INGONYAMA TRUST BOARD’S 2ND AND 3RD QUARTER PERFORMANCE AND FINANCIAL REPORT: 2015 – 2016 FINANCIAL YEAR PRESENTATION TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM DATE : 17 FEBRUARY 2016 2019/05/07

CONTENTS Introduction Overall Programme Performance Programme 1 : Administration Programme 2 : Land Management Programme 3 : Rural Development Programme 4 : Traditional Council Support Overall Financial Performance Educational Awards Accounting Authority meetings Conclusion 2019/05/07

INTRODUCTION The presentation covers the organisational programme performance in line with the four (4) programmes of the Ingonyama Trust Board Performance recorded during the period under review is compared against targets set in the 2015 – 2016 Annual Performance Plan (APP) 2019/05/07

PROGRAMME PERFORMANCE 2019/05/07

PROGRAMME 1 : ADMINISTRATION Strategic Objective Performance Indicator Annual Target 2015/16 2nd Quarter Target 2nd Quarter Results 3rd Quarter Target 3rd Quarter Results Reason for variance Corrective action To ensure that efficient internal resource management is aligned to legislative requirements Number of policies approved by the Board 5 1 No Variance Not applicable Percentage of all moveable assets to be recorded in the asset register 100% 90% Balance of the tractors purchased still in storage awaiting distribution Plan in place to visit storage facility in order to record tractors Percentage of vacant positions to be filled 100% (3) 88.8% 66.6% - 2nd Quarter focus was of filling the position of Head of Secretariat in July 2015; - Positions finalised in 3rd Quarter for Deputy Manager Administration and Assistant Registry Clerk - 2nd Quarter priority was the filling of the (3) vacant posts which were finalised in 3rd Quarter for Deputy Manager Administration, Assistant Registry Clerk. HOD Real Estate position interviews held awaiting finalisation in 4th Quarter. 2019/05/07

PROGRAMME 1 : ADMINISTRATION (contd) Strategic Objective Performance Indicator Annual Target 2015/16 2nd Quarter Target 2nd Quarter Results 3rd Quarter Target 3rd Quarter Results Reason for variance Corrective action To ensure that efficient internal resource management is aligned to legislative requirements Percentage of performance agreements signed 100% 94.4% 56 out of 57 Employees signed Performance Agreements during the 2nd Quarter and the balance was to be finalised during 3rd Quarter 1 Employee finalised their performance agreements during the 3rd Quarter Monthly Backup of exchange / file server properly completed 12 3 No Variance Not Applicable Bi annual check of software compliance conducted 2 1 Not applicable Provision of skills development to employees to improve service delivery Number of training programmes conducted 10   Priority during the 2nd Quarter was given to Performance Agreements and Personal Development Plans Revised plan being finalised based on current challenges on the ground 2019/05/07

PROGRAMME 1 : ADMINISTRATION (contd) Strategic Objective Performance Indicator Annual Target 2015/16 2nd Quarter Target 2nd Quarter Results 3rd Quarter Target 3rd Quarter Results Reason for variance Corrective action To improve customer relationship Payment of valid invoices paid within 30 days of receipt in finance 100% No Variance Not Applicable Communicati on Strategy approved 1 Not applicable Number of Memorandum of Agreements with Traditional Councils(TC’s) approved 4 - During the 2nd Quarter the translation of the MOU was completed and a plan for engagement of amaKhosi developed; - During the 3rd Quarter the Engagement with Amakhosi was done and two TCs indicated their willingness to sign which are Qiko and Bhidla TCs; - Qiko TC has signed and Bhidla TC is still outstanding Follow up to be done with Bhidla TC for the signed MOU Number of monthly communicatio n reports approved by the Board 12 3 2019/05/07

