ANNUAL REPORT 2018/2019
contents
PAR T A : GENERAL INFORMATION PART B : performance INFORMATION
List of acronyms 3 Statement of responsibility for Performance Information 24
Letter to the Executive Authority by the Sole Trustee 4 - 5 Performance Information per programme 25 - 29
Report by the Chairperson 6 - 9 PART C : GOVERNANCE Report by the Chief Executive Officer 10 - 12 Accounting authority 31 - 33 Statement of responsibility and confirmation of accuracy of the 13 Annual Report The Board 34 - 35
Our values 14 Board Committees 36 - 37
About Ingonyama Trust Board 15 - 22 Internal Control Environment 38
Audit Committee Report 39
Ingonyama trust board | annual report 2018 - 19 i PAR T d : human resource management Statement of changes in net assets for the year ended 31 March 57 2019
Human Resources oversight statistics 41 Cash flow statement for the year ended 31 March 2019 58
Notes to the Annual Financial Statements 59 - 90 PART e : financial management Trust fund - statement of comparison of budget and actual 91 - 92 Statement of Board’s responsibility for financial and 45 amounts year ended 31 March 2019 performance Information Departmental / Transfer payment - statement of comparison of 93 - 94 Report of the Auditor General to Parliament on Ingonyama 47 budget and actual amounts year ended 31 March 2019 Trust Board Consolidated unaudited detailed statement of financial 95 - 97 Response of the Ingonyama Trust Board to aspects of the 53 performance year ended 31 March 2019 Auditor General’s Report Notes to the Annual Financial Statements 98 - 99 Statement of financial position as at 31 March 2019 55
Statement of financial performance as at 31 March 2019 56
Ingonyama trust board | annual report 2018 - 19 ii PART A GENERAL INFORMATION
ingonyama trust board | annual report 2018 - 19 2 human resource General information performance information governance financial information management
LIST OF ACRONYMS
GENERAL INFORMATION
AG - Auditor General CEO - Chief Executive Officer Registered name : KwaZulu - Natal Ingonyama Trust CFO - Chief Financial Officer DRDLR - Department of Rural Development and Land Reform Registration number : Statutory Trust EXCO - Executive Committee FINCO - Finance Committee Registered Office Address : 65 Trelawney Road, Southgate, FMPPI - Framework for Managing Programme Performance Pietermaritzburg, 3201 Information GIS - Geographic Information System Postal Address : P. O. Box 601, GRAP - Generally Recognised Accounting Practice Pietermaritzburg, 3200 HR - Human Resources ITB - Ingonyama Trust Board Contact telephone numbers : 033 846 9900 IT - Ingonyama Trust IESB - International Ethics Standards Board for Accountants Email address : [email protected] ISA - International Standards in Auditing KPI - Key Performance Indicator Website address : www.ingonyamatrust.org.za KZN - KwaZulu - Natal MANCO - Management Committee External auditors : Auditor General South Africa MOU - Memorandum of Agreement MOA - Memorandum of Understanding Bankers information : First National Bank OD - Organisational Development PAA - Public Audit Act of South Africa Company Secretary : The Head of Secretariat performs PFMA - Public Finance Management Act this function TC - Traditional Council
ingonyama trust board | annual report 2018 - 19 3 A LETTER TO THE EXECUTIVE AUTHORITY BY THE SOLE TRUSTEE
Dear Madam Minister
It is a real pleasure for me to welcome you back as the Minister and Executive Authority responsible for the Ingonyama Trust and for the appointment of the Board which administers the Trust with myself as Trustee. I wish you well in your demanding portfolio as do the members of the Board.
In my contribution to the last Annual Report (2018), I went to great lengths to explain the workings of the Trust. Judging from media reports my sincere efforts to put matters into a true perspective have been in vain. It is probably futile for me to reiterate what I wrote last year. I wish however to emphasise:
a) No-one with the right of customary tenure is forced to take a residential lease. Those who do, do so because a lease will assist them in the various aspects of modern life, which I mentioned last year. We also have come to realise that some of the women who apply are seeking the proof of tenure which a lease provides. This is surely in line with the Constitution.
b) Commercial leases are insisted upon. Their purpose is to provide employment and investment opportunities to beneficiary communities. In some cases the leases are a prerequisite to obtaining money from a financial institution or to meet the requirements of trading license laws. The alternative is for these communities to remain in perpetual poverty.
Picture courtesy of Igunundu Agency / Nhlanhla Mtaka It is my hope that you will read my last year’s letter. ingonyama trust board | annual report 2018 - 19 4 human resource General information performance information governance financial information management
More recent attacks on the Trust, strictly speaking, fall outside the ambit of this report covering the period to 31st March 2019. However, as I write this letter I am aware that another Panel has addressed the Ingonyama Trust and its continued functioning. Once again we (the Trustee and the Board) have not been afforded the courtesy of putting our point of view; a failure to observe the legal principle of “hearing the other side”. Do we have to go to court to get a fair hearing?
Madam Minister, be assured we want to work with you, the Department and the Portfolio Committee. We will endeavour to do so in harmony.
It remains for me to thank Board members and the Secretariat staff for their hard work and to thank your Department for its support. I also record my respects to Parliament and especially our Portfolio Committee.
Kind regards.
Yours sincerely
King Zwelithini Goodwill ka BhekuZulu King of the Zulu Nation
* The foreword of the chairperson compliments this letter which His Majesty the King ordinarily sends to the Executive Authority as a matter of courtesy.
ingonyama trust board | annual report 2018 - 19 5 REPORT BY the chairperson
In this report like some before, I find myself compelled to repeat things I have said before. This time around, I am prompted by a number of issues and events. In particular the year under review was one where the Ingonyama Trust and Ingonyama Trust Board were placed under intense attack, especially some sections in the media and other public figures.
I therefore wish to give the background of the Ingonyama Trust and how it fits in the present constitutional order. In the process, I will illustrate that its critics have no particular dislike of the Trust per se. Instead the attack is directed at land ownership in terms of customary law and the institution of African Traditional leadership. The criticism further conflates Roman Dutch law and Zulu customary law. In the view of the critics Zulu customary should not exist. The debate is combative and a dressed up scientific racism and tribalism all dressed up in one. It would appear that there are other motives which drive this agenda.
The origins of Ingonyama Trust can be traced back to colonial times. Prior to this land vested in the King so to speak. This was and is not to be equated with vesting in terms of common law. The abstract notion of the State is foreign in customary law. In as much as the concept of immovable property is.
The current geographical setting of the province of Kwa-Zulu Natal is to a large extent a re- enactment of the original Zulu Kingdom under King Shaka and later under King Dingane. In 1843, the first Deeds Office was opened South of the uThukela river. This part of the Kingdom was then called the Natal Colony. The North of uThukela river remained the Zulu Picture courtesy of Igunundu Agency / Nhlanhla Mtaka Kingdom under the King. The colonization of part of the Kingdom and the opening of the ingonyama trust board | annual report 2018 - 19 6 human resource General information performance information governance financial information management
Deeds Office and other institutions changed the way things were done forever. While a lot has been said since 1994, about the Ingonyama Trust, no rational argument has been advanced why it should not exist. Instead in 1997 the Act was rewritten and The first Zulu Native Trust was established by an Act of the Colonial Statute in 1860. In renamed the Kwa-Zulu Natal Ingonyama Trust Amendment Act. In 2004, the latter Act 1887, the Zulu Kingdom as it then existed was annexed to the Natal Colony. Annexation was further amended so that the Trust was to be governed consistent with the Communal took place after the King’s executive powers were effectively taken away illegally by the Land Rights Act, 2004, (CLARA). Unfortunately the latter Act never saw the light of day. Colonial Government. He was imprisoned in the Cape Colony. It was declared invalid by the High Court in Pretoria. This decision was later confirmed by the Constitutional Court. Until then the existence of the Ingonyama Trust had not While there he sought and was granted audience by Queen Victoria in England. Whatever been questioned in the manner as it was done. It would be noted that the government promises were made his executive powers were stripped forever. However his powers recognizes communal land ownership. over land and people were reduced. Some were given to the Governor General and later the State President. Under democratic government these powers, we contend were There has always been statutory trusts in this country from time immemorial. There are restored to him and this was to be reflected in the Provincial Constitution. The latter is as many reasons why these trusts should exist. As for the Ingonyama Trust, it is just the yet to see the light of the day twenty five years into democracy. goodwill of the King that he agreed that the land he holds in Trust be so held under a statutory trust. If he so wishes he could seek a mandate from his people and hold the The colonization of the Zulu Kingdom in the manner I describe above resulted in the land same land under a private trust. Perhaps this avenue may have to be explored. But this of the Zulu people being under the custodianship of the State. When the Colony of Natal, report is not about this now. My intention in this report is to illustrate and report on the the Cape and the Boer Republics of the Orange Free State and Transvaal formed the challenges both the Trust and the Ingonyama Trust Board had to contend with in the year Union of South Africa, the land which originally belonged to the people was absorbed by under review. the National Government. In turn the State decided what should be given to the African people, as it deemed fit. It would be noted that structurally there is nothing wrong with the Trust and the Board. Neither is there any questions with the legality of this institution. Obviously if there was, I The notion of land for the African people being held in Trust by a statutory entity was have no doubt that such would long have been pointed out to all the affected in particular a model initially explored in the Natal colony as explained above. The Natal Zulu Native the King, Amakhosi and various clans who are the beneficiaries of the rust.T Trust was never formally abolished. It was treated side by side with the then newly formed Native Trust in terms of the 1913 Native Land Act. The Minister responsible for African Ordinarily where there is a problem with the legal structure, the problem is put on the Affairs had delegated powers over this Trust from the State President who in terms of the table and then find a solution for it. You do not resolve the problem by demonizing the law was the Supreme Chief (King) of all Africans in the country. Strange as this may sound, institution and advocate for its dissolution. The government on a daily basis creates or this is how things were until the 27th April 1994. recognize the statutory trusts created in terms of the Communal Property Association Act. Very little is known about these trusts and we do not see them receiving the The homeland system in the eyes of the apartheid rulers was meant to restore that which condemnation similar to the one levelled at Ingonyama Trust. It would appear that there belongs to the Africans. For the purposes of this report, that which belonged to the Zulu are other motives behind the attack of Ingonyama Trust and the King. Nation within the KwaZulu homeland, the issue of land and the system of traditional governance did not rest. Amakhosi and the government of the time seem to have pushed The attack to the person of the King has become too personal. Some critics hold the on. The consequence of which during the transition period, the entirety of the land under view that the nature of the trust promotes and is tribalism. Some complain that the Trust that government was conceded to the Nation via the Ingonyama Trust. This process has should not own such a large size of the land. All these arguments lack substance and are commenced in the early nineties not as claimed elsewhere. not worth any further consideration.
ingonyama trust board | annual report 2018 - 19 7 In the year under review, the Board for its administration received just about R20M, from On a daily basis, the interface between the individual who is either an existing land government as a grant. For the Board to function it needs staff and other resources. beneficiary or prospective land rights holder under Ingonyama Trust, takes place at Surely these cannot be met from the current budget. The mandate of the Trust apart from Traditional Court level. It is this institution which is entrusted with land allocation and holding land for and on behalf of various specified clans and their respective members, dispute resolution among the beneficiaries. These interactions are mainly governed may do anything which may be lawfully done. I will come back to this mandate shortly. by customary law and are predominantly oral. Ingonyama Trust only gets involved in For a moment let me dwell on land management. In so doing, I emphasize that land is circumstances where the individual concerned wants to be issued with a formal right. In administered at different levels. The sketch below will help to explain the past, these rights have been either a Permission to Occupy(PTO) or a lease.
PTO’s were issued in terms of various sets of racially based legislation. I quote below the standard heading of most PTO’s and one of the standard clauses. “Issued under the Black Areas Land Regulations,” “Permission to occupy the allotment shall not convey ownership therein.” Racially based land tenure was abolished during the transition to democracy. In any event the present constitution proscribes racial discrimination. It should be clear from DEEDS OFFICE SURVEYOR GENERAL this that those who are advocating for the revival of the PTO regime are ignorant of the South African law especially the constitution.
- Registration of tenure - Survey and demarcation A leasehold instrument of tenure on land is an internationally “The mandate of the Trust recognized instrument. It is not unilateral but apart from holding land consensual. The ownership 3 of Ingonyama Trust land for and on behalf of various - Strengthening and cannot vest in various INGONYAMA TRUST documentation of land bodies. It vests in the BOARD / INGONYAMA tenure Trustee like in all instances specified clans and their TRUST pertaining trust property. When the beneficiaries respective members.” refer to themselves as owners, they mean so as a 2 collective. TRADITIONAL COUNCIL - Granting of land tenure The issuing of leases to an individual beneficiary is not a notice to vacate. Neither does (under customary law) this undermine customary law rights. It is worth remarking that in other Provinces, land administered under Traditional leadership in terms of customary law is similarly dealt with like the illustration above except that stage 3 above is performed by the Government. This is so because such land is treated as State land. Thus the situation in those areas is 1 similar to pre 1994. This situation is at the heart of the attack on Ingonyama Trust. The attack is why the King is a Trustee and not the Government. INDIVIDUAL - Application for land
tenure The new democratic order has put to the fore new challenges. Some of these were not foreseen prior. For instance it was not foreseen that municipal property rates will be extended to areas which were previously racially discriminated against prior to such areas being first developed especially when it comes to infrastructure and services. The land
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still calls for proper survey which will run into millions of rands to undertake. (not even a trustee) of “tribal communal land” people are better off or better treated by the State as the land owner. While the occupiers of Ingonyama Trust are also beneficiaries, The debate does question the fact that apart from lease rental, Ingonyama Trust has no those who occupy State land (as the owner of tribal land) have no legal status whatsoever. reliable source of revenue. Its royalties and other revenue are currently collected and If the argument is that the lease is a precarious right then what is the nature of an oral retained by the government. Thus among the issues for discussion is the need to clearly right on State land. This is a fair question to be interrogated. It will be upon the answers identify all the assets which are owned by the Trust, determine who has been collecting to the questions raised here that the nakedness and sheer prejudice of those who unfairly the relevant revenue, and then design instruments which govern the relationship with all level attacks on Ingonyama Trust and the person of the Zulu King and his administration affected stakeholders. will be exposed. Until then challenges will remain hidden and disguised.
It would be noted from this report that in the country as a whole there is communal Various strategies were employed to try and destroy the Trust. These include spurious land administered in terms of customary law in at least six Provinces out of nine. There litigation. Another disturbing issue is the expectation from some quarters that when are Houses of Traditional Leaders in all these Provinces. Traditional Leaders are there to Ingonyama Trust is challenged and taken to court it should not defend itself. One such preserve, protect and promote customary law, custom and culture of their respective example is an instance where Trust land was a subject of a land claim. The Commission subjects. These subjects reside on land and some in urban cities and towns. Customary never deemed it fit to notify the Trust. Only when the matter was before the Land Claims law and its institutions are recognised and protected by the Constitution. The difference Court was the Trust made aware by the State attorney of the claim. When the Trust raised (and perhaps the source of envy and related attacks on Ingonyama Trust), is that in other a number of important legal issues it was considered a spoiler. There are few other cases Provinces the State “owns tribal land.” In Kwa-Zulu Natal the King is the sole trustee of still pending before courts. These cases are all aimed at weakening the Trust. the Trust which owns the land as the Zulu National asset. The combined resources spent with the aim of trying to disestablish the Ingonyama Trust There is no evidence ever presented that in those Provinces where the State is the owner could be better used helping the disadvantaged communities rather than trying the almost impossible. Efforts aimed at disestablishing the Ingonyama Trust in whatever way are bound to fail. Instead the Trust will get stronger and stronger. One hopes there would be a better approach to the issues which seek to divide than the combative approach the Trust experienced in the year under review.
S. J. Ngwenya Chairperson of the Board and Royal Nominee INGONYAMA TRUST BOARD
Pictured above are members of the traditional communities in attendance at a dispute resolution meeting called by His Majesty the King for families who have a difference of opinion relating to traditional leadership and the rightful heirs to their respective thrones. ingonyama trust board | annual report 2018 - 19 9 MESSAGE FROM THE CHIEF EXECUTIVE OFFICER report by the chief executive officer
INTRODUCTION
I felt humbled and equally honored when I was considered and appointed the Chief INTRODUCTIONExecutive Officer in January 2019 to inter-alia drive the strategic objectives, mandates and I feltthe humbled goals andof Ingonyama equally honored Trust when Board I was and considered that of Ingonyama and appointed Trust. the When Chief incorporated Executiveto this Officer dynamic in January organization, 2019 to inter-alia I immediately drive the strategicformatted objectives, a view mandatewhich andaccentuate that the goalsIngonyama of Ingonyama Trust Trustand Board.Ingonyama When incorporatedTrust Board to has this ability dynamic to organization, transform Ifrom being the immediatelyholder andformatted administrator a view which of the accentuate approximately that Ingonyama 3 million Trust hectors and Ingonyama of communal land held Trustby Board Trust has to abilitybe a driver to transform of socio-economic from being the development holder and administratorand an entity of that the can ignite and approximatelydeliver on 3 povertymillion hectors alleviation of communal and job land creation held by through Trust to wealth be a driver generation. of socio- economic development and an entity that can ignite and deliver on poverty alleviation and job creation through wealth generation. This is notwithstanding the fact that these entities under the watchful eye of His Majesty, This Kingis notwithstanding Zwelithini Goodwill the fact that KaBhekuzulu these entities (the under Sole the Trustee) watchful and eye ofHis His industrious Majesty, Board led by KingHis Zwelithini Lordship, Goodwill Honorable, KaBhekuzulu Judge (the Ngwenya Sole Trustee) ( Chairperson and His industrious of the BoardBoard) led has by outperformed His Lordship,themselves Honorable, under Judgestressful Ngwenya and difficult (Chairperson environment. of the Board) has outperformed themselves under stressful and difficult environment. On assumption of duties assigned to me by the Board it became evident that I am joining On assumptiona dynamic of organizations duties assigned tothat me are by the unique Board andit became which evident need that aggressive I am joining and progressive a dynamic organizations that are unique and which need aggressive and progressive programsprograms in order in toorder achieve to achievetheir mandates, their mandates, I immediately I immediately committed myself committed to work myself to work beyondbeyond the call the of callduty of in orderduty into ordermake a to positive make impact a positive to the impact organizations to the organizations themselves, themselves, the management,the management, staff members,staff members, Amakhosi, Amakhosi,Izinduna and Izinduna the targeted and thebeneficiaries targeted of beneficiaries of IngonyamaIngonyama Trust Land. Trust Land.
ingonyama trust board | annual report 2018 - 19 INGONYAMA TRUST BOARD | ANNUAL REPORT 2018 - 19 10 10 human resource General information performance information governance financial information management
THE INGONYAMA TRUST BOARD ENVIRONMENTAL ANALYSIS Trust Board jumbo jet and ensures that it is flying safely and passengers are comfortable. Fortunately, I begin to observe commitment, sacrifice and dedication from the cabin crew These organizations operates under a number of National, Provisional and local members (management and staff members) in providing quality services to our most legislations of which they must comply with. For instance there is great expectation for valuable customers. Judging from the commitment and dedication from our management the Ingonyama Trust Board to put more emphasis on Rural Development, this is despite team, I have no doubt that success is on our side. the fact that the Trust has to generate its own resources as it does not have access to any other form of funding except of its own initiative. Despite these short comings, I am INSTILLING AN ENTREPRENEURIAL CULTURE inspired by the commitment of the private sector that are eager to partner with the IT Board in implementing programs and projects that has ability to improve the quality of I come from entrepreneurial background whereat innovation and creativity is the driver life of people living on Ingonyama Trust Land. I cannot but commend His Majesty and His of wealth creation, sustainable revenue and cash flow generation, organizational growth, Board for their endless effort to attract direct foreign investment aimed at improving the maintenance of healthy balance sheet and bottom line and profitability. life of people living on the Trust Land. I am convinced that we need to transform our current organizational culture and instill I am aware that the successes in attracting investors is a mammoth task faced by His a sense of urgency when implementing short, middle and long term developmental Majesty, the Board and the Secretariat as they have to deal with environmental humps plans and strategies so as to declare expected dividends to our shareholders. Indeed our that are obstructing leadership strategy must be underpinned by entrepreneurship spirit and mindset. This potential investors to deal entail the process of providing appropriate support systems to Amakhosi, their Traditional “Part of the review with Ingonyama Trust Board Councils, Izinduna so that they become a critical stakeholder in driving the developmental through negative publicity . I agenda aimed at improving the socio-economic conditions of people living on Ingonyama strategy is to address must admit that it is beyond Trust land and the subjects of His Majesty in general. comprehension how these organizations to date has The performance of our organizations continues to show improvement compared to last skills shortage as well as survived the turbulent financial year. The Annual and the Auditor General Reports indicate that our organizations weather conditions, airbags are in a healthy financial status, for instance we have seen a steady increase in performance staff competences and or and bumpy runways from 35% to 50%. Our investments portfolio remains intact and debt revenue collection they unfortunately find strategy employed by management is beginning to yield position results. I am confident lack thereof.” themselves confronted that at the end of the current financial year we will produce exciting results which will with. show significant improvement.
