-2 Pa (90) Liability (R’000) 52 238 54 288 50 221 Cost / (Saving) (R’000) 2 050 ( 2 017)

The impact on the next year’s projection from a 1% increase/decrease in the discount rate is as follows:

Current Discount Rate Discount Rate Benefit Projection Assumptions -1% R’000 +1% R’000 R’000 PBO at start of period (31 March 2018) 52 238 60 034 45 908 Interest Cost 4 695 4 802 4 577 Service Cost 1 415 1 694 1 195 Expected Beneﬁt payments -1 587 -1 587 ( 1 587) PBO at end of period (31 March 2019) 56 761 64 943 50 093

DITSONG Annual Report 2017 - 18 127 PART E - Financial Information

2018 2017 RR 9. Trade and other payables Trade and other payables 23 740 139 6 643 340 Trade payable 789 108 85 Leave and bonus accruals 2 081 421 3 172 469 Sundry payables 3 428 874 3 388 358 Payments received in advance 17 358 308 - Deposits 82 429 82 429

Opening Amounts Payables Closing 2018 balance received / raised balance used RRRR Trade payable 85 ( 85) 789 108 789 108 Leave and bonus accruals 3 172 469 (1 708 458) 617 410 2 081 421 Sundry payables 3 388 358 (3 388 358) 3 428 874 3 428 874 Payments received in advance - - 17 358 308 17 358 308 Deposits 82 429 - - 82 429 6 643 340 (5 096 901) 22 193 700 23 740 139

Opening Amounts Payables Closing 2018 balance received / raised balance used RRRR Trade payable - - 85 85 Leave and bonus accruals 3 320 335 (1 708 458) 1 560 591 3 172 469 Sundry payables 2 646 478 (2 646 478) 3 388 358 3 388 358 Payments received in advance 1 600 ( 1 600) - - Deposits 84 829 ( 2 400) - 82 429 6 053 242 (4 358 936) 4 949 034 6 643 340

9.1 Currency and security

None of the trade and other payables are denominated in foreign currencies. Furthermore, no ﬁnancial assets or non-ﬁnancial assets have been pledged as security for the trade and other payables and as such the payables are unsecured.

9.2 Defaults and breaches

The procurement policy of the entity makes provision for the settlement of trade and other payables within 30 days after the receipt of the invoice. During the period the entity has not renegotiated any of the contractual terms of any of the creditors. Also, during the period the entity has not defaulted on any of the principal capital or interest repayments.

DITSONG Annual Report 2017 - 18 128 PART E - Financial Information

* Prior period error During the year accruals of R575 735 were identiﬁed as omitted in prior year balance. The prior year balance has been restated from R2 812 623.

10. Provisions VAT provision Performance Total 2017 Bonus provision RRR Opening balance 529 913 407 841 937 754 Utilisation of provisions during the year ( 529 913) - ( 529 913) Provisions made during the year ( 1 450) ( 1 450) Closing balance - 406 391 406 391

VAT provision Performance Total 2018 Bonus provision RRR Opening balance - 406 391 406 391 Utilisation of provisions during the year - - - Provisions adjustment made during the year 446 650 446 650 Closing balance - 853 041 853 041

The performance bonus provision was made in line with the approved performance management policy.

11. Contingencies

11.1 Contingent liabilities Probable loss Possible loss Estimate Description Total costs/ Future costs RRR None - - -

11.2 Contingent assets Probable Possible in- Estimate Total 2017 income come income/ Future income RRR Legal action for outstanding money

DMSA versus Bella Casa Housing Developments Pty (Ltd) (a) - 167 969 167 969 DMSA versus Allan Coleman t/a The War Store (b) 133 190 - 133 190 DMSA versus Soshanguve North Business Forum others (c) 73 830 73 830 133 190 241 799 374 989

DITSONG Annual Report 2017 - 18 129 PART E - Financial Information

Probable Possible in- Estimate Total 2018 income come income/ Future income RRR None - - -

Remarks: (a) Bella Casa failed to complete erecting a concrete palisade fence at Tswaing. DMSA instituted legal action against the company R2 300 000. Legal costs amounted to R167 968. The company went into liquidation and its property has been sold but the registration of transfer process has not yet been ﬁnalized. The attorney advised that we wait for the disposing of the assets after which the liquida- tors will indicate whether there are any proceeds from the sale that can be distributed to the creditors. (b) Lessee at Ditsong National Museum of Millitary History was disputing termination of lease agreement. He has since vacated the premises and must pay DMSA’s legal costs as per the court order. The attorney has appointed a cost consultant to prepare the bill of cost and also to attend to the taxation. The bill of costs has been prepared but not yet taxed by the consultant. (c) Urgent application for an interdict against the Soshanguve North Business Forum others, others interdicting the community from intimidating, abusing or threatening any of Ditsong’s employees and contractors.

