GAUTENG DEPARTMENT OF ECONOMIC DEVELOPMENT ANNUAL REPORT

Transcription

1 GAUTENG DEPARTMENT OF ECONOMIC DEVELOPMENT ANNUAL REPORT

2 2 Gauteng Department of Economic Development Annual Report 2016/2017

3 Gauteng Department of Economic Development Annual Report 2016/2017 3

4 contents PART A: GENERAL INFORMATIon 5 1. DEPARTMENT GENERAL INFORMATIon 6 2. LIST OF ABBREVIATIONS/ACRONYMs 7 3. FOREWORD BY THE MEc 8 4. REPORT OF THE ACCOUNTING OFFICER STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORt STRATEGIC OVERVIEW Vision Mission Values LEGISLATIVE AND OTHER MANDATEs ORGANISATIONAL STRUCTURE ENTITIES REPORTING TO THE MEc 20 PART B: PERFORMANCE INFORMATIon AUDITOR GENERAL S REPORT: PREDETERMINED OBJECTIVEs OVERVIEW OF DEPARTMENTAL PERFORMANCE Service Delivery Environment Service Delivery Improvement Plan Organisational environment Key policy developments and legislative changes STRATEGIC OUTCOME ORIENTED GOALs PERFORMANCE INFORMATION BY PROGRAMME Programme 1: Administration Programme 2: Integrated Economic Development Services Programme 3: Trade and Sector Development Programme 4: Business Regulation and Governance Programme 5: Economic Planning TRANSFER PAYMEnts Transfer payments to public entities Transfer payments to all organisations other than public entities CONDITIONAL GRAnts Conditional grants and earmarked funds paid Conditional grants and earmarked funds received DONOR FUNDs Donor Funds Received CAPITAL INVESTMEnt Capital investment, maintenance and asset management plan 75 PART C: GOVERNANCE INTRODUCTIon RISK MANAGEMEnt FRAUD AND CORRUPTIon MINIMISING CONFLICT OF INTEREst 78 5.CODE OF CONDUct HEALTH SAFETY AND ENVIRONMENTAL ISSUEs PORTFOLIO COMMITTEEs SCOPA RESOLUTIons PRIOR MODIFICATIONS TO AUDIT REPORts INTERNAL CONTROL UNIt INTERNAL AUDIT AND AUDIT COMMITTEEs THE PROMOTION OF ACCESS TO INFORMATION ACT, 2000 (ACT NO. 2 OF 2000) (PAIA) AUDIT COMMITTEE REPORt 85 PART D: HUMAN RESOURCE MANAGEMEnt INTRODUCTIon OVERVIEW OF HUMAN RESOURCEs HUMAN RESOURCES OVERSIGHT STATISTIcs 91 PART E: FINANCIAL INFORMATIon REPORT OF THE AUDITOR GENERAL GDED report of the Auditor-General GLB report of the Auditor-General ANNUAL FINANCIAL STATEMEnts GDED Annual Financial Statements GLB Annual Financial Statements 222 PART F: OUTlook for the coming YEAR Gauteng Department of Economic Development Annual Report 2016/2017

5 A general information Gauteng Department of Economic Development Annual Report 2016/2017 5

6 part A general information DEPARTMENT GENERAL INFORMATION PHYSICAL ADDRESS: POSTAL ADDRESS: Umnotho House 56 Eloff Street Johannesburg Private Bag X091 Marshalltown 2107 TELEPHONE NUMBER/S: +27 (0) FAX NUMBER: +27 (0) ADDRESS: gdedenquiries@gauteng.gov.za WEBSITE ADDRESS: 6 Gauteng Department of Economic Development Annual Report 2016/2017

7 List of Abbreviations A AIDC - Automotive Industry Development Centre IYM - In-Year Monitoring AGSA - Auditor-General of South Africa JCCI - Johannesburg Chamber of Commerce APP - Annual Performance Plan MEC - Member of the Executive Council AO - Accounting Officer HOD - Head of Department ASB - Accounting Standards Board MCS - Modified Cash Basis Standards BAC - Bid Adjudication Committee TIH - The Innovation Hub BBBEE - Broad Based Black Economic Empowerment TER - Township Economy Revitalisation BDS - Business Development Support TMR - Transformation, Modernisation and Re-industrialisation BRG - Business Regulation and Governance TR - Treasury Regulations CAP - Co-operative Assistance Programme MTEF - Medium Term Expenditure Framework CIC - Climate Innovation Centre SAB - South African Breweries ConHill - Constitution Hill Development Company SMME - Small Medium and Micro Enterprises COHWHS - Cradle of Humankind World Heritage Sites SCM - Supply Chain Management CSI - Corporate Social Investment SCOPA - Standing Committee On Public Accounts CSC - Corporate Service Corps SITA - State Information Technology Agency CISCA - Climate Innovation Centre South Africa SDIP - Service Delivery Improvement Plan CIP - Compulsory Induction Programme IEDS - Integrated Economic Development Services DDI - Domestic Direct Investment GGDA - Gauteng Growth and Development Agency DMO - Destination Marketing Organisation GTA - Gauteng Tourism Authority DPSA - Department of Public Service and Administration GCR - Gauteng City Region DSC DTI EXCO - Departmental Standing Committee - Department of Trade and Industry - Executive Committee NAACAM - National Association of Automotive Component and Allied Manufacturers NAAMSA - National Association of Automobile Manufacturers of South Africa FDI - Foreign Direct Investment NDP - National Development Plan GAS - Gauteng Audit Services MPAT - Management of Performance Assessment Tool GCR - Gauteng City Region TIHMC - The Innovation Hub Management Company GDED - Gauteng Department of Economic Development MMA - Maxum Media Accelerator GHS - Ga-Rankuwa Hotel School SPV - Special Purpose Vehicle GEDP - Gauteng City Region Economic Development Plan RAMC - Risk and Audit Management Committee GEP - Gauteng Enterprise Propeller SMS - Senior Management Service GGB - Gauteng Gambling Board PAIA - Promotion of Access to Information Act GLB - Gauteng Liquor Board PACCC - Provincial Anti-Corruption Coordinating Committee GRAP - Generally Recognised Accounting Practices PAJA - Promotion of Administrative Justice Act CFO - Chief Financial Officer PFMA - Public Finance Management Act GPT - Gauteng Provincial Treasury PPP - Public Private Partnership GTA - Gauteng Tourism Authority PMDS - Performance Management Development System ICAS - Independent Counselling Advisory Services GEMS - Government Employees Medical Scheme IDZ - Industrial Development Zone HDI - Historically Disadvantaged Individuals IPAP - Gauteng Industrial Policy Action Plan Gauteng Department of Economic Development Annual Report 2016/2017 7