I must confess that I have great respect and honor for the role His Majesty who has thus REVIEW AND RE-ALIGNMENT OF THE ORGANIZATIONS STRATEGIC OBJECTIVES far played a prominent role in navigating these entities to this end. The effort by the Chairperson of ITB and his board, Amakhosi and the ITB Secretariat and staff members The Board and the Secretariat has identified a number of weakness in the operational in managing challenges imposed by external environment pressures is unbelievable. I am structure which if not corrected will have a negative effect on our strategy implementation. also inspired by the Ingonyama Trust Land Guardian Angels that are looking and protecting As a result thereof an organizational review, restructuring and re-alignment aimed the Trust Land, all we need to do is to be able to hear them as they pass massages to us at responding effectively to current and future challenges is in progress. The Board is and respond accordingly. currently considering and reviewing a number of policies developed to improve quality output, efficiency and effectiveness. In order to succeed in overcoming both external and internal challenges the Secretariat and staff need to acquire appropriate skills and technical know-how and be dedicated Part of the review strategy is to address skills shortage as well as staff competences and in supporting His Majesty and the Board in flying this Ingonyama Trust and Ingonyama or lack thereof. There is continuous assessment and audit of skills in the organization
ingonyama trust board | annual report 2018 - 19 11 as well as careful placement of staff so as to optimize input, throughput and output. c) The creation of a pool of competent human capital who will ensure that the ITB Skills transfer to Amakhosi, Izinduna, Tribal Councils and their Secretariat is part of the mandate is successfully implemented Board agenda as they have been identified as critical stakeholders in partnering with ITB implementing their strategic objectives. d) The implementation of efficient and effective management systems for ITB and Amakhosi THE INGONYAMA TRUST BOARD NEW VISION e) The creation of sustainable funding instruments and models so to reduce dependency of to state resources Being an entrepreneurial driven entities as proposed herein above requires the Secretariat and the Board to timorously formulate new vision so as to respond appropriately to ACKNOWLEDGMENT ever changing business external and internal environmental challenges. A new five year strategic plan is underway which will inter-alia accentuate the value of Ingonyama Trust In conclusion, I must state categorically that I am privileged and humbled by the through transformation from communal land owner to enabler that has potential to opportunity to interact and continue to receive guidance from His Majesty , King Zwelithini enact growth, job creation, land use development and being an active investor. Goodwill KaBhekuzulu, the Honorable Judge Ngwenya the ITB Chairperson & his Board, the Minister and Department who is the Accounting Authority in this case, the Portfolio Recently, the organization has been undated with a number of requests from private Committee, Amakhosi Esizwe and all those who provides support to me and to my role as sector institutions to partner with Ingonyama Trust Board and to implement projects and a Chief Executive Officer. programs using Ingonyama Trust Land. The increase of private sector engagement with Ingonyama Trust Board in driving its developmental agenda has prompted the Board to Lastly, may I extend my sincere thanks and appreciation to my colleagues that manages re-align its vision and operational structures so that synergies between our organizations various departments and the staff members of Ingonyama Trust Board and staff members and private sector makes it easy to implement projects and programs on Ingonyama Trust that work with Amakhosi and Tribal Councils, the Tribal Councils themselves, Izinduna and Land. the beneficiaries of Ingonyama Trust Land.
The Board will during its strategic planning sessions planned to take place in September 2019, consider defining its scope, embarking on developing business models, identify and prioritizing viable projects, engage professionals in developing financial modeling for potential projects and capital raising, consolidation of IT land and its land values. Part of the intensive discussion during the proposed strategic planning meeting will entail B L Mkhwanazi the role to be played by small scale businesses using the Ingonyama Trust Land, Youth Chief Executive Officer development, Women empowerment and promotion of business established by People INGONYAMA TRUST BOARD living with disabilities.
THE EXPECTED IMPACT OF THE PROPOSED ITB NEW VISION
Lastly, the drive to implement a new vision for ITB is to encourage:
a) Amakhosi, Tribal Councils, Izinduna and communities to take initiative in conceptualizing, packaging and implementing projects that will make positive socio-economic conditions and improves the lifestyle of people living on Ingonyama Trust Land, b) The re-alignment of the core business both Ingonyama Trust and Ingonyama Trust Board
ingonyama trust board | annual report 2018 - 19 12 human resource General information performance information governance financial information management
STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY OF THE ANNUAL REPORT
To the best of my knowledge and belief, I confirm the following:
All information and amounts disclosed in the annual report is 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 Generally Recognised Accounting Practice (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 in this information.
The accounting authority is responsible for establishing, and implementing a system of internal control which has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the annual financial statements.
The external auditors are engaged to express an independent opinion on the annual financial statements.
In our opinion, the annual report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the entity for the financial year ended 31 March 2019.
Yours faithfully,
Chairperson of the Ingonyama Trust Board Chief Executive Officer Hon. Mr Justice S J Ngwenya Mr B L Mkhwanazi Date : Date :
ingonyama trust board | annual report 2018 - 19 13 Ourvalues
Transparency Value for money
Service Excellence Professionalism
Consultation Honesty
Open Communication Integrity
Non - discrimination
ingonyama trust board | annual report 2018 - 19 14 human resource General information performance information governance financial information management Gauteng INGONYAMA TRUST BOARD LAND
Gauteng
Mpumalanga
Manguzi .!
Jozini .! Mbazwana About .! Umkhanyakude Newcastle ingonyama trust board .! Vryheid Amajuba .! Free State Zululand
Nongoma .!
Hluhluwe .!
Nqutu .!
Ulundi .!
Ladysmith .! Nkandla Umzinyathi .!
Uthukela KwaZulu-Natal Tugela Ferry .! Uthungulu Richards Bay .!
Eshowe .!
Mooi River VISION .! iLembe Stanger .!
Lesotho Umgungundlovu
Pietermaritzburg To become a leader in sustainable communal land management. .!
Underberg .! eThekwini Durban Richmond .! MISSION .!
Sisonke Ixopo .!
Scottburgh To contribute to the improvement of the quality of life of the members of the traditional .! communities living on Ingonyama Trust land by ensuring that land management is to
Kokstad their benefit and in accordance with the laws of the land. .! Ugu
Port Shepstone To develop progressive business models for the social and economic upliftment and the .! empowerment of the members of traditional communities on land administered by the Trust. Eastern Cape
ingonyama trust board | annual report 2018 - 19 Legend·
.! Towns 15 District Municipalities Ingonyama Trust Board Land Ingonyama Trust was established in 1994 by the erstwhile KwaZulu Government in terms administration. This is left to Board members none of whom is a trustee. of the KwaZulu Ingonyama Trust Act, (Act No 3KZ of 1994) to hold all the land that was hitherto owned or belonged to the KwaZulu Government. Communally the land is owned by the clans as a collective in respect of each demarcated area. In turn each member of each clan is entitled through the procedures under The mandate of the Trust was to hold land for “the benefit, material welfare and social customary law to have ownership of his/her allotment. well-being of the members of the tribes and communities” living on the land. The land which Ingonyama Trust owns, is the property envisaged in Section 25(1) of When the democratic government came into existence initially in terms of the Interim the constitution. Thus while not each and every member of the beneficial clans has a Constitution of 1993 the original enabling Act creating Ingonyama Trust was reviewed registered title deed in respect of his/her allotment, such ownership is protected by the comprehensively such that the final product was a new Act albeit called the Amendment law. Act. While Section 25(6) provides for the enactment of a legislation to strengthen land This Amendment Act had to meet all the constitutional requirements both in terms of right ownership to address past historical racial inequalities, it is submitted that land the Interim Constitution and the final Constitution of 1996. beneficiaries of Ingonyama Trust land can have access to such protection even currently. The Ingonyama Trust land is still the most economically accessible land in the province. His Majesty the King is the sole Trustee of the land. The Amendment Act provides, among However, due to population exponential growth strong measures are to be applied in other things, for the establishment of Ingonyama Trust Board to administer the affairs of land allocation by the Traditional Councils on the ground. the Trust and the Trust land. For this to happen, the Ingonyama Trust Board needs to expedite policy formulation and LEGAL CONTEXT cascade it to the Traditional Councils sooner than late.
There are at least four provisions in the Constitution of the Republic of South Africa, 1996 The Trust mandate is not confined to land ownership only. It is entitled to do anything (Act No. 108 of 1996) which are crucial in order to grasp the context and the environment which a corporate body may do, subject to the enabling legislation. in which Ingonyama Trust find expression. amended in 1997 to create a Board separate from the Trust to administer the trust and its Section 211 and 212 recognise the institution of traditional leadership and customary law, assets which include land. This amendment tried as far as possible to align itself with the subject to the constitution. Section 2 of the Constitution provides for the supremacy of practice under customary law. The King for all practical purposes is relieved of all hands the constitution and provides that law or conduct inconsistent with it is invalid, and the on administration. This is left to Board members none of whom is a trustee. obligations imposed by it must be fulfilled. Communally the land is owned by the clans as a collective in respect of each demarcated While the Ingonyama Trust predates the Constitution, its existence finds expression and area. In turn each member of each clan is entitled through the procedures under protection under the provisions quoted above and Section 25 of the constitution. customary law to have ownership of his/her allotment.
Firstly, the land which the Trust is the nominal owner of is administered mainly in terms The land which Ingonyama Trust owns, is the property envisaged in Section 25(1) of of Zulu customary law. The land is divided according to clans under the leadership of the constitution. Thus while not each and every member of the beneficial clans has a Traditional Leaders (AMAKHOSI) who in turn are responsible to the King in terms of registered title deed in respect of his/her allotment, such ownership is protected by the customary law. Hence the King is the only Trustee of Ingonyama Trust. law. While Section 25(6) provides for the enactment of a legislation to strengthen land The schedule in the next few pages depicts the clans which are beneficiaries of the right ownership to address past historical racial inequalities, it is submitted that land land under His Majesty the King as sole trustee. The enabling Act was amended in 1997 beneficiaries of Ingonyama Trust land can have access to such protection even currently. to create a Board separate from the Trust to administer the trust and its assets which include land. This amendment tried as far as possible to align itself with the practice The Ingonyama Trust land is still the most economically accessible land in the province. under customary law. The King for all practical purposes is relieved of all hands on However, due to population exponential growth strong measures are to be applied in
ingonyama trust board | annual report 2018 - 19 16 human resource General information performance information governance financial information management
land allocation by the Traditional Councils on the ground. The Trust mandate is not confined to land ownership only. It is entitled to do anything which a corporate body may do, subject to the enabling legislation. For this to happen, the Ingonyama Trust Board needs to expedite policy formulation and cascade it to the Traditional Councils sooner than late.
AmaKhosi voicing their views in a meeting held to brief them about the lawsuit by the Council for the Advancement of the South African Constitution (CASAC) and Legal Resource Centre (LRC).
ingonyama trust board | annual report 2018 - 19 17 DISTRICT NAME OF TRADITIONAL COUNCIL / COMMUNITY DISTRICT NAME OF TRADITIONAL COUNCIL / COMMUNITY
EMNAMBITHI CUNU / MCHUNU ENSELENI BIYELA / KWAYANGUYE INGWE BIYELA / OBUKA KUNENE CEBEKHULU / OBIZO MABASO KHOZA MBHENSE MBONAMBI (MAXWELL) MTHEMBU MTHEMBU / SOMOPHO NXUMALO NDHLAZI / MAMBUKA SITHOLE ZULU / NTEMBENI ZUNGU / MADLEBE EMZUMBE BHEKANI MTHETHWA / MHLANA CELE M CELE P EZINGOLWENI CELE DLAMINI / VUSATHINAMAZULU DLAMINI / KWAFODO DUNGE / AMADUNGE DUMA / THOKOZANI MADUMISA EMBO / SIZWE HLANGANANI JALI / NHLANGANO MBHELE MACI / ISIBONDA MJOLI / SIZWE MAVUNDLA / MVUNDLA NDELU MBOTHO / MAMBOTHO NHLANGWINI MTHIMUDE NYAVINI NSIMBINI QOLOQOLO NZIMAKWE HLONGWA SHWAWU / JABULANI BESHWAYO HLUBI XOLO KHOLWA / SIZWE HLANGANANI SHWAWU / BESHWAYO MADZIKANE / SIZWE HLANGANANI NYUSWA / QINISELANI MANYUSWA LUSHABA MADADENI GULE / NYANYADU MADLALA HLUBI / BUHLE – BOMZINYATHI COMMUNITY AUTHORITY QWABE P MANGWENI / BUHLE – BOMZINYATHI COMMUNITY QWABE Z AUTHORITY THULINI KUBHEKA / BUHLE – BOMZINYATHI COMMUNITY ZIZI - SIZWE / HLANGANANI AUTHORITY NKOSI / BUHLE – BOMZINYATHI COMMUNITY HLABISA ABAKWA HLABISA MDLETSHE MPEMBENI MPUKUNYONI / MKHWANAZI
ingonyama trust board | annual report 2018 - 19 18 human resource General information performance information governance financial information management
DISTRICT NAME OF TRADITIONAL COUNCIL / COMMUNITY DISTRICT NAME OF TRADITIONAL COUNCIL / COMMUNITY
HLANGANANI BATLOKOA / BASOTHO MAPHUMULO ABAKWA CELE BOMVU / ZASHUKE ABAKWA ZUBANE DLAMINI / BIDLA AMAMBEDU / MBEDU DLAMINI / ESIPHAHLENI BOMVU A DUMISA / MAGUSWANA BOMVU W KHOLWA / ISIBONELO ESIHLE EMBO KHOLWA / VUMINDABA GCWENSA KUZENI / AMAKUZE HLONGWA MADZIKANE / BHACA KHABELA MEMELA / SIZANANI LUTHULI MKHULISI / VEZOKUHLE MABOMVINI MOLIFE / ISIMINZI MLAMULA / NYUSWA NDLOVU / VUKANI MTHEMBU / SITHOLE NGWANE / AMANGWANE NTULI / MTULINI NXAMALALA NDLOVU / MASIHAMBISANE PEPETA / UMACALA GWALA NGCOLOSI NTANZI INKANYEZI BANGINDODA ZULU NTULI / HOHOZA / MKONTO BHEKESHOWE ZULU QADI BIYELA / MOBENI QWABE BIYELA / MVUZANE SITHOLE / MTHEMBU BIYELA / NDLANGUBO ZULU / NODUNGA KHOLWENI KHOZA MAHLABATHINI BUTHELEZI KWAMONDI BUTHELEZI - EMPITHIMPITHINI MATHONSI MBATHA MPUNGOSE MPUNGOSE NTULI NDEBELE SHANGE NOBAMBA COMMUNITY AUTHORITY SIKHONYANE XIMBA ZUNGU INGWAVUMA MATHENJWA MNGOMEZULU NONGOMA ZULU / KHAMBI NYAWO ZULU / MANDLAKAZI TEMBE ZULU / MATHENI ZULU / USUTHU
ingonyama trust board | annual report 2018 - 19 19 DISTRICT NAME OF TRADITIONAL COUNCIL / COMMUNITY DISTRICT NAME OF TRADITIONAL COUNCIL / COMMUNITY
MSINGA BASO NKANDLA AMAKHABELA BOMVU BIYELA / AMAHLAYIZENI CHUNU BIYELA / MANGIDINI MTHEMBU CUBE NGOME CUNU QAMU IZIGQOZA KHABELA NDWEDWE CHILI KHANYILE / EKUKHANYENI CIBANE KHANYILE / IZINDLOZI EMALANGENI / LANGA MAGWAZA EMBO / KWAKHABAZELA MBHELE / AMAPUTO INKUMBA / NYUSWA MPUNGOSE HLOPHE NTULI / GODIDE KHUMALO NTULI / NGONO MANGANGA NXAMALALA MTHEMBU SIBISI / CWEZI NGCOLOSI XULU NGONGOMA / MAVELA ZONDI NODWENGU PHEPHETHA NQUTHU HLATSHWAYO QADI JAMA QINISELANI MANYUSWA MDLALOSE / HLAHLINDLELA QWABE MNCUBE / MBOKODWEBOMVU SHANGASE MOLEFE WOSIYANE NGOBESE / KHIPHINKUNZI NGWE / MANGWE – BUTHANANI MPUMALANGA DASSENHOEK COMMUNITY AUTHORITY NTOMBELA EMBO SITHOLE / VULINDLELA FREDVILLE COMMUNITY AUTHORITY ZONDI ILANGA COMMUNITY AUTHORITY ZONDO GCUMISA ZULU / EMANDLENI MAPHUMULO MDLULI / MANYAVU ONGOYE DUBE SHANGASE MKHWANAZI XIMBA MZIMELA CAMBINI NZUZA ZULU
ingonyama trust board | annual report 2018 - 19 20 human resource General information performance information governance financial information management
DISTRICT NAME OF TRADITIONAL COUNCIL / COMMUNITY DISTRICT NAME OF TRADITIONAL COUNCIL / COMMUNITY
OKHAHLAMBA AMAZIZI VULAMEHLO BELE / QIKO DLAMINI CELE HLUBI DUMISA M EMBO DUMISA N MABASO EMBO / KHWEZI LOKUSA MHLUNGWINI EMBO / UKUTHULA NGWANE / AMANGWANE MBHELE / KWALEMBE NGWE / AMANGWE NHLANGWINI / SHIYABANYE NYUSWA SIMDLANGENTSHA DLAMINI ZEMBENI / ZEMBE DLAMINI M MAVUSO – MASIDLA COMMUNITY AUTHORITY VULINDLELA FUZE MTUNGWA – MASIDLA COMMUNITY AUTHORITY NXAMALALA MSIBI XIMBA MTHETHWA ZONDI / INADI NTSHANGASE ZONDI / MPUMUZA SIBIYA – MASIDLA COMMUNITY AUTHORITY SIMELANE UBOMBO MABASO MANUKUZA / JOBE MASHABANE MNQOBOKAZI MYENI / NGWENYA MYENI / NSINDE NIBELA SIQAKATHA QWABE / MAKASA ZIKHALI / MBILA UMBUMBULU CELE / VUMANGAZI EMBO / NKASA ISIMAHLA EMBO / TIMUNI EMBO / VUMUKWENZA LUTHULI / UMNINI Trust MAKHANYA / SOBONAKHONA MANGANGENI / VUMAZONKE MAPHUMULO TOYANA
ingonyama trust board | annual report 2018 - 19 21 Ingonyama Trust
Ingonyama Trust Board
HIS MAJESTY THE KING SOLE TRUSTEE OF INGONYAMA TRUST
Head of Secretariat
Land and Tenure Corporate Services Financial Management Management
ingonyama trust board | annual report 2018 - 19 22 human resource General information performance information governance financial information management
PART B performance INFORMATION
ingonyama trust board | annual report 2018 - 19 23 STATEMENT OF RESPONSIBILITY FOR PERFORMANCE INFORMATION
The Ingonyama Trust Board prepared the report on its performance against predetermined objectives in accordance with the requirements of sections 40 (3)(a) and 55 (2)(a) of the Public Finance Management Act, Act No. 1 of 1999, Chapter 18 section 18.3.1 (b) of Treasury Regulations and Chapter 6 of the National Treasury Framework for Managing Programme Performance Information, issued by the National Treasury.
Therefore, the information reported is a product of established internal policies, procedures and controls related to the management of performance information designed to provide reasonable assurance about the integrity and reliability of performance information.
In my opinion, the performance information fairly reflects the performance of the department against objectives set for the financial year ended 31 March 2019.
Chairperson of the Ingonyama Trust Board Chief Executive Officer Hon. Mr Justice S J Ngwenya Mr B L Mkhwanazi Date : Date :
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performance information per programme
PROGRAMME 1 : ADMINISTRATION
PURPOSE
The purpose is to provide strategic leadership, corporate services, logistical support services and financial management to the Trust.
PROGRAMME STRUCTURE
The administration programme comprise of the following:
- Board; - Management; - Communication; - Legal services; - Information Technology (IT); - Corporate Support Services; and, - Financial admnistration.
STRATEGIC OBJECTIVES
The following are the strategic objectives of Programme 1 : Administration.
