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Mpumalanga Tourism and Parks Agency Annual Report 2017/2018


CONTENTS

PART A: GENERAL INFORMATION

PUBLIC ENTITY’S GENERAL INFORMATION 3

LIST OF ABBREVIATIONS / ACRONYMS 4

STRATEGIC OVERVIEW 6 Vision 6 Mission 6 Values 6 Strategic Outcome Oriented Goals 6

LEGISLATIVE AND OTHER MANDATES 7

ORGANISATIONAL STRUCTURE 8

FOREWORD BY THE MEC 9

OVERVIEW BY CHAIRPERSON OF THE BOARD 11

OVERVIEW BY THE CHIEF EXECUTIVE OFFICER 15

PART B: PERFORMANCE INFORMATION STATEMENT OF RESPONSIBILITY FOR PERFORMANCE INFORMATION 19

AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES 20

OVERVIEW OF THE PUBLIC ENTITY’S PERFORMANCE 21 Service Delivery Environment 21 Organisational Environment 24 Key Policy Developments and Legislative Changes 25 Strategic Outcome Oriented Goals 26

PERFORMANCE INFORMATION BY PROGRAMME 27 Programme 1: Executive Office 27 Programme 2: Office of the CFO 33 Programme 3: Corporate Services 36 Programme 4: Tourism 39 Programme 5: Biodiversity Conservation 45 Programme 6: Commercial Operations 50

SUMMARY OF FINANCIAL INFORMATION 52 Revenue Collection 52 Programme Expenditure 53 Capital Investment, Maintenance and Asset Management Plan 54 Materiality and Significance Framework 54

PART C: GOVERNANCE INTRODUCTION 57

PORTFOLIO COMMITTEES 57

EXECUTIVE AUTHORITY 59

THE ACCOUNTING AUTHORITY / BOARD 59

RISK MANAGEMENT 70

INTERNAL CONTROL 72

INTERNAL AUDIT, AUDIT AND RISK COMMITTEE 73

COMPLIANCE WITH LAWS AND REGULATIONS 77

FRAUD AND CORRUPTION 77

MINIMISING CONFLICT OF INTEREST 78

CODE OF CONDUCT 78

HEALTH, SAFETY AND ENVIRONMENTAL ISSUES 78

COMPANY SECRETARY / BOARD SECRETARIAT 78

SOCIAL RESPONSIBILITY 79

AUDIT AND RISK COMMITTEE REPORT 79

PART D: HUMAN RESOURCE MANAGEMENT INTRODUCTION 81

HUMAN RESOURCE OVERSIGHT STATISTICS 83

PART E: FINANCIAL STATEMENTS 89

PART F: GROUP FINANCIAL STATEMENTS 155


PART AGENERAL INFORMATION


REGISTERED NAME Mpumalanga Tourism and Parks Agency

REGISTRATION NUMBERS Schedule 3C

REGISTERED OFFICE ADDRESS Samora Machel Drive, Hall’s Gateway, Mataffin, Mbombela, 1200

POSTAL ADDRESS Private Bag x11338, Mbombela, 1200

TELEPHONE NUMBER/S 027 13 759 5300/01 (Switchboard) 027 13 759 5432 (Reservations)

FAX NUMBER 027 13 755 3928

EMAIL ADDRESS [email protected]

WEBSITE ADDRESS www.mpumalanga.com

EXTERNAL AUDITORS The Auditor – General South Africa, P O Box 446, Pretoria, 0001

BANKERS

First National Bank 1 Parkin Street, Pinnacle Building, Ground floor, Mbombela, 1201

Standard Bank The Grove Centre, Corner of R40 and Riverside Road, Mbombela, 1200

COMPANY SECRETARY Ms. M.P. Hlahane Company Secretary

1. PUBLIC ENTITY’S GENERAL INFORMATION


AFS Annual Financial Statements

ARC Agricultural Research Council

BABS Bio-prospecting and Benefit Sharing

BATOBIC Barberton Tourism and Biodiversity Corridor

BMML Barberton Makhonjwa Mountain Land

CA Chartered Accountant

CATHSSETA Culture, Arts, Tourism, Hospitality and Sport

Sector Education and Training Authority

CEO Chief Executive Officer

CFO Chief Financial Officer

CIA Certified Internal Auditor

CIBTM China Incentive Business Travel and Meetings

Exhibition

CITES Convention on International Trade in Endangered

Species

CMC Co-management Committee

COE Cost of Employment

CPA Communal Property Association

CPE Chrissiesmeer Protected Environment

DARDLEA Department of Agriculture, Rural Development,

Land and Environmental Affairs

DCA Damage Causing Animals

DCSSL Department of Community Safety, Security and

Liaison

DEA Department of Environmental Affairs

DEDT Department of Economic Development and

Tourism

DIRCO Department of International Relations and

Cooperation

DMS Destination Marketing System

EE Employment Equity

EIA Environmental Impact Assessment

EPIP Environmental Protection and Infrastructure

Programme

EPWP Expanded Public Works Programme

EWT Endangered Wildlife Trust

FILDA Feira International de Luanda

HDI Historically Disadvantaged Individuals

GEF Global Environmental Facility

GIS Geographical Information System

GRAP Generally Recognized Accounting Practice

HED (PG) Higher Education Diploma (Post Graduate)

HOD Head of Department

ICCA International Congress and Convention

Association

ICT Information Communication Technology

IKM Information Knowledge Management

IMEX Worldwide Exhibition for Incentives Travel,

Meetings and Events

INATUR National Tourism Institute of Mozambique

ITB International Tourisme Borse

IUCN International Union For Conservation Of Nature

KLT Kruger Lowveld Tourism

2. LIST OF ABBREVIATIONS / ACRONYMS


KNP Kruger National Park

LED Local Economic Development

LMF Labour Management Forum

MANCO Management Committee

MBCP Mpumalanga Biodiversity Conservation Plan

MBSP Mpumalanga Biodiversity Sector Plan

MEC Member of the Executive Council

MEGA Mpumalanga Economic Growth Agency

METT Management Effectiveness Tracking Tool

MICE Meetings, Incentives, Conferences and

Exhibitions

MOA Memorandum of Agreement

NDT National Department of Tourism

NEMPA National Environmental Management Protected

Areas Act

NR Nature Reserve

NTSS National Tourism Sector Strategy

OHS Occupational Health and Safety

OPCO Operations Committee

PA Protected Area

PAE Protected Area Expansion

PE Protected Environment

PFMA Public Finance Management Act

PMDS Performance Management Development System

PMU Project Management Unit

RLCC Regional Land Claims Commission

SAPPI South African Pulp and Paper Industry

SAPS South African Police Service

SATSA Southern African Tourism Services Association

SAWHCC South African Wildlife Heritage Convention

Committee

SCM Supply Chain Management

SCOPA Standing Committee On Public Accounts

SITE Society of International Travel Executives

SMART Specific, Measureable, Achievable, Relevant,

Time-bound

SMME Small Medium Micro Enterprise

SMTFCA Songimvelo-Malolotja Transfrontier

Conservation Area

SOPA State of the Province Address

SOP Standard Operating Procedures

TOPS Threatened or Protected Species

WHS World Heritage Site

WPS Wildlife Protection Services

WSP Workplace Skills Plan

WTM World Travel Market

2. LIST OF ABBREVIATIONS / ACRONYMS

CONTINUED


3.1 VISION Mpumalanga a world-class tourism and wildlife economy.

3.2 MISSION Grow tourism and manage biodiversity to stimulate sustainable economic growth that is inclusive and creates decent employment .

3.3 VALUES The MTPA subscribes to the following core values: • Productive (results oriented / disciplined / efficient / punctual / cost conscious); • Integrity (ethical / honest / transparent / truthful / accountable / reliable / responsible); • Committed (motivated / dedicated / diligent / passionate); • Teamwork (participative / consultative / collaborative); • Service excellence (responsive / client need driven / approachable / friendly / competitive / time conscious); • Innovative (flexible / creative / adaptable / pro-active / initiative); • Respectful (treating others with respect / dignity / humility / fairness / consistent); and • Quality conscious (attention to detail / accuracy / critical mindset / quality focus / preparedness).

3.4 STRATEGIC OUTCOME ORIENTED GOALS

NO STRATEGIC OUTCOME ORIENTED GOALS GOAL STATEMENT

1 Sustainable environment Conserve, manage and protect biodiversity and eco-systems in the Province by 2019

2 Sustained economic growthPromote the Province through branding, marketing, invest in tourism infrastructure and product development by 2019

3. STRATEGIC OVERVIEW


The MTPA was established in terms of the Mpumalanga Tourism and Parks Agency Act of 2005, Act No. 5 of 2005, and listed as a Schedule 3C Public Entity. The entity came into existence on 1 April 2006 following the merger of the now defunct Mpumalanga Parks Board and Mpumalanga Tourism Authority.

Section 3 to the MTPA Act defines the Objects of the Agency as follows:

1. The objects of the Agency shall be to provide for the sustainable management and promotion of tourism and nature conservation in the Province and to ensure the sustainable utilization of natural resources.

2. In pursuing its objects, the Agency shall –

a) Provide for effective management and conservation of biodiversity and ecosystems within the Province;

b) Develop and ensure effective management and market tourism;

c) Foster, promote and sustainably develop and market tourism; and

d) Promote and create socio-economic growth and transformation within the tourism and conservation industry, thereby creating economic and employment opportunities for previously disadvantaged individuals and local communities in the Province.

The following key policy frameworks have been recognised as part of clarifying the legal and legislative mandate of MTPA.• The Constitution of the Republic of South Africa• The MTPA Act of 2005 • Regulations to the MTPA Act• The White Paper on Biodiversity, (1997)• The Mpumalanga Economic Growth and Development Path • The Mpumalanga Tourism Growth Strategy (MTGS) (2006)• The National Biodiversity Strategy and Action Plan (DEAT 2005)• The National Environmental Management Biodiversity Act (Act 10 of 2004)• The Mpumalanga Biodiversity Conservation Plan (MBCP 2006)• The Mpumalanga Nature Conservation Act (Act 10 of 1998)• The Provincial Growth and Development Strategy (2008)• The National Environmental Management Act (1998)• The National Environmental Management Protected Areas Act (2003)• The White Paper on Promotion and Development of Tourism (1996)• The National Tourism Act (Act 3 0f 2014)• The Mpumalanga Biodiversity Sector Plan (MBSP 2006)

4. LEGISLATIVE AND OTHER MANDATES


EXECUTIVE MANAGER:

TOURISM

(MR. JX MTHETHWA)

EXECUTIVE MANAGER:

BIODIVERSITY CONSERVATION

(MR. VA SIBIYA)

EXECUTIVE MANAGER:

CORPORATE SERVICES

(MR. AN MAHLANGU)

EXECUTIVE MANAGER:

COMMERCIAL OPERATIONS

(VACANT)

CHIEF FINANCIAL OFFICER

(MR. S MATHYE - ACTING)

COMPANYSECRETARY

(MS. MP HLAHANE)

CHIEF

EXECUTIVE OFFICER

(MR. BJ NOBUNGA )

MTPA BOARD

5. ORGANISATIONAL STRUCTURE


Mr. S.E. Kholwane, MPL MEC: Finance, Economic Development and Tourism

6. FOREWORD BY THE MEC

• embarked on marketing initiatives to African and European countries to expand reach of our destination promotion in source markets; and

• significantly, the entity signed a tourism partnership agreement with our Russian counterparts - the Ural Association of Tourism in Yekaterinburg. This agreement focuses on exchange programmes, joint marketing initiatives, investment and environmental issues in our regions.

The diversification of the product base, in order to offer tourists a plethora of choices remains a priority of the entity in the forthcoming years.

The provincial government has prioritised the revitalisation of our strategic heritage towns of Pilgrim’s Rest and Waterval Boven and the feasibility studies for these towns have been completed and we will seek to follow through the recommended programmes to improve tourist experiences and thereby increase the bed nights in these strategic and iconic tourism towns.

One of the focus areas during the year under review was the improvement of infrastructure conditions in our reserves. The other focus was on the improvement of all tourism roads in the province. A steering committee comprising of the Agency, Department of Economic Development and Tourism, Department of Public Works, Roads and Transport as well as municipalities was formulated to investigate the extent of key tourism road infrastructure that needs maintenance and repair in the province. The committee is putting together an intervention plan with cost implications that would be presented to source funding in the next financial year (2018/19).

We have also added new day visitor facilities and a caravan park at Manyeleti to MTPA’s product portfolio in order to increase revenue generation in our reserves.

I am pleased to present the 2017/2018 Annual Report for the Mpumalanga Tourism and Parks Agency (MTPA).MTPA has been given a communal responsibility to be the custodian of Tourism treasures and the conserver of our rich Biodiversity.

The entity plays a pivotal role in marketing our wildlife, leisure and cultural tourism to both domestic and international markets.

Domestic tourism remains an important component of destination marketing.

During the year under review, the Agency:

• hosted the World Tourism Day celebrations on behalf of the provincial and national government;

• implemented a number of tourism awareness campaigns for the local tourism market;


6. FOREWORD BY THE MEC

CONTINUED

Mpumalanga is blessed with a high level of biological diversity that complements the proposition of the province as a cradle of humanity.

During the 2017/2018 financial year, the Agency hosted an international high-level delegation from UNESCO as a prequel to the process of declaring the Barbeton Makhonjwa Mountains a World Heritage Site, which will once inscribed be the first world heritage site in the Province. This notable achievement is expected to be announced on or around June /July 2018.

We would like to convey our gratitude to the Agency and our technical partner BATOBIC who are coordinating and leading all interested and affected stakeholders towards the common objective of attaining the inscription of the Barberton Makhonjwa Mountains in the World heritage list

The Province continues to implement an integrated approach to the handling of Damage Causing Animals (DCAs) in and near our nature reserves. A number of incidents relating to Damage Causing Animals or Dangerous animals within the communities were attended to during the year under review. This includes elephant, lion and hippo as the most prominent species. The incidents were attended to timeously and handled in a responsible manner to ensure community safety. We continue to be grateful to the good working relationship between MTPA and SANParks.

The Business and Tourism industry has publicly recognised the efforts of the Agency and its strategic partners in the biodiversity conservation fight. On the 13th of October 2017, Mountainlands Nature Reserve and Mpumalanga Tourism and Parks Agency were presented with the KLCBT/ The Halls Properties Alan Bachelor Environmental Award 2017. This was awarded to the Agency and Mountainlands Nature Reserve for successfully defending the Barbeton Nature Reserve and the geological sites within the Nature Reserve from exposure to mining activities, including the prospecting of the same. This was a landmark Supreme Court of appeal Decision case as it paved the way for conservation and protection of all protected areas in the country from mining or similar activities that have an adverse effect on the natural resources.

We are aware that our work is far from being finished. We will continue to work with the tourism industry and our partners in conservation to ensure that the entity delivers on the expectations of the society and the mandate conferred to us by the legislation.

Let me take this opportunity to thank the Board of the MTPA, led by Mr Thulani Nzima, as well as the Executive Management of MTPA for providing leadership and stability within the MTPA.

My sincere gratitude is also extended to the Executive Council for supporting us in developing the entity into a vibrant and result oriented agent for tourism development and biodiversity in the Province.

Mr SE Kholwane (MPL) MEC For Finance, Economic Development and Tourism


7. CHAIRPERSON’S OVERVIEW

Mr. T.J Nzima Chairperson of the MTPA Board

Despite the decline of domestic tourism trips to the province by an average of 24% in recent years, the Agency has embarked on alternative measures and strategies to encourage local and domestic travelling, one of which was the development of the Tourism Marketing and the Tourism SMME Support Strategies.

More resources were put in forming partnerships with various stakeholders in order to leverage on key programmes aimed at attracting more visitors to the province. Small tourism businesses were given marketing access through participation in various local and international exhibitions with an intent to expose the vast product offering. Safety of tourists visiting the Province remains our major priority because that in itself enhances their experience and encourages that they return to the province.

The entity is still marketing the province from its natural endowments, therefore efforts to ensuring that the Barberton Makhonjwa Mountains becomes a World Heritage Site, is a major priority for the Agency. The Board is committed to the implementation of the carefully selected tourism and biodiversity conservation opportunities that will improve the value of the heritage site and appeal to different markets.

Poaching of endangered fauna and flora remain a challenge and has been prioritized at a national level. We appreciate and acknowledge the joint efforts put in place by government, private sector, law enforcement agencies and social groups to save our natural resources and sustain tourism.

The infrastructure developments and upgrades that were conducted at most of the prioritized nature reserves will go a long way in ensuring that there is increased revenue and diverse product offering for tourists.

I am delighted to present the overview for the 2017/2018 Annual Report on behalf of the Board of Mpumalanga Tourism and Parks Agency. The Agency has continued during the year under review to work hard in managing biodiversity conservation and promoting Mpumalanga as a preferred tourist destination. This is evident in the number of interventions performed in marketing the province.

The Agency’s participation at various domestic and international trade shows, leveraging on a number of events as well as conducting brand activations have continued to improve our presence in various core markets aimed at positioning destination Mpumalanga. We continue to see a steady increase of the foreign visitor arrivals from the Africa Region and Europe market.


7. CHAIRPERSON’S OVERVIEW

CONTINUED

The Board is pleased to have finally appointed a CEO in consultation with the MEC. Mr. B.J. Nobunga assumed his duties as the CEO of MTPA with effect from 1 April 2018. This has brought about the much needed organizational stability at the leadership level. We are on course to complete the appointment of the full Executive Management which will take the Agency to the next level.

The Agency has completed the development of an Organizational Health Audit, which the Board has identified as fundamental departure point to build organizational culture and inspire a high level of dedication and commitment amongst our staff. The Board is committed to support management to implement the recommendations of the audit and we anticipate that it will bring about stability and improve capacity within the entity.

The Agency obtained an unqualified audit outcome for the year under review implying that there has been significant improvement in the way of delivering on the Agency’s mandate and management controls. The Board remains committed to ensure that we strive for a clean audit and address key strategic areas that will assist the Agency to achieve that goal.

I would also like to thank the support received from industry and government in making Mpumalanga a destination of choice through their various initiatives

On behalf of the entire Board of MTPA, I would like to thank the Honourable MEC for Finance, Economic Development and Tourism, Mr. S E Kholwane (MPL) for his leadership and guidance. I would also like to extend gratitude to my fellow Board members, the Executive Management for their leadership and to all employees for ensuring that we strive towards fulfilling the Agency’s mandate.

Mr. T.J. Nzima Chairperson of the MTPA Board


MEMBERS OF THE BOARD

MR THULANI NZIMA

Chairperson

MS NOMASWAZI SHABANGU-MNDAWEDeputy Chairperson

MS NONYANISO MZUZU

Board Member

MS THOLAKELE NKAMBULE

Board Member

MR CHRISTOPHER GOLOLO

Board Member

MR TLOU KEETSE

Board Member

MR SIPHO MTHOMBENI

Board Member

MS SIJABULILE MAKHATHINI

Board Member

DR DANIEL MAGOME

Board Member

MS SHEILA SEKHITLA

Board Member

DR FREEK VENTER

Co-opted Board Member

MS MPHO MASEKO

Co-opted Board Member


AUDIT AND RISK COMMITTEE

EXECUTIVE MANAGEMENT COMMITTEE

MR ABE SIBIYAExecutive Manager:

Biodiversity Conservation

MR SAM MTHEMBUMember

MR JOHANNES NOBUNGAChief Executive

Officer

MS PRECIOUS MVULANEChairperson

MR SIZWE MATHYEActing

Chief Financial Officer

MS NONYANISO MZUZUMember

MR ABSALOM MAHLANGUExecutive Manager: Corporate Services

MR MDUDUZI ZAKWEMember

MS PETUNIA HLAHANECompany Secretary

MR XOLANI MTHETHWA Executive Manager:

Tourism

MS SIJABULILE MAKHATHINIMember


1.5 THE BOARD8. CHIEF EXECUTIVE OFFICER’S OVERVIEW

MR. B.J NOBUNGA Chief Executive Officer

We have seen a gradual improvement in the overall performance of the organization during the year under review. The outcome of the audit indicates a significant improvement from the previous year, thus demonstrating the positive impact of the measures that were introduced to improve the internal controls within the MTPA. A number of interventions were put in place with the aim of improving governance. We will continue to work hard to ensure that revenue enhancement efforts that we have put in place are realised. This will assist in ensuring that the entity grows its own revenue to a better sustainable maintenance of its assets.

During the year under review, the Agency procured 21% more from BEE compliant service providers for goods and services than planned. We generated a revenue of R 55 875 million at year-end instead of the planned R45 million, which was more by R10 875 million. The newly formed Commercial Operations Programme developed a Strategic Plan for Commercialisation. Through the regularisation process, the programme managed to generate revenue of R7 328 611.00 from concessions management. Upgrades and improvements on facilities were done and Andover Nature Reserve was awarded a two star grading by the Tourism Grading Council of South Africa.

Despite persistent budgetary constraints, satisfactory performance was achieved on key strategic deliverables. The MTPA continues to play a significant role in the promotion of tourism and management of biodiversity conservation in the province. During the year under review the MTPA embarked on various marketing activities which included platforms such as digital and print media, trade shows and workshops in countries such as Mozambique, Zimbabwe, Zambia, United Kingdom, Spain, Germany, Russian Federation and South Africa. As a result of participating at these platforms, the destination has shown to be a top of mind holiday destination for the inbound tour operators. Evidently, we are seeing a steady increase of the foreign visitor arrivals from the Africa Region and Europe market.

The decline of domestic tourism trips to the province by an average of 24% in recent years has prompted the entity to look at alternative strategies to encourage local and domestic travel. In the year under review, the entity invested more resources in partnerships to leverage

I am pleased to present my first overview as the Chief Executive Officer of Mpumalanga Tourism and Parks Agency. The financial year under review was filled with exciting and challenging moments, which presented us with an opportunity to reflect on our performance as an Agency and continue to work even harder to deliver on our mandate.

There has been a significant progress in addressing the challenges encountered by the Agency. To date we have managed to fill all the Executive Managers positions with only one for Commercial Operations still underway. The Organizational Health Audit was conducted in an effort to ensure proper diagnosis of the issues that may have a negative impact on service delivery are addressed. The audit further seeks to enhance organizational capacity. The Health Audit will afford the Agency an opportunity to review the current organogram and prioritise key critical positions that will have to be filled in the next financial year.


8. CHIEF EXECUTIVE OFFICER’S OVERVIEW

CONTINED

on key provincial events. One of these flagship events was the inaugural Mbombela Jazz Festival, which was hosted in September 2017 and attracted over 4000 people. Other partnerships were done with event organisers of Nabalabntfu Festival, Sunrise Women’s Awards, Innibos and Mpumalanga Cultural Experience.

A memorandum of Understanding was signed with the Ural Association of Tourism in Svedsvlok, Oblast Region in the sidelines of the LETO exhibition in Yekaterinburg in the Russian Federation. On 20 September 2017, the MTPA facilitated the hosting of the World Tourism Day celebrations on behalf of the National Department of Tourism. The event was presided over by the National Tourism Minister.

In the year under review, the Board approved the following plans and strategies:

• The Tourism Marketing Strategy

• The Tourism SMME Support Strategy

• The Tourism Safety Plan

• The Strategic Plan for Commercialisation

These strategies will provide guidelines for the marketing of the destination and the support to grow our small tourism businesses in order for them to get in the mainstream of the tourism value chain.

The Provincial EXCO took a resolution for the management and control of the two (2) strategic towns of Pilgrim’s Rest and Emgwenya (formerly Waterval Boven). We appointed a service provider to look into the rejuvenation plan of the two strategic tourism heritage towns. The report was finalised and submitted to the Board for consideration and inputs. The report gives details on the feasibility to rejuvenate the two towns.

We continue to conduct stakeholder engagements with the aim to foster continuous working relationship and cooperation with the private sector in our efforts of promoting Mpumalanga as a safe destination of choice. We have finalised the Tourism Safety Plan, which was approved during the year under review. The plan is an extension of the National Tourism Safety Initiative and provides guidelines for the tourism safety awareness and a systematic process in dealing with the tourists who were victims of crime and car accidents in the Province.

The MTPA has made significant improvements in the management effectiveness of the provincial nature reserves as measured through the Management Effectiveness Tracking Tool (METT). We achieved 77,38% of the area of provincial Protected Areas assessed through the METT score above 67% against the set target of 50%. The reason for the increase in management effectiveness is due to infrastructure upgrades primarily through EPIP funded projects. A total of 361 job opportunities were created in the Protected Areas through EPWP.

The Barberton Makhonjwa Mountains nomination for listing as a World Heritage Site made good progress. Following the submission of the nomination dossier by the MTPA to the National Department of Environmental Affairs, the MTPA was requested to submit additional supplementary information to the IUCN with possible inscription being finalised in July 2018.

We are happy to report that five (5) Integrated Management Plans (IMPs) were completed for the protected areas, namely SS Skosana, Nooitgedacht, Andover, Ohrigstad and Bushbuckridge. These plans are intended to put in place the management objectives for the Nature Reserve, the management programmes as well as actions to be undertaken for a period of five years. This includes zonation of the reserve as well as the economic and tourism development opportunities.


8. CHIEF EXECUTIVE OFFICER’S OVERVIEW

CONTINED

Rhino poaching and the related criminal activities such as possession or selling of rhino horns is still a major issue and a national priority crime for the Province. The MTPA has very close working relationships with various SAPS branches such as the Stock Theft and Endangered Species Units as well as Organised Crime through the Rhino 8 National Project. There has been a number of cases and some have been investigated successfully like cases of meat poaching, dog hunting as well as the theft and possession of cycad.

The frequency of escaping animals at Kruger National Park increased in the last few years. Once these animals are outside of Kruger it becomes the MTPA’s mandate to respond to action. During the year under review, the MTPA responded to (8) incidences of escaped lions, (2) incidents of escaped elephants and (1) incident of hippopotamus into human settlement. The story of escaped lions in particular continued to attract local and international news.

The MTPA continues to collaborate with claimant communities in the management of nature reserves, which are subject to restitution claims. Settlement and co-management agreements are in the final stages of being concluded for Blyde, Loskop Dam, Andover and Bushbuckridge

Nature Reserves. We continue to experience some challenges and delays in finalizing some agreements; however, we continue to work together with the RLCC and the Provincial People and Parks forum to find an amicable way to resolve them.

The Agency continues to perform infrastructure upgrades in the nature reserves. A special budget allocation from the Mpumalanga Provincial Government and the Department of Environmental Affairs was utilised. During the year under review, infrastructure developments and upgrades were conducted at Blyde River Canyon and Manyeleti Nature Reserves. The infrastructure upgrades will result in increased revenue for the MTPA and prolong the life of our infrastructure.

The audit outcomes of the year under review suggest that we have made significant improvements in the general management of the entity. However, we still have to put more effort and work even harder to improve our performance and eliminate all the repeat audit findings from the past years and put greater emphasis on risk management.

On behalf of the Executive Management team, I would like to express my sincere gratitude to the Honorable MEC for Finance, Economic Development and Tourism, the Head of Department for Economic Development and Tourism, and the MEC for DARDLEA, with whom the Biodiversity and Conservation function resides. The gratitude also goes to the Board of MTPA for their continued support and guidance. I would also like to thank the staff of MTPA for their dedication and hard work.

Mr. B.J. Nobunga Chief Executive Officer


PART BPERFORMANCE INFORMATION


1. STATEMENT OF RESPONSIBILITY FOR PERFORMANCE INFORMATION

FOR THE YEAR ENDED 31 MARCH 2018

The Chief Executive Officer is responsible for the preparation of the Public Entity’s performance information and for the judgement made in this information.

The Chief Executive Officer is responsible for establishing, and implementing a system of internal control designed to provide reasonable assurance as to the integrity and reliability of performance information.

In my opinion, the performance information fairly reflects the actual achievements against planned objectives, indicators and targets as per the strategic and annual performance plan of the public entity for the financial year ended 31 March 2018.

The Mpumalanga Tourism and Parks Agency’s performance information for the year ended 31 March 2018 have been examined by the external auditors and their report is presented on page 100.

The performance information of the entity set out on page 27 to page 51 was approved by the Board.

Mr. B.J. Nobunga Mr. T.J. Nzima Chief Executive Officer Chairperson of MTPA Board

31 July 2018 31 July 2018


The Auditor General South Africa currently performs the necessary audit procedures on the performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported under the Report on the audit of the annual performance report section of the auditor’s report.

Refer to page 100 of the report of the Auditor General’s Report, published as Part E: Financial Statements.

2. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES



3.1 SERVICE DELIVERY ENVIRONMENT During the period under review, the entity promoted the Mpumalanga province as a preferred tourism destination through twenty

marketing activities. These marketing activities included platforms such as digital and print media, trade shows and workshops in countries such as Mozambique, Zimbabwe, Zambia, United Kingdom, Spain, Germany, Russian Federation and South Africa. As a result of participating at these platforms, the destination is becoming a top of mind holiday destination for the inbound tour operators. Evidently, we are seeing a steady increase of the foreign visitor arrivals from the Region Africa and Europe market. The decline of domestic tourism trips to the province by an average of 24% in recent years has prompted the entity to look at alternative strategies to encourage local and domestic travelling. In the year under review, the entity invested more resources in the partnership to leverage on key provincial events. One of these flagship events was the inaugural Mbombela Jazz Festival, which was hosted in September 2017 and attracted over 4 000 people. Other partnerships were done with event organisors of Nabalabantfu Festival, Sunrise Women’s Awards, Innibos and Mpumalanga Cultural Experience.

The MTPA was represented in the Client/Supplier workshop in Tshwane, Gauteng, the International Business Tourism Market in Barcelona, Spain and Meetings Africa in Sandton, Gauteng. A Memorandum of Understanding was signed with the Ural Association of Tourism in Svedsvlok, Oblast Region in the sidelines of the LETO exhibition in Yekaterinburg in the Russian Federation. On 20 September 2017, the MTPA facilitated the hosting of the World Tourism Day celebrations on behalf of the National Department of Tourism. The event was presided over by the National Tourism Minister. Two strategies were approved by the board during the year under review, one being the Tourism Marketing Strategy and the Tourism SMME Support Strategy. These strategies will provide guidelines for the marketing of the destination and the support to grow our small tourism businesses in order for them to get in the mainstream of the tourism value chain.

A report about the rejuvenation plan of the two strategic tourism heritage towns was submitted to the Board for consideration and inputs. The report gives details on the feasibility to rejuvenate the towns of Pilgrim’s Rest and Emgwenya (formerly Waterval Boven). Through stakeholder engagements, a list of priority tourism roads to be repaired and maintained was submitted to the Department of Public Works, Roads and Transport for processing. The Tourism Safety Plan was finalized and approved. The plan is an extension of the National Tourism Safety Initiative. The plan provides guidelines for the tourism safety awareness and a step-by-step process in dealing with the tourists who were victims of crime and car accidents in the Province.

MANAGEMENT AND CONSERVATION OF BIODIVERSITY AND ECO-SYSTEMS

Management effectiveness tracking tool of the provincial nature reserves has improved during the 2017/2018 financial year, this was largely attributable to the fact that significant investments have been made on infrastructure improvements and upgrades on the nature reserves and the completion of management plans for various reserves.

Rhino poaching continues to be a major challenge for the MTPA. A total of 45 rhinos were lost to poaching within Mpumalanga Province (which excludes animals poached within the Kruger National Park), compared to last year’s 67 rhinos poached. The achievements were attributed to the integrated strategic interventions with the KNP, the bordering Private Nature Reserves and Intelligence Working Group on Illegal Wildlife Trade (IWG), coordinated by the National Intelligence Coordination Committee (NICOC).

3. OVERVIEW OF THE PUBLIC ENTITY’S PERFORMANCE



INFRASTRUCTURE UPGRADE AND MAINTENANCE

The entity continues to perform infrastructure upgrades in the nature reserves. Development and upgrading of infrastructure projects were conducted using special budget allocation from the Mpumalanga Provincial Government and other external funding from the Department of Environmental Affairs.

Infrastructure developments and upgrades were conducted at Blyde River Canyon and Manyeleti Nature Reserves. Planned maintenance was also done at SS Skosana Nature Reserve.

Manyeleti Nature Reserve - Caravan Park

Construction of a new caravan park was completed and ready to be utilized with the following deliverables:

• Access roads to the camp site.

• 20 modern caravan parking stands complete with paved stands, braai areas and wash-up basins.

• Communal ablution facility.

• Electrical connections and water reticulation to all facilities.

Manyeleti Nature Reserve - Day Visitor Facility

Construction of a new Day Visitor Facility was completed and ready to be utilized with the following deliverables:

• 1.6 km of electrified fence around the facility with three access and exit gates.

• 1.2km access road and parking areas.

• Bulk water supply and water reticulation to all facilities.

• Electrical reticulation to all facilities (bulk electricity with a transformer at the camp was supplied by ESKOM through a standard contract with the MTPA).

• Buildings constructed - 2 ablution facilities, tuck shops facility, communal hall and lapa.

• Construction of 2 swimming pools for adults and children and pump-house for the pool pumps and filters.

• Construction of 4 braai circles each with 20 braai areas.

• Provision of animal-proof dust bins.

• Two septic tanks supplied to the facilities

Blyde River Canyon View Sites

Upgrades at the Belvedere Guest House Complex – upgrades completed on the following deliverables:

• Renovations and upgrades to the main Belvedere Guest House, garage (with attached flat) and Groendak Guest House.

• Renovations and upgrades to the Ranger’s house.

Clearstream and Waterval Hiking Trail Huts - upgrades completed on the following deliverables:

• Removal and safe disposal of all asbestos roofing at Waterfall hiking and Clearstream hiking trail huts.

• Raise existing walls and provide new roofing structures.

• Renovations and upgrades to sleeping cottages, ablutions and cooking area.


CONTINUED


Bourke’s Luck Potholes - upgrades completed on the following deliverables:

• Water provision from the Treur River as primary source and repairs to existing pump station in the Blyde River as back-up source. This work included a 55m free span cable stayed bridge over the Blyde River to get the feeder line from the Treur River supply over the Blyde River at a level higher than the 50 year flood line.

• Replacement of the main septic tank sewer system with a modern state of the art purification plant enabling the release of purified grey water back into the Blyde River. This included the provision of an above ground modular 55 Kilolitre waste water works.

• Renovations to the House of the Reserve Manager.

Three Rondavels View Point - upgrades completed on the following deliverables:

• The demolishing of old curio stalls and construction of four new curio stalls and 1 curio sales hall.

• Upgrades to water supply including the servicing of pumps, replacement of sections of feeding pipe, creation of extra storage of water and the provision of buck-up pump gear are complete.

God’s Window View Point- upgrades completed on the following deliverables:

• The construction of a new access control gate house (which serves as a pay point).

• The renovation of an ablution block.

• The renovation and upgrades to six existing curio stalls which included the removal and disposal of the old dilapidated roof structures and replacement with new roof structures.

Planned infrastructure and facilities maintenance at MTPA reserves: The maintenance of infrastructure and facilities was conducted in 5 nature reserves and that includes the maintancence of ablution

facilities servicing tourists, perimeter fence, plumbing repairs, tiling and painting, renovation of tourists’ accommodation and the re-installation of bulk water supply at SS Skosana, Songimvelo and Verloren Vallei Nature Reserves.

The following multi-year infrastructure projects funded by the National Department of Environmental Affairs are at different stages of completion. The projects commenced in 2015 and will be completed at the end of 2020.

Manyeleti Nature Reserve – upgrades on the following deliverables have been completed:

• Upgrading 19 chalets.

• Development of an office block and conference hall.

• Construction of a 17km fence.

• Development of staff accomodation.

• Repairs to standby generator.

• Upgrading of dormitories for school children on study tours.

Mthethumusha Nature Reserve - the following infrastructure upgrades are at different stages of completion:

• Upgrade of the main entrance gate at Mpakeni is in progress.

• New office block is completed.

• Picnic area is in progress.

• A new guard house is completed.


CONTINUED


• Luphisi gate is completed.• Refurbishment of the staff accommodation at Luphisi is in progress.

Mahushe Shongwe Nature Reserve - the following infrastructure upgrades are at different stages of completion:

• Office block converted to 4-bedroom staff accommodation completed.

• Reserve Manager’s house completed.

• Construction of rangers’ picket is completed.

• Cold storage is completed.

Loskop Nature Reserve - the following infrastructure upgrades are at different stages of completion:

• Upgrade of staff accommodation (three houses, with asbestos removed) is in progress.

• Bulk water and electricity supply is in progress.

• Upgrade and development of new rangers’ pickets is in progress.

Nooitgegadaght Dam Nature Reserve:

• 35km fence was upgraded.

• Staff accommodation is being upgraded.

• Office block is being renovated.

3.2 ORGANISATIONAL ENVIRONMENT The current organisational environment in the Agency within which Human Resource Management is located, is a challenging one.

The Agency is facing multiple strategic, resourcing, organisational and operational challenges. The vacancy rate is still at about 45%. Complicating these challenges further is the state of uncertainty presented by the pending changes resulting from the shareholder initiated institutional realignment of the Agency, as well as internal reorganization initiatives. The entity explored the option of placing Zithabiseni staff with MTPA . The Agency has been appointed as the management authority of Zithabiseni Resort whilst looking for a private operator.

The process of reviewing the organizational structure was started and it resulted in the approval of the top structure and subsequently putting the approval of the lower structure on hold pending the finalization of the Organizational Health Audit. The Chief Executive Officer and Executive Manager Corporate Services were appointed during this reporting cycle. The appointment of Executive Manager Commercial Operations is still a work in progress and should be completed in the 2018/2019 financial year. The ability of an organization to efficiently attract, develop and retain key talent is crucial in developing a high-performing organisation. In order for MTPA to achieve its strategic mandate, a world-class Human Resource strategic plan needs to be developed, implemented and monitored throughout the organisation.

During the year under review MTPA implemented a new reporting platform that provides timeous financial reports highlighting variances between expected and actual performances. These reports supported managers with decision-making and allowed corrective actions to be taken on time. The budgeting is decentralized, giving responsibilities to Executive Managers of Programmes and Reserve Managers to prepare their budgets and take responsibility over the spending. Policies and procedures that enable and support the understanding and execution of internal control objectives, processes and responsibilities were not adequately established to ensure compliance with the requirements of the PFMA, Preferential Procurement policies framework on procurement.


CONTINUED


Physical verification of assets was conducted and unaccounted infrastructure assets were identified during the year and capitalised in the balance sheet for completeness. The useful lives of all assets was re-assessed and some assets whose life span has long expired have been recommended for disposal and replacement in the 2018/2019 financial year, particularly the vehicle fleet whose maintenance costs have become high.

Programmesandsub-programmesareasfollowsforthe2017/2018financialyear:

PROGRAMME SUB-PROGRAMME

EXECUTIVE OFFICE

• Office of the CEO• Project Management Unit• Board Secretariat• Communication and Public Relations• Risk Management and Internal Audit• Planning and Coordination• Monitoring and Evaluation • Security Management• Zithabiseni Resort and Conference Centre

OFFICE OF THE CFO• Financial and Management Accounting • Supply Chain Management• Asset Management

CORPORATE SERVICES• Human Resources• Legal Services• Information Communication Technology, Management and Systems

TOURISM• Tourism Development• Tourism Marketing• Tourism Registration

BIODIVERSITY CONSERVATION

• Protected Areas and Development• Biodiversity Support Services• Conservation Services• Biodiversity Policy and Compliance

COMMERCIAL OPERATIONS • Commercial Operations

3.3 KEY POLICY DEVELOPMENT AND LEGISLATIVE CHANGES The entity is providing an oversight role on Zithabiseni Resort and Conference Centre. The procurement processes are underway to

secure a commercial operator and thereafter the entity will cease to provide an oversight role.


CONTINUED


3.4 STRATEGIC OUTCOME ORIENTED GOALS The following progress was made towards the achievement of the Strategic Goals:

STRATEGIC GOAL 1: SUSTAINABLE ENVIRONMENT

Protected areas achieved 77,38% on Management Effectiveness Tracking Tool (METT) assessment towards the effective management of protected areas against the set target of 50%. The reason for the increase in management effectiveness is due to infrastructure upgrades primarily funded through EPIP. Wildlife crimes remain a challenge in the in the nature reserves. MTPA is collaborating with the SAPS and NPA to fight wildlife crimes.

River health monitoring The Crocodile Catchment Eco-status report has been compiled and submitted to Inkomati and Usuthu River Catch Management

Authority (IUCMA) for peer review.

Environmental education The entity reached 161 462 learners against the annual target of 140 000 learners through several conservation education programmes.

STRATEGIC GOAL 2: SUSTAINED ECONOMIC GROWTH

Various marketing activities were undertaken to promote Mpumalanga as a tourist destination and to increase the tourist numbers to the Province. The marketing activities included:

• Exhibited at the Tourism Indaba 2017 in Durban, KwaZulu Natal• Hosted the National World Tourism Day celebrations on 27 September 2017 at KaNyamazane Stadium in Mpumalanga• Participated at the Fikani Tourism Show in Maputo, Mozambique• Participated at the Sanganai Show in Harare, Zimbabwe• Attend the Client Supplier Workshop in Tshwane, Gauteng• Exhibited at the International Business Tourism Market (IBTM) in Barcelona, Spain• Participated at the SAT UK School in 4 cities in the UK• Leveraged on 4 events namely Mbombela Jazz Festival, Beach Festival, Sunrise Women’s Awards and Nabalabantfu• Participated at the LETO Exhibition in Yekaterinburg, Russia


CONTINUED


4. PERFORMANCE INFORMATION BY PROGRAMME


4.1 PROGRAMME 1: EXECUTIVE OFFICE Purpose To oversee specialist functions within the Executive Office

Sub-programmes• Office of the CEO • Project Management Unit• Board Secretariat • Communication and Public Relations• Risk Management and Internal Audit • Planning and Coordination• Monitoring and Evaluation • Company Secretariat• Security Management • Zithabiseni Resort and Conference Centre

Strategic objectives• To manage and improve stakeholder relationships• To improve governance and compliance• Improve financial performance

STRATEGIC OBJECTIVES, PERFORMANCE INDICATORS, PLANNED TARGETS AND ACTUAL ACHIEVEMENTS

STRATEGIC OBJECTIVES

PROGRAMME 1: EXECUTIVE OFFICE


ACTUAL ACHIEVEMENTS 2016/2017

PLANNED TARGETS 2017/18

ACTUAL ACHIEVEMENTS

2017/2018

DEVIATIONS FROM PLANNED

TARGETS TO ACTUAL

ACHIEVEMENTS FOR 2017/2018

COMMENTS ON DEVIATIONS

Maintain stability and sustainability

Obtain qualified audit opinion

Obtain an unqualified audit opinion by 31 March 2018

Obtained an unqualified audit opinion

None Not applicable

Improved infrastructure conditions in the reserves in order to grow tourist numbers visiting nature reserves.

