INGONYAMA TRUST BOARD ANNUAL REPORT 2014 - 2015 BRIEFING TO THE SELECT COMMITTEE ON LAND AND MINERAL RESOURCES 17 MAY 2016 2019/05/24

PRESENTATION OUTLINE Background of the ITB Overview of the Ingonyama Trust Board Allocation, monitoring and reporting of grants Performance Report – Non financial Performance Report – Financial Auditor – General’s Report on performance (predetermined objectives) 2019/05/24

BACKGROUND Ingonyama Trust was established in 1994, in terms of the KwaZulu Ingonyama Trust Act, (Act No 3KZ of 1994), The mandate of the Trust was to hold land for “the benefit, material welfare and social well-being of the members of the tribes and communities” living on the land. The Act was amended in 1997 and the amendments came into effect in 1998, His Majesty the King Goodwill Zwelithini Zulu is the sole Trustee of the land. The Amendment Act provides, among other things, for the establishment of Ingonyama Trust Board to administer the affairs of the Trust and the Trust land. 2019/05/24

Mandate of ITB The Ingonyama Trust Board, “the Board” is a schedule 3A Public Entity reporting to the National Minister for Rural Development and Land Reform. Objective Optimal land management for the material benefit and social well-being of the communities living on Ingonyama Trust Land

LEGISLATIVE AND OTHER MANDATES Constitutional Mandates Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) The mandate of the Ingonyama Trust Board is derived from sections 25 and 27 of the Constitution. Section 25 (property clause) confirms the framework for the granting of tenure rights on land, and section 27 (health care, food, water and social security clause) confirms the framework for the provision of support to rural communities residing under Ingonyama Trust land. 2019/05/24

Legislative mandates The Ingonyama Trust Board obtains its legislative mandate as follows: Ingonyama Trust Act, 1994 (Act No. 3 KZ of 1994) as amended by Act 9 of 1997 The Ingonyama Trust was established in 1994 by the KwaZulu Ingonyama Trust Act, (Act No 3 of 1994) and the KwaZulu - Natal Ingonyama Trust Amendment Act No 9 of 1997. Section 2 (2) of the Ingonyama Trust Act establishes the framework for the administration of the land for the benefit of communities. Section 2 (5) of the Ingonyama Trust Act establishes the framework in which land rights are to be granted and at the same time protecting trust land. 2019/05/24

POLICY MANDATES All policies of the National government pertaining to land apply to Ingonyama Trust land. Policies like environmental affairs, water, and conservation equally apply on Ingonyama Trust land. Indigenous law practices and communal land act principles are applicable in land allotment. Therefore the Board as a matter of policy has advanced a practice that beneficiaries of this communal land should opt for a lease as a formal instrument of their right in a communal setup. 2019/05/24

THE BOARD 2019/05/24

BOARD COMMITTEES 2019/05/24 EXECUTIVE COMMITTEE The Executive Committee (EXCO) is chaired by the Chairperson or Vice Chairperson of the Board or any member elected in terms of Regulation 9 of the Administrative Regulations of Ingonyama Trust Board. The membership of this Committee consists of not less than two members of the Board. The powers and functions of this committee are as follows: • To deal with any matters specifically delegated to it by the Board, • To generally manage the Trust land in terms of the Act, Government policy and the Board’s policies between sittings of the Board, • To make recommendations to the Board on policies, procedures generally and in relation to specific cases. TENURE RIGHTS COMMITTEE The Tenure Rights Committee is chaired by the Chairperson or Vice Chairperson of the Board or any member elected in terms of Regulation 9 of the Administrative Regulations of Ingonyama Trust Board. The membership of this Committee consists of not less than two members of the Board. • To decide on behalf of the Board the granting or refusal of applications for any and all forms of tenure rights, • To make recommendations to the Board on land tenure matters. AUDIT COMMITTEE The Audit Committee reviewed the performance of the Board and the Secretariat to ensure that they complied with the PFMA, Financial Regulations, Treasury Regulations and other relevant pieces of legislation and directives. BID ADJUDICATION COMMITTEE During the period under review the Bid Adjudication Committee ensured that procurement is fair, equitable, transparent, competitive and cost-effective in accordance with the Supply Chain Management policy and the PFMA. 2019/05/24

THE ALLOCATION,MONITORING AND REPORTING OF GRANTS The Ingonyama Trust Board does not pay any grants, however receives a transfer payment from the Department of Rural Development and Land Reform. For 2014/2015 an amount of R 17.3 m was received and utilised. 2019/05/24