8 part A FOREWORD BY THE MEC Despite the economic downgrade that we have experienced as a country, our provincial economy remains resilient and is an attractive destination for both foreign and domestic investment. This investment is needed to help us build the catalytic infrastructure that is necessary to grow our economy, to take advantage of opportunities in the green and blue economies, to undertake smart reindustrialisation, to spatially transform the province so that it better reflects the demographics of the people that live in it and provides decent living conditions and opportunities for all. A number of programmes and initiatives aimed at fulfilling the policy mandates of the provincial government have been undertaken which have taken us closer towards building an economy for the 99% (as opposed to the 1%) to use a line from a World Economic Forum report that was released earlier this year. Firstly, the Integrated Economic Development Services (IEDS) Programme aims, in the main, to ensure that the transformation mandates of the department are met adequately. Transformation has been, and continues to be an existential imperative in South Africa and with this in mind, the IEDS programme places its focus on developing a new, smart economy based on knowledge and industries that are capable of growing our economy, creating decent work, helping us build an inclusive economy and most importantly fighting income and wealth inequality. 1. Executive summary 1.1 foreword by the mec At a time when the economic and socio-political landscape of South Africa and the global village as a whole is undergoing significant change, and at times, upheaval it becomes imperative that we take time to reflect upon our accomplishments over the past year in order to accurately map out our path going forward. With that in mind this Annual Report serves as the aforementioned reflection on work that has been done, which will in turn help indicate the work that must still be done to carry provincial policy goals forward. Having reached the mid-term stage as the fifth administration and having perfected the art of planning and capacity building, our focus going forward is on fast-tracking implementation of the Gauteng Economic Development Plan with its strategic sectoral interventions, so that we can radically transform, modernise and re-industrialise our city region s economy. Secondly, and with a focus on the development of smart industries, we have established The Innovation Hub (TIH). TIH was established to primarily focus on information and communications technology, biosciences and the ever-growing renewable energy and low-carbon economy technologies. TIH is a critical agency as we take steps towards the fourth industrial revolution as a city region. As part of the Department s continuing work through TIH, the Bio-Science Park Facility Project serves as an example of the incubation thrust of this and other provincial entities that are at the forefront of our service delivery and innovation drive. The main aim with the Bio-Science Park Facility is to nurture SMMEs within the biotechnology space. In this particular sphere, the TIH serves as a development hub for biotechnology start-ups, supporting and helping them to grow sustainably and become important parts of our province s economy. This is all in line with our aim of building a modern, smart, innovation driven economy that is inclusive and globally competitive. Thirdly, the Climate Innovation Centre South Africa (CICSA) was established to provide enterprise development support to SMMEs and researchers aiming to develop and deploy profitable green economy technologies. To achieve its mandate, the CICSA recruited a number of entrepreneurs working in the energy, waste, water and construction sectors. Their various technologies were pitched during CICSA pitching events with the involvement of the Development Bank of South Africa (DBSA) through its Green Fund national recruitment exercise. We are excited about the ground-breaking enterprises that will be coming out of this initiative and the contribution they will make to the growth of our economy. 8 Gauteng Department of Economic Development Annual Report 2016/2017

9 FOREWORD BY THE MEC part A These initiatives and programmes named above are but a few of those we have been implementing in order to advance our goal of transforming the Gauteng economy in line with national policy directives. Alongside all new efforts, are the perennial and continuous efforts to deliver according to our given mandate in terms of the regulation of business, and governance overall. The department through some of its agencies, the Gauteng Liquor Board, Gauteng Gambling Board and Consumer Affairs continues its regulatory responsibilities with the aim of growing and transforming our economy and protecting interests of consumers. The push for ethical business practices and the protection of the consumer is a core objective of the provincial government, and as such, subprogrammes under the ambit of Business Regulation and Governance aim squarely at achieving this outcome. The 2016/17 period was generally one of positive progress in terms of the sub-programmes managed by the GDED, as the figures below will show. Consumer Protection resolved a total of consumer complaints during the year, exceeding the total target of by a wide margin. This achievement was mainly due to an increased focus on awareness of the Consumer Protection office through heightened media and education campaigns in the Province. A demonstration of the varied and diverse awareness campaigns engaged in by the Consumer Protection programme is shown by the 469 campaigns undertaken during the year. A focus on the elderly and on disability month was aimed at empowering members of our community who may have not benefitted from conventional methods of communication, and assisted the Consumer Protection Office in exceeding its target for events in the year. As is the norm throughout the year, the GDED s Economic Planning Programmes have the objective of providing thought leadership for the overall TMR initiatives in the province. It is through Economic Planning Programmes that policy and strategy development initiatives find fruition. Successes were recorded by the Youth Placement Project, which exceeded its annual target. The projects and successes listed above are just some of the initiatives undertaken throughout the 2016/17 financial year, which is one we believe to be a success on the whole. This Annual Report serves as a milestone in our journey to fulfil the overall policy and strategic mandates of the Province. We want to position Gauteng as a significant economic, cultural and political hub for Africa and the world as a whole. Let us continue to work towards growing the Gauteng economy, the kind of growth that lifts people out of poverty, that moves the city region forward and takes everyone along with it (inclusive growth). Sincere gratitude to the Head of Department, CEOs of the Agencies, subsidiaries and their respective Boards, Portfolio Committee and all staff for their positive contribution during the 2016/17 year. We are looking forward to an even more effective, impactful upcoming year. We look forward to working with you all in achieving our overall mandate, and reshaping the Gauteng economic and industrial landscape. Lebogang Maile (MPL) Member of Executive Council Department of Economic Development, Environment, Agriculture and Rural Development Gauteng Department of Economic Development Annual Report 2016/2017 9

