ANNUAL 2012/ REPORT 2013 Your passport to international trade THE PERISHABLE PRODUCTS EXPORT CONTROL BOARD PPECB ANNUAL REPORT HANDLED WITH CARE / PAGE 2012/2013 FOR A SUSTAINABLE FUTURE 1 HAND LED WITH CARE PAGE 2 PPECB REGIONAL ZIMBABWE OFFICES LIMPOPO MOZAMBIQUE POLOKWANE BOTSWANA NELSPRUIT PRETORIA JOHANNESBURG MAPUTO NORTH WEST GAUTENG NAMIBIA FREE STATE UPINGTON KIMBERLEY BLOEMFONTEIN NORTHERN CAPE DURBAN EASTERN CAPE EAST LONDON WESTERN CAPE GEORGE CAPE TOWN PORT ELIZABETH PPECB ANNUAL REPORT HANDLED WITH CARE / PAGE 2012/2013 FOR A SUSTAINABLE FUTURE 3 Co 50 FINANCIAL STATEMENTS 50 / AUDIT COMMITTEE STATEMENT OF RESPONSIBILITY 52 / CFO’S REVIEW nt 55 / BOARD’S RESPONSIBILITIES AND APPROVAL 56 / REPORT OF THE INDEPENDENT AUDITORS 58 / DIRECTORS’ REPORT en 01 60 / STATEMENT OF FINANCIAL POSITION UPFRONT 61 MINISTER’S MESSAGE / 04 / STATEMENT OF FINANCIAL PERFORMANCE CHAIRMAN’S FOREWORD / 06 61 CEO’S FOREWORD / 08 / STATEMENT OF CHANGES IN NET ASSETS 62 / CASH FLOW STATEMENT ts 63 / ACCOUNTING POLICIES 66 / NOTES TO THE FINANCIAL STATEMENTS 12 GOVERNANCE AND ADMINISTRATIVE INFORMATION / 10 STRUCTURAL REALIGNMENT / 14 CORPORATE GOVERNANCE REPORT / 16 18 78 DIVISIONAL REPORTS 78 / APPENDIX / STATUTORY OPERATIONS: STRATEGIC PLAN & COASTAL REGION / 22 BUDGET 2014 – 2017 NORTHERN REGION / 29 102 / ANNEXURE A & B / SOUTHERN REGION / 31 OBJECTIVES AND FOOD SAFETY PROGRAMME / 36 TARGETS CORPORATE SERVICES / 39 112 / ANNEXURE C / HUMAN RESOURCES / 42 ORGANISATIONAL PERFORMANCE REPORT – 2012/2013 PAGE MINISTER’S 4 FOREWORD TINA JOEMATT-PETTERSON MINISTER’S 01 foreword Dear All is both reassuring and promises a brighter future for the organisation. We have faced a tough year in agriculture over the past year. From the farm worker’s Lastly, our engagements with the PPECB are strike that grasped the Western Cape and always fruitful. Stakeholder engagements other parts of the country, to the numerous have brought the PPECB’s mandate into challenges faced by producers. However, focus. This is in line with what the department not all has been doom and gloom. Statistics strives to achieve as stakeholders form the South Africa released results signifying job backbone of this administration. I would increases, including sustained jobs, in the like to wish PPECB well on the year ahead. agriculture sector in the first quarter of 2013. We are all together in the success of the This upward trend is both exciting and serves agriculture sector! as a motivation for us. Congratulations and all the best for the I am pleased with the Perishable Products coming year! Export Control Board’s (PPECB’s) success in its quest to provide quality certification and cold chain management services from the producers and exporters of perishable products. As part of the President’s Infrastructure Programme, named SiP 11, we are mandated STATISTICS SOUTH to find solutions to problems associated with AFRICA RELEASED creating the necessary support mechanism RESULTS SIGNIFYING and bottlenecks that hinder development in JOB INCREASES, the transportation of perishable products. I INCLUDING have had numerous, promising engagements with Transnet to look at innovative ways in SUSTAINED JOBS, IN which to solve the issues that are related to THE AGRICULTURE transporting perishable goods. SECTOR IN THE I would like to extend a warm thank you to FIRST QUARTER the PPECB Board for their dedicated service OF 2013. THIS during their tenure. The changes that the UPWARD TREND PPECB has introduced are key in ensuring IS BOTH EXCITING a sustainable future, as well as in delivering AND SERVES AS on the mandate given to them. The proposed A MOTIVATION changes to the PPEC Act and the APS Act FOR US. will further make the PPECB sustainable. This PPECB ANNUAL REPORT HANDLED WITH CARE / PAGE 2012/2013 FOR A SUSTAINABLE FUTURE 5 THE JOURNEY STARTS HERE... PAGE CHAIRMAN’s 6 FOREWORD 02LOUIS VORSTER Chairman’s foreword The PPECB Board members and the emphasise this business philosophy, DAFF the 2012-13 financial year, the PPECB re- executive management team implemented cited our Board’s commendable decision to ported a shortfall of R1.2 million against important changes during 2012-13 in an exit the business of competing in the private a budgeted shortfall of R4 million. This im- effort to fulfil stakeholder expectations. sector over third-party certifications. provement in the nett result was achieved At this point, it is appropriate to make early The message from National Treasury has through significant savings in expenditure, reference to the National Development Plan also been clear: ‘As a state-owned enter- and a marginal improvement in income from (NDP) – the document endorsed and led by prise, the PPECB should be lean and mean, statutory services. Our income of R195.1 Parliament that outlines how South Africa and should manage its finances year-on- million was 2% higher than in the previous as a country will successfully reach 2030. year towards a break-even scenario’. year, and expenditure of R196.3 million was The