STRATEGIC PLAN PERFORMANCE REPORT STRATEGIC OBJECTIVES PERFORMANCE MEASURE INDICATOR TARGETED PERFORMANCE AUDITED PERFORMANCE VARIANCE Unlocking an enabling environment conducive to development on Trust land Number of tenure rights approved by the Board 1200 1100 -100 Number of land management projects approved by the Board 5 Effective and efficient asset management services Land Holding Register maintained on a quarterly basis 4 Provide Human Resources Management Number of HRM / Legal policies developed / reviewed -5 Support to Traditional Councils in capacity building programs Number of Traditional Council workshops held on land management issues 43 31 -12 2019/05/24

COMMENTS ON PERFORMANCE REPORT Number of Tenure rights approved by the Board As at 31 March 2015, there was a shortfall of 100 unsigned leases. These leases were subsequently signed by both parties. Number of HRM / Legal policies developed / reviewed The Board has identified relevant policies to be developed in line with the revised APP, the proposed organogram and current business environment. Number of Traditional Council workshops held on land management issues Due to limited capacity, one individual was employed to undertake this task , therefore only 31 Traditional Councils were attended to during the period under review. Currently the Real Estate section is also involved in the training of Traditional Councils to fast track this process. 2019/05/24

FINANCIAL PERFORMANCE – TRANSFER PAYMENT FUNDING 31/03/15   R  TRANSFER PAYMENT FUNDING 17 352 676 Current payments Compensation of employees 10 903 245 Goods and services 6 449 431 TOTAL EXPENDITURE FOR THE YEAR ( excluding depreciation) The total transfer payment funding received for 2014/2015 was utilized for the year. 2019/05/24

Summary Statement of Financial Position for the year ended 31 March 2015 2014 / 2015 2013 / 2014 Total Assets 436,750,659 373,181,304 Total Liabilities 308,841,774 262,388,379 Net Assets 127,908,885 110,792,925 Total Net Assets 5. 2019/05/24

SUMMARY – STATEMENT OF CONSOLIDATED FINANCIAL PERFORMANCE AS AT 31/03/15 Income   Rental Income 70 785 638 Finance Income 11 357 283 Royalty Revenue 898 581 Other Revenue (including transfer payment) 18 040 268 Total Revenue 101 081 770 Expenditure 83 965 810 SURPLUS FOR THE YEAR 17 115 960 2019/05/24

Cash flow Statement for the year Notes R 2014 / 2015 2013 / 2014 Net cash flow from operating activities 1 10,278,996 13,562,960 Net cash flow from investing activities (4,673,251) (6,315,113) Increase in cash and cash equivalents 2 __5,605,745 _7,247,847 Cash and Cash Equivalents at the end of the year 184,939,560 179,333,815 Notes:- There was a decrease in cash flow from operating activities due increase in operational expenditure. The Increase in cash and cash equivalents from 2013 / 2014 amounted to R5,6 m The decrease in cash flow from investing activities is due to the completion of major construction of office accommodation in the previous year and decrease in vehicle purchases. 2019/05/24

Compensation of employees 17 115 352 Goods and services 66 652 458 CONSOLIDATED FINANCIAL PERFORMANCE AS PER ECONOMIC CLASSIFICATION AT 31/03/15   R  Current payments Compensation of employees 17 115 352 Goods and services 66 652 458 Rent on land 198 000 83 965 810  Capital Expenditure 4 733 251 TOTAL EXPENDITURE FOR THE YEAR 88 699 061 2019/05/24

Operating expenditure trends Current year Total expenditure decreased by 22.72 % mainly due to decrease in the rates provision in 2014/2015. Compensation of employees increased by 17.18% . Rental is paid for the only satellite office at Ulundi. Goods and services includes general operating and administrative expenses (excluding employee cost). 2019/05/24

Employee cost to company 2019/05/24

Capital expenditure incurred at cost 2019/05/24

Capital Expenditure Trends Current year Capital expenditure is paid from income generated from trading activities ( not transfer payment) ITB purchased vehicle, furniture and equipment due to the increase in business activities. Software development for the database of leases undertaken. 2019/05/24

Total Revenue for the year 2014/2015 Note: The Percentage composition of the Total Revenue of R 101 081 770 is as follows : - - Rental Income = 70% - Other Revenue = 18.% ( including transfer payment) - Finance Income = 11% - Royalty Income = 1% 2019/05/24

Departmental Transfer Payments 2019/05/24

AUDITOR GENERAL’S REPORT ON PERFORMANCE INFORMATION The Auditor General did not identify any material findings on : The usefulness and reliability of the reported performance information for the unlocking an enabling environment conducive to development on Trust land, effective and efficient asset management services, provide human resource management and support to Traditional Council in capacity building objectives. 2019/05/24

Thank You 2019/05/24