PROGRAMME 2 : LAND MANAGEMENT Strategic Objective Performance Indicator Annual Target 2015/16 2nd Quarter Target 2nd Quarter Results 3rd Quarter Target 3rd Quarter Results Reason for variance Corrective action Provision of secured tenure rights to facilitate development on Ingonyama Trust land Number of land tenure rights approved by the Board 1300 325 106 49 - During the 2nd Quarter there were 2 meetings held in which 162 tenure applications were approved and 106 applications signed by both parties - During the 3rd Quarter there was a requirement of informed consent on residential leases - Also in the 3rd Quarter the reviews of rentals charged on commercial and agricultural leases were done - To Engage and educate the communities on residential leases for informed consent - Finalisation of the rental policy and development of a replacement tool for the residential leases To maintain an intergrated and comprehensive land tenure administration system (database of tenure rights) Quarterly update of land holdings register 4 1 No Variance Not applicable 2019/05/07

PROGRAMME 2 : LAND MANAGEMENT (contd) Strategic Objective Performance Indicator Annual Target 2015/16 2nd Quarter Target 2nd Quarter Results 3rd Quarter Target 3rd Quarter Results Reason for variance Corrective action Making Trust land available for infrastructure development Number of MOUs and planning and development agreements approved by the Board 4 1 - During the 2nd Quarter a Draft MOU was developed between the ITB and Newcastle Local Municipality feedback was not received - Follow up with Newcastle Local Municipality - Finalisation of the report by consultants to enable MOU negotiation Prevention and monitoring of illegal occupation of Trust land Number of legal interventions undertaken by the Board 3 - During the 2nd Quarter three areas were threatened with by the illegal occupation of land which as Mathonzi, Gezinsila and Fynn - A letter of demand was sent to the illegal occupier under the Macambini TC Not applicable 2019/05/07

PROGRAMME 3 : RURAL DEVELOPMENT Strategic Objective Performance Indicator Annual Target 2015/16 2nd Quarter Target 2nd Quarter Results 3rd Quarter Target 3rd Quarter Results Reason for variance Corrective action Provide support to beneficiary communities to improve food security Number of agricultural projects approved by the Board 5 1 4 - During the 2nd Quarter there were four (4) agricultural projects which were implemented - These projects were carried over to the 3rd Quarter Not applicable To facilitate economic development (industry and rural enterprise establishment) Develop a strategy on economic development Terms of reference drafted prioritised for implementation in 4th Quarter Number of partnership agreements approved by the Board - During the 2nd Quarter work was in progress on identification of relevant partnerships - During the 3rd Quarter the identified partners had not come on board Secretariat to continue and pursue the potential partners 2019/05/07

PROGRAMME 3 : RURAL DEVELOPMENT (contd) Strategic Objective Performance Indicator Annual Target 2015/16 2nd Quarter Target 2nd Quarter Results 3rd Quarter Target 3rd Quarter Results Reason for variance Corrective action To identify strategically located land to be utilised for high impact commercial ventures Number of commercial high impact projects approved by the Board 4 1 3 It was identified that the indicator was incorrectly written. A proposed amendment to the indicator to read as Land with high commercial impact identified and approved by the Board Land has been identified in 3 areas (Newcastle, Nyokeni Precinct, Mpophomeni) and is currently being packaged 2019/05/07

PROGRAMME 4 : TRADITIONAL COUNCIL SUPPORT Strategic Objective Performance Indicator Annual Target 2015/16 2nd Quarter Target 2nd Quarter Results 3rd Quarter Target 3rd Quarter Results Reason for variance Corrective action Provide training to Traditional Communities in skills development and capacity building programs Number of traditional councils trained 45 11 9 - During the 2nd Quarter the training programme was reviewed - During the 3rd Quarter the availability of Traditional Councils was a challenge - The results of the review of the training programme in the 2nd Quarter resulted in the development of a training plan for implementation in the 3rd Quarter - The variance for the training programme to be catered in the 4th Quarter to cover the shortfall in performance Facilitate socio – economic investment to communities living on Trust land Number of educational awards granted 100 25 20 2 - During the 2nd Quarter Tembe TC submitted bursary requests - During the 3rd Quarter only two requests were received by the Board Influx of requests expected to be received during the 4th Quarter as a result of school opening for 2016 academic year 2019/05/07