- Provide effective monitoring and evaluation systems to the Ingonyama Trust Board; - Ensure effective stakeholder engagement and communication; - Provide IT support to improve efficiency; - To ensure that efficient internal resource management is aligned to legislative requirements; - To ensure reduction of vacancies; - To ensure performance management in ITB; - Provision of skills development to improve service delivery; and, - To improve customer relationship.
ingonyama trust board | annual report 2018 - 19 25 programme 1 : administration
STRATEGIC OBJECTIVE PERFORMANCE INDICATOR BASELINE TARGET 2018 ACTUAL AUDITED VARIANCE REASONS FOR VARIANCE (ACTUAL OUTPUT) / 19 ACHIEVEMENT 2017/18 2018/19 1.1.Policy development and Number of policies developed 0 16 3 -13 - Leave monitoring and reviewed - General Conditions of Employment - HR Policy at draft stage under review currently 1.2. Corporate governance Performance of the New indicator 100% 100% N/A N/A organisation consistent with the best practices and policies of the organisation 1.3.Adequate staffing in Percentage posts filled against 93% 100% 0 N/A N/A all departments to ensure the organogram operational efficiency.
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SUB proGRAMME 1.1 : FINANCIAL MANAGEMENT
STRATEGIC OBJECTIVE PERFORMANCE INDICATOR BASELINE TARGET 2018 ACTUAL AUDITED VARIANCE REASONS FOR VARIANCE (ACTUAL OUTPUT) / 19 ACHIEVEMENT 2017/18 2018/19 1.1.1. % submission of budget within New indicator 100% 100% N/A N/A Preparation of financial prescribed timelines statements % submission of financial New indicator 100% 100% N/A N/A statements within the prescribed timelines Performance of the New indicator 100% 100% N/A N/A organisation consistent with the best practices and policies of the organisation 1.1.2. Audit outcome by AGSA New indicator 80% of audit Not achieved N/A The Board noted that Ethical compliance qualifications the indicator would be addressed amended to read better in future APPs. New indicator (i) Royalty Not achieved N/A There has been discussion income with the Department of 40% fully Mineral Resources on addressed this matter. Contractual royalties accrue to the Ingonyama Trust. (ii) 40% of More than 90% +50 % The ITB is currently properties of IT land has working on queries raised valued been valued by the AG regarding (using municipal missing survey diagrams valuations) in and missing title deeds. 2018/19 which amounts to R 24.38 billion. Payment of undisputed invoices 100% 100% N/A N/A N/A paid within 30 days of receipt by finance
ingonyama trust board | annual report 2018 - 19 27 PROGRAMME 2 : LAND AND TENURE MANAGEMENT
PURPOSE
The purpose is to provide a secure tenure right and establish a comprehensive land tenure information system.
PROGRAMME STRUCTURE
The land management programme comprise of the following:
- Provision of formal tenure rights; and, - Maintenance of Land Tenure information system.
STRATEGIC OBJECTIVES
The following are the strategic objectives of Programme 2 : Land Management.
- Provision of secured tenure rights to facilitate development on Ingonyama Trust land; - To maintain an intergrated and comprehensive land tenure administration system / (database of land tenure rights); - Making trust land available for infrastructure development at district municipality level; and, - Ensure legal occupation of trust land.
ingonyama trust board | annual report 2018 - 19 28 human resource General information performance information governance financial information management
programme 2 : land and tenure management
STRATEGIC OBJECTIVE PERFORMANCE INDICATOR BASELINE TARGET 2018 ACTUAL AUDITED VARIANCE REASONS FOR VARIANCE (ACTUAL OUTPUT) / 19 ACHIEVEMENT 2017/18 2018/19 2.1. Number of land tenure rights 715 1450 1713 +263 Not applicable as the target Provision of secure Tenure approved by the Board was achieved rights 2.2. Number of updates to the land 4 4 4 N/A N/A Property Development holding register
programme 3.1. : PROACTIVE LAND PLANNING
STRATEGIC OBJECTIVE PERFORMANCE INDICATOR BASELINE TARGET 2018 ACTUAL AUDITED VARIANCE REASONS FOR VARIANCE (ACTUAL OUTPUT) / 19 ACHIEVEMENT 2017/18 2018/19 3.1. Number of Traditional Councils 5 5 0 -5 The new investment To ensure sustainable land with development plans strategy is underway, planning which attracts therefore these TC plans investment on IT land require to be in sync with the IT Strategy Number of Human settlement 4 4 0 -4 Time constraints did not plans on strategically located permit the achievement of land this performance indicator
ingonyama trust board | annual report 2018 - 19 29 PART C GOVERNANCE
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ACCOUNTING AUTHORITY
THE BOARD The Board is comprised of the following members.
The Ingonyama Trust is administered by the The Ingonyama Trust Board (ITB) “the His Majesty the King (Statutory Sole Trustee) Board”, which is a schedule 3A public entity in terms of the Public Finance Management Hon. Mr Justice S.J. Ngwenya (Chairperson - Royal nominee) Act (PFMA). Ms J.T. Bhengu (Vice Chairperson) Advocate W.E.R Raubenheimer In line with its statutory mandate, the Board is responsible for: Mr B.L. Shabalala Inkosi T.W. Mavundla Inkosi P.R. Bele - Providing strategic leadership for management of Trust land; Inkosi Z.T. Gumede - Oversee operational performance of the organisation and the Trust; Inkosi S.E. Shabalala Dr. M.S. Mbatha - Provide leadership and policy direction in matters pertaining to communal land under the leadership of Amakhosi in the province. Advocate. V.Z. Mngwengwe (Ministerial representative) - (resigned 27 September 2018)
For operational efficiencies the Board has created the following governance structures: THE SECRETARIAT
Board Committees The Secretariat is the administrative unit through which the Board discharges its mandate.
- Executive Committee of the Board (EXCO); The current structure of the Secretariat is as follows: - Human Resource and Organisational development Committee; - Administration; - Finance Committee (FINCO); - Finance, and; - Audit Committee. - Real Estate. Management Committees These are all headed by the Head of the Secretariat. It is felt that this structure is very limiting and hence a substantial review of the organogram is underway. - MANCO; - Bid Specification Committee; - Bid Evaluation Committee; - Bid Adjudication Committee; - Bursary Committee.
ingonyama trust board | annual report 2018 - 19 31 General Administration Traditional Council Support
The General Administration component provides administrative support services to the The objective of the programme is mainly facilitating skills development to the Traditional Board, and the Secretariat as a whole. Councils through:
The core functions of this component include: - Training traditional councils on various aspects on matters pertaining to land; - Management of bursary programme to youth in rural areas. - Fleet management, logistics, registry and reception; - Human resources. Finance
Real Estate Financial Administration consists of providing financial accounting, budgeting, regulating compliance and risk management services to the Ingonyama Trust Board to ensure that The Real Estate Department has a number of sub – programmes. These are Land and the asset of the Trust which is principally land, is administered professionally and its Asset Management, Rural Development and Traditional Council support. finances well protected. Among the main functions, the Finance Department has the following responsibilities: Land and Asset Management - Ensure that all moveable assets of the Board and the Trust are well documented Land Management includes tenure allocation and liaison with the communities and and accounted for; Traditional Councils. Asset Management in this context entails the management of Ensuring that sound financial administration policies are in place; immovable property register amongst others. Further and additional activities of these - components include the following. - Establishing of sound internal controls and regularly maintaining them;
- Ensure that all creditors of the Board and the Trust are timeously paid. - Development of land management policies and implementation; - Processing of tenure right applications on land; - Making inputs to various government legislation and policies dealing with land matters; - Land surveying and Geographic Information System (GIS).
Rural Development
The objective of the programme is to facilitate and coordinate rural development through various community projects. These range from agricultural projects to small town developments and human settlements.
ingonyama trust board | annual report 2018 - 19 32 human resource General information performance information governance financial information management
His Majesty the King facilitated a discussion with local farmers and amaKhosi from the King Cetshwayo District Municipality. The purpose of this meeting was to find solutions to promote and support small scale farmers from the traditional community to enter into mainstream agricultural production. Pictured here is His Majesty the King, Her Majesty the King and some of the guests who attended this meeting. The result of this meeting was committment by the local farmers in this district on working with the local communities in agricultural production. More engagements have since followed on this initiative and further updates on this project will be given in the future.
ingonyama trust board | annual report 2018 - 19 33 THE BOARD
Mr S J Ngwenya (ITB Chairperson and Royal nominee) Committees: EXCO, HR & OD, Tenure
Ms J T Bhengu (Vice Chairperson)
His Majesty the King (Trustee) Committees: EXCO, HR & OD, Tenure Dr M S Mbatha Advocate W E R Raubenheimer Mr B L Shabalala Advocate V Z Mngwengwe Dr M S Mbatha Advocate W E R Raubenheimer Mr B L Shabalala Advocate V Z Mngwengwe Committees: EXCO, Finance, Audit, Committees: EXCO, Finance, Tenure, HR Committees: EXCO, Finance, HR & OD, Ministerial appointee Committees: EXCO, Finance, Audit, Committees: EXCO, Finance, Tenure, HR Committees: EXCO, Finance, HR & OD, Ministerial appointee Tenure Tenure, Audit Tenure & OD& OD Tenure, Audit
Inkosi W T Mavundla Inkosi S E Shabalala Inkosi P R Bele Inkosi Z T Gumede
Committees:Inkosi W TEXCO, Mavundla Finance, Tenure Committees:Inkosi EXCO, S E Shabalala Tenure Committees: EXCO,Inkosi Tenure P R Bele Committees: EXCO,Inkosi Tenure Z T Gumede
Committees: EXCO, Finance, Tenure Committees: EXCO, Tenure Committees: EXCO, Tenure Committees: EXCO, Tenure BOARD COMMITTEES
EXECUTIVE COMMITTEE OF THE BOARD (EXCO) HUMAN RESOURCES AND ORGANISATIONAL DEVELOPMENT COMMITTEE
The Executive Committee of the Board has always been a Board Committee. It has The Human Resources and Organisational Development Committee (HR & OD Committee) since been revised during the period under review to address matters which are of the Board is a newly established committee of the Board to address matters which operational in the implementation of the Board’s mandate. relate to the development of a world class Secretariat in support of the Board.
EXCO is responsible for: This committee is responsible for:
- To deal with any matters specifically delegated to it by the Board; - Provide leadership in the process of structuring the Secretariat of the Ingonyama Trust Board; - To generally manage the Trust land in terms of the Act, Government policy and the Board’s policies between sittings of the Board. - Providing leadership and policy direction in matters pertaining to Human Resources for the ITB. The EXCO is constituted by 6 core members and 2 alternate members as tabled below. During the period under review the following meetings were held by EXCO The HR & OD Committee is constituted by 4 members as tabled below. and the following Board members were in attendance. During the period under review the following meetings were held by this committee and the following Board members were in attendance. Member Board EXCO meetings meetings attended attended Member Meetings attended Hon. Mr Justice S.J. Ngwenya (Chairperson) 13/13 5/5 Hon. Mr Justice S.J. Ngwenya (Chairperson) 3/3 Ms J.T.J. Bhengu (Deputy Chairperson) 12/13 5/5 Ms J.T.J. Bhengu 3/3 Adv W.E.R. Raubenheimer 8/13 3/5 Adv W.E.R. Raubenheimer 2/3 Mr B.L. Shabalala 12/13 5/5 Mr B.L. Shabalala 3/3 *Inkosi T.W. Mavundla 11/13 3/5 FINANCE COMMITTEE (FINCO) Inkosi P.R. Bele 13/13 5/5 *Inkosi S.E. Shabalala 8/13 2/5 The Finance Committee (FINCO) of the Board is a newly established committee of the Board to address matters which relate to sound financial management to the Board. Dr M.S. Mbatha 12/13 2/5
Inkosi Z T Gumede 10/13 - This committee is responsible for: Advocate. V.Z. Mngwengwe (Ministerial - - representative) - resigned 27 September 2018 - Review monthly and quarterly finance report;
ingonyama trust board | annual report 2018 - 19 36 human resource General information performance information governance financial information management
Monitor progress on audit issues; - This committee is responsible for: - Provide financial advice for the Board. - Decide on behalf of the Board on the granting and refusal of applications for The FINCO comprises of 4 members as tabled below. tenure rights; Make recommendations to the Board on land tenure matters. During the period under review the following meetings were held by this committee and - the following Board members were in attendance. Member Meetings attended Member Meetings attended Hon. Mr Justice S.J. Ngwenya (Chairperson) 8/8 Dr M.S. Mbatha (Chairperson) 4/5 Ms J.T.J. Bhengu (Deputy Chairperson) 7/8 Adv W.E.R. Raubenheimer 5/5 Adv W.E.R. Raubenheimer 8/8 Mr B.L. Shabalala 4/5 Mr B.L. Shabalala 6/8 Inkosi T.W. Mavundla 5/5 *Inkosi T.W. Mavundla 8/8 Inkosi P.R. Bele 7/8 Audit Committee *Inkosi S.E. Shabalala 7/8 The Audit Committee has always been part of the Board Committees dealing with Dr M.S. Mbatha 7/8 matters related to Audit and Risk within the organisation. It has since been revised with Inkosi Z T Gumede 7/8 the addition of Board members to improve efficiency. Advocate. V.Z. Mngwengwe (Ministerial representative) - This committee is responsible for:
- Provide leadership in the process of structuring the Secretariat of the Ingonyama Trust Board; - Providing leadership and policy direction in matters pertaining to Human Resources for the ITB.
The Audit Committee is constituted by 4 members. Further information pertaining to the members and meetings attended is contained in the Audit Committee report which can be found on page 39 of this document.
Tenure committee
The Tenure Committee has always been part of the Board Committee dealing with matters related to processing the tenure rights applications of the ITB. In order to fast track the approval of tenure rights applications this Committee has been split in to two teams.
ingonyama trust board | annual report 2018 - 19 37 internal control environment
In order for the Board to comply with its mandate it ensures that a sustainable internal control environment is maintained.
Risk Management
The Board approved a Risk Management strategy for the financial year. The risk management plan was primarily designed to prevent and identify fraud and related risks.
Internal Audit
The Public Finance Management Act (PFMA) requires the Board to establish an effective internal audit function under the control and direction of the Audit Committee. The objective of the internal audit is to provide an independent objective and consulting service to add value and improve the operations of the Trust. This is achieved through the evaluation, improvement and testing of effective risk management, financial controls and governance processes and policies.
During the financial year under review Kaizen International (PTY) LTD performed the Internal Audit function.
ingonyama trust board | annual report 2018 - 19 38 human resource General information performance information governance financial information management
AUDIT COMMITTEE REPORT
We are pleased to present our report for the year ended 31 March 2019. audit approach. Various recommendations have been made to the Board arising from reviews of its operations and reports from the internal auditors. As a result the Audit committee members and attendance Board has formalised policies this year and is currently considering more policies for adoption. The Audit Committee consists of the members listed hereunder. The Committee should meet not less than four times per annum as prescribed in the audit charter. Evaluation of Financial Statements
During the current year four meetings were held. The Audit Committee has:
Member Committee - Reviewed the Auditor - General’s management letter and management’s Meetings response thereto, Mr S Gabela (Chairperson) - resigned 31 March 2019 4/4 - Reviewed changes in accounting policies and practice, and; Mr M Khuzwayo (Chairperson after 31 March 2019) 4/4 - Reviewed significant adjustments resulting from the audit. Mr B.L. Shabalala 3/4 Dr M.S. Mbatha 4/4
Audit Committee’s Responsibility
The Audit Committee reports that it has complied with its responsibilities arising from section 51(1) (a) of the PFMA and Treasury Regulations. Mr M Khuzwayo Chairperson The Audit Committee also report that it has adopted appropriate formal terms of August 2019 reference as its audit committee charter and has discharged its responsibilities in terms of this charter. The Audit Committee has liaised with both internal and external auditors and reviewed their plans and findings to ensure that the internal controls are as effective as possible and appropriate to the organization.
The King III Report on Corporate Governance has been implemented to the extent it is applicable to the organisation and both internal and external auditors have unrestricted access to the Audit Committee.
The financial policies have been reviewed and the Audit Committee is satisfied with the effective functioning of the internal control system. A risk management process has been undertaken and has been evaluated by the auditors as a basis for their
ingonyama trust board | annual report 2018 - 19 39 PART d human resource management
ingonyama trust board | annual report 2018 - 19 40 human resource General information performance information governance financial information management
HUMAN RESOURCES OVERSIGHT STATISTICS personnel cost by programme programme Total Expenditure for the Personnel Personnel exp. As a % No. of employees Average personnel Entity Expenditure of total exp. cost per employee Ingonyama Trust Board R 97,000,113 R 26,538,905 27% 60 R 442,315 training costs programme Personnel expenditure Training Training No. of employees Avg. training cost expenditure expenditure as a % of trained per employee Personnel cost N/A N/A N/A N/A N/A N/A
EMPLOYMENT AND VACANCIES
Overall Employment statistics programme 2018/2019 2018/2019 2018/2019 No. of Employees 2018/2019 % of vacancies No. of Employees Approved Posts (additional to establishment, Vacancies (permanent) contract) Ingonyama Trust Board 49 49 11 N/A N/A
ingonyama trust board | annual report 2018 - 19 41 EMPLOYMENT AND VACANCIES BY SALARY BANDS
SALARY BAND number of posts number of filled number of vacant Number of total posts posts posts additional posts
Senior Management 4 4 0 1 5 (level 13 - 15) Professional qualified 3 3 0 1 4 (level 9 - 12) Skilled 19 18 0 23 42 (level 6 - 8) Semi - skilled 3 3 0 7 10 (level 3 - 5) Unskilled 0 0 0 0 0 (level 1 - 2) TOTAL 28 18 0 33 60
TRAINING NEEDS / SKILLS DEVELOPMENT
SALARY BAND MALE MALE MALE MALE FEMALE FEMALE FEMALE FEMALE TOTAL AFRICAN COLOURED INDIAN WHITE AFRICAN COLOURED INDIAN WHITE
Senior Management 0 0 0 0 0 0 0 0 0 (level 13 - 15) Professional qualified 0 0 0 0 0 0 0 0 0 (level 9 - 12) Skilled 0 0 1 0 1 0 0 0 2 (level 6 - 8) Semi - skilled 0 0 0 0 0 0 0 0 0 (level 3 - 5) Unskilled 0 0 0 0 0 0 0 0 0 (level 1 - 2) GRAND TOTAL 0 0 1 0 1 0 0 0 2
ingonyama trust board | annual report 2018 - 19 42 human resource General information performance information governance financial information management
EMPLOYMENT EQUITY
OCCUPATIONAL LEVELS MALE FEMALE A C I W TOTAL A C I W TOTAL Senior Management 4 0 0 0 4 1 0 0 0 1 (level 13 - 15) Professional qualified 2 0 2 2 4 0 0 0 0 0 (level 9 - 12) Skilled 13 0 1 1 15 23 2 0 1 26 (level 6 - 8) Semi - skilled 6 0 0 0 6 4 0 0 0 4 (level 3 - 5) Unskilled 0 0 0 0 0 0 0 0 0 0 (level 1 - 2) GRAND TOTAL 25 0 3 1 29 28 2 0 2 31
TERMINATION OF SERVICE AS AT 31 MARCH 2019
SALARY BAND RETIREMENTS CONTRACT EXPIRY RESIGNATIONS DEATH DISMISSAL TOTAL
Senior Management 0 1 0 0 0 1 (level 13 - 15) Professional qualified 0 1 0 0 0 1 (level 9 - 12) Skilled 0 0 1 0 0 1 (level 6 - 8) Semi - skilled 0 0 0 0 0 0 (level 3 - 5) Unskilled 0 0 0 0 0 0 (level 1 - 2) TOTAL 0 2 1 0 0 3
ingonyama trust board | annual report 2018 - 19 43 PART e
INGONYAMA TRUST BOARD
CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
31 MARCH 2019 ingonyama trust board | annual report 2018 - 19 44 human resource General information performance information governance financial PERFORMANCE management
Statement of Board’s responsibility for financial and performance information
The Board is responsible for the maintenance of adequate accounting records and the Auditors: preparation and integrity of the financial statements and related information. The Auditor General of South Africa is responsible for reporting on the fair presentation Auditor - General of South Africa of the financial statements. The financial statements have been prepared in accordance with Generally Recognised Accounting Practice Standards. Bankers:
The Board is also responsible for the Trust’s system of internal financial control. First National Bank - a division of FirstRand Bank Ltd These are designed to provide reasonable, but not absolute, assurance as to Nedbank Ltd the reliability of the financial statements, and to adequately safeguard, verify Absa Bank Ltd and maintain accountability of the assets, and prevent and detect misstatements Investec Bank Limited and loss. Nothing has come to the attention of the Board to indicate any material Standard Bank of South Africa Ltd breakdown in the functioning of these controls, procedures and systems during the year under review. Registered Office: The financial statements set out on pages 55 to 99 were approved by the Board members on the 29 May 2019 and signed on its behalf by the chairperson of the 65 Trelawney Road P.O. Box 601 Tel: 033 846 9900 Board. Pietermaritzburg Pietermaritzburg Fax: 033 386 2528 3201 3200 General Information
Members of the Ingonyama Trust Board as at 31 March 2019 :
His Majesty the King (Trustee ) Hon. Mr Justice S.J. Ngwenya (Chairperson - Royal nominee) Ms J.T.J. Bhengu (Vice chairperson) Adv. W.E.R. Raubenheimer Mr B.L. Shabalala Inkosi T. W Mavundla Inkosi P.R Bele Inkosi Z.T Gumede Inkosi S. E Shabalala Dr M.S Mbatha Adv. V.Z Mngwengwe (Ministerial representative) - resigned 27 September 2018
ingonyama trust board | annual report 2018 - 19 45 General information - continued
The Ingonyama Trust Board is a schedule 3A Public Entity. The Executive Authority for the period of this report is the Minister of Rural Development and Land Reform. The area of jurisdiction is Kwazulu-Natal.