10 part A REPORT OF THE ACCOUNTING OFFICER as a guiding and support oversight body continues, with close collaboration delivering satisfactory results in all four quarters of the 2016/17 period. With lofty targets having been set across the various entities, initiatives and programmes, a pleasing majority of those targets have been comfortably exceeded during this financial year. In keeping with the mandate to protect and promote the rights of consumers, and to foster and promote ethical consumer focused business practices, the Department resolved 2061 consumer complaints against a total target of A total of 469 Consumer Education and Awareness Campaigns were successfully implemented in partnership with different stakeholders. Proudly, many of the campaigns included elderly, and disabled demographics during Disability Month. Other campaigns included, but were not limited to the Spend Wisely Campaign, Ntirhisano Outreach events, the 40 th anniversary commemoration of the June 1976 massacre in Soweto and the ConHill Debating Competition REPORT OF THE ACCOUNTING OFFICER 1. OVERVIEW OF THE OPERATIONS OF THE DEPARTMENT The Gauteng Department of Economic Development (GDED) has made great strides in implementing its mandate based on the provincial government s Programme of Action of Transformation, Modernisation and Re-industrialisation (TMR) and Township Economy Revitalisation (TER). Now in the third year of implementation within the 5 th Administration, the Department has endeavoured to continue with its shift in focus from theoretical strategy to the practical implementation of same. While this has introduced numerous challenges, it is my belief that the Department has only gone from strength to strength in fulfilling its provincial mandate. As has become the norm for the Department, community expectations garnered by canvassing exercises throughout the Province have been the guide for the implementation of strategic programmes for economic transformation. This exercise has continued in earnest during the year under review. The implementing arms of the Department, which are its public and trading entities, have maintained the focus on being geared toward the implementation of departmental mandates. The role of the Department Under the ambit of the GDED to separate the functions of tourism demand and supply, the role of the management of supply in this industry was given to the Department. Key tourism industry components that have become the purview of the Department now include the development of tourism products and experiences, as well as training interventions mooted as part of the TMR/TER that cut across various categories such as service excellence, business skills and business administration, among others. Throughout the financial year, with a focus on enrolling youth into training interventions, quarterly targets were met during quarters 1 and 2, with quarter 3 being affected by the rescheduling of sessions intended to be held during the latter quarter being held earlier than planned. Despite this, a commendable number of exercises were held during all quarters of the year under review. The Gauteng Gambling Board (GGB) completed a sterling financial year. A number of compliance audits and inspections to various licensees were conducted, for which the annual target of 180 and 678 respectively with a year end result of 190 and 691. In terms of tax revenue collection, the yearend result was R982,7 million, which was 2% below target. The Gauteng Growth and Development Agency (GGDA) continued to lead, facilitate and manage sustainable job creation and inclusive economic growth and development in the Gauteng City Region. Part of its achievements included supporting growth of the cooperatives economy, facilitation of trade and investment and increased strategic economic infrastructure. The Agency implemented its programmes and services through the Automotive Industry Development Cooperation, The Innovation Hub, the Gauteng Industrial Development Zone and Constitution Hill. 10 Gauteng Department of Economic Development Annual Report 2016/2017

11 REPORT OF THE ACCOUNTING OFFICER part A The Gauteng Tourism Authority (GTA) achieved a number of notable successes during the year under review, managing to support 52 business events and 7 signature events during the year under review. In support of Pillar 10 of Radical Transformation, the GTA participated in the Magical Kenya Trade Show, and courted Chinese travel business through online campaigns through partners. Other successful events included the 7 th Biennial Conference of the International Law Association; the SA Festival of Motoring; and the Arnold Africa Games. With the importance of industrialisation and reindustrialisation being central to the TMR and TER, the re-industrialisation of the Gauteng City Region (GCR) has been a point of focus for the department during the 2016/17 financial year. Of significance is the tailoring of the National Black Industrialist Framework (NBIF) for the Gauteng Province, which has culminated in the development of the Gauteng Black Industrial Policy Framework (GBIPF). The GBIPF was developed through a close consultative process with the Department of Trade and Industry and other stakeholders. Progress in terms of the development of high impact industrialisation projects has been steady with all 12 business cases having been developed during the year under review. As ongoing oversight is central to the GDED, monthly reports indicating progress, along with regular consultations, are in place to ensure that constant progress is being made in terms of work being done in this regard. Importantly, the development of the Gauteng Industrial Policy Action Plan (IPAP) / GCR EDP Implementation Plan was completed in earnest during the year under review. Consultation was detailed and conducted intensively to ensure that all sector departments were given the opportunity to make valuable contribution to the plan. Consequent to all development and internal processes, the proposed IPAP/GCR EDP implementation plan was presented to Executive Council for approval. 2. OVERVIEW OF THE FINANCIAL RESULTS OF THE DEPARTMENT During the 2016/17 financial year, the Department spent 98% of the final appropriated budget amount of R billion, with actual expenditure at R billion, which is an underspend of R million, that is 2%, towards the implementation of the 5th Administration s new mandate. The Department processed and paid 86% of its creditors within 10 days, 96% within 14 days and 100% within 30 days, which is an unprecedented achievement for three successive years. 2.1 Departmental Receipts In the year under review, the Department s main source of funding was the equitable share, which was spent towards the goals and priorities of the Department as well as those of the Gauteng Provincial Government. The Gauteng Gambling Board, one of the Department s Agencies, generated its own revenue, mainly from gambling taxes and license fees drawn from casino and horse racing taxes. The Department s other sources of revenue included sales of goods and services other than capital assets, interest, dividends and rent on land, as well as financial transactions in assets and liabilities. Gauteng Department of Economic Development Annual Report 2016/

12 part A REPORT OF THE ACCOUNTING OFFICER TABLE 2.1: DEPARTMENTAL RECEIPTS 2016/ /2016 Departmental Receipts Estimate Actual Amount Collected (Over) / Under Collection Estimate Actual Amount Collected (Over) / Under Collection R 000 R 000 R 000 R 000 R 000 R 000 Tax Revenue (53 847) ( ) Sale of goods and services other than capital assets Interest, dividends and rent on land (413) (374) (1 004) (3 056) Sales of capital assets - 30 (30) Financial transactions in assets and liabilities (834) 277 (5 215) Total (56 128) ( ) 2.2 Reasons for Over-collecting In the year under review the Department recognised revenue at gross as opposed to recognising it at net, this then resulted in the over collection (R million) of revenue. The tax revenue is inclusive of the 8% commission payable to Gauteng Gambling Board (GGB) which is in line with the accounting standards. table 2.2. Analysis per Programme 2016/ /2016 Programme Name Final Appropriation Actual Expenditure (Over) / Under Expenditure Final Appropriation Actual Expenditure (Over) / Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Administration Integrated Economic Development Services Trade and Sector Development Business Regulation and Governance Economic Planning Total During the course of the 2016/17 financial year, the Department has been able to, by and large, achieve efficient use of all allocated resources through its internal reprioritisation process. The continued monitoring of allocated budgets has contributed towards enhanced service delivery, and the achievement of targets set out in the Annual Performance Plan (APP) for the year under review. There were isolated instances of underspending, which were as follows: 12 Gauteng Department of Economic Development Annual Report 2016/2017