12. Operating leases

DMSA is currently leasing out its facilities to generate income. The following are the premises being rented out: Duration Lessee Effective from of the agreement Maribelo Trading and Projects: Natural History Museum 01-Jan-15 5 years Pretoria Society of Advocates - DMSA Head Oﬃce 01-Jul-12 10 years Green Dawn Consulting 01-Dec-16 5 years South African Heritage Resources Agency 01-May-13 5 years Somtse Trading and Projects 01-Apr-17 5 years MSQRD Designs 01-Jan-17 5 years SAAACA - Museum of Military History 01-Oct-13 5 years

The following lease payments are receivable: 2018 2017 RR Within I year 730 572 1 022 055 Between 1-5 years 2 238 987 3 200 722 Later than ﬁve years 0 131 934 Total lease commitments 2 969 559 4 354 711

The contracts entered into during the year and future contracts are benchmarked against the market rates.

DITSONG Annual Report 2017 - 18 130 PART E - Financial Information

2018 2017 RR 13 Commitments

13.1 Capital Commitments Commitments in respect of capital expenditure:

Approved and contracted for 2 807 977 4 084 895 Infrastructure 100 464 2 009 290 Security infrastructure - 2 075 605 Other 2 707 513

Total Capital Commitments 2 807 977 4 084 895

This expenditure will be ﬁnanced from: Government Grants 2 807 977 4 084 895 2 807 977 4 084 895

Infrastructure projects will be running for periods exceeding one year

13.2 Operational Commitments Commitments in respect of operational expenditure:

Approved and contracted for 17 968 409 15 281 100 Cleaning services 1 810 023 2 050 006 Security services 10 019 620 11 320 364 GRAP 103 Heritage Assets 2 070 000 - Other 4 068 766 1 910 730

Total Operational Commitments 17 968 409 15 281 100

This expenditure will be ﬁnanced from: Own resources 17 968 409 15 281 100 17 968 409 15 281 100

Cleaning and security services will be running for periods longer than one year

Total Commitments 20 776 386 19 365 995

DITSONG Annual Report 2017 - 18 131 PART E - Financial Information

2018 2017 RR 14 Reconciliation of cash paid for the operating expenditure

Deﬁcit for the year (4 709 118) (2 735 887)

Non-cash movements 27 418 046 3 846 708 Depreciation 3 192 001 3 596 883 Health care beneﬁt adjustment (1 439 000) (1 339 000) (Increase)/decrease in inventory 13 661 ( 22 543) (Increase)/decrease in trade and other receivables 641 019 (1 028 608) Interest and service cost 5 812 000 5 932 000 Impairment of assets 208 640 Increase/(decrease) in provision for performance bonus 446 650 ( 531 363) Amortisation 41 113 6 140 Actuarial Gain / (Loss) 1 383 000 (3 312 000) (Decrease)/increase in trade and other payables 17 096 799 590 099 (Proﬁt) / Loss on sale of asset 22 164 ( 44 900)

Cash generated from operations 22 708 928 1 110 821

15 Going Concern

The annual ﬁnancial statements have been prepared on the accounting policies applicable to a going concern.

16 Taxation

No provision has been made for taxation since Ditsong Museums of South Africa is exempted from taxation in terms of Section 10(1)(cA)(1) of the Income Tax Act.

DITSONG Annual Report 2017 - 18 132 PART E - Financial Information

TOTAL Other Benefits Pension Pension Contribution Contribution

Bonus

R R R R R

Core 3 303 001 166 320 532 389 43 327 4 045 037 Functions Functions HRREMCO ARIC Other TOTAL Salary/Fee

308 219 35 462 28 544 38 412 283 575 694 212 Council Council

31 March 2018 31 March Dr BC Ndhlovu - Chief Executive OfficerDr BC Ndhlovu - Chief Executive @ OfficerMs NL Sakawuli ^ - Chief Financial Mr Officer~ K Kaposa - Chief Financial 590 640 415 355 321 651 41 555 - 161 446 59 622 - 10 500 6 000 44 010 762 586 522 532 3 300 368 961 Adv BD Mushwana - Chief Executive Officer - Chief Executive * BD Mushwana Adv “Ms SR Mackenzie DNMMH - Director Dr S Badernhorst DNMNH # - Director 740 108 81 936 47 211 586 412 12 600 221 403 18 229 881 855 107 609 - 2 500 17 989 714 751 1 500 240 892