1. Rehabilitation of Belvedere Guest House Complex in progress.

2. Upgrading of bulk services is in progress at Bourke’s Luck Potholes and Three Rondavels.

3. Demolition of old structures at Three Rondavels completed and commenced with construction of foundations.

Preventative infrastructure maintainance completed at SS Skosana (thatch roofing, plumbing), Songimvelo (treating of timber in chalets and sewer upgrade), Mabusa and Mdala (upgrade pickets), nature reserves by 31 March 2018.

Completed preventative infrastructure maintainance at SS Skosana (thatch roofing, plumbing), Songimvelo (treating of timber in chalets).

Preventative infrastructure maintainance not commenced at Songimvelo (sewer upgrade), Mabusa and Mdala (upgrade pickets).

Songimvelo nature reserve: the area identified for the sewer upgrade is highly ecological and requires environmental scans.








ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Improved infrastructure conditions in the reserves in order to grow tourist numbers visiting nature reserves. continued

4. Construction of paypoint completed, 3 curio stalls completed and additional 3 in progress at God’s Window.

5. Upgrading of trails huts in progress.

6. Installation of access control and revenue collection system at all view sites not commenced.

7. Visitor management system not procured.

Mabusa and Mdala pickets upgrade are behind schedule due to delays in finding suitable service providers from the local community. All outstanding upgrades will be completed in the second quarter of 2018/2019.

1. New day visitor facility: fencing of the site completed, road networks completed, construction of a swimming pool, ablution facility and hall in progress.

2. New camping and caravan facility: road network, ablution facility, braai stand, drainage system complete, electrification and plumbing in progress.

3. Access control and revenue collection system not commenced.

4. Development and implementation of new tourism products completed.

New capital infrastructure projects developed and upgraded in Blyde, Manyeleti and Mahushe Shongwe nature reserves by 31 March 2018.

New capital infrastructure projects developed and upgraded in some areas: Blyde (upgraded hiking trail huts and developed a new pay point at God’s Window to enhance revenue collection); Manyeleti: developed a day visitor facility and Caravan Park; Mahushe Shongwe: upgraded an office to a 4 bedroomed staff accommodation and developed 2 bedroomed staff accommodation.

New capital infrastructure projects were not upgraded:

Blyde (road maintenance at Swadini), Manyeleti (landscaping at the main camp).

Blyde: road maintenance at Swadini could not commrnce due high rain fall causing severe damage to sections of the road to the point where the total reconstruction of sections of the road base layer is required at a very high cost.

Manyeleti: landscaping at the main camp not commenced due to DEA capital infrastructure upgrades and development at the main camp still underway. External funding from DEA and National



CONTINUED





ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Improved infrastructure conditions in the reserves in order to grow tourist numbers visiting nature reserves. continued

Department of Tourism as well as assistance from DPWR&T is being sought to commence with the upgrades.

KEY PERFORMANCE INDICATORS, PLANNED TARGETS AND ACTUAL ACHIEVEMENTS

SUB-PROGRAMME: RISK MANAGEMENT AND INTERNAL AUDITPURPOSE: RISK MANAGEMENT , MONITORING AND TO CONDUCT INTERNAL AND OTHER AUDITS

SUB PROGRAMME PERFORMANCE

INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Unqualified audit opinion.

Obtain an unqualified audit opinion by 31 March 2017.

Obtain an unqualified audit opinion by 31 March 2018.

Obtained an unqualified audit opinion.

None. Not applicable.



CONTINUED


SUB-PROGRAMME: PROJECT MANAGEMENTPURPOSE: THE MANAGEMENT OF MTPA AND PARTNERSHIP FUNDED PROJECTS AND THE ALIGNMENT OF THESE PROJECTS WITH THE IDPS AT DISTRICT MUNICIPALITIES


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Number of preventative infrastructure maintainance completed.

1. Rehabilitation of Belvedere Guest House Complex in progress.

2. Upgrading of bulk services is in progress at Bourke’s Luck Potholes and Three Rondavels.

3. Demolition of old structures at Three Rondavels completed and commenced with construction of foundations.

4. Construction of paypoint completed, 3 curio stalls completed and additional 3 in progress at God’s Window.

5. Upgrading of trails huts in progress.

6. Installation of access control and revenue collection system at all view sites not commenced.

7. Visitor management system not procured.

Preventative infrastructure maintainance completed at SS Skosana (thatch roofing, plumbing), Songimvelo (treating of timber in chalets and sewer upgrade), Mabusa and Mdala (upgrade pickets), nature reserves by 31 March 2018.

Completed preventative infrastructure maintainance at SS Skosana (thatch roofing, plumbing), Songimvelo (treating of timber in chalets).

Preventative infrastructure maintainance not commenced at Songimvelo (sewer upgrade), Mabusa and Mdala (upgrade pickets).

• Songimvelo nature reserve: the area identified for the sewer upgrade is highly ecological and requires environmental scans.

• Mabusa and Mdala pickets upgrade are behind schedule due to delays in finding suitable service providers from the local community.

• All outstanding upgrades will be completed in the second quarter of 2018/2019.



CONTINUED

SUB-PROGRAMME: PROJECT MANAGEMENTPURPOSE: THE MANAGEMENT OF MTPA AND PARTNERSHIP FUNDED PROJECTS AND THE ALIGNMENT OF THESE PROJECTS WITH THE IDPS AT DISTRICT MUNICIPALITIES


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Number of new capital infrastructure projects developed and upgraded in the nature reserves.

1. New day visitor facility: fencing of the site completed, road networks completed, construction of a swimming pool, ablution facility and hall in progress.

2. New camping and caravan facility: road network, ablution facility, braai stand, drainage system complete, electrification and plumbing in progress.

3. Access control.4. Development

and implemetation.

New capital infrastructure projects developed and upgraded in Blyde, Manyeleti and Mahushe Shongwe nature reserves by 31 March 2018.

New capital infrastructure projects developed and upgraded in some areas of: Blyde (upgraded hiking trail huts and developed a new pay point at God’s Window to enhance revenue collection);

Manyeleti: developed a Day Visitor Facility and Caravan Park;

Mahushe Shongwe upgraded an office to a 4 bedroomed staff accommodation and developed 2 bedroomed staff accommodation.

New capital infrastructure projects were not upgraded:

Blyde (road maintenance at Swadini),

Manyeleti (landscaping at the main camp).

• Blyde: road maintenance at Swadini could not commrnce due to high rain fall causing severe damage to sections of the road to the point where the total reconstruction of sections of the road base layer is required at a very high cost.

• Manyeleti: landscaping at the main camp not commenced due to DEA capital infrastructure upgrades and development at the main camp still underway. The DEA project will be completed completed in the third quarter of 2018/2019.

STRATEGY TO OVERCOME AREAS OF UNDER-PERFORMANCE

AREAS OF UNDER-PERFORMANCE STRATEGY TO OVERCOME AREAS OF UNDER-PERFORMANCE

Preventative infrastructure maintainance not completed at Songimvelo (sewer upgrade), Mabusa and Mdala (upgrade pickets).

Complete the environmental scans at Songimvelo in the second quarter of 2018/2019 and commence with the sewer upgrades. The upgrades at Mdala and Mabusa nature reserves have commenced and will be completed in the third quarter of 2018/2019 financial year.

New capital infrastructure projects not upgraded: Blyde: road maintenance at Swadini; Manyeleti: landscaping at the main camp not completed.

External funding from DEA and National Department of Tourism as well as assistance from DPWR&T is being sought.



CONTINUED

LINKING PERFORMANCE WITH BUDGET

SUB- PROGRAMME

2017/2018 2016/2017

COMMENTS ON THE (OVER)/

UNDER-EXPENDITUREBUDGET

R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

BUDGET R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER-

EXPENDITURE R’000

Office of the CEO 6 289 5 162 1 127 4 114 4 083 31 Two resignations without

replacements.

Board Secretariat 5 054 4 450 604 3 767 4 516 (748)

Critical position filled with lower than expected acting allowance. Estimated increase in daily rates during budget not yet approved for implementation.

Project Management 11 809 9 815 1 993 27 283 18 052 9 231 Slow progress on new

infrastructure developments.

Communication and Public Relations

2 212 1 940 272 2 077 1 955 123Savings recorded on Public Relation and Communication expenditure.

Risk Management and Internal Audit

5 224 6 035 (810) 6 021 5 416 604 Risk management and other assurances.

Planning and Coordination 2 141 1 847 294 1 592 1 751 (159) Saving in Annual report

printing costs.

Monitoring and Evaluation 1 356 175 1 181 1 261 1 264 (3) One resignation without

replacement.

Security Management 8 719 8 359 360 6 852 7 375 (523) Lower adhoc incidents

recorded than anticipated.

EPWP 2 605 2 571 (34) 2 911 2 912 (1)

Zithabiseni Resort 22 512 22 512 (0) 21 510 21 510 0

Total 67 922 62 866 5 055 77 389 68 835 8 555

Joint Project Conservation expenses

4 963 4 963 0 5 682 5 682 0

Expenses incurred are off-set by Partnership funding received and recorded as Income.

Ringfenced projects 10 646 10 646 0 10 10 0

Relates to funding received in prior year of which expenditure was only incurred in the current year.

Total after Joint Project Conservation and Ringfenced expenses

83 531 78 476 5 055 83 081 74 527 8 555



CONTINUED

4.2. PROGRAMME 2: OFFICE OF THE CFO Purpose Financial Services

Sub-programmesThe Office of the CFO Programme comprises of the following sub-programmes:

• Financial and Management Accounting• Supply Chain Management• Asset Management

Strategic objectives• Improve financial performance



PROGRAMME 2: OFFICE OF THE CFO




ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Improve financial performance.

Revenue collection increased to R37,9 million.

Increase revenue collection to R45 million by 31 March 2018.


Revenue collection increased by R10,9 million.

Top up fees from concession payments and implementer fee from DEA infrastructure projects.

BEE Empowerment through procurement.

None. 70% of procurement of goods and services spent on BEE by 31 March 2018.

88% of procurement of goods and services spent on BEE.

18% more procurement of goods and services spent on BEE.

Strict enforement of the BEE legislation and Preferential Procurement Policy Framework Act.



CONTINUED


SUB-PROGRAMME: FINANCIAL AND MANAGEMENT ACCOUNTINGPURPOSE: FINANCIAL AND ACCOUNTING SERVICES


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Increase revenue collection to R45 million by 31 March 2018.


Increase revenue collection to R45 million by 31March 2018.


Revenue collection increased by R10,9 million.

Top up fees from concession payments and implementer fee from DEA infrastructure projects.


SUB-PROGRAMME: SUPPLY CHAIN MANAGEMENTPURPOSE: PROCUREMENT


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Percentage of procurement spend on BEE.

None. 70% of procurement of goods and services spent on BEE by 31 March 2018.

18% percent of procurement of goods and services spent on BEE.

18% more procurement of goods and services spent on BEE.

Strict enforcement of the BEE legislation and Preferential Procurement Policy Framework Act.



None. None.



CONTINUED


SUB- PROGRAMME

2017/2018 2016/2017



R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

BUDGET R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

CFO 4 215 2 255 1 961 1 632 2 355 (723)

Savings due to reimbursement for the seconded CFO. CFO salary was fully budgeted at market related with the aim of filling the position. The process was not completed.

Financial and Management Accounting

10 576 10 413 164 12 348 8 402 3 946 Lower than estimated Head Office Communication costs.

Supply Chain Management 6 831 8 549 (1 719) 7 001 7 228 (227)

Increased printing cost on rental equipment. Successful appeal process increased COE cost to incude backpays and improved remuneration packages.

Asset Management 7 833 9 700 (1 867) 8 127 8 431 (304)

Replace vehicle that was written off. Absorbed overflow of fuel charges from Reserves.

Total 29 455 30 917 (1 461) 29 108 26 416 2 692



CONTINUED

4.3. PROGRAMME 3: CORPORATE SERVICES Purpose To provide effective and efficient management and business support

Sub-programmes• Human Resources • Information Communications Technology, Management and System• Legal Services

Strategic objectives• To provide strategic leadership, administrative and management support to the MTPA• To improve governance and compliance• Improve organisational performance



PROGRAMME 3: CORPORATE SERVICES




ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Improve organisational performance.

Not applicable. Human Resources strategy developed and approved by 31 March 2018.

Human Resources strategy developed.

Human Resources strategy awaiting approval.

Strategy will be presented in the first quarter of 2018/2019 financial year for approval.

Not applicable. Organizational Health Audit conducted and approved by 31 March 2018.

Organizational Health Audit conducted.

Health Audit awaiting Board approval.

Development of the Health Audit Report took longer than anticipated due to extended consultations with external and internal stakeholders, the organisational Health Audit was subsequently approved by the Board in May 2018.



CONTINUED

PROGRAMME 3: CORPORATE SERVICES




ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



To improve governance and compliance.

Draft ICT Governance Framework developed.

ICT Strategy approved and implemented by 31 March 2018.

ICT Strategy approved and implemented.

None. Not Applicable.


SUB-PROGRAMME: HUMAN RESOURCES PURPOSE: HUMAN RESOURCE SUPPORT SERVICES


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Human Resource strategy developed.

Not assesed. Human Resources strategy developed and approved by 31 March 2018.

Human Resources strategy developed.

Human Resources strategy awaiting approval.

Strategy will be presented in the first quarter of 2018/2019 financial year for approval.


Not assesed. Organizational Health Audit conducted and approved by 31 March 2018.


Health Audit awaiting Board approval.

Development of the Health Audit Report took longer than anticipated due to extended consultations with external and internal stakeholders.Organizational Health Audit was subsequently approved by Board in May 2018.

Approved ICT Strategy.

Draft ICT Governance Framework developed.

ICT Strategy approved and implemented by 31 March 2018.

ICT Strategy approved and implemented.




CONTINUED



Human Resources strategy awaiting approval. Engagement with the service provider will continue so that the strategy and plan are approved during the first quarter of 2018/2019 financial year.

Health Audit awaiting approval. Organizational Health Audit approved by the Board in the first quarter of 2018/2019 financial year.


SUB- PROGRAMME

2017/2018 2016/2017



R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

BUDGET R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

Executive Manager Corporate Services

2 057 1 707 350 610 1 335 (725)

Savings recorded due to the Executive Manager of Corporate services position being vacant for most part of the financial year 2017/2018.

Human Resources 16 926 18 885 (1 959) 15 974 18 307 (2 332)

Incidents in reserves increased Workmens Compensation fees. Vehicle reimbursement travel exceeded budget.

Legal Services 4 546 7 069 (2 523) 4 800 3 715 1 085Unforseen activity in litigation procedures not anticipated during budget.

ICT 10 764 9 313 1 451 9 743 7 043 2 700Reduced spending in subscriptions after services were cancelled.

Total 34 293 36 974 (2 680) 31 127 30 400 728


3 355 3 355 0 4 181 4 181 0

Expenses incurred are off-set by Partnership funding received and recorded as Income.


37 648 40 329 (2 680) 45 051 41 624 8 555



CONTINUED

4.4. PROGRAMME 4: TOURISM Purpose Foster, promote and sustainably develop and market tourism

Sub-programmesThe Tourism Programme comprises of the following sub-programmes:

• Tourism Development • Tourism Registration• Tourism Marketing

Strategic objectives• Promote the Province to increase tourist arrivals by 10%• Increase the number of business events hosted in the Province by 20%• Increase HDI participation in the tourism industry



PROGRAMME 4: TOURISM




ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Promote the Province to increase tourist arrivals by 10% by 2020.

12 leisure marketing programmes conducted:• Winter, Festive and

Easter campaigns.• Getaway show.• Consumer exhibition

at a Women’s Forum.• WTM Africa.• Indaba.• FACIM.• SIFT. • Three workshops.

14 leisure marketing activities conducted by 31 March 2018.

14 leisure marketing activities conducted.


Not assesed. 6 business events marketing activities conducted by 31 March 2018.

6 business events marketing activities conducted.


Not assesed. Tourism marketing strategy developed and approved by 31 March 2018.

Tourism marketing strategy developed and approved.




CONTINUED





ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Promote the Province to increase tourist arrivals by 10% by 2020. continued

Not assesed. Three tourism partnership/cooperation programme with Ural Assosiation of Tourism in Russia, East3Route and Triland implemented by 31 March 2018.

Three tourism partnership/cooperation programmes with Ural Assosiation of Tourism in Russia, East3Route and Triland implemented.


Not assesed. Two strategic heritage tourism projects facilitated to diversify the tourism product offerings (Waterval Boven and Pilgrims Rest) by 31 March 2018.

Two strategic heritage tourism projects facilitated to diversify the tourism product offerings (Waterval Boven and Pilgrims Rest).


Two tourism awareness programmes conducted:• Tourism Month.• Lilizela Awards.

Conduct 20 Tourism Awareness activities (including Tourism month and hosting of World Tourism Day) by 31 March 2018.

Conduct 20 Tourism Awareness activities (including Tourism month and hosting of World Tourism Day).


Five training programmes conducted:• Housekeeping.• Tourism buddies.• General travel.• 2 x Tourist guides

training.

Six Tourism Training activities conducted by 31 March 2018.

Six Tourism Training activities conducted.


326 tourist guides registered.

215 tourist guides registered by 31 March 2018.


171 more tourist guides registered.

Awareness created in the industry to register and renew their tourist guides licences.



CONTINUED





ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Transformation of sector to ensure participation of HDI owned products in the tourism industry.

Five new HDI supported. 10 new HDI owned products supported by 31 March 2018.

10 new HDI owned products supported.


12 existing HDI supported.

15 existing HDI owned products supported by 31 March 2018.

15 existing HDI owned products supported.



SUB-PROGRAMME: MARKETINGPURPOSE: MARKETING THE MPUMALANGA PROVINCE AS A TOURISM DESTINATION


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Number of marketing activities conducted.

12 leisure marketing programmes conducted:• Winter, Festive

and Easter campaigns.

• Getaway show.• Consumer

exhibition at a Women’s Forum.

• WTM Africa.• Indaba.• FACIM.• SIFT. • Three

workshops.

14 leisure marketing activities conducted by 31 March 2018.

14 leisure marketing activities conducted.


Five business events marketing programmes conducted:• IMEX.• Business Events.

Conference.• Meetings Africa.• Innibos.• Beach Festival.

Six business events marketing activities conducted by 31 March 2018.

Six business events marketing activities conducted.




CONTINUED

SUB-PROGRAMME: MARKETINGPURPOSE: MARKETING THE MPUMALANGA PROVINCE AS A TOURISM DESTINATION


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Tourism marketing strategy developed.

Not assesed. Tourism marketing strategy developed and approved by 31 March 2018.

Tourism marketing strategy developed and approved.


Number of Regional tourism partnership/cooperation programmes facilitated and implemented.

Not assesed. Two tourism partnership/cooperation programmes with East3Route and Triland implemented by 31 March 2018.

Two tourism partnership/cooperation programme with East3Route and Triland implemented.


Number of International Tourism partnership/cooperation programmes facilitated and implemented.

Not assesed. One tourism partnership/cooperation programme with Ural Assosiation of Tourism in Russia implemented by 31 March 2018.

One tourism partnership/cooperation programme with Ural Assosiation of Tourism in Russia implemented.



SUB-PROGRAMME: TOURISM DEVELOPMENTPURPOSE: DEVELOP AND GROW THE TOURISM INDUSTRY AND MAINTENANCE AND DEVELOPMENT OF MTPA INFRASTRUCTURE

SUB-PROGRAMME PERFORMANCE

INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Number of strategic tourism development projects facilitated to diversify the tourism product offerings.

Not assesed. Two strategic heritage tourism projects facilitated to diversify the tourism product offerings (Waterval Boven and Pilgrims Rest) by 31 March 2018.

Two strategic heritage tourism projects facilitated to diversify the tourism product offerings (Waterval Boven and Pilgrims Rest).




CONTINUED

SUB-PROGRAMME: TOURISM DEVELOPMENTPURPOSE: DEVELOP AND GROW THE TOURISM INDUSTRY AND MAINTENANCE AND DEVELOPMENT OF MTPA INFRASTRUCTURE


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Number of Tourism Awareness Activities conducted.

Two tourism awareness programmes conducted:• Tourism Month.• Lilizela Awards.

Conduct 20 Tourism Awareness activities (including Tourism month and hosting of World Tourism Day) by 31 March 2018.

Conducted 20 Tourism Awareness activities (including Tourism month and hosting of World Tourism Day).


Number of Tourism Trainning Activities conducted.

Five training programmes• Housekeeping.• Tourism buddies.• General travel.• 2 x Tourist

guides training.

Six Tourism Training activities conducted by 31 March 2018.

Six Tourism Training activities conducted.


Number of new HDI owned products supported to participate in the tourism industry.

Five new HDI supported.

10 new HDI owned products supported by 31 March 2018.

10 new HDI owned products supported.


Number of HDI owned products supported to gain market access.

12 existing HDI supported.

15 existing HDI owned products supported by 31 March 2018.

15 existing HDI owned products supported to gain market access.


Tourism SMME support and development strategy developed.

Not assesed. Tourism SMME support and development strategy developed and approved by 31 March 2018.

Tourism SMME support and development strategy developed and approved by 31 March 2018.




CONTINUED


SUB-PROGRAMME: REGISTRATIONPURPOSE: DEVELOP AND GROW THE TOURISM INDUSTRY AND MAINTENANCE AND DEVELOPMENT OF MTPA INFRASTRUCTURE


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Number of tourist guides registered.

326 tourist guidesregistered.

215 tourist guides registered by 31 March 2018.


171 more tourist guides registered.

Awareness created in the industry to register and renew their tourist guides licences.



None. None.


SUB- PROGRAMME

2017/2018 2016/2017



R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

BUDGET R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

Executive Manager Tourism

2 064 1 706 358 1 876 1 699 177

Savings resulted from vacant position which was filled by secondment of an Executive Secretary from another Programme.

Tourism Development 25 762 21 220 4 542 13 518 12 590 928

Tender awarded on the Waterval Boven and Pilgrims Rest was below budget.

Tourism Marketing 13 698 14 045 (347) 10 434 13 825 (3 392) Overspending

on traveling.

Tourism Registration 2 399 2 121 278 2 165 2 076 89

The cost of training tour guides was lower than budgeted.

Total 43 923 39 092 4 830 27 993 30 191 (2 197)



CONTINUED

4.5. PROGRAMME 5: BIODIVERSITY CONSERVATION Purpose Management and conservation of biodiversity and eco-systems within the Province

Sub-programmes• Protected Areas and Development• Biodiversity Support Services• Conservation Services• Biodiversity Policy and Compliance

Strategic objectives• To manage the Provincial protected areas effectively• Maintain adequate enforcement capacity in the Province• To increase land under conservation in the Province• Develop and maintain scientific biodiversity data, an information and land use decision support tools



PROGRAMME 5: BIODIVERSITY CONSERVATION




ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



To manage the Provincial protected areas effectively.

43% of the area of state managed protected areas assessed with a METT score above 67%.

50% of the area of Provincial protected areas assessed with a METT score above 67% by 31 March 2018.

77,38% of the area of Provincial protected areas assessed with a METT score above 67%.

27,38% more of the area of Provincial protected assessed achieved a METT score above 67%.

The factors contributing to the percentage increase is due to the upgrades of tourism and other infrastructure facilities (EPIP funded projects) which were completed during 2017/2018 and enhancement of human capital through DEA funded programmes (e.g. Environmental Monitors).



CONTINUED

PROGRAMME 5: BIODIVERSITY CONSERVATION




ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



To manage the Provincial protected areas effectively. continued

Not assesed. Feasibility studies conducted on identified resources management projects by 31 March 2018.

Not achieved. Feasibility studies not conducted on identified resources management projects .

Service provider was only appointed in the fourth quarter to conduct feasiability studies. Tender was advertised, however no suitable candidate was found and therefore tender had to be re-advertised. Feasiability will be completed in the third quarter of 2018/2019.

818 119 (87.6%) tourism visitors visited protected areas.

Seven marketing activities conducted for the nature reserves by 31 March 2018.

Five marketing activities conducted for the nature reserves.

Two marketing activities were not conducted.

Budget constraints limited the number of marketing activities that could be conducted.

Not assessed. 348 job opportunities created through EPWP by 31 March 2018.

361 Job opportunities created through EPWP.

13 more jobs were created.

More budget was allocated for internal EPWP job creation projects.

Provided conservation education to 142 842 learners.

Provide conservation education to 140 000 learners by 31 March 2018.


Provided conservation education to an additional 21 462 learners.

Increase in requests from schools bordering PA. This is due to the development of quality materials in line with school needs and curriculum.



CONTINUED


SUB-PROGRAMME: PROTECTED AREAS AND DEVELOPMENTPURPOSE: MANAGEMENT AND CONSERVATION OF BIODIVERSITY IN PROTECTED AREAS AND MANAGEMENT AND MAINTENANCE OF FACILITIES WITHIN PROTECTED AREAS


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Percentage of MTPA managed reserves assessed with a METT score above 67%.

43% of the area of state managed protected areas assessed with a METT score above 67%.

50% of the area of Provincial protected areas assessed with a METT score above 67 by 31 March 2018.

77,38% of the area of Provincial protected areas assessed with a METT score above 67%.

27,38% more of the area of Provincial protected assessed achieved a METT score above 67%.

The factors contributing to the percentage increase is due to the upgrades of tourism and other infrastructure facilities (EPIP funded projects) which were completed during 2017/2018 and enhancement of human capital through DEA funded programmes (e.g. Environmental Monitors).

Resources management projects identified and feasibility studies conducted.

Not assesed. Feasibility studies conducted on identified resources management projects by 31 March 2018.

Not achieved. Feasibility studies not conducted on identified resources management projects.

Service provider was only appointed in the fourth quarter to conduct feasiability studies. Tender was advertised, however no suitable candidate was found and therefore tender had to be re-advertised. Completion of feasibility will be completed in the third quarter of 2018/2019.

Number of marketing activities conducted for the nature reserves.

818 119 (87.6%) tourism visitors visited protected areas.

Seven marketing activities conducted for the nature reserves by 31 March 2018.

Five marketing activities conducted for the nature reserves.

Two less marketing activites conducted than planned.

(Five conducted as follows: Indaba trade show;Innibos show and Gateway show; festive season campaign and Beeld Show).

Budget constraints limited the number of marketing activities that could be conducted.



CONTINUED

SUB-PROGRAMME: PROTECTED AREAS AND DEVELOPMENTPURPOSE: MANAGEMENT AND CONSERVATION OF BIODIVERSITY IN PROTECTED AREAS AND MANAGEMENT AND MAINTENANCE OF FACILITIES WITHIN PROTECTED AREAS


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Number of job opportunities created through EPWP.

Not assessed. 348 job opportunities created through EPWP by 31 March 2018.

361 job opportunities created through EPWP.

13 more jobs were created.

More budget was allocated for internal EPWP job creation projects.


SUB-PROGRAMME: BIODIVERSITY SUPPORT SERVICESPURPOSE: BIO-DIVERSITY RESEARCH, STATUS MONITORING AND SCIENTIFIC SUPPORT, ENGAGEMENT AND DEVELOPMENT OF NEIGHBOURING COMMUNITIES TO PROTECTED AREAS AND INCREASE OF LAND UNDER CONSERVATION TO ACHIEVE NATIONAL TARGETS


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Number of learners reached through conservation education programmes.


Provide conservation education to 140 000 learners by 31 March 2018.


Provided conservation education to an additional 21 462 learners.

Increase in requests from schools bordering PA. This is due to the development of quality materials in line with school needs and curriculum.



Feasibility studies not conducted on identified resources management projects.

Accelerate the process of research and consulations with relevant stakeholders to complete the feasibility study by end of third quarter of 2018/2019.

Two marketing activites not conducted. Prepare collateral and align the marketing of nature reserves with that of the destination Mpumalanga.



CONTINUED


SUB- PROGRAMME

2017/2018 2016/2017



R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

BUDGET R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

Executive Manager Biodiversity Conservation

8 432 5 397 3 035 5 585 5 525 59

Project Manager Infrastructure (Engineer) was not appointed. Tender awarded for the Resource Management project was below budget.

Protected Area Management 174 534 184 564 (10 028) 148 272 174 792 (26 520)

Over expenditure due to Public Holidays and Sunday work remuneration. Electricity rates increased above inflation. Approved km allocation not aligned with budget.

Biodiversity Support Services

11 644 10 408 1 236 24 048 15 642 8 407

COE cost in the operating system to be aligned with decentralised budget across sub-programmes.

Conservation Services 24 715 22 721 1 993 38 286 21 320 16 967

COE cost in the operating system to be aligned with decentralised budget across sub-programmes.

Total 219 325 223 089 (3 763) 216 191 217 279 (1 087)


325 325 0 306 306 0

Expenses incurred are off-set by Partnership funding received and recorded as income.

Ringfenced projects 935 935 0 484 484 0

Relates to funding received in prior year of which expenditure only incurred in the current year.


220 585 224 348 (3 763) 216 981 218 069 (1 087)



CONTINUED

4.6 PROGRAMME 6: COMMERCIAL OPERATIONS Purpose To sustainably improve revenue generation and collection in order to secure the future existence of the MTPA

Sub-programmes• Commercial Operations

Strategic objectivesDevelopment and implementation of key catalytic projects



PROGRAMME 6: COMMERCIAL OPERATIONS




ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Development of key catalytic projects.

Not applicable. Negotiations and signing of agreements completed for four PPP projects by 31 March 2018.

Not achieved. Negotiations and signing of agreements with four PPP not completed.

The claimant communities are disputing the MTPA’s right to manage the PPP process, despite earlier agreements.

Not applicable. Six PPP transactions initiated by 31 March 2018.

Nine PPP transactions initiated.

Three more PPP trasactions initiated.

The additional three PPP transactions are planned for 2018/2019 financial year, to save time all transactions were initiated with National Treasury.



CONTINUED


SUB-PROGRAMME: COMMERCIAL OPERATIONSPURPOSE: TO SUSTAINABLY IMPROVE REVENUE GENERATION AND COLLECTION IN ORDER TO SECURE THE FUTURE EXISTENCE OF THE MTPA


INDICATORS

ACTUAL ACHIEVEMENTS

2016/2017


ACTUAL ACHIEVEMENTS

2017/2018


TARGETS TO ACTUAL



Negotiations completed for Public Private Partnerships (PPP) projects.

None. Negotiations and signing of agreements completed for four PPP projects by 31 March 2018.

Not achieved. Negotiations and signing of agreements with four PPP not completed.

The claimant communities are disputing the MTPA’s right to manage the PPP process, despite earlier agreements.

Number of Public Private Partnerships (PPP) projects initiated.

None. Six PPP transactions initiated by 31 March 2018.

Nine PPP transactions initiated.

Three more PPP trasactions initiated.

The additional three PPP transactions are planned for 2018/2019 financial year, to save time all transactions were initiated with National Treasury.


SUB- PROGRAMME

2017/2018 2016/2017



R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

BUDGET R’000

ACTUAL EXPENDITURE

R’000

(OVER) / UNDER

EXPENDITURE R’000

Commercial Operations 4 227 2 324 1 903 0 0 0

Decreased activity in commercialisation projects in Blyde and other reserves.

Total 4 227 2 324 1 903 0 0 0



Negotiations and signing of agreements with four Public Private Partnerships not completed.

Intensify negotiations with communities in order to conclude them during the 3rd quarter of 2018/2019.

Registration of the transactions with National Treasury was not completed.

Fast track approval of the strategic plan for commercislisations. Continue with the procurement of investors, utilising the PPP guidelines.


5. SUMMARY OF FINANCIAL INFORMATION


5.1. REVENUE COLLECTION

SOURCES OF REVENUE

2017/2018 2016/2017

BUDGET R’000

ACTUAL AMOUNT

COLLECTED R’000

(OVER) / UNDER R’000

BUDGET R’000

ACTUAL AMOUNT

COLLECTED R’000

(OVER)/ UNDER R’000

Sale of goods 4 717 5 653 (936) 2 088 3 693 (1 606)

Rendering of services 30 383 31 026 (643) 21 706 22 733 (1 027)

Concession fees 2 200 7329 (5 129) 3 394 4 516 (1 122)

Rental income 85 190 (105) 85 108 (23)

Recoveries 242 262 (20) 198 252 (54)

Sales – game 5 000 2 189 2 811 6 420 2 241 4 179

Sundry income 1 473 6 643 (5 170) 308 2 772 (2 464)

Interest received 900 1 156 (256) 800 912 (112)

DEA Implementers Management Fee 0 1 436 (1 436) 0 0 0

Total 45 000 55 833 (10 883) 35 000 37 229 (2 229)

Non-Cash Asset Donation 7 027 7 027 0 0 0 0

Joint Project Conservation income 7 130 7 130 0 6 150 6 150 0

Total after Joint Project Conservation income and Non-Cash Asset Donation

59 157 70 041 (10 883) 41 150 43 378 (2 229)

NB: Financial information above excludes all non-cash deposit.** Included in sundry income are partnership funds.



CONTINUED

5.2 PROGRAMME EXPENDITURE

PROGRAMME

2017/2018 2016/2017

BUDGET R’000

ACTUAL EXPENDITURE

R’000

(OVER)/ UNDER EXPENDITURE

R’000

BUDGET R’000

ACTUAL EXPENDITURE

R’000

(OVER)/ UNDER

EXPENDITURE R’000

Executive Office 67 922 62 866 5 055 77 389 68 835 8 555

Office of the CFO 29 455 30 917 (1 461) 29 108 26 416 2 692

Corporate Services 34 293 36 974 (2 680) 31 127 30 400 727

Tourism 43 923 39 092 4 830 27 993 30 191 (2 197)

Biodiversity Conservation 219 325 223 089 (3 763) 216 191 217 279 (1 087)

Commercial Operations 4 227 2 324 1 903 0 0 0

Total Approved Budget 399 145 395 262 3 883 381 809 373 119 8 690


8 643 8 643 0 10 169 10 169 0

Ringfenced projects 11 581 11 581 0 494 494 0


419 369 415 486 3 883 392 472 383 782 8 690

Note: Under-expenditure:• Decreased activity in commercialisation projects in Blyde and other reserves• Slow progress on new infrastructure developments• Underspending on Tourism Business Events

Over-expenditure:• Over expenditure due to Public Holidays and Sunday work remuneration, electricity rates increased above inflation, approved

km allocation not aligned with budget increased.• Printing cost on rental equipment. Successful appeal process increased COE cost included backpays and improved remuneration

packages.• Unforseen activity in litigation procedures not anticipated during budget.



CONTINUED

5.3 CAPITAL INVESTMENT, MAINTENANCE AND ASSET MANAGEMENT PLAN

INFRA-STRUCTURE PROJECTS

2017/2018 2016/2017

BUDGET R’000

ACTUAL EXPENDITURE R’000 (OVER)

/ UNDER EXPEN-DITURE R’000

BUDGET R’000

ACTUAL EXPENDITURE R’000 (OVER)

/ UNDER EXPEN-DITURE R’000

WORK IN

PROG- RESS

MAINTE-NANCE

CAPITAL EXPEND-

ITURE

WORK IN

PROG- RESS

MAINTE-NANCE

CAPITAL EXPENDI-

TURE

Infrastructure upgrade prior year roll over

-

- 1 10 646

(10 647)

18 000 6 763 28 3 900

7 309

Infrastructure upgrade

5 000

- 0 1 443

3 557

- 0 0 0

-

Infrastructure maintenance

500

- 1 470 0

(970)

3 000 0 1 046 1 383

571

Total 5 500 - 1 470 12 090 8 060 21 000 6 763 1 074 5 283 7 880

5.4 MATERIALITY AND SIGNIFICANCE FRAMEWORKRegulation 28.2.1 of the Treasury Regulations requires that the Annual Report of public entities shall detail the materiality/ significance framework applied during the financial year which relates to:

• Any material losses through criminal conduct and any irregular and fruitless and wasteful expenditure must be disclosed as a note to the Annual Financial Statements of the public entity; and

• Particulars of the public entity’s strategic objectives and outcomes as identified and agreed on by the Executive Authority, the key performance measures and indicators for assessing the entity’s performance in delivering the desired outcomes and objectives and the entity’s actual performance against the strategic objectives and outcomes must be based on the Annual Report of the public entity.

Regulations 28.3.1 of the Treasury Regulations require that the Accounting Authority must develop and agree on a framework of acceptable levels of materiality and significance with the relevant Executive Authority. South African Audit Standard 320 paragraph 3 defines materiality as “information is material if its omission or misstatement could influence the economic decision of users taken on the basis of the financial statements”. Materiality depends on the size of the item, or error judged in the particular circumstances of its omission or misstatement.

In accordance therewith, this framework has been considered from two main perspectives, namely, quantitative and qualitative aspects. The policy framework set-out hereunder is as required appropriately presented in the Strategic Plan 2015-2020, in terms of the PFMA and Treasury Regulations.



CONTINUED

QUANTITATIVE ASPECTS:

Taking into account the materiality guideline, we assessed the level of the material loss and the significance is as follows:

• Every amount in respect to criminal conduct;

• R300,000 and above in respect of irregular, fruitless and wasteful expenditure involving gross negligence; and

• R4.8 million and above being 1% of PPE in respect of any other irregular, fruitless and wasteful expenditure.

In determining the materiality levels the following factors were taken into account:

• The Nature of MTPA’s Business;

• The statutory requirement laid down for the MTPA with specific reference to the PFMA and Treasury Regulations; and

• The control and inherent risks associated with MTPA.

QUALITATIVE ASPECTS:

Materiality is not merely related to the size of the entity and the elements of its financial statements. Misstatements that are large, either individually or in the aggregate, may affect a “reasonable” user’s judgement. However, misstatements may also be material on qualitative grounds. For purpose of significance in terms of a section 54(2) of the PFMA, the level of significance was assessed at an amount of R4.8 million being approximately 1% of PPE. These qualitative grounds, which will be reviewed annually include, amongst others:

• Establishment or participation in the establishment of the company;

• Participation in a significant partnership, trust, incorporated joint venture or similar arrangement;

• Acquisition or disposal of a significant shareholding in a company;

• Acquisition or disposal of a significant asset;

• Commencement or cessation of a significant business activity; and

• A significant change in nature or extent of its interest in a significant partnership, trust, incorporated joint venture or similar arrangement.


PART CGOVERNANCE


GOVERNANCE


1. INTRODUCTION Corporate governance embodies processes and systems by which public entities are directed, controlled and held to account. In

addition to legislative requirements based on a public entity’s enabling legislation, and the Companies Act, corporate governance with regard to public entity’s is applied through the precepts of the Public Finance Management Act (PFMA) and run in tandem with the Protocol on Corporate Governance, which encapsulates the principles contained in the King’s Report on Corporate Governance.

The Executive and the Boards of the public entity are responsible for corporate governance.

2. PORTFOLIO COMMITTEES The MTPA attended the following meetings of the Portfolio Committee on Premier’s Office, Finance, Economic Development and

Tourism: • 02 May 2017 - 2017/2018 Budget and APP • 22 August 2017 - 1st Quarter Performance Report • 14 November 2017 - 2nd Quarter Performance Report • 20 February 2018 - 3rd Quarter Performance Report

Below are recommendations of the Portfolio Committee house Resolutions for the 2017/2018 financial year and progress made as at 31 March 2018:

RECOMMENDATIONS PROGRESS AS AT 31 MARCH 2018 STATUS

1. The entity must ensure that the Health Audit will commence and be completed in the fourth quarter of 2017/18 financial year. A progress report must be submitted to the Committee not later than 06 April 2018.

The Organizational Health Audit has been completed and will be approved in the 1st quarter of 2018/2019.

Completed.

2. The entity must develop systems, mechanisms and implementation plans to ensure that planned targets are met in the fourth quarter of the 2017/18 financial year, as well as implementation plans to mitigate under-spending of the approved budget.

The entity has monitoring and evaluation processes that monitors the performance activities to ensure that planned targets are met. The entity has achieved, over eighty percent of the planned targets. In the 2017/18 financial year, the entity recorded an under-spending of one (1) percent. The entity prepares an annual procurement plan in the beginning of the year and submits to Provincial Treasury as a guideline to monitor budget transfers and spending. The entity further implements budget confirmations before proceeding with any procurement. Budgeted and actual expenditure report are prepared and presented to the management and the Accounting Authority, monthly and quarterly, respectively.

Completed.

3. The entity must submit an updated progress report on the commercialization process as well as on the finalization of the land claim. The progress report must be submitted not later than 06 April 2018.

The Commercialisation of Zithabiseni Resort is at procurement stage. The evaluation of companies that submitted expression of interest has been completed. Two preferred companies have been selected. A service provider has been appointed to conduct a due diligence with the assistance of Nkangala District Municipality, thereafter a suitable operating company will be appointed. A meeting was held between the Minister of Rural Development and Land Reform as well as the MEC for Finance, Economic Development and Tourism to look into finalizing the land claim and facilitating investments. Consequently, a technical team was set up between both departments to help facilitate and accelerate the process.

Ongoing.


BELOW ARE QUESTIONS RAISED BY STANDING COMMITTEE ON PUBLIC ACCOUNTS (SCOPA) ON THE 2016/2017 FINANCIAL YEAR AND PROGRESS MADE IN THIS REGARD:

RESOLUTION PROGRESS AS AT 31 MARCH 2018 STATUS

1. ZITHABISENI RESORT OWNERSHIP PROPERTIES

i. The Accounting Authority must ensure that the entity provide progress made towards resolving the property ownership of Zithabiseni Resort and Conference Centre.

Technical engagement was held at Zithabizeni between CLCC / RLCC / DEDT / and MTPA.

Erwen that formed the property of Zithabiseni were consolidated into one farm. Transfer to take place as soon as possible.

Ongoing.

ii. Portfolio Committee must meet with Rural Development and follow-up on the Zithabiseni land claim.