The Trust was initially created by the Kwazulu Legislative Assembly as a repository for the communal land of the Zulu Nation with His Majesty the King as sole Trustee. This was by way of the Ingonyama Trust Act 3 of 1994kz. In 1997 the democratic National Parliament amended this Act,so that it is consistent with modern constitutional order.
This amendment involved changes to all sections of the Act by way of the Kwazulu-Natal Ingonyama Trust Amendment Act No 9 of 1997. Importantly this Act established the Trust Board appointed by the then Minister of Land Affairs following a consultative process with the KZN Premier – in – Executive Council and the Chairperson of the KZN House of Traditional Leaders. The King remains the sole Trustee and he (or his nominee) chairs the Board. The 1997 amendment Act also excluded application of private trust legislation to the Ingonyama Trust. The effect of these amendment among others was to create a Board which is a separate and independent legal entity. The members of the Board are not trustees but are appointed by the Minister responsible for land affairs.
The function of the Board is to administer the affairs of the trust and trust land. This is a unique situation since trusts are ordinarily controlled by boards of trustees.
The Ingonyama Trust owns land in Trust. In practice it is a nominal owner since the land in question belongs to the beneficial clans and the members thereof.
Access to the Trust land is primarily in terms of indigenous law. The preferred tenure option by the Board is the lease which to a greater extent is consistent with customary law approach to land ownership. With the changing times and socio economic development in the country the Board is encouraging every land rights holder on Trust land to acquire formal tenure and in return make some financial contribution towards the sustainability of this land.
Approval of Annual Financial Statements
The Annual Financial Statements for the year ended 31 March 2019 were approved by the Board on 29 May 2019.
Chairperson of the Ingonyama Trust Board Hon. Mr Justice S J Ngwenya
ingonyama trust board | annual report 2018 - 19 46 human resource General information performance information governance financial PERFORMANCE management
Report of the Auditor General to Parliament on Ingonyama Trust Board
R eport on the audit of the consolidated and separate financial statements 4. The trust did not recognise investment property where land is held to earn rentals in accordance with the requirements of GRAP 16, Investment Adverse opinion Property. The entity owns land which is leased out, but has not been accounted for as investment property. Consequently, investment property 1. I have audited the consolidated and separate financial statements of the is understated and property, plant and equipment is overstated. I did Ingonyama Trust Board and it’s subsidiary set out on pages 55 to 99, which not determine the correct fair value and extent of land held as it was comprise the consolidated and separate statement of financial position impracticable to do so. as at 31 March 2019, the consolidated and separate statement of financial performance, statement of changes in net assets, cash flow statement and statement of comparison of budget information with actual information for Expenditure the year then ended, as well as the notes to the consolidated and separate financial statements, including a summary of significant accounting policies. 5. The trust did not recognise expenditure of R320,88 million relating to municipal property rates in the consolidated financial statements resulting 2. In my opinion, because of the significance of the matters described in the in non-compliance with GRAP 1, Presentation of financial statements. basis for adverse opinion section of this auditor’s report, the consolidated Adequate systems and controls were not in place to ensure that all and separate financial statements do not present fairly, in all material municipal property rates payable were identified and recognised in the respects, the financial position of the Ingonyama Trust Board as at 31 March consolidated financial statements. Consequently, total expenditure and 2019, and its financial performance and its cash flows for the year then ended current liabilities were understated. I was not able to determine the full in accordance with the South African Standards of Generally Recognised extent of the municipal property rates payable as it was impracticable to do Accounting Practice (SA Standards of GRAP) and the requirements of the so. There was also a resultant impact on the surplus for the period and on Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) the accumulated surplus. (PFMA).
Irregular expenditure Basis for adverse opinion 6. During the course of the audit, the auditors identified irregular expenditure Property plant and equipment of R1,90 million, which was not disclosed in terms of section 55(2)(b)(i) of the PFMA. This relates to the contravention of the supply chain management 3. The trust did not properly account for property, plant and equipment in (SCM) requirements. Management subsequently made a disclosure in note accordance with GRAP 17, Property, plant and equipment. This was due to 43 to the separate financial statements, however, immediately condoned certain properties owned by Ingonyama Trust not being reflected in the the full amount without any investigation or proper approval. Consequently, consolidated financial statements and inadequate controls to correctly I was unable to determine the full extent of irregular expenditure which is value the properties. Consequently, I was not able to determine the full now stated at a nil balance at year end. extent of the property, plant and equipment of R24,42 billion (2018: R24,41 billion) as shown in note 21 to the consolidated financial statements, as it was impracticable to do so.
ingonyama trust board | annual report 2018 - 19 47 Contingent liabilities Responsibilities of accounting authority for the consolidated and separate financial statements 7. The contingent liabilities and other information pertaining to municipal property rates as disclosed in note 37 to the consolidated financial 13. The accounting authority is responsible for the preparation and fair statements, could not be verified. This disclosure was not in accordance presentation of the consolidated and separate financial statements in with the requirements of GRAP 19, Provisions, contingent liabilities and accordance with SA Standards of GRAP and the requirements of the PFMA, contingent assets. Consequently, contingent liabilities were overstated. and for such internal control as the accounting authority determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud Context for the opinion or error.
8. I conducted my audit in accordance with the International Standards on 14. In preparing the consolidated and separate financial statements, the Auditing (ISAs). My responsibilities under those standards are further accounting authority is responsible for assessing the Ingonyama Trust described in the auditor-general’s responsibilities for the audit of the Board’s ability to continue as a going concern, disclosing, as applicable, financial statements section of this auditor’s report. matters relating to going concern and using the going concern basis of accounting unless the accounting authority either intends to liquidate the 9. I am independent of the entity in accordance with sections 290 and 291 of entity or to cease operations, or has no realistic alternative but to do so. the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA code) and the ethical requirements that Auditor-general’s responsibilities for the audit of the consolidated and separate are relevant to my audit in South Africa. I have fulfilled my other ethical financial statements responsibilities in accordance with these requirements and the IESBA code. 15. My objectives are to obtain reasonable assurance about whether the 10. I believe that the audit evidence I have obtained is sufficient and appropriate consolidated and separate financial statements as a whole are free from to provide a basis for my adverse opinion. 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 Other matter accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered 11. I draw attention to the matter below. My opinion is not modified in respect material if, individually or in aggregate, they could reasonably be expected of this matter. to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.
Unaudited supplementary schedules 16. A further description of my responsibilities for the audit of the consolidated and separate financial statements is included in the annexure to this 12. The supplementary information set out on pages 91 to 99 does not form auditor’s report. part of the financial statements and is presented as additional information. I have not audited these schedules and, accordingly, I do not express an opinion thereon.
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Report on the audit of the annual performance report 21. I did not raise any material findings on the usefulness and reliability of the reported performance information for this programme. Introduction and scope Other matters 17. 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 22. I draw attention to the matters below. responsibility to report material findings on the reported performance information against predetermined objectives for selected programmes Achievement of planned targets presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance. 23. The annual performance report on pages 23 to 29 sets out information on the achievement of planned targets for the year and explanations provided 18. My procedures address the reported performance information, which for the under achievement of a significant number of targets. 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 Adjustment of material misstatements also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods 24. I identified material misstatements in the annual performance report that may be included as part of the reported performance information. submitted for auditing. These material misstatements were on the reported Accordingly, my findings do not extend to these matters. performance information of land and tenure management programme. As management subsequently corrected the misstatements, I did not raise 19. I evaluated the usefulness and reliability of the reported performance any material findings on the usefulness and reliability of the reported information in accordance with the criteria developed from the performance performance information. management and reporting framework, as defined in the general notice, for the following selected programme presented in the annual performance report of the entity for the year ended 31 March 2019: Report on the audit of compliance with legislation
Programme Pages in the annual Introduction and scope performance report Programme 2 - Land and tenure management 28 - 29 25. 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 20. I performed procedures to determine whether the reported performance identify findings but not to gather evidence to express assurance. information was properly presented and whether performance was consistent with the approved performance planning documents. I 26. The material findings on compliance with specific matters in key legislation performed further procedures to determine whether the indicators and are as follows: related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was Annual financial statements valid, accurate and complete.
ingonyama trust board | annual report 2018 - 19 49 27. The consolidated financial statements submitted for audit were not 34. The accounting authority is responsible for the other information. The other prepared in accordance with the prescribed financial reporting framework, information comprises the information included in the annual report. The as required by section 55(1) of the PFMA. other information does not include the consolidated and separate financial statements, the auditor’s report and the selected programme presented in 28. Material misstatements in property plant and equipment, expenditure the annual performance report that has been specifically reported in this and contingent liabilities identified by the auditors in the submitted auditor’s report. consolidated financial statements were not adequately corrected and the supporting records could not be provided subsequently, which resulted in 35. My opinion on the consolidated and separate financial statements and the consolidated financial statements receiving an adverse opinion. 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. Procurement and contract management 36. In connection with my audit, my responsibility is to read the other information 29. Goods and services with a transaction value below R500 000 were procured and, in doing so, consider whether the other information is materially without obtaining the required price quotations, as required by treasury inconsistent with the consolidated and separate financial statements and regulation 16A6.1. the selected programme presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially 30. Quotations were awarded to suppliers whose tax matters had not been misstated. declared by the South African Revenue Services to be in order as required by treasury regulation 16A9.1(d). 37. I did not receive the other information prior to the date of this auditor’s report. After I receive and read this information, and if I conclude that there 31. Some of the contracts were extended or modified without the approval is a material misstatement, I am required to communicate the matter to of a properly delegated official as required by section 44 of the PFMA and those charged with governance and request that the other information be treasury regulations 8.1 and 8.2. corrected. If the other information is not corrected, I may have to retract this auditor’s report and re-issue an amended report as appropriate. However, if 32. Some of the invitations for competitive bidding were not advertised for a it is corrected this will not be necessary. required minimum period, as required by treasury regulation 16A6.3(c). Internal control deficiencies 33. Quotations were accepted from prospective suppliers who did not submit a declaration on whether they are employed by the state or connected to any person employed by the state, which is prescribed in order to comply with 38. I considered internal control relevant to my audit of the consolidated and treasury regulation 16A8.3. separate financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to Other information express any form of assurance on it.
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39. The matters reported below are limited to the significant internal control Annexure – Auditor-general’s responsibility for the audit deficiencies that resulted in the basis for the adverse opinion and the findings on compliance with legislation included in this report. 1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my 40. The leadership did not establish effective oversight and monitoring over audit of the consolidated and separate financial statements, and the financial reporting processes and compliance with laws and regulations. procedures performed on reported performance information for selected programmes and on the entity’s compliance with respect to 41. Management did not implement controls to adequately review financial the selected subject matters. reporting and monitor compliance with legislation. Financial statements
Other reports 2. In addition to my responsibility for the audit of the consolidated and separate financial statements as described in this auditor’s report, I 42. I draw attention to the following engagement conducted by various parties also: that had, or could have, an impact on the matters reported in the entity’s consolidated and separate financial statements, reported performance - identify and assess the risks of material misstatement of the information, compliance with applicable legislation and other related consolidated and separate financial statements whether due to fraud matters. This report does not form part of my opinion on the financial or error, design and perform audit procedures responsive to those statements or my findings on compliance with legislation. risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material 43. An investigation is being conducted by the accounting authority, which misstatement resulting from fraud is higher than for one resulting from covers the period 1 April 2017 to 31 March 2018. The investigation relates to error, as fraud may involve collusion, forgery, intentional omissions, an allegation of possible misappropriation of the trust’s assets. Six officials misrepresentations, or the override of internal control. have been charged by the accounting authority with financial misconduct. The outcome of the investigation is expected in the 2019-20 financial year - obtain an understanding of internal control relevant to the audit in order due to delays experienced in finalising the investigation in the current to design audit procedures that are appropriate in the circumstances, financial year. 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 officer. Pietermaritzburg 31 July 2019
ingonyama trust board | annual report 2018 - 19 51 - conclude on the appropriateness of the accounting authority’s use of the going concern basis of accounting in the preparation of the consolidated and separate 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 Ingonyama Trust Board’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the separate and consolidated 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 the entity to cease continuing as a going concern.
- evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Communication with those charged with governance
3. I communicate with the accounting authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.
4. I also confirm to the accounting authority that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to have a bearing on my independence and, where applicable, related safeguards.
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Response of the Ingonyama Trust Board to aspects of the Auditor General’s Report
1. Recording of land values and extent in the Land register. It is noteworthy that the auditors have imposed this description on Trust land.
Land vested at no cost to the Ingonyama Trust in terms section 3(a) of the Ingonyama Further engagement is planned to take place with the Auditor General to resolve this Trust Act, 1994. matter.
The Ingonyama Trust owns approx 2.8 m hectares of land in kwazulu-Natal. The Board 2. Rates expenditure & payable not disclosed in the AFS. has saved millions of rands in state funds by making use of municipal valuations. With reference to the Ingonyama Trust we submit that save for the Treasury Regulation The ITB did not determine and disclose a land value in the financial statements of the 14, the provisions of the PFMA do not apply to Ingonyama Trust. Ingonyama Trust for prior years; however, for the first time in 2017/2018 a value of R 25 billion was reflected in the AFS, based on municipal valuations. Our submission in this regard is premised on the following:
In 2017/2018 The Auditor General undertook to audit almost 100 % of the land values a) Ingonyama Trust is not a listed public entity in terms of the PFMA. reflected in the land register. For 2018/2019 The Auditor General undertook to audit a sample of the land parcels. b) Ingonyama Trust does not receive any funding from the State. Significant work was done in the current year under audit to ensure that all survey c) Ingonyama Trust is neither a constitutional institute nor a government diagrams were made available to the Auditor General and that the register included department. reliable land valuations.
The Board is working towards achieving a land register that will satisfy audit requirements. d) Ingonyama Trust is only associated with the state by virtue of being created by statute. Nothing more and nothing less. Investment Property e) As a result it is bound to be administered in accordance with the founding The land owned by the Trust is held in trust for and on behalf of the identified beneficiaries. legislation. The provisions of such must first be exhausted before other It is not owned for any other purpose. legislation could be looked at.
The law instructs that the Trust must be administered for the benefit, material welfare The finding pertaining to Rates expenditure and payables is erroneous. and social well-being of the beneficiaries. It follows from this injunction that the subject land must be administered in this context. The finding further fails to appreciate that save the offices where the Trust operates, the rest of the Trust owned land “vests in and is held in trust by the Ingonyama as Trustee of Simply by collecting rental from those beneficiaries, who opt for leases, does not convert the Ingonyama Trust.” The beneficiaries of this land are the occupiers of it including a the subject land into investment property. number of government institutions and departments as well as commercial enterprises.
State and other public institutions do pay rental, not because such properties are investment properties.
ingonyama trust board | annual report 2018 - 19 53 Response of the Ingonyama Trust Board to aspects of the Auditor General’s Report
It would further be noted that the Trust has no other material source of income other than that received by those beneficiaries who agree to take leases and in turn pay rental.
Suffice is here to state the following:
a) The invoices issued by the municipalities are not accurate and valid. This is also confirmed by the Auditor Generals audit findings. Furthermore the invoices are not issued pursuant compliance with the Municipal Property Rates Act. They thus fall to be ignored. In any event the Board has raised various legal objections in a case between the Mandeni Local Municipality and the Trust. While this case is still pending, some of the objections raised to date have been upheld in favour of the Trust.
b) Municipalities concerned are multiple dipping. They raise invoices in respect of the same property against the Trust and the beneficiaries. In any event except those which have taken to court, most of these municipalities have not persisted with their claims.
c) The Trust and the Accounting Authority remain firmly of the view that it is the beneficiary concerned that is liable for rates. As a matter of interest no formal dispute has been declared by any of those.
d) It is noteworthy that the AGSA has not provided any reason why the provisions of Regulation 14 of the National Treasury Regulations do not apply to the Trust. We conclude accordingly on this score that no obligation has arisen to the Trust as a result of the invoices referred to.
3. Irregular Expenditure
The accounting authority noted that the irregular expenditure incurred was made for known goods and services in the ordinary course of business, without any financial risk to the Board.
The Board is committed to ensure that irregular expenditure is closely monitored and will be at minimal in future years.