13 REPORT OF THE ACCOUNTING OFFICER part A Programme 1: Administration The total spend for the year under review amounted to R227.5 million, that is 94% spend, against the final appropriated budget of R242 million, which translates to a saving of R14.5 million (6%). The underspending is attributed to the savings realised under compensation of employees as a result of the non-implementation of the proposed organisational structure due to delays in the approval process. Furthermore, accrued payments and commitments contributed to the underspending in both goods and services as well as machinery and equipment. The Department has applied for a rollover of funds from the Gauteng Provincial Treasury to ensure that funds are availed in the 2017/18 financial year to cover accruals and commitments arising from the 2016/17 financial year. Programme 4: Business Regulation and Governance This programme was allocated a budget of R79 million, with an actual expenditure of R72.9 million, which is 92% spend. The underspending amounts to R6.1 million (8%), which is due to work currently underway with regards to the establishment of the Conservation and Heritage Agency, as well the transcription services for the Consumer Court. The Department has applied for a rollover of funds from the Gauteng Provincial Treasury to ensure that funds are availed in the 2017/18 financial year to cover accruals and commitments arising from the 2016/17 financial year. Programme 5: Economic Planning This Programme spent 98% of its allocated budget, that is R135.6 million against the budget of R138.6 million. The underspending amounts to R2.9 million (2%), and is due to unpaid invoices relating to the refurbishment of the township industrial hubs, and committed funds towards the development of the Gauteng Barometer. 2.3 Virements The Gauteng Provincial Treasury approved the Department s application for virement and the shifting of funds. The purpose of the virement application was to defray overspending that had incurred in some programmes. The table below outlines the schedule of virements: Table 2.3. schedule of budget VIREMENTS Adjusted Programme Appropriation R 000 Actual Expenditure R 000 Virements & Shifts R 000 Final Appropriation R 000 Administration Integrated Economic Development Services (23) Trade and Sector Development (375) Business Regulation and Governance (37) Economic Planning (3 946) Total future plans of the department The GCR Economic Development Plan has been approved by Exco and forms the basis of programmes and projects to be implemented in the ensuing years. The EDP has specifically identified sectors to be prioritised in the Province. Intervention plans have been developed for the West Rand emanating from the West Rand Economic Summit. Projects and programmes will be implemented in partnership with the private sector. 4. Public Private Partnerships (PPP) The Gauteng Department of Economic Development did not initiate nor participate in any PPP-related activities during the year under review. Gauteng Department of Economic Development Annual Report 2016/

14 part A REPORT OF THE ACCOUNTING OFFICER 5. Discontinued activities / activities to be discontinued The Department has migrated the management and administration of Ga-Rankuwa Hotel School to the Cradle of Humankind World Heritage Site which is a trading entity under the Department. 6. New or proposed activities There were no new or proposed activities in the department during the year under review. 7. supply chain management The Department did not receive any unsolicited bids during the financial year. The Department continued to maintain adequate Supply Chain Management processes and systems to ensure that the procurement of goods and services was fair, equitable, transparent and cost-effective, in line with the provisions of National Treasury, Treasury Regulations and all relevant legislative and regulatory prescripts. 8. Gifts and donations received in kind from non-related parties The Department of Economic Development entered into a partnership with Sun International and Gauteng Enterprise Propeller as part of sponsoring the Township Entrepreneurship Awards that took place on 8th April Sun International sponsored the Township SMME Awards under the Tourism, Hospitality and Entertainment related category, as part of the partnership agreement. This sponsorship included venue and catering as agreed to between the parties, to a maximum value of R (six hundred thousand rand only), which was calculated at Sun International s sole discretion, as well as a total cash prize of R (four hundred and fifty thousand rand only) to the winner and two finalist nominees in the Tourism, Hospitality and Entertainment related category. 9. EXEMPTIONS & DEVIATIONS RECEIVED FROM NATIONAL TREASURY Neither exemptions nor deviations were applied for nor received from National Treasury during the reporting period. 10. Events after the reporting date The Department has undertaken the migration of the Ga-Rankuwa Hotel School to the Cradle of Humankind World Heritage Site and Dinokeng Projects, with effect from 1 April Other The Department prepares its Annual Financial Statements on the Modified Cash Basis of Accounting, while the Gauteng Liquor Board, Cradle of Humankind World Heritage Site and Dinokeng Projects prepare their Annual Financial Statements on an accrual basis using Generally Recognised Accounting Practices (GRAP), which is populated on a specific template provided by National Treasury. All resolutions of the Standing Committee on Public Accounts (SCOPA) as well as the findings raised by the Auditor General for the Department of Economic Development, the Gauteng Liquor Board, Cradle of Humankind World Heritage Site and Dinokeng Projects were mitigated through internal controls, systems and procedures to prevent the recurrence of any adverse findings. The Gauteng Liquor Board (GLB), a trading entity of the Department, is located as a chief directorate within the Business Regulation and Governance Branch. It is charged with the responsibility of regulating the liquor industry, through registration and licensing of liquor manufacturers, retailers and other outlets throughout the Gauteng Province. Over the years, the GLB has undergone changes in leadership, processes and systems. In the financial year, significant efforts have been put in place to position the GLB to be more responsive to both its internal and external stakeholders. A major weakness of the GLB, which has persisted over many years, is that it does not have a reliable database of all liquor outlets in the Province. Consequently, the regulation mandate is not fully exercised which adversely impacts the amount of revenue generated within the Province. The GLB has thus initiated a project that will see a province-wide physical verification of all liquor outlets. This will be done in a manner that would produce quality reliable data to assist the GLB to make informed decisions pertaining to regulation, transformation and revenue generation. It is a foregone reality that a reliable database of liquor outlets in Gauteng will result in a marked increase in the number of those that need to be registered and licensed. The benefits of the physical verification project include the creation of a database of verified and comprehensive Gauteng-based liquor outlets; significantly contributing towards the achievement of Pillars 1, 4 and 6 of the TMR; as well as improved revenue generation which will increase the provincial fiscus, which in turn will increase opportunities for budget allocation towards priority socio-economic development initiatives. In addition, the GLB, which is also responsible for the management of liquor licenses issued to establishments based in the Gauteng Province, has identified the need to automate all processes relating to the regulation and issuing of liquor licenses. The GLB Automation System will go live on 1 st April The main objectives of the system automation are eliminating manual processes with regards liquor license applications for improved management and tracking of applications; creating a central database of information with quality and reliable data; and better management of industry regulation. 14 Gauteng Department of Economic Development Annual Report 2016/2017

15 REPORT OF THE ACCOUNTING OFFICER part A The GLB Annual Financial Statements reflect that their liabilities exceed the budget for the year under review. However, the Department of Economic Development will carry these costs that cannot be funded by the GLB, through a reprioritisation of the appropriated budget. As the Gauteng Liquor Board is an Applications Board, there was an increased number of Board meetings that were required to process liquor license applications. In this regard, the Board meets two days per week with the Local Committees meeting one day per week. Because of its status as a juristic person, the Board is sued directly and may institute legal action. Hence, Board members are required to attend legal consultations and all matters relating to legal actions instituted by and against the Board. 12. Acknowledgements First and foremost, I would like to thank MEC Maile for his continued leadership and guidance. A vote of thanks is extended to the Senior Management Team of the Department of Economic Development, its agencies and subsidiaries for their commitment and contribution to achieving the mandate and goals of the organisation. To our oversight bodies, that assist the Department to move from strength to strength in terms of governance and compliance, thank you for your guidance and support. 13. Conclusion The Accounting Officer has duly considered all relevant legislation and has exercised informed judgement in terms of information disclosed in this Annual Report. With careful consideration of the prudent use of financial resources allocated to achieve the strategic goals and objectives of the Department and Gauteng Provincial Government, mechanisms to minimise inherent organisational risks and the prevention of fraud and corruption have been implemented throughout the period under review. The Department has strengthened its governance structures that continued to provide organisational policy directives as well as management oversight responsibility. 14. Approval and Sign Off The Annual Financial Statements as set out on pages 135 to 246 were approved by the Accounting Officer. Ms Phindile Mbanjwa Accounting Officer Department of Economic Development Gauteng Department of Economic Development Annual Report 2016/