NDP places considerable emphasis on R8.6 million below budget. The changes that the PPECB has imple- service delivery, particularly for public sec- mented over the last 12 months in response Looking at the priorities ahead, the Board tor organisations. In this regard, the PPECB to stakeholder feedback are seen as very has earmarked R5.4 million of the accumu- is no exception. Service delivery is a basic necessary to the future sustainability of the lated net assets to invest in the upgrade of requirement of our paying clients – and it re- organisation. These changes included a technology and the introduction of mobile mains a key factor in their international com- realignment of the management structure, technology. This investment should enable petitiveness. largely to achieve quicker response times in the PPECB to timeously deliver more accu- Quite understandably, therefore, stakeholder the company. The changes could not have rate statistical information to its stakeholders, engagements during 2012-13 brought the been comfortable for many PPECB employ- and enjoy improved operational efficiencies PPECB’s mandate into sharp focus. Our ees. It is particularly pleasing, therefore, to over the medium term. customer industries articulated what they hear of how positively so many of our people There is still much to be done at the PPECB. require from our organisation as follows: to responded to these tough challenges. I am As the outgoing Chairman and a PPECB enhance the credibility of the South African confident that those who have stayed the Board member for many years, I am hugely export certificate; optimise cold chain integ- course will be well rewarded for their ability optimistic that the organisation can once rity; prioritise food safety; and provide intelli- to adapt to new circumstances. again play a meaningful role among the in- gent information. The persistently tough eco- The PPECB has worked tirelessly with dustries it serves. nomic climate has brought about significant DAFF’s legal team to amend the two exist- Finally, I would like to extend my personal market changes, and these changes have ing Acts that govern our organisation’s man- gratitude to the Minister, the members of the put substantial financial pressure on the date: the Perishable Products Export Control Agricultural Portfolio Committee, the PPECB PPECB’s clients. For these reasons, the De- (PPEC) Act and the Agricultural Product Board members and the PPECB executive partment of Agriculture, Forestry and Fisher- Standard (APS) Act. When these revised team for their guidance and support over the ies (DAFF) and the PPECB will continue to Acts have been passed through Parliament, years. make a determined effort to meet their cus- they will modernise the PPECB’s business, tomers’ requirements – and to deliver on their As a proud customer, I will be watching with and the organisation will be better positioned expectations. interest as you collectively steer this organi- to serve its customers in a rapidly changing sation to great heights. DAFF has made it patently clear this year in commercial environment. which space the PPECB should be operat- The financial health of the PPECB is sta- ing. It did so by reiterating the need for the Louis Vorster ble. It ended the year with total assets of PPECB to stick to its statutory mandate when Chairman, PPECB R125.7 million, which exceeded its liabili- operating in a monopolistic environment. To ties of R33.4 million by R92.3 million. For PPECB ANNUAL REPORT HANDLED WITH CARE / PAGE 2012/2013 FOR A SUSTAINABLE FUTURE 7 IN PREPARATION FOR THE FUTURE, THE PPECB WILL MAINTAIN ITS FOCUS ON MEETING THE NEEDS OF ALL STAKEHOLDERS THROUGH SUPERIOR SERVICE DELIVERY AND EFFICIENT STEWARDSHIP OF RESOURCES. PAGE CEO’s 8 FOREWORD STUART SYMINGTON CEO’s 03 foreword Our greatest asset is our people. That is during the last financial year was how PPECB where we concentrated our efforts during employees have adapted to change – and 2012-13. lots of it. Indeed, a multitude of changes has swept our organisation: a new CEO arrived Therefore, let me immediately commend the and other executives departed; one divi- PPECB’s Human Resources (HR) team for sion closed and another was absorbed; HR the energy they injected into their portfo- personnel were deployed in the field and we lio’s initiatives. Under some very trying cir- reorganised our structures; violent strikes cumstances, they bedded down a number broke out on our customers’ premises and of remarkable projects that are now paying the PPCEB was unionised; performance handsome dividends. Put simply: they went incentive bonuses underwent wholesale the extra mile − and that’s what it’s all about. revision; citrus black spot loomed; and the sudden changes in the standard operation Triple play procedure surrounding the issuing of export During this watershed year, the PPECB family certificates raised far-reaching implications. had to concentrate on three important philoso- The only constant in the world today is phies.