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Statement of financial position as at 31 March 2019
2019 2018 Ingonyama Total Ingonyama Total Trust Board Trust Board Assets Notes Non - current Assets 31,228 24,445,991,704 39,695 24,430,241,197
Property, Plant and Equipment 3 & 21.1 15,826 24,429,227,899 20,371 24,413,356,653 Heritage Assets 3 & 22 - 15,988,144 - 15,988,144 Intangible Assets 4 & 23 15,402 775,661 19,324 896,400
Current assets 921,276 742,666,186 155,042 681,862,509
Receivables from exchange transactions 25.1 157,796 556,599,015 16,875 476,166,974 Receivables from non - exchange transactions 25.2 160,238 2,205,076 130,174 252,914 Cash and cash equivalents 26 603,242 183,862,095 7,993 205,442,621
Total Assets 952,504 25,188,657,890 194,737 25,112,103,706
Liabilities Current liabilities 2,081,805 24,257,948 1,656,013 18,210,020
Payables from exchange transactions 27.1 2,081,805 24,257,948 1,656,013 18,210,020
Total liabilities 2,081,805 24,257,948 1,656,013 18,210,020
Net assets (1,129,301) 25,164,399,942 (1,461,276) 25,093,893,686
NET ASSETS
Accumulated fund (38,739,412) 25,164,399,942 (18,224,607) 25,093,893,686
Total net assets (38,739,412) 25,164,399,942 (18,224,607) 25,093,893,686
ingonyama trust board | annual report 2018 - 19 55 Statement of financial performance as at 31M arch 2019
2019 2018 Ingonyama Total Ingonyama Total Trust Board Trust Board Revenue Notes Rental revenue - 114,807,839 - 96,491,370
Leases (including straight lining income) 11 & 35 - 114,807,839 - 96,491,370
Contractual royalty revenue from mining activites on Ingonyama Trust land 6.2.2 / 45.2 - 1,170,437 - 794,157
Other revenue 20,521,896 37,247,761 19,881,531 36,135,617
Transfer payment - Department of Rural Development & Land Reform 7/46 20,349,000 20,349,000 19,727,000 19,727,000 Servitude compensation and other - 1,678,213 - 410,498 Interest on Bank and Short term investments 6.3.1 112,963 14,398,347 154,531 15,247,425 Recovery of funds on fraudulent use of petrol cards 59,933 59,933 - - Interest on overdue debtors accounts - 762,268 - 750,694
Total revenue 20,521,896 153,226,037 19,881,531 133,421,144
Expenditure 42 (41,036,701) (76,485,308) (34,605,371) (66,491,438) al board annu Trust Fund - Administration - (35,448,607) - (31,886,067) atements trust
st Expenses funded from Transfer Payment funding (41,036,701) (41,036,701) (34,605,371) (34,605,371)
Available funds transferred to Accumulated Fund (20,514,805) 76,740,729 (14,723,840) 66,929,706 financial consolidated ingonyama
ingonyama trust board | annual report 2018 - 19 56 human resource General information performance information governance financial PERFORMANCE management
Statement of changes in net assets for the year ended 31 March 2019
Ingonyama Total Trust Board R R Notes Retained earnings Opening balance : 01.04.2017 (2,921,077) 28,824,556,939
Adjustment prior to 2017/2018 - (3,794,009,038)
Increase in lease income prior to 2017/2018 28.2 - 1,082,708 Increase in straight lining income 28.2 - 3,130,637 Correction of fair valuation adjustment (land holdings) 28.1 - (3,798,527,298) Refunds 28.2 - 304,915
Retained earnings 2017/2018 (15,303,530) 63,345,785
Retained earnings previously reported for 2017/2018 (15,347,720) 59,634,616 44,190 3,711,169
Increase in lease income for 2017/2018 - 2,351,683
Leave pay provision 44,190 - Increase in straing lining income - 1,359,486 al board
annu
atements trust
st
Opening balance : 01.04.2018 (18,224,607) 25,093,893,686
Movements for the year 2018/2019 (20,514,805) 70,506,256 financial Less : Payments - (6,234,473) consolidated ingonyama Current year retained earnings transferred to Accumulated Fund (20,514,805) 76,740,729
Balance : 31.03.2019 (38,739,412) 25,164,399,942
ingonyama trust board | annual report 2018 - 19 57 Cash flow statement for the year ended 31M arch 2019
2019 2018 Ingonyama Total Ingonyama Total Trust Board Trust Board Notes Cash flows from operating activities Receipts 41,036,701 97,530,515 34,641,968 88,367,830
Services - 43,723,428 - 40,249,036 Transfer payments 20,349,000 20,349,000 19,727,000 19,727,000 Ingonyama Trust payment in terms of Financial regulation 10(2) of the 5,664,615 5,664,615 4,812,038 4,812,038 Ingonyama Trust Act Ingonyama Trust payment for re-imbursement of Trust expenses 14,850,190 14,850,190 9,948,399 9,948,399 Recovery of funds on fraudulent use of petrol cards 59,933 59,933 - - Interest received 112,963 12,883,349 154,531 13,631,357
Payments (40,441,452) (100,233,829) (35,615,198) (76,893,567)
Suppliers (14,020,435) (73,812,812) (13,541,441) (54,819,810) Loss on fraudulent use of petrol cards - - (59,933) (59,933) Employee costs (26,421,017) (26,421,017) (22,013,824) (22,013,824)
al Net cash flows from operating activities 39. (A) 595,249 (2,703,314) (973,230) 11,474,263 board annu Cash flows from investing activities atements trust
st Purchase of plant and equipment including construction costs 39.(B) - (18,877,212) - (4,979,122) Proceeds/insurance claim from disposal of property,plant & equipment - - - 77,131 financial consolidated Net cash flows from investing activities - (18,877,212) - (4,901,991) ingonyama
Increase in cash and cash equivalents 595,249 (21,580,526) (973,230) 6,572,272 Cash and cash equivalents at beginning of the year 7,993 205,442,621 981,223 198,870,349
Cash and cash equivalents at end of year 39.(C) 603,242 183,862,095 7,993 205,442,621
ingonyama trust board | annual report 2018 - 19 58 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE 1.1 BasisofPreparationandconsolidation The Ingonyama Trust Board was listed by Government Notice 402 of 16 16 of 402 Notice Government by 2001. April 1 listed effective 2001, February was Board Trust the Ingonyama of The date reporting The Trust. Ingonyama Trust Board. Ingonyama the for same Trust the is Ingonyama the is entity controlled The Trust Trust Act. Ingonyama the of Ingonyama section of terms in Trustthe land and of affairs the administers Board Trust Ingonyama The amended, as 1997 Act, Trust Ingonyama the by Trust Board. Ingonyama Trust and namely, Ingonyama created been have entities Two - - - Responsibility for trust money and Property Ingonyama the by : follows as reads 14 which required regulation Treasury and Kz 1994 of 3 Act Trust Act, manner a in and the Board by Standards issued Accounting directives and in Accounting interpretations any Recognised prepared including (GRAP), Generally Practice been of Standards have effective Statements with Financialaccordance Annual consolidated The General information revenue fund. relevant the to accruing revenue are and account trust the from payable are fees Such trustee. the with agreed as or, absence, trustees its in of board by rates at approved the account trust a of administration the for fee a charge may agent, authorised duly its or institution, The instrument. equivalent or aduly or trust of relevantdeed the with accordance in property, and money trust officer financial chief of use proper and safekeeping the for responsible is agent, authorised the through officer, accounting The for purposes specific the details used. be itmay which that instrument equivalent or trust of adeed of terms in entities or persons other of behalf on institution by an held is that and State the to belong not does that property or money is property or money trust regulation, this of For purposes performance information s governance
1.3 Criticaljudgments,estimationsandassumptions 1.2. Changesinaccountingpolicyandcomparability 59 and subsequently delisted by government gazette 1261 dated 17 April 2003. 1261gazette 17 gazette April dated by government delisted government subsequently and same the by listed was Trust Ingonyama Kwazulu The b) a) change: the if only policy accounting an changes Authority Accounting The indicated below: otherwise exceptwhere applied,consistently Policieshavebeen Accounting 1.3.2 Financial liabilities and assets 1.3.1 Revenue Recognition Financial Annual Statements: in the of recognised amounts the process on involving effect the significant most those in made from the have that has and Policies Accounting Boards’ apart Trust Ingonyama Authority the applying Accounting judgments, the critical that the estimations, are following The on the performance or cash flow. cash or performance the on about information the ofeffects other transactions, events or conditions relevant more reliable and providing statements financial the in results or GRAP; of by a Standard required is The classification of financial assets and liabilities into categories is categories into liabilities Authority. and Accounting by the judgments on based assets financial of classification The appropriate. is year current The rendered. been has revenue the of the in recognition that issatisfied AccountingAuthority service the whether rendered, are services when and goods the of ownership of rewards and buyer risks the significant to the transferred the had sold, whether are GRAP goods particular, when in Trust, In Ingonyama out Transactions: set Exchange as from revenue Revenue of 9: recognition the for the criteria considered detailed Authority Accounting the judgment, their making In Board. by the recorded be will revenue which under conditions the Accounting Policy 6.2 on Revenue from Exchange Transactions describes i n g on human resource yama management t ru st
b o ard | annual report 2018-19 report annual | financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 1.6 PresentationofBudgetinformationinFinancial Statements 1.5 Offsetting 1.4 Goingconcernassumption to 31 March 2019 and is for the Ingonyama Trust Board and the Ingonyama Ingonyama the and Trust. Board Trust Ingonyama the for is and 2019 March 31 to 2018 April 1 from the period on fiscal the covers approved budget approved The and basis. accrual prepared is statements financial the and budget The of GRAP. by a Standard permitted or required is offsetting except when offset, beenhave expensesnotrevenues and liabilities, Assets, concern going a on prepared basis. been have Statements Financial Annual The 1.3.5 Write down of PPE Impairment: Inventories and 1.3.4 Useful lives of Property, Plant (“PPE”) Equipment and 1.3.3 Impairment of Financial Assets
Significant estimates and judgments are made relating to PPE to values. relating realisable net to made inventories of are down write and judgments tests impairment and estimates Significant knowledge. industry on based are assets the of values residual and lives useful The use. for available are assets the when determined Trust is which lives, useful their of end the at assets the of values residual the the depreciation, account into taking assets, the of lives useful estimated the over assets on Policies Accounting depreciates/amortises its property, plant and equipment and intangible in described As year,the appropriate. is during recorded assets financial of impairment 104: GRAP in out and Measurementset as assets financial the Accounting considered Authority impairment, the detailed ofcriteria impairment ofthe of estimation the making In impaired. be should assets financial which by value the determine to followed process the on 8.2.2 Policy Accounting i n g on yama t ru . The Accounting Authority is satisfied that the that satisfied is Authority Accounting The . st
b o
ard | annual report 2018 -19 report annual | Impairment ofImpairment Financial Assets Financial Instruments - Recognition -Recognition Instruments Financial describes describes 60 3.1. Property, PlantandEquipment 3. Property, PlantandEquipment and 2. PresentationCurrency 1.7 Commitments 3.1 .1 Initial Recognition The Annual financial statements are presented in South African Rand, Rand, African South in presented are currency. functional the is which Trust’s rand nearest the to off rounded statements financial Annual The Capital operational and commitments (GRAP 1). Statements Financial of Presentation statement the in financial included amounts” complete separate set of financial actual statements as specified a and in theStandard budget GRAPof on in of comparison presented of be “statement will amounts budget of actual comparisons on and be will information budget of presentation The deemed cost, being the fair value of the asset on initial recognition. initial on asset the of value fair the being cost, deemed its donation, or on grant by cost acquired assets of at case the in or date recognised acquisition initially are equipment and plant Property, reliably. measured be can item the of value fair or cost the if and Trust, the to flow will item the or with associated benefits potential economic service future that probable is it if only and if, asset an as recognised is equipment and plant property, of item an of cost The asset. leased afinance including year one than more during used be to expected are and purposes, administrative for use for held are that assets non-current tangible are equipment and plant Property, service was not rendered and relates to the outstanding value of the the of end. year at value contract outstanding the the to where relates and contracts rendered not to was relate service end year at commitments capital The H eritage assets 3.1.2 Subsequent Measurement 3.1.2 Subsequent General information according to the cost model. cost the to according losses. impairment accumulated and depreciation accumulated less assets), unrecognised previously for cost deemed includes (which cost at measured are equipment, and plant property all Subsequently economic future asset. the with or associated benefits capacity the increases it when capitalised only is can be reliably measured. Subsequent expenditure expenditure incurred on an asset subsequent the of value fair or cost the and entity the to flow will expenditure subsequent the with associated delivery service potential or benefits economic future that probable is it if capitalised is equipment and plant property, to relating expenditure Subsequent is cost its value, up. given asset the of amount fair carrying the at its measured at measured be not could item acquired If the value. fair its at measured is in assets non-monetary acquired and monetary of equipment and plant property, of exchange assets for or non-monetary assets, item monetary or a combination an of cost The acquired. date the on asset that of value fair the to equal be to deemed is cost the transaction), non-exchange a (i.e. nominal consideration or no for Trust Ingonyama the by acquired is asset an Where as for accounted and are plant they property, lives, equipment. and plant (major property, of items of components) separate useful item different an have of equipment components significant When located. is it which on site the restoring and asset the removing and of dismantling costs The the necessary also includes applicable, cost. where cost, the at arriving in deducted are rebates and discounts Trade Authority. Accounting by the intended location the to asset manner in the the operating of to it be for capable necessary condition and bring to attributable costs other and purchase price the is equipment and plant property, of item an of cost The T he Ingonyama Trust recognises Property, plant and equipment equipment and plant Property, recognises Trust Ingonyama he performance information
governance 61 3.1.3 Depreciation Plant and Equipment are stated at historical cost and adjusted adjusted and and cost assets of historical impairment values, depreciation. at residual account stated into taking are after Equipment and Plant stated otherwise. only Depreciation commences when the asset is available for use, unless The separately. lives. useful estimated following depreciated the on based are rates depreciation are lives useful different have that and asset whole to the inrelation significant are that assets of Components to be expected are potential Trust. by the consumed service or benefits economic future assets. the of lives in which the asset’sthe pattern depreciationThe used method reflects useful estimated the over values residual their to is land cost their to allocate than method, line straight the using other on cost, calculated assets on Depreciation life. indefinite regarded an is it having as as depreciated not is Trust Ingonyama the by owned Land where appropriate. approach componentisation the on based is charge depreciation The plant tangible to and equipment is capitalised based on the additions measure of work completed. and improvements major on Expenditure equipment and machinery Agricultural offices home Park Furniture & equipment Computer equipment vehicles Motor Buildings account into follows: as values residual taking after lives useful their over basis line straight the T he cost of each asset is depreciated to its estimated residual value on on value residual estimated its to depreciated is asset each of cost he i n g on human resource yama management t ru st
b o ard | annual report 2018-19 report annual | - 6years - 15 years - 12 years - 12 years - 5years - 25 years financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board
3 3.1.4 De-recognition of property,3.1.4 De-recognition plant equipment and .1.5 generating assets of Non-Cash Impairment depreciation or amortisation is recognised immediately in surplus or or accumulated surplus any in deficit. immediately less recognised cost is at amortisation or carried depreciation assets of loss impairment An loss. impairment an is reduction That amount. service recoverable its to reduced is asset the of carrying amount its carrying the than amount, less is asset an of amount service recoverable the If use. in value its and sell to costs less value fair its of higher the is unit cash-generating a or asset an of amount service recoverable The the determined. is which belongs asset to unit cash-generating the of amount service recoverable to estimate the recoverable service amount of the individual asset, the service amount is estimated for the individual asset. If it is not possible recoverable the may be impaired, an asset that is any indication If there such any If asset. amount the of service recoverable impaired. the be estimates Trust may the asset exists, indication an that whether indication date any reporting is each there at assesses Authority Accounting The revenue. in included not are is Gains item de-recognised. the when deficit or surplus in included is equipment and plant The gain or loss arising from the de-recognition of an item of property, disposal. or use its from expected are potential or service benefits or on economic when no disposal, future recognised is de- equipment and plant of an of property, item amount carrying The of date from use. and occupation beneficial depreciated been has accommodation office for used Building componentisised. not are assets cost, total of proportion a as are the the or same, is assets the Where cost not component significant i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 62 3.2 Heritageassets 3.2.2 Depreciation 3.2.2 Recognition Initial 3.2.1 Heritage assets are held indefinitely for the benefit of present and present of benefit the depreciated. not are and for generations future indefinitely held are assets Heritage 103. GRAP of terms in for accounted be will and Trust Ingonyama environmental, the by cost at recognised are assets Heritage cultural, generations. future a and present of benefit the for have indefinitely held are that and significance artistic or technological assets scientific, natural, historical, are assets Heritage A reversal of an impairment loss of assets carried at cost less less cost at carried assets of deficit. or surplus loss impairment an accumulated depreciation isor recognisedamortisation immediately in of reversal A periods. prior in asset would that have beenamount haddetermined no lossimpairment been recognised for the carrying the exceed not does loss impairment an The increased amount carrying of an asset attributable to a reversal of estimated. are assets those of amounts any prior service If recoverable the exists, decreased. in indication such have may recognised or exist loss longer no may impairment assets for an periods that whether indication date any reporting is each there at assesses Authority Accounting The unit. the in asset each of amount carrying the of basis the on rata pro- unit, the of assets - to the carrying the reduce to allocated follows: as unit the of assets the is of amount loss the impairment The if unit. the units of cash-generating for amount recognised is carrying the less of than unit the amount service recoverable is loss impairment An 4.1 InitialRecognition 4. IntangibleAssets separately or internally generated are reported at cost less accumulated accumulated less cost at losses. impairment accumulated and reported amortisation are generated internally or separately acquired assets Intangible cost. at recognised initially are assets Intangible 31. GRAP with accordance in annually, impairment for tested are assets Development years. three exceeding not life, useful its over basis on use for a is straight-line ready asset the at which point the from amortised previously subsequent a costs in asset are and assets an intangible as Development recorded are development costs Capitalised as period. recognised criteria incurred. not are these expense as an as meet expense recognised not an do as that recognised expenditures development Other when incurred. before they are capitlised. Research expenditure is recognised as an expense criteria are assets recognition to subject intangible strict generated Internally reliably. to flow measured be can will asset the of asset value fair or the cost the and to Trust Ingonyama the attributable are that potential of service Statement or benefits its in asset intangible economic future only it when Position is that the expected probable Financial an recognises Trust assets. Ingonyama intangible The as recognised for and or classified others, are to purposes rental for administrative services, of supply or production the in use for held are which substance physical without assets non–monetary Identifiable e-recognition 3.2.3 General information from its use or disposal. or use its from b) when no future economic benefits or potentialservice are expected a) or disposal, on de-recognised: be shall asset aheritage of amount carrying The
D performance information governance 4.3 De-recognition 4.2 63 S ubsequent carrying amount of the asset(s) the of up. amount given carrying the is cost deemed it’s determinable, not was value item’s fair acquired the If is acquired asset the (the value cost). fair at measured assets, initially non-monetary and a monetary or of assets, combination monetary or asset non-monetary a for exchange in acquired is asset intangible an Where acquired. is it date the at as value fair its is cost its Where an asset intangible is acquired at no cost or for a nominal consideration, proceeds and the carrying value and is recognised in the Statement of of Statement the in recognised is and sales value Financial Performance. the carrying between difference the the and as proceeds determined is asset retirement or intangible disposal the an on of arising loss or gain The asset. the of use the from expected potential service or benefits economic when further noor are of there disposed is asset the when de-recognised are assets Intangible Performance. Financial of Statement the in estimate accounting in a change as prospectively applied annually. are review annual the reviewed from arising are adjustments Any method amortisation and life useful estimated The amount. recoverable the and amount carrying the between difference the is loss impairment The revaluation. previous a reverses is impairment the where which loss, impairment the by adjusted recognised as is an expense value in the period that carrying the impairment the is identified except impaired, been have assets intangible of items Where use. for intangible available yet including not assets impairment, for tested annually are assets Intangible deemed are assets amortised. not intangible are assets intangible such life, Where useful indefinite haveto an design. website and software computer assets’ intangible the over useful lives, which does basis not exceed twelve straight-line years including but not a to restricted on charged is Amortisation M easurement, Amortisationand i n g on human resource yama management
t ru st