16 part A REPORT OF THE ACCOUNTING OFFICER 5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT To the best of my knowledge and belief, I confirm the following: All information and amounts disclosed throughout the annual report are consistent. The annual report is complete, accurate and is free from any omissions. The annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury. The Annual Financial Statements (Part E) have been prepared in accordance with the modified cash standard for the Department, GRAP for entities of the Department, as well as all relevant frameworks and guidelines issued by the National Treasury. The Accounting Officer is responsible for the preparation of the annual financial statements and for the judgements made in this information. The Accounting Officer is responsible for establishing, and implementing a system of internal control that has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the annual financial statements. The external auditors are engaged to express an independent opinion on the annual financial statements. In my opinion, the annual report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the Department for the financial year ended 31 March Yours faithfully Ms. Phindile Mbanjwa Accounting Officer Department of Economic Development 16 Gauteng Department of Economic Development Annual Report 2016/2017

17 general information part A 6. STRATEGIC OVERVIEW The mandate of the Gauteng Department of Economic Development (GDED) is to facilitate, promote economic growth and development in the province, with a targeted commitment to focus on enhancing inclusivity of the economy, while not neglecting to improve its competitiveness. In line with this mandate, the vision, mission and values for the Department are as follows: 6.1 Vision A radically transformed, modernised and re-industrialised economy in Gauteng, manifesting decent work, economic inclusion and equity. 6.2 Mission The mission of the GDED in pursuit of its vision is to: Ensure radical transformation, modernisation and re-industrialisation of the Gauteng economy; Provide an enabling policy and legislative environment for equitable economic growth and development; Develop and implement programmes and projects that will: Revitalise Gauteng s township economies; Build new smart, green, knowledge-based economy and industries; Ensure decent employment and inclusion in key economic sectors; Facilitate radical economic transformation, modernisation and re-industrialisation; Include the marginalised sectors of women, youth and persons with disabilities in mainstream economic activities; and Establish appropriate partnerships for delivery and ensure the GDED effectively delivers on its mandate. 6.3 Values These values are informed by the vision and mission of the department namely: Serve as a centre of excellence in leading radical economic transformation, modernisation and reindustrialisation of Gauteng s economy; Provide ethical, consultative and people-focused services; Facilitate equity, redress and access to economic opportunities and decent employment; Ensure that Gauteng s economic profile reflects its demographic profile; Practice transparent, participatory and good governance at an internal level; and Foster high levels of professionalism, innovation, effectiveness, efficiency and the practice of Batho Pele amongst the staff of DED and all its implementation agencies. 7. LEGISLATIVE AND OTHER MANDATES Constitutional, National and Provincial Legislative Mandates In terms of Schedule 4 (Part A) of the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996), provinces have concurrent legislative competence with the National Government in respect of, inter alia, urban and rural development. Casinos, racing, gambling and wagering as well as Consumer Protection are also areas of concurrent national and provincial legislative competence as per Schedule 4 (Part A) of the Constitution. Schedule 4 (Part B) provides for provincial and national legislatures to have concurrent legislative competence in respect of local government matters such as municipal planning. In terms of Schedule 5 (Part A), provinces have exclusive legislative competence over provincial planning. Liquor licencing is also a functional area of exclusive provincial legislative competence as per Schedule 5 (Part A) of the Constitution. Section 154 provides that the national and the provincial governments, by legislative and other measures, must support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions. The South African Constitution requires that all spheres of government work together to address poverty, under-development, marginalisation of individuals and communities and other legacies of apartheid and discrimination. There are certain related and relevant acts and policies, in addition to the Constitution, that provide the provincial government with its mandate and specifically guide the Gauteng Department of Economic Development as it executes its mandate. These selected Acts and Policies are listed below and are in the sections on national and pieces of provincial legislation: Public Finance Management Act (PFMA), 1999 Treasury Regulations Promotion of Access to Information Act (PAIA), 2000 Employment Equity Act, 1998 National Records and Service Act, 1996 Promotion of Administrative Justice Act (PAJA) (No 3), 2000 Batho Pele Principles. Gauteng Department of Economic Development Annual Report 2016/

18 part A general information National Legislative Mandate Provincial Legislative Mandate National Credit Act, 34 of 2005 Consumer Protection Act, 68 of 2008 Business Act, 1991 Public Service Act, 1994 Public Service Regulations, 2016 Skills Development Act, 1998 World Heritage Convention Act, 1999 Administration of Justice Act, 2000 Preferential Procurement Policy Framework Act, 2000 Municipal Finance Management Act (MFMA), 2004 Convention Concerning the Protection of the World Cultural and Natural Heritage (adopted by the General Conference UNESCO on 16 November 1972 and by the RSA on 10 July 1997) National Environmental Management: Protected Areas Act, 2003 Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000) Less Formal Township Establishment Act, 1991 (Act No. 113 of 1991) Development Facilitation Act, 1995 (Act No. 67 of 1995) Gauteng Growth and Development Agency Act, 2012 Gauteng Enterprise Propeller Act, 2005 Gauteng Gambling Act, 1995, 1996, 2001 Gauteng Consumer Affairs (Unfair Business Practices) Act, 1996 Gauteng Tourism Act, 2001 Gauteng Liquor Act, 2003 Intergovernmental Fiscal Relations Act, 1997 Town Planning and Townships Ordinance, 1986 (Ordinance 15 of 1986) Gauteng Removal of Restrictions Act, 1996 (Act No. 3 of 1996) Municipal Systems Act, 2000 Broad Based Black Economic Empowerment Act, 2003 Companies Act, 1973, as amended 2009 Building Regulations Act, 1995 Intergovernmental Relations Framework Act, 2005 (Act No. 13 of 2005) Gauteng Liquor Shebeen Regulations, Gauteng Department of Economic Development Annual Report 2016/2017

19 general information part A DDG: Economic Planning CD: Economic Planning CD: Inclusive Economy CD: Sector and Industry Development DDG: Business Regulation and Governance CD: Consumer Affairs CD: Liquor Affairs CD: Governance 8. ORGANISATIONAL STRUCTURE Office of the MEC AGENCIES -GGDA -GEP -GTA -GGB Head of Department Director: Executive Support Director: Risk Management CD: Communications CD: Legal Advisory Services CD: Financial Management DDG: Corporate Management CD: Strategic Planning Monitoring and Evaluation CD: Resource Management Gauteng Department of Economic Development Annual Report 2016/