Meeting was also held between National Minister of DRDLR, MEC DEDT and MTPA CEO. Meeting agreed that this matter needed immediate attention and has to be finalized as soon as possible.

Completed.

2. PROPERTY, PLANT AND EQUIPMENT

i. The Accounting Authority must take disciplinary actions against official(s) who failed to ensure that the entity has adequate controls in safeguarding and monitoring of assets.

The entity is under-staffed within the Asset management unit.

The entity has more than 11 million assets across 17 reserves.

The enforcement of controls requires more staff, due to the moratorium, the entity could not hire additional staff.

Physical verification of assets is now conducted electronically (scanner). This electronic system has brought about adequate control and monitoring of assets.

Ongoing.

ii. The Accounting Authority must ensure that the entity has an accurate asset register before the end of the financial year 2017/18.

The entity has an updated accurate asset register. Completed.

3. OTHER INCOME: CONCESSION FEES

i. The Accounting Authority must ensure that the entity operates with adequate and effective contract management system.

The entity has standardized all concession contracts. Where there were no contracts or the terms have expired, the entity has negotiated new terms and signed with the concessionaires. However there are contracts that have not been concluded because the entity is still engaging on the new standardized terms

Ongoing.

4. PREDETERMINED OBJECTIVES

i. The Accounting Authority must ensure that the Performance Information Policy is developed and implemented accordingly.

The Performance Information Policy has been developed and approved by the Board.

Completed.

ii. The Accounting Authority must conduct quarterly review on performance information and ensure that MOV`s is verified and filed properly.

Quarterly reviews on performance information are conducted and Portfolio of Evidence verified and filed.

Completed.

5. IRREGULAR EXPENDITURE

i. The Accounting Authority must provide progress report and/or outcome of the submission to Treasury (irregular expenditure R35 957 190.00).

The National Treasury has not yet provided feedback on the submission of the irregular expenditure. Follow up meetings were held with the Provincial Treasury however they are still awaiting feedback from National Treasury.

Ongoing.

GOVERNANCE

CONTINUED


GOVERNANCE

CONTINUED

RESOLUTION PROGRESS AS AT 31 MARCH 2018 STATUS

6. COMPLIANCE WITH LEGISLATION (COMPILATION OF FINANCIAL STATEMENTs)

i. The Accounting Authority must establish a system of development and reviewing of Financial Statements on a Quarterly basis and a quality assurance team to review Annual Financial Statements.

The entity has established a system of development and reviewing of Financial Statements: Half year Financial Statements are reviewed by an independent audit firm and Treasury to ensure that no material misstatements are found when the Annual Financial Statements are consolidated. The entity’s internal auditors are conducting quarterly reviews of financial reports.

Completed.

7. PROCUREMENT AND CONTRACT MANAGEMENT

i. The Accounting Authority must take disciplinary actions against officials who contravene Treasury Regulation 16A6.3, 16A9.1 (d) and Preferential Procurement Regulations.

The irregular expenditure was investigated by an independent investigator. The report did not recommend disciplinary actions against any official because the entity derived value for money on the transactions.

However, the entity has provided training to officials in the finance department to avoid recurrence of the irregular expenditure.

Ongoing.

3. EXECUTIVE AUTHORITY The following reports were submitted to the Executive Authority during the reporting period: • Annual Report 2016/2017 - 31 August 2017 • Quarter 1 (2017/2018) - 31 July 2017 • Quarter 2 (2017/2018) - 27 October 2017 • Quarter 3 (2017/2018) - 31 January 2018 • Quarter 4 (2017/2018) - 03 May 2018

The Executive Authority raised no issues during the reporting period with regards to the above reports submitted.

4. THE ACCOUNTING AUTHORITY / THE BOARD INTRODUCTION: The Board is the Accounting Authority of the MTPA and constitutes a fundamental base for the application of corporate governance

principles in the MTPA. The Board exercises and performs the powers and functions conferred or imposed upon the Agency by the MTPA Act or any other law. The Board provides strategic direction to the MTPA.

THE ROLE OF THE BOARD IS AS FOLLOWS: In accordance with the MTPA Act and corporate governance, the specific responsibilities discharged by the Board collectively, include

the following:• Retaining effective control over the MTPA and monitoring Management’s implementation of the strategic plan, the Annual

Performance Plan as well as financial objectives, as approved by the Board;• Defining levels of materiality;• Written delegation of specific powers to management and reserving specific powers to the Board;• Monitoring of the delegated powers to management;• Ensuring that efficient systems of policies and procedures are in place and appropriate governance structures exist to ensure

efficient and effective running of the Agency;


• Ensuring compliance to applicable laws and regulations, audit and accounting principles, the MTPA Code of Conduct, the King III report and such other principles that may be established by the Board from time to time;

• Regularly reviewing and evaluating the risks to the business of the MTPA and ensuring the existence of comprehensive and appropriate internal controls to mitigate such risks;

• Exercising objective judgement on the affairs of the MTPA, independent from management, but with sufficient management information to enable a proper and informed assessment; and

• Ensuring that the MTPA acts responsibly towards all relevant stakeholders who have a legitimate interest in its affairs.

BOARD CHARTER:

As recommended by the King Code, the Board has a Charter that sets out the role of the Board, the composition of the Board and the processes that relate to key governance activities.

The Charter does not necessarily specify all the workings of the Board. It is a high level document that is supported by other (internal) documents such as:• Delegation of Authority;• Board Policies; and• Operational Policies

The following progress was made in complying with the Board Charter:

• The Board has satisfied its role of determining the Agency’s purpose, values, giving strategic direction, identifying key risk areas and monitoring the performance of the Agency against the set objectives. It has further successfully, advised on significant financial matters in the period under review;

• With regard to the composition of the Board, the Board’s composition is according to the terms set out in the MTPA Act;• There is a clear division of responsibilities between the Chairperson of the Board and the CEO;• The Board convened its meetings as set out in the Act and also in the Charter and has also convened additional meetings to

address issues that were pertinent to the Agency;• The Board established governance structures on assumption of office to facilitate efficient decision making. It has further aligned

the structures according to its mandate and Treasury prescripts;• The Board Members adhere to the declaration of interests on an annual basis and at each meeting Board Members are required

to declare conflict of interest if any;• The Company Secretary’s office has been aligned with the Charter to permeate a situation whereby it works closely with the

Chairperson of the Board and the CEO;• The appointment of Internal Auditors has been delegated to the Audit and Risk Committee; and• The Board has satisfied all the reporting and accountability requirement to the MEC, Provincial Legislature, Provincial Treasury

and the Auditor General’s office as set out in the MTPA Act and the PFMA.

BOARD MEMBERS:

The table below compose of both the interim and permanent Board Members as appointed by the Member of the Executive Council (MEC), their date of appointment and resignation for the financial year under review.

GOVERNANCE

CONTINUED


GOVERNANCE

CONTINUED

NAMEDESIG-NATION

DATE APPOINTED

DATE RESIGNED

QUALIFICATIONSAREAS

OF EXPERTISE

BOARD DIRECTORSHIPS

COMMITTEES

NUMBER OF

MEETINGS ATTENDED

Mr. TJ Nzima

Board Chairperson

1-Mar-16 Active BCom Degree Tourism • CEO & Ex-officio Board Member - SA Tourism 2012-2015;• Director Sales & Marketing Avis Rent a Car Southern Africa 2007-2011;• CEO SA Travel Centre 2005-2007; • Senior Executive Manager SAA 2003-2005; • Senior Executive Manager Retail & Coastal Sales SAA 2001 - 2002; • Senior Executive Manager Sales & Voyager Strategy SAA 2001-2002;• General Manager KZN & Boarder SAA 2000-2001; • Regional Manager - Benelux Countries 1997-2000;• Market Development Manager - Americas 1996-1997;• Market Development Manager - Asia & Australia 1993-1996;• Overseas Cadet Manager 1991-1993;• Sub Branch Manager - Wynberg Perm Building Society 1984-1991;• Business Develop-ment Manager - Wynberg Perm Building Society 1985 – 1987

Chairpersons Committee, Tourism and Marketing Committee.

19 of 20


NAMEDESIG-NATION

DATE APPOINTED

DATE RESIGNED

QUALIFICATIONSAREAS

OF EXPERTISE

BOARD DIRECTORSHIPS

COMMITTEES

NUMBER OF

MEETINGS ATTENDED

Mrs. NR Shabangu- Mndawe

Chairperson Remunera-tion, Nomina-tions and Governance Committee

1-Mar-16 Active B.Proc; LLB;Corporate Gov-ernance

Legal Services

• Deputy Chairperson of Black Lawyers Association 2011 - to date;

• Member of Family Law Committee: Law Society of South Africa 2011 - to date

Remunera-tion, Nomina-tions and Governance Committee;

Chairpersons Committee;

Zithabiseni special Board Task Team; Recruitment process of Executive Management

17 of 18

Mr. TF Keetse

Tourism & Marketing Committee Chairperson

1-Mar-16 Active B-Tech Marketing; Global Leardership Certificate - Duke CE India - 2009, MAP - Wit; Sales and Channel Leardership - Insead Business School France; Graduate Diploma in International Marketing - UNISA 1999,

Marketing and Finance

• Head: Franchise and Stakeholder Relations - Old Mutual;

• Board Member - BMF Mpumalanga

Tourism and Marketing Committee

19 of 19

GOVERNANCE

CONTINUED


GOVERNANCE

CONTINUED

NAMEDESIG-NATION

DATE APPOINTED

DATE RESIGNED

QUALIFICATIONSAREAS

OF EXPERTISE

BOARD DIRECTORSHIPS

COMMITTEES

NUMBER OF

MEETINGS ATTENDED

Dr. DT Magome

Board Member

1-Mar-16 Active Bsc (Hons) University of Bophuth- atswana; MSc University of Witwatersrand - Ecology of Sable Antelope; MSc Colorado State University - Wildlife Mnagement; PhD University of Kent UK - Conservation Policy

Conservation • Managing Executive Conservation Services 2000-2005;

• General Manager: Park Planning and Development 1996 - 1999; • Chief Executive: Bop Parks; • Assistant Director - Community Wildlife 1992 -1994;

• Study Leave for MSc Wildlife Biology at Colorado State 1990 - 1992;

• Ecologist 1987 - 1990 (For Professor Norman Owen-Smith);

• Assistant Ecologist 1986 - 1987 Botsalano Game Reserve

Conservation Committee; Chairpersons

Commit-tee and Zithabiseni Board Task Team

15 of 17


NAMEDESIG-NATION

DATE APPOINTED

DATE RESIGNED

QUALIFICATIONSAREAS

OF EXPERTISE

BOARD DIRECTORSHIPS

COMMITTEES

NUMBER OF

MEETINGS ATTENDED

Ms. TB Nkambule

Board Member

1-Mar-16 Active BCom: Industrial Psychology and Economics; BCom Honors (Economics) Higher Education Diploma; Masters in Development Economics; Advance Certificate in Policy Planning & Project Analysis; Econometrics; Project Management; Jobs for Growth Certificate; SA Excellent model in Entrepreneur- ship

Economic and Busines Development, Environmen-tal Manage-ment

• Director: Ntobe Fire Control; • Director: Pel Africa Management CC; • Director: Neighborhood Development Company; • Professional Associate: Blue Print; • Director: Toront Business Enterprise; • Director: Imbombela ICC; • Board Member: SEDA; • Board of Trustees: My Acre of Africa; • Enablis Business Plan Competition; • Umsobomvu Mentoring and Business Support; • Executive Chairperson: Toro Toro Business Enterprise; • Southern Regional Manager: Kruger National Park 2001 - 2004; • Head Economic Planning and Research Unit 1998-2001; • Assistant Director: SMME Desk 1997-1998; • Senior Lecturer: Elijah Mango College 1990-1996; • Lecturer: Mgwenya College of Education 1989-1990; • Teacher: Khumbula High School 1986-1989

Conservation Committee

12 of 14

GOVERNANCE

CONTINUED


GOVERNANCE

CONTINUED

NAMEDESIG-NATION

DATE APPOINTED

DATE RESIGNED

QUALIFICATIONSAREAS

OF EXPERTISE

BOARD DIRECTORSHIPS

COMMITTEES

NUMBER OF

MEETINGS ATTENDED

Ms. JS Sekhitla

Board Member

1-Mar-16 Active Diploma in General Nursing;

Diploma In Midwifery;

Diploma in Business Management (RAU);

Certificate in Business Sector Development (RAU);

Academy of Real Estate - Certificate of Completion;

Computer Studies (RAU;

Tourism Certificate from THETHA;

Good Governance Course - Institute of Directors SA;

Public Finance for non-financial managers programme - Regenesys, Bachelor of Business Administration (Incomplete)

Tourism • Board Member and Director Tourism Grad-ing Council of South Africa 2006-2009;

• Board Member and Director of Tourism Marketing South Africa 2005-2011;

• Executive Member of Tunisia South Africa Chamber of Com-merce 2006-2009;

• Ministerial Appoin-tee Higher Educa-tion Board Member Cathsseta 2011-2016;

• Executive Member Ekurhuleni Business Innitiatives 2002 - to date;

CURRENT DIRECTORSHIP: • The View Guest House, • Merafe Travel and Tourism, • Mmamerafe Con-struction and Civil Engineering;

CHAIRPERSON: • South African Women in Tourism 2013 - to date,

• Ekurhuleni Travel and Tourism Associa-tion 2014 - to date; • Tembisa Tourism Association: Gen-eral Secretary Nafcoc Gauteng 1998;

• Secretary of Tembisa Chamber o Commerce 1994;

• Professional Nurse: Garankuwa Hospi-tal 1985-1986 and Tembisa Hospital 1986-1989

Tourism and Marketing Committee,

Zithabiseni Board Task Team.

15 of 17


GOVERNANCE

CONTINUED

NAMEDESIG-NATION

DATE APPOINTED

DATE RESIGNED

QUALIFICATIONSAREAS

OF EXPERTISE

BOARD DIRECTORSHIPS

COMMITTEES

NUMBER OF

MEETINGS ATTENDED

Ms. BN Mzuzu

Board Member

1-Mar-16 Active B.Proc Degree (University of Fort Hare);

Practical Legal Training School; (Law Society of the Cape of Good Hope);

MS Windows Certificate - Windows 98;

Debt Collection Course (Legal Interact);

Conveyencing Practice Course (Legal Education and Development Pretoria)

Legal Services

Founder & Director of Mzuzu Attorneys

Remunera-tion, Nomina-tions and Governance Committee;

Audit and Risk Committee.

12 of 20

Ms. SFS Makhathini

Board Member

1-Mar-16 Active Qualified Chatered Accountant CA: SA, saica Articles - TIPP Auditing;

Honours in Bachelor of Accounting Sciences (UNISA);

Post Graduate Diploma in Accounting Sciences;

Diploma in Accounting Sciences (UNISA);

Bachelor of Commerce in Accounting (Wits University)

Accounting Director: Business Methodologies - Ubambo Consult-ing (Pty) Ltd; Audit Manager - Projecys Management and Reporting : CBB Rodl & Partner Inc.;

Finance Controller: Richards Bay Coal Terminal;

Golden Key Honour Society Member;

Young Achiever of the Year - Richards Bay Coal Terminal; Execu-tive Commitee Interact Club

Audit and Risk Committee;

Zithabiseni Board Task Team.

11 of 17


GOVERNANCE

CONTINUED

NAMEDESIG-NATION

DATE APPOINTED

DATE RESIGNED

QUALIFICATIONSAREAS

OF EXPERTISE

BOARD DIRECTORSHIPS

COMMITTEES

NUMBER OF

MEETINGS ATTENDED

Mr. CL Gololo

Board Member

1-Mar-16 Active Diploma Institute Development Management Tanzinia - 1992;

Certificate Govt Change Management Wits University - 1994;

Certificate Export Management (New Delhi; India) - 1989;

Studied in Czechoslovakia - 1983; Studied and Trained in Cuba - 1980

Economic and Business Development

• Managing Director and Executive Con-sultant: TLS Global Consultants.

• Director: MAAMS Health Clinic

Conservation Committee

13 of 14

Mr. SG Mthombeni

Board Member

1-Mar-16 Active B Admin Public Administration and Industrial Psychology Fort Hare;

MBA - Masters in Business Administration (Michigan State University);

MSPA Master of Science in Professional Accounting - Walsh College;

CPA Sat and Passed Certificate Public Accountancy Board Examinations in Michigan USA

Legal Services

None Audit and Risk Committee

14 of 15


GOVERNANCE

CONTINUED

NAMEDESIG-NATION

DATE APPOINTED

DATE RESIGNED

QUALIFICATIONSAREAS

OF EXPERTISE

BOARD DIRECTORSHIPS

COMMITTEES

NUMBER OF

MEETINGS ATTENDED

Ms M Maseko

Tourism Marketing Committee Coopted Member

1 Sept 2017

Active Certificate: Leadership Development Programme

Post Graduate Diploma in Management

Brand

Communication Management

Diploma -Media Consultant

Majors: Advertising & Public Relations

Bachelor of Arts Degree

Marketing 2 of 6

Dr F Venter Conserva-tion Commit-tee Coopted Member

1 Sept 2017

Active B.Sc. (1976):Majors Soil Science and Botany, University of Northwest (NWU), South Africa

B.Sc. Hons. (1977): Soil Science (NWU).

M.Sc. (1981):Ecology (NWU). Thesis: “Grondtipes van die Swenispruit-opvanggebied” (Soil types of the Sweni River catchment).

Ph.D. (1990):Ecology (UNISA). Thesis: A classification of land for management planning in the Kruger National Park.

Conservation 0 of 6


GOVERNANCE

CONTINUED

BOARD COMMITTEES

The Board had the following Committees:• Audit and Risk Committee• Remuneration, Nominations and Governance Committee• Conservation Committee• Tourism and Marketing Committee• Zithabiseni Task Team

BOARD’S LIST OF COMMITTEES, MEMBERS THAT SERVED IN EACH COMMITTEE AND THE NUMBER OF MEETINGS HELD ARE AS FOLLOWS:

COMMITTEENO. OF

MEETINGS HELDNO. OF

MEMBERSNAME OF MEMBERS

Audit and Risk Committee 6 5 Ms. PMK Mvulane: Chairperson (01 August 2016)Mr. MS Mthembu (01 April 2016) Ms. SFS Makhathini (01 April 2016)Ms. NB Mzuzu (23 March 2017) Mr. ME Zakwe (1 September 2017)

Remuneration, Nominations and Governance Committee

4 3 Ms. NR Shabangu-Mndawe: Chairperson (30 March 2016) Mr. SG Mthombeni (30 March 2016)Ms. BN Mzuzu (30 March 2016)

Conservation Committee 4 4 Dr. DT Magome: Chairperson - (30 March 2016)Ms. TB Nkambule (30 March 2016) Mr. CL Gololo (30 March 2016) M. FJ Venter - Co-opted Member (01 September 2017)

Tourism and Marketing Committee

6 3 Mr.TF Keetse: Chairperson - (30 March 2016)Mr. TJ Nzima (30 March 2016)Ms. JS Sekhitla (30 March 2016) Ms. MA Maseko - Co-opted Member (01 September 2017)

Zithabiseni Board Task Team 2 5 Mr. SG Mthombeni: Chairperson Ms. NR Shabangu-MndaweMs. SFS Makhathini Ms. JS Sekhitla Dr. DT Magome

Chairpersons Committee 3 5 Mr. TJ Nzima: Chairperson Ms. PMK Mvulane Ms. NR Shabangu-MndaweDr. DT MagomeMr. TF Keetse

Special Board Task Team*** 2 2 Ms. NR Shabangu-Mndawe Mr. SG Mthombeni

***Recruitment Process of Executive Manager: Corporate Services


GOVERNANCE

CONTINUED

THE REMUNERATION OF THE BOARD MEMBERS APPOINTED FOR THE PERIOD UNDER REVIEW IS AS FOLLOWS:

NAMEDATE

RESIGNEDREMUNERATION

R

OTHER ALLOWANCES

R

OTHER REIMBURSEMENT

EG. TRAVEL R

TOTAL R

Mr Nzima TJ (Chairperson) Active 310 077 12 000 71 920 393 997Ms. Shabangu-Mndawe NR (Deputy Chairperson) Active 136 005 9 000 22 392 167 397Dr Magome DT Active 70 731 6 000 37 582 114 313Ms. Makhathini SFS* Active 48 822 3 000 7 887 59 709Mr. Mthombeni SG Active 84 412 3 000 81 118 168 530Ms. Mzuzu NB Active 64 921 3 000 2 986 70 907Ms. Sekhitla JS Active 104 909 3 000 23 674 131 583Ms. Nkambule TB Active 66 155 3 000 15 361 84 516Mr. Gololo CL Active 77 553 3 000 14 645 95 198Mr. Keetse TF* Active 114 059 6 000 41 262 161 321Ms. Maseko M Active 13 604 0 852 14 456Mr. Venter F Active 4 609 0 1 183 5 792Total 1 095 857 51 000 320 862 1 467 719

* Totals include remuneration for Audit and Risk Committee attendance Remuneration = Gross Amount

NAMEDATE

RESIGNEDREMUNERATION

R

OTHER ALLOWANCES

R

OTHER REIMBURSEMENT

EG. TRAVEL R

TOTAL R

Ms. Mvulane PMK Active 66 823 6 000 3 400 76 223Mr. Mthembu MS Active 54 936 3 000 2 428 60 364Mr. Zakwe M Active 10 026 0 995 11 021Total 131 785 9 000 6 823 147 608

Remuneration = Gross Amount

5. RISK MANAGEMENT The MTPA Board is accountable for the risk management process and is reviewed through the Audit and Risk Committee for

effectiveness. The Committee is provided with quarterly progress reports which are subsequently presented to the Board.

A risk assessment workshop was held in March 2017 with the objective to understand what is at risk within the context of the entity’s explicit and implicit objectives and to generate a comprehensive inventory of risks based on the threats and events that might prevent, degrade, delay or enhance the achievement of the objectives. This was done in line with the Approved 2017/18 Annual Performance Plan.


GOVERNANCE

CONTINUED

Participants at the annual risk management workshop are, Executive Managers of Programmes which is the Risk Management Committee , Senior Managers and Managers within the Programmes. Quarterly risk mitigation progress reports are submitted to the Audit and Risk Management Committee.

The top ten risks in the Agency for the period under review are as follows:

RISK PROGRESS

Ineffective management of protected areas • Due to inadequate funding allocations, the Entity has sought additional resources through YES (Youth Environmental Services), EPWP which will assist with reducing the capacity challenges at the protected areas. Proposals for second cycle of EPIP funding for 19 projects for MTPA reserves was developed and submitted to DEA for continuous monitoring of co-management agreements where there are land claims.

Inadequate funding • Continous engagement with the relevant stakeholder (GEF6/ SANBI; SETA’s) for additional funding.

• Enhanced revenue controls at the source by implementing a central reservation system at prioritised reserves, provided training to all cashiers.

• The development of a funding strategy including a revenue enhancement plan to address the decrease in baseline is underway. The strategy will be approved at the end of the first quarter in 2018/2019 financial year.

Leadership instability • The entity has prioritised to fill key critical positions.• A permanent CEO has been appointed with effect from 01 April 2017.• A permanent Executive Manager for Corporate Services has been appointed

effective February 2018. Whilst a process to appoint Executive Manager Commercial Operations and CFO is still in progress.

• Moratorium to fill critical positions has been lifted. Thus filling of other critical vacant positions has been prioritised for the 2018/19 financial year.

• Conducted Organisational Health Audit to address inadequacies within the Human Resources of the Entity. Implementation of the recommendations is underway.

• Strategy will be submitted to the next Board meeting.Financial mismanagement • Financial management policies (Asset Management, SCM, budget control

policy, payments policy, contract management, debtors policy, liabilities, irregular expenditure) together with the standard operating procedures have been developed and approved.

• Compliance management framework developed and approved by the Board.• Delegation of Authority manual has been reviewed and will be presented to the

Board for approval at the end of first quarter in 2018/2019 financial year.• Monthly and quarterly financial reports provided at all applicable reporting levels for

adequate management and monitoring financial resources.


GOVERNANCE

CONTINUED

RISK PROGRESS

Inadequate resources to implement the annual performance plan

• The development of HR Strategy that responds to the challenges of Cost of Employment requirements and budget realities is underway. The strategy and plan will be presented to the Board at the end of the first quarter.

• Standard operating procedure for performance information is being implemented.• Moratorium to fill critical positions has been lifted. Thus filling of other critical vacant

positions has been prioritised for 2018/2019 financial year.• Conducted Organisational Health Audit to address inadequacies within the Human

Resources of the Entity. Implementation of the recommendations is underway.Non-compliance with relevant legislation, regulations, policies and procedures/ ineffective Corporate Governance

• Oversight structures have been formed to monitor compliance on a quarterly basis• Financial management policies (Asset management, SCM, budget control

policy, payments policy, contract management, debtors policy, liabilities, irregular expenditure) together with the standard operating procedures have been developed and approved.

• Compliance management framework has been developed and approved by the Board.

• There are continuous awareness workshops on existing policies and applicable regulations.

Ineffective development of tourism products • Implementation of the Provincial Tourism Growth Strategy is very slow due to the external factors.

• The appointment of the Transaction Advisor for the Blyde flagship projects is on track.

Fraud and corruption • Ongoing awareness campaigns on existing fraud prevention policy and strategy including applicable approved policies and procedures across MTPA.

• Continuous monitoring and evaluation by Governance structures.• Existing code of conduct, disciplinary code and procedures.• Declaration of interest is monitored annually.• Existing Fraud Hotline Number 0800 204 625.

Decrease in tourist arrivals • MTPA five year Strategic plan.• Developed a comprehensive marketing strategy.• Ongoing implementation of marketing plan.

Inadequate ICT plan to meet the strategic objectives of the Entity

• ICT Disaster recovery plan approved and implemented.• Reviewed and approved ICT strategy accompanied by a three year implementation

plan.

6. INTERNAL CONTROL The Accounting Authority is obliged in terms of PFMA, to ensure that the Entity maintains an effective, efficient and transparent system

of financial; risk management and internal control. These controls are designed to provide reasonable assurance that transactions are concluded in accordance with management’s delegated authority, that the assets are adequately protected against material loss of unauthorised acquisition, use or disposition, and that transactions are properly authorised and recorded. The system includes a documented organisational structure and division of responsibility, established policies and procedures, including a code of ethics to foster a strong ethical and internal control environment, which is communicated throughout the organisation, and the careful selection, training and development of staff.


GOVERNANCE

CONTINUED

The entity conducts an annual risk assessment process with the objective to understand what is at risk within the context of the entity’s explicit and implicit objectives and to generate a comprehensive inventory of risks based on the threats and events that might prevent, degrade, delay or enhance the achievement of the objectives.

7. INTERNAL AUDIT AND AUDIT AND RISK COMMITTEE INTERNAL AUDIT

The objective of the Internal Audit Activity (IAA) is to provide an effective, independent objective assurance and consulting activity designed to add value and improve the entity’s operations. It achieves this by evaluating and improving the effectiveness of risk management, control and governance processes; and facilitates the full functioning of the Audit and Risk Committee .

The internal Audit service was outsourced to SizweNtsalubaGobodo and Associates (SNG) effective August 2015 ending 31 March 2018 to provide independent and objective assurance and consulting services in the areas of internal controls, risk management and governance processes. The appointment was subject to open tender. Upon appointment, the internal auditors drafted a three year risk based strategic audit and annual internal audit operational plans. The Audit and Risk Committee reviews annual plans at the beginning of each financial year and approves for implementation.

The internal audit unit reports functionally to the to the Audit and Risk Committee on a quarterly basis, and operationally to the Chief Executive Officer. On a quarterly basis the Internal auditors monitor the operation of the internal control system, report findings and make recommendations to management. Corrective actions are taken to address control deficiencies and other opportunities for improving the systems, as they are identified. The Board, operating through the Audit and Risk Committee, provides oversight of the financial reporting process and internal control systems.

A review conducted by Internal Audit revelead that the systems of internal controls were inadequate in some areas due to delays in finalisation and approval of applicable policies and standard operating procedures. Applicable policies were approved by the Board in the third quarter.

Internal auditing encompasses, but is not limited to, the examination and evaluation of the adequacy and effectiveness of the organization’s governance, risk management and internal process as well as the quality of performance in carrying out assigned responsibilities to achieve the MTPA’s objectives. This includes:a Evaluating the reliability and integrity of information and the means used to identify measure, classify, and report such information.b. Evaluating the systems established to ensure compliance with those policies, plans, procedures, laws, and regulations which

could have a significant impact on the organization.c. Evaluating the means of safeguarding assets and, as appropriate, verifying the existence of such assets.d. Evaluating the effectiveness and efficiency with which resources are employed.e. Evaluating operations or programs to ascertain whether results are consistent with established objectives and goals and whether

the operations or programs are being carried out as planned.f. Monitoring and evaluating governance processes.g. Monitoring and evaluating the effectiveness of the organization’s risk management processes.h. Evaluating the quality of performance of external auditors and the degree of coordination with internal audit.i. Performing consulting and advisory services related to governance, risk management and control as appropriate for the

organization.j. Reporting periodically on the internal audit activity’s purpose, authority, responsibility, and performance relative to its plan.


GOVERNANCE

CONTINUED

k. Reporting significant risk exposures and control issues, including fraud risks, governance issues, and other matters needed or requested by the Board.

l. Evaluating specific operations at the request of the Board or management, as appropriate

Summary of internal audit work carried out by Internal Audit during the year under review are as follows: :

FOCUS AREA PLANNED START DATE STATUS AS AT 31 MARCH 2018

Audit of Pre-determined Objectives (AOPO) Review July and October 2017; January and April 2018

Completed July and October 2017; January and April 2018

Reserves and Stations surprise visits (revenue) July 2017 Completed October 2017Supply Chain Management July 2017, January 2018 Completed July 2017 and January 2018Tourism and Other Stakeholders Management Review November 2017 January 2018ITGC and applications control review November 2017 January 2018Follow-ups on Auditor Generals’ findings Quarterly review Completed Quarterly reviewsCritical Financial controls and review of policies - Zithabiseni

January 2018 Completed February 2018

Half year Financial Statements review Adhoc Completed October 2017Irregular Expenditure Compliance Audit Adhoc Completed February 2018Risk assessment workshop and review February 2018 Completed February 2018Risk Management governance documents review Adhoc Completed August 2017


The Committee assists the Board through critically evaluating the Board’s financial control measures, accounting practices, information systems and audit procedures, including information systems controls and security, the quality of the financial and other management information produced to ensure integrity and reliability, any related significant findings and recommendations of the internal and external auditors together with management’s responses thereto. The Committee performs this function continuously by way of close liaison with the executive management and with the Board’s internal and external auditors.

The Audit and Risk Committee consists of three independent members and two non-executive members. The Chief Executive Officer (CEO);Executive Management;nominated representatives of the AGSA and DEDT attend by standing invitation. The authority and mandate of the Audit and Risk Committee, its duties and functions, its composition and its operations have been approved by the Board in the form of a detailed charter. The Committee has complied with its responsibilities arising from Treasury Regulations and the PFMA.

Key activities and objectives of the Audit and Risk Committee are as follows:

a. Discuss with management, internal and external auditors and major stakeholders the quality and adequacy of the MTPA’s internal controls system and risk management process, and their effectiveness and outcomes, and meet regularly.

b. Review and discuss with management and the external auditors and approve the audited financial statements of the organization and make a recommendation regarding inclusion of those financial statements in any public filing. Also review with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet issues in the organization’s financial statements;

c. Confirm the scope of audits to be performed by the external and internal auditors, monitor progress and review results and review fees and expenses. Review significant findings or unsatisfactory internal audit reports, or audit problems or difficulties encountered by the external independent auditor. Monitor management’s response to all audit findings;


GOVERNANCE

CONTINUED

d. Manage complaints concerning accounting, internal accounting controls or auditing matters;e. Receive regular reports from the Chief Executive Officer, Chief Financial Officer and the MTPA’s other Control Committees

regarding deficiencies in the design or operation of internal controls and any fraud that involves management or other employees with a significant role in internal controls; and

f. Support management in resolving conflicts of interest. Monitor the adequacy of the organization’s internal controls and ensure that all fraud cases are acted upon.

The Audit and Risk Committee was fully functional and comprised five members (external to the Entity) as at 31 March 2018, noting that 1 independent member was appointed during the second quarter in September 2017; and the details of membership and number of meetings is outlined as follows:

NAME QUALIFICATIONSINTERNAL

OR EXTERNAL

IF INTERNAL, POSITION IN THE PUBLIC

ENTITY

DATE APPOINTED

DATE RESIGNED

NUMBER OF

MEETINGS ATTENDED

Ms. PMK Mvulane

• Chartered Accountant and Registered Auditor 2009,

• Public Practice Examination Independent Regulatory Board for Auditors Accountants (Part2) 2009,

• Final Qualifying Examination South African Institute of Chartered Accountants (Part1) 2002,

• Specialist Diploma in Auditing 2001, • Bachelor of Commerce in Accounting

(Accounting), • Bachelor of Commerce in Accounting

(Honours).

External Not Applicable

01-Aug-16 Active 6 of 6

Mr. MS Mthembu

• Master of Business Leardership (UNISA) 2004, Bachelor of Commerce in Accounting 1992, Diploma in Accounting and Business Studies 1984, General,

• Internal Auditor GIA (IIA) SA Institute of internal Auditors 2003,

• Licentiate Diploma in Banking: LIB (IOB) SA Institute of Bankers in South Africa 1998,

• Certificate in Gaming Regulation Gaming and Wagering in South Africa 1997,

• Advanced Gaming Regulator Course University of Las Vegas International Gaming Institute, Certificate in Business Advisory.


01-Apr-16 Active 6 of 6


GOVERNANCE

CONTINUED


OR EXTERNAL


ENTITY

DATE APPOINTED

DATE RESIGNED

NUMBER OF

MEETINGS ATTENDED

Ms. SFS Makhathini

• Qualified Chartered Accountant CA: SA, SAICA Articles - TIPP Auditing,

• Honours in Bachelor of Accounting Sciences (UNISA),

• Post Graduate Diploma in Accounting Sciences,

• Diploma in Accounting Sciences (UNISA),

• Bachelor of Commerce in Accounting (Wits University).


01-Apr-16 Active 3 of 6

Ms. BN Mzuzu • B.Proc Degree (University of Fort Hare),

• Practical Legal Training School, (Law Society of the Cape of Good Hope),

• MS Windows Certificate - Windows 98,• Debt Collection Course (Legal

Interact), • Conveyencing Practice Course

(Legal Education and Development - Pretoria).


23-Mar-17 Active 3 of 6

Mr. ME Zakwe • Masters in Science (Cyber Security) 2014 - Current University of Maryland (USA).

• B Com 1997 University of Natal – Durban.

• B Com Honours 2000 University of Natal.

• SAICA FQE Part 1 2002 S. A. Institute of Chartered Accountants Professional Level.

• PAAB FQE Part 2 2003. Public Accountants and Auditors Board Professional Level.

• Audit Specialty Course 2002, APT & RAU.

• Postgraduate Diploma in Business Management 2002 University of Natal -Graduate School of Business Business Management Science.

• MBA – Level 1 2003 University of Natal -Graduate School of Business Networking Internet & Emerging IT


01-Sept-17 Active 2 of 6


GOVERNANCE

CONTINUED


OR EXTERNAL


ENTITY

DATE APPOINTED

DATE RESIGNED

NUMBER OF

MEETINGS ATTENDED

• Business Research Methods MBA - Level 2 2004 University of Natal - Graduate School of Business Advanced Strategic Management.

• MBA – Thesis Level Dec 05 University of KwaZulu Natal Information Management & E-Commerce.

• Applied Cyber Security Certificate September 2014 Massachusetts Institute of Technology.

8. COMPLIANCE WITH LAWS AND REGULATIONS The Agency ensured compliance with applicable legislation as follows:

MTPA Act, PFMA and Treasury Regulations

Complied by compiling and submitting the following documents: • 2016/2017 Annual Report; • Four quarterly reports for the year 2017/2018; • 2018/2019 Annual Performance Plan; and • Board members fulfilled their fiduciary obligations by holding a minimum of 4 Board meetings as required by the PFMA and

Companies Act.

9. FRAUD AND CORRUPTION MTPA has committed itself to actively combat fraud and all other acts of dishonesty on a zero-tolerance basis. A review of the fraud

prevention strategy, policy and plan was conducted and implemented. These policies and strategies are designed to align MTPA’s anti-fraud functions with the PFMA. In line with the implementation of its Fraud and Corruption prevention Strategy, the entity has published the fraud and corruption reporting hotline number on its website. Cases reported via the national anti-corruption hotline are referred to the office of the CEO, who appoints an investigative officer to facilitate the investigation of alleged fraud or corruption. Where fraud or corruption is detected or suspected, disciplinary proceedings, prosecution or action aimed at the recovery of losses are initiated.

MTPA is on an ongoing process implementing the Fraud and Corruption (Zero Tolerance) campaign in partnership with Deloitte. This

campaign involves the following: • Review of the Fraud Prevention and Response Plan • The anti-crime prevention initiative • The awareness campaign with all MTPA staff and some selected stakeholders


GOVERNANCE

CONTINUED

10. MINIMISING CONFLICT OF INTEREST The Supply Chain Management and the Code of Conduct policies are implemented in all procurement processes. The policies were

developed in line with the Treasury Regulations and the code of conduct is issued in accordance with the framework for supply chain management, section 74(4) (c) of the PFMA.

MTPA is therefore required to align this to Treasury Regulations and to issue a code of conduct for all officials involved in supply chain management processes.

All officials involved in the procurement process are made aware of the requirements of supply chain management procedures and the code of conduct. Officials who are involved in procurement should: • Not take improper advantage of their previous office after leaving their official position in the Public Service;• To the extent of their position, declare any business, commercial and financial interests or activities undertaken for financial gain

that may raise a possible conflict of interest;• Not place themselves under any financial or other obligation to outside individuals or companies and organisations that might

seek to influence them in the performance of their official duties; • Be or are accountable for their decisions and actions to the public and use public property scrupulously;• Record and account for all transactions conducted by a particular practitioner in an appropriate accounting system i.e. all

transactions (requisitions/orders/invoices) and payments should be captured on the appropriated financial system. Practitioners should not make any false or misleading entries into the system for any reason whatsoever; and

• All officials on the bid committees are required to declare their interest annually, cleared to the level of confidentiality.

During the period under review no instances of conflict of interest were identified.

11. CODE OF CONDUCT The Agency has a Code of Ethics as part of the Human Resource Policies. This Code is intended to raise ethical awareness and to act

as a guide to employees of the MTPA. The Code contains ethical and moral standards to which employees are expected to conform. Contravention of the Code is dealt with in terms of the Disciplinary procedure of the Agency.

12. HEALTH, SAFETY AND ENVIRONMENTAL ISSUES The Agency continues to provide assistance to the employees through the Employee Wellness Programme. In compliance with the

Occupational Health and Safety Act, 1993 (Act no.85 of 1993) the Agency appointed Health and Safety representatives accordingly. Occupational Health and Safety Committee was established to assist in monitoring compliance with legislation in all the work stations. Ongoing inspections were conducted to identify occupational hazards and recommend remedial actions.

13. COMPANY SECRETARY/BOARD SECRETARIAT In the period under review, the role and responsibilities of the Board Secretariat were as following: • Compliance in terms of the King III report and Company’s Act; • Coordination of Board and Board Committee meetings; • Keeping of Board and Board related documents; • Monitoring Board compliance; • Advising the Board as a collective and as individuals;


GOVERNANCE

CONTINUED

• Ensuring that the Board is properly inducted; • Identifying training needs of Board Members; • Writing of Minutes and Reports; and • Managing the Board Office.

14. SOCIAL RESPONSIBILITY The Agency did not contribute to any social responsibility programmes during the period under review.

15. AUDIT AND RISK COMMITTEE REPORT Please refer to the Financial Information (Part E)


PART DHUMAN RESOURCE MANAGEMENT


HUMAN RESOURCE MANAGEMENT


1. INTRODUCTION OVERVIEW OF HR MATTERS AT THE PUBLIC ENTITY

Efforts were focused on providing business support on integrated human resource management services, legal services and information communication and technology services. The Agency successfully recruited and appointed a permanent Chief Executive Officer and signed a five year fixed contract with him. The Agency also managed to successfully recruit and appoint a permanent Executive Manager of Corporate Services who equally signed a five year fixed term contract with the Agency.The Agency’s top structure was reviewed and the position of the Chief Operations Officer was removed from the organogram. The new position of Executive Manager Commercial Operations was created. The Organisational Top Structure was approved by the Board in July 2017.

SET HR PRIORITIES FOR THE YEAR UNDER REVIEW AND THE IMPACT OF THESE PRIORITIES

The Agency continued to successfully implement skills development programmes through a workplace skills plan with a view to address identified skills gap and subsequently improve operational efficiency. The implementation of the employee health and wellness programme has to a great extent contributed to the healthy and productive workforce in the various work stations. The Agency also conducted the Organisational Health Audit in an efforft to ensure proper diagnosis of the issues that may be negatively affecting its service delivery. The Organisational Health Audit programme is however to be finalised in the new financial year. The Agency has conducted HR policy workshops across its workstations through what is called HRD and HR clinics.

WORKFORCE PLANNING FRAMEWORK AND KEY STRATEGIES TO ATTRACT AND RECRUIT A SKILLED AND CAPABLE WORKFORCE

The Agency continued to attract and recruit skilled employees by following an approach of identifying functional competencies for various occupational categories. To ensure compliance and the eradication of barriers, the Agency has set employment equity targets and numeric goals for consideration in the recruitment processes.

EMPLOYEE PERFORMANCE MANAGEMENT FRAMEWORK

The implementation of the performance management and development system was facilitated for all programmes in line with the policy on Performance Management and Development System including quarterly performance reviews for the year under review, however challenges were experienced in the final implementation of the system and attempts to resolve the matter are in progress.

EMPLOYEE HEALTH AND WELLNES PROGRAMMES

The Employee Health and Wellnes programme functions of the Agency implemented its support programmes focusing on the mainstreaming of the pillars as guided by the national framework on employee health and wellness programmes namely; Health and Productivity Management, HIV and AIDS in the workplace, Wellness Management and Occupational Health and Safety.