Mr M Ditlhake 29 100 13 968 9 421 52 489 Ms Z Khanyile 26 772 9 312 34 560 70 644 Mr B Daniels 32 592 15 132 33 748 81 472 Y Mashilela Ms 29 100 6 984 37 290 73 374 Mr B Mgijima 16 296 7 112 2 833 26 241 MJ Ralefatane Adv 41 904 12 248 9 312 61 023 124 487 Dr P Bayliss 37 248 14 510 28 890 80 648 Dr M Matlou 41 520 13 840 25 446 80 806

Ms K Rapoo: Chairperson Council 53 687 50 364 104 051

Senior Management: Council: +T Ndebele Monyela Mr DNMCH $ Dr N Solani - Director 58 427 369 005 24 600 - 85 794 8 708 2 400 4 527 481 799 71 662

17 Members and Senior Management Committee Emoluments of Council,

DITSONG Annual Report 2017 - 18 133 PART E - Financial Information 4 760 210 Core Functions Functions HRREMCO ARIC Other TOTAL Council Council * end of October 2017 CEO resigned Independent Chairpersons: Ms F Mudau - Chairperson of Audit, RiskMs F Mudau - Chairperson of Audit, & ICT Committee 4 092 16 368 501 20 961 @ 2018 on the 9th of March 2017 and resigned on 1 November CEO Appointed ^ 2017 CFO contract on 31 August terminated ~ of January on the 3rd CFO appointed 2018+ contract ended 31 April 2017 Director’s “ 2017 on the 1st of November was appointed Director # on the 30th of October 2017 on the 1st of June 2017 and resigned appointed Director $ on the 1st of January appointed Director 2018

TOTAL TOTAL

TOTAL SUB 312 311 35 462 28 544 54 780 284 076 715 173 - -

DITSONG Annual Report 2017 - 18 134 PART E - Financial Information

4 039 723 TOTAL Other Benefits 11 563 - 11 563 Pension Pension Contribution Contribution

Bonus

R R R R R

Core 2 925 300 185 775 385 886 100 207 3 597 168 Functions Functions HRREMCO ARIC Other TOTAL Salary/Fee

231 921 42 706 44 058 23 516 88 791 430 992 Council Council

31 March 2017 31 March Independent Chairpersons: Ms Z Khanyile 33 238 7 848 41 086 Mr B Daniels 16 562 5 686 9 511 31 759 Ms NL Sakawuli - Chief Financial OﬃcerMs NL Sakawuli - Chief Financial 802 559 66 880 174 384 13 785 1 057 608 Adv BD Mushwana - Chief Executive Oﬃcer - Chief Executive BD Mushwana Adv 1 426 736 118 895 107 005 26 985 1 679 620 Ms B Maleka & Risk - Audit Committee

MJ Ralefatane Adv 39 005 - 7 383 18 471 64 860 Dr M Matlou 18 657 12 002 - 30 659 Y Mashilela Ms 17 323 5 625 11 858 34 807 Mr B Mgijima 10 402 5 612 5 853 21 867

Mr C Kneale 3 592 7 562 2 589 - 13 743 Mr M Ditlhake 17 880 5 263 3 452 26 595 TOTAL TOTAL Dr P Bayliss 32 512 22 655 8 635 134 63 936

Ms K Rapoo: Chairperson Council 42 750 2 437 14 852 9 978 31 663 101 680

Senior Management: TOTAL SUB 231 921 42 706 44 058 35 079 88 791 442 555 Council: T Ndebele-Monyela - Director Mr 696 005 - 104 497 59 438 859 940

- -

DITSONG Annual Report 2017 - 18 135 PART E - Financial Information

18 Related parties

The following related party transactions occurred during the year: 2018 2017 Party Relation RR

a) Department of Arts and Culture Executive Authority Grant transferred 76 734 000 73 080 000 annual government grant received. Municipal charges 4 043 000 7 541 238 Operating leases 1 199 964 Grap 103 grant 45 000 000

b) The remuneration of Council 4 760 210 4 039 723 members and executive directors is disclosed in note 18

c) Museum Pension Fund Post employment beneﬁt plan 5 164 958 6 063 436

Museum pension fund is administered by ABSA and manages the pension fund of most employees

d) Government Employee Pension Post employment beneﬁt plan 96 554 87 816 Fund

Government employee pension fund manages the pension fund of some employees

e) The Auditor General of South Africa Auditing services 3 021 222 2 248 846

f) ESKOM Electricity supplier 257 611

g) City of Tshwane Municipal services 3 836 358

h) Government Printing Works Printing services 9 000

i) Telkom SA Telecommunication 241 908

j) South African Revenue Services Taxes (PAYE & UIF) 5 410 012

DITSONG Annual Report 2017 - 18 136 PART E - Financial Information

19 Risk management

19.1 General

Exposure to credit, interest rate, currency and liquidity risks arises in the normal course of business. It is the entity’s objective to minimise its exposure to the various ﬁnancial risks through its risk management policies and procedures.