20 part A general information 9. ENTITIES REPORTING TO THE MEC The table below indicates the entities that report to the MEC: Name of Entity Legislative Mandate Financial Relationship Nature of Operations Gauteng Enterprise Propeller To primarily drive the revitalisation of township economies and enhanced participation of SMMEs and Co-operatives in the Province s mainstream economy. The entity received a monthly allocation based on their Annual Performance Plan. Implementation agent of the Department Gauteng Gambling Board To regulate the industry in a transparent, fair, equitable and competent manner for the benefit of all stakeholders. The entity generates its own revenue through gambling taxes. Implementation agent of the Department Gauteng Growth and Development Agency To be the premier catalyst of innovative and sustainable growth and socio-economic development within the Southern African region. The entity received a monthly allocation based on their Annual Performance Plan. Implementation agent of the Department Gauteng Tourism Authority To position Gauteng as Africa s most visited vibrant, big city experience. It starts here! The entity received a monthly allocation based on their Annual Performance Plan. Implementation agent of the Department 20 Gauteng Department of Economic Development Annual Report 2016/2017

21 B performance information Gauteng Department of Economic Development Annual Report 2016/

22 part A general information 1. AUDITOR GENERAL S REPORT: PREDETERMINED OBJECTIVES The AGSA currently performs certain 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 Predetermined Objectives heading in the Report on other legal and regulatory requirements section of the auditor s report. Refer to page 133 of the Report of the Auditor General, published as Part E: Financial Information. 22 Gauteng Department of Economic Development Annual Report 2016/2017

23 general information part A 2. OVERVIEW OF DEPARTMENTAL PERFORMANCE 2.1. Service Delivery Environment The Gauteng Provincial Government through the Department of Economic Development in partnership with the local government, organised business, organised labour and civil society organisations; has developed and adopted a comprehensive and an overarching Gauteng City Region Economic Development Plan (GEDP) 2030 in order to radically Transform, Modernise and Re-industrialise (TMR) the Gauteng City Region Economy. The GEDP is a provincial blueprint guiding the economic trajectory in the short-term, medium-term and longterm and can be viewed as the GCR s implementation of the National Development Plan (NDP), hence the outcomes of the GCR Economic Plan, proportionally contribute to the overall NDP outcomes of employment creation, output growth, reduction of inequality and elimination of poverty. The GEDP is primarily linked to the 10 Pillar Programme of Radical Economic Transformation, Modernisation and Re-Industrialisation (TMR) of the GCR economy and hence all the key focus areas of the Framework are linked to the Pillars of the TMR. The GEDP is linked to the Ten (10) Pillar Programme of radical economic Transformation, Modernisation and Re-Industrialisation of the GCR economy. The GEDP is intended to contribute to the GCR s vision, which is to be a seamlessly integrated, socially cohesive, economically inclusive region that is globally competitive and leading economy in the continent. The strategic objectives for GEDP towards the achievement of the TMR vision are as follows: Economic Ownership: Changing ownership patterns to bring the majority of the black people into the economic mainstream and creating black industrialists; Beneficiation: Changing the current industrial structure of the GCR economy to prioritise manufacturing and industrialisation through the processing of rich mineral resources and other raw materials locally; New Economic Sectors: The development of new modern, innovation-driven industries in the areas of high-tech, biotechnology, and the green economy; Skills Development: Investing in skills development to change the skills profile of the citizenry in line with the new strategic sectors and modern industries; Income Distribution: Changing income distribution to ensure equity and decent living standards for all; Spatial Reconfiguration: Transforming the apartheid spatial economy and human settlement patterns to integrate economic opportunities, transport corridors and human settlements; Support for Township Economy, SMME and Cooperatives: Growing the SMME sector as a key driver of growth and employment, revitalising and mainstreaming the township economy; State Institutional Capacity: Strengthening the capacity of the state to direct economic development and enhance the competitiveness of strategic economic sectors; Infrastructure Investments: Upscaling investment in infrastructure as prioritised by the Gauteng Integrated Infrastructure Master Plan as an enabler, stimulus to growth, skills development and job creation; Strategic partnership: Transformative partnerships between the private and public sector in addressing the developmental challenges outlined in the NDP; Cementing Gauteng s position in the African markets by expanding the export offering in goods and services: Buoyed by the tripartite Free Trade Agreement that covers 26 countries, a population of 600 million people and a combined GDP of US1.4 trillion, Gauteng can use its firstmover advantage by leading industrialisation in Africa through goods and service exports intensification. Gauteng Department of Economic Development Annual Report 2016/

24 part B performance information The GEDP is supported by a number of policies, frameworks, programmes and strategies developed and adopted the Gauteng Province Executive Council. These include the following amongst others: Gauteng Spatial Development Perspective; Gauteng City Region International Relations Strategy; Gauteng Mega Human Settlement Strategy; Gauteng Township Economy Revitalisation Strategy; Gauteng Informal Business Upliftment Strategy; Gauteng Integrated Infrastructure Master Framework; Sedibeng and West Rand Regional Economic and Industrial Frameworks; Gauteng Trade and Investment Strategy; Integrated Transport Master Framework; Gauteng Master Skills Framework; Gauteng City Region Agri-Food Transformation and Development Strategy; Gauteng Energy Security Strategy; Creative Industries Sector Strategy; Gauteng Mineral Beneficiation Strategy; Gauteng Construction and Building Materials Sector Strategy; Gauteng Clothing, Textile, Leather and Footwear Sector Strategy; Gauteng Automotive Sector Strategy; Gauteng Machinery and Equipment Sector Strategy; Chemicals and Plastics Sector Strategy; Food and beverages Sector Strategy; Furniture Sector Strategy; Gauteng Business Process Services Sector Strategy; Gauteng Information and Communication Sector Strategy; Gauteng Meetings, Incentives, Conventions and Exhibitions Strategy; and Gauteng Broad-Based Economic Empowerment Framework. The Plan demonstrates that through sectors and sub-sectors interventions across the five (5) development corridors, the GCR can be radically transformed into a competitive, sustainable and inclusive City Region economy. Implementation of the Gauteng City Region Economic Development Plan The GEDP will be implemented through a partnership of provincial government, five Gauteng municipal regions, industries, academia and civil society and it will leverage on partnership resources as well as national funding (incentives) that has been set aside through the Industrial Policy Action Plan, among others. Future work on the implementation of the GEDP, include among others, the sectoral prioritisation in line with the approved sector strategies and quantifying the sectoral interventions and how they contribute to the GEDP outcome, which speaks to output and employment. The GEDP will be implemented through five iterations ( , and ) aligned to the period of implementation of the National Development Plan. GDED will continue to monitor the implementation of the of the GEDP (per approved strategies) on annual basis and conduct impact assessments on key interventions at the end of each five year government mandate up to Gauteng Department of Economic Development Annual Report 2016/2017