b o ard | annual report 2018-19 report annual | I mpairment financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 6.1 General 6. RevenueRecognition Trelawney Road 65 at accommodation office than other - holdings) (land Property 5. asset and there is no liability to repay the amount. amount. the repay to liability no is there the and asset to an as recognition for recognised qualifies receivable or receipt generally related the that is extent transactions non-exchange from Revenue directly without entity another exchange. in value equal approximately from giving revenue received Trust Ingonyama the where transactions to refers transactions non-exchange from Revenue receivable. or received consideration the approximates which of value the sold, goods / rendered services for return in directly Trust the to accrued that revenue to refers transactions exchange from Revenue arrangement. type each of specifics the the and transaction of type customer,consideration the of into taking results, historical on estimates its bases Trust Ingonyama The resolved. been have sale the to relating all contingencies until measurable reliably be to considered not is revenue of amount The below. described as Trust’s activities have offor meteach beenthe criteria Trustthe Ingonyama specific and when flow will to benefits economic future that is it probable measured, be reliably can revenue of amount the when revenue recognises Trust Ingonyama The discounts. and rebates returns, tax, value-added of net shown Ingonyama is Revenue the of activities. Trust’s course ordinary the in services and goods of sale the for Revenuevaluethe ofconsiderationthe fair comprises received orreceivable hectare. per value land municipal average the on based statements financial T Trust Act. Ingonyama at but vested in a Trustthe Ingonyama of the price, acquired was not in terms T Trust. the of assets as recognised are Trust Ingonyama the of name the in registered holdings) (land Property he fair value of the Ingonyama Trust Property has been disclosed in the the in disclosed been has Property Trust Ingonyama the of value fair he it as Statements Financial the in disclosed been not has Property of cost he i n g on yama
t ru st
b o ard | annual report 2018 -19 report annual |
64
6.2. Revenuefromexchangetransactions 6.2.1 Leases 6.2.1 6.2.3 Other income land Trust Contractual Royalty 6.2.2 activities Ingonyamaon Revenue mining from Revenue from Exchange transactions comprises of Leases, Royalties, and and Royalties, Leases, compensation). /(servitude income Other of comprises transactions Exchange from Revenue compensation and interest income. interest and compensation servitude including above classified not income other all to refers This prospecting and mining to Trust. Ingonyama land its the of income as recognised is revenue royalty leases Contractual operators. Trust Ingonyama The T T revenue This purposes. revenue. non-mining to relates non-commercial and commercial for land its leases Trust The year. financial one than more over span periods lease such where agreement, lease the of term the over on basis recognised straight-line a is leases operating as land of rental the from Revenue agreements. 35. note in disclosed been has charge normal and lining straight the between difference The income. lease he Ingonyama Trust has not entered into any new finance lease lease finance new any into entered not has Trust Ingonyama he for revenue reported the increased has leases of lining straight he
8.1 FinancialAssets-Classification 8. FinancialInstruments 7. GovernmentGrants/(Transfer PaymentsandReceipts) 6.3 RevenuefromNon-Exchangetransactions 6.3.1 Finance Income thereto: to right notes the in or Position Financial of the Statement of face the on contractual a reflected as or cash of assets financial of consisting types Trust Ingonyama following the has The cash. receive asset any is asset financial A Liabilities. Financial or Assets Financial either as categorised bebroadly can these and instruments financial of types Trust The various has Performance. Financial of Statement is it if the in and earned interest as creditor recognised is it interest Trust the Boards Ingonyama the of part as recorded is it funder the to payable is it If Interest earned on is investments treated in accordance with grant conditions. receivable. become they which in period the in no with Board future related costs, are Trust recognised in Ingonyama the Statement of the Financial Performance to support financial immediate giving of purpose the for or incurred already losses or expenses for compensation not have as receivable are that obligations grants or Government recognised. is liability conditions a met, been criteria, the that extent the To are agreement. funding has Board and Trust the in embodied Ingonyama obligations or conditions criteria, the the donations of any with complied that extent the grants, to revenue conditional as recognised from received Income General information that takes into account the effective yield on the investment. the on yield effective the account into takes that basis proportionate time the on maturity on investments to capitalised I accounts. on current and rates interest fixed at term short a over banks with invested funds from earned is Interest nterest on investments is recognised on the accrual basis and and basis accrual the on recognised is investments on nterest
performance information governance
Investments in Fixed Deposits Fixed in Investments Other Debtors Consumer Debtors Cash and Balances Bank –Call Deposits Investment Short-term Type Asset Financial of 65 either of the following conditions: following the of either at assets fair Financial value through profitor loss classified as follows into the four categories allowed by this standard this by allowed categories four the into follows as classified of the Ingonyama Trust Assets are 104, In the GRAP Financial with accordance available for sale or are not classified as: classified not are or sale for available Available investments for sale - or trading; for held as classified are - they - Bank Balances and Cash and Balances - Bank Deposits Investment - Short-term Debtors Other - Certain - Consumer Debtors - I Performance. Financial of Statement the through value fair at Assets - Financial or Investments; - Held-to-Maturity Receivables; and - Loans Performance. Financial of Statement
upon initial recognition they are upon as recognition designated initial at fair value the through nvestments in Fixed Deposits Deposits Fixed in nvestments i n g on human resource yama management t ru st r fnnil ses ht r dsgae as designated are that assets financial are
b
o ard | annual report 2018-19 report annual | Classification in terms of G Classificationin terms H Held-to-maturity Held-to-maturity investments - receivables and Loans investments sale for Available eld-to-maturity investmentseld-to-maturity are financial assets that meet thatmeet assets are financial financial
PERFORMANCE R A P 104
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 8.2 Financial Trust categorises cash and cash equivalents as financial assets: loans and and loans assets: financial as Ingonyama receivables. equivalents The cash overdrafts. and bank cash of categorises net Trust banks, with call on held deposits hand, on cash comprise equivalents cash and cash statement, flow cash the of purposes the For value. in ofchange risk to insignificant an subject are and liquid less or months three of highly maturities with institutions held short-term banking are registered that with cash are of amounts banks known into equivalents with convertible readily cash Cash investments, and deposits). cash) petty call (including (including hand on cash includes Cash and intent positive the has maturity. to investment the hold to Trust ability the where maturity fixed and payments financial asset to another entity. The Ingonyama Trust has the following types types Financial of following thereto: notes the in or Statement Position the the has of face the Trust on another or reflected Ingonyama as The liabilities financial cash of entity. deliver to another to obligation asset contractual a financial is liability financial A Held-to-Maturity rate interest effective the using cost, impairment. for aprovision less method amortised at measured are Assets Financial recognition initial After value. fair represents which cost at recognised initially are receivables and Loans assets. non-current as classified are are They market. active an included in assets, except current in for greater than maturities 12 quoted months, which not are that payments determinable Receivables and Loans are all classified as “Other financial liabilities”. financial as “Other classified all are basis. yield the 104 GRAP effective an with on accordance In recognised expense interest with method, interest effective the using cost amortised at measured subsequently are financial liabilities Other costs. transaction of net value, fair at measured initially are and liabilities” financial “Other as classified are liabilities financial other Any - Certain Other Creditors Other Certain L i iabilities -Classification n g on yama Investments are financial assets with fixed or determinable determinable or fixed with assets financial are Investments t ru are non derivative financial assets with fixed or fixed with assets financial derivative non are st
b o ard | annual report 2018 -19 report annual | Financial Liabilities Financial of the Ingonyama Trust Ingonyama the of 66 8.2.1.1 Financial Assets: 8.2.1.1 and Initial Subsequent Measurement 8.2.1 8.2.2 Impairment of Financial Impairment Assets 8.2.2 Financial Liabilities: 8.2.1.2 Performance. Financial of Statement the in recognised being loss or profit the with and value initially fair at measured are year, financial each of Available-for-Sale end the at and subsequently, Value Fair at Assets Financial Interest basis. yield Effective effective an the on recognised revenue using with impairment, cost any less Method amortised at measured are assets these Subsequently, asset. financial the of issue or acquisition the to measured at fair value plus transaction costs that are directly attributable 12 months from the date of reporting are classified as current. classified are reporting of date the from 12 months year the off written in within which receivable they asAmounts are are irrecoverable. identified debts Bad year-end. at amounts outstanding all of experience on default past based debt is for doubtful made estimate An method. rate interest effective the using cost amortised at carried subsequently and value fair at valued are Receivable Accounts Initially such is there If 104. GRAP with accordance in recognised is debtor). the loss impairment an of and estimated is amount recoverable the evidence difficulties financial of insolvency significant of evidence or probability the objective as (such is Assets Financial there of where impairment impaired are assets Financial date. sheet balance each at impairment of loss, indicators or for profit assessed are through value fair at those than other assets, Financial method. rate interest effective the cost using amortised at measured are liabilities financial Other value. fair at measured subsequently and initially are value fair at liabilities Financial Held-to-maturity Investments Held-to-maturity and Loans Receivables and are initially initially are 8.2.3 Assets of Financial De-recognition General information f wesi o te se t aohr niy ecp we te Trust the when except recoverability. non to due Assets entity, Financial of write-off the approves another to asset the of when it ownership or of expire rewards only and risks asset the all the substantially and from Assets asset financial the flows transfers cash Financial the to rights de-recognises contractual the Trust Ingonyama The recognised. been not impairment the had have been is does cost not reversed would exceed what the impairment amortised the to date the at investment the Performance of amount Financial carrying the that of extent the Statement the through impairment reversed recognised is loss previously the recognised, was impairment the after occurring event an to a objectively related be can decrease in the if instruments, and decreases loss impairment the equity of amount the period, subsequent Available-for-Sale of exception the With Performance. Financial of Statement the in recognised are account allowance the of amount allowance the carrying the in Changes account. against credited are off written previously amounts of recoveries trade Subsequent account. allowance the against of off written is it exception the with allowance account. When a is trade receivable considered uncollectible, assets financial all where amount receivables, is the carrying reduced through the use of an for directly loss of assetis the amount reducedfinancial bythe impairment The carrying receivable. as regarded are and accounts such as for provided similar not are with accounts Government assets characteristics. financial risk in credit assets the the grouping whereby after 39.64 collectively IAS then and individually with assessed is Debtors accordance Consumer of in recoverability made debts. is bad for provision provision a The less cost at stated are Debtors Consumer amount rate. interest The effective original receivables. of atthe discounted flows, cash future of estimated value present the and terms amount carrying original asset’s the between the difference the is to provision the of according due amounts all collect to able be when not will Trust the established that is evidence objective is receivables there trade of impairment for provision A performance information governance 8.3 67 R isks associatedwithfinancialinstruments 8.3.2 Credit risk 8.3.1 risk Market Liabilities of Financial De-recognition 8.2.4 to recognise the financial asset and also recognises a collateralised collateralised a continues recognises Trust also and the forborrowing the proceeds received. asset asset, financial financial the recognise transferred to a of ownership rewards of and risks the all substantially retains Trust Ingonyama the If pay. to have may it amounts for liability associated an and asset the in the control substantially interest to retained its recognises continues Trust Ingonyama the retains asset, and transferred ownership nor of rewards transfers and risks neither the all Trust Ingonyama the If plcns r uuly cend eoe es apiain are applications payments. lease before D screened usually approved. are Applicants purposes. non-mining and mining for land of leasing the from arise debtors trade Trust’s Ingonyama The Trust. Ingonyama the to risk a expose not do therefore and end at year fixed and determined already are owing amounts the as prices market in changes of because The future cash flowsfrom trade and otherwill receivables not fluctuate term. ashort over date investment the at fixed are rates investment the as forces market by affected not are investments of value fair The date. reporting the on exposed is Trust the which to instruments financial from arising risks of that extent information and nature the disclose evaluate to to statements financial Trust its of user Ingonyama the enables the of policy the is It expire. they or cancelled discharged, are Trust’s obligations the when, only and when, Liabilities Financial IngonyamaTrust de-recognises The ebt collection procedures exist for the collection of outstanding outstanding of collection the for exist procedures collection ebt i n g
on human resource yama management t ru st
b o ard | annual report 2018-19 report annual | financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 9. Provisions prtn lse. h peet biain ne a oeos otat is contract onerous future an for under recognised obligation aprovision. as measured and recognised not present are The Provisions losses. occur. operating will they that evidence objective sufficient is there obligation where an provision a of amount settle the in to reflected are required amount the affect may that events Future Financial current Statements. the in recorded provisions no are There obligation. the of made be potential can an estimate reliable service a or and that obligation the settle probable to required be benefits is will economic it or embodying events, resources present past of a of outflow has result Trust a as obligation Ingonyama the constructive when recognised are Provisions 8.3.5 Interest rate risk risk 8.3.4 Currency 8.3.3risk Liquidity are fixed at an agreed rate over the term of the investment. the of term the over rate agreed an at fixed are The Ingonyama Trust does not have any rate interest risk as investments rates. interest market in changes of because fluctuate which instrument financial a of flows cash future or value fair the about uncertainty the from originates risk rate Interest exists. risk currency no therefore currency to a foreign translated to be funds requires that transaction any have not does Trust Ingonyama The end. year after settled have been payables trade Vat and The Ingonyama Trust has fundssufficient toits service financial liabilities. met. are requirements flow cash that ensure to rates competitive at established are new arrangements additional flow required, if and, cash basis timeous a to on met are relation payments contractual in all that rates ensuring by managed are interest Liabilities reinvested competitive requirements. are assets at all that maturity ensuring at by managed is risk Liquidity i n g on yama t ru
st
b o ard | annual report 2018 -19 report annual | 68 10.3 Contributionstothemedicalaidscheme 10.2 ContributionstoadefinedProvidentfundcontributionplan 10.1 Remunerationandleavepay 10. Employeebenefits Performance as a finance cost as it occurs. it as cost afinance as Performance reflect that of flows the unwinding is discount in periodic recognised the of Statement Financial the of impact cash The money. of value future time the of assessments expected market current are the provisions discounting material, is by discounting determined of effect the When settle to obligation. required be the provision to expected a expenditure of the of amount value the present and the is date reporting at reviewed are Provisions under Secretariat administration fees in the detailed statement of financial financial of performance. statement detailed the in fees administration Secretariat under aid medical a scheme. to The contributions are contribute expensed and employees included inits the and amount reported Board Trust Ingonyama The performance. financial of statement detailed the in fees administration Secretariat under for reported amount the in included and expensed are contributions The plan. Contribution defined a is fund The the to contributed have employees 2011. its 1February from fund provident Work at Funds Umbrella Momentum and Board Trust Ingonyama The Position. Financial of Statement the in acreditor as shown is The service. related and end year at days leave the accrued total the on based is pay leave renders for liability employee the which in period the during The costs of all employee short-term such benefits as leave pay, are recognised accrual. an leave payas for provision its non-accumulating Trust treats Ingonyama The for except rendered, occurs. event specific the when recognised only are are which benefits, Financial services of the Statement as the Performance in recognised is employees to Remuneration 11.1 TheIngonyamaTrust asaLessee 11. Leases the relevant lease. relevant the of term the over basis straight-line a on the in performance financial expense an of as statement recognised the are of rentals scope lease the Operating within fall definition. not above do that leases those are leases Operating is years. five is asset photocopier leased the of case the in lease The payables. lease which term lease the or life useful asset’s to the of overshorter the depreciated applied are instruments financial of de-recognition to relating policies accounting The incurred. when expensed are costs finance Lease method. rate interest effective the using repayment lease the by reduced is the costand liability lease capital finance the between are which allocated payments, lease The assets. intangible or in equipment for accounted are assets leased accordance the with stated accounting policies the applicable to property, plant, recognition, initial to Subsequent expensed when incurred. are costs finance Lease method. rate interest effective the using repayment incurred. costs direct any plus asset Lease arepayments allocated the between lease finance cost the andcapital the of value fair the unguaranteed to and value payments residual lease the discounts exactly that rate interest the uses Trust Ingonyama the payments, lease the discounting In interest. of minimum the of lease due payments in sum terms of the the discounted for lease agreement, the as effect measured are and lease the of inception the at recognised initially are liabilities corresponding The Liabilities. Lease Finance Position as in are of included the Financial Statement liabilities Corresponding lease. the of inception the fair at determined each payments, the to equal amounts at the value capitalised of the leased asset or, are if to lower, the present value of the agreements minimum lease transferred lease finance are to asset an of subject Ingonyama Assets Trust. or plant and Intangible equipment Property, ownership with and risks associated the all rewards substantially where leases finance as classified are Leases applicable. be will policy following the than does it if however lease, finance any into entered not has entity The General information performance information governance 13. CashandEquivalents 12. Value addedTax 11.3 TheTrust asaLessor 11.2 69 D eferred financechargeassetrelatedtoleaseliability time pattern in which economic benefits from the leased asset are consumed. are asset leased the from benefits economic which in pattern the time of representative more is basis systematic another where except basis, operating into straight-line a on benefit enter expense rental of aggregate reduction a as to recognised The is incentives of liability. received a as are recognised are incentives incentives such lease leases, that event the In The Ingonyama Trust accounts for Value Added Tax basis. Added invoice Value for the on Trust accounts Ingonyama The lease. relevant the of term the over basis straight-line a on recognised is income rental lease Operating sale installment or leases the of respect agreements. in outstanding investment Trusts’ leases. Ingonyama net the on return the of rate in periodic constant a reflect investment to as so net periods Trust’saccounting to allocated is Ingonyama income sale installment or the lease Finance of amount the at receivables as recorded are leases finance under lessees from due Amounts finance deferred no statements. are financial the in recorded there assets charge Currently utilised. fully is it until lease the of finance charge The asset deferred is reduced byfinance charges overthe term the of inception liability. lease finance the and value the carrying at asset leased the recognised between difference the is as lease finance asset charge finance deferred The i n g on human resource yama management t ru st
b o ard | annual report 2018-19 report annual | financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board
16.1 Prioryearcomparatives 16. ComparativeInformation 15. Eventsafterreportingdate 14. Relatedparties When the presentation or classification of items in the Annual Financial Financial disclosed. are Annual reclassification the for reasons and nature The the in reclassified. items are amounts comparative of period prior amended, is Statements classification or presentation the When Statements. Financial Annual the to notes the in disclosed have been date reporting the after events non-adjusting as classified are that date reporting have events the after events The adjusting Statements. Financial Annual the accountedinbeen for as classified are that date reporting the after Events authority. 20 accounting by the GRAP of adoption early the of terms in Trust Ingonyama the Ingonyama and Board Trust the between transactions the includes disclosure party Related Officer. reporting Executive Chief the by designated as or Officer other Executive managers Chief to the directly all and Officer Financial Chief officer, Executive in making financial party and/orother the over operatinginfluence significant decisions.exercise or party other Key the jointly personnelcontrol or control to are theindirectly, Chief or directly ability, the has party one if parties related are entities and/or members, family close their as well as Individuals incurred. as expensed are overdrafts bank on charges Finance utilised. facility the on based recorded are overdrafts Bank overdrafts. bank of net equivalents instruments, financial cash in and investments and banks cash with call on held statement, deposits hand, on flow cash comprise cash the of purposes the For an to subject are and less value. in change of risk or insignificant months three of are maturities banking equivalents with registered Cash with institutions held are that banks. investments liquid with highly cash short-term and cash-on-hand includes Cash i n g on yama t ru st