The entity attempts to manage ﬁnancial risk where this involves activities in which it has appropriate competencies.

19.2 Operational risk

Operational risk is the risk of loss arising from system failure, human error or external events. When controls fail to perform, operational risk can cause damage to reputation, have legal or regulatory implications or can lead to financial loss. The entity cannot expect to eliminate all operational risks, but by initiating a rigorous control framework and by monitoring and responding to potential risk, the entity is able to manage the risk. Controls include effective segregation of duties, access control, authorisation and reconciliation procedures, staff education and assessment processes.

19.3 Categories of financial instruments 2018 2017 RR FINANCIAL ASSETS Classification

Trade and other receivables 2 106 810 2 747 829 Trade receivables Loans and receivable 518 620 672 954 Other receivables Loans and receivable 1 588 190 2 074 875

Cash and cash equivalents 56 081 492 35 525 161 Bank balances Loans and receivable 19 508 383 1 528 979 Short term deposits Loans and receivable 36 573 108 33 996 182

FINANCIAL LIABILITIES

Trade and other payables 23 740 139 6 643 340 Trade payables Financial liabilities at amortised cost 23 740 139 6 643 340

19.4 Liquidity risk

Prudent liquidity risk management implies maintaining suﬃcient cash through proper management of working capital, capital expenditure and cash. Due to the dynamic nature of the underlying operations, the Entity aims to maintain suﬃcient funding through a robust Medium-term Expenditure Framework (MTEF) budgeting process.

The entity manages liquidity risk through proper management of working capital, capital expenditure and actual versus forecast cash ﬂows and its cash management policy. Adequate reserves and liquid resources are also maintained.

DITSONG Annual Report 2017 - 18 137 PART E - Financial Information

Liquidity risk management includes maintaining suﬃcient cash and cash equivalents, the availability of funding from adequate banking facilities ranging from overnight to 364 day facilities and the ability to close out market positions.

19.5 Borrowing capacity

In terms of the Public Finance Management Act (Act No. 1 of 1999) as read with the Treasury Regulations the entity may not enter into any borrowing agreements without the express consent of National Treasury.

19.6 Interest rate risk

The entity’s policy is to manage interest rate risk so that fluctuations in variable rates do not have a material impact on surplus / (deficit). The entity’s interest rate risk arises from financial service assets such as cash and cash equivalents. Borrowings issued at floating rates expose the entity to cash flow interest rate risk, while fixed rate borrowings expose the entity to fair value interest rate risk. As part of the process of managing the entity’s fixed and floating rate borrowings mix, the interest rate characteristics of new borrowings and refinancing of existing borrowings are positioned according to expected movements in interest rates.

The sensitivity of the entity’s surplus or net assets to its exposure to interest rate risk is presented below. The analysis considers the impact of a reasonably possible change in the prime rate of interest, with all other variables held constant. At the reporting date, the prime rate is 10% (2017: 10.5%).

Movement in Effect on Effect on net 2018 basis points surplus assets for the year RR Floating rate financial assets

Cash and cash equivalents +150 841 222 841 222 -50 ( 280 407) ( 280 407)

Movement in Effect on Effect on net 2017 basis points surplus assets for the year RR Floating rate financial assets

Cash and cash equivalents +150 532 877 532 877 -50 ( 177 626) ( 177 626)

There are no foreign interest-bearing borrowings.

DITSONG Annual Report 2017 - 18 138 PART E - Financial Information

The carrying amounts of the entity’s ﬁnancial instruments that are exposed to interest rate risk are as follows:

19.7 Cash flow interest rate risk

Financial instrument Current Due in less Due in two to Due in five to interest rate than a year five years ten years R R Trade and other receivables - normal 6,00% 2 106 810 - - credit terms Cash and cash equivalents: 0,00% - - - Bank balances 6,00% 19 508 383 - - Short term deposits 7,10% 36 573 108 - - Finance lease obligation 11,14% - - - Trade and other payables 0,00% 23 257 965 - -

19.8 Credit risk

Credit risk arises on cash and cash equivalents and trade receivables. The risk on the cash and cash equivalents is managed through dealing with well established ﬁnancial institutions, endorsed by National treasury.

The risk arising on the trade receivables is managed through normal credit risk relating to the trade receivables is not concentrated due to a diversiﬁed customer base. Adequate provision is made for doubtful debts.

