1. 2016/17 DRDLR Annual Financial Statement Presentation
Presentation to the Portfolio Committee on Rural Development and Land Reform
4 October 2017
2016/17 DRDLR Annual Financial Statement Presentation

2. Table of Contents Introduction Financial Statements Analysis
Agricultural Land Holding Account (ALHA)
Deeds Registration Trading Account 2

3. THANK YOU

4. Introduction Unqualified Audit Opinion 2016/17 2015/16
Management Report
Unqualified Audit Opinion
2016/17
2015/16
Accounting Policies
The financial statements have been prepared in accordance with policies, which have been applied consistently in all material aspects, unless otherwise indicated.
Where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the financial statements and to comply with the statutory requirements of the PFMA and Treasury Regulations issued in terms of PFMA and DORA 4

5. Financial Statement Analysis
Financial Performance: Revenue
Financial Performance: Expenditure per programme
Expenditure amounted to R bil or 99.4% leaving R57.3 mil unspent in 2016/17 and R9.118 bil or 99.1% leaving R79.3 mil unspent in 2015/16.
Unspent funds were mainly due to vacancies
Increased expenditure was mainly due to the implementation of more land claims settlement agreements received.
Total Revenue of R bil and R9.288 bil for 2016/17 and 2015/16 respectively included voted funds, departmental revenue and aid assistance;
The department’s revenue increased from R mil in 2015/16 to R89,8 mil in 2016/ This recorded actual increase of R35,2 mil. 5

6. Financial Statement Analysis Financial Performance: Expenditure per Econ class
Expenditure was mainly on; Compensation of employees to cater for filled posts; Goods and Services such as computer services, office accommodation charges, travel and subsistence, consultants and training and development; Transfers and subsidies such as departmental agencies and accounts, Provincial and municipalities and Non-profit institutions; Payments for capital assets such as Land and subsoil assets, Buildings and other fixed structures and machinery and Equipment; and Payments for financial assets
Total surplus to be surrendered:
2016/17: R57.3 mil /16: R79.3 mil
Unspent funds were mainly due to vacancies 6

7. 2016/17 2015/16 R2.678 bil for Land claims R2.020 bil for Land claims
Financial Performance: per priority
R2.678 bil for Land claims
2015/16 Total : R6.942 bil
R2.020 bil for Land claims
2016/17 Total : R7.331 bil
R1.607 bil for Support services such as office accomm
R1.337 bil for Support services e.g. office accomm
R881 mil for Land acquisition
R1.007 bil for Land acquisition
2016/17
2015/16
R782.4 mil for Land reform/Recap
R1.034 bil for Land reform/Recap
R660 mil
for RID
R732.1 mil
for RID
R372.6 mil
for REID
R527.7 mil
for REID
R349.4 mil
for NARYSEC
R274.3 mil
for NARYSEC 7

8. Financial Statement Analysis
Financial position
Changes in Net Assets
Total Assets of R340.4 mil in 2016/17 and R mil in 2015/16 mainly include PMG, Restitution balances, and interdepartmental claims (ALHA/Deeds);
Total Liabilities of R326.9 mil in 2016/17 and R mil in 2015/16 include unclaimed Restitution balances;
Net Assets amount to R13.5 mil in 2016/17 and R27.5 mil in 2015/16.
Movement was mainly on capitalisation reserves that decreased to nil in 2016/17 8

9. Financial Statement Analysis
Major items on Financial Disclosures

10. AGRICULTURAL LAND HOLDING ACCOUNT (ALHA) PORTFOLIO COMMITTEE ANNUAL FINANCIAL STATEMENT PRESENTATION 2016/17

11. MANAGEMENT REPORT AND REPORT ON AUDITOR GENERAL
Unqualified (Clean) Audit Opinion with no findings
2016/17
2015/16
Audit Opinion
In my opinion, the financial statements present fairly, in all material respects, the financial position of the Agricultural Land Holdings Account as at 31 March 2017, and its financial performance and cash flows for the year then ended in accordance Standards of South African Standards of Generally Recognised Accounting Practices (SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA). 10

12. Financial Statement Analysis
Financial Performance: Revenue
Financial Performance: Expenditure
Expenditure in 2016/17 amounted to R594.5 mil or 90% of the allocated budget and R527.4 mil or 98% in 2015/16 excluding capital expenditure of R 679.8mil and R 900m for 2016/17 and 2015/16
Unspent funds in 2016/17 were mainly due to unspent SRR projects funds, whereas in 2015/16 it was due to land acquisition commitments not transferred by year end
Increased expenditure was mainly due to the implementation of more land claims settlement agreements received.
Total Revenue of R1.607 bil and R1.424 bil for 2016/17 and /16 respectively includes grant income, interest income and other income which accounts to 93% and 3% and 4% respectively;
The entity’s grant income increased by R160.9 mil in 2016/17, whereas interest increased by R8.7 mil. This increases represent 11% and 18% increase from 2015/16 financial year.

13. Financial Statement Analysis
Capital expenditure decreased by 31% due to SRR funds for the acquisition of land and working capital not disbursed by NEF. Operating expenditure rose by 13%, this is attributed to the bad debts written off in the current financial year with none written off in the previous year. Surplus increased to R1.012 billion due to unspent funds for SRR projects. Grant income (revenue: non-exchange) increased to R1.5 billion representing 13% increase. Revenue from exchange transactions consists of rental and interest on lease transactions and interest earned from the bank representing 13% increase from prior year.
Total surplus to be surrendered:
2016/17: R1.012 bil /16: R mil

14. Financial Statement Analysis
Financial position
Changes in Net Assets
Total Assets of R bil in 2016/17 and R bil in 2015/16 consists of property, plant and equipment, intangible assets and other financial assets with Land Bank;
Total Liabilities of R mil in 2016/17 and R mil in 2015/16 include unclaimed SRR transfer balances of R140 mil made by the department on behalf of ALHA representing 38% increase from prior year;
Net Assets amount to R bil in 2016/17 and R bil in 2015/16.
Movement was mainly on capitalisation reserves

15. 2016/17 2015/16 R603 mil for Land acquisition
Financial Performance: Standard item
2015/16 Total : R1.484 bil
2016/17 Total : R1.377 bil
R603 mil for Land acquisition
R1.007 bil for Land acquisition
R463 mil for Land reform/Recap
R401 mil for Land reform/Recap
Rnil
for Drought
2016/17
2015/16
R76 mil
for Drought
Rnil
for SRR Projects
R mil
for SRR Projects
R mil
for Planning
R mil
for Planning

16. Registration of Deeds Trading Account Performance Report :2016/17 Financial Year

17. 2016/2017 Financial Performance

18. Intangible Impairment
FINANCIAL
performance:
Growth trends
Intangible Impairment

19. Cumulative Financial Performance: Per Economic Classification

20. Governance and audit trail 2011/12 2012/13 2013/14 2014/15 2015/16
(over the past 5 years)
2011/12
2012/13
Qualified
Unqualified
2013/14
Unqualified
2014/15
Unqualified
2015/16
2016/17
Unqualified
Clean

21. Thank You