25 performance information part B Furthermore, Gauteng Provincial Government will develop an economic model for the GCR growth trajectory up to 2030 by quantifying all the interventions and their likely contribution to the GEDP and subsequently, the National Development Plan Outcomes, namely: output, employment, reduction of inequality, elimination of poverty. Furthermore, as the custodian of Outcome 4, which is Decent Employment through Inclusive Growth, GDED continues to coordinate job creation reporting through the Gauteng Job creation Tracking Framework, taking into account employment creation initiatives implemented by provincial government, local government and state agencies and integrating this effort with quarterly employment reports that are released by Statistics South Africa. 2.2 Service Delivery Improvement Plan The Department has completed a Service Delivery Improvement Plan. The tables below highlights the service delivery plan and the achievements to date: MAIN SERVICES AND STANDARDS Main services Beneficiaries Current/actual standard of service Desired standard of service Actual achievement Consumer Protection Service All consumers in Gauteng. To resolve consumer complaints through mediation and arbitration within 60 days. Resolve and close consumer complaints through mediation and arbitration in 60 days Consumer Complaints received complaints resolved and closed. The number of complaints resolved exceeds the number of complaints received as complaints received in the previous reporting period were also resolved in this reporting period. Liquor Licensing Gauteng Citizens and Liquor Traders. To process liquor applications within 90 days. Liquor License applications processed within 30 working days Liquor Pre-inspections conducted; Compliance inspections conducted; Liquor licenses issued; 0 Rejected Liquor licenses. Gauteng Department of Economic Development Annual Report 2016/

26 part B performance information BATHO PELE ARRANGEMENTS WITH BENEFICIARIES Current / actual arrangements Desired arrangements Actual achievements Workshops; Public participation programmes; Road shows/campaigns; Imbizos; One on one (walk-ins) consultations; Dedicated Consumer Complaint line. Workshops; Public participation programmes; Road shows/campaigns; Imbizos; One on one (walk-ins) consultations; Dedicated Liquor Complaint line. Citizens were able to access services at Head Office and 5 Regional Offices to minimise the distance travelled by citizens to access services. 350 Consumer education Programmes to be conducted 130 liquor education and stakeholder activities to be conducted. GDED Group mobile offices (buses) were utilised for key outreach programs such as Ntirhisano and Project Qondisa Ishishini Lakho. 469 citizens and stakeholder activities: 139 Special awareness programmes: 77 Consumer education programmes for businesses; 215 General Consumer workshops; 0 Consumer education programmes for big businesses in partnership with Consumer Goods Council; 01 train the trainer session; and 37 financial literacy Workshops. 337 citizens and stakeholder activities: 121Workshops; 132 Stakeholder meeting conducted; 49 Road shows/ campaigns; and 35 Imbizos Liquor compliance inspections conducted; 2717 Pre- Liquor inspections conducted; and 366 complaints and queries resolved. GDED has established a Walk in Centre at 124 Main (one stop shop), where citizens can access all GDED services in one physical location. 26 Gauteng Department of Economic Development Annual Report 2016/2017

27 performance information part B SERVICE DELIVERY INFORMATION TOOL Current / actual information tools Departmental Brochure; Departmental website; Annual Report; Information Annual Citizen s Report; Consumer Affairs Information Booklet; Liquor Pamphlet. N/A Desired information tools Actual achievements Consumer Affairs information booklet was developed and printed in braile; English; Afrikaans; Zulu; Sotho and on audio. COMPLAINTS MECHANISM Current / actual complaints mechanism Re-establishment of Service Delivery Improvement Committee that will ensure redress of Batho Pele Principles violations at the appropriate level (complaints, complements and suggestion mechanism system). Desired complaints mechanism Effective utilisation of compliment and suggestion boxes by the public. Actual achievements Number of Liquor queries received : 366 Number of Liquor queries resolved: 366 Gauteng Department of Economic Development Annual Report 2016/

28 part B performance information 2.3 Organisational environment The organisational environment for the year under review was stable, with no major labour strikes or disputes having occurred. The head office of the Department moved to another site within Johannesburg Central, which move was undertaken in the middle of Quarter 3. Despite this move, there were no major disruptions to the implementation of the Five Year Strategic Plan, or the Annual Performance Plan. The migration of the information, communication and technology infrastructure of the Department was not disrupted, and had no negative effect on the ability of the Department to carry out its mandate. Furthermore, service delivery as a whole was not negatively impacted as the relocation was done based in a phased approach. 2.4 Key policy developments and legislative changes The Department is in the process of merging the Gauteng Liquor Board and the Gauteng Gambling Board into one entity. The process requires the amendment and / or the repeal of the current founding legislations of the two entities, which will affect the future operations of both. 28 Gauteng Department of Economic Development Annual Report 2016/2017

29 performance information part B 3. STRATEGIC OUTCOME ORIENTED GOALS Strategic Outcome Orientated Goal 1 Goal Statement Gauteng s economy radically transformed This goal is intended to move away from the current monopoly dominated economy to an inclusive and job creating economy that: Harnesses indigenous resources, skills and capacity as part the mainstream economy Develops new, smart, green knowledge-based economy and industries Addresses the legacy of apartheid s skewed spatial economic development planning through revitalising and modernising township economies Addresses the dominance of monopoly capital that perpetuates high levels of poverty, unemployment and inequality Brings SMMEs, township enterprises and cooperatives into the eleven (11) identified key economic sectors at all levels of their value chain Guarantees energy security through appropriate and sustainable energy mixes, application of green technologies and processes and radical transformation of the economic sector Regulates the liquor industry and facilitates its contribution to job creation and an inclusive economy Regulates the gambling industry and facilitates its contribution to job creation and an inclusive economy Promotes and protects the rights of consumers Gauteng Department of Economic Development Annual Report 2016/

30 part B performance information 3. STRATEGIC OUTCOME ORIENTED GOALS Strategic Outcome Orientated Goal 2 Goal Statement Gauteng s economy re-industrialised This goal is intended to address the policy imperatives of creating decent employment, ensuring greater inclusion in the mainstream economy and enhancing competitiveness and growth through: Supporting the province s eleven (11) identified economic growth sectors (Finance, Automotive Industry, Manufacturing, ICT, Tourism, Pharmaceuticals, Creative Industries, Construction, Real Estate, Mineral Beneficiation and Agro-processing) Strategic economic infrastructure development (R300 billion in post, freight, rail and pipeline capacity) Revitalising and modernising old industries with the massive roll out of transport infrastructure The procurement of 75% of government goods and services from South African producers Supporting local manufacturing e.g. of steel Increasing domestic and export demand for South African manufactured goods Promoting beneficiation activities Supporting high growth, competitive and labour absorbing sectors Attracting Domestic Direct Investment (DDI) and Foreign Direct Investment (FDI) Increasing trade and export opportunities on the African Continent and globally Strategic Outcome Orientated Goal 3 Goal Statement DED capacitated to deliver and implement efficiently and effectively This goal is intended to ensure that the DED is able to deliver and implement its core-function programmes and projects through the provision of support services in the areas of: Financial management Human resource management Centralised planning, co-ordination and management Business intelligence to drive the work of the DED Auxiliary and Legal services Communication, Marketing and Branding Information and Communication Technology Agency oversight and governance 30 Gauteng Department of Economic Development Annual Report 2016/2017