The bulk of customers is concentrated in the private sector but also consists of other government agencies. On-going credit evaluation is performed on the ﬁnancial condition of trade receivables. No events occurred in the sector during the ﬁnancial year that may have an impact on accounts receivable that have not yet been adequately provided for.

19.9 Gains and losses on financial instruments

Fair value Interest Interest Impairment Total 2018 movement income expense loss RRRRR Trade and other receivables - - - 448 671 448 671 Trade and other receivable # - - 448 671 448 671

Cash and cash equivalents - ( 3 042 755) - - ( 3 042 755) Bank balances - ( 3 042 755) - - ( 3 042 755)

FINANCIAL LIABILITIES

Finance lease obligation - - - - - Finance lease - - - - -

Trade and other payables - - 307 507 - 307 507 Trade payables # - - 307 507 - 307 507

DITSONG Annual Report 2017 - 18 139 PART E - Financial Information

Fair value Interest Interest Impairment Total 2017 movement income expense loss RRRRR Trade and other receivables - ( 145 200) - ( 582 071) ( 727 271) Trade and other receivable # - ( 145 200) - ( 582 071) ( 727 271)

Cash and cash equivalents - ( 2 529 258) - - ( 2 529 258) Bank balances - ( 2 529 258) - - ( 2 529 258)

FINANCIAL LIABILITIES

Finance lease obligation - - - - - Finance lease - - - - -

Trade and other payables - - 64 201 - 64 201 Trade payables # - - 64 201 - 64 201

# The interest and fair value movement relate to notional interest that arises from the discounting of these ﬁnancial instruments to determine the fair value thereof at the date of initial recognition and therefore do not present “actual” interest levied. therefore, the interest noted on trade payables do not constitute fruitless and wasteful expenditure as deﬁned in the Public Finance Management Act.

2018 2017 RR 20 Irregular, unauthorised, fruitless and wasteful expenditure

20.1 Irregular expenditure

Opening balance 5 568 688 3 179 328 * Add: Irregular Expenditure – current year 27 572 988 2 389 359 $ Add: Unauthorised Expenditure – current year Less: Amounts condoned -

Less: Amounts recoverable (not condoned) - - Less: Amounts not recoverable (not condoned) - - Irregular Expenditure awaiting condonation 33 141 676 5 568 688

Analysis of expenditure awaiting condonation per age classiﬁcation

Current year 27 572 988 2 389 359 Prior years 5 568 688 3 179 328 Total 33 141 676 5 568 688

DITSONG Annual Report 2017 - 18 140 PART E - Financial Information

* 2016_ Restated amount, previously reported as R2 027 173. Additional irregular expenditures were identiﬁed during the year. $ 2017_ Restated amount, previously reported as R2 025 217. Additional irregular expenditures were identiﬁed during the year.

2018 2017 RR Details of Irregular Expenditure – Current year

Incident Services rendered without official purchase order 12 693 127 573 Travel agent providing service after contract expired 114 398 Deviation for sole supplier approved after the order had been placed 34 035 Contract continued on month to month 960 162 4 248 444 Supplier not on approved supplier list 98 040 Quotations not obtained and lowest quote not obtained 465 632 Invalid BEE certificate 188 828 Quotations disqualified by panel without further evaluation in accordance with PPPFA 291 737 There is no formal approved deviation 118 503 Bid advertised for less than 21 days without approval from National Treasury 26 481 631

Disciplinary steps taken/criminal proceedings Warnings given

Details of Irregular Expenditure condoned

Incident Condoned by (condoning authority) - in the process of Applying for condonation to national treasury and council

Details of Irregular Expenditure recoverable (not condoned)

Incident 33 141 676

Details of Irregular Expenditure not recoverable (not condoned)

Incident -

DITSONG Annual Report 2017 - 18 141 PART E - Financial Information

2018 2017 RR 20.2 Fruitless and wasteful expenditure

Opening balance 2 875 852 2 406 623 & Add: Fruitless and Wasteful Expenditure – current year 307 507 469 229  Less: Amounts condoned - -

Less: Amounts recoverable (not condoned) - - Less: Amounts not recoverable (not condoned) - - Fruitless and wasteful expenditure awaiting condonation 3 183 359 2 875 852

Analysis of expenditure awaiting condonation per age classiﬁcation

Current year 307 507 469 229  Prior years 2 875 852 2 406 623 & Total 3 183 359 2 875 852

Details of Fruitless and Wasteful Expenditure – Current year

Incident Disciplinary steps taken/criminal proceedings Warnings given - 4 114 Disciplinary steps taken/criminal proceedings Charges raised 296 590 against employee