FINANCIAL PERFORMANCE 2019/05/07

2nd and 3rd QUARTER EXPENDITURE 2015/2016 EXPENDITURE PER PROGRAMME Item Final Budget 2nd Quarter Spending 3rd Quarter Spending Spending to the end of 3rd Quarter Percentage of Total Budget Spent in the 3rd Quarter Mitigation plan on under expenditure R % ADMINISTRATION 59 089 913.97 8 823 970.69 8 339 099.42 23 635 127.47 40.00 See Note 1 LAND MANAGEMENT 2 785 900.05 493 696.38 582 527.70 1 080 128.53 38.77 See Note 2 RURAL DEVELOPMENT 9 000 000.00 34 391.39 963 367.43 6 290 394.82 69.89 See Note 3 TRADITIONAL COUNCIL SUPPORT 16 766 609.98 926 802.50 997 842.44 3 967 283.25 23.66 See Note 4 87 642 424.00 10 278 860.96 10 882 836.99 34 972 934.07 39.90 2019/05/07

2nd and 3rd QUARTER EXPENDITURE 2015/2016 EXPENDITURE PER ECONOMIC CLASSIFICATION Item Final Budget 2nd Quarter Spending 3rd Quarter Spending Spending to the end of 3rd Quarter Percentage of Total Budget Spent in the 3rd Quarter R % COMPENSATION OF EMPLOYEES 18 896 704.00 4 685 194.12 4 779 782.99 13 305 398.43 70.41 GOODS AND SERVICES 43 459 544.00 5 300 355.33 5 581 257.88 16 541 609.85 38.06 RENT ON LAND - ULUNDI OFFICE 210 000.00 54 450.00 163 350.00 77.79 BUILDING AND OTHER FIXED STRUCTURES 18 000 000.00 - 113 903.00 150 328.00 0.84 MACHINERY, EQUIPMENT & VEHICLES 6 576 176.00 174 085.51 326 637.70 4 698 016.37 71.44 SOFTWARE AND INTANGIBLE ASSETS 500 000.00 64 776.00 26 805.42 114 231.42 22.85 87 642 424.00 10 278 860.96 10 882 836.99 34 972 934.07 39.90 2019/05/07

NOTES ON EXPENDITURE The total expenditure for Quarter 2 and Quarter 3 amounted to R10.3m and R10.8m respectively. 39.90% of the total budget was spent to the end of Quarter 3 (including capital expenditure) 70.41% of the total salary budget was utilised up to the end of the 3rd quarter. 38.06% of the total goods and services budget was utilised up to the end of the 3rd quarter. 2019/05/07

MITIGATION PLAN Note 1 : Administration The filling of the vacancies for the Deputy manager administration, Real estate manager, Auxiliary clerk and the Business development specialist will result in further expenditure being incurred in quarter four. In excess of R 200 000.00 is committed for the 4th quarter for stakeholder /community engagements. It is also envisaged that funds will be utilised for the development of policies, organizational structure and job grading in the 4th quarter. Further audit costs will be incurred during the finalisation of the year end financial statements. 2019/05/07

MITIGATION PLAN (contd) Note 2 - Land management Funds will be utilised for the the land valuation exercise which is to commence in the 4th quarter Funds are to be utilised on training of traditional councils on land management Note 3 - Rural Development Irrigation systems are to be installed for the agricultural projects. Expenditure is to be incurred for completion of existing projects. Note 4 - Traditional Council Support The Board has appointed a Business development specialist who is working with Traditional Councils to draft business plans for the utilization of funds. The Board has set aside R 500 000.00 for bursaries to be paid in terms of the “Funda Zulu Bursary scheme”. 2019/05/07

SCHEDULE OF GOODS AND SERVICES Item 2nd Quarter Actual 3rd Quarter R Legal fees - other 435 033.84 509 773.72 Staff Training 4 600.00 11 655.70 Land Tenure Information System 5 421.60 6 297.70 Advertising and public awareness campaign 10 326.92 39 129.86 Bank Charges 19 659.48 22 808.84 Cleaning repairs & other expenses 188 081.74 210 398.16 Payments to community beneficiaries 926 802.50 997 842.44 Tenure Upgrade and finalisation of Settlement - 576 230.00 Projects launches and informative meetings 392 998.00 492 260.93 Workshop for Co - operation agreement 299 082.54 Workshops and road shows 189 192.24 HRM Strategy and Communication Strategy 10 247.62 Board Members Remuneration 712 384.33 582 074.38 2019/05/07