b o
ard | annual report 2018 -19 report annual | 70 17 .Taxation 16.2 ContingentAssetsandLiabilities 19. ChangesinAccountingPolicies,Estimates andErrors 18. I rregular, fruitless&wastefulexpenditure are disclosed in the notes to the annual financial statements. financial annual the to notes the in disclosed are Contingent assets and contingent liabilities are not recognised. Contingencies GRAP 3 requirements. Details of changes in estimates are disclosed in the the in disclosed applicable. are where statements financial estimates annual the to notes in changes of Details requirements. 3 GRAP in Changes are accordance in with prospectively estimates applied accounting practicable. is restatement retrospective which for period earliest the for assets net and liabilities assets, of balances opening the restate shall oftheeffect or change the incumulative effects policy. Insuchcasesthe Trust period-specific the determine to impracticable is it that extentexcept the to requirements, 3 GRAP accordancewith in retrospectively applied beenhave Changes in accounting policies that are effected by the Accounting Authority expenditure wasteful & fruitless year. the irregular, during of occurrences no were There identified. when statements financial the to note a in disclosed are and relate they which to events of class specific I exercised. been care reasonable had avoided have been would and vain in made was that expenditure means expenditure wasteful & Fruitless legislation. or applicable any of of, requirement a contravention with accordance in in not incurred expenditure means expenditure Irregular from exempt is Trust Tax Income the Act. 10 of Ingonyama section of terms in tax income the as taxation for made is provision No rregular and fruitless and wasteful expenditure are recognised against the the against recognised are expenditure wasteful and fruitless and rregular
issuedbutnotyeteffective 20. GRAP 110 Living and Non-living Resources Non-living and Living Agents and by Principals Accounting Receivables Statutory 110 GRAP Entities Other in Interests of Disclosure 109 GRAP 108 GRAP 38 GRAP 37 GRAP Statements Financial Separate 36 GRAP Grantor Concession Arrangements: Service G Disclosures Related Party 34 GRAP 32 GRAP 20 GRAP Document no RAP RAP S tandards, amendmentstostandardsandinterpretations have by yetadopted the Board: early not been The following standards haveGRAP been issued but not yet effective and practicable. is restatement retrospective which for and the balances net opening for of liabilities assets period the assets, earliest of theeffect error. cumulative In such casesthe Ingonyama shallrestate Trust the or effects period-specific the determine to impracticable is it that extent the the to whichexcept requirements, in3 GRAP with period accordance in theoccurred has error in retrospectively applied is Errors of Correction
35 Consolidated Financial Statements Financial Consolidated 35
General information Joint Arrangements I Title nvestments in Associates and Joint Ventures Joint and Associates in nvestments performance information
governance
71 Trust. Ingonyama the and Board Trust related Ingonyama the the between for transactions account party to 20 GRAP adopted has authority accounting The position, Ingonyama the Trust. of flow cash or financial performance the financial on impact significant a have not will of standards adoption these the that anticipated and effective GRAP yet not mentioned but above issued the standards all considered has Authority Accounting Finance. of The Minister the by announced already or announced be to date future a from effective become will standards GRAP above the of all of Application i n g on human resource yama management t ru st
b o ard | annual report 2018-19 report annual | financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board The Accounting Authorityhasreviewedthe depreciationmethod,residual valuesandusefullives ofassetsasat31March2019, (refertonote34forchange inresidualvalues). 1.5 hectares,deedoftransfer numberT5795/1980.alsoknownas65T The Trust purchasedaproperty forofficeaccommodationmorefullydescribedasSans Souci,Portion1of1772,RegistrationDivision,FT,Province ofKwazuluNatalinextent Property - Office accommodation 65 accommodation -Office Property equipment and Plant Property, 21.1. Equipment and Plant Property, 21. Furniture andEquipment At Cost:Land-28January2009 Computer equipment Agricultural machineryandequipment value fair at accomodation) (other office than Trust Land Ingonyama Building atcostandimprovementstoProperty Motor vehicles Property, Plant and Equipment is reconciled as follows: as reconciled is Equipment and Plant Property, Furniture and equipment Computer equipment equipment and machinery Agicultural 65Road Trelawney accomodation 2-office Phase Property accomodation) office than other holdings (Property Trust Land Ingonyama Motor vehicles Motor i n g on yama t ru st
b o ard T r elawney elawney | annual report 2018 -19 report annual | R oa d relawney Road,Southgate, Pietermaritzburg,3201. 72 Opening carrying value oa cuuae e okNetbook Netbook Accumulated Total otdpeito value depreciation cost R 20,866 45,476 66,342 12,860 20,371 7,511 ------ercainClosingcarrying Depreciation R (35,562) (14,954) (50,516) (2,946) (4,545) (1,599) ------Ingonyama Trust Ingonyama Trust Board Board value R 58624,429,227,899 15,826 58624,429,227,899 15,826 ,1 1,782,705 9,914 ,1 1,782,705 9,914 ,1 1,230,441 5,912 ,1 1,230,441 5,912 ------24,397,329,049 24,397,329,049 value Total Total 2019 2019 2019 19,549,018 21,049,018 21,049,018 R 1,500,000 2,344,476 2,344,476 5,492,210 5,492,210 Property -office accomodation 65 Trelawney Road Motor vehicles Motor Furniture and equipment Motor vehicles Furniture andEquipment equipment Computer Agricultural machineryandequipment Ingonyama Trust Land(other thanoffice accomodation) follows: as reconciled is Equipment and Plant Property, 21.1. Ingonyama Trust Land (Property holding other than office accomodation) office than other holding (Property Trust Land Ingonyama Computer equipment Computer equipment and machinery Agricultural 65 accomodation Road Trelawney Office General information performance information Opening carrying value Cost R governance 632(591 03124,413,356,653 20,371 (45,971) 66,342 20,866 546(266 12,860 (32,616) 45,476 ,6 (120) 2,465 2,465 - 73 ------Accumulated depreciation Disposals R 1,5)7511,132,785 7,511 (13,355) (87) (33) ------Trust Board Trust Ingonyama i n Change in estimate Carrying g on 2018 vaue R human resource 402(,1)2,7 24,413,356,653 20,371 (6,016) 24,042 yama 14,606 9,436 management t - - - 24,378,745,872 - 3,255,273 - - - - ru st ercainClosing Depreciation
b o 22,066,999 Total ard 2,042,848 6,112,876 R | annual report 2018-19 report annual | 188 ,1 1,132,785 7,511 (1,838) (4,178) - - - - carrying financial value 12,860
- 24,378,745,872 - 3,255,273 - -
PERFORMANCE 22,066,999 Total 2018 2,042,848 6,112,876
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 17. Theeffectivedateofthevaluationis01April2016. GRAP of terms in such as disclosed and area municipal a to specific hectare per value municipal Act,1994 at no cost to the Ingonyama Trust. In 2017/2018 TrustLand Ingonyama has the been of valued terms using in the average 1994 in Trust Ingonyama the to vested land Trust Ingonyama The centers, hotels,gamereserves,damsandbytelecommunication serviceproviders. Townships HV HU HT GV GU GT GS FU FT FS ET ES 21.2 Propertyholdingsperregistrationdivisions Ingonyama Trust land is used for residential, institutional and commercial such as : shopping 2,883,925 Hectares i 475,609 491,860 265,467 n 335,626 651,739 2019 115,670 2115() 5,0 56545675,635,425,697 5,635,425,697 251,203 (8) 251,195 102,175 25,896 34,564 79,547 53,932 g on 65 3 ,4,7 4,841,476 4,841,476 637 8 645 yama Changesin t property holdings ru st
b o ard ------| annual report 2018 -19 report annual | 283952,7,4,7 24,378,745,872 24,378,745,872 2,883,925 Hectares 4569 ,4,3,2 2,240,339,720 2,240,339,720 475,609 4180 ,6,7,0 2,065,070,801 2,065,070,801 491,860 2547 ,6,8,6 3,364,587,164 3,364,587,164 265,467 3566 ,6,6,8 1,365,768,881 1,365,768,881 335,626 617974675537,476,775,533 7,476,775,533 651,739 2018 1560 6,6,9 766,764,694 766,764,694 115,670 1215 5,1,4 453,212,840 453,212,840 102,175 2,9 120157162,011,537 162,011,537 25,896 3,6 131436133,154,336 133,154,336 34,564 7,4 377938397,709,338 397,709,338 79,547 5,3 330387313,083,857 313,083,857 53,932
2019 land value 2018 land value 74 Website design Computer software Intangible assets are reconciled as follows as : reconciled are assets Intangible Website design Computer software 23. Intangible assets Sans Soucibuilding-Phaseone Heritage assetarereconciledasfollows: No impairmentswerenotedfortheyear. Sans Soucibuilding-Phaseone 22. Heritage Assets 22. General information performance information governance 75 Opening Carrying value 934(3,922) 19,324 934(3,922) 19,324 - mriainChangein Amortisation i otAccumulated Cost n R g 47,062 on 47,062 human resource yama management - - t
ru Ammortisation st estimate
b o R ard 3,6)1,0 703,172 15,402 (31,660) 3,6)1,0 775,661 15,402 (31,660) | annual report 2018-19 report annual |
- - - - Trust Board Trust Board Trust Board Ingonyama Ingonyama Ingonyama Net book Carrying financial Closing value value R 542703,172 15,402 542775,661 15,402 2019
- - - - - PERFORMANCE 15,988,144 15,988,144 15,988,144 Total Total Total Total 2019 2019 2019 72,489 72,489
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board Buildings Computer software Furniture and equipment Computer equipment machinery and equipment Agricultural Depreciation24. Website design Computer software follows: as reconciled are assets Intangible Website design Motor vehicles Motor Ingonyama Trust - Statement of budget and actual amounts (Page 96) amounts actual and budget of Trust -Statement Ingonyama as disclosed is depreciation Net design website and software -Computer assets Intangible 98) (Page amounts actual and budget of comparison of -Statement Trust Board Ingonyama i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 76 Opening Carrying value Cost R 702(778 934812,418 19,324 (27,738) 47,062 702(778 934896,400 19,324 (27,738) 47,062 - - - - Amtsto Changein Armotisation Armotisation Accumulated Trust Board Ingonyama R 392 3261,2 812,418 19,324 23,246 (3,922) (3,922) ,6 8,467 8,467 ,4 297,672 2,946 ,6 3,126,705 8,467 ,6 3,126,705 8,467 ,2 120,739 3,922 ,9 158,850 1,599 ------Trust Board Ingonyama Net book estimate value Total 2019 3,118,238 1,017,981 620,666 R 910,797 - - - carrying Closing value Total 2018 83,982 934896,400 19,324 - Total 2018 83,982 South African Revenue Services - vat refund -vat Services Revenue African South Receivables25.2 from non - exchange transactions ) debtors income lease lining straight (non -actual Leases including Trade debtors Trade debtors 25.1 Receivables from exchange transactions Receivables 25. Less : Provision for doubtful debts doubtful for :Provision Less income per the straight lining method adopted. method lining straight the per income lease of determination the and agreements lease the per invoiced amount the between income in difference the as calculated is debtors income lease Straight lining The debtors income lease lining Straight Refund due from service providers service from due Refund Accrued interest Receivables Other Private usage of telephone and staff deductions staff and telephone of usage Private electricity and -water Municipality Msunduzi First National Bank - (refund for unauthorised use of credit card) credit of use unauthorised for -(refund Bank National First 65 Trelawney for Road Municipality by Msunduzi held Deposit Electricity General information performance information governance 77 Trust Board Ingonyama R 4,9 149,294 149,294 6,3 2,205,076 160,238 5,9 556,599,015 157,796 ,0 6,200 6,200 ,0 2,302 2,302 ------(27,998,583) 499,853,146 82,969,771 i 54,971,188 54,971,188 n Total 2019 1,514,998 g R 88,000 on 13,887 human resource yama management t ru st
b o ard | annual report 2018-19 report annual | Trust Board Ingonyama financial 685476,166,974 16,875 R 3,7 252,914 130,174 68516,875 16,875
------PERFORMANCE - - - (25,518,690) 423,795,153 75,850,766 50,332,076 50,332,076 Total 1,616,068 2018 R 88,000 318,802 - -
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board Advance proceeds on property / (land) disposal /(land) property on proceeds Advance by debtors payments Advance Petty cash Petty deposits /fixed account Call Current accounts equivalents cash and Cash 26. Trade creditors 27.1. exchange transactions from Payables 27. Payables 2019. 31 March at as balances cash restricted no are There use. for available Trust are by the held balances equivalent cash and Cash policy. disbursement Board’s the with complying them to subject beneficiaries, community to year. the available are Funds during /secured encumbered not were equivalents cash and Cash 2.50% and between was 7.78%. year the during rate interest average The months. four within mature deposits fixed as nature in current are equivalents cash and Cash Sundry creditors Sundry National Bank which is used to pay operational expenditure on a short term basis. term ashort on expenditure pay operational to used is which Bank National by First provided been has R500,000 of facility card Acredit end. year at calculated pay is Leave end. year at municipalities the to transferred yet not but sold sites for municipalities from received monies to refers disposal land on proceeds Advance rights. tenure for advance in received amounts to relate by debtors payment Advance -FNB facility card Credit payaccrual Leave i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 78 Trust Board Ingonyama ,8,0 24,257,948 2,081,805 ,8,0 1,185,100 1,185,100 9,9 4,398,986 793,894 0,4 183,862,095 603,242 R 9,9 3,899,607 598,197 0,1 102,811 102,811 ,4 5,045 5,045 - - - - 179,957,443 18,472,196 Total 2019 R 77,600 21,255 Trust Board Ingonyama ,5,1 18,210,020 1,656,013 ,6,1 1,067,212 1,067,212 4,5 1,365,481 540,352 R 84948,449 48,449 ,9 205,442,621 7,993 ,1 3,986 3,818 ,7 2,208,742 4,175 - - - - 203,299,893 15,630,023 Total 2018 R 77,600 21,255 Balance: 01.04.2018 Balance: income lining Straight in Increase payprovision Leave 2017/2018 for income lease in Increase reported previously earnings Retained year the for earnings Re -stated Re-stated equipment and plant Property, billion. by R3.8 decreased been has fund been accumulated year. and Trusthas land Ingonyama prior the of billion value land the 3.8 present R of fairly to made adjustment year prior A valuations. municipal on 2017/2018based in 28.17billion R at valued been has 1994 in Trust Ingonyama the to vested Land valuation -land -Property error period prior of Correction 28.1 Error Period Prior of Correction 28. Increase in straight lining income for 2016/2017 for income lining straight in Increase 2016/2017 for income lease in Increase 2016/2017 for income retained to Adjustments :01.04.2017 balance Opening by R3.3m 2017/2018. for increased surplus by accumulated R3.3m and increased Trade debtors period. prior the in lessees by the occupation to due periods prior for rental charging current, the into entered have been agreement Lease periods. respective their in years 2017.2018 for prior and accrued income lease for account correctly to made been has adjustment An income -lease error period prior of Correction 28.2. holdings -land adjustment value fair of Correction Previously reported Refunds on agricultural projects agricultural on Refunds General information performance information governance 79 Trust Board Ingonyama R ------i n g Total 2019 on R human resource yama management t ru ------st
b o ard | annual report 2018-19 report annual | Trust Board Ingonyama financial R ------
PERFORMANCE (3,798,527,298) 28,831,996,276 28,827,478,016 24,378,745,872 28,177,273,170 74,982,336 78,649,315 Total 2018 3,666,979 1,359,486 4,518,260 1,082,708 3,130,637 2,351,683 R (44,190) 304,915
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 29. Board members’ fees fees members’ Board 29. Dr MSMbatha Dr Chairperson - Justice SJNgwenya -Justice Chairperson Advocate WERRaubenheimer Advocate Ms JBhengu Ms Subsistence and Travel and Subsistence Subsistence and Travel and Subsistence Basic Basic
Subsistence and Travel and Subsistence Subtotal Basic Subsistence and Travel and Subsistence Subtotal Basic Subtotal Basic Basic Subtotal i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 80 Trust Board Ingonyama 1,269,907 1,269,907 1,562,898 4,757,417 392,890 259,069 347,495 225,569 225,569 R 342,324 342,324 292,991 377,517 377,517 33,500 15,373 5,171 Total 2019 R 1,269,907 1,269,907 1,562,898 4,757,417 392,890 259,069 347,495 225,569 225,569 342,324 342,324 292,991 377,517 377,517 33,500 15,373 5,171 Trust Board Ingonyama ,6,8 1,365,380 1,365,380 1,365,380 1,365,380 ,8,8 1,687,083 1,687,083 ,6,2 5,165,723 5,165,723 R 8,7 485,675 485,675 8,7 485,675 485,675 1,0 412,902 412,902 412,902 412,902 5,5 259,353 259,353 0,0 501,002 501,002 1,3 418,735 418,735 2,0 321,703 321,703 3,5 233,751 233,751 3,5 233,751 233,751 56225,602 25,602 1,2 15,327 15,327 5,833 Total 2018 R 5,833 Inkosi S E Shabalala E S Inkosi Shabalala L B Mr Inkosi Z TGumede Inkosi W TMavundla Inkosi Inkosi P RBele Inkosi Subsistence and Travel and Subsistence Subsistence and Travel and Subsistence Subtotal Basic Basic Basic Basic Basic Subsistence and Travel and Subsistence Subtotal Basic Travel and Subsistence Subtotal Basic Travel and Subsistence Subtotal Subtotal General information performance information governance Trust Board 81 Ingonyama 200,690 383,606 383,606 460,744 460,744 302,430 356,748 R 223,436 223,436 378,583 661,434 495,871 175,576 261,415 261,415 112,265 78,994 117,168 181,172 181,172 i n Total g 2019 on R human resource 200,690 383,606 383,606 yama 460,744 460,744 302,430 356,748 223,436 223,436 378,583 661,434 495,871 175,576 261,415 261,415 112,265 78,994 117,168 181,172 181,172 management t ru st
b o ard | annual report 2018-19 report annual | Trust Board Ingonyama financial R 4380 423,890 423,890 423,890 423,890 5004 550,094 550,094 3782 387,842 387,842 3782 387,842 387,842 1083 190,893 190,893 1083 190,893 190,893 3,3 339,030 339,030 2688 216,858 216,858 2688 216,858 216,858 1668 126,678 126,678 615,094 1624 126,204 126,204 280,812 1183 171,883 171,883 1817 148,137 148,137 4321 443,211 443,211 443,211 443,211 1,2 514,520 514,520 6,5 63,954 63,954
PERFORMANCE Total 2018 R 615,094 280,812
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board Chief Financial officer Financial Chief plan for the year amounted to R1,125,927.50 to amounted year the for plan ). (2018 -R644,652 ( ) employer and to employee The portion contributions total contribution the defined Plan. Contribution Provident defined the to Contributions 31. Head Land Management services Management Land Head Chief Executive Officer Executive Chief managers senior of remuneration Gross 30. Manager - Corporate Services Services -Corporate Manager Travel and cell phone allowance allowance Travel phone cell and Basic Company contributions to uif and skills levy skills and uif to contributions Company Company contributions to uif and skills levy skills and uif to contributions Company Cash Allowance Cash Basic Company contributions to uif and skills levy skills and uif to contributions Company allowance Travel phone cell and Basic Company contributions to uif and skills levy skills and uif to contributions Company Basic i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 82 Trust Board Ingonyama 1,084,069 1,462,500 1,073,220 4,165,169 1,559,555 800,499 1,115,506 406,039 R 302,814 402,174 79,847 10,849 17,208 12,193 3,865 - Total 2019 R 1,084,069 1,462,500 1,073,220 4,165,169 1,559,555 800,499 1,115,506 406,039 302,814 402,174 79,847 10,849 17,208 12,193 3,865 - Trust Board Ingonyama 14261 1,462,661 1,462,661 24107 2,481,017 2,481,017 13642 1,316,412 1,316,412 R 2366 283,606 283,606 6234 662,394 662,394 1000 130,000 130,000 9661 956,661 956,661 6,3 60,938 60,938 1,4 16,249 16,249 6,9 61,695 61,695 1,6 10,661 10,661 757 - - - - Total 2018 R 757 - - - - 34.1 Change in accounting estimate - Residual value of Motor vehicles Motor of value -Residual estimate accounting Change in 34.1 estimate Change accounting in 34. transactions party Related 33. Date Reporting the Events after 32. The increase in depreciation and accumulated depreciation for the current year is R51 is values. year 030.52 residual in change the to current due the for depreciation accumulated and depreciation in increase The years. future in depreciation greater in resulting thus increased, be would amount depreciable the as 442.00 by R322 decrease also will profits Future estimate. accounting an in achange in resulting by 442.00 R322 decreased has vehicles motor of value residual The values. trading year previous and current betweeen difference the on based is estimate in end.The change year at assessed was Trust vehicles Ingonyama all of value residual The reported be to need that events subsequent significant other no were There d) b) a) c) General information There is no provision made for doubtful debts relating to related parties as these debts are recoverable. are debts these as parties related to relating debts doubtful for made provision no is There Board. Ingonyama the of Trust books the in reflected accordingly is cost employee therefore and employer the is Trust Board Ingonyama The management”. “land business core the on expenditure incurs 14 mainly regulation by Treasury regulated is Trust which Ingonyama The performance. Financial of statement the in noted expenditure administrative and operational incurs Trust Board Ingonyama the Trust, the administering In 10 (2). regulation Financial Trust Act, Ingonyama of terms Trust in Ingonyama the by for paid was year current the mfor R5.6 of shortfall the and State by the funded partially is Trust Board Ingonyama The Trust land. Trust and Ingonyama the of affairs the administers Trust Board Ingonyama Tust. Ingonyama The the and Trust Board Ingonyama the between exists transaction party A related Trust. R 29,631.12 the to owing was of 2017/2018year.amount an the for end financial At payable year is R16,405.80 to amounting Rental 2009. 1February on commenced lease Corporation.The close the of member the is Board the of F.Madlopha aconsultant Dr is CC. who &Distributors Manufacturing Mkhathi to granted is agreement A lease the to owing Trust. was of R 353,769.42 year.amount 2018/2019an the end R71,989.95to for financial At year payable is amounting company. Rental this of ashareholder is member aBoard JNgwenya, (Pty) Ltd .Judge S. Utilities Zwelibanzi to granted was agreement A lease policy. Board’s the of terms in Agreements Availability Land for consideration a member, Board CC. Ngwenya, S.J Justice is of to this company. a Investments is Ketshe has shareholder no There been granted Agreement A Availability Land
performance information governance 83 i n g on human resource yama management t ru st