Details of Fruitless and Wasteful Expenditure written off

Incident Approved by (authority) - -

Details of Fruitless and Wasteful Expenditure recoverable

Incident Interest charged on late payment 307 507 64 201 overpayment on salaries 303 971 Wasteful expenditure relating to boardroom costs for meetings 101 057

Details of Fruitless and Wasteful Expenditure not recoverable

Incident Leave payout incorrectly calculated

DITSONG Annual Report 2017 - 18 142 PART E - Financial Information

Restatement of prior year balance & The prior year opening balance was revised from R725 771 to R2 406 623 to correct expenditure previously recorded as prior year’s additions. # The prior year balance was revised from R1 219 699 to R469 229 to remove expenditure relating to previous years to opening balance and account for additional fruitless expenditures identiﬁed during the year

21 Budget variances

As required by GRAP 24 para 12 (c) an explanation of material diﬀerences between the budget for which the entity is held publicly accountable and actual amounts as disclosed in the statement of budget information are as follows:

Income:

Overall income was on target as it was only 0,12% below budget for the ﬁnancial year at a total of R96.5m (2017: R96.5m). The overall income shows an increase of 42% from prior year’s performance due to a grant of R45m towards implementation of GRAP103 standard. The admission fees were 4% below budget and 4% below prior year’s performance. The total collected was R4.26m (2017: R4.44m). This decline was due to the targeted number of visitors not being achieved during the year. We realised a 13.4% increase in our investment income of R3m (2017:

R2.7m) from prior period and a 11% increase from budget. This was largely due to favourable interest rates and cash injection from DAC. Rental income increased from prior year by 8% but fell short of meeting the current years budget by 6%. The rental income raised was R3m (2017: R2.8m)

Expenses: Overall expenses were below the budget by R5.2m (2017: over by R9m) which is 3.99% (2017: 10.07%) of total budget. This under spending was inspite of the increase in the valuation of post-retirement medical aid which led to interest service cost of R4.5m (2017: R4.6m), current service cost of R1.3m (2017: R1.3m) and actuarial loss of R1.8m (2017: gain of R3.3m). Other non-cash items included the depreciation of R3.2m, bad debts of R296 435 and

impairment of R208 640. These costs were oﬀset by the savings in the valuation of Heritage Assets, which costed R29m from a budget of R45m. Professional services increased by R629 087 from budget and security by R1.7m. Employee costs was kept at 1% below budget at a cost of R53.7m (2017: R51.88m)

DITSONG Annual Report 2017 - 18 143 PART E - Financial Information

22 Prior period error

22.1 Consolidated Statement of Financial Position

As previously Adjustments As restated

reported Cash and cash equivalents 35 525 161 35 525 161 Trade and other receivables 2 224 330 523 499 2 747 829 Inventories 153 810 153 810 Current Assets 37 903 302 523 499 38 426 801

Property, Plant & Equipment 21 169 946 1 062 621 22 232 567 Intangible Assets 159 483 - 159 483 Heritage Assets 506 930 227 385 586 518 892 516 745 Non-Current Assets 528 259 656 386 649 139 914 908 795

Trade and other payables 6 067 605 575 735 6 643 340 Provisions 406 391 0 406 391 Current Liabilities 6 473 996 575 735 7 049 731

22.2 Consolidated Statement of Financial Performance

As previously Adjustments As restated

reported Grants and donations 82 257 855 82 257 855 Gross income from trading operations 5 451 723 5 451 723 Interest received 2 666 306 8 152 2 674 458 Other Revenue 2 824 651 2 824 651 Total Revenue 93 200 535 8 152 93 208 687

Employee costs (52 486 968) ( 0) (52 486 968) Administrative (16 221 050) ( 390 114) (16 611 164) Depreciation (3 452 917) ( 143 966) (3 596 883) Amortisation ( 6 140) ( 6 140) Operating expenses (20 955 668) 431 160 (20 524 508) Impairment of assets ( 34 711) ( 34 711) Interest service cost (4 598 000) (4 598 000) Current service cost (1 334 000) (1 334 000) Finance costs ( 64 201) ( 64 201) Total expenses (99 118 944) ( 137 631) (99 256 574)

Deficit for the year (2 606 409) ( 137 631) (2 744 040)

DITSONG Annual Report 2017 - 18 144 PART E - Financial Information

22.3 Extract from Statement of Changes in Net Assets

Restated Prior Year’s Closing Balance Note Accumulated Surplus / (Loss) R Balance as at end 2016 515 813 370 Correction of Prior Period Error: Property, plant and equipment 7,1 1 206 588 Trade and other receivables 5 ( 66 724) Heritage Assets 385 586 518 Balance at beginning of 2016 (Restated) 902 539 752

Loss for the year (2 735 887) Closing balance as at end of 2017 899 803 865

23 Segment reporting

23.1 Information about geographical areas

The entity’s operations are in the Gauteng Province with the majority of operations being in Pretoria and some operations being in Johannesburg. The operations in Pretoria are spread to Northern Pretoria, Eastern Pretoria and Central Pretoria. Revenues are not allocated per geographical area.