The Agency conducted the following Health and Wellness workshops and activities:

• Financial Wellness Workshop;

• 2017 Wellness Games;

• Field Ranger Medical Assessments; and

• 2017 Women’s Wellness Seminar.


INFORMATION TECHNOLOGY AND INFORMATION SYSTEMS

Information technology is playing an ever increasing role as a strategic enabler of the business. The Agency managed to establish effective governance of ICT by developing and facilitating the approval of the Governance Charter, ICT framework, ICT strategic plan and implementation of the ICT plan.

The Agency was also responsible for upgrading the network infrastructure at the head office and in the reserves .The employee Self-service VIP leave was implemented at the Head Office .The Reservation system Innkeeper was implemented at the Head Office, Manyeleti and Andover Nature Reserves. The new revamped website was developed and search engine optimized.

The data warehouse for Pastel was developed and implemented to improve business intelligence reporting at MTPA. The main challenge in the ICT unit performance is largely affected by limited internal capacity whereas it is expected to play a critical role as a strategic partner and key enabler for business strategy.

HIGHLIGHT OF CHALLENGES AND ACHIEVEMENTS FACED BY THE PUBLIC ENTITY

The entity experienced a strain and instability at the strategic level over the years mainly as a result of failure to fill both executive and strategic positions. The gradual filling of executive positions will enhance the earnest efforts towards restoring confidence on the ability of the entity to deliver on its mandate and also rebuild trust with the relevant stakeholders. There is problem of high proportion employee costs against operational costs caused by various historical factors. The Agency has prioritised the development of a Human Resource Stategy and Plan in order to enhance its corporate performance. The inability to fill critical vacancies creates institutional risk in many ways such as inadequate segregation of duties, heavy reliance on key personnel and interns which compromises the execution of the core mandate. The slow implementation of the Organisational Development process facilitated by the shareholder has derailed the initiative to revise the current organisational structure.

The Employment Equity Act (EEA) section 21 report was submitted to the Department of Labour during the reporting period. In compliance with the EEA the work environment barriers were investigated in the work stations and subsequently the action plan was presented to EXCO for implementation.

FUTURE HR PLANS/GOALS

The approval and implementation of the developed Human Resource Strategy and Plan is one of the critical goals to fulfil the manpower requirement aimed at linking business strategy and its operations. Phase one of the Skills Audit was finalised and a process is underway to conduct the last phase of skills audit with a view to obtain reliable skills profile for the Agency and recommendations for skills development programmes where applicable. Review of the current organisational structure with an intention to realign with the newly approved corporate strategy as well as the core mandate is underway. The finalisation of the organisational development programmes is facilitated by the shareholder. Review of the Employment Equity Plan as required by the Act. HR policies will be reviewed to ensure compliance with legislation.


CONTINUED


2. HUMAN RESOURCES OVERSIGHT STATISTICS PERSONNEL COST BY PROGRAMME

PROGRAMME

TOTAL EXPENDITURE

FOR THE ENTITY R’000

PERSONNEL EXPENDITURE

R’000

PERSONNEL EXPENDITURE AS A PERCENTAGE

OF TOTAL EXPENDITURE

%

NUMBER OF

EMPLOYEES

AVERAGE PERSONNEL COST PER EMPLOYEE

R’000

Executive Office 62 866 14 844 24% 18 825

Office of the CFO 30 917 12 704 41% 20 635

Corporate Services 36 974 15 877 43% 29 547

Tourism 39 092 19 126 49% 27 708

Biodiversity Conservation 223 089 180 952 81% 525 344

Commercial Operations 2 324 - 0% 0 -

TOTAL 395 262 243 503 62% 619 393

PERSONNEL COST BY SALARY BAND

LEVELPERSONNEL

EXPENDITURE R’000

PERCENTAGE OF PERSONNEL EXPENDITURE TO TOTAL

PERSONNEL COST %

NUMBER OF

EMPLOYEES

AVERAGE PERSONNEL COST PER EMPLOYEE

R’000

Top Management 7 718 3.17% 5 1544

Senior Management 16 271 6.69% 14 1162

Professional qualified 91 682 37.66% 126 728

Skilled 28 591 11.75% 77 371

Semi-skilled 64 031 26.30% 221 290

Unskilled 35210 14.46% 176 200

TOTAL 243 503 100% 619 393


CONTINUED


PERFORMANCE REWARDS

PROGRAMMEPERFORMANCE

REWARDS R’000

PERSONNEL EXPENDITURE

R’000

% OF PERFORMANCE REWARDS TO TOTAL PERSONNEL COST

%

Top Management 0 7 718 0%

Senior Management 76 16 271 0.47%

Professional qualified 495 91 682 0.21%

Skilled 173 28 591 0.08%

Semi-skilled 379 64 031 0.16%

Unskilled 203 35 210 0.09%

TOTAL 1 326 243 503 0.55%

TRAINING COST

PROGRAMMEPERSONNEL

EXPENDI-TURE R’000

TRAINING EXPENDI-

TURE R’000

TRAINING EXPENDITURE AS A

PERCENTAGE OF PERSONNEL COST

%

NUMBER OF EMPLOYEES

TRAINED

AVERAGE TRAINING COST PER EMPLOY-

EE R’000

Executive Office 14 844 456 7.7% 270 104

Office of the CFO 12 703 92 32.8% 21 36

Corporate Services 15 876 489 47.9% 59 69

Tourism 19 126 31 60% 11 33

Biodiversity Conservation 180 950 1 904 16.2% 840 31

TOTAL 243 502 2 974 13.7% 1 201 34

EMPLOYMENT AND VACANCIES

PROGRAMME NUMBER OF EMPLOYEES

APPROVED POSTS VACANCIES

PERCENTAGE OF VACANCIES

%

Executive Office 18 24 6 25%

Office of the CFO 20 36 16 44%

Corporate Services 29 55 26 47%

Tourism 27 54 27 50%

Biodiversity Conservation 525 960 435 45%

TOTAL 619 1129 510 45%


CONTINUED


SALARY BAND NUMBER OF EMPLOYEES

APPROVED POSTS VACANCIES PERCENTAGE OF

VACANCIES %

Top Management 5 6 1 17%

Senior Management 14 23 9 39%

Professional qualified 126 215 89 41%

Skilled 77 186 109 59%

Semi-skilled 221 410 189 46%

Unskilled 176 289 113 39%

TOTAL 619 1129 510 45%

EMPLOYMENT CHANGES

SALARY BAND NUMBER OF EMPLOYEES APPOINTMENTS TERMINATIONS EMPLOYMENT

AT END OF PERIOD

Top Management 3 3 1 5

Senior Management 15 0 1 14

Professional qualified 131 0 5 126

Skilled 78 0 1 77

Semi-skilled 228 0 7 221

Unskilled 188 0 12 176

TOTAL 643 3 27 619

REASON FOR STAFF LEAVING

REASON NUMBER OF EMPLOYEES PERCENTAGE OF TOTAL NUMBER OF STAFF LEAVING

Death 5 0.81%

Resignation 2 0.33%

Dismissal 2 0.33%

Retirement 16 2.59%

Health 1 0.17%

Expiry of contract 1 0.17%

Other 0 0%

TOTAL 27 4.3%


CONTINUED


LABOUR RELATIONS: MISCONDUCT AND DISCIPLINARY ACTION

NATURE OF DISCIPLINARY ACTIONS NUMBER

Verbal Warning 0

Written Warning 4

Final Written Warning 3

Dismissal 2

Demotion 0

Suspension 2

Mediation 3

TOTAL 14

EQUITY TARGET AND EMPLOYMENT EQUITY STATUS

LEVELS

MALE

AFRICAN COLOURED INDIAN WHITE

CURRENT TARGET CURRENT TARGET CURRENT TARGET CURRENT TARGET

Top Management 4 3 0 0 0 0 0 0

Senior Management 5 10 0 0 0 0 2 2

Professional qualified 53 64 1 2 0 1 30 30

Skilled 32 39 0 1 0 1 2 4

Semi-skilled 171 219 1 6 0 2 0 10

Unskilled 61 65 0 0 0 0 0 0

TOTAL 326 400 2 9 0 4 34 46


CONTINUED


TARGETS ARE AS PER THE EE PLAN UP TO 2018.

LEVELS

FEMALE

AFRICAN COLOURED INDIAN WHITE

CURRENT TARGET CURRENT TARGET CURRENT TARGET CURRENT TARGET

Top Management 0 3 0 0 0 0 1 0

Senior Management 7 8 0 1 0 0 0 1

Professional qualified 32 40 1 2 1 2 8 12

Skilled 36 37 1 1 1 1 5 6

Semi-skilled 46 80 0 5 0 2 0 10

Unskilled 118 130 0 0 0 0 0 0

TOTAL 239 298 2 9 2 5 14 29

TARGETS ARE AS PER THE EE PLAN UP TO 2018

LEVELS

DISABLED STAFF

MALE FEMALE

CURRENT TARGET CURRENT TARGET

Top Management 0 0 0 0

Senior Management 0 0 0 1

Professional qualified 0 1 2 1

Skilled 0 2 2 1

Semi-skilled 5 5 0 1

Unskilled 3 3 5 0

TOTAL 8 11 9 4


CONTINUED


PART EFINANCIALSTATEMENTS


COUNTRY OF INCORPORATION AND DOMICILE South Africa

NATURE OF BUSINESS AND PRINCIPAL ACTIVITIES To perform its duties in line with Mpumalanga Tourism and Parks Agency Act 5 of 2005. Mpumalanga Tourism and Parks Agency’s (hereinafter ‘’MTPA’’) main shareholder is the Department of Economic Development and Tourism formerly DEDET (hereinafter “DEDT”) from which it receives its’ funding.

BOARD MEMBERS IN THE OFFICE DURING Mr. TJ Nzima ( Chairperson)THE REPORTING PERIOD Ms. NR Shabangu-Mndawe (Deputy Chairperson)

Ms. NB Mzuzu Ms. TB Nkambule Mr. CL Gololo Mr. SG Mthombeni Ms. SFS Makhathini Ms. JS Sekhitla Dr. DT Magome Mr. TF Keetse Ms. M Maseko (Co-opted) Dr. F Vreek (Co-opted)

EX OFFICIO BOARD MEMBERS Ms. SP Xulu (Acting Head of Department) Appointed January 2018 to 31 March 2018

Mr. MW Mkhize (Head of Department) Resigned January 2018

Mr. BJ Nobunga (Chief Executive Officer)

REGISTERED OFFICE Samora Machel Drive Hall’s Gateway Mataffin Mbombela 1200

BUSINESS ADDRESS Samora Machel Drive Hall’s Gateway Mataffin Mbombela 1200

GENERAL INFORMATION



POSTAL ADDRESS Private Bag X11338 Mbombela 1200

BANKERS Standard Bank and, First National Bank of South Africa Limited

AUDITORS The Auditor General South Africa

SECRETARY Ms. Hlahane P

AUDIT AND RISK COMMITTEE EXTERNAL INDEPENDENT Ms. Mvulane P (Chairperson) MEMBERS FOR THE REPORTING PERIOD Mr. Mthembu S

Ms. Mzuzu NB Ms. Makhathini SFS Mr. Zakwe M - Appointed 01 September 2017

GENERAL INFORMATION

CONTINUED


THE REPORTS AND STATEMENTS SET OUT BELOW COMPRISE THE ANNUAL FINANCIAL STATEMENTS PRESENTED TO THE STAKEHOLDERS:

INDEX PAGE

Accounting Authority’s Responsibilities and Approval 92

Report of the Chief Executive Officer 93

Report of the Audit and Risk Committee 96

Report of Accounting Authority 98

Auditor General’s Report for the year ended 31 March 2018 100

Statement of Financial Position as at 31 March 2018 106

Statement of Financial Performance for the year ended 31 March 2018 107

Statement of Changes in Net Assets for the year ended 31 March 2018 108

Cash Flow Statement for the year ended 31 March 2018 109

Statement of Comparison of Budget and Actual Amounts for the year ended 31 March 2018 110

Accounting Policies for the year ended 31 March 2018 114

Disclosure notes to the Annual Financial Statements for the year ended 31 March 2018 128

The following supplementary information does not form part of the Annual Financial Statements and is unaudited:

Detailed Income statement 152

CONTENTS


The Public Finance Management Act requires the Board Members of MTPA to ensure that MTPA keeps the full and proper records of its financial affairs. The Annual Financial Statements should fairly present the state of affairs of MTPA, and its financial position at the end of the year in terms of the prescribed standards of Generally Recognised Accounting Practices.

The Board Members are responsible for monitoring the preparation of the Annual Financial Statements. The Auditor General South Africa is responsible for independently auditing and reporting on the Annual Financial Statements.

The Annual Financial Statements are prepared in accordance with the prescribed standards of Generally Recognised Accounting Practices, as per Directives 5 2014; (Appendix G) issued by the Accounting Standards Board (ASB) and incorporate disclosure in line with the accounting policies of MTPA. The Annual Financial Statements are based on appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates and are prepared on the going concern basis.

MTPA is not entirely comfortable with the current level of financial support from the Provincial Government, and although all indications are that MTPA will continue to be sustainable and will be able to meet its obligations better going forward, the recent reductions in the funded budget will impact on the ability of the Agency to deliver on all of its mandates. In order to accommodate the anticipated budgetary constraints, Management have prioritized deliverables, focusing on core mandates. The view of Management expressed above provides additional assurance as to the continued sustainability of MTPA. Additional information with regards to going concern is included in this annual report.

To enable the Board Members to discharge the above responsibilities, MTPA Board developed, and maintains a system of internal control. The internal controls include a risk based system of internal accounting and administrative controls designed to provide reasonable but not absolute assurance that assets are safeguarded and that transactions are executed and recorded in accordance with generally accepted business practices and MTPA’s policies and procedures. These controls are implemented by trained, skilled personnel with appropriate segregation of duties, are monitored by Management and include a comprehensive budgeting and reporting system operating within strict deadlines and an appropriate control framework.

The system of internal control is designed to provide cost effective assurance that assets are safeguarded and that liabilities and working capital are efficiently managed. The high vacancy rate has not as yet been fully addressed. However, some of the executive Management positions have been filled. The general vacancies will be addressed now that the health audit has been finalised and Management is in the process of actioning the recommendations.

Management remains confident that the system of internal control applied by MTPA over financial and risk management is in general effective and transparent.

As part of the system of internal control, MTPA’s internal audit function conducts operational, financial and specific audits and co-ordinates audit coverage with the external auditors. The MTPA’s Internal Audit function is outsourced to external consultants.

The Annual Financial Statements for the year ended 31 March 2018 set out in pages 106 - 151 were approved on 31 July 2018 by the Board of the MTPA appointed in terms of MTPA Act, 2005 (Act No 5 2005) which has assumed the responsibilities of the Board and are signed on its behalf by:

Mr. TJ Nzima Mr. BJ NobungaChairperson of the Board Chief Executive Officer

Mbombela

ACCOUNTING AUTHORITY’S RESPONSIBILITIES AND APPROVAL



I am pleased to present my first overview as the Chief Executive Officer of Mpumalanga Tourism and Parks Agency.

The financial year under review was filled with exciting and challenging moments, which presented us with an opportunity to reflect on our performance as an Agency and continue to work even harder to deliver on our mandate.





The decline of domestic tourism trips to the province by an average of 24% in recent years has prompted the entity to look at alternative strategies to encourage local and domestic travel. In the year under review, the entity invested more resources in partnerships to leverage on key provincial events. One of these flagship events was the inaugural Mbombela Jazz Festival, which was hosted in September 2017 and attracted over 4000 people. Other partnerships were done with event organisers of Nabalabntfu Festival, Sunrise Women’s Awards, Innibos and Mpumalanga Cultural Experience.




REPORT OF THE CHIEF EXECUTIVE OFFICER














REPORT OF THE CHIEF EXECUTIVE OFFICER (CONTINUED)



The MTPA continues to collaborate with claimant communities in the management of nature reserves, which are subject to restitution claims. Settlement and co-management agreements are in the final stages of being concluded for Blyde, Loskop Dam, Andover and Bushbuckridge









We are pleased to present our report for the financial year ended 31 March 2018.

AUDIT AND RISK COMMITTEE MEMBERS AND ATTENDANCE The Audit and Risk Committee consists of the members listed hereunder and should meet at least four times per annum as per its approved terms of reference. During the current year, the committee held four audit and risk committee meetings and two special committee meetings. One was to review the 2017/18 APP and the other for the review of strategic and operational risk management.

Name Role Attended

Ms. PMK Mvulane: Chairperson (01 August 2016) Chairperson 6 Mr. MS Mthembu (01 April 2016) External Member 6 Ms. SFS Makhathini (01 April 2016) Board Member 3 Ms. BN Mzuzu (23 March 2017) Board Member 3 Mr. ME Zakwe (01 September 2017) External Member 2

AUDIT AND RISK COMMITTEE RESPONSIBILITY The Committee reports that it has complied with its responsibilities arising from Section 51 (1)(ii), Section 76 (4) (d) of the Public Finance Management Act 1 of 1999 and Treasury Regulations 27.1.

The Committee also reports that it has adopted appropriate formal terms of reference as its Audit and Risk Committee Charter, has regulated its affairs in compliance with this charter, and has discharged its responsibilities as contained therein. The charter is reviewed annually and adopted by the committee on approval by the Accounting Authority.

INTERNAL AUDITThe Committee has reviewed the quarterly Internal Audit Reports which were prepared as per approved the risk based three year rolling internal audit plan and annual operational plan. The Committee further co-ordinated and monitored the activities of the internal audit function. Through this, the Committee is able to report on the effectiveness of the internal audit. The internal audit function was co-outsourced and operational for the financial year under review even though there were budget constraints.

The Committee reviewed the internal audit reports; where there were weaknesses identified within the Agency and considered the adequacy of management responses, to ensure the risk exposure is reduced and there is continuous improvement within the control environment. The management corrective actions were not adequate to deal with the system or processes.

The reports were recommended to the Accounting Authority for adoption. The Committee is satisfied with the effectiveness of the internal audit function taking into account the available budget for the internal audit unit.

RISK MANAGEMENT The Audit and Risk Committee is responsible for oversight of the institution’s control, governance and risk management. Furthermore, the Audit and Risk Committee provides the Board with independent counsel, advice and direction in respect of risk management and thus the stakeholders rely on the Committee for an independent and objective view of the institution’s risk management processes. As a result, the Committee provides the oversight required to ensure that stakeholder interests are protected.

The Audit and Risk Committee was provided with quarterly progress reports, which were evaluated, scrutinized by the Accounting Authority. The following are the activities were conducted by the Committee through its oversight role on Risk Management reviewed strategies, policies and quarterly plans.

EFFECTIVENESS OF INTERNAL CONTROLSOur review of the findings of the Internal Audit work, which was based on the risk assessments conducted in the public entity revealed certain weaknesses, which were then raised with the public entity.

REPORT OF THE AUDIT AND RISK COMMITTEE



The following internal audit work was completed during the year under review:• Audit of Pre-determined Objectives (AOPO Review• Risk Management governance documents review including facilitating a workshop with all stakeholders. • Finance: Supply Chain Management including Irregular expenditure compliance audit and Interim Financial Statements • Tourism and Other Stakeholders Management Review• ITGC and applications control review• Critical Financial controls and review of policies including Zithabiseni Nature Resort and Conference Centre• Reserves and stations surprise visits (revenue)

Matters of serious concern to the Committee regarding internal controls are as follows:a) Policies and procedures not all of them were finalised. b) Ineffective management responses and delays in implementation of management action plans c) Deficiencies/non-compliance noted within the SCM Procurement, and Contract Management;d) Audit of Pre-determined Objectives still need improvements and consequences management

IN YEAR MANAGEMENT AND QUARTERLY REPORTINGThe committee determined that the administration of quarterly reports submitted in terms of the PFMA and Division of Revenue Act were partly adequate according to internal audit results and management assurances.

EVALUATION OF FINANCIAL STATEMENTS The Audit and Risk Committee has: • Reviewed the audited annual financial statements to be included in the annual report with the Agency; • Evaluated the audited annual financial statement for the consistent application of accounting policies and practices; and reviewed the

changes in accounting policies and practices• Considered the appropriateness, adoption and consistent application of the South African Statement of Generally Recognised

Accounting Practices adopted by the Accounting Authority;• Reviewed the financial statements of the Entity for the year ended 31 March 2018 and is satisfied that they comply with relevant

provisions of the Public Finance Management Act and the South African Statement of Generally Recognised Accounting Practices;• Reviewed the annual financial statements for abnormal and/or significant transactions of the Agency and the disclosure thereof; • Sought explanations for and evaluated all significant variances in the annual financial statements as compared to the prior year;• Evaluated the clarity and completeness of disclosure and whether disclosures made have been set properly in context; and• Evaluated write offs, reserve transfers, and the levels of general and specific provisions.

AUDITOR GENERAL SOUTH AFRICAThe committee has reviewed the entity’s implementation plan for audit issues raised in the previous years and we are satisfied that 80 % of the matters have been adequately resolved. We will monitor the remainder of matters that still need attention.

The Audit and Risk Committee concurs with the Auditor General South Africa’s conclusions on the annual financial statements and pre determined objectives and noted the improved audit outcome to an unqualified audit opinion with findings.

GENERALThe Audit and Risk Committee would like commend the Accounting Authority and Management in dealing with audit action plans for both internal and external audit together with all other recommendations made by the Audit and Risk Committee, we are of a view that as we work towards clean administration it will allow the entity to provide better and responsive service delivery to the citizens of Mpumalanga.

Ms. Precious Mvulane Chairperson of the Audit and Risk Committee

31 July 2018

REPORT OF THE AUDIT AND RISK COMMITTEE (CONTINUED)



REPORT OF ACCOUNTING AUTHORITY


1. BACKGROUND MTPA is a juristic person established in terms of the MTPA Act (Act 5 of 2005) and is registered as a Schedule 3C Public Entity in terms

of the PFMA Act (Act 1 of 1999). MTPA’s main shareholder is the Department of Economic Development and Tourism (hereinafter ‘’DEDT’’) from which it receives its funding.

2. REVIEW OF ACTIVITIES MAIN BUSINESS AND OPERATIONS The objective of MTPA is to fulfil its mandate in terms of the MTPA Act (Act 5 of 2005), which provides for the management and

promotion of responsible Tourism and Nature Conservation in the Province and to ensure sustainable utilisation of natural resources for the benefit of everyone in the Province. The MTPA is committed to showcase Mpumalanga’s scenic beauty, diverse wildlife, adventure activities, culture and heritage.

LAND CLAIMS/CO – MANAGEMENT/SETTLEMENT AGREEMENTS The fact that the land in the majority of our nature reserves are under claim, poses a challenge to our ability to speedily execute our

plans as required by the land restitution processes. MTPA has consequently entered into co-management and settlement agreements with some of the land claimants, in cases where land ownership has been authenticated by the Regional Land Claims Commission (RLCC); i.e. Mdala, Mkhombo, and Mabusa Nature Reserves (in 2010/2011) and Songimvelo Nature Reserve (in 2012). The RLCC however, is still to formally transfer the land (title deeds) to these successful land claimants.

In certain instances, the land is subject to contested land claims. MTPA continues to endeavour to assist the RLCC to settle these claims in our priority reserves. These contested land claims negatively affect MTPA’s ability to realise the full potential of the conservation and tourism capacity of the land. However, this has no impact on the Annual Financial Statements for the period under review, as MTPA, through its provincial legislative mandate; has the right to use, manage, preserve and develop all the reserves according to the acceptable recognised standards and legislation.

The operating results and state of affairs of the MTPA are fully set out in the attached Annual Financial Statements.

2018 Revised 2017 Financial Performance R R

Grant received 329 028 000 304 387 100 Conditional grant - Expanded Public Works Programme (Hereafter EPWP”) 2 605 000 2 911 000 Zithabiseni 22 512 000 21 510 000 Infrastructure upgrade - 18 000 000 (Deficit) (10 577 681) (6 241 031)

Total assets 559 761 884 558 113 262 Total liabilities 57 250 950 45 024 646

3. GOING CONCERN We draw attention to the fact that at 31 March 2018 MTPA had a net asset value of R 502 510 934 (Restated 2017: R 513 088 616) and

that the MTPA’s current liabilities exceed its current assets by R 3 196 498 (Restated 2017: R 629 772), the current liabilities includes a leave provision of R11 356 897 (2017: R10 886 768). This provision will not strain the cash flow requirements of the entity due to the leave policy that does not allow voluntary encashment of leave. The board after having reviewed the projected cash flows for the foreseeable future and management’s assessment of MTPA’s ability to operate as a going concern, has a reasonable expectation that the Agency has adequate resources to continue its operations as a going concern for the foreseeable future.


REPORT OF ACCOUNTING AUTHORITY (CONTINUED)


4. IRREGULAR EXPENDITURE Irregular expenditure to an amount of R 6 720 772 (2017: 4 977 412) was identified during this year. Detail of this is disclosed under

note 26. The 2017 balance was submitted to Provincial Treasury for condonement.

5. BOARD MEMBERS FOR THE REPORTING PERIOD Mr. Nzima TJ ( Chairperson) Ms. Shabangu-Mndawe NR (Deputy Chairperson) Ms. Mzuzu NB Ms. Nkambule TB Mr. Gololo CL Mr. Mthombeni SG Ms. Makhathini SFS Ms. Sekhitla JS Dr. Magome DT Mr. Keetse TF

Ms. Maseko M (co-opted) Dr. Venter F (co-opted)

EX OFFICIO BOARD MEMBERS Ms. Xulu SP (Acting Head of Department) - Appointed January 2018 to 31 March 2018 Mr. Mkhize MW (Head of Department) - Resigned January 2018 Mr. Nobunga BJ (Chief Executive Officer)

6. ZITHABISENI RESORT AND CONFERENCE CENTRE The Provincial Executive Council, at its meeting of 23 August 2015, resolved to transfer the Zithabiseni Resort and Conference Centre

to the Mpumalanga Tourism and Parks Agency as a managing authority for the resort. Mpumalanga Tourism and Parks Agency resumed responsibilities as a managing Authority effective 01 April 2016. Further to this effect, the Executive Council approved the option, which promotes joint ownership of the Resort by the State and the Community, but managed by an independent operator (to be appointed) with defined state and community benefits.

The Agency maintains appropriate measures to ensure that the Government grant transferred to Zithabiseni is used for its intended purpose. MTPA receives the Government grant from the Department of Economic Development and Tourism for further transfer to the Resort. The grant is mainly spent on Salaries and Wages. Monitoring on the use of the grant is done through requests for the company’s financial statements and regular reporting by the company through quarterly reports and the review of non-financial performance.

7. ANNUAL FINANCIAL STATEMENTS The separate Annual Financial Statements are for the main entity excluding the Trusts and Zithabiseni Resort and Conference Centre.

8. CONCLUSION Other than the above, there is nothing that the MTPA Board wishes to draw attention to that has not already been highlighted

elsewhere in the Annual Financial Statements, Auditor-General South Africa Report and Annual Report.


Mbombela


AUDITOR-GENERAL’S REPORT


Report of the auditor-general to the Mpumalanga Provincial Legislature on the Mpumalanga Tourism and Parks Agency

Reportontheauditofthefinancialstatements

Opinion

1. I have audited the financial statements of the Mpumalanga Tourism and Parks Agency and its subsidiaries set out on pages 106 to151 which comprise the statement of financial position as at 31 March 2018, the statement of financial performance, statement of changes in net assets, cash flow statement and statement of comparison of budget information with actual amounts for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies.

2. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Mpumalanga Tourism and Parks Agency as at 31 March 2018, and its financial performance and cash flows for the year then ended in accordance with Generally Recognised Accounting Practice (GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Division of Revenue Act of South Africa, 2017 (Act No. 3 of 2017) (Dora).

Basis for opinion

3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities under those standards are further described in the auditor-general’s responsibilities for the audit of the financial statements section of this auditor’s report.

4. I am independent of the public entity in accordance with the International Ethics Standards Board for Accountants’ Code of ethics for professional accountants (IESBA code) and the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA code.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Emphasis of matters

6. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Restatementofcorrespondingfigures

7. As disclosed in note 30 to the financial statements, the corresponding figures for 31 March 2017 have been restated as a result of an error in the financial statements of the public entity at, and for the year ended, 31 March 2018.

Uncertainty relating to the future outcome of exceptional litigation

8. With reference to note 20 to the financial statements, the entity is the defendant in a land utilisation lawsuit of R740 million. The entity is opposing the claim. The ultimate outcome of the matter cannot presently be determined and no provision for any liability that may result has been made in the financial statements.

Material impairments

9. As disclosed in note 3 to the financial statements, the receivables from exchange transactions balance was significantly impaired. The impairment of receivables from exchange transactions amounted to R2 872 772 (2017: R4 862 617), which represented 34% (2017: 40%) of the total receivables from exchange transactions.

Irregular as well as fruitless and wasteful expenditure

10. As disclosed in note 26 to the financial statements, irregular expenditure of R6 720 772 was incurred, as supply chain management and contract management processes were not adhered to.


AUDITOR-GENERAL’S REPORT (CONTINUED)


11. As disclosed in note 24 to the financial statements, fruitless expenditure of R659 894 was incurred, as a result of penalties and interest as well as two salaries incurred on the same position.

Responsibilitiesoftheaccountingauthorityforthefinancialstatements

12. The accounting authority is responsible for the preparation and fair presentation of the financial statements in accordance with GRAP and the requirements of the PFMA and Dora, and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

13. In preparing the financial statements, the accounting authority is responsible for assessing the public entity’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the accounting authority either intends to liquidate the public entity or to cease operations, or has no realistic alternative but to do so.

Auditor-general’sresponsibilitiesfortheauditofthefinancialstatements

14. My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from 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 accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

15. A further description of my responsibilities for the audit of the financial statements is included in the annexure to this auditor’s report.

Report on the audit of the annual performance report

Introduction and scope

16. 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 responsibility to report material findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance.

17. My procedures address the reported performance information, which must be based on the approved performance planning documents of the public entity. I have not evaluated the completeness and appropriateness of the performance indicators included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, my findings do not extend to these matters.

18. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected programmes presented in the annual performance report of the public entity for the year ended 31 March 2018:

Programmes Pages in the annual performance report

programme 4 - tourism 39 - 44 programme 5 - biodiversity 45 - 49 programme 6 - commercial operations 50 - 51

19. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.


20. I did not raise any material findings on the usefulness and reliability of the reported performance information for the following programmes:

programme 4 - tourism

programme 5 - biodiversity

Programme 6 – commercial operations

Other matters

21. I draw attention to the matters below.

Achievement of planned targets

22. Refer to the annual performance report on pages 27 to 51 for information on the achievement of planned targets for the year and explanations provided for the under- or overachievement of a significant number of targets.

Adjustment of material misstatements

23. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of the biodiversity conservation and the commercial operations programmes. As management subsequently corrected the misstatements, I did not raise any material findings on the usefulness and reliability of the reported performance information.

Report on the audit of compliance with legislation


24. 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 public entity with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance.

25. The material findings on compliance with specific matters in key legislation are as follows:

Strategic planning and performance management

26. Procedures for the facilitation of effective performance monitoring, evaluation and corrective action through quarterly reports were not formally established for the greater part of the year, as required by treasury regulation 30.2.1.

Financial statements, performance report and annual report

27. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records, as required by section 55(1)(a) and (b) of the PFMA. Material misstatements of non-current assets, current liabilities and disclosure items identified by the auditors in the submitted financial statements were corrected and the supporting records were provided subsequently, resulting in the financial statements receiving an unqualified audit opinion.

Procurement and contract management

28. Some invitations for competitive bidding were not advertised for the required minimum period, as required by treasury regulation 16A6.3(c).

29. Bid documentation for the procurement of commodities designated for local content and production did not stipulate the minimum threshold for local production and content, as required by the 2017 preferential procurement regulation 8(2).




Expenditure management

30. Effective and appropriate steps were not taken to prevent irregular expenditure, as required by section 51(1)(b)(ii) of the PFMA.

Revenue management

31. Effective and appropriate steps were not taken to collect all revenue due, as required by section 51(1)(b)(i) of the PFMA.

Other information

32. The accounting authority is responsible for the other information. The other information comprises the information included in the annual report, which includes the Audit and Risk Committee’s report. The other information does not include the financial statements, the auditor’s report and those selected programmes presented in the annual performance report that have been specifically reported in this auditor’s report.

33. My opinion on the financial statements and 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.

34. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements and the selected programmes presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

35. The other information I obtained prior to the date of this auditor’s report is the general information of the public entity. The report of the CEO, audit and risk committee’s report, foreword by the MEC, overview by the chairperson of the board and overview of the CEO are expected to be made available to me after 31 July 2018.

36. If, based on the work I have performed on the other information that I obtained prior to the date of this auditor’s report, I conclude that there is a material misstatement in this other information, I am required to report that fact. I have nothing to report in this regard.

37. After I receive and read the report of the CEO, audit and risk committee’s report, foreword by the MEC, overview by the chairperson of the board and overview of the CEO, and if I conclude that there is a material misstatement, I am required to communicate the matter to those charged with governance and request that the other information be 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 it is corrected this will not be necessary.

Internalcontroldeficiencies

38. I considered internal control relevant to my audit of the financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to express any form of assurance on it. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on compliance with legislation included in this report.

Leadership

39. Adequate oversight responsibility was not exercised regarding financial and performance reporting and compliance as well as related internal controls.

40. Effective human resource management was not implemented to ensure that vacant key management positions were filled.

41. Policies and procedures that enable and support the understanding and execution of internal control objectives, processes and responsibilities were not adequately established and communicated.

42. The developed action plan to address external audit recommendations was not fully implemented, as recurring audit findings were identified.




Financial and performance management

43. Management did not implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information was accessible and available to support financial and performance reporting.

Governance

44. Adequate oversight of performance reporting was not exercised.

Mbombela

31 July 2018




Annexure – Auditor-general’s responsibility for the audit

1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my audit of the financial statements, and the procedures performed on reported performance information for selected programmes and on the public entity’s compliance with respect to the selected subject matters.

Financial statements

2. In addition to my responsibility for the audit of the financial statements as described in this auditor’s report, I also:

• identify and assess the risks of material misstatement of the financial statements whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the public entity’s internal control

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the accounting authority

• conclude on the appropriateness of the accounting authority’s use of the going concern basis of accounting in the preparation of the 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 public entity’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 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 a public entity to cease continuing as a going concern

• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the 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.




2018 2017 Figures in Rand Note(s) Restated

ASSETS

CURRENT ASSETS

Inventories 2 786 631 405 936 Receivables from exchange transactions 3 5 476 824 7 378 457 Receivables from non-exchange transactions 4 682 568 5 140 061 Cash and cash equivalents 5 42 981 006 27 957 522

49 927 029 40 881 976

NON-CURRENT ASSETS

Property, plant and equipment 6 474 338 555 481 948 079 Intangible assets 7 213 093 - Heritage assets 8 35 283 207 35 283 207

509 834 855 517 231 286

Total Assets 559 761 884 558 113 262

LIABILITIES

CURRENT LIABILITIES

Payables from exchange transactions 10 16 432 182 20 823 606 Provisions 11 11 356 897 10 886 768 Project liabilities 12 25 015 241 9 365 799 Long service awards - short term portion 10.1 319 200 435 575

53 123 520 41 511 748

NON-CURRENT LIABILITIES

Long service awards 10.1 4 127 430 3 512 898

Total Liabilities 57 250 950 45 024 646

Contribution from owners 13 70 015 412 70 015 412

RESERVES

Revaluation reserve 361 446 209 371 219 451 Accumulated surplus 71 049 313 71 853 753

Net Assets 502 510 934 513 088 616 Total Liabilities 57 250 950 45 024 646

Total net assets and liabilities 559 761 884 558 113 262

STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2018



Revenue from non-exchange transactions (Grants received) 14 331 633 000 325 298 100 Revenue from non-exchange transactions (Other) 14 9 011 143 1 800 471 Revenue from exchange transactions 14 36 678 511 26 544 334

Gross surplus 377 322 654 353 642 905 Other income 15 23 615 851 16 561 839 Operating expenses 16 (412 350 959) (377 352 576)

Operatingdeficit (11412454) (7147832) Interest received 17 1 156 419 912 155 Interest expense 18 (321 646) (5 354)

Deficitfortheyear (10577681) (6241031)

STATEMENT OF FINANCIAL PERFORMANCE



Contribution Revaluation Accumulated Total net FiguresinRand Note(s) fromowners reserve surplus/(deficits) assets

Balance as at 1 April 2016 70 015 412 384 492 279 (12 529 262) 441 978 429

CHANGES IN NET ASSETS Deficit for the year - - (6 241 031) (6 241 031) Realisation of revaluation surplus on building - (13 272 829) 13 272 829 - Correction of concession - - (1 944 485) (1 944 485) Prior period error 30 - - 79 295 702 79 295 702

Total changes - (13 272 829) 84 383 015 71 110 186

Restated balance as at 01 April 2017 70 015 412 371 219 450 71 853 753 513 088 615

CHANGES IN NET ASSETS (Deficit)/surplus for the year - - (10 577 681) (10 577 681) Realisation of revaluation surplus on building 6 - (9 773 241) 9 773 241 -

Total changes - (9 773 241) (804 440) (10 577 681)

Closing balance as at 31 March 2018 70 015 412 361 446 209 71 049 313 502 510 934

Note(s) 13

STATEMENT OF CHANGES IN NET ASSETS




CASH FLOWS FROM OPERATING ACTIVITIESRECEIPTS

Cash receipts from exchange transactions 57 306 901 41 357 492 Cash receipts from non-exchange transactions 335 469 412 324 187 571 Interest received 1 156 419 912 155 EPWP 2 605 000 2 911 000

396 537 732 369 368 218

PAYMENTS

Employee costs (272 533 664) (257 197 868) Suppliers (109 641 330) (94 114 362) Interest expense (321 646) (5 354)

(382 496 640) (351 317 584)

Netcashflowsfromoperatingactivities 19 14041092 18050634

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment 6 (14 347 411) (10 798 625) Purchase of other intangible assets 7 (319 639) -

Netcashflowsfrominvestingactivities (14667050) (10798625)

CASH FLOWS FROM FINANCING ACTIVITIES Movement in project liability 15 649 442 7 357 415

Net increase/(decrease) in cash and cash equivalents 15 023 484 14 609 424 Cash and cash equivalents at the beginning of the year 27 957 522 13 348 098

Cash and cash equivalents at the end of the year 5 42 981 006 27 957 522

CASH FLOW STATEMENT



BUDGET ON ACCRUAL BASIS

Actual Difference amounts on between Approved Final comparable finalbudget Figures in Rand budget Adjustments budget basis and actual Reference

STATEMENT OF FINANCIAL PERFORMANCERevenue from exchange transactions

Sale of goods 4 717 000 - 4 717 000 5 652 592 935 592 Note 1 Rendering of services 30 383 000 - 30 383 000 31 025 919 642 919 Note 2 Concession fees 2 200 000 - 2 200 000 7 328 611 5 128 611 Note 3 Rental income 85 000 - 85 000 190 269 105 269 Note 4 Recoveries 242 000 - 242 000 261 660 19 660 Note 5 Hunting wildlife sales 5 000 000 - 5 000 000 2 189 193 (2 810 807) Note 6 Joint project conservation income - - - 7 130 259 7 130 259 Note 7 Sundry income 1 473 000 - 1 473 000 8 078 474 6 605 474 Note 8 Interest received 900 000 - 900 000 1 156 419 256 419 Note 9

Total revenue from exchange transactions 45 000 000 - 45 000 000 63 013 396 18 013 396

REVENUE FROM NON-EXCHANGE TRANSACTIONS Transfer revenue

Grant allocation 327 970 000 1 058 000 329 028 000 329 028 000 - EPWP 2 605 000 - 2 605 000 2 605 000 -

Total revenue from non-exchange transactions 330 575 000 1 058 000 331 633 000 331 633 000 -

Total revenue 375 575 000 1 058 000 376 633 000 394 646 396 18 013 396

EXPENDITURE

Compensation of employees (267 683 999) (1 058 000) (268 741 999) (271 512 589) (2 770 590) Note 10 Board and board committee compensation (1 861 243) - (1 861 243) (1 613 368) 247 875 Note 11 EPWP compensation (2 605 000) - (2 605 000) (2 584 488) 20 512 Programme costs (45 061 255) - (45 061 255) (38 019 719) 7 041 536 Note 12 Payment of capital assets (6 737 292) - (6 737 292) (3 692 782) 3 044 510 Note 13 Goods and services (51 626 211) - (51 626 211) (54 940 973) (3 314 762) Note 14

Total expenditure (375 575 000) (1 058 000) (376 633 000) (372 363 919) 4 269 081


STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS




Operating surplus - - - 22 282 477 22 282 477 Joint project conservation expenses - - - (8 699 208) (8 699 208) Note 7 Interest expense - - - (321 646) (321 646) Ring-fenced funds - - - (810 957) (810 957) Note 15 Joint project conservation assets - - - (67 857) (67 857) Note 7

- - - (9 899 668) (9 899 668)

Surplus/(deficit)beforetaking into account non-cash items - - - 12 382 809 12 382 809

RECONCILIATION Basis difference Assets donation - - - 7 027 224 - Increase in stock adjustment - - - 36 044 - Bad debts adjustment - - - 385 261 - Loss on fixed assets - - - (637 961) - Depreciation - - - (28 512 677) - Bonus provision - - - (141 051) - Provision for leave accrual - - - (470 129) - Partnership assets - - - 67 857 - Impairment - - - (4 407 840) - Non income statement - capex - - - 3 692 782 -

Actual Amount in the Statement of Financial Performance - - - (10 577 681) - Note 16

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS (CONTINUED)



VARIANCE ON BUDGET

There is a deficit of R10.5 million as per the Statement of Financial Performance which is including non-cash items as listed above. However the entity under-spent by R4.2 million not taking into account the non-cash items, refer to note 12 below.

REVENUE FROM EXCHANGE TRANSACTION

Note 1: Due to high demand for permits from external private game reserves for their endangered species breeding project

Note 2: Increase in tariffs had a positive impact on the revenue from entrance fees at the reserves, mainly Blyde.