b o ard | annual report 2018-19 report annual | financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 36. Commitments Commitments 36. income Lease of lining Straight and income Lease 35. aggregate as follows: aggregate in noted are receivable income lease operating actual future following The review. under year the for revenue as recognised rents contingent no are There period. term long and short The Trust as lessor enters into cancellable operating land lease agreements over a year the for balances debtor trade and surplus net in Increase Rental income as per straight lining method lining straight per as income Rental Rental income invoiced as per lease agreements lease per as invoiced income Rental follows: as balances Trade and debtor surplus the increased has basis line straight the to income lease changing from result The purposes. commercial and residential for basis term long and ashort on Trust land Trust leases Ingonyama The The commitments relate to potential contracts for operational expenditure. operational for contracts potential to relate commitments The iii) ii) ii) i) i) later than one year and not later than five years, and years, five than later not and year one than later not later than one year, one than later not later than five years, five than later later than one year and not later than five years five than later not and year one than later year, one than later not i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 84 Ingonyama Trust Board 25,346 21,121 ------73,657,093,915 Total 2019 2019 114,807,839 135,797,633 38,749,846 76,057,993 35,967,933 54,042 73,941 Ingonyama Trust Board 156,015 156,015 2,286 2,286 ------3,751,841,443 Total 133,260,967 2018 2018 96,491,370 65,419,229 34,102,154 34,102,154 31,072,141 156,015 156,015 2,286 2,286 37.2 Other legal matters in court in matters legal 37.2 Other 37. liability Contingent 37.1 - Rates liability Contingent Mr Ron Wilson Mr Wilson, a former lessee alleges that the he was forced forced was he the that alleges lessee former a Wilson, Mr Wilson Ron Mr I municipality. the of policy indigent the of terms in treated or rates of exemption qualify complete for generally would land Trust Ingonyama populate who beneficiaries the of majority the and grants governmental any receive not does Trust Ingonyama The nevertheless raised the provision of the contingent liabilities to the amount above. thatWhilst the Ingonyama Trust Board believes these claims relation are not sustainable it Intergovernmental the of terms 2005. in of Act Framework dispute a declared have some and Trust Ingonyama against summons rating issued have continue some and prescripts land, Trust Ingonyama with compliance of regardless municipalities Some some which of result municipalities have:- a as municipalities various with prescripts the raised has It after payable constitution. the include and which prescripts due with compliance become rates that view the hold Board Trust Ingonyama bound to seek from the beneficiaries contributions for rates. for contributions beneficiaries the from seek to bound land Trust Ingonyama on lessee Mpeko, Edward Mr entity of Name n the light of this the Ingonyama Trust Board in discharging its mandate is duty duty is mandate its discharging in Board Trust Ingonyama the this of light the n ii) i) General information
Exempted Ingonyama Trust land from rateable properties rateable from Trust land Ingonyama Exempted raised. claim the -off Written
decided on in court. in on decided been not have has to matter ITB.The claims the of he because ITB, income lost the by business his of dispose to him. Mr Mpeko is claiming damages to the property. the to damages claiming is Mpeko Mr him. to restored was property IT the after Mpeko E. application Mr against eviction an revive to attempting is entity The Description of matter of Description performance information governance 85 Ingonyama Trust Board i - - - - n g on human resource yama management Total 2019 2019 320,877,451 t 2,300,000 4,277,600 1,977,600 ru st
b o ard | annual report 2018-19 report annual | Ingonyama Trust Board financial - - - -
PERFORMANCE Total 2018 2018 138,327,395 138,327,395 2,300,000 4,277,600 1,977,600
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 39. Notes to the Cash Flow Statement Cash the to Notes 39. financial of statement the in surplus with surplus budget of conciliation 38. A) performance R Reconciliation of net cash flows from operating activities to surplus to activities operating flowsfrom cash net of Reconciliation Available funds transferred to Accumulated Fund Accumulated to transferred Available funds Adjusted for: Adjusted The Ingonyama Trust Board does not budget for an operating surplus or loss. or surplus operating an for budget not does Trust Board Ingonyama The e Available funds transferred to Accumulated Fund Accumulated to transferred Available funds Depreciation/amortisation N Increase in provision of doubtful debts doubtful of provision in Increase Fund accumulated of to/out Transfer Fund Accumulated in Increase assets of disposal/impairment on Loss Non-cash movements less : straight lining lease income not budgeted not income lease lining :straight less Increase in receivables from non -exchange transactions non from receivables in Increase received not income Budgeted Increase in receivables from exchange transactions from receivables in Increase exchange transactions from payables in Increase -exchange transactions non from payables in Decrease Actual expenditure less than Budget -Trust Budget than less expenditure Actual Net surplus per approved budget approved per surplus Net et cash flows from operating activities flowsfrom operating cash et i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 86 Ingonyama Trust Board (30,064) 595,249 425,792 191,054 8,467 8,467 ------(83,061,640) (76,057,993) (82,579,959) Total 2019 2019 160,241,558 (6,234,473) 77,862,654 76,740,729 76,740,729 (2,703,314) (1,952,162) 2,479,893 3,126,705 5,715,953 (627,875) - - - Ingonyama Trust Board (973,230) (447,967) (441,744) (130,174) (59,933) 36,597 36,597 10,058 23,336 9,938 120 ------(20,902,629) (3,994,448) Total (65,419,229) 2018 2018 (64,727,417) 66,929,706 66,929,706 21,800,000 16,160,410 16,160,410 11,474,263 11,474,263 12,945,929 (7,861,178) 28,150,701 14,531,711 14,531,711 (252,914) 3,113,207 573,407 43,230 43,230 B) C) comprise the following statement of amounts indicating the financial position : position financial the indicating amounts of statement following the comprise statement flow cash the in included equivalents cash and Cash equivalents cash and Cash intangible assets at a cost of R 18,877,212 as follows : R18,877,212 of follows as acost at assets intangible and equipment and property,plant acquired Trust the year 2018/2019 the During assets intangible and equipment PlantProperty, and The entity had no borrowing facillity as at 31 March 2019. 31 March at as facillity borrowing no had entity The General information Cash on hand and balances with banks with balances and hand on Cash Property / land and office accomodation construction costs construction accomodation office and /land Property Motor vehicles Motor Furniture and equipment Computer equipment equipment and machinery Agricultural Intangible assets - computer software/website design software/website -computer assets Intangible Short-term Short-term investments performance information governance 87 Ingonyama Trust Board 603,242 603,242 ------i n g on human resource own funds funds own yama management Total 183,862,095 2019 2019 179,957,443 18,583,177 3,904,652 18,877,212 t ru 256,506 37,529 st
b o - - - ard Ingonyama Trust | annual report 2018-19 report annual | Board financial 793 2,212,728 7,993 7,993 205,442,621 205,442,621 7,993 ------
PERFORMANCE own funds funds own 203,229,893 203,229,893 Total 2018 2018 1,052,400 4,979,122 2,144,252 1,713,752 63,763 4,955 -
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 40. Financial instruments Financial 40. The following balances are exposed to Interest rate risk rate Interest to exposed are balances following The The following balances are exposed to Credit risk Credit to exposed are balances following The risk Liquidity to exposed are balances following The instruments: financial of use its from risks following the to exposure Trust has The Trusts’s the business. of course normal the in arise risks liquidity and risk credit rate, interest currency, to Exposure 8. note in disclosed are instruments financial regarding policies Accounting The Bank Balances and Cash Cash and Balances Bank deposits fixed in Investments Certain other debts other Certain debtors /trade Consumer Trade and creditors Payables Risk Credit Risk Rate Interest Risk Liquidity i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 88 Ingonyama Trust Board 2,081,805 603,242 318,034 - - Total 2019 2019 179,957,443 24,257,948 54,971,188 3,904,652 1,934,919 Ingonyama Trust Board 1,656,013 147,049 7,993 - - Total 203,229,893 2018 2018 50,332,076 18,210,020 2,169,919 2,169,919 2,212,278 41. Contingent asset - Wesbank asset 41. Contingent Trust expenditure Board 42. and Board members' fees (excluding travel re-imbursement) (excluding fees travel members' Board charges Bank fees members' committee audit Internal refunded by Wesbank during the course of the year. the of course the by during Wesbank refunded was money The persons. by unknown accounts card ITB’s the petrol the of use unauthorised the by for Wesbank Trust Board Ingonyama the to due Monies Agricultural Project expenses Project Agricultural Advertisements Legal fees Insurance internal fees- Audit Depreciation/amortisation Computer fees expenses &general repairs Cleaning fees Audit Increase in provision for doubtful debts doubtful for provision in Increase expenses planning and Management tenure Land General information performance information governance 89 i n g on human resource yama management 2019 76,485,308 20,429,797 R 2,479,893 t 5,544,451 1,199.045 4,757,418 3,126,705 1,953,912 ru 1,428,117 326,336 639,450 497,864 104,883 423,952 62,891 st
b o ard - | annual report 2018-19 report annual | financial
PERFORMANCE 2018 66,491,438 5,208,876 5,208,876 R 16,160.410 4,160,522 1,216,063 1,216,063 1,667,026 3,113,207 3,113,207 626,978 1,117,034 210,000 210,000 453,820 325,149 327,754 59,933 59,933 64,943 52,347
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board 43. Irregular expenditure Irregular 43. Secretariat administration fees administration Secretariat printing and Stationery expenses vehicle Motor Rates and municipal charges - office accommodation -office charges municipal and Rates Bursaries - Funda Zulu Zulu -Funda Bursaries expenses Communication Workshops expenses Security Telephone Organogram - restructuring costs -restructuring Organogram travel) members Board (including expenses meeting and accomodation Travelling, Staff training Staff policies of maintenance and Review Closing Balance Closing Board by the condoned :Amount Less YearCurrent Balance Opening cards petrol of use fraudulent on Loss Accounting fees -GRAP fees Accounting assets of disposal on Loss assets infrastructure IT of Audit i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | 90 2019 26,538,905 (1,900,533) R 3,006,394 1,900,533 764,993 368,282 501,994 495,323 555,773 195,937 313,383 170,615 541,135 0 6 3 , 5 3 22,500 ------2018 21,969,634 R 2,692,277 3,421,039 3,421,039 644,604 644,604 234,048 234,048 708,796 539,704 322,070 399,821 399,821 513,650 225,792 43,230 43,230 59,933 12,711 ------human resource General information performance information governance financial PERFORMANCE management
Notes Approved Shift of funds Final Budget Actual Variance Actual Budget 2019 & Additional 2019 2019 2019 2018 funds Revenue
Leases (including straight lining income) 11 & 35 - - - 76,057,993 76,057,993 65,419,229 Lease income actual 36,840,821 - 36,840,821 38,749,846 1,909,025 31,072,141
Net rental revenue 36,840,821 - 36,840,821 114,807,839 77,967,018 96,491,370
Contractual royalty revenue from mining activities on 6.2.2/45.2 Ingonyama Trust land 1,030,565 - 1,030,565 1,170,437 139,872 794,157 Interest on Bank and Short term investments 19,271,220 - 19,271,220 14,285,384 (4,985,836) 15,092,894 Servitude compensation and other income 158,700,000 - 158,700,000 1,678,213 (157,021,787) 410,498 Interest on debtors overdue accounts 865,100 - 865,100 762,268 (102,832) 750,694 From accumulated fund - 18,588,261 18,588,261 - - -
Total Revenue 216,707,706 18,588,261 235,295,967 132,704,141 (84,003,565) 113,539,613
Revenue available for Trust and Board use 216,707,706 18,588,261 235,295,967 132,704,141 (84,003,565) 113,539,613
get nt nt year e Less portion for Board and Trust use 139,025,052 - 139,025,052 55,963,412 83,061,640 46,646,504 019 m 2 bud e
Advertisements 424,181 - 424,181 423,952 229 327,754 t a of
Bank charges 67,005 - 67,005 46,421 20,584 49,112 march amounts
1 1 3 al und - st - und
Cleaning repairs & general expenses 700,000 83,815 783,815 783,815 - 662,783 arison f
Depreciation / amortisation 24 4,086,860 - 4,086,860 3,118,238 968,622 3,103,269 actu
ended comp
trust trust
Legal fees 18,000,000 (4,563,246) 13,436,754 5,544,451 7,892,303 5,208,876 of and Agricultural project expenses 2,000,000 - 2,000,000 1,199,045 800,955 453,820 Land tenure management and planning expenses 17,000,000 3,429,797 20,429,797 20,429,797 - 1,667,026 Increase in provision for doubful debts 844,000 - 844,000 2,479,893 (1,635,893) 16,160,410
ingonyama trust board | annual report 2018 - 19 91 Notes Approved Shift of funds Final Budget Actual Variance Actual Budget 2019 & Additional 2019 2019 2019 2018 funds Workshops 4,712,806 - 4,712,806 495,323 4,217,483 2,692,277 Communication Expenses 348,150 - 348,150 195,937 152,213 234,048 Provision of rates payable to municipalities for Ingonyama Trust land 69,032,654 - 69,032,654 - 69,032,654 - Review and maintenance of policies 450,000 - 450,000 22,500 427,500 - Computer fees 516,950 - 516,950 62,334 454,616 244,072 Asset tagging 5,275 - 5,275 - 5,275 - Motor vehicle expenses 100,000 - 100,000 7,451 92,549 - Audit of Ingonyama Trust infrastructure assets - - - - - 399,821 Loss on disposal of assets - - - - - 43,110 Bursaries - Funda Zulu 600,000 - 600,000 - 600,000 12,711 Insurance 672,000 - 672,000 639,450 32,550 626,978 Ingonyama Trust payment in terms of Financial regulation 10 (2) of the Ingonyama Trust Act 47 5,664,615 - 5,664,615 5,664,615 - 4,812,038 Ingonyama Trust payment for re - imbursement of Trust
expenses 13,800,556 1,049,634 14,850,190 14,850,190 - 9,948,399 get nt nt year e
019 m 2 bud Available funds transferred to Accumulated Fund 77,682,654 18,588,261 96,270,915 76,740,729 (167,065,205) 66,893,109 e t a of
march amounts
1 1 Capital expenditure 19,200,000 18,588,261 37,788,261 (18,877,212) 18,911,049 (4,979,122) 3 al und - st - und arison f actu
ended comp
Total 58,482,654 - 58,482,654 57,863,517 (148,154,156) 61,913,987 trust trust of and
ingonyama trust board | annual report 2018 - 19 92 human resource General information performance information governance financial PERFORMANCE management
Notes Approved Shift of Funding in Final Budget Actual Variance Actual baseline funds addition to 2019 2019 2018 Budget baseline
Revenue
Transfer payments received 20,871,000 - (522,000) 20,349,000 20,349,000 - 19,727,000
Ingonyama Trust payment in terms of Fnancial regulation 10 (2) of the Ingonyama Trust Act 47 5,664,615 - - 5,664,615 5,664,615 - 4,812,038 Ingonyama Trust Payment for re - imbursement of Trust expenses 13,800,556 - 1,049,634 14,850,190 14,850,190 - 9,948,399 Interest on bank account 95,659 - 17,304 112,963 112,963 - 154,531
Recovery of funds on fraudulent use of petrol cards - - 59,933 59,933 59,933 - -
Total Revenue 40,431,830 - 604,871 41,036,701 41,036,701 - 34,641,968
Total Expenditure 40,431,830 - 604,871 41,036,701 41,036,701 - 34,605,371
Bank charges 16,385 85 - 16,470 16,470 - 15,831
Board members' fees 29 4,078,435 678,983 - 4,757,418 4,757,418 - 4,160,522
Motor vehicle expenses 268,605 92,226 - 360,831 360,831 - 322,070 and of
nt nt
Secretariat administration fees 28,674,996 (2,740,962) 604,871 26,538,905 26,538,905 - 21,969,634 get e m transfer
e bud / t Audit Fees external 798,483 1,155,429 - 1,953,912 1,953,912 - 1,117,034 a amounts of
- current 798,483 (506,174) - 292,309 292,309 - - al nt - st - nt e arison actu
- previous years - 1,661,603 - 1,661,603 1,661,603 - 1,117,034 ym a p departmental Internal Audit Committee members' fees 19,236 85,647 - 104,883 104,883 - 52,347 comp
Computer software/licencing and maintenance 300,000 (35,998) - 264,002 264,002 - 81,077
Loss on disposal of assets ------120
ingonyama trust board | annual report 2018 - 19 93 Notes Approved Shift of Funding in Final Budget Actual 2019 Variance 2019 Actual 2018 baseline funds addition to Budget baseline Depreciation / amortisation of assets 24 4,335 4,132 - 8,467 8,467 - 9,938
Stationery & printing 661,573 (105,800) - 555,773 555,773 - 644,604
Travel, accomodation & meeting expenses 2,118,387 888,007 - 3,006,394 3,006,394 - 3,421,039
Telephone 276,000 37,383 - 313,383 313,383 - 225,792
Security expenses 732,000 32,993 - 764,993 764,993 - 708,796
Cleaning repairs and general expenses 793,850 (149,548) - 644,302 644,302 - 553,280
Electricity and water 660,000 (158,006) - 501,994 501,994 - 513,650
Internal Audit fees 269,295 228,569 - 497,864 497,864 - 210.000
Organogram - restructuring cost - 541,135 - 541,135 541,135 - 539,704
Rent - Ulundi OFFice 180,000 (180,000) - - - - -
Loss of fraudulent use of petrol cards ------59,933
Accounting fees - GRAP - 170,615 - 170,615 170,615 - - and of
nt nt
get Staff training 580,250 (544,890) - 35,360 35,360 - - e m transfer
e bud / t
a amounts of
al Retained earnings for the year (non -cash) ------36,597 nt - st - nt e arison actu ym a p departmental comp Note : This Statement reflects Transfer Payments received and expenditure incurred thereon. The Transfer payment received from the Department is not sufficient to defray all operating expenditure of the Trust, therefore the Trust utilised its own income as reflected on page 96 to pay for expenses.
ingonyama trust board | annual report 2018 - 19 94 human resource General information performance information governance financial PERFORMANCE management
Notes R R 2019 2018 Revenue
Lease income actual 11 & 35 38,749,846 31,072,141
Leases - including straight lining income 76,057,993 65,419,229
Net rental revenue 114,807,839 96,491,370
Royalty revenue 1,170,437 794,157
Other Revenue 57,762,566 50,896,054
Transfer payment 20,349,000 19,727,000
Ingonyama Trust payment in terms of Financial regulation 10 (2) of the Ingonyama Trust Act 5,664,615 4,812,038 Ingonyama Trust payment for re-imbursement of Trust expenses 14,850,190 9,948,399
Servitude compensation and other 1,678,213 410,498
Recovery of funds on fraudulent use of petrol cards 59,933 -
Interest on bank and short term investments 14,398,347 15,247,425
Interest on debtors overdue accounts 762,268 750,694 of
udited Total Revenue 173,740,842 148,181,581 una
atement performance st
Total Expenditure 97,000,113 81,251,875
Agricultural project expenses 1,199,045 453,820 ailed det financial Advertisements 423,952 327,754 consolidated
ingonyama trust board | annual report 2018 - 19 95 Notes R R 2019 2018 Audit fees 1,953,912 1,117,034
- current 292,309 -
- previous year 1,661,603 1,117,034
Internal audit committee members’ fees 104,883 52,347
Bank charges 62,891 64,943
Board members’ fees (excluding travel re-imbursement) 29 4,757,418 4,160,522
Cleaning repairs & general expenses 1,428,117 1,216,063
Computer fees 326,336 325,149
Depreciation / amortisation 24 3,126,705 3,113,207
Audit fees - internal 497,864 210,000
Insurance 639,450 626,978
Legal fees 5,544,451 5,208,876
of Land tenure management and planning expenses 20,429,797 1,667,026 udited Increase in provision for doubtful debts 2,479,893 16,160,410 una
atement performance
st Motor vehicle expenses 368,282 322,070
Stationery and printing 555,773 644,604 ailed det financial Secretariat administration fees consolidated 26,538,905 21,969,634
Rates and municipal charges - office accomodation 501,994 513,650
ingonyama trust board | annual report 2018 - 19 96 human resource General information performance information governance financial PERFORMANCE management
Notes R R 2019 2018 Review and maintenance of policies 22,500 -
Staff training 35,360 -
Travelling, accomodation and meeting expenses ( including Board members travel) 3,006,394 3,421,039 Organogram - restructuring costs 541,135 539,704
Telephone 313,383 225,792
Security expenses 764,993 708,796
Workshops 495,323 2,692,277
Communication expenses 195,937 234,048
Bursaries - Funda Zulu - 12,711
Ingonyama Trust payment in terms of Financial regulation 10 (2) of the Ingonyama Trust Act 47 5,664,615 4,812,038 Ingonyama Trust payment for re-imbursement of Trust expenses 14,850,190 9,948,399
Audit of IT infrastructure assets - 399,821 of
Loss on disposal of assets - 43,230 udited una
Accounting fees - GRAP 170,615 - atement performance st
Loss on fraudulent use of petrol cards - 59,933 ailed det financial consolidated Available funds transferred to accumulated fund 76,740,729 66,929,706
ingonyama trust board | annual report 2018 - 19 97 NOTES TO THE annual financial statements
ingonyama trust board 45.2 RoyaltyIncome 45.1 LandV 45. Additional Notes 44. Reasonsforvariances-IngonyamaTrust (Page96)
No 49 2008, allows for two kinds of royalties, namely : namely royalties, of kinds two for No 49 allows 2008, Act , Act Amendment Development Resources petroleum and Mineral The reasons: following the Trust for Ingonyama year previous the of of 17 to assets the apply not would GRAP being reason look, qualifications a fresh requires the year previous the in that note We and needs organisational the of future. the in review a results better obtain to processes address and to capacity Organogram staff the of of issue review the complete a undertaking is The Board targets. annual planned of achievement non- the by evidenced is This . Trust the of programs certain in underspending general a been has There 4) 3) 5) 2) 1) Treasury Regulations 14. Regulations Treasury by is regulated which Trustof the property is part in land question The existence. in At of the the of time land 17 acquisition on 1994, GRAP 24 was April not As a result the value is disclosed in the financial statements for the the for statements years. previous financial and review under year the in disclosed is value the result a As acceptable method. the that view the of Trustof Ingonyama value is land is an fair the to used determine method Board Trust Ingonyama the professional report, the and valuers valuation municipal the both on then relying land, of value fair a determine to valuation of method recognised a is valuation municipal The Trust. Ingonyama of that including valuations do as land elsewhere, municipalities undertake indicated Furthermore, in land the land. of subject the of value afair at samples arrive to order take to valuers land professional of services I n any event notwithstanding these, the Board had engaged the the engaged had Board the these, notwithstanding event any n aluation i n g on yama
t ru st
b o
ard | annual report 2018 -19 report annual |
98 royalties. state and royalties contractual following :-following on the by minerals informed is argument the The expropriated. of were land Trust Ingonyama notion the challenged further Board were The Mineral Resources. meetings of year, Department the financial and Board Trust previous Ingonyama the the between held of audit the to Subsequent thereof. beneficiaries the of benefit the Trust for Ingonyama royalties the all to due are Treasury National Therefore, the of office the Trust. through state the Ingonyama to paid the in vested remain therefore and rightfully expropriated not were Trust, Ingonyama the to belonging by expropriated the State. The Ingonyama Trust contended that the royalties T is matter subject the as far as Africa concerned. South of General - Auditor the and T 2) 1) he view of the Auditor - General of South Africa is that all royalties were were royalties all that is Africa South of General - Auditor the of view he Board Trust Ingonyama the between debate ongoing an been has here audit team. audit the to provided been has Resources Mineral of Department the and Board Trust Ingonyama the between communication extent, this To detail a upon Treasury National the provided. being plan business from accessed be can These has expropriation Trust,no Ingonyama taken place and that the has of state the taken custodianship minerals. the to pertaining those circumstances like the that concluded judgement court constitutional A no because Constitution not the :- following the on based resolution to was close be to appears of it 25 expropriation section sustained compensation was paid to the Ingonyama Trust. The a matter however with was accordance there in if event any In cannot state the therefore itself. itself,since expropriate and expropriated have state not the could of state creature the a being Trust Ingonyama The
of theIngonyamaTrust Act. 47. Ingonyama Trust payment in terms of Financial regulation 10 (2) Reform 46.TransferPayment - Department of Rural Development & Land Ingonyama Trust has paid an amount of R 5.6m for the operating expenditure expenditure operating the for 5.6m R of income. lease lining amount an the , paid has straight excluding Trust income Ingonyama the 10is Act % of which Board the of Trust Trust Ingonyama the of (2) 10 Ingonyama regulation financial of terms In the of cost year. current the for R20.34m administration received of been has amount An Board. the bear shall Reform Land and Development In terms of Section 4 of the Ingonyama Trust Act, the Department of Rural General information performance information governance 99 i n g on human resource yama management t ru st
b o ard | annual report 2018-19 report annual | financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board NOTES TO THE annual financial statements
ingonyama trust board i n g on yama t ru st
b o ard | annual report 2018 -19 report annual | NOTES 100 General information performance information NOTES governance 101 i n g on human resource yama management t ru st
b o ard | annual report 2018-19 report annual | financial
PERFORMANCE
NOTES TO THE annual financial statements
ingonyama trust board
65 Trelawney Road Southgate Pietermaritzburg 3201
033 846 9900 033 386 2528