SCHEDULE OF GOODS AND SERVICES (contd) Item 2nd Quarter Actual 3rd Quarter R Agricultural Projects - Expenses 34 391.39 679 827.43 Insurance 117 681.07 112 533.16 Motor Vehicle Expenses 37 635.22 95 626.29 External Audit Fees 414 771.28 95 441.52 Internal Audit Committee Remuneration 1 508.28 4 579.02 Internal Audit Fees - 63 752.72 Computer Software/Licencing Fee 53 832.00 35 342.32 Stationery and Printing 189 725.50 133 192.49 Travel , Accommodation, Meetings 854 414.80 498 472.83 Electricity and Water 170 011.73 198 357.47 Security Expenses 135 869.75 140 619.96 Telephone/Data 96 683.50 75 040.94 5 300 355.33 5 581 257.88 2019/05/07

SCHEDULE OF REVENUE R % Item Actual income for the 2nd Quarter Actual income for the 3rd Quarter Cumulative to the end of 3rd Quarter Budget for the year Cumulative actual over budget percentage R % RENTAL INCOME R 4,671,235 R 2,976,129 R 21,574,980 R 17,642,621 122,29% SERVITUDES,REFUND ON LEGAL FEES AND OTHER R 86,404 R 763 786 R 1 ,006,636 R 352,650 285,45% INVESTMENT INCOME R 2,875,916 R 2,990,544 R 8,702,956 R 10,647,248 81,74% TOTAL INCOME EXCLUDING RESERVES AND TRANSFER PAYMENT R 7,633,555 R 6,730 459 R 31,284,572 R 28,642,519 109,22% TRANSFER PAYMENT R 5,721,000 R 5,050,000 R 16,887,000 R 18,069,000 93,46% RESERVES - R 40,930,905 00,00% TOTAL INCOME R 13,354,555 R 11,780 459 R 48,171 572 R 87,642,424 54,96% 2019/05/07

NOTES ON 2nd and 3rd QUARTER INCOME The total revenue generated for quarter 2 amounted to R7.6 million and for quarter 3 amounted to R6.7 million (excluding transfer payments). The accumulative income at the end of quarter 3 amounted to R31.2 million which exceeded the budget by 9.22%. 93.46% of the transfer payment was received up to the end of quarter 3. 2019/05/07

EDUCATIONAL AWARDS – Granted 2nd QUARTER Total Amount : R 120 000 No of Males No of Females Total 11 9 20 Name of Student Gender Field   NZ Thusi Female Bachelor of Public Admin University of Zululand SM Banda Male B.Com Business Management & Economics M Ndlazi SS Manzini B.Com Accounting NB Manzini Bachelor of Communication Science TN Zwane Bachelor of Education MM Khumalo SN Mahlangu Nursing KC Gumede L Mthembu N Thwala Science Foundation SN Gwala Bachelor of Law T Ngema Bachelor of Arts DM Shange LS Msweli SS Mageba Z Mkhumbuzi B.Com Banking NV Gumede KK Mathenjwa ML Mdluli 2019/05/07

EDUCATIONAL AWARDS – Granted 3rd QUARTER Total Amount Paid : R 20 000 No of Males No of Females Total 2 Name of Student Gender Field Institution Amount   L Ntanzi Female Bachelor of Education University of Zululand 10 000.00 LH Thango Bachelor of Law 2019/05/07

ACCOUNTING AUTHORITY MEETINGS MEETING TYPE/QUARTER EXECUTIVE COMMITTEE (EXCO) TENURE COMMITTEE BOARD QUARTER 2 22 July 30 July 14 August 18 September 13 August 25 August 25 September 29 September QUARTER 3 21 October 23 October 30 October 09 December 27 November 20 November 30 November 14 December 11 December 21 December 2019/05/07

Thank You 2019/05/07