Note 3: Concessions fees are budgeted based on agreed amounts per contracts. At year end, audited numbers from operators reflected good financial performance, therefore top up fees had to be invoiced, hence the over-collection in concession fees.

Note 4: Rental agreement signed for the new tenants and increase in rental.

Note 5: Recovery on staff consumption.

Note 6: Prolonged assessment of the game census results led to delayed procurement processes for trophy hunting and game capture. This deprived the entity a full hunting season.

Note 7: The joint project conservation income and expenses is the joint initiative with SANPARKS, SANBI, DST and other projects, to promote conservation management within the protected areas in the nature reserves. Grants received were not budgeted for and consequently neither the joint project conservation expenses. Grant income and expenses cannot be budgeted for, as joint project conservation occurs as and when required by the different parties.

Note 8: Included in sundry income are the following unbudgeted items:

a) DEA implementers’’ fees

b) Insurance refunds.

c) DEDT salary reimbursement of the seconded Chief Financial Officer.

Note 9: Interest received increased as a result of excess cash reserves for ring fenced projects.




TOTAL EXPENDITURE VARIANCE RESULTS FROM THE FOLLOWING:

Note 10: Due to increase in Public and Sunday rates claims.

Note 11: The under-spending in board remuneration is due to non-attendance by certain members.

Note 12: Underspending is due to the following:

a) Waterval Boven and Pilgrims Rest tender awarded lower than estimated budget.

b) National Department of Tourism (NDT) developed the brand strategy hence the allocated budget was not spent.

c) Due to delays in the appointment of the service provider for the Resource Management Project.

Note 13: Slow progress on full infrastructure maintenance as emergency repairs had to be attended to.

Note 14: Due to increase vehicle reimbursements, as the 1500 km limit was exceeded, telephone costs and electricity charges.

Note 15: This relates to expenditure against the ring fenced monies received in previous financial years and actually spent in the current financial year. This remains a commitment up until expenditure is incurred.

Note 16: Agreed to the Annual Statement of Financial Performance (SPF).




1. BASIS OF PREPARATION The Annual Financial Statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting

Practice (GRAP), including any interpretations and directives issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act, (Act No 1 of 1999).

The Annual Financial Statements are prepared on the accrual basis of accounting and incorporate the historical cost conventions as the basis of measurement, except where specified otherwise.

In the absence of an issued and effective Standard of GRAP, accounting policies for material transactions, events or conditions were developed in accordance with paragraphs 8, 10 and 11 of GRAP 3 as read with Directive 5.

Assets, liabilities, revenues and expenses were not offset, except where offsetting is either required or permitted by a Standard of GRAP.

The principal accounting policies, applied in the preparation of these Annual Financial Statements, are set out below, which are consistent with those adopted in the prior financial year:

1.1 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY

• These Annual Financial Statements have been prepared based on the expectation that the entity will continue to operate as a going concern for at least the next 12 months.

• The Annual Financial Statements have been prepared on an accruals basis.

• Changes in accounting policies are accounted for in accordance with the transitional provisions in the standard. If no such guidance is given, they are applied retrospectively, unless it is impracticable to do so, in which case they are applied prospectively.

• Transactions are accounted for and presented in accordance with their substance and economic reality and not merely their legal form. The substance of transactions or other events is not always consistent with that which is apparent from their legal or contrived form.

• Presentation and disclosure takes into consideration the materiality of the transaction, which can either be material qualitatively or quantitatively or both.

• In preparing the Annual Financial Statements, Management is required to make estimates and assumptions that affect the amounts represented in the Annual Financial Statements and related disclosures. Use of available information and the application of judgements are inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the Annual Financial Statements. Accounting estimates are utilised in determining fair value, total useful lives and remaining useful lives of property, plant and equipment.

1.2 PROPERTY, PLANT AND EQUIPMENT

Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are recognised in the Statement of Financial Position initially at cost and thereafter measured at the end of the reporting period at the revalued amount, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be determined using fair values at the end of the reporting period.

Any revaluation increase arising on the revaluation of such infrastructure and land and buildings is recognised in other comprehensive income, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in surplus or deficit, in which case the increase is credited to surplus or deficit to the extent of the decrease previously expensed.

ACCOUNTING POLICIES



A decrease in the carrying amount arising on the revaluation of such land and buildings is recognised in surplus or deficit to the extent that it exceeds the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset.

Depreciation on revalued buildings is recognised in set of Statement of Financial Performance. On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to accumulated deficit. The revaluation reserve in equity related to a specific item of property, plant and equipment is transferred directly to accumulated surplus or deficit as the asset is used. The amount transferred is equal to the difference between depreciation based on the revalued carrying amount and depreciation based on original cost of the asset.

Other fixed assets are stated at cost or deemed cost in terms of directive 7, less accumulated depreciation and accumulated impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end. Changes are accounted for as a change in accounting estimate.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in surplus or deficit.

The depreciation rates are in accordance with the MTPA’s asset management policy. Assets are written off over their expected useful lives up to their residual values. The depreciation rates are the following:

Land 0% Buildings 1-10% Large and small equipment 25% Furniture and fixtures 20-25% Motor vehicles 33% Computer equipment 33% Infrastructure 2-10%

Large and small equipment and technical furniture and equipment have been grouped together for disclosure purposes.

1.3 INTANGIBLE ASSETS

An intangible asset is an identifiable, non-monetary asset without physical substance. Intangible assets are identifiable resources controlled by the entity from which the entity expects to derive future economic benefits.

An intangible asset is identifiable if it either is separable, i.e is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless of whether the entity intends to do so or arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

An intangible asset is recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably.

ACCOUNTING POLICIES (CONTINUED)



The entity assesses the probability of expected future economic benefits using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.

Intangible assets that are acquired and have finite useful lives are initially recognised at cost with subsequent measurement at cost less any accumulated amortisation and any impairment losses.

Intangible assets are derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets. For all other intangible assets amortisation is recognised in the profit or loss and is provided on the straight-line basis which, it is estimated, will reduce the carrying amount of the assets to their residual values at the end of their useful lives.

Intangible assets are amortised at the following rates:

Computer software 33%

1.4 HERITAGE ASSETS

Heritage assets are assets, which have a cultural, environmental, historical, natural, scientific, technological, or artistic significance, and are held indefinitely for the benefit of present and future generations.

Classes of heritage assets include conservation areas such as reserves. This land is reflected as a heritage asset of MTPA.

Characteristics often displayed by heritage assets include the following:

• their value in cultural, environmental, educational and historical terms is unlikely to be fully reflected in monetary terms;

• ethical, legal and/or statutory obligations may impose prohibitions or severe stipulations on disposal by sale; they are often irreplaceable;

• their value may increase over time even if their physical condition deteriorates;

• they have an indefinite life and their value appreciates over time due to their cultural, environmental, educational, natural scientific, technological, artistic or historical significance; and

• they are protected, kept unencumbered, cared for and preserved.

Recognition

A heritage asset shall be recognised as an asset if, and only if:

• it is probable that future economic benefits or service potential associated with the asset will flow to the entity; and

• the cost or fair value of the asset can be measured reliably.

MTPA holds heritage assets through conservation areas in the reserves that are regarded as heritage assets. MTPA does not recognise heritage assets, which on initial recognition, do not meet the recognition criteria of a heritage asset because they cannot be reliably measured. Relevant and useful information about them has been disclosed in the notes to the Annual Financial Statements.




Initial measurement

A heritage asset that qualifies for recognition as an asset, shall be measured at its cost. When it is acquired through a non-exchange transaction, it will be measured at its fair value/deemed cost as at the date of acquisition.

Subsequent measurement

After recognition as an asset, a class of heritage assets is carried at its cost less any accumulated impairment losses.

Impairment

MTPA assesses at each reporting date whether there is an indication that it may be impaired. If any such indication exists, MTPA estimates the recoverable amount or the recoverable service amount of the heritage asset.

Transfers

Transfers from heritage assets are only made when the particular asset no longer meets the definition of a heritage asset. Transfers to heritage assets are only made when the asset meets the definition of a heritage asset. The transfer will be made at the carrying value of the heritage asset.

Derecognition

MTPA derecognises heritage assets on disposal, or when no future economic benefits or service potential are expected from its use or disposal. The gain or loss arising from derecognition of a heritage asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the heritage asset. Such difference is recognised in surplus or deficit when the heritage asset is derecognised.

1.5 FINANCIAL INSTRUMENTS

Initial recognition

The MTPA classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial assets and financial liabilities are recognised on the MTPA’s Statement of Financial Position when the MTPA becomes party to the contractual provisions of the instrument.

Receivables from exchange and non-exchange transactions

Trade and other receivables are classified as receivables from exchange transactions and receivables from non-exchange transactions.

Trade receivables are measured at initial recognition at fair value less provision made for impairment of these receivables.

Short-term receivables and payables are not discounted where the initial credit period granted or received is consistent with terms used in the public sector either through established practices or legislation.

MTPA provides for receivables which are older than 120 days. Appropriate allowances for estimated irrecoverable amounts are recognised in deficit or surplus when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial re-organisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired.




The carrying value of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in the Statement of Financial Performance.

Payables from exchange transactions and payables from non-exchange transactions

Payables from exchange transactions are carried at the fair value of the consideration to be paid in future for goods or services that have been received or supplied and invoiced or formally agreed with the supplier.

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

Other loans and receivables

Other financial assets classified as loans and receivables are initially recognised at fair value plus transaction costs, and are subsequently carried at amortised cost less any accumulated impairment losses.

These financial assets are not quoted in an active market and have fixed or determinable payments.

1.6 TAX

The MTPA is registered as a tax payer in terms of S10(1) of the Income Tax Act, 1962. The institution qualifies as an exempt institution, and is accordingly exempt from South African normal tax in terms of S10(1) of the Income Tax Act, 1962.

1.7 LEASES

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases.

Operating leases

Leases for assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Financial Performance on a straight-line basis over the period of the lease after taking into account any fixed escalation clauses.

Contingent rents are charged as an expense in the periods in which they are incurred.

1.8 INVENTORIES

MTPA inventories include consumables, staff uniforms and fuel.

Inventories are initially measured at cost except where inventories are acquired through a non-exchange transaction, then their costs are their fair value as at the date of acquisition.

Subsequently inventories are measured at the lower of cost and net realisable value.




Inventories are measured at the lower of cost and current replacement cost where they are held for;

• Distribution at no charge or for a nominal charge; or

• Consumption in the production process of goods to be distributed at no charge or for a nominal charge.

Current replacement cost is the cost the entity incurs to acquire the asset on the reporting date.

The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of operations less the estimated costs of completion and the estimated costs necessary to make the sale, exchange or distribution.

When inventories are sold, the carrying amounts of those inventories are recognised as an expense in the period in which the related revenue is recognised. If there is no related revenue, the expenses are recognised when the goods are distributed, or related services are rendered. The amount of any write-down of inventories to net realisable value or current replacement cost and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value or current replacement cost, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

1.9 IMPAIRMENT OF CASH-GENERATING ASSETS

Cash-generating assets are those assets held by the MTPA for the purpose of generating a commercial return. When an asset is deployed in a manner consistent with that adopted by a profit-orientated MTPA, it generates a commercial return.

The MTPA assesses at each reporting date whether there is any indication that an asset or cash-generating unit to which an asset belongs to may be impaired.

When such an indication exists, the MTPA estimates the recoverable amount of the asset. The recoverable amount is the higher of the cash-generating asset’s fair value less costs to sell and its value in use. The value in use is determined as the present value of the estimated future cash flows expected to be derived from the continuing use of an asset and from its disposal at the end of its useful life.

The future expected cash flows are discounted at a rate that reflects the current market assessment of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted.

If the carrying amount of a cash-generating asset exceeds its recoverable amount, it is impaired. An impairment loss is recognised immediately in surplus or deficit.

The MTPA assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a cash-generating asset may no longer exist or may have decreased. If any such indication exists, the entity estimates the recoverable amount of that asset and accounts for the reversal of impairment loss if necessary. The increase in the carrying amount of an asset due to the reversal of an impairment loss should not exceed what the carrying amount would have been if no impairment loss had been recognised.

1.10 IMPAIRMENT OF NON-CASH-GENERATING ASSETS

Non-cash-generating assets are those assets held by the MTPA without an intention of generating a commercial return from such asset, such as assets used for general administrative and governance purposes and assets used purely for service delivery. This identification is based on the materiality of cash flows generated from these assets.




The MTPA assesses at each reporting date whether any indications exist that an asset may be impaired. When such an indication exists, the MTPA estimates the recoverable service amount of the asset. The recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use. The value in use is determined by using either the depreciated replacement cost, restoration cost or service unit approach, depending on the availability of data and the nature of the impairment.

If the carrying amount of a non-cash-generating asset exceeds its recoverable service amount, it is impaired. An impairment loss is recognised immediately in surplus or deficit.

The MTPA assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a non-cash-generating asset may no longer exist or may have decreased. If any such indication exists, the MTPA estimates the recoverable service amount of that asset and accounts for the reversal of impairment loss if necessary. The increase in carrying amount of an asset due to the reversal of impairment loss should not exceed what the asset’s original carrying value would have been if no impairment loss were recognised.

1.11 CONTRIBUTION FROM OWNERS

An equity instrument is any contract that evidences a residual interest in the assets of an MTPA after deducting all of its liabilities.

1.12 CONTINGENT ASSETS

Contingent assets are possible assets whose existence will be confirmed by the occurrence or non-occurrence of uncertain future events that are not wholly within the control of the entity. Contingent assets are not recognised, but they are disclosed when it is more likely than not that an inflow of benefits will occur. However, when the inflow of benefits is virtually certain an asset is recognised in the statement of financial position, because that asset is no longer considered to be contingent.

1.13 EMPLOYEE BENEFITS

Short-termemployeebenefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of surplus sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.

Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined contribution plans where the entity’s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.

Definedbenefitplans

Otherlong-termemployeebenefits

Other long-term employee benefits may include, for example:

• long-term compensated absences such as long service or sabbatical leave;




• other long service benefits;

• long-term disability benefits;

• bonus, incentive and performance related payments payable twelve months or more after the end of the reporting period in which the employees render the related service;

• deferred compensation paid twelve months or more after the end of the reporting period in which it is earned.

Long service awards

Long service awards are provided to employees who achieve certain pre-determined milestones of service within MTPA. The MTPA’s obligation under these plans is valued periodically and the corresponding liability is raised. Payments are set-off against the liability, including notional interest, resulting from the valuation by Management and are charged against the Statement of Financial Performance as employee benefits upon valuation.

Gains and losses arising from the experience adjustments and changes in assumptions, is charged or credited to the Statement of Financial Performance in the period that it occurs. These obligations are valued periodically by management.

1.14 PROVISIONS

Provisions are recognised when:

• the MTPA has a present obligation as a result of a past event;

• it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; and

• a reliable estimate can be made of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

1.15 REVENUE FROM NON-EXCHANGE TRANSACTIONS

Government grants

Government grants are recognised in the period when they become receivable and credited to the Statement of Financial Performance. Funds received for capital development as conditional grants are recognised as deferred income and credited to the Statement of Financial Performance on a straight-line basis when the stipulations of the conditional grants are met.

Restrictions on government grants may result in such revenue being recognised on a time proportion basis. Where there is no restriction on the period, such revenue is recognised on receipt or when the Act becomes effective, whichever is earlier.

When government remit grants on a re-imbursement basis, revenue is recognised when the qualifying expense has been incurred and to the extent that any other restrictions have been complied with.

Revenue from non-exchange transactions

Revenue from donations received shall be measured at the amount of the increase in net assets which in this case will be the net proceeds received from the various donors; and




Revenue from special projects grant shall be measured at the amount of the increase in net assets which in this case will be the net proceeds received from the funders. If conditions are attached to the grant, a liability will be recognised and shall be the best estimate of the amount required to settle the present obligation at the reporting date. When a liability is subsequently reduced because a condition is satisfied the amount of the reduction in the liability will be recognised as revenue.

Assets in-kind

Assets in-kind are property, plant and equipment transferred to an entity in a non-exchange transaction, without charge, but may be subject to stipulations. Assets in-kind are recognised as revenue and property, plant and equipment:

• when it is probable that the future economic benefits or service potential will flow to MTPA and the fair value of the assets can be measured reliably.

• when the assets are received, or there is a binding arrangement to receive the goods. If assets in-kind are received without conditions attached, revenue is recognised immediately. If conditions are attached, a liability is recognised, which is reduced and revenue recognised as the conditions are satisfied.

On initial recognition, assets in-kind are measured at their fair value as at the date of acquisition, which may be ascertained by reference to an active market, or by appraisal.

1.16 REVENUE FROM EXCHANGE TRANSACTIONS

Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.

An exchange transaction is one in which MTPA receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange.

Sale of goods

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• the MTPA has transferred to the purchaser the significant risks and rewards of ownership of the goods;

• the MTPA retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits or service potential associated with the transaction will flow to the entity; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates.

Interest is recognised, in the Statement of Financial Performance, using the effective interest rate method.

Rendering of services

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits or service potential associated with the transaction will flow to the entity;




• the stage of completion of the transaction at the reporting date can be measured reliably; and

• the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

• Accommodation income is recognised on a daily basis.

• Entrance fees are recognised on a daily basis and other tourist related activities are recognised upon commencement of the activity.

• Joint project conservation income relates to employment projects that are administered by MTPA but funded from external parties. i.e. MTPA – Environmental Monitors for PMU, ICMA – Komati river scientific programs are included in sundry income. These are recognised when accrued.

• Sundry income relates to once-off payments that are received for insurance claims, incidental rental income, nursery sales, wood sales etc. These are recognised when accrued.

• Sales relates to game sales, hunting packages and fishing, hunting permits.

• Management fees for managing special projects are only raised at year end, based on the services performed.

• Rent received is recorded on a daily basis or monthly in accordance with the substance of the relevant agreements.

• Income from concessions granted to operators to build, operate and transfer lodges and from rental of facilities to operators is recognised as it accrues over the period of the agreement.

1.17 COMMITMENTS UNDER SERVICE LEVEL AGREEMENTS

Commitments under service level agreements are disclosed in respect of contracted amounts for which delivery by the contractor is outstanding at the accounting date, and for amounts which the Boards’ approval has been obtained but not yet contracted for. Commitments are not recognised in the Statement of Financial Position as a liability or as an expenditure in the Statement of Financial Performance but are included in the disclosure notes 27.

1.18 PROJECT LIABILITIES

Projects arise as and when a new project is planned per the MTPA’s implementation plan. These projects are funded by external stakeholders and the projects funds are managed by the MTPA.

The cash payments made during the year relating to these projects are recognised as expenditure in the Statement of Financial Position when final authorisation for payments is effected on the system (by no later than 31 March of each year). Any unutilised amounts are recognised as payables in the Statement of Financial Position.

The community benefit-sharing project arises once a co-management agreement between MTPA and the respective Communities adjacent to the protected areas is in place. A liability is recognised when the amounts due to the community are not paid during the year.

1.19 FRUITLESS AND WASTEFUL EXPENDITURE

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.




1.20 IRREGULAR EXPENDITURE

Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including -

• this Act; or

• the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or

• any provincial legislation providing for procurement procedures in that provincial government.

Irregular expenditure that was incurred and identified during the current financial year is disclosed under note 26.

Irregular expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the value of the irregular expenditure incurred, unless it is impractical to determine, in which case reasons therefore must be provided in the notes.

Irregular expenditure receivables are measured at the amount that is expected to be recovered and are de-recognised when settled or written-off as irrecoverable.

Irregular expenditure must be removed from the balance of the irregular expenditure notes when it is either:

• condoned by the relevant authority if no official was found to be liable in law;

• recovered from an official liable in law;

• written-off if it’s irrecoverable from an official liable in law; or

• written-off if it’s not condoned and not recoverable.

1.21 CONTINGENT LIABILITIES

Contingent liabilities are possible obligations that arose from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within control of the entity; or a present obligation that arises from past events but is not recognised because:

• it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• the amount of the obligation cannot be measured with sufficient reliability.

1.22 BUDGET INFORMATION

MTPA are typically subject to budgetary limits in the form of appropriations or budget authorisations (or equivalent), which is given effect through authorising legislation, appropriation or similar.

General purpose financial reporting by MTPA shall provide information on whether resources were obtained and used in accordance with the legally adopted budget.

The approved budget is prepared on an accrual basis and presented by programmes linked to performance outcome objectives.

The approved budget covers the fiscal period from 1 April 2017 to 31 March 2018.




1.23 RELATED PARTIES

The MTPA operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the provincial sphere of government are considered to be related parties.

Management are those persons responsible for planning, directing and controlling the activities of the MTPA, including those charged with the governance of the MTPA in accordance with legislation, in instances where they are required to perform such functions. This includes close family members who are considered to be those family members who may be expected to influence, or be influenced by Management in their dealings with the MTPA.

1.24 CHANGE IN ACCOUNTING POLICIES, ESTIMATES AND ERRORS

Change in estimate

A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of a period consumption of an asset, the results from the assessment of the present status of, and expected future benefits and obligations associated with assets and liabilities. Change in accounting estimate result from new information and new developments and are not correction of errors.

The effect of a change in accounting estimate shall be recognised prospectively by including it in surplus or deficit in:

• the period of the change, if the change affects that period only; or

• the period of the change and future periods, if the change affects both.

To the extent that a change in an accounting estimate gives rise to changes in assets and liabilities, or relates to an item of net assets, it shall be recognised by adjusting the carrying amount of the related asset, liability or item of net assets in the period of the change.

Prior period errors

Prior period errors are omissions from, and misstatements in, the entity’s financial statements for one or more prior periods arising from a failure to use or misuse of, reliable information that:

• was available when the Annual Financial Statements for those period were authorised for issue; and

• could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements.

A prior period error shall be corrected by retrospective restatement in the first set of financial statements authorised for issue after their discovery by:

• restating the comparative amounts for the prior period(s) presented in which the error occurred; or

• if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and net assets for the earliest prior period presented.

A prior period error shall be corrected by retrospective restatement except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the error.

When it is impracticable to determine the period-specific effects of the error on comparative information for one or more prior periods presented, the entity shall restate the opening balances of the assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable (which may be the current period).




When it is impracticable to determine the cumulative effect, at the beginning of the current period, the entity shall restate the comparative information to correct the error prospectively from the earliest date practicable.

Change in Accounting Policies

Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.

An entity shall change an accounting policy only if the change:

• is required by a standard of GRAP; or

• results in the Annual Financial Statements providing reliable and more relevant information about the effects of the transactions, other events or conditions on the MTPA’s Financial Position, Financial Performance or Cash Flows.

A change in accounting policy shall be applied retrospectively, except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the change.

When is it impracticable to determine the period-specific effects of changing an accounting policy on comparative information of one or more prior periods presented, the entity shall apply the new accounting policy to the carrying amounts of the assets and liabilities as at the beginning of the earliest period of which retrospective application is practicable, which may be the current period, and shall make a corresponding adjustment to the opening balance of each affected component of net assets for that period. When it is impracticable to determine the cumulative effect, at the beginning of the current period, of applying a new accounting policy to all prior periods, the entity shall adjust the comparative information to apply the new accounting policy prospectively from the earliest date practicable.

1.25 NEW STANDARDS AND INTERPRETATIONS

The standards and interpretations are effective 01 April 2017 and adopted by MTPA during the current year

STANDARD

GRAP 1 Presentation of Financial Statements

GRAP 2 Cash Flow Statements

GRAP 3 Accounting Policies, Changes in Accounting Estimates and Errors

GRAP 9 Revenue from Exchange Transactions

GRAP 10 Financial Reporting in Hyperinflationary Economies

GRAP 12 Inventories

GRAP 13 Leases

GRAP 14 Events After the Reporting Date

GRAP 17 Property Plant and Equipment

GRAP 19 Provisions, Contingent Liabilities and Contingent Assets

GRAP 18 Segment reporting

GRAP 21 Impairment of Non-cash-generating Assets

GRAP 23 Revenue from Non-exchange Transactions (Taxes and Transfers)

GRAP 24 Presentation of Budget Information in Financial Statements




GRAP 25 Employee Benefits

GRAP 26 Impairment of Cash-generating assets

GRAP 27 Agriculture

GRAP 103 Heritage Assets

GRAP 104 Financial Instruments

GRAP 105 Transfer of Functions Between Entities Under Common Control

GRAP 106 Transfer of Functions Between Entities Not Under Common Control

GRAP 107 Mergers

GRAP Standards approved but not yet effective

STANDARD

GRAP 20 Related Party Disclosures

GRAP 32 Service Concession Arrangements: Grantor

GRAP 34 Separate Financial Statements

GRAP 35 Consolidated Financial Statements

GRAP 36 Investments in Associates and Joint Ventures

GRAP 37 Joint Arrangements

GRAP 38 Disclosure of Interests in Other Entities

GRAP 108 Statutory Receivables

GRAP 109 Accounting by Principals and Agents

GRAP 110 Living and Non-living Resources




2. INVENTORIES Consumable stores 24 516 70 798

Fuel (Diesel, Petrol) 762 115 335 138

786 631 405 936

3. RECEIVABLES FROM EXCHANGE TRANSACTIONS

Receivables from exchange transactions 8 349 596 12 241 074 Provision for impairment of trade receivables (2 872 772) (4 862 617)

5 476 824 7 378 457

TRADE AND OTHER RECEIVABLES PLEDGED AS SECURITY

The average credit period on trade receivables is 30 days. No interest is charged on outstanding balances of trade receivable accounts.

The majority of MTPA’s accounts receivables originate from sales of goods and rendering of services. The inherent credit risk is mitigated by a credit verification process performed before awarding of future accounts.

The following receivables had balances outstanding that represented more than 5% of the total balance of outstanding receivables from exchange transactions:

31 March Percentage 31 March Percentage 2018 of total 2017 of total Account Rand (%) Rand (%)

Inzalo - - 3 882 184 32 Tintswalo Safari Lodge 1 578 907 29 692 848 6 CATHSSETA - - 918 699 8 CAWS 1 129 171 21 1 149 171 9 Honeyguide Tented Safari Camps 1 805 326 33 3 280 338 27

4 513 404 9 923 240

2018 2017 Figures in Rand Restated

DISCLOSURE NOTES

TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018


AGEING OF DEBTORS IS AS FOLLOWS: Balance at Balance at 31 March 2018 31 March 2017 Account Rand Rand

0 - 30 days 4 755 423 4 302 394 30 - 60 days 562 170 - 60 - 90 < days 159 231 137 497 90 - 120 days 215 486 234 152 > 120 days 2 657 286 7 567 031

8 349 596 12 241 074

RECONCILIATION OF PROVISION FOR IMPAIRMENT OF TRADE AND OTHER RECEIVABLES

Opening balance (4 862 617) (2 494 929) Provision for doubtful debts 1 989 846 (2 367 688)

(2 872 771) (4 862 617)

In determining the recoverability of a trade receivable, the entity considers any change in the credit quality of the trade receivable from the date the credit was initially granted up to the reporting date. The receivable balances that constitute the prior year allowance for impairment losses have been partially collected in the current year, since these receivables are still in the process of being collected.

4. RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS Other receivables 32 838 282 456

Deposits 39 193 39 192 Prepaid expenses 599 977 4 480 424 SARS - PAYE - 320 916 Staff receivables 10 560 17 073

682 568 5 140 061

5. CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS CONSIST OF:

Cash on hand 11 918 14 118 Bank balances 42 969 088 27 943 404

Current assets 42 981 006 27 957 522

BANK BALANCES MTPA Operational account 2 864 040 17 539 883

MTPA salaries account 9 883 485 908 937 Funds held on behalf of the projects* 30 221 563 9 494 584

42 969 088 27 943 404

*Funds held on behalf of projects in several bank accounts.


DISCLOSURE NOTES (CONTINUED)



6. PROPERTY, PLANT AND EQUIPMENT 2018 2017

Cost/ Accumulated Carrying Cost/ Accumulated Carrying Valuation depreciation value Valuation depreciation value

Land 4 487 213 - 4 487 213 4 487 213 - 4 487 213 Buildings 520 696 407 (238 121 682) 282 574 725 508 783 351 (227 698 202) 281 085 149 Large and small equipment 21 447 268 (16 323 041) 5 124 227 21 152 623 (14 251 683) 6 900 940 Furniture and fixtures 11 174 373 (8 410 363) 2 764 010 10 371 381 (7 744 498) 2 626 883 Motor vehicles 29 040 453 (25 043 277) 3 997 176 28 661 826 (22 199 737) 6 462 089 Computer equipment 9 184 512 (7 001 179) 2 183 333 8 838 718 (6 895 927) 1 942 791 Infrastructure 273 274 819 (100 066 948) 173 207 871 260 766 597 (89 357 237) 171 409 360 Work in progress - - - 7 033 654 - 7 033 654

Total 869 305 045 (394 966 490) 474 338 555 850 095 363 (368 147 284) 481 948 079

RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT - 2018

Opening Disposals Assets Disposal Deprecia- balance Additions Cost Transfers in kind Accum dep tion Total

Land 4 487 213 - - - - - - 4 487 213 Buildings 281 085 149 286 372 (1 247 576) 8 343 715 4 530 545 651 246 (11 074 726) 282 574 725 Large and small capital equipment 6 900 940 326 247 (187 962) 129 299 40 000 155 539 (2 239 836) 5 124 227 Furniture and fixtures 2 626 883 177 722 (19 654) - 632 418 19 593 (672 952) 2 764 010 Motor vehicles 6 462 089 378 627 - - - - (2 843 540) 3 997 176 Computer equipment 1 942 791 1 123 792 (782 224) - - 772 942 (873 968) 2 183 333 Infrastructure 171 409 360 1 088 305 - 9 526 986 1 824 260 - (10 641 040) 173 207 871 Work in progress 7 033 654 10 966 346 - (18 000 000) - - - -

481 948 079 14 347 411 (2 237 416) - 7 027 223 1 599 320 (28 346 062) 474 338 555





RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT - 2017 RESTATED

Opening Disposals Prior year Transfers Deprecia- Disposal balance Additions Cost correction from WIP tion Accum dep Total

Land 4 487 213 - - - - - - 4 487 213 Buildings 284 943 298 556 487 - - 2 500 000 (6 914 636) - 281 085 149 Large and small capital equipment 9 516 941 344 728 - - - (2 960 729) - 6 900 940 Furniture and fixtures 3 263 446 131 669 - - - (768 232) - 2 626 883 Motor vehicles 10 383 059 1 078 665 (746 757) - - (4 777 336) 524 458 6 462 089 Computer equipment 3 486 135 298 300 (102 225) - - (1 802 827) 63 408 1 942 791 Infrastructure 61 543 915 144 865 - 115 227 196 3 116 921 (8 623 537) - 171 409 360 Work in progress 4 406 661 8 243 911 - - (5 616 918) - - 7 033 654

382 030 668 10 798 625 (848 982) 115 227 196 3 (25 847 297) 587 866 481 948 079

DESCRIPTION OF LAND

Place ERF Rands

Head Office Portion 14 of the farm riverside 308 JT 3 505 433 Elukwatini ERF 27 Elukwatini- B Ext 1 981 780

Total 4 487 213

REVALUATIONS - BUILDINGS

The MTPA undertook an extensive exercise in March 2015 to identify and value the depreciated cost of the immovable assets and leaseholds improvements. The valuations were performed by the MTPA Management in consultation with an independent valuer, Mr Jannie Van Graan, the Managing Associate of Industrial and Mining Valuations Fixed Assets Register Services. The useful lives of the properties were reviewed accordingly.

Fair Value estimations were ascertained by determining the Estimated Replacement Cost, based on internationally published building rates per measured surface area, applicable to Africa. A condition rating, based on physical observation, was applied to the Estimated Replacement Cost to calculate the Depreciated Replacement Cost used as the Net Replacement Value at year-end. Significant assumptions included in the valuation process relate to the very stagnant realty market, which resulted in the land values not being increased for the 2015 year.

The effective date of the valuation is 31 March 2015, valid for 5 years until 2019.





7. INTANGIBLE ASSETS 2018 2017

Accumulated Accumulated amortisation amortisation and and Cost / accumulated Carrying Cost / accumulated Carrying Valuation impairment value Valuation impairmen value

Computer software 319 639 (106 546) 213 093 - - -

RECONCILIATION OF INTANGIBLE ASSETS - 2018

Opening balance Additions Amortisation Total

Computer software - 319 639 (106 546) 213 093

8. HERITAGE ASSETS In the prior year, MTPA reviewed its accounting policy for land and a decision was taken to change the accounting policy for

conservation land from Property, Plant and Equipment (GRAP 17) to account for it as Heritage Assets under GRAP 103. Hence the below items which met the definition of Heritage Assets, were transferred from Property, Plant and Equipment (GRAP 17) to Heritage Assets (GRAP 103):

2018 2017

Accumulated Accumulated Cost / impairment Carrying Cost / impairment Carrying Valuation losses value Valuation losses value

Conservation areas 35 283 207 - 35 283 207 35 283 207 - 35 283 207

RECONCILIATION OF HERITAGE ASSETS 2018 Opening balance Total

Conservation areas 35 283 207 35 283 207



NAME OF THE RESERVE Hectares Historical cost

Loskop Dam 22 891 26 866 932 Paardeplaats Nature Reserve 2 426 8 416 275

Totals 35 283 207





HERITAGE ASSETS WHICH FAIR VALUES CANNOT BE RELIABLY MEASURED.

A significant value of MTPA Heritage assets were obtained through non-exchange transactions from various state-owned organisations. For Heritage assets obtained from non-exchange transactions MTPA attempted to establish the value thereof using guidance from Directive 7 issued by the Accounting Standards Board. Due to the nature of MTPA activities, MTPA could not establish neither a fair value /deemed cost nor a replacement cost for its Heritage assets acquired from non-exchange transactions. For that reason, MTPA Heritage assets acquired from non-exchange transactions could not be recognised in the Annual Financial Statements. However, information pertaining to such assets has been disclosed below.

MTPA assesses at each reporting date whether there is any indication that the heritage assets may be impaired. No such indication existed at the end of the current financial reporting period.

Name of the Nature Reserve Size in Hectares

Cynthia Letty Nature Reserve 7 Ida Doyer Nature Reserve 32 Tinie Louw Nature Reserve 10 Thorncroft Nature Reserve 17 Swadini Nature Resort 100 Vertroosting Nature Reserve 162 Mangwazi Nature Reserve 419 Sterkspruit 2 Nature Reserve 478 Witbad Nature Reserve 565 Mahushe Shongwe Nature Reserve 1 140 Sterkspruit 1 Nature Reserve 1 133 Little Joker – Formosa Nature Reserve 1 273 SS Skhosana Nature Reserve 1 816 Ohrigstad Dam Nature Reserve 2 525 Barberton Phase 1 Nature Reserve 2 569 Nooitgedacht Dam Nature Reserve 2 986 Barberton Phase 2 Nature Reserve 5 415 Verloren Vallei Nature Reserve 5 989 Andover Nature Reserve 6 816 Bushbuck Ridge Nature Reserve 7 094 Mthethomusha Nature Reserve 7 979 Mdala Nature Reserve 8 165 Mabusa Nature Reserve 10 006 Mkhombo Nature Reserve 11 224 Barberton Phase 3 Nature Reserve 19 558 Manyeleti Nature Reserve 22 563 Blyde River Canyon Nature Reserve 27 290 Songimvelo Nature Reserve 46 320

Total 193 651





9. BIOLOGICAL ASSETS NON - FINANCIAL INFORMATION: QUANTITIES

MTPA performs a game census every three years, on animals that can easily be counted from the air and for specific sections of the nature reserves. MTPA does not perform counts on small animals, insects, birds and freshwater biodiversity. Below are results of census carried out during the period 2016/2017, the next game census will be conducted in 2018/2019.

Name Estimated Head Count

Blue wildebeest 685 Buffalo 436 Bushbuck 81 Duiker 258 Giraffe 114 Impala 1239 Kudu 528 Nyala 227 Warthog 72 Waterbuck 196 White Rhino 44 Zebra 813 Elephant 34 Steenbok 9 Ostrich 3 Klipspringer 13 Mountain reedbuck 8 Red hartebeest 46 Hippo 39 Eland 113 Oribi 23 Reedbuck common 4 Tsessebe 100

MTPA’s main mandate is to provide for the sustainable management and promotion of tourism and nature conservation in the Mpumalanga Province and to ensure the sustainable utilisation of natural resources. As part of this mandate, MTPA is responsible for biodiversity conservation in defined protected areas and the biological assets consists of a large variety of species.

MTPA does not intervene in eco-systems. The nature reserves are home to different species of animals where all inhabitants of an eco-system co-exist without human interference.

Biological assets consist of wild animals managed for conservation purposes. This management is however not an agricultural activity as the main objective is not to harvest (or produce additional biological assets for harvest) but manage and maintain a





specific environment as a whole. Hence such assets cannot be accounted for using the principles of GRAP 27. Hence MTPA has accounted for these assets in accordance with the principles and interpretations of GRAP 17.

Based on the Framework for the Preparation and Presentation of Financial Statements and GRAP 17, these assets meet the definition of an asset but does not meet the recognition criteria relating to reliable measurement. MTPA cannot reliable measure the values of biological assets as they are not of a nature that can be easily counted with a level of certainty. Valuations are not easily available as the assets are kept for conservation purposes, and the parks cannot keep up with births and deaths and migrations of wildlife. As the biological assets cannot be counted, it is impossible to calculate gains and losses in biological assets during the year.

MTPA does not recognise its biodiversity assets as it does not meet the recognition criteria, but only discloses the game census results as additional disclosure for the benefit of users to the Annual Financial Statements.

10. PAYABLES FROM EXCHANGE TRANSACTIONS Trade payables from exchange transactions 9 159 891 3 916 575

Salary control accounts 1 892 535 1 605 659 Other payables - accruals 5 379 756 15 301 372

16 432 182 20 823 606

10.1 LONG SERVICE AWARDS

Opening balance 3 512 898 3 502 341 Increase in long service awards 933 732 446 132 Short term portion in long service awards (319 200) (435 575)

4 127 430 3 512 898

The provision relates to a long term portion of amounts due to employees over five years and above from the next financial year. The obligation will be settled upon completion of each five year period of employment. MTPA assumes a staff loss of 5% each year. (2017: 5%) The average future rate increase is 4%. (2017: 6.5%)

11. PROVISIONS RECONCILIATION OF PROVISIONS - 2018 Opening Balance Movement for the year Total

Leave pay provision 10 886 768 470 129 11 356 897

RECONCILIATION OF PROVISIONS - 2017 Opening Balance Movement for the year Total


The annual leave pay accrual consists of the valued leave as at reporting date, which accrues in terms of the Basic Conditions of Employment Act. The entity allows its employees to accumulate annual leave to a maximum of one year’s allocation of 30 days annual leave per employee. The entity remains liable to pay out an amount equal to the leave balance at the current rate of remuneration.





12. PROJECT LIABILITIES Community Benefit Sharing (CPA)@ 484 250 947 750

Mzinti Conservation Fund@ 146 389 137 273 Loskop Dam DEA* 954 585 880 377 Mahushe DEA* 2 015 501 4 280 297 Mthethomusha DEA* 2 113 042 2 961 223 Songimvelo DEA* 7 285 285 158 879 Tourism Monitors** 12 016 189 -

25 015 241 9 365 799

@Relates to co-management with claimant communities where settlement and co-management agreements have been concluded.

*Relates to projects funded by external stakeholders (Department of Environmental Affairs - DEA) and the project funds are managed by the MTPA within the project management unit. Projects arise as and when a new project is approved per infrastructure assessment report.

**Funds from National Department of Tourism for tourism monitors learnerships.

13. CONTRIBUTION FROM OWNERS Closing balances from Mpumalanga Tourism Authority

and Mpumalanga Parks Board 70 015 412 70 015 412

14. REVENUE REVENUE FROM NON-EXCHANGE TRANSACTIONS

Grant received 329 028 000 304 387 100 Conditional grant - Expanded Public Works Programme (EPWP) 2 605 000 2 911 000 Infrastructure upgrade - 18 000 000 Other grants (SANBI and CATHSETA) 1 983 919 1 800 471 Assets donation in kind 7 027 224 -

340 644 143 327 098 571

REVENUE FROM EXCHANGE TRANSACTIONS

Sales of goods 5 652 592 3 790 678 Rendering of services 31 025 918 22 753 656

36 678 510 26 544 334





15. OPERATING DEFICIT The following have been (charged) / credited to the Statement of Financial Performance in arriving at the operating (deficit)

surplus.

OTHER INCOME

Concession fees 7 328 611 6 147 709 Rental income 190 269 108 370 Recoveries 261 659 251 965 Hunting wildlife sales 2 189 193 2 241 105 Sundry income* 13 646 118 7 812 690

23 615 851 16 561 839

* Included in sundry income is R 5.1m (2017: R 4.3m) of joint project conservation income; (Department of Science and Technology (DST) R500k (2017: R500k); SANPARKS R4.5m (2017: R3.7m); ICMA R179k (2017: R153k); DEA implementer’s fee R1.4m (2017: Rnil) ; and Insurance refund R2.7m (2017: R1.1m).