The table below indicates the expenditure incurred in the diﬀerent regional areas after eliminating inter segmental transfers: 2018 2017 RR Gauteng Province

Johannesburg ( 8 852 950) ( 10 257 960) Central Pretoria ( 85 597 904) ( 66 637 014) Pretoria East ( 11 969 035) ( 12 152 839) Pretoria North ( 7 702 736) ( 3 568 609)

Total segment expenditure ( 114 122 626) ( 92 616 422)

DITSONG Annual Report 2017 - 18 145 PART E - Financial Information

24 Breakdown of other

2018 2017 RR 24.1 Other expenses Other expenses in note 2.3.1 and in Annexure A are made up as follows:

Membership Fees 260 565 19 387 Conference/Seminars 5 700 59 219 Entertainment 376 140 270 148 Computer Software 0 17 237 Advance 0 41 085 Printing 354 824 359 158 Expenses sales/services 8 715 18 577 Expenses sales/services casts 0 1 940 Education 49 184 79 603 Collection management -7 288 405 376 Festivals 85 531 92 257 National events 66 935 83 304 Outreach program 88 958 216 280 Farming expenses 187 030 102 576 Exhibition 0 13 605 Reserves funded project expenditure 30 154 731 4 619 843 Other Expenses 31 631 025 6 399 595

24.2 Other receipts Other receipts in the statement of cash ﬂows is made up as follows:

Other receipts Other Revenue Streams 8 479 0 Rental income 3 015 343 2 779 751 Bursary and training fees recovered 6 088 0 Other receipts 3 029 910 2 779 751

DITSONG Annual Report 2017 - 18 146 Annexure A DETAILED STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2018

2018 2018 2017 2017 Budget Actual Budget Actual RRRR

Income Gross sales 136 788 120 842 360 230 181 958 Less: Cost of sales 91 156 81 218 197 000 76 654 Opening inventory 0 153 810 - 131 267 Purchases 91 156 67 557 197 000 99 197 Less: Closing inventory 0 ( 140 149) - ( 153 810) Trading gross proﬁt 45 632 39 624 163 230 105 304 Government Grant 80 779 500 80 777 000 73 080 000 73 080 000 Admission fees 4 445 454 4 264 212 5 499 754 4 443 579 Interest received 2 727 151 3 042 755 1 985 534 2 674 458 Bursary and training fees recovered - 6 088 - - Fundraising 12 719 8 479 2 080 000 - Sundry income 841 353 748 650 1 181 420 947 740 Actuarial gain - - - 3 312 000 Rental income 3 186 294 3 015 343 4 950 440 2 779 751 Other grant income 45 000 000 27 715 671 1 600 000 9 166 371 Donations 9 985 21 363 70 000 11 484 Total income 137 048 088 119 639 185 90 610 378 96 520 687

Total expenditure 130 610 141 124 348 303 89 628 418 99 256 574 Personnel expenditure 54 536 965 53 031 670 63 388 531 52 486 968 External audit fees 2 800 000 3 021 222 1 824 000 2 248 846 Consumable furniture and equipment 41 712 13 428 84 000 18 043 Library 337 966 56 137 505 750 145 128 Consumable stores 1 482 920 1 426 844 1 533 937 1 339 779 Rental expense 13 536 10 715 2 500 1 216 875 Security services 6 454 157 8 162 570 5 190 066 5 635 542 Repairs and maintenance 859 850 833 348 1 001 000 716 543 Bad debts written oﬀ 296 435 ( 520 121) Other expenses - Note 24.1 47 114 212 31 631 025 2 950 871 6 399 595 Exhibition maintenance - - 115 000 86 027 Exhibition expense 241 524 139 125 1 520 000 87 372 Restoration expense 155 294 97 582 340 000 79 969 Research expense 22 566 40 666 1 640 000 431 269 Learnership expense - - - - (Proﬁt) /Loss on sale of assets - 66 658 - -