16. OPERATING EXPENSES Advertisement (181 719) (111 802)

Animal feed (48 000) (86 108) Auditor’s remuneration - external audit fees (3 791 651) (3 583 074) Auditor’s remuneration - internal audit fees (845 942) (514 008) Bank charges (460 565) (509 402) Board emoluments and travelling allowance (1 613 368) (1 788 716) Catering expenses (190 653) (84 721) Chemicals and veterinary drugs (8 645) (59 000) Cleaning and consumables (868 095) (886 919) Courier and delivery costs (1 220) (9 244) Depreciation on property, plant and equipment (28 512 676) (25 825 858) Donations - (424 522) Employee costs (272 123 769) (258 241 479) Impairment (4 407 840) - Loss on disposal of assets (637 961) (271 303) Gas bottle refill (117 243) (90 365) Hire - helicopter (113 228) (53 940) HR related costs (18 372 722) (18 901 814) Insurance (1 897 966) (1 812 793) License and registrations (1 706 766) (1 448 595) Legal fees (5 394 048) (1 907 998) Motor expenses - fuel and oil (2 995 057) (2 679 077)





Municipal - electricity (5 525 917) (5 364 916) Municipal - rates and taxes (1 199 048) (387 686) Operating lease rentals (3 119 947) (2 708 569) Pastel evolution and VIP systems - (174 067) Printing and stationery (568 703) (559 405) Programme cost (27 427 036) (19 518 634) Provision for bad debts - (2 367 688) Repairs and maintenance (3 590 243) (1 871 117) Expenditure on behalf of partnerships (DST; Goldview; ICMA; SANBI and Cathsseta) (12 558 897) (13 560 300) Security (7 097 763) (6 235 820) Small Tools (52 146) (34 307) Subscriptions (2 546 536) (1 939 766) Telephone costs (2 536 873) (2 058 190) Travel - accommodation (1 838 716) (1 281 373)

(412 350 959) (377 352 576)

17. INTEREST RECEIVED Interest received 1 156 419 912 155

18. INTEREST EXPENSE Interest expense 321 646 5 354

19. CASH GENERATED FROM OPERATIONS Deficit (10 577 681) (6 241 031)

ADJUSTMENTS FOR: Depreciation and amortisation 28 512 676 25 825 857 Loss on disposal of assets 637 961 261 115 Provision for leave accrual - 4 811 137

Provision for bad debts - 2 367 688 Non-cash Items (59 941) - Assets donation (7 027 224) - Provision for long- term service awards 614 532 47 607 Provision for short- term service awards (116 375) - Correction of prior year error (Concessions and PPE) - (5 989 816)





CHANGES IN WORKING CAPITAL: Inventories (380 695) 128 979 Receivables from exchange transactions 1 901 633 (1 140 914) Other receivables from non-exchange transactions 4 457 493 (4 230 751) Payables from exchange transactions (3 921 287) 2 210 763

14 041 092 18 050 634

20. CONTINGENT LIABILITIES INZALO / BOE (MPAKENI RESERVE ACCOUNT)

There is a civil suit against the MTPA by Inzalo for the cancellation of a head lease at Mthethomusha Nature Reserve (Bongani Lodge). The legal costs for this claim not known at this stage.

FRED DANIEL CASE A: CASE NO. 34502/2010 IN THE NORTH HIGH COURT IN PRETORIA

This court case which is fully cited as Grand Valley Estates and 11 others versus Mpumalanga Tourism and Parks Agency & 24 others: Case No: 34502/2010 has been instituted by one businessman, namely Mr Frederick Coenraad Daniel & 11 others, against various government bodies in the North Gauteng High Court in Pretoria in 2010.

The case is being defended through the Office of the State Attorney in Pretoria. This court case involves 12 Plaintiffs (parties instituting the action) which are mostly companies associated with Mr Daniels and a few of his individual fellow business associates. It has 25 Defendants which include various National and Provincial government departments, state entities, state officials and individuals. The National department cited in the matter is Environmental Affairs; Provincial department cited is Agriculture and Land Affairs; and state entities cited include MTPA, Regional Land Claims Commissioner: Mpumalanga Province and national Commissioner of South African Police. Most state officials and individuals are sued herein in vicarious liability as at all times they were acting within the course and scope of their duties in relation to the allegations made against them.

The cause of action set out in the issued summons is broadly alleged to be unlawful actions and numerous breaches of legal duties by Defendants which allegedly resulted in Plaintiffs suffering damages mainly through loss of profit and prospective profit, among others.

The total amount sued for as contained in the issued summons is currently in the sum of R 1 094 330 740. 00 which is jointly and severally payable by the Defendants to the Plaintiffs. The amount computed to be payable by the MTPA as an entity is the sum of about R740 million as set out in the issued summons.

This case is pending before the court with pleadings continuing. There is no trial date yet. The issue of amendments and the raised exceptions that were pending for the previous years has been ironed out between the parties with the Defendants eventually filing their plea towards the end of last year.

The incurred legal fees with this matter is thus far about R7.8 million. The future payable fees are not known but would be substantial given the nature of this matter.





GAYE EVANGELINE CORBETT & TINTSWALO SAFARI LODGES (PTY) LTD VERSUS FRANCOIS KRIGE & THE MTPA: CASE NO: 12833/17: HIGH COURT: GAUTENG DIVISION: PRETORIA

This is the High court case which has been instituted by the Plaintiffs, namely Director of Tintswalo (Gaye) together with Tintswalo Safari Lodges against the Defendants, namely Mr Frans Krige an employee of the MTPA who is sued in his official capacity herein and the MTPA. This action has been instituted in February 2017.

This action is for the claim of damages in the sum of R2 million for the alleged defamation and injury to the reputation of the plaintiffs. The cause of action in this case emanates from the exchange of emails between the parties and the utterances made by Mr Krige in a telephone conversation he had with the Director of Tintswalo in February 2017.

The MTPA is defending this action through its appointed legal representatives who have advised the MTPA to defend the case as there are prospects of success in defending it.

Pleadings are underway. There is no trial date yet.

Legal fees incurred thus far are about R500 000. The future legal fees are unknown.

There is also no provision made yet in respect of the claim itself as the matter is at an intermediate stage with no final court determination made

21. RELATED PARTIES RELATED PARTY BALANCES

Identity of related parties

MTPA was established by the Mpumalanga Provincial Government, to promote Mpumalanga as a tourism destination in the local and international markets, as well as, for biodiversity conservation. MTPA reports directly to the Department of Economic Development and Tourism (DEDT).

Nelspruit Development Trust and Nelspruit Financing Trust are controlled entities as the majority of the trustees are former MTPA board members, there are no related party transactions.

The Executive Council, at its meeting of 23 August 2015, resolved to transfer the Zithabiseni Resort and Conference Centre to the Mpumalanga Tourism and Parks Agency as a managing authority for the resort. Mpumalanga Tourism and Parks Agency resumed responsibilities as a managing Authority effective 01 April 2016. Further to this effect, the Executive Council approved the option, which promotes joint ownership of the Resort by the State and the Community, but managed by an independent operator (to be appointed) with defined state and community benefits.

Executive Management and Board Members (refer to note 20) are also considered to be related parties to the MTPA. The Executive Management Committee consist of:





Chief Executive Officer Mr. Nobunga BJ Chief Financial Officer Ms. Thrush H (Seconded 01 July 2017 to date) Acting Chief Financial Officer Mr. Mathye S Acting Head of Corporate Mr. Lubanga T (Acting April 2017) Acting Head of Corporate Ms. Bulter IF (May 2017 to 31 July 2017) Acting Head of Corporate Ms. Selamolela J (Acting August 2017 to 31 January 2018) Head Corporate Service Mr. Mahlangu AN (Appointed 01 February 2018) Head Biodiversity Conservation Mr. Sibiya VA Head Tourism Mr. Mthethwa X Company Secretary Ms. Hlahane P

Performance Acting Travel and 31 March 2018 Bonus Allowance Salary Subsistence Total

Chief Executive Officer - - 2 088 032 100 714 2 188 746 Chief Operating Officer* - - 743 584 - 743 584 Acting Chief Financial Officer - - 948 724 3 837 952 561 Chief Financial Officer# - - 332 297 - 332 297 Acting Chief Head of Corporate@ - 216 856 - - 216 856 Head Corporate Services** - - 213 923 4 929 218 852 Head Biodiversity Conservation 31 361 32 124 1 377 397 128 004 1 568 886 Head Tourism 31 361 - 1 377 276 78 327 1 486 964 Company Secretary - - 1 170 107 21 523 1 191 630

62 722 248 980 8 251 340 337 334 8 900 376

*Contract terminated 31 July 2017 **Appointed 01 February 2018 @Mr. Lubanga T (acting April 2017); Ms. Bulter IF (Acting May to July 2017); and Ms Selamolela J (Acting August to 31 January 2018) #Chief Financial Officer was seconded to DEDT from 01 July 2017 to date

RELATED PARTY TRANSACTIONS

Grant received 329 028 000 304 387 100 Conditional grant - Expanded Public Works Programme (EPWP) 2 605 000 2 911 000 Infrastructure upgrade - 18 000 000 Grant received - Zithabiseni 22 512 000 21 510 000

354 145 000 346 808 100





22. BOARD MEMBERS AND EXECUTIVE MANAGEMENT EMOLUMENTS BOARD MEMBERS

Cellphone Travel and 31 March 2018 Allowance Fees subsistence Total

Mr. Nzima TJ ( Chairperson) 12 000 310 077 71 920 393 997 Ms. Shabangu-Mndawe NR (Deputy Chairperson) 9 000 136 005 22 392 167 397 Ms. Mzuzu NB 3 000 64 921 2 986 70 907 Ms. Nkambule TB 3 000 66 155 15 361 84 516 Mr. Gololo CL 3 000 77 553 14 645 95 198 Mr. Mthombeni SG 3 000 84 412 81 118 168 530 Ms. Makhathini SFS 3 000 48 822 7 887 59 709 Ms. Sekhitla JS 3 000 104 909 23 674 131 583 Dr. Magome DT 6 000 70 731 37 582 114 313 Mr. Keetse TF 6 000 114 059 41 262 161 321 Ms. Maseko M - 13 604 852 14 456 Dr. Venter F - 4 609 1 183 5 792

51 000 1 095 857 320 862 1 467 719


Mr. Nzima TJ ( Chairperson) 12 000 291 107 62 175 365 282 Ms. Shabangu-Mndawe NR (Deputy Chairperson) 8 250 177 736 8 489 194 475 Ms. Mzuzu NB 2 250 90 565 2 278 95 093 Ms. Nkambule TB 2 250 77 117 3 995 83 362 Mr. Gololo CL 2 250 69 055 7 187 78 492 Ms. Masekaomeng MS (nee’ Nkgadima) 2 250 23 673 13 317 39 240 Mr. Mthombeni SG 2 250 117 667 69 582 189 499 Ms. Makhathini SFS 2 250 79 232 4 504 85 986 Ms. Sekhitla JS 2 250 89 569 2 360 94 179 Dr. Magome DT 6 000 109 520 51 213 166 733 Mr. Keetse TF 6 000 88 729 30 634 125 363

48 000 1 213 970 255 734 1 517 704







Ms. Mvulane P (Chairperson) 6 000 66 823 3 400 76 223 Mr. Mthembu S 3 000 54 936 2 428 60 364 Mr. Zakwe M - 10 026 995 11 021

9 000 131 785 6 823 147 608


Ms. Mvulane P (Chairperson) 4 000 62 685 625 67 310 Ms. Mtebele N 2 000 52 676 1 717 56 393 Ms. Mawelele TE 2 250 4 753 239 7 242 Mr. Mthembu S 2 250 49 550 914 52 714

10 500 169 664 3 495 183 659

SUMMARY

Total Board Emoluments Total board emoluments 1 467 719 1 517 704 Total Audit and Risk Committee remuneration 140 939 183 659 Travel and accommodation 847 952 1 052 150

2 456 610 2 753 513





EXECUTIVE MANAGEMENT COMMITTEE REMUNERATION


Chief Executive Officer - - 2 088 032 100 714 2 188 746 Chief Operating Officer* - - 743 584 - 743 584 Acting Chief Financial Officer - - 948 724 3 837 952 561 Chief Financial Officer#- - 332 297 - 332 297 Acting Chief Head of Corporate@ - 216 856 - - 216 856 Head Corporate Services**- - 213 923 4 929 218 852 Head Biodiversity Conservation 31 361 32 124 1 377 397 128 004 1 568 886 Head Tourism 31 361 - 1 377 276 78 327 1 486 964 Company Secretary - - 1 170 107 21 523 1 191 630

62 722 248 980 8 251 340 337 334 8 900 376

*Contract terminated 31 July 2017 **Appointed 01 February 2018 @Mr. Lubanga T (acting April 2017); Ms. Bulter IF (Acting May to July 2017); and Ms Selamolela J (Acting August to 31 January 2018) #Chief Financial Officer was seconded to DEDT from 01 July 2017 to date.

Acting Travel and 31 March 2017 Allowance Salary Subsistence Total

Acting Chief Executive Officer 383 673 - - 383 673 Chief Operating Officer - 1 681 161 - 1 681 161 Chief Financial Officer*** - 1 561 732 - 1 561 732 Consultant in Finance@ - 568 854 - 568 854 Acting Chief Financial Officer@@ - 634 738 - 634 738 Head Biodiversity Conservation - 1 338 890 98 604 1 437 494 Head Tourism - 1 335 820 46 491 1 382 311 Company Secretary - 1 111 301 3 806 1 115 107

383 673 8 232 496 148 901 8 765 070

@ Acting from 01 April 2016 to 31 July 2016 @@ Acting from 11 August 2016 to date. ***CFO labour dispute with Agency was concluded in January 2017 with the CFO successful in her appeal. Currently, engagements are taking place to have her seconded, possibly, to another government department.






23. RISK MANAGEMENT FINANCIAL RISK MANAGEMENT

The MTPA’s activities expose itself to a variety of financial risks: market risk (including, interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The MTPA has an approved risk management framework and has implemented a risk management register to mitigate identified risks.

MTPA’s overall risk management program focusses on the unpredictability of financial markets and seeks to minimise potential adverse effects on MTPA’s financial performance. Risk management is carried out under policies approved by the Accounting Authority. The Accounting Authority provides principles for overall risk management and policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk and investment

LIQUIDITY RISK

MPTA is exposed to liquidity risk as a result of the funds available to cover future commitments. MTPA manages liquidity risk through an ongoing review of future commitments. MTPA manages its funds conservatively by maintaining a comfortable level of cash and cash equivalents in order to meet continuous operational need. Cash flow forecasts are prepared and are monitored.

The table below analyses the MTPA’s financial liabilities into relevant maturity groups based on the remaining period at the date of the Statement of Financial Position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Less than Between Between Over At 31 March 2018 1 year 1 and 2 years 2 and 5 years 5 years

Payable from exchange transactions and payables from non-exchange transactions 16 432 189 - - - Payables for long service awards 319 200 - - 4 127 430 Leave pay provision 11 356 897 - - -



CREDIT RISK

The company is exposed to credit risk on financial assets, mainly attributable to cash deposits, cash equivalents and trade debtors.

The financial assets carried at cost exposes the entity to credit risk. The values of the maximum exposure to credit risk are as follows for each class of financial asset at cost.





Financial assets exposed to credit risk at year end were as follows:

FINANCIAL INSTRUMENT

Receivable from exchange transactions 8 349 596 12 241 074 Cash and cash equivalents 42 981 007 27 957 522

AGEING OF DEBTORS AT THE REPORTING DATE:

Balance at Balance at 31 March 2018 31 March 2017 Account Rand Impairment Rand

0 - 30 days 4 755 423 - 4 302 394 30 - 60 days 562 170 - - 60 - 90 < days 159 231 - 137 497 90 - 120 days 215 486 - 234 152 120 days 2 657 286 (2 872 772) 7 567 031

8 349 596 (2 872 772) 12 241 074

MARKET RISK

Market risk is the risk that changes in certain market prices, such as interest rates, will affect the MTPA’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Interest rate risk

As the MTPA has no significant variable interest-bearing assets, the MTPA’s income and operating cash flows are substantially independent of changes in market interest rates

24. FRUITLESS AND WASTEFUL EXPENDITURE Opening balance 2 114 697 547 611

Interest expense - on outstanding accounts 731 5 354 CFO’s salary* 332 297 1 561 732 Penalty fee for no show 5 950 - SARS - penalties and interest** 320 916 -

2 774 591 2 114 697

*This is due to special leave given to the incumbent CFO, while an acting CFO holds the same position. **The amount of R 320 916 was the amount withdrawn by SARS, due to penalties and interest charged on EMP501 re-submission in 2010.




WATERBUCK

25. COMMITMENTS UNDER OPERATING LEASES MTPA rents various copiers, facsimile, machines and laser printers from Nashua Lowveld (Nashua) as well as an administrative

building from Primkop Airport Management (Pty) Ltd. Contingent rental relates to cartridge costs for copiers.

Minimum lease payments under operating leases recognised as an expense during the year 1 823 511 1 752 657 Contingent rental 1 334 465 921 861

Operating leases - office rental and equipment - payables within 1 year 679 724 1 823 511 - payables between 2 and 5 years - 791 232

679 724 2 614 743

None of the trade and other receivables have been pledged as security for liabilities or contingent liabilities.

The Nashua Lowveld is the rental of photocopier machines for a period of three years coming to an end in April 2018. The rental amount escalates at 15% annually. The Primkop Airport Management Company is the rental of office space at the Kruger International airport for a period of three years from 01 April 2016. The rental amount escalates at 8% annually. The contract has an option to further renew for a period of 3 years

There were no defaults or breaches of the contractual terms of the leases during the financial year.

26. IRREGULAR EXPENDITURE Opening balance* 40 934 601 35 957 190

Add: Irregular Expenditure - current year 6 582 044 4 977 411 Add: Irregular Expenditure - 2016/2017 138 728 -

47 655 373 40 934 601

ANALYSIS OF IRREGULAR EXPENDITURE AWAITING CONDONATION PER AGE CLASSIFICATION

Current year 47 655 373 35 957 190





DETAILS OF IRREGULAR EXPENDITURE IN THE CURRENT YEAR

Due to SCM non-compliance 733 329 1 982 473 Service rendered without a purchase order 226 307 90 875 Service rendered without an SLA 717 059 752 399 SCM procurement process not followed 2 747 129 11 308 Incorrect preferential point system used 1 894 198 - Contracts on a month to month 385 950 2 140 357 Expenditure exceeded contractual value 16 800 -

6 720 772 4 977 412

*Irregular expenditure for prior years was submitted to National Treasury for condonement.

27. COMMITMENTS UNDER SERVICE LEVEL AGREEMENTS CONTRACTS AWARDED

ADT Security 9 667 223 126 Bothile Security 4 823 545 8 083 145 Bunhlebentfutfuko - 2 050 884 Deloitte and Touch - 86 209 Delta Consulting 449 921 2 496 749 Fast net pro-mpu003P 5 876 9 463 Fidelity Cash Solutions (Pty) Ltd 17 064 93 024 Global glo 277 473 437 276 GS Fencing and Construction 1 978 422 - Hlaj Security 1 998 054 3 888 189 Honeycomb Solution - 74 174 Kgotle Water 221 410 345 970 Kunene Makopo /SHA Underwriters 2 947 550 2 000 000 Lerandzu Trading - 766 821 Library Specialists 184 270 - Marsel - IT - 34 200 Metrofile 83 494 183 212 Muga T/A 3D design - 902 578 Multichoice 5 854 18 504 Nelspruit Airport Operating - 30 055 Newsclip 120 138 200 154 Pasqa Consulting - 531 169 Paygate 24 650 28 002 Phepha MV 2 904 478 4 860 238 Prosperity Link 110 979 164 910 Prospero Digital 755 126 1 419 300






Real Travel and Tourism systems CC 33 438 248 100 Selectra Investments 24 t/a Omega data - 69 540 Sibongile Thembisile Florence 5 015 405 3 501 098 Siboyiye Trading - 2 867 297 Sita (Pty) Ltd - 183 734 Sita Gov Tech - 1 337 915 Sizampilo - 5 680 092 SizweNtsalubaGobodo - 94 023 Softline Pastel - 98 645 Softline Sage VIP - 220 654 Sunday Kit Uniform 3 373 707 4 800 000 The Document Warehouse - 11 004 Vodacom 1 737 145 2 511 831 Vuthani Bafazi - 65 040

27 077 666 50 616 325

CONTRACTS AWARDED MONTH TO MONTH

Month to month contract 2 697 59 563

AUTHORISED OPERATIONAL EXPENDITURE

Approved and Contracted 27 077 666 50 616 325

28. RETIREMENT BENEFIT OBLIGATIONS DEFINED CONTRIBUTION PLAN

The MTPA is a participating employer in the Government Employees Pension Fund (GEPF). The MTPA became a participative employer in 2006 with the inception of the MTPA as a result of employees that were transferred from Government departments, i.e. DALA and Limpopo Province to the MTPA. The employer’s contribution paid is 13% as this was the percentage employer contribution that was paid by these Government departments upon transfer of these employees to the MTPA.


Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined contribution plans where the MTPA’s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.

The entity accounts for this defined benefit state plan as a defined contribution plan, as there is no consistent and reliable basis for allocating the obligation, plan assets and costs to the individual employers to actuarial risks associated with the current and former employees of other employers participating in the plan.

MTPA GEPF Fund 6 308 342 6 204 728




29. GOING CONCERN We draw attention to the fact that at 31 March 2018 MTPA had a net asset value of R 502 510 934 (Restated 2017: R 513 088 616)

and that the MTPA’s current liabilities exceed its current assets by R 3 196 498 (Restated 2017: R 629 772), the current liabilities includes a leave provision of R11 356 897 (2017: R10 886 768), this provision will not strain the cash flow requirements of the entity due to the leave policy that does not allow voluntary encashment of leave. The board after having reviewed the projected cash flows for the foreseeable future and management’s assessment of MTPA’s ability to operate as a going concern, has a reasonable expectation that the Agency have adequate resources to continue its operations as a going concern for the foreseeable future.

30. PRIOR PERIOD ERRORS In 2017 there were following prior period errors:

• Concession fees of African Ivory Route, Pungwe and Inzalo was not accounted for.

• The legal fee expense and accrual was overstated for the Department of Justice.

• Work in progress was incorrectly classified as repairs and maintenance.

• The useful lives of certain assets were not reassessed.

• Certain assets had no deemed costs or incorrect costs and accumulated depreciation

• Revenue recorded in the incorrect accounting period

• Board travelling expenses was incorrectly classified as Travel - accommodation

• Leave accrual was incorrectly accounted for with regards to forfeited leave.

The comparative of 2017 have been restated.

The effect of the restatement on the Annual Financial Statement is summarised below:


Increase in other income - concession fees (African Ivory Route) - (162 000) Increase in other income - concession fees (Inzalo) - (1 138 800) Increase in other income - concession fees (Pungwe) - (330 480) Decrease in operating expenses - legal fees - (200 000) Decrease in operating expenses - repairs and maintenance - (270 380) Decrease in operating expenses - depreciation - (3 398 376) Increase in revenue from exchange transactions - (117 400) Increase in operating expenses - Board emoluments and travelling allowance - 964 797 Decrease in operating expenses - Travel - accommodation - (964 797) Decrease in operating expenses - employee costs - (4 041 133)

- (9 658 569)






Increase in receivables from exchange transactions - 3 262 560 Decrease in payables from exchange transactions - 200 000 Increase in accummulated surplus - (79 283 359) Decrease in property, plant and equipment - Buildings - (11 904 730) Increase in property, plant and equipment - Large and small capital equipment - 2 031 217 Increase in property, plant and equipment - Furniture and fixtures - 1 871 336 Increase in property, plant and equipment - Motor vehicles - 1 812 417 Increase in property, plant and equipment - Computer equipment - 420 750 Decrease in provision for leave accrual - 4 041 133 Increase in property, plant and equipment - work in progress - 270 380 Increase in property, plant and equipment - infrastructure assets - 86 819 465 Increase in receivables from exchange transactions - 117 400

- 9 658 569






REVENUE REVENUE FROM EXCHANGE TRANSACTIONS

Sale of goods 5 652 592 3 790 678 Rendering of services 31 025 919 22 753 656 Concession fees 7 328 611 6 147 709 Rental income 190 269 108 370 Recoveries 261 660 251 965 Wildlife sales 2 189 193 2 241 105 Sundry income 13 646 118 7 812 690 Interest received 17 1 156 419 912 155

Total revenue from exchange transactions 61 450 781 44 018 328

REVENUE FROM NON-EXCHANGE TRANSACTIONS TRANSFER REVENUE

Government grants 329 028 000 304 387 100 Conditional grant (EPWP, and other) 11 616 143 22 711 471

Total revenue from non-exchange transactions 340 644 143 327 098 571

Total revenue 14 402 094 924 371 116 899

EXPENDITURE

Employee related costs (272 123 768) (258 241 478) Depreciation and amortisation (28 512 676) (25 825 857) Operating expenses 16 (108 124 272) (91 414 124) Repairs and maintenance (3 590 243) (1 871 117) Finance costs 18 (321 646) (5 354)

Total expenditure (412 672 605) (377 357 930)


DETAILED INCOME STATEMENT



HERITAGE

WILDLIFE & SCENERY

CULTURE

ADVENTURE


PART FGROUP FINANCIALINFORMATION


COUNTRY OF INCORPORATION AND DOMICILE South Africa

NATURE OF BUSINESS AND PRINCIPAL ACTIVITIES To perform its duties in line with Mpumalanga Tourism and Parks Agency Act 5 of 2005. Mpumalanga Tourism and Parks Agency’s (hereinafter ‘’MTPA’’) main shareholder is the Department of Economic Development and Tourism formerly DEDET (hereinafter “DEDT”) from which it receives its’ funding.

BOARD MEMBERS IN THE OFFICE Mr. TJ Nzima ( Chairperson)DURING THE REPORTING PERIOD Ms. NR Shabangu-Mndawe (Deputy Chairperson)

Ms. NB Mzuzu Ms. TB Nkambule Mr. CL Gololo Mr. SG Mthombeni Ms. SFS Makhathini Ms. JS Sekhitla Dr. DT Magome Mr. TF Keetse Ms. M Maseko (co-opted) Dr. F Venter (co-opted)

EX OFFICIO BOARD MEMBERS Ms. SP Xulu (Acting Head of Department) Appointed January 2018 to 31 March 2018

Mr. MW Mkhize (Head of Department) Resigned January 2018

Mr. BJ Nobunga (Chief Executive Officer)

REGISTERED OFFICE Samora Machel Drive Hall’s Gateway Mataffin Mbombela 1200

BUSINESS ADDRESS Samora Machel Drive Hall’s Gateway Mataffin Mbombela 1200

GROUP GENERAL INFORMATION



POSTAL ADDRESS Private Bag X11338 Mbombela 1200

BANKERS Standard Bank and First National Bank of South Africa Limited

AUDITORS The Auditor General South Africa

SECRETARY Ms. Hlahane P

AUDIT AND RISK COMMITTEE EXTERNAL INDEPENDENT Ms. Mvulane P (Chairperson) MEMBERS FOR THE REPORTING PERIOD Mr. Mthembu S

Ms. Mzuzu NB Ms. Makhathini SFS Mr. Zakwe M - Appointed 01 September 2017

GROUP GENERAL INFORMATION

CONTINUED


THE REPORTS AND STATEMENTS SET OUT BELOW COMPRISE THE GROUP ANNUAL FINANCIAL STATEMENTS PRESENTED TO THE STAKEHOLDERS:

INDEX PAGE

Statement of Responsibilities for the Group Annual Financial Statements 158

Report of the Chief Executive Officer 159

Group report Audit and Risk Committee 162

Group Report of Accounting Authority 164

Auditor General’s Report 166

Group Statement of Financial Position as at 31 March 2018 172

Group Statement of Financial Performance for the year ended 31 March 2018 173

Group Statement of Changes in Net Assets for the year ended 31 March 2018 174

Group Cash Flow Statement for the year ended 31 March 2018 175

Group Statement of Comparison of Budget and Actual Amounts for the year ended 31 March 2018 176

Group Accounting Policies for the year ended 31 March 2018 180

Disclosure notes to the Group Annual Financial Statements for the year ended 31 March 2018 194

The following supplementary information does not form part of the Group Financial Statements and is unaudited:

Detailed Income statement 218

CONTENTS


The Public Finance Management Act requires the Board Members of the Group to ensure that Group keeps the full and proper records of its financial affairs. The Group Annual Financial Statements should fairly present the state of affairs of the Group, and its financial position at the end of the year in terms of the prescribed standards of Generally Recognised Accounting Practices.

The Board Members are responsible for monitoring the preparation of the Group Annual Financial Statements. The Auditor General South Africa is responsible for independently auditing and reporting on the Group Annual Financial Statements.

The Group Annual Financial Statements are prepared in accordance with the prescribed standards of Generally Recognised Accounting Practices, as per Directives 5 2014; (Appendix G) issued by the Accounting Standards Board (ASB) and incorporate disclosure in line with the accounting policies of the Group. The Group Annual Financial Statements are based on appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates and are prepared on the going concern basis.

The Group is not entirely comfortable with the current level of financial support from the Provincial Government, and although all indications are that the Group will continue to be sustainable and will be able to meet its obligations better going forward, the recent reductions in the funded budget will impact on the ability of the Agency to deliver on all of its mandates. In order to accommodate the anticipated budgetary constraints, Management have prioritised deliverables, focusing on core mandates. The view of Management expressed above provides additional assurance as to the continued sustainability of the Group. Additional information with regards to going concern is included in this annual report.

To enable the Board Members to discharge the above responsibilities, the Group Board developed, and maintains a system of internal control. The internal controls include a risk based system of internal accounting and administrative controls designed to provide reasonable but not absolute assurance that assets are safeguarded and that transactions are executed and recorded in accordance with generally accepted business practices and the Group’s policies and procedures. These controls are implemented by trained, skilled personnel with appropriate segregation of duties, are monitored by Management and include a comprehensive budgeting and reporting system operating within strict deadlines and an appropriate control framework.

The system of internal control is designed to provide cost effective assurance that assets are safeguarded and that liabilities and working capital are efficiently managed. The high vacancy rate has not as yet been fully addressed. However, some of the executive Management positions have been filled. The general vacancies will be addressed now that the health audit has been finalised and management is in the process of auctioning the recommendations.

Management remains confident that the system of internal control applied by the Group over financial and risk management is in general effective and transparent.

As part of the system of internal control, the Group’s internal audit function conducts operational, financial and specific audits and co-ordinates audit coverage with the external auditors. The Group’s Internal Audit function is outsourced to external consultants.

The Group Annual Financial Statements for the year ended 31 March 2018 set out on pages 172 - 217 were approved on 31 July 2018 by the Board of the Group appointed in terms of the MTPA Act, 2005 (Act No 5 2005) which has assumed the responsibilities of the Board and are signed on its behalf by:


Mbombela

STATEMENT OF RESPONSIBILITIES FOR THE GROUP ANNUAL FINANCIAL STATEMENTS



REPORT OF THE CHIEF EXECUTIVE OFFICER


I am pleased to present my first overview as the Chief Executive Officer of Mpumalanga Tourism and Parks Agency.

The financial year under review was filled with exciting and challenging moments, which presented us with an opportunity to reflect on our performance as an Agency and continue to work even harder to deliver on our mandate.





The decline of domestic tourism trips to the province by an average of 24% in recent years has prompted the entity to look at alternative strategies to encourage local and domestic travel. In the year under review, the entity invested more resources in partnerships to leverage on key provincial events. One of these flagship events was the inaugural Mbombela Jazz Festival, which was hosted in September 2017 and attracted over 4000 people. Other partnerships were done with event organisers of Nabalabntfu Festival, Sunrise Women’s Awards, Innibos and Mpumalanga Cultural Experience.
















The MTPA continues to collaborate with claimant communities in the management of nature reserves, which are subject to restitution claims.




Settlement and co-management agreements are in the final stages of being concluded for Blyde, Loskop Dam, Andover and Bushbuckridge









We are pleased to present our report for the financial year ended 31 March 2018.

AUDIT AND RISK COMMITTEE MEMBERS AND ATTENDANCE The Audit and Risk Committee consists of the members listed hereunder and should meet at least four times per annum as per its approved terms of reference. During the current year, the committee held four audit and risk committee meetings and two special committee meetings. One was to review the 2017/18 APP and the other for the review of strategic and operational risk management.

Name Role Attended

Ms. PMK Mvulane: Chairperson (01 August 2016) Chairperson 6 Mr. MS Mthembu (01 April 2016) External Member 6 Ms. SFS Makhathini (01 April 2016) Board Member 3 Ms. BN Mzuzu (23 March 2017) Board Member 3 Mr. ME Zakwe (01 September 2017) External Member 2

AUDIT AND RISK COMMITTEE RESPONSIBILITY The Committee reports that it has complied with its responsibilities arising from Section 51 (1)(ii), Section 76 (4) (d) of the Public Finance Management Act 1 of 1999 and Treasury Regulations 27.1.

The Committee also reports that it has adopted appropriate formal terms of reference as its Audit and Risk Committee Charter, has regulated its affairs in compliance with this charter, and has discharged its responsibilities as contained therein. The charter is reviewed annually and adopted by the committee on approval by the Accounting Authority.

INTERNAL AUDITThe Committee has reviewed the quarterly Internal Audit Reports which were prepared as per approved the risk based three year rolling internal audit plan and annual operational plan. The Committee further co-ordinated and monitored the activities of the internal audit function. Through this, the Committee is able to report on the effectiveness of the internal audit. The internal audit function was co-outsourced and operational for the financial year under review even though there were budget constraints.

The Committee reviewed the internal audit reports; where there were weaknesses identified within the group and considered the adequacy of management responses, to ensure the risk exposure is reduced and there is continuous improvement within the control environment. The management corrective actions were not adequate to deal with the system or processes.

The reports were recommended to the Accounting Authority for adoption. The Committee is satisfied with the effectiveness of the internal audit function taking into account the available budget for the internal audit unit.

RISK MANAGEMENT The Audit and Risk Committee is responsible for oversight of the institution’s control, governance and risk management. Furthermore, the Audit and Risk Committee provides the Board with independent counsel, advice and direction in respect of risk management and thus the stakeholders rely on the Committee for an independent and objective view of the institution’s risk management processes. As a result, the Committee provides the oversight required to ensure that stakeholder interests are protected.

The Audit and Risk Committee was provided with quarterly progress reports, which were evaluated, scrutinized by the Accounting Authority. The following are the activities were conducted by the Committee through its oversight role on Risk Management reviewed strategies, policies and quarterly plans.

EFFECTIVENESS OF INTERNAL CONTROLSOur review of the findings of the Internal Audit work, which was based on the risk assessments conducted in the public entity revealed certain weaknesses, which were then raised with the public entity.

The following internal audit work was completed during the year under review:• Audit of Pre-determined Objectives (AOPO Review

GROUP REPORT OF THE AUDIT AND RISK COMMITTEE



GROUP REPORT OF THE AUDIT AND RISK COMMITTEE (CONTINUED)


• Risk Management governance documents review including facilitating a workshop with all stakeholders. • Finance: Supply Chain Management including Irregular expenditure compliance audit and Interim Financial Statements • Tourism and Other Stakeholders Management Review• ITGC and applications control review• Critical Financial controls and review of policies including Zithabiseni Nature Resort and Conference Centre• Reserves and Stations surprise visits (revenue)

Matters of serious concern to the Committee regarding internal controls are as follows:a) Policies and procedures not all of them were finalised. b) Ineffective management responses and delays in implementation of management action plans c) Deficiencies/non-compliance noted within the SCM Procurement, and Contract Management;d) Audit of Pre-determined Objectives still need improvements and consequences management

IN YEAR MANAGEMENT AND QUARTERLY REPORTINGThe committee determined that the administration of quarterly reports submitted in terms of the PFMA and Division of Revenue Act were partly adequate according to internal audit results and management assurances.

EVALUATION OF FINANCIAL STATEMENTS The Audit and Risk Committee has: • Reviewed the audited annual financial statements to be included in the annual report with the group; • Evaluated the audited annual financial statement for the consistent application of accounting policies and practices; and reviewed the

changes in accounting policies and practices• Considered the appropriateness, adoption and consistent application of the South African Statement of Generally Recognised

Accounting Practices adopted by the Accounting Authority;• Reviewed the financial statements of the Entity for the year ended 31 March 2018 and is satisfied that they comply with relevant

provisions of the Public Finance Management Act and the South African Statement of Generally Recognised Accounting Practices;• Reviewed the annual financial statements for abnormal and/or significant transactions of the group and the disclosure thereof; • Sought explanations for and evaluated all significant variances in the annual financial statements as compared to the prior year;• Evaluated the clarity and completeness of disclosure and whether disclosures made have been set properly in context; and• Evaluated write offs, reserve transfers, and the levels of general and specific provisions.

AUDITOR GENERAL SOUTH AFRICAThe committee has reviewed the entity’s implementation plan for audit issues raised in the previous years and we are satisfied that 80 % of the matters have been adequately resolved. We will monitor the remainder of matters that still need attention.

The Audit and Risk Committee concurs with the Auditor General South Africa’s conclusions on the annual financial statements and pre determined objectives and noted the improved audit outcome to an unqualified audit opinion with findings.

GENERALThe Audit and Risk Committee would like commend the Accounting Authority and Management in dealing with audit action plans for both internal and external audit together with all other recommendations made by the Audit and Risk Committee, we are of a view that as we work towards clean administration it will allow the entity to provide better and responsive service delivery to the citizens of Mpumalanga.

Ms. Precious Mvulane Chairperson of the Audit and Risk Committee

31 July 2018


GROUP REPORT OF ACCOUNTING AUTHORITY


1. BACKGROUND The Group is a juristic person established in terms of the MTPA Act (Act 5 of 2005) and is registered as a Schedule 3C Public Entity

in terms of the PFMA Act (Act 1 of 1999). The Group’s main shareholder is the Department of Economic Development and Tourism (hereinafter ‘’DEDT’’) from which it receives its funding.

2. REVIEW OF ACTIVITIES MAIN BUSINESS AND OPERATIONS

The objective of the Group is to fulfil its mandate in terms of the MTPA Act (Act 5 of 2005), which provides for the management and promotion of responsible Tourism and Nature Conservation in the Province and to ensure sustainable utilisation of natural resources for the benefit of everyone in the Province. The Group is committed to showcase Mpumalanga’s scenic beauty, diverse wildlife, adventure activities, culture and heritage.

LAND CLAIMS / CO – MANAGEMENT / SETTLEMENT AGREEMENTS

The fact that the land in the majority of our nature reserves are under claim, poses a challenge to our ability to speedily execute our plans as required by the land restitution processes. The Group has consequently entered into co-management and settlement agreements with some of the land claimants, in cases where land ownership has been authenticated by the Regional Land Claims Commission (RLCC); i.e. Mdala, Mkhombo, and Mabusa Nature Reserves (in 2010/2011) and Songimvelo Nature Reserve (in 2012). The RLCC however, is still to formally transfer the land (title deeds) to these successful land claimants.

In certain instances, the land is subject to contested land claims. The Group continues to endeavour to assist the RLCC to settle these claims in our priority reserves. These contested land claims negatively affect MTPA’s ability to realise the full potential of the conservation and tourism capacity of the land. However, this has no impact on the Group Annual Financial Statements for the period under review, as the Group, through its provincial legislative mandate; has the right to use, manage, preserve and develop all the reserves according to the acceptable recognised standards and legislation.

The operating results and state of affairs of the Group are fully set out in the attached Group Annual Financial Statements.

2018 Revised 2017 Financial Performance R R

Grant received 329 028 000 304 387 100 Conditional grant - Expanded Public Works Programme (Hereafter EPWP”) 2 605 000 2 911 000 Zithabiseni 22 512 000 21 510 000 Infrastructure upgrade - 18 000 000 (Deficit) (12 097 752) (9 813 610)

Total assets 608 968 112 610 400 95 Total liabilities 61 008 018 50 414 539

3. GOING CONCERN We draw attention to the fact that at 31 March 2018 the Group had a net asset value of R 547 960 094 (Restated 2017: R 559 986 411)

and that the Group’s current liabilities exceed its current assets by R 6 024 873 (Restated 2017: R 4 980 599), the current liabilities includes a leave provision of R 11 356 897 (2017: R10 886 768). This provision will not strain the cash flow requirements of the entity due to the leave policy that does not allow voluntary encashment of leave. The board after having reviewed the projected cash flows for the foreseeable future and Management’s assessment of Group’s ability to operate as a going concern, has a reasonable expectation that the Group have adequate resources to continue its operations as a going concern for the foreseeable future.


GROUP REPORT OF ACCOUNTING AUTHORITY CONTINUED


4. IRREGULAR EXPENDITURE Irregular expenditure to an amount of R 6 720 772 (2017: R 4 977 412) was identified during this year. Detail of this is disclosed under

note 26. The 2017 balance was submitted to Provincial Treasury for condonement.

5. ACCOUNTING AUTHORITY Mr. Nzima TJ ( Chairperson) Ms. Shabangu-Mndawe NR (Deputy Chairperson)

Ms. Mzuzu NB Ms. Nkambule TB Mr. Gololo CL Mr. Mthombeni SG Ms. Makhathini SFS Ms. Sekhitla JS Dr. Magome DT Mr. Keetse TF Ms. M Maseko (co-opted) Dr. F Venter (co-opted)

EX OFFICIO BOARD MEMBERS Ms. Xulu SP (Acting Head of Department) - Appointed January 2018 to 31 March 2018

Mr. Mkhize MW (Head of Department) - Resigned January 2018 Mr. Nobunga BJ (Chief Executive Officer)

6. ZITHABISENI RESORT AND CONFERENCE CENTRE The Provincial Executive Council, at its meeting of 23 August 2015, resolved to transfer the Zithabiseni Resort and Conference Centre

to the Group as a managing authority for the resort. The Group resumed responsibilities as a managing Authority effective 01 April 2016. Further to this effect, the Executive Council approved the option, which promotes joint ownership of the Resort by the State and the Community, but managed by an independent operator (to be appointed) with defined state and community benefits.

The Group maintains appropriate measures to ensure that the Government grant transferred to Zithabiseni is used for its intended purpose. The Group receives the Government grant from the Department of Economic Development and Tourism for further transfer to the Resort. The grant is mainly spent on Salaries and Wages. Monitoring on the use of the grant is done through requests for the company’s financial statements and regular reporting by the company through quarterly reports and the review of non-financial performance.

7. ANNUAL FINANCIAL STATEMENTS The Group Annual Financial Statements are including MTPA, Zithabiseni Resort and Conference Centre, Nelspruit Financing Trust

and Nelspruit Development Trust.

8. CONCLUSION Other than the above, there is nothing that the Group Board wishes to draw attention to that has not already been highlighted

elsewhere in the Group Annual Financial Statements, Auditor-General South Africa Report and Annual Report.


Mbombela


Report of the auditor-general to the Mpumalanga Provincial Legislature on the Mpumalanga Tourism and Parks Agency

Reportontheauditoftheconsolidatedfinancialstatements

Qualifiedopinion

1. I have audited the consolidated financial statements of the Mpumalanga Tourism and Parks Agency and its subsidiaries (the group) set out on pages 172 to 217, which comprise the statement of financial position as at 31 March 2018, the statement of financial performance, statement of changes in net assets, cash flow statement and statement of comparison of budget information with actual amounts for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies.

2. In my opinion, except for the possible effects of the matters described in the basis for qualified opinion section of this auditor’s report, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the group as at 31 March 2018, and the group’s financial performance and cash flows for the year then ended in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Division of Revenue Act of South Africa, 2017 (Act No. 3 of 2017) (Dora).

Basisforqualifiedopinion

Property, plant and equipment

3. I was unable to obtain sufficient appropriate audit evidence that the properties and buildings of the subsidiary, Zithabiseni Resort and Conference Centre (Proprietary) Limited, to the value of R47 871 394 were owned by the subsidiary. Furthermore, these properties were revalued in the previous financial year but the entity had no revaluation policy as part of its accounting policies. I was unable to confirm the ownership and the appropriate policy to be used by alternative means. Consequently, I was unable to determine whether any adjustment was necessary to property, plant and equipment stated at R522 616 097 (2017: R533 196 977) in the consolidated financial statements.

Context for the opinion

4. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities under those standards are further described in the auditor-general’s responsibilities for the audit of the consolidated financial statements section of this auditor’s report.

5. I am independent of the group in accordance with the International Ethics Standards Board for Accountants’ Code of ethics for professional accountants (IESBA code) and the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA code.

6. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion.

Emphasis of matters

7. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Restatementofcorrespondingfigures

8. As disclosed in note 32 to the financial statements, the corresponding figures for 31 March 2017 have been restated as a result of an error in the financial statements of the public entity at, and for the year ended, 31 March 2018.

AUDITOR-GENERAL’S REPORT





Uncertainty relating to the future outcome of exceptional litigation

9. With reference to note 22 to the financial statements, the entity is the defendant in a land utilisation lawsuit of R740 million. The entity is opposing the claim. The ultimate outcome of the matter cannot presently be determined and no provision for any liability that may result has been made in the financial statements.

Material impairments

10. As disclosed in note 3 to the financial statements, the receivables from exchange transactions balance was significantly impaired. The impairment of receivables from exchange transactions amounted to R2 981 363 (2017: R5 647 848), which represented 34% (2017: 43%) of the total receivables from exchange transactions.

Irregular as well as fruitless and wasteful expenditure

11. As disclosed in note 28 to the financial statements, irregular expenditure of R6 720 772 was incurred, as supply chain management and contract management processes were not adhered to.

12. As disclosed in note 26 to the financial statements, fruitless expenditure of R659 894 was incurred, as a result of penalties and interest as well as two salaries incurred on the same position.

Responsibilitiesoftheaccountingauthorityforthefinancialstatements

13. The accounting authority is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the SA Standards of GRAP and the requirements of PFMA and Dora, and for such internal control as the accounting authority determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

14. In preparing the consolidated financial statements, the accounting authority is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the accounting authority either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so.

Auditor-general’sresponsibilitiesfortheauditofthefinancialstatements

15. My objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from 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 accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

16. A further description of my responsibilities for the audit of the consolidated financial statements is included in the annexure to this auditor’s report.

Report on the audit of the annual performance report


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 responsibility to report material findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance.


18. My procedures address the reported performance information, which must be based on the approved performance planning documents of the public entity. I have not evaluated the completeness and appropriateness of the performance indicators included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, my findings do not extend to these matters.

19. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected programmes presented in the annual performance report of the public entity for the year ended 31 March 2018:

Programmes Pages in the annual performance report

programme 4 - tourism 39 - 44 programme 5 - biodiversity 45 - 49 programme 6 - commercial operations 50 - 51

20. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

21. I did not raise any material findings on the usefulness and reliability of the reported performance information for the following programmes:

Programme 4 – tourism

Programme 5 – biodiversity conservation

Programme 6 – commercial operations

Other matters

22. I draw attention to the matters below.

Achievement of planned targets

23. Refer to the annual performance report on pages 27 to 51 for information on the achievement of planned targets for the year and explanations provided for the under- or overachievement of a significant number of targets.

Adjustment of material misstatements

24. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of the biodiversity conservation and the commercial operations programmes. As management subsequently corrected the misstatements, I did not raise any material findings on the usefulness and reliability of the reported performance information.

Report on the audit of compliance with legislation


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 public entity with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance.




26. The material findings on compliance with specific matters in key legislation are as follows:

Strategic planning and performance management

27. Procedures for the facilitation of effective performance monitoring, evaluation and corrective action through quarterly reports were not formally established for the greater part of the year, as required by treasury regulation 30.2.1.

Financial statements, performance report and annual report

28. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records, as required by section 55(1)(a) and (b) of the PFMA. Material misstatements of current liabilities and disclosure items identified by the auditors in the submitted financial statements were corrected and the supporting records were provided subsequently, but the uncorrected material misstatements and supporting records that could not be provided resulted in the financial statements receiving a qualified opinion.

Procurement and contract management

29. Some invitations for competitive bidding were not advertised for the required minimum period, as required by treasury regulation 16A6.3(c).

30. Bid documentation for the procurement of commodities designated for local content and production did not stipulate the minimum threshold for local production and content, as required by the 2017 preferential procurement regulation 8(2).

Expenditure management

31. Effective and appropriate steps were not taken to prevent irregular expenditure, as required by section 51(1)(b)(ii) of the PFMA.

Revenue management

32. Effective and appropriate steps were not taken to collect all revenue due, as required by section 51(1)(b)(i) of the PFMA.

Other information

33. The accounting authority is responsible for the other information. The other information comprises the information included in the annual report, which includes the audit committee’s report. The other information does not include the consolidated financial statements, the auditor’s report and those selected programmes presented in the annual performance report that have been specifically reported in this auditor’s report.

34. My opinion on the financial statements and 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.

35. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements and the selected programmes presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

36. The other information I obtained prior to the date of this auditor’s report is the general information of the public entity. The report of the CEO, audit committee’s report, foreword by the MEC, overview by the chairperson of the board and overview of the CEO are expected to be made available to me after 31 July 2018.

37. If, based on the work I have performed on the other information that I obtained prior to the date of this auditor’s report, I conclude that there is a material misstatement in this other information, I am required to report that fact. I have nothing to report in this regard.




38. After I receive and read the report of the CEO, Audit and Risk Committee’s report, foreword by the MEC, overview by the chairperson of the board and overview of the CEO, and if I conclude that there is a material misstatement, I am required to communicate the matter to those charged with governance and request that the other information be 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 it is corrected this will not be necessary.

Internalcontroldeficiencies

39. I considered internal control relevant to my audit of the consolidated financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to express any form of assurance on it. The matters reported below are limited to the significant internal control deficiencies that resulted in the basis for the qualified opinion and the findings on compliance with legislation included in this report.

Leadership

40. Adequate oversight responsibility was not exercised regarding financial and performance reporting and compliance as well as related internal controls.

41. Effective human resource management was not implemented to ensure that vacant key management positions were filled.

42. Policies and procedures that enable and support the understanding and execution of internal control objectives, processes and responsibilities were not adequately established and communicated.

43. The developed action plan to address external and internal audit findings was not fully implemented, as recurring audit findings were identified.

Financial and performance management

44. Management did not implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information was accessible and available to support financial and performance reporting.

Governance

45. Adequate oversight of performance reporting was not exercised.

Mbombela

31 July 2018




Annexure – Auditor-general’s responsibility for the audit

1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my audit of the consolidated financial statements, and the procedures performed on reported performance information for selected programmes and on the public entity’s compliance with respect to the selected subject matters.

Financial statements

2. In addition to my responsibility for the audit of the consolidated financial statements as described in this auditor’s report, I also:

• identify and assess the risks of material misstatement of the consolidated financial statements whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the public entity’s internal control

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the accounting authority

• conclude on the appropriateness of the accounting authority’s use of the going concern basis of accounting in the preparation of the 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 public entity and its subsidiaries’ 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 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 a public entity to cease continuing as a going concern

• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the 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.





ASSETS CURRENT ASSETS

Inventories 2 837 107 449 788 Receivables from exchange transactions 3 5 692 049 7 451 752 Receivables from non-exchange transactions 4 911 467 5 396 786 Cash and cash equivalents 5 43 415 092 28 622 440

50 855 715 41 920 766

NON-CURRENT ASSETS

Property, plant and equipment 6 522 616 097 533 196 977 Intangible assets 7 213 093 - Heritage assets 8 35 283 207 35 283 207

558 112 397 568 480 184

Total Assets 608 968 112 610 400 950

LIABILITIES CURRENT LIABILITIES

Payables from exchange transactions 10 20 189 335 26 213 223 Provision 11 11 356 897 10 886 768 Project liabilities 12 25 015 156 9 365 799 Long service awards - short term portion 9 319 200 435 575

56 880 588 46 901 365

NON-CURRENT LIABILITIES

Finance lease obligation - 276 Long service awards 9 4 127 430 3 512 898

4 127 430 3 513 174

Total Liabilities 61 008 018 50 414 539

NET ASSETS

Contribution from owners 13 70 197 729 70 197 729

RESERVES

Revaluation reserve 419 641 209 429 414 450 Accumulated deficits 58 121 156 60 374 232

Net Assets 547 960 094 559 986 411 Total Liabilities 61 008 018 50 414 539

Total net assets and liabilities 608 968 112 610 400 950

GROUP STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2018



REVENUERevenue from non-exchange transactions (Grants received) 15 331 633 000 325 298 100 Revenue from non-exchange transactions - (Zithabiseni grant received) 15 22 512 000 21 510 000 Revenue from non-exchange transactions (Other) 15 9 011 142 1 800 471 Revenue from exchange transactions 15 42 655 823 31 834 745 Cost of sales 16 (954 755) (969 187)

Gross surplus 404 857 210 379 474 129 Other income 17 23 837 469 16 768 521 Operating expenses 18 (440 982 710) (406 698 331)

Operatingdeficit (12288031) (10455681) Interest income 19 1 178 468 932 054 Interest expense 20 (988 189) (289 983)


GROUP STATEMENT OF FINANCIAL PERFORMANCE



Contribution Contribution Revaluation Accumulated Total net FiguresinRand Note(s) fromowners reserve deficits Assets

Balance as at 01 April 2016 70 197 729 384 492 279 (12 477 884) 442 212 124

CHANGES IN NET ASSETSDeficit for the year - - (9 813 610) (9 813 610) Correction of concession - - (1 944 485) (1 944 485) Realisation of revaluation surplus on buildings - (13 272 829) 13 272 829 - Zithabiseni - - (7 958 319) (7 958 319) Revaluation of building - Zithabiseni - 58 194 999 - 58 194 999 Prior period error 32 - - 79 295 701 79 295 701

Total changes - 44 922 170 72 852 116 117 774 286

Restated balance as at 01 April 2017 70 197 729 429 414 449 60 374 233 559 986 411

CHANGES IN NET ASSETS(Deficit) / Surplus for the year - - (12 097 752) (12 097 752) Realisation of revaluation surplus on building 6 - (9 773 241) 9 773 241 - Prior period error - Zithabiseni 32.1 - - 71 434 71 434

Total changes - (9 773 241) (2 253 077) (12 026 318)

Closing balance as at 31 March 2018 70 197 729 419 641 208 58 121 156 547 960 093

Note(s) 13

GROUP STATEMENT OF CHANGES IN NET ASSETS




CASH FLOWS FROM OPERATING ACTIVITIES

RECEIPTS

Cash receipts from exchange transactions 86 013 859 43 705 232 Cash receipts from non-exchange transactions 335 469 412 342 789 574 Interest received 1 178 468 932 054 EPWP 2 605 000 2 911 000

425 266 739 390 337 860

PAYMENTS Employee costs 13 (272 533 664) (277 195 495) Suppliers (137 929 880) (91 987 052) Interest expense 15 (988 189) (289 983)

(411 451 733) (369 472 530)

Netcashflowsfromoperatingactivities 21 13815006 20865330

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment 6 (14 351 796) (11 119 587) Purchases of other intangible assets 7 (319 639) -

Netcashflowsfrominvestingactivities (14671435) (11119587)

CASH FLOWS FROM FINANCING ACTIVITIESMovement in project liabilities 15 649 357 5 298 951 Finance lease payments (276) (1 044)

Netcashflowsfromfinancingactivities 15649081 5297907

Net (decrease)/ increase in cash and cash equivalents 14 792 652 15 040 647

Cash and cash equivalents at the beginning of the year 28 622 440 13 581 793 Cash and cash equivalents at the end of the year 5 43 415 092 28 622 440

GROUP CASH FLOW STATEMENT





REVENUE REVENUE FROM EXCHANGE TRANSACTIONS

Sale of goods 6 317 000 - 6 317 000 7 211 440 894 440 Note 1 Rendering of services 35 188 000 - 35 188 000 35 444 383 256 383 Note 2 Concession fees 2 200 000 - 2 200 000 7 328 611 5 128 611 Note 3 Rental income 85 000 - 85 000 190 269 105 269 Note 4 Recoveries 242 000 - 242 000 261 660 19 660 Note 5 Hunting wildlife Sales 5 000 000 - 5 000 000 2 189 193 (2 810 807) Note 6 Joint project conservation income - - - 7 130 259 7 130 259 Note 7 Sundry income 1 933 000 - 1 933 000 8 300 092 6 367 092 Note 8 Interest received 920 000 - 920 000 1 178 468 258 468 Note 9

Total revenue from exchange transactions 51 885 000 - 51 885 000 69 234 375 17 349 375 Note 18

REVENUE FROM NON-EXCHANGE TRANSACTIONS

Government grants Grant allocation 327 970 000 1 058 000 329 028 000 329 028 000 - EPWP 2 605 000 - 2 605 000 2 605 000 - Grant allocation - Zithabiseni 22 512 000 - 22 512 000 22 512 000 -

Total revenue from non-exchange transactions 353 087 000 1 058 000 354 145 000 354 145 000 -

Total revenue 404 972 000 1 058 000 406 030 000 423 379 375 17 349 375

EXPENDITURE Compensation of employees (267 683 999) (1 058 000) (268 741 999) (271 512 589) (2 770 590) Note 10 Board and board committee compensation (1 861 243) - (1 861 243) (1 613 368) 247 875 Note 11 EPWP compensation (2 605 000) - (2 605 000) (2 584 488) 20 512 Programme costs (45 061 255) - (45 061 255) (38 019 719) 7 041 536 Note 12 Payment of capital assets (6 737 292) - (6 737 292) (3 692 782) 3 044 510 Note 13 Goods and services (51 626 211) - (51 626 211) (55 014 590) (3 388 379) Note 14 Operating expenses - Zithabiseni (29 397 000) - (29 397 000) (25 480 305) 3 916 695 Note 17 Cost of sales - Zithabiseni - - - (954 755) (954 755)

Total expenditure (404 972 000) (1 058 000) (406 030 000) (398 872 596) 7 157 404

GROUP STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS





Operating surplus - - - 24 506 779 24 506 779 Joint project conservation expenses - - - (8 699 208) (8 699 208) Note 7 Interest expense - - - (321 646) (321 646) Ring- fenced funds - - - (810 957) (810 957) Note 15 Finance costs - Zithabiseni - - - (666 543) (666 543) Joint project conservation assets - - - (67 857) (67 857)

- - - (10 566 211) (10 566 211)

Surplus/(Deficit)beforetaking into acccount non-cash items - - - 13 940 568 13 940 568

RECONCILIATIONBASIS DIFFERENCE

Assets donation 7 027 224 Zithabiseni - Depreciation (3 008 242) Increase in provision for bad debts 385 261 Bad debts - Zithabiseni (69 588) Depreciation (28 512 677) Increase in leave pay accrual (470 129) Bonus provision (141 051) Increase in stock adjustment 36 044 Impairment (4 407 840) Profit/(loss) on fixed assets (637 961) Partnership assets 67 857 Non income statement - Capex 3 692 782

Actual Amount in the Statement of Financial Performance (12 097 752) Note 16

GROUP STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS (CONTINUED)



VARIANCE ON BUDGETThere is a deficit of R12 million as per the Group Statement of Financial Performance which is including non-cash items as listed above. However the entity under-spent by R7 million not taking into account the non-cash items, refer to note 12 below.

REVENUE FROM EXCHANGE TRANSACTION

Note 1: Due to high demand for permits from external private game reserves for their endangered species breeding project

Note 2: Increase in tariffs had a positive impact on the revenue from entrance fees at the reserves, mainly Blyde.

Note 3: Concessions fees are budgeted based on agreed amounts per contracts. At year end, audited numbers from operators reflected good financial performance, therefore top up fees had to be invoiced, hence over-collection in concession fees.

Note 4: Rental agreement signed for the new tenants and increase in rental.

Note 5: Recovery on staff consumption.

Note 6: Prolonged assessment of the game census results led to delayed procurement processes for trophy hunting and game capture. This deprived the entity a full hunting season.

Note 7: The joint project conservation income and expenses is the joint initiative with SANPARKS, SANBI, DST and other projects, to promote conservation management within the protected areas in the nature reserves. Grants received were not budgeted for and consequently neither the joint project conservation expenses. Grant income and expenses cannot be budgeted for, as joint project conservation occurs as and when required by the different parties.

Note 8: Included in sundry income are the following unbudgeted items:

a) DEA implementers’’ fees

b) Insurance refunds.

c) DEDT salary reimbursement of the seconded Chief Financial Officer.

Note 9: Interest income increased as a result of excess cash reserves for ring-fenced projects.




TOTAL EXPENDITURE VARIANCE RESULTS FROM THE FOLLOWING: Note 10: Due to increase in Public and Sunday rates claims.

Note 11: The under-spending in board remuneration is due to non-attendance by certain members.

Note 12: Underspending is due to the following:

a) Waterval Boven and Pilgrims Rest tender awarded lower than estimated budget.

b) National Department of Tourism (NDT) developed the brand strategy hence the allocated budget was not spent.

c) Due to delays in the appointment of the service provider for the Resource Management Project.

Note 13: Slow progress on full infrastructure maintenance as emergency repairs had to be attended to.

Note 14: Due to increase vehicle reimbursements, as the 1500 km limit was exceeded, telephone costs and electricity charges.

Note 15: This relates to expenditure against the ring fenced monies received in previous financial years and actually spent in the current financial year. This remains a commitment up until expenditure is incurred.

Note 16: Agreed to the Group Annual Statement of Financial Performance (SPF).

Note 17: The over-spending against the baseline budget was actually offset by revenue generated by Zithabiseni.

Note 18: Included in the total revenue is revenue from Zithabiseni amounting to R 5.9m against the budget of R6.8m




1. BASIS OF PREPARATION The Group Annual Financial Statements have been prepared in accordance with the effective Standards of Generally Recognised

Accounting Practice (GRAP), including any interpretations and directives issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act, (Act No 1 of 1999).

The Group Annual Financial Statements are prepared on the accrual basis of accounting and incorporate the historical cost conventions as the basis of measurement, except where specified otherwise.

In the absence of an issued and effective Standard of GRAP, accounting policies for material transactions, events or conditions were developed in accordance with paragraphs 8, 10 and 11 of GRAP 3 as read with Directive 5.

Assets, liabilities, revenues and expenses were not offset, except where offsetting is either required or permitted by a Standard of GRAP.

The principal accounting policies, applied in the preparation of these Group Annual Financial Statements, are set out below, which are consistent with those adopted in the prior financial year:

1.1 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY

• These Group Annual Financial Statements have been prepared based on the expectation that the entity will continue to operate as a going concern for at least the next 12 months.

• The Group Annual Financial Statements have been prepared on an accruals basis.

• Changes in accounting policies are accounted for in accordance with the transitional provisions in the standard. If no such guidance is given, they are applied retrospectively, unless it is impracticable to do so, in which case they are applied prospectively.

• Transactions are accounted for and presented in accordance with their substance and economic reality and not merely their legal form. The substance of transactions or other events is not always consistent with that which is apparent from their legal or contrived form.

• Presentation and disclosure takes into consideration the materiality of the transaction, which can either be material qualitatively or quantitatively or both.

• In preparing the Group Annual Financial Statements, Management is required to make estimates and assumptions that affect the amounts represented in the Group Annual Financial Statements and related disclosures. Use of available information and the application of judgements is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the Group Annual Financial Statements. Accounting estimates are utilised in determining fair value, total useful lives and remaining useful lives of property, plant and equipment.

1.2 PROPERTY, PLANT AND EQUIPMENT

Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are recognised in the Group Statement of Financial Position initially at cost and thereafter measured at the end of the reporting period at the revalued amount, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be determined using fair values at the end of the reporting period.

Any revaluation increase arising on the revaluation of such land and buildings is recognised in other comprehensive income, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in surplus or deficit, in which case the increase is credited to surplus or deficit to the extent of the decrease previously expensed. A decrease in the carrying amount arising on the revaluation of such land and buildings is recognised in surplus or deficit to the extent that it

GROUP ACCOUNTING POLICIES



exceeds the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset.

Depreciation on revalued buildings is recognised in set of the Group Statement of Financial Performance. On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to accumulated deficit. The revaluation reserve in equity related to a specific item of property, plant and equipment is transferred directly to accumulated surplus or deficit as the asset is used. The amount transferred is equal to the difference between depreciation based on the revalued carrying amount and depreciation based on original cost of the asset.

Other fixed assets are stated at cost or deemed cost in terms of directive 7, less accumulated depreciation and accumulated impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end. Changes are accounted for as a change in accounting estimate.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in surplus or deficit.

The depreciation rates are in accordance with the Group’s asset management policy. Assets are written off over their expected useful lives up to their residual values. The depreciation rates are the following:

Land 0% Buildings 1-10% Large and small equipment 25% Furniture and fixtures 20-25% Motor vehicles 33% Computer equipment 33% Infrastructure 2-10%

Large and small equipment and technical furniture and equipment have been grouped together for disclosure purposes.

1.3 INTANGIBLE ASSETS

An intangible asset is an identifiable, non-monetary asset without physical substance. Intangible assets are identifiable resources controlled by the entity from which the entity expects to derive future economic benefits.

An intangible asset is identifiable if it either is separable, ie is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless of whether the entity intends to do so or arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

An intangible asset is recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably.

The entity assesses the probability of expected future economic benefits using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.

GROUP ACCOUNTING POLICIES (CONTINUED)



Intangible assets that are acquired and have finite useful lives are initially recognised at cost with subsequent measurement at cost less any accumulated amortisation and any impairment losses.

Intangible assets are derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets. For all other intangible assets amortisation is recognised in the profit or loss and is provided on the straight-line basis which, it is estimated, will reduce the carrying amount of the assets to their residual values at the end of their useful lives.

Intangible assets are amortised at the following rates:

Computer software 33%

1.4 HERITAGE ASSETS

Heritage assets are assets, which have a cultural, environmental, historical, natural, scientific, technological, or artistic significance, and are held indefinitely for the benefit of present and future generations.

Classes of heritage assets include conservation areas such as reserves. This land is reflected as a heritage asset of the Group.

Characteristics often displayed by heritage assets include the following:

• their value in cultural, environmental, educational and historical terms is unlikely to be fully reflected in monetary terms;

• ethical, legal and/or statutory obligations may impose prohibitions or severe stipulations on disposal by sale;

• they are often irreplaceable;

• their value may increase over time even if their physical condition deteriorates;

• they have an indefinite life and their value appreciates over time due to their cultural, environmental, educational, natural scientific, technological, artistic or historical significance; and

• they are protected, kept unencumbered, cared for and preserved.

Recognition

A heritage asset shall be recognised as an asset if, and only if:

• it is probable that future economic benefits or service potential associated with the asset will flow to the entity; and

• the cost or fair value of the asset can be measured reliably. The Group holds heritage assets through conservation areas in the reserves that are regarded as heritage assets. The

Group does not recognise heritage assets, which on initial recognition, do not meet the recognition criteria of a heritage asset because they cannot be reliably measured. Relevant and useful information about them has been disclosed in the notes to the annual financial statements.

Initial measurement

A heritage asset that qualifies for recognition as an asset, shall be measured at its cost. When it is acquired through a non-exchange transaction, it will be measured at its fair value/deemed cost as at the date of acquisition.




Subsequent measurement

After recognition as an asset, a class of heritage assets is carried at its cost less any accumulated impairment losses.

Impairment

The Group assesses at each reporting date whether there is an indication that it may be impaired. If any such indication exists, the Group estimates the recoverable amount or the recoverable service amount of the heritage asset.

Transfers

Transfers from heritage assets are only made when the particular asset no longer meets the definition of a heritage asset. Transfers to heritage assets are only made when the asset meets the definition of a heritage asset. The transfer will be made at the carrying value of the heritage asset.

Derecognition

The Group derecognises heritage assets on disposal, or when no future economic benefits or service potential are expected from its use or disposal. The gain or loss arising from derecognition of a heritage asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the heritage asset. Such difference is recognised in surplus or deficit when the heritage asset is derecognised.

1.5 FINANCIAL INSTRUMENTS

Initial recognition

The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the Group becomes party to the contractual provisions of the instrument.

Receivables from exchange and non-exchange transactions

Trade and other receivables are classified as receivables from exchange transactions and receivables from non-exchange transactions.

Trade receivables are measured at initial recognition at fair value less provision made for impairment of these receivables.

Short-term receivables and payables are not discounted where the initial credit period granted or received is consistent with terms used in the public sector either through established practices or legislation.

The Group provides for receivables which are older than 120 days. Appropriate allowances for estimated irrecoverable amounts are recognised in deficit or surplus when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial re-organisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired.

The carrying value of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in the Group Annual Statement of Financial Performance.




Payables from exchange transactions and payables from non-exchange transactions

Payables from exchange transactions are carried at the fair value of the consideration to be paid in future for goods or services that have been received or supplied and invoiced or formally agreed with the supplier.

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

Other loans and receivables

Other financial assets classified as loans and receivables are initially recognised at fair value plus transaction costs, and are subsequently carried at amortised cost less any accumulated impairment losses.

These financial assets are not quoted in an active market and have fixed or determinable payments.

1.6 TAX

The Group is registered as a tax payer in terms of S10(1) of the Income Tax Act, 1962. The institution qualifies as an exempt institution, and is accordingly exempt from South African normal tax in terms of S10(1) of the Income Tax Act, 1962.

1.7 LEASES

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases.

Operating leases

Leases for assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Group Statement of Financial Performance on a straight-line basis over the period of the lease after taking into account any fixed escalation clauses.

Contingent rents are charged as an expense in the periods in which they are incurred.

Finance leases

Assets held under finance leases are recognised in the balance sheet at amounts equal to the fair value of the leased assets,

Or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liabilities, net of finance charges, on the finance leases are recorded as obligations under finance leases. All assets held under finance leases are classified as fixed assets, except for those properties held to earn rental income which are classified as investment property.

Depreciation and impairment loss are calculated and recognised in the same manner as the depreciation and impairment loss on fixed assets as set out in note, except for the estimated useful lives cannot exceed the relevant lease terms, if shorter.

Minimum lease payments are apportioned between finance charge and the reduction of the outstanding liabilities. The finance charge is recognised in profit or loss over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.




1.8 INVENTORIES

The Group inventories include consumables, staff uniforms and fuel.

Inventories are initially measured at cost except where inventories are acquired through a non-exchange transaction, then their costs are their fair value as at the date of acquisition.

Subsequently inventories are measured at the lower of cost and net realisable value.

Inventories are measured at the lower of cost and current replacement cost where they are held for;

• Distribution at no charge or for a nominal charge; or

• Consumption in the production process of goods to be distributed at no charge or for a nominal charge.

Current replacement cost is the cost the entity incurs to acquire the asset on the reporting date.

The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of operations less the estimated costs of completion and the estimated costs necessary to make the sale, exchange or distribution.

When inventories are sold, the carrying amounts of those inventories are recognised as an expense in the period in which the related revenue is recognised. If there is no related revenue, the expenses are recognised when the goods are distributed, or related services are rendered. The amount of any write-down of inventories to net realisable value or current replacement cost and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value or current replacement cost, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

1.9 IMPAIRMENT OF CASH-GENERATING ASSETS

Cash-generating assets are those assets held by the entity for the purpose of generating a commercial return. When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercial return.

The Group assesses at each reporting date whether there is any indication that an asset or cash-generating unit to which an asset belongs to may be impaired.

When such an indication exists, the Group estimates the recoverable amount of the asset. The recoverable amount is the higher of the cash-generating asset’s fair value less costs to sell and its value in use. The value in use is determined as the present value of the estimated future cash flows expected to be derived from the continuing use of an asset and from its disposal at the end of its useful life.

The future expected cash flows are discounted at a rate that reflects the current market assessment of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted.

If the carrying amount of a cash-generating asset exceeds its recoverable amount, it is impaired. An impairment loss is recognised immediately in surplus or deficit.

The Group assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a cash-generating asset may no longer exist or may have decreased. If any such indication exists, the entity




estimates the recoverable amount of that asset and accounts for the reversal of impairment loss if necessary. The increase in the carrying amount of an asset due to the reversal of an impairment loss should not exceed what the carrying amount would have been if no impairment loss had been recognised.

1.10 IMPAIRMENT OF NON-CASH-GENERATING ASSETS

Non-cash-generating assets are those assets held by the entity without an intention of generating a commercial return from such asset, such as assets used for general administrative and governance purposes and assets used purely for service delivery. This identification is based on the materiality of cash flows generated from these assets.

The Group assesses at each reporting date whether any indications exist that an asset may be impaired. When such an indication exists, the entity estimates the recoverable service amount of the asset. The recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use. The value in use is determined by using either the depreciated replacement cost, restoration cost or service unit approach, depending on the availability of data and the nature of the impairment.

If the carrying amount of a non-cash-generating asset exceeds its recoverable service amount, it is impaired. An impairment loss is recognised immediately in surplus or deficit.

The Group assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a non-cash-generating asset may no longer exist or may have decreased. If any such indication exists, the entity estimates the recoverable service amount of that asset and accounts for the reversal of impairment loss if necessary. The increase in carrying amount of an asset due to the reversal of impairment loss should not exceed what the asset’s original carrying value would have been if no impairment loss were recognised.

1.11 CONTRIBUTION FROM OWNERS

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

1.12 CONTINGENT ASSETS

Contingent assets are possible assets whose existence will be confirmed by the occurrence or non-occurrence of uncertain future events that are not wholly within the control of the Group. Contingent assets are not recognised, but they are disclosed when it is more likely than not that an inflow of benefits will occur. However, when the inflow of benefits is virtually certain an asset is recognised in the Group Annual Statement of Financial Position, because that asset is no longer considered to be contingent.

1.13 EMPLOYEE BENEFITS

Short-termemployeebenefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.





Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined contribution plans where the Group’s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.

Definedbenefitplans

Otherlong-termemployeebenefits

Other long-term employee benefits may include, for example:

• long-term compensated absences such as long service or sabbatical leave;

• other long service benefits;

• long-term disability benefits;

• bonus, incentive and performance related payments payable twelve months or more after the end of the reporting period which the employees render the related service;

• deferred compensation paid twelve months or more after the end of the reporting period in which it is earned.

Long service awards

Long service awards are provided to employees who achieve certain pre-determined milestones of service within the Group. The Group’s obligation under these plans is valued periodically and the corresponding liability is raised. Payments are set-off against the liability, including notional interest, resulting from the valuation by Management and are charged against the Group Annual Statement of Financial Performance as employee benefits upon valuation.

Gains and losses arising from the experience adjustments and changes in assumptions, is charged or credited to the Group Annual Statement of Financial Performance in the period that it occurs. These obligations are valued periodically by Management.

1.14 PROVISIONS

Provisions are recognised when:

• the Group has a present obligation as a result of a past event;

• It is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; and

• a reliable estimate can be made of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

1.15 REVENUE FROM NON-EXCHANGE TRANSACTION: GOVERNMENT GRANT

Government grants

Government grants are recognised in the period when they become receivable and credited to the Group Statement of Financial Performance. Funds received for capital development as conditional grants are recognised as deferred income and credited to the Group Statement of Financial Performance on a straight-line basis when the stipulations of the conditional grants are met.




Restrictions on government grants may result in such revenue being recognised on a time proportion basis. Where there is no restriction on the period, such revenue is recognised on receipt or when the Act becomes effective, whichever is earlier.

When government remit grants on a re-imbursement basis, revenue is recognised when the qualifying expense has been incurred and to the extent that any other restrictions have been complied with.

Revenue from non-exchange transactions

Revenue from donations received shall be measured at the amount of the increase in net assets which in this case will be the net proceeds received from the various donors; and

Revenue from special projects grant shall be measured at the amount of the increase in net assets which in this case will be the net proceeds received from the funders. If conditions are attached to the grant, a liability will be recognised and shall be the best estimate of the amount required to settle the present obligation at the reporting date. When a liability is subsequently reduced because a condition is satisfied the amount of the reduction in the liability will be recognised as revenue.

Assets in-kind

Assets in-kind are property, plant and equipment transferred to an entity in a non-exchange transaction, without charge, but may be subject to stipulations. Assets in-kind are recognised as revenue and property, plant and equipment:

• when it is probable that the future economic benefits or service potential will flow to the Group and the fair value of the assets can be measured reliably; and

• when the assets are received, or there is a binding arrangement to receive the goods. If assets in-kind are received without conditions attached, revenue is recognised immediately. If conditions are attached, a liability is recognised, which is reduced and revenue recognised as the conditions are satisfied.

On initial recognition, assets in-kind are measured at their fair value as at the date of acquisition, which may be ascertained by reference to an active market, or by appraisal

1.16 REVENUE FROM EXCHANGE TRANSACTIONS

Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.

An exchange transaction is one in which the entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange

Rendering of services

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

• the amount of revenue can be measured reliably.

• it is probable that the economic benefits or service potential associated with the transaction will flow to the entity.

• the stage of completion of the transaction at the reporting date can be measured reliably.

• the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable




• Accommodation income is recognised on a daily basis.

• Entrance fees are recognised on a daily basis and other tourist related activities are recognised upon commencement of the activity.

• Partnership income relates to employment projects that are administered by the Group but funded from external parties. i.e. Group – Environmental Monitors for PMU, ICMA – Komati river scientific programs are included in sundry income. These are recognised when accrued.

• Sundry income relates to once-off payments that are received for insurance claims, incidental rental income, nursery sales, wood sales etc. These are recognised when accrued.

• Sales relates to game sales, hunting packages and fishing, hunting permits.

• Management fees for managing special projects are recognised on a monthly basis, based on the services performed.

• Rent received is recorded on a daily basis or monthly in accordance with the substance of the relevant agreements.

• Income from concessions granted to operators to build, operate and transfer lodges and from rental of facilities to operators is recognised as it accrues over the period of the agreement.

Sale of goods and services

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits associated with the transaction will flow to the Group; and

• The costs incurred or to be incurred in respect of the transaction can be measured reliably

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates.

Interest is recognised, in the Group Statement of Financial Performance, using the effective interest rate method.

1.17 CAPITAL COMMITMENTS

Capital commitments are disclosed in respect of contracted amounts for which delivery by the contractor is outstanding at the accounting date, and for amounts which the Board’s approval has been obtained but not yet contracted for. Commitments are not recognised in the Group Statement of Financial Position as a liability or as an expenditure in the Group Statement of Financial Performance but are included in the disclosure notes 29.

1.18 PROJECT LIABILITIES

Projects arise as and when a new project is planned per the Group’s implementation plan. These projects are funded by External stakeholders and the projects funds are managed by the Group.

The cash payments made during the year relating to these projects are recognized as expenditure in the Group Statement of Financial Position when final authorisation for payments is effected on the system (by no later than 31 March of each year). Any unutilised amounts are recognised as payables in the Group Statement of Financial Position.




1.19 FRUITLESS AND WASTEFUL EXPENDITURE

Fruitless and wasteful expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the Group Statement of Financial Performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the Group Statement of Financial Performance.

1.20 IRREGULAR EXPENDITURE

Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including -

• this Act; or

• the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or

• any provincial legislation providing for procurement procedures in that provincial government.

Irregular expenditure that was incurred and identified during the current financial year is disclosed under note 28.

Irregular expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the value of the irregular expenditure incurred, unless it is impractical to determine, in which case reasons therefore must be provided in the notes.

Irregular expenditure receivables are measured at the amount that is expected to be recovered and are de-recognised when settled or written-off as irrecoverable.

Irregular expenditure must be removed from the balance of the irregular expenditure notes when it is either:

• condoned by the relevant authority if no official was found to be liable in law;

• recovered from an official liable in law;

• written-off if it’s irrecoverable from an official liable in law; or

• written-off if it’s not condoned and not recoverable.

1.21 CONTINGENT LIABILITIES

Contingent liabilities are possible obligations that arose from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within control of the entity; or a present obligation that arises from past events but is not recognised because:

• it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• the amount of the obligation cannot be measured with sufficient reliability.

1.22 BUDGET INFORMATION The Group is typically subject to budgetary limits in the form of appropriations or budget authorisations (or equivalent), which

is given effect through authorising legislation, appropriation or similar.

General purpose financial reporting by Group shall provide information on whether resources were obtained and used in accordance with the legally adopted budget.




The approved budget is prepared on an accrual basis and presented by programmes linked to performance outcome objectives.

The approved budget covers the fiscal period from 1 April 2017 to 31 March 2018.

1.23 RELATED PARTIES

The Group operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the provincial sphere of government are considered to be related parties.

Management are those persons responsible for planning, directing and controlling the activities of the Group, including those charged with the governance of the Group in accordance with legislation, in instances where they are required to perform such functions. This includes close family members who are considered to be those family members who may be expected to influence, or be influenced by, that Management in their dealings with the Group.

1.24 CHANGE IN ACCOUNTING POLICIES, ESTIMATES AND ERRORS

Change in estimate

A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of a period consumption of an asset, the results from the assessment of the present status of, and expected future benefits and obligations associated with assets and liabilities. Change in accounting estimate result from new information and new developments and are not correction of errors.

The effect of a change in accounting estimate shall be recognised prospectively by including it in surplus or deficit in:

• the period of the change, if the change affects that period only; or

• the period of the change and future periods, if the change affects both.

To the extent that a change in an accounting estimate gives rise to changes in assets and liabilities, or relates to an item of net assets, it shall be recognised by adjusting the carrying amount of the related asset, liability or item of net assets in the period of the change.

Prior period errors

Prior period errors are omissions from, and misstatements in, the Groups’ Annual Financial Statements for one or more prior periods arising from a failure to use or misuse of, reliable information that:

• was available when financial statements for those period were authorised for issue; and

• could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements.

A prior period error shall be corrected by retrospective restatement in the first set of the Group’s Annual Financial Statements authorised for issue after their discovery by:

• restating the comparative amounts for the prior period(s) presented in which the error occurred; or

• if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and net assets for the earliest prior period presented.

A prior period error shall be corrected by retrospective restatement except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the error.




When it is impracticable to determine the period-specific effects of the error on comparative information for one or more prior periods presented, the entity shall restate the opening balances of the assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable (which may be the current period).

When it is impracticable to determine the cumulative effect, at the beginning of the current period, the entity shall restate the comparative information to correct the error prospectively from the earliest date practicable.

Change in Accounting Policies

Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.

An entity shall change an accounting policy only if the change:

• is required by a standard of GRAP; or

• results in the Group Annual Financial Statements providing reliable and more relevant information about the effects of the transactions, other events or conditions on the Group’s Financial Position, Financial Performance or Cash Flows.

A change in accounting policy shall be applied retrospectively, except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the change.

When is it impracticable to determine the period-specific effects of changing an accounting policy on comparative information of one or more prior periods presented, the entity shall apply the new accounting policy to the carrying amounts of the assets and liabilities as at the beginning of the earliest period of which retrospective application is practicable, which may be the current period, and shall make a corresponding adjustment to the opening balance of each affected component of net assets for that period. When it is impracticable to determine the cumulative effect, at the beginning of the current period, of applying a new accounting policy to all prior periods, the entity shall adjust the comparative information to apply the new accounting policy prospectively from the earliest date practicable.

1.25 NEW STANDARDS AND INTERPRETATIONS

The standards and interpretations are effective 01 April 2017 and adopted by Group during the current year

STANDARD

GRAP 1 Presentation of Financial Statements

GRAP 2 Cash Flow Statements

GRAP 3 Accounting Policies, Changes in Accounting Estimates and Errors

GRAP 9 Revenue from Exchange Transactions

GRAP 10 Financial Reporting in Hyperinflationary Economies

GRAP 12 Inventories

GRAP 13 Leases

GRAP 14 Events After the Reporting Date

GRAP 17 Property Plant and Equipment

GRAP 19 Provisions, Contingent Liabilities and Contingent Assets

GRAP 18 Segment reporting




GRAP 21 Impairment of Non-cash-generating Assets

GRAP 23 Revenue from Non-exchange Transactions (Taxes and Transfers)

GRAP 24 Presentation of Budget Information in Financial Statements

GRAP 25 Employee Benefits

GRAP 26 Impairment of Cash-generating assets

GRAP 27 Agriculture

GRAP 103 Heritage Assets

GRAP 104 Financial Instruments

GRAP 105 Transfer of Functions Between Entities Under Common Control

GRAP 106 Transfer of Functions Between Entities Not Under Common Control

GRAP 107 Mergers

GRAP Standards approved but not yet effective

STANDARD

GRAP 20 Related Party Disclosures

GRAP 32 Service Concession Arrangements: Grantor

GRAP 34 Separate Financial Statements

GRAP 35 Consolidated Financial Statements

GRAP 36 Investments in Associates and Joint Ventures

GRAP 37 Joint Arrangements

GRAP 38 Disclosure of Interests in Other Entities

GRAP 108 Statutory Receivables

GRAP 109 Accounting by Principals and Agents

GRAP 110 Living and Non-living Resources




2. INVENTORIES Consumable stores 74 992 114 650

Fuel (Diesel, Petrol) 762 115 335 138

837 107 449 788

3. RECEIVABLES FROM EXCHANGE TRANSACTIONS Receivables from exchange transactions 8 673 412 13 099 600

Provision for impairment of trade receivables (2 981 363) (5 647 848)

5 692 049 7 451 752

The average credit period on trade receivables is 30 days. No interest is charged on outstanding balances of trade receivable accounts.

The majority of the Group’s accounts receivables originate from tender awarding processes. The inherent credit risk is mitigated by a credit verification process performed before awarding of future accounts.