DITSONG Annual Report 2017 - 18 147 2018 2018 2017 2017 Budget Actual Budget Actual RRRR Impairment of assets - 208 640 - 34 711 Professional services 2 228 801 2 857 888 822 000 2 639 642 Depreciation - 3 192 001 - 3 596 883 Amortisation 41 113 6 140 Inventory write down - - - - Interest service cost 0 4 521 000 4 598 000 Current service cost 1 291 000 1 334 000 Finance costs 307 507 64 201 Actuarial loss - 1 383 000 - - Administrative expenses: 14 320 639 11 718 729 8 710 764 16 611 164 Advertising and marketing 1 649 993 900 017 805 519 975 911 Staﬀ training 446 442 472 738 901 768 409 108 Bank charges 341 149 325 160 235 784 276 821 Legal fees 1 180 195 1 290 282 350 000 624 927 Insurance 640 030 631 178 709 901 612 159 Postage and stationery 375 700 366 530 458 272 306 145 Telephone and internet 1 784 832 1 625 149 1 927 056 2 079 149 Travelling costs 1 112 852 1 191 544 914 119 815 278 Water and electricity 6 471 845 4 714 167 2 160 845 10 346 179 Licence fees 317 600 201 966 247 500 165 486

Net Surplus/(Deficit) for the year 6 437 946 (4 709 118) 981 960 (2 735 887)

DITSONG Annual Report 2017 - 18 148 Annexure B PUBLICATIONS

Peer-reviewed publications: i. Xavier Glaudas, T. C Kearney and G. J. Alexander. 2017. To hold or not to hold? The effects of prey type and size on the predatory strategy of a venomous snake. Journal of Zoology 302(3): 211-218; ii. Kohtamaki, Marjaana and Badenhorst, Shaw. Preliminary results from recent iron age excavations in southern Mozambique [online]. South African Archaeological Bulletin, Vol. 72(205): 80-90. Availability: [cited 27 Jul 18]; iii. Xavier Glaudas, Teresa C. Kearney and Graham J. Alexander. 2017. Museum Specimens Bias Measures of Snake Diet: A Case Study Using the Ambush-Foraging Puff Adder (Bitis arietans). Herpetologica 74(2): 121-128; iv. Jonathan C. Driver and Shaw Badenhorst. 2017. Hunting by farmers: ecological implications. In: Economic Zooarchaeology: Studies in Hunting, Herding and Early Agriculture. London: Oxbow; v. M. Krüger. Revision of the genera Lysceia Walker and Pasteosia Hampson (Lepidoptera: Erebidae, arctiinae: Lithosiini). 2017. Annals of the Ditsong National Museum of Natural History, 7(1):8 - 96; vi. M. Krüger. 2017. Henicovalva gen. n., a new genus of predominantly Afrotropical Ennominae with unusually complex genitalia (Lepidoptera: Geometridae). African Entomology 25(1): 42 - 61; vii. Aurore Val, Lucinda R. Backwell, Paul H.G.M. Dirks. 2017. Reconstruction of the burial position of two hominin skeletons (Australopithecus sediba) from the early Pleistocene Malapa cave site, South Africa. Geoarchaeology 33(3):291-306; viii. Alexandre Hassanin, Raphael Colombo, Guy-Crispin Gembu, Marie Merle, Vuong Tan Tu, Tamas Gorfol, Perscott Musaba Akawa, Gabor Csorba, Teresa Kearney, Ara Monadjem, Ros Kiri Ing. 2017. Multilocus phylogeny and species delimitation within the genus Glauconycteris (Chiroptera, Vespertilionidae, with the description of a new bat species from the Tshopa Province of the Demoncratic Republic of the Congo. Journal of Zoological Systematics and Evolutionary Research 56(1):1-22; ix. Shaw Badenhorst. 2017. The zooarchaeology of iron age farmers from Southern Africa. In: The Oxford Handbook of Zooarchaeology Oxford: Oxford Handbooks Online; x. Gaokgotlhe M Tawane and J. Francis Thackeray. 2018. The cranium of Sts 5 (“Mrs Ples”) in relation to sexual dimorphism of Australipithecus africanus. South African Journal of Science 114(1/2): 1-4; xi. M. Kaiser, Agness Gidna, Amandus Kwekason, Audax ZP Mabulla, Fredrich K. Manthi, Lazarus Kgasi, Ellen Schulz- Kornas und Mirriam Tawane. 2018. Klimawandel als antrieb der menschlihen evolution. In: KLIMAGEWALTEN Treibende Kra t der Evolution. Darmstadt: Landesamt für Denkmalpflege und archäologieSachsen-Anhalt, Landesmuseum für Vorgeschichte Halle und WBG (Wissenschaftliche Buchgesellschaft)

DITSONG Annual Report 2017 - 18 149 DITSONG: National Museum of Military History