The following receivables had balances outstanding that represented more than 5% of the total balance of outstanding receivable from exchange transactions:

31 March Percentage 31 March Percentage 2018 of total 2017 of total Account Rand (%) Rand (%)

Inzalo - - 3 882 184 30 Tintswalo Safari Lodge 1 578 907 18 692 848 5 CATHSSETA - - 918 699 7 CAWS 1 129 171 13 1 149 171 9 Honeyguide Tented Safari Camps 1 805 326 21 3 280 338 25

4 513 404 9 923 240

AGEING OF DEBTORS IS AS FOLLOWS: Balance at Balance at 31 March 2018 31 March 2017 Account Rand Rand

0 - 30 days 4 755 423 4 302 394 30 - 60 days 562 170 - 60 - 90 < days 159 231 137 497 90 - 120 days 215 486 234 152 > 120 days 2 657 286 7 567 031 Zithabiseni - 0-120 days 323 816 858 525

8 673 412 13 099 600


TO THE GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018

DISCLOSURE NOTES


RECONCILIATION OF PROVISION FOR IMPAIRMENT OF TRADE AND OTHER RECEIVABLES

Opening balance (5 647 848) (2 494 929) Provision for doutful debts 2 666 485 (3 152 919)

(2 981 363) (5 647 848)

In determining the recoverability of a trade receivable, the entity considers any change in the credit quality of the trade receivable from the date the credit was initially granted up to the reporting date. The receivable balances that constitute the prior year allowance for impairment losses have been partially collected in the current year, since these receivables are still in the process of being collected.

4. RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS Other receivables 143 203 331 206

Deposits 236 341 238 167 Prepaid expenses 521 363 4 480 424 SARS - PAYE - 320 916 Staff receivables 10 560 26 073

911 467 5 396 786

5. CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS CONSIST OF:

Cash on hand 12 074 14 190 Bank balances 43 403 018 28 608 250

Current assets 43 415 092 28 622 440

BANK BALANCES

MTPA Operational account 2 864 040 17 539 883 MTPA salaries account 9 883 485 908 937 Funds held on behalf of the projects* 30 221 478 9 494 584 Consolidated bank account - Trusts 231 919 233 174 Zithabiseni bank account 202 096 431 672

43 403 018 28 608 250

*Funds held on behalf of projects in several bank accounts.





6. PROPERTY, PLANT AND EQUIPMENT 2018 2017

Cost/ Accumulated Carrying Cost/ Accumulated Carrying Valuation depreciation value Valuation depreciation value

Land 4 487 213 - 4 487 213 4 487 213 - 4 487 213 Buildings 578 891 407 (248 445 288) 330 446 119 566 978 351 (235 112 058) 331 866 293 Large and small capital equipment 21 966 147 (16 823 392) 5 142 755 21 671 502 (14 727 893) 6 943 609 Furniture and fixtures 12 024 897 (8 911 797) 3 113 100 11 189 405 (8 226 024) 2 963 381 Motor vehicles 29 877 483 (25 865 154) 4 012 329 29 498 856 (22 986 597) 6 512 259 Computer equipment 9 184 512 (7 001 179) 2 183 333 8 851 057 (6 908 266) 1 942 791 Infrastructure 273 274 819 (100 066 948) 173 207 871 260 766 597 (89 357 237) 171 409 360 Office equipment 2 411 (2 407) 4 2 411 (2 407) 4 Computer equipment - Zithabiseni 167 134 (143 761) 23 373 162 750 (124 337) 38 413 Work in progress - - - 7 033 654 - 7 033 654

Total 929 876 023 (407 259 926) 522 616 097 910 641 796 (377 444 819) 533 196 977

RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT - 2018

Opening Disposals Assets Deprecia- Disposal balance Additions Cost Transfers in kind tion Accum dep Total

Land 4 487 213 - - - - - - 4 487 213 Buildings 331 866 293 286 372 (1 247 576) 8 343 715 4 530 545 (13 984 476) 651 246 330 446 119 Large and small capital equipment 6 943 609 326 247 (187 962) 129 299 40 000 (2 112 682) 155 539 5 294 050 Furniture and fixtures 2 963 381 177 722 (19 654) - 632 418 (811 655) 19 593 2 961 805 Motor vehicles 6 512 259 378 627 - - - (2 878 557) - 4 012 329 Computer equipment 1 942 791 1 123 792 (782 224) - - (873 968) 772 942 2 183 333 Office equipment 4 - - - - - - 4 Computer equipment - Zithabiseni 38 413 4 385 - - - (19 425) - 23 373 Infrastructure 171 409 360 1 088 305 - 9 526 986 1 824 260 (10 641 040) - 173 207 871 Work in progress 7 033 654 10 966 346 - (18 000 000) - - - -

533 196 977 14 351 796 (2 237 416) - 7 027 223 (31 321 803) 1 599 320 522 616 097





RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT - 2017 RESTATED

Opening Disposals Prior year Deprecia- Disposal balance Additions Cost Transfers correction tion Accum dep Total

Land 4 487 213 - - - - - - 4 487 213 Buildings 338 634 192 556 487 - 2 500 000 - (9 824 386) - 331 866 293 Large and small capital equipment 9 247 326 551 058 - - - (2 982 262) - 6 816 122 Furniture and fixtures 3 627 845 246 301 - - - (783 278) - 3 090 868 Motor vehicles 10 502 977 1 078 665 (746 757) - - (4 847 084) 524 458 6 512 259 Computer equipment 3 486 135 298 300 (102 225) - - (1 802 827) 63 408 1 942 791 Office equipment 4 - - - - - - 4 IT equipment 59 421 - - - - (21 008) - 38 413 Infrastructure 61 543 915 144 865 - 3 116 921 115 227 196 (8 623 537) - 171 409 360 Work in progress 4 406 661 8 243 911 - (5 616 918) - - - 7 033 654

435 995 689 11 119 587 (848 982) 3 115 227 196 (28 884 382) 587 866 533 196 977

DESCRIPTION OF LAND

Place ERF Rands

Head Office Portion 14 of the farm riverside 308 JT 3 505 433 Elukwatini ERF 27 Elukwatini- B Ext 1 981 780

Total 4 487 213

REVALUATIONS - BUILDINGS

The Group undertook an extensive exercise in March 2015 to identify and value the depreciated cost of the immovable assets and leaseholds improvements. The valuations were performed by the Group’s Management in consultation with an independent valuer, Mr Jannie Van Graan, the Managing Associate of Industrial and Mining Valuations Fixed Assets Register Services. The useful lives of the properties have been reviewed accordingly.

Fair Value estimations were ascertained by determining the Estimated Replacement Cost, based on internationally published building rates per measured surface area, applicable to Africa. A condition rating, based on physical observation, was applied to the Estimated Replacement Cost to calculate the Depreciated Replacement Cost used as the Net Replacement Value at year-end. Significant assumptions included in the valuation process relate to the very stagnant realty market, which resulted in the land values not being increased for the 2015 year.

The effective date of evaluation is 31 March 2015, valid for five years until 2019.





NET CARRYING AMOUNTS OF LEASED ASSETS

Computer equipment 11 928 16 673

DETAILS OF PROPERTIES

Farm no 62 KLIPDRIFT (JS) R25 Road, Groblersdal

TERMS AND CONDITIONS

- Last revalued value - 8 803 520 - Additions since purchase or valuation 49 391 480

58 195 000

7. INTANGIBLE ASSETS 2018 2017

Accumulated Accumulated amortisation amortisation and and Cost / accumulated Carrying Cost / accumulated Carrying Valuation impairment value Valuation impairmen value

Computer software 319 639 (106 546) 213 093 - - -

RECONCILIATION OF INTANGIBLE ASSETS - 2018

Opening balance Additions Amortisation Total

Computer software - 319 639 (106 546) 213 093

8. HERITAGE ASSETS In the prior year, the Group reviewed its accounting policy for land and a decision was taken to change the accounting policy for

conservation land from Property, Plant and Equipment (GRAP 17) to account for it as Heritage Assets under GRAP 103. Hence the below items which met the definition of Heritage Assets, were transferred from Property, Plant and Equipment (GRAP 17) to Heritage Assets (GRAP 103):

2018 2017

Accumulated Accumulated Cost / impairment Carrying Cost / impairment Carrying Valuation losses value Valuation losses value

Conservation areas 35 283 207 - 35 283 207 35 283 207 - 35 283 207









Name of the reserve Hectares Historical cost

Loskop Dam 22 891 26 866 932 Paardeplaats Nature Reserve 2 426 8 416 275

Totals - 35 283 207

HERITAGE ASSETS WHICH FAIR VALUES CANNOT BE RELIABLY MEASURED.

A significant value of the Group Heritage assets were obtained through non-exchange transactions from various state-owned entity. For Heritage assets obtained from non-exchange transactions the Group attempted to establish the value thereof using guidance from Directive 7 issued by the Accounting Standards Board. Due to the nature of the Group activities, the Group could not establish neither a fair value /deemed cost nor a replacement cost for its Heritage assets acquired from non-exchange transactions. For that reason, the Group Heritage assets acquired from non-exchange transactions could not be recognised in the Group Annual Financial Statements. However, information pertaining to such assets has been disclosed below.

The Group assesses at each reporting date whether there is any indication that the heritage assets may be impaired. No such indication existed at the end of the current financial reporting period.

Name of the Nature Reserve Size in Hectares

Cynthia Letty Nature Reserve 7 Ida Doyer Nature Reserve 32 Tinie Louw Nature Reserve 10 Thorncroft Nature Reserve 17 Swadini Nature Resort 100 Vertroosting Nature Reserve 162 Mangwazi Nature Reserve 419 Sterkspruit 2 Nature Reserve 478 Witbad Nature Reserve 565 Mahushe Shongwe Nature Reserve 1 140 Sterkspruit 1 Nature Reserve 1 133 Little Joker – Formosa Nature Reserve 1 273 SS Skhosana Nature Reserve 1 816 Ohrigstad Dam Nature Reserve 2 525 Barberton Phase 1 Nature Reserve 2 569 Nooitgedacht Dam Nature Reserve 2 986 Barberton Phase 2 Nature Reserve 5 415





Verloren Vallei Nature Reserve 5 989 Andover Nature Reserve 6 816 Bushbuck Ridge Nature Reserve 7 094 Mthethomusha Nature Reserve 7 979 Mdala Nature Reserve 8 165 Mabusa Nature Reserve 10 006 Mkhombo Nature Reserve 11 224 Barberton Phase 3 Nature Reserve 19 558 Manyeleti Nature Reserve 22 563 Blyde River Canyon Nature Reserve 27 290 Songimvelo Nature Reserve 46 320

Total 193 651

9. BIOLOGICAL ASSETS NON - FINANCIAL INFORMATION: QUANTITIES

The Group performs a game census every three years, on animals that can easily be counted from the air and for specific sections of nature reserves. The Group does not perform counts on small animals, insects, birds, and freshwater biodiversity. Below are results of the census carried out during the period 2016/2017, the next game census will be conducted in 2018/2019.

Name Estimated Head Count

Blue wildebeest 685 Buffalo 436 Bushbuck 81 Duiker 258 Giraffe 114 Impala 1239 Kudu 528 Nyala 227 Warthog 72 Waterbuck 196 White Rhino 44 Zebra 813 Elephant 34 Steenbok 9 Ostrich 3 Klipspringer 13 Mountain reedbuck 8 Red hartebeest 46 Hippo 39 Eland 113 Oribi 23 Reedbuck common 4 Tsessebe 100





The Group’s main mandate is to provide for the sustainable management and promotion of tourism and nature conservation in the Mpumalanga Province and to ensure the sustainable utilisation of natural resources. As part of this mandate, the Group is responsible for biodiversity conservation in defined protected areas and the biological assets consists of a large variety of species.

The Group does not intervene in eco-systems. The nature reserves are home to different species of animals where all inhabitants of an eco-system co-exist without human interference.

Biological assets consist of wild animals managed for conservation purposes. This management is however not agricultural activity as the main objective is not to harvest (or produce additional biological assets for harvest) but manage and maintain a specific environment as a whole. Hence such assets cannot be accounted for using the principles of GRAP 27. Hence the Group has accounted for these assets in accordance with the principles and interpretations of GRAP 17.

Based on the Framework for the Preparation and Presentation of Financial Statements and GRAP 17, these assets meet the definition of an asset but does not meet the recognition criteria relating to reliable measurement. MTPA cannot reliable measure the values of biological assets as they are not of a nature that can be easily counted with a level of certainty, valuations are not easily available as the assets are kept for conservation purposes, and the parks cannot keep up with births and deaths and migrations of wildlife. As the biological assets cannot be counted, it is impossible to calculate gains and losses in biological assets during the year.

The Group does not recognise its biodiversity assets as it does not meet the recognition criteria, but only discloses the game census results as additional disclosure for the benefit of users to the Group Annual Financial Statements.

10. PAYABLES FROM EXCHANGE TRANSACTIONS Trade payables from exchange transactions 10 366 867 4 872 513

Salary control accounts 4 148 840 5 360 215 Other payables - accruals 5 673 628 15 980 495

20 189 335 26 213 223

10.1 LONG SERVICE AWARDS

Opening balance 3 512 898 3 502 341 Increase in long service awards 933 732 446 132 Short term portion long service awards provision (319 200) (435 575)

4 127 430 3 512 898

The provision relates to a long term portion of amounts due to employees over five years and above from the next financial year. The obligation will be settled upon completion of each five year period of employment. The Group assumes a staff loss of 5% each year. (2017: 5%) The average future rate increase is 4%. (2017: 6.5%)





11. PROVISIONS RECONCILIATION OF PROVISION - 2018

Opening Balance Movement for the year Total


RECONCILIATION OF PROVISION - 2017

Opening Balance Movement for the year Total


The annual leave pay accrual consist of the valued leave as at reporting date, which accrues in terms of the Basic Conditions of Employment Act. The Group allows its employees to accumulate annual leave to a maximum of one year’s allocation of 30 days annual leave per employee. The Group remains liable to pay out an amount equal to the leave balance at the current rate of remuneration.

12. PROJECTS LIABILITIES Community Benefit Sharing (CPA)@ 484 250 947 750

Mzinti Conservation Fund@ 146 389 137 273 Loskop Dam DEA* 954 585 880 377 Mahushe DEA* 2 015 501 4 280 298 Mthethomusha DEA* 2 113 042 2 961 223 Songimvelo DEA* 7 285 285 158 399 Tourism Monitors** 12 016 189 -

25 015 241 9 365 799

@Relates to co-management with claimant communities where settlement and co-management agreements have been concluded.

*Relates to projects funded by external stakeholders (Department of Environmental Affairs - DEA) and the project funds are managed by the Group within the project management unit. Projects arise as and when a new project is approved per infrastructure assessment report.

**Funds from National Department of Tourism for tourism monitors learnerships.

13. CONTRIBUTION FROM OWNERS Closing balances from Mpumalanga Tourism Authority

and Mpumalanga Parks Board 70 197 729 70 197 729





14. GROUP ENTITIES Name of company Name of company

Name of company interest 2018 interest 2017

The Nelspruit Development Trust 100.00% 100.00% The Nelspruit Financing Trust 100.00% 100.00%

Although the entity does not hold any ownership interests in the above named trusts, it receives substantially all of the benefits related to their operations and net assets based on the terms of agreements under which these entities were established. The MTPA also controls these entities. Consequently, the entity consolidates these entities.

In the current year, Zithabiseni Resort and Conference Centre was also consolidated.

15. REVENUE REVENUE FROM NON-EXCHANGE TRANSACTIONS

Grant received 329 028 000 304 387 100 Conditional grant - Expanded Public Works Programme (EPWP) 2 605 000 2 911 000 Zithabiseni - grant received 22 512 000 21 510 000 Infrastructure upgrade - 18 000 000 Assets donation in kind 7 027 224 - Other grants (SANBI and CATHSETA) 1 983 919 1 800 471

363 156 143 348 608 571

REVENUE FROM EXCHANGE TRANSACTIONS

Sales of goods 7 211 440 4 952 639 Rendering of services 35 444 383 26 882 106

42 655 823 31 834 745

16. COST OF SALES SALE OF GOODS

Cost of goods sold 948 255 942 327 Cost of services 6 500 26 860

954 755 969 187





17. OPERATING DEFICIT The following have been (charged) / credited to the Group Statement of Financial Performance in arriving at the operating (deficit)

surplus.

OTHER INCOME

Concession fees 7 328 611 6 147 709 Rental income 190 269 152 926 Recoveries 261 659 251 965 Hunting wildlife sales 2 189 193 2 241 105 Sundry income* 13 867 737 7 974 816

23 837 469 16 768 521

* Included in sundry income is R 5.1m (2017: R 4.3m) of joint project conservation income; (Department of Science and Technology (DST) R500k (2017: R500k); SANPARKS R4.5m (2017: R3.7m); ICMA R179k (2017: R153k); DEA implementers’ fee R1.4m (2017: Rnil) ; and Insurance refund R2.7m (2017: R1.1m).

18. OPERATING EXPENSES Advertisement (181 719) (111 802)

Animal feed (48 000) (86 108) Auditor’s remuneration - external audit fees (3 791 651) (3 583 074) Auditor’s remuneration - internal audit fees (845 942) (514 008) Bank charges (461 820) (509 924) Board emoluments and travelling allowance (1 613 368) (1 788 716) Catering expenses (190 653) (84 721) Chemicals and vetinary drugs (8 645) (59 000) Cleaning and consumables (842 755) (886 919) Courier and delivery costs (1 220) (9 244) Depreciation on property, plant and equipment (28 512 676) (25 825 859) Donations - (424 522) Employee costs (272 123 769) (258 241 479) Loss on disposal of assets (637 961) (271 303) Gas bottle refill (117 243) (90 365) Hire - helicopter (113 228) (53 940) HR related costs (18 275 923) (18 901 814) Impairment (4 407 840) - Insurance (1 897 966) (1 812 793) License and registrations (1 706 766) (1 448 595) Legal fees (5 394 048) (1 907 999) Motor expenses - fuel & oil (2 995 057) (2 679 077) Municipal - electricity (5 525 917) (5 364 916) Operating lease rentals (3 117 515) (2 708 568) Pastel evolution and VIP systems - (174 067) Printing and stationery (568 703) (559 405)





Programme cost (27 887 712) (19 518 635) Provision for bad debts - (2 367 688) Rates and taxes (1 199 048) (387 686) Repairs and maintenance (3 616 337) (1 871 117) Expenditure on behalf of partnerships (DST; Goldview; ICMA; SANBI; and Cathsseta) (12 199 835) (13 560 300) Security (7 097 763) (6 235 820) Small tools (52 146) (34 307) Subscriptions (2 546 536) (1 939 766) Telephone costs (2 536 873) (2 058 190) Travel - accommodation (1 838 716) (1 281 373) Zithabiseni operating expenses (28 627 359) (29 345 232)

(440 982 710) (406 698 332)

19. INTEREST INCOME Interest received 1 178 468 932 054

20. INTEREST EXPENSE Interest expense 988 189 289 983

21. CASH GENERATED FROM OPERATIONS Deficit (12 097 752) (9 813 610)

ADJUSTMENTS FOR: Depreciation and amortisation 31 520 917 28 862 941 Loss on disposal of assets 637 961 261 115 Assets donation (7 027 224) - Provision for bad debts - 2 367 688 Provision for short term service awards (116 375) - Effect of 2016 non consolidation of Zithabiseni - 3 117 805 Provision for long term service awards 614 532 47 607 Movement in provisions 470 129 - Correction of prior period error - (6 977 966) Prior period error - Zithabiseni 71 434 - Non-cash items - 273 623

CHANGES IN WORKING CAPITAL:

Inventories (387 319) 85 127 Receivables from exchange transactions 1 667 261 3 759 669 Other receivables from non-exchange transactions 4 485 319 (4 230 751) Payables from exchange transactions (6 023 877) 3 109 079

13 815 006 20 862 327





22. CONTINGENT LIABILITIES INZALO / BOE (MPAKENI RESERVE ACCOUNT)

There is a civil suit against the Group by Inzalo for the cancellation of a head lease at Mthethomusha Nature Reserve (Bongani Lodge). The legal costs for this claim are not known at this stage.

FRED DANIEL CASE A: CASE NO. 34502/2010 IN THE NORTH HIGH COURT IN PRETORIA

This court case which is fully cited as Grand Valley Estates and 11 others versus Mpumalanga Tourism and Parks Agency & 24 others: Case No: 34502/2010 has been instituted by one business man, namely Mr. Frederick Coenraad Daniel & 11 others, against various government bodies in the North Gauteng High Court in Pretoria in 2010.

The case is being defended through the Office of the State Attorney in Pretoria. This court case involves 12 Plaintiffs (parties instituting the action) which are mostly companies associated with Mr. Daniels and a few of his individual fellow business associates. It has 25 Defendants which include various National and Provincial government departments, state entities, state officials and individuals. The National department cited in the matter is Environmental Affairs; Provincial department cited is Agriculture and Land Affairs; and state entities cited include the Group Regional Land Claims Commissioner: Mpumalanga Province and National Commissioner of South African Police. Most state officials and individuals are sued herein in vicarious liability as at all times they were acting within the course and scope of their duties in relation to the allegations made against them.

The cause of action set out in the issued summons is broadly alleged to be unlawful actions and numerous breaches of legal duties by Defendants which allegedly resulted in Plaintiffs suffering damages mainly through loss of profit and prospective profit, among others.

The total amount sued for as contained in the issued summons is currently in the sum of R 1 094 330 740. 00 which is jointly and severally payable by the Defendants to the Plaintiffs. The amount computed to be payable by the Group as an entity is the sum of about R740 million as set out in the issued summons.

This case is pending before the court with pleadings continuing. There is no trial date yet. The issue of amendments and the raised exceptions that were pending for the previous years has been ironed out between the parties with the Defendants eventually filing their plea towards the end of last year.

The incurred legal fees with this matter is thus far about R7.8 million. The future payable fees are not known but would be substantial given the nature of this matter.

GAYE EVANGELINE CORBETT & TINTSWALO SAFARI LODGES (PTY) LTD VERSUS FRANCOIS KRIGE & GROUP: CASE NO: 12833/17: HIGH COURT: GAUTENG DIVISION: PRETORIA

This is the High court case which has been instituted by the Plaintiffs, namely Director of Tintswalo (Gaye) together with Tintswalo Safari Lodges against the Defendants, namely Mr Frans Krige an employee of the Group sued in his official capacity herein and the Group action has been instituted in February 2017.





This action is for the claim of damages in the sum of R2 million for the alleged defamation and injury to the reputation of the plaintiffs. The cause of action in this case emanates from the exchange of emails between the parties and the utterances made by Mr Krige in a telephone conversation he had with the Director of Tintswalo in February 2017.

The Group is defending this action through its appointed legal representatives who have advised the Group to defend the case as there are prospects of success in defending it.

Pleadings are underway. There is no trial date yet.

Legal fees incurred thus far are about R500 000. The future legal fees are unknown.

There is also no provision made yet in respect of the claim itself as the matter is at an intermediate stage with no final court determination made.

23. RELATED PARTIES RELATED PARTY BALANCES

Identity of related parties

The Group was established by the Mpumalanga Provincial Government, to promote Mpumalanga as a tourism destination in the local and international markets, as well as, for biodiversity conservation. The Group reports directly to the Department of Economic Development and Tourism (DEDT).

Nelspruit Development Trust and Nelspruit Financing Trust are controlled entities as the majority of the trustees are former Group board members, there are no related party transactions.

The Executive Council, at its meeting of 23 August 2015, resolved to transfer the Zithabiseni Resort and Conference Centre to the Group as a managing authority for the resort. The Group resumed responsibilities as a managing Authority effective 01 April 2016. Further to this effect, the Executive Council approved the option, which promotes joint ownership of the Resort by the State and the Community, but managed by an independent operator (to be appointed) with defined state and community benefits.

Executive Management and Board Members (refer to note 20) are also considered to be related parties to the Group. The Executive management committee consist of:

Chief Executive Officer Mr. Nobunga BJ Chief Financial Officer Ms. Thrush H (Seconded 01 July 2017 to date) Acting Chief Financial Officer Mr. Mathye S Acting Head of Corporate Mr. Lubanga T (Acting April 2017) Acting Head of Corporate Ms. Bulter IF (May 2017 to 31 July 2017) Acting Head of Corporate Ms. Selamolela J (Acting August 2017 to 31 January 2018) Head Corporate Service Mr. Mahlangu AN (Appointed 01 February 2018) Head Biodiversity Conservation Mr. Sibiya VA Head Tourism Mr. Mthethwa X Company Secretary Ms. Hlahane P






Chief Executive Officer - - 2 088 032 100 714 2 188 746 Chief Operating Officer* - - 743 584 - 743 584 Acting Chief Financial Officer - - 948 724 3 837 952 561 Chief Financial Officer# - - 332 297 - 332 297 Acting Chief Head of Corporate@ - 216 856 - - 216 856 Head Corporate Services** - - 213 923 4 929 218 852 Head Biodiversity Conservation 31 361 32 124 1 377 397 128 004 1 568 886 Head Tourism 31 361 - 1 377 276 78 327 1 486 964 Company Secretary - - 1 170 107 21 523 1 191 630

62 722 248 980 8 251 340 337 334 8 900 376

*Contract terminated 31 July 2017 **Appointed 01 February 2018 @Mr. Lubanga T (acting April 2017); Ms. Bulter IF (Acting May to July 2017); and Ms Selamolela J (Acting August to 31 January 2018) #Chief Financial Officer was seconded to DEDT from 01 July 2017 to date

RELATED PARTY TRANSACTIONS

Grant received from DEDT 329 028 000 304 387 100 Zithabiseni - Grant received from DEDT 22 512 000 21 510 000 Infrastructure upgrade - 18 000 000 Conditional grant - Expanded Public Works Programme (EPWP) 2 605 000 2 911 000 Zithabiseni - Transfer (22 512 000) (21 510 000)

331 633 000 325 298 100

24. BOARD MEMBERS AND EXECUTIVE MANAGEMENT EMOLUMENTS BOARD MEMBERS


Mr. Nzima TJ ( Chairperson) 12 000 310 077 71 920 393 997 Ms. Shabangu-Mndawe NR (Deputy Chairperson) 9 000 136 005 22 392 167 397 Ms. Mzuzu NB 3 000 64 921 2 986 70 907 Ms. Nkambule TB 3 000 66 155 15 361 84 516 Mr. Gololo CL 3 000 77 553 14 645 95 198 Mr. Mthombeni SG 3 000 84 412 81 118 168 530 Ms. Makhathini SFS 3 000 48 822 7 887 59 709 Ms. Sekhitla JS 3 000 104 909 23 674 131 583





Dr. Magome DT 6 000 70 731 37 582 114 313 Mr. Keetse TF 6 000 114 059 41 262 161 321 Ms. Maseko M - 13 604 852 14 456 Dr. Venter F - 4 609 1 183 5 792

51 000 1 095 857 320 862 1 467 719


Mr. Nzima TJ ( Chairperson) 12 000 291 107 62 175 365 282 Ms. Shabangu-Mndawe NR (Deputy Chairperson) 8 250 177 736 8 489 194 475 Ms. Mzuzu NB 2 250 90 565 2 278 95 093 Ms. Nkambule TB 2 250 77 117 3 995 83 362 Mr. Gololo CL 2 250 69 055 7 187 78 492 Ms. Masekaomeng MS (nee’ Nkgadima) 2 250 23 673 13 317 39 240 Mr. Mthombeni SG 2 250 117 667 69 582 189 499 Ms. Makhathini SFS 2 250 79 232 4 504 85 986 Ms. Sekhitla JS 2 250 89 569 2 360 94 179 Dr. Magome DT 6 000 109 520 51 213 166 733 Mr. Keetse TF 6 000 88 729 30 634 125 363

48 000 1 213 970 255 734 1 517 704



Ms. Mvulane P (Chairperson) 6 000 66 823 3 400 76 223 Mr. Mthembu S 3 000 54 936 2 428 60 364 Mr. Zakwe M - 10 026 995 11 021

9 000 131 785 6 823 147 608


Ms. Mvulane P (Chairperson) 4 000 62 685 625 67 310 Ms. Mtebele N 2 000 52 676 1 717 56 393 Ms. Mawelele TE 2 250 4 753 239 7 242 Mr. Mthembu S 2 250 49 550 914 52 714

10 500 169 664 3 495 183 659

2016 2015 Figures in Rand R R




SUMMARY

Total Board Emoluments Total board emoluments 1 467 719 1 517 704 Total Audit and Risk Committee remuneration 140 939 183 659 Travel and accommodation 847 952 1 052 150

2 456 610 2 753 513

EXECUTIVE MANAGEMENT COMMITTEE REMUNERATION


Chief Executive Officer - - 2 088 032 100 714 2 188 746 Chief Operating Officer* - - 743 584 - 743 584 Acting Chief Financial Officer - - 948 724 3 837 952 561 Chief Financial Officer#- - 332 297 - 332 297 Acting Chief Head of Corporate@ - 216 856 - - 216 856 Head Corporate Services**- - 213 923 4 929 218 852 Head Biodiversity Conservation 31 361 32 124 1 377 397 128 004 1 568 886 Head Tourism 31 361 - 1 377 276 78 327 1 486 964 Company Secretary - - 1 170 107 21 523 1 191 630

62 722 248 980 8 251 340 337 334 8 900 376

*Contract terminated 31 July 2017 **Appointed 01 February 2018 @Mr. Lubanga T (acting April 2017); Ms. Bulter IF (Acting May to July 2017); and Ms Selamolela J (Acting August to 31 January 2018) #Chief Financial Officer was seconded to DEDT from 01 July 2017 to date.

Acting Travel and 31 March 2017 Allowance Salary Subsistence Total

Acting Chief Executive Officer 383 673 - - 383 673 Chief Operating Officer - 1 681 161 - 1 681 161 Chief Financial Officer*** - 1 561 732 - 1 561 732 Consultant in Finance@ - 568 854 - 568 854 Acting Chief Financial Officer@@ - 634 738 - 634 738 Head Biodiversity Conservation - 1 338 890 98 604 1 437 494 Head Tourism - 1 335 820 46 491 1 382 311 Company Secretary - 1 111 301 3 806 1 115 107

383 673 8 232 496 148 901 8 765 070






@ Acting from 01 April 2016 to 31 July 2016 @@ Acting from 11 August 2016 to date. ***CFO labour dispute with Agency was concluded in January 2017 with the CFO successful in her appeal. Currently, engagements are taking place to have her seconded, possibly, to another government department.

25. RISK MANAGEMENT FINANCIAL RISK MANAGEMENT

The Group’s activities expose itself to a variety of financial risks: market risk (including, interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group has an approved risk management framework and has implemented a risk management register to mitigate identified risks.

The Group’s overall risk management program focusses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Group’s financial performance. Risk management is carried out under policies approved by the Accounting Authority. The Accounting Authority provides principles for overall risk management and policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk and investment.

LIQUIDITY RISK

The Group is exposed to liquidity risk as a result of the funds available to cover future commitments. The Group manages liquidity risk through an ongoing review of future commitments. The Group manages its funds conservatively by maintaining a comfortable level of cash and cash equivalents in order to meet continuous operational need. Cash flow forecasts are prepared and are monitored.

The table below analyses the Group’s financial liabilities into relevant maturity groups based on the remaining period at the date of the Group Statement of Financial Position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.









MARKET RISK

Market risk is the risk that changes in certain market prices, such as interest rates, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

INTEREST RISK

As the Group has no significant variable interest-bearing assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates.

CREDIT RISK

The Group is exposed to credit risk on financial assets, mainly attributable to cash deposits, cash equivalents and trade debtors.

The financial assets carried at cost exposes the entity to credit risk. The values of the maximum exposure to credit risk are as follows for each class of financial asset at cost.

FINANCIAL ASSETS EXPOSED TO CREDIT RISK AT YEAR END WERE AS FOLLOWS:

Receivable from exchange transactions 8 673 412 13 099 600 Cash and cash equivalents 43 415 092 28 622 440

AGEING OF DEBTORS AT THE REPORTING DATE:

Balance at Balance at 31 March 2018 31 March 2017 Account Rand Impairment Rand

0 - 30 days 4 755 423 - 4 302 394 30 - 60 days 562 170 - - 60 - 90 < days 159 231 - 137 497 90 - 120 days 215 486 - 234 152 > 120 days 2 657 286 (2 872 772) 7 567 031 Zithabiseni - 0-120 days 323 816 (108 591) 858 525

8 673 412 (2 981 363) 13 099 600

CONCENTRATION OF CREDIT RISK

Potential concentrations of credit risk consist mainly of short term cash, cash equivalent investments and trade debtors.

The Group limits its counter party exposure from its money market investment operations by only dealing with well established financial institutions of high quality standing. The credit exposure to any one counter party is managed by setting transaction/exposure limits, which are reviewed annually.




WATERBUCK

26. FRUITLESS AND WASTEFUL EXPENDITURE Opening balance 2 114 697 547 611

Interest expense - on outstanding accounts 731 5 354 CFO’s salary* 332 297 1 561 732 Penalty fee for no show 5 950 - SARS - penalties and interest** 320 916 -

2 774 591 2 114 697

*This is due to special leave given to the incumbent CFO, while an acting CFO holds the same position. **The amount of R 320 916 was the amount withdrawn by SARS, due to penalties and interest charged on EMP501 re-submission in 2010.

27. COMMITMENTS UNDER OPERATING LEASES The Group rents various copiers, facsimile, machines and laser printers from Nashua Lowveld (Nashua) as well as an administrative

building from Primkop Airport Management (Pty) Ltd. Contingent rental relates to cartridge costs for copiers.

Minimum lease payments under operating leases recognised as an expense during the year 1 823 511 1 752 657 Contingent rental 1 334 465 921 861

OPERATING LEASES - OFFICE RENTAL AND EQUIPMENT

- payable within 1 year 1 077 366 2 036 956 - payable between 2 and 5 years - 791 232

1 077 366 2 828 188

None of the trade and other receivables have been pledged as security for liabilities or contingent liabilities.

There were no defaults or breaches of the contractual terms of the leases during the financial year.

28. IRREGULAR EXPENDITURE Opening balance* 40 934 601 35 957 190

Add: Irregular Expenditure - current year 6 582 044 4 977 411 Add: Irregular Expenditure - 2016/2017 138 728 -

47 655 373 40 934 601





ANALYSIS OF IRREGULAR EXPENDITURE AWAITING CONDONATION PER AGE CLASSIFICATION

Current year 47 655 373 35 957 190

DETAILS OF IRREGULAR EXPENDITURE IN THE CURRENT YEAR Due to SCM non-compliance 733 329 1 982 473 Service rendered without a purchase order 226 307 90 875 Service rendered without an SLA 717 059 752 399 SCM procurement process not followed 2 747 129 11 308 Incorrect preferential point system used 1 894 198 - Contracts on a month to month 385 950 2 140 357 Expenditure exceeded contractual value 16 800 -

6 720 772 4 977 412

*Irregular expenditure for prior years was submitted to National Treasury for condonement.

29. COMMITMENTS UNDER SERVICE LEVEL AGREEMENTS CONTRACTS AWARDED

ADT Security 9 667 223 126 Bothile Security 4 823 545 8 083 145 Bunhlebentfutfuko - 2 050 884 Deloitte and Touch - 86 209 Delta Consulting 449 921 2 496 749 Fast net pro-mpu003P 5 876 9 463 Fidelity Cash Solutions (Pty) Ltd 17 064 93 024 Global glo 277 473 437 276 GS Fencing and Construction 1 978 422 - Hlaj Security 1 998 054 3 888 189 Honeycomb Solution - 74 174 Kgotle Water 221 410 345 970 Kunene Makopo /SHA Underwriters 2 947 550 2 000 000 Lerandzu Trading - 766 821 Library Specialists 184 270 - Marsel - IT - 34 200 Metrofile 83 494 183 212 Muga T/A 3D design - 902 578 Multichoice 5 854 18 504 Nelspruit Airport Operating - 30 055 Newsclip 120 138 200 154 Pasqa Consulting - 531 169






Paygate 24 650 28 002 Phepha MV 2 904 478 4 860 238 Prosperity Link 110 979 164 910 Prospero Digital 755 126 1 419 300 Real Travel and Tourism systems CC 33 438 248 100 Selectra Investments 24 t/a Omega data - 69 540 Sibongile Thembisile Florence 5 015 405 3 501 098 Siboyiye Trading - 2 867 297 Sita (Pty) Ltd - 183 734 Sita Gov Tech - 1 337 915 Sizampilo - 5 680 092 SizweNtsalubaGobodo - 94 023 Softline Pastel - 98 645 Softline Sage VIP - 220 654 Sunday Kit Uniform 3 373 707 4 800 000 The Document Warehouse - 11 004 Vodacom 1 737 145 2 511 831 Vuthani Bafazi - 65 040

27 077 666 50 616 325

CONTRACTS AWARDED MONTH TO MONTH

Month to month contract 2 967 59 563

AUTHORISED OPERATIONAL EXPENDITURE

Approved and Contracted 27 077 666 50 616 325

30. RETIREMENT BENEFIT OBLIGATIONS DEFINED CONTRIBUTION PLAN

The Group is a participating employer in the Government Employees Pension Fund (GEPF). The Group became a participative employer in 2006 with the inception of the Group as a result of employees that were transferred from Government departments, i.e. DALA and Limpopo Province to the Group. The employer’s contribution paid is 13% as this was the percentage employer contribution that was paid by these Government departments upon transfer of these employees to the Group.


Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined contribution plans where the Group’s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.




The Group accounts for this defined benefit state plan as a defined contribution plan, as there is no consistent and reliable basis for allocating the obligation, plan assets and costs to the individual employers to actuarial risks associated with the current and former employees of other employers participating in the plan.

MTPA GEPF Fund 6 308 342 6 204 728

31. GOING CONCERN We draw attention to the fact that at 31 March 2018 the Group had a net asset value of R 547 960 094 (Restated 2017: R 559 986 411)

and that the Group’s current liabilities exceed its current assets by R 6 024 873 (Restated 2017: R 4 980 599), the current liabilities includes a leave provision of R11 356 897 (2017: R10 886 768). This provision will not strain the cash flow requirements of the entity due to the leave policy that does not allow voluntary encashment of leave. The board after having reviewed the projected cash flows for the foreseeable future and Management’s assessment of Group’s ability to operate as a going concern, has a reasonable expectation that the Group have adequate resources to continue its operations as a going concern for the foreseeable future.

32. PRIOR PERIOD ERRORS In 2017 there were following prior period errors:

• Concession fees of African Ivory Route, Pungwe and Inzalo was not accounted for.

• The legal fee expense and accrual was overstated for the Department of Justice.

• Work in progress was incorrectly classified as repairs and maintenance.

• The useful lives of certain assets were not reassessed.

• Certain assets had no deemed costs or incorrect costs and accumulated depreciation

• Revenue recorded in the incorrect accounting period

• Board travelling expenses was incorrectly classified as Travel - accommodation

• Leave accrual was incorrectly accounted for with regards to forfeited leave

The comparative of 2017 have been restated.

The effect of the restatement on the Group Financial Statement is summarised below:






Increase in other income - concession fees (African Ivory Route) - (162 000) Increase in other income - concession fees (Inzalo) - (1 138 800) Increase in other income - concession fees (Pungwe) - (330 480) Decrease in operating expenses - legal fees - (200 000) Decrease in operating expenses - repairs and maintenance - (270 380) Decrease in operating expenses - depreciation - (3 398 376) Increase in revenue from exchange transactions - (117 400) Increase in operating expenses - Board emoluments and travelling allowance - 964 797 Decrease in operating expenses - Travel - accommodation - (964 797) Decrease in operating expenses - employee costs - (4 041 133)

- (9 658 569)


Increase in receivables from exchange transactions - 3 262 560 Decrease in payables from exchange transactions - 200 000 Increase in accummulated surplus - (79 283 359) Decrease in property, plant and equipment - Buildings - (11 904 730) Increase in property, plant and equipment - Large and small capital equipment - 2 031 217 Increase in property, plant and equipment - Furniture and fixtures - 1 871 336 Increase in property, plant and equipment - Motor vehicles - 1 812 417 Increase in property, plant and equipment - Computer equipment - 420 750 Decrease in provision for leave accrual - 4 041 133 Increase in property, plant and equipment - work in progress - 270 380 Increase in property, plant and equipment - infrastructure assets - 86 819 465 Increase in receivables from exchange transactions - 117 400

- 9 658 569

32.1 PRIOR PERIOD ERRORS - ZITHABISENI

Accounts receivable valued at R 3 704 were as a result of an invoice duplication in the prior years. Accounts payables to the value of R 75 139 owed to the municipality were as a result of an account that does not belong to the reporting entity (Zithabiseni resort)

Statementoffinancialposition-Zithabiseni

Account receivable (MTPA) (3 705) Accounts payable ( Tembisile Hani) 75 139

71 434






REVENUE Sale of goods 7 211 440 4 952 639 Rendering of services 35 444 383 26 882 106 Concession fees 7 328 611 6 147 709 Rental income 190 269 152 926 Recoveries 261 660 251 965 Hunting wildlife sales 2 189 193 2 241 105 Sundry income 13 867 736 7 974 817 Interest received 1 178 468 932 054 Government grants 15 331 633 000 307 298 100 Conditional grant (EPWP, Zithabiseni and Infrastructure) 31 523 143 41 310 471

Total revenue 430 827 903 398 143 892

EXPENDITURE

Personnel (292 606 177) (278 239 105) Depreciation and amortisation (31 520 917) (28 862 941) Finance costs 20 (988 189) (289 983) Bad debts written off (69 588) (2 367 688) Collection costs (35 527) - Repairs and maintenance (3 791 405) (2 004 633) General Expenses 18 (113 913 852) (96 193 152)

Total expenditure (442 925 655) (407 957 502)


DETAILED INCOME STATEMENT

GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018


Samora Machel DriveHall’s Gateway, MataffinMbombela, 1200

Private Bag X11338 Mbombela, 1200

Tel: +27 13 759 5300 / 01Fax: +27 13 755 3928Reservations: +27 13 759 5432Email: [email protected]

PR 398/2018ISBN: 978-0-621-46766-6

Title of Publication:Mpumalanga Tourism & Parks Agency Annual report 2017/2018

Cover picture Makhonjwa Mountains

mpumalanga tourism and parks agency page annual report ......mpumalanga tourism and parks agency...

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