31 performance information part B 4. PERFORMANCE INFORMATION BY PROGRAMME 4.1 Programme 1: Administration The purpose of this programme is to provide strategic leadership, support and transversal business solutions to enable the Member of Executive Committee (MEC), Head of Department (HOD) and Gauteng Department of Economic Development (GDED) Group to effectively deliver on the mandate of the Department. Under the banner of Administration, there are numerous sub-programmes, which are the following: Office of the MEC; Office of the HOD; Strategic Planning, Monitoring and Evaluation; Office of the Chief Financial Officer; and Corporate Management. The main objective of the Administration Programme for the 2016/17 financial year is to ensure that there is a high level of financial accountability, with numerous compliance reports being produced in line with the relevant financial regulations and guidelines. In addition, the direction of the cross-sectional administrative programmes leading the Department was a further objective, which remains of paramount importance. Finally, the implementation of a risk management function within the GDED, as well as the continuing focus on employment equity in terms of women and persons with disabilities, remained critical for the Administration Programme during the period under review Financial Management The Department spent R billion against the budget of R billion, which translates to a 98% spend. The 2% overall underspending is attributed to non-implementation of the proposed organisational structure due to delays in the approval process and the non-filling of the vacancies as per the new structure. Furthermore, projects such as the implementation of the proposed mobile application, the development of the Gauteng barometer, installation of blinds, delays in awarding a tender for computer services for the Department, payment of infrastructure projects as well as outstanding accruals and commitments contributed to the 2% underspend. The Department has applied for a rollover of funds to be able to pay for its commitments and accruals in the 2017/18 financial year. The spending patterns and analysis were tabled at Departmental executive management meetings so that where there were early warning signs of potential spending inconsistencies, remedial actions could be devised for immediate implementation. The Department paid 100% of its suppliers within 30 days, with the time taken to make payments averaging 14 days. Payments are settled within the prescribed period from the date of receipt of invoice. All invoices are received from the Gauteng Department of e-government (e-gov) as the central point. The interim financials were compiled and submitted to the Gauteng Provincial Treasury (GPT) as prescribed. Furthermore, an interim financial statement process was put in place to illustrate the timelines related to preparation, review and submission. Gauteng Department of Economic Development Annual Report 2016/

32 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR FINANCIAL MANAGEMENT SUB-PROGRAMME Programme Name: Administration Sub-programme: Financial Management Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Financial accountability and compliance reports produced aligned to prescribed financial regulations and guidelines. Number of In-Year- Monitoring (IYM) reports produced None. None. Financial accountability and compliance reports produced aligned to prescribed financial regulations and guidelines. Number of interim Annual Financial Statement reports compiled None. None. Sub-programme expenditure programme expenditure Sub- Programme Name 2016/ /16 Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Office of the MEC Office of the HOD Financial Management Corporate Services (257) TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

33 performance information part B 4.2 Programme 2: Integrated Economic Development Services The purpose of this programme is to ensure radical transformation that addresses the triple policy imperatives. The programme s objective is to develop a new, smart, knowledge based economy and industries that are responsive to the triple policy imperatives of job creation, an inclusive economy and equality, and that fosters competitiveness. It aims to achieve this by: Revitalising and modernising township economies to address the legacy of apartheid s spatial economic planning ensuring participation of Small, Medium and Micro-Sized Enterprises (SMMEs), township enterprises and cooperatives in the full value chain of the 11 identified key economic sectors and in other mainstream economic activities. Building the skills and capacity of SMMEs, township enterprises and cooperatives to become effective businesses. Building energy security through appropriate and sustainable energy mixes, and the application of green technologies and processes Gauteng Enterprise Propeller The GEP was incorporated in terms of the Gauteng Enterprise Propeller Act (No. 5 of 2005), and is listed as a Schedule 3C Provincial Public Entity in terms of the PFMA. Its mandate falls in line with the strategic objectives of the Enterprise Development Programme and the mandate of the Department as a whole as it is focused on the promotion, fostering and development of small enterprises. The GEP is one of the key implementing agencies of the GDED, and during the year under review, numerous TER initiatives were supported by the GEP. Entrepreneurship activities supported by the GEP during the 2016/17 financial year include the following: Incubation; The Community Fund; Business development support; Township business renewal programmes; Mentoring and coaching; Investment management; and Skills development training. The activities undertaken by the GEP fall under Pillar 2 of the TER strategy of Gauteng, which is Entrepreneurship Development. During the year under review, the GEP achieved eleven (11) of its 14 planned targets. The Agency provided non-financial support to SMMEs, which total number was less than the targeted SMMEs. The non-achievement of this target was largely due to the low demand for non-financial support by new SMMEs that had been in operation for less than a year. In line with the TER strategy of the Province, the GEP funded township-based business enterprises through the Community Fund as well as the Township Business Renewal initiative. This achievement was buttressed by the acceleration of approval of funding applications throughout the period under review, with the total number of SMMEs and Cooperatives being approved for funding being 708 SMMEs, against the planned target of 345 SMMEs. The low number of Cooperative applications for support at GEP Regional Offices and the general social problems making it difficult to sustain working relations in Cooperatives, largely contributed to the nonachievement of targets. In this regard, 189 Cooperatives were supported financially, lower than the targeted 210 Cooperatives. However, 731 Cooperatives were supported non-financially, surpassing the targeted 700 Cooperatives. The GEP will continue to work with other Entities and Non-Profit Organisations, with a view of supporting qualifying Cooperatives obtained from their database in the 2017/18 financial year. Gauteng Department of Economic Development Annual Report 2016/

34 part B performance information 34 Gauteng Department of Economic Development Annual Report 2016/2017

35 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG ENTERPRISE PROPELLER Programme Name: Integrated Economic Development Services Sub-programme: Gauteng Enterprise Propeller Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of existing SMME s financially supported in the prioritised sectors. Number of new SMME s financially supported in the prioritised sectors The target was over-achieved due to a high demand for the provision of funding to qualifying SMMEs and the expedited approval of loan, Township Business Renewal and Community fund applications. Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of existing Co-ops financially supported in the prioritised sectors The target was over-achieved due to a high demand for funding to qualifying existing co-operatives. Gauteng Department of Economic Development Annual Report 2016/

36 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG ENTERPRISE PROPELLER Programme Name: Integrated Economic Development Services Sub-programme: Gauteng Enterprise Propeller Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of new Cooperatives financially supported in the prioritised sectors The target was not achieved due to the low volumes of new Cooperatives applying and qualifying for financial assistance Partnerships will be utilized to source Co-operative applications in the 2017/2018 financial year. Co-operative Databases of government departments and entities will continue to be assessed against GEP s qualifying criteria for financial support. Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of TER businesses funded. # GEP received more applications than anticipated due to high awareness of the Agency brought by the Township Renewal Programme and direct visits to communities. 36 Gauteng Department of Economic Development Annual Report 2016/2017

37 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG ENTERPRISE PROPELLER Programme Name: Integrated Economic Development Services Sub-programme: Gauteng Enterprise Propeller Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of existing SMME s non-financially supported in the prioritised sectors The target was not achieved due to the low number of SMMES qualifying for support. Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of new SMME s non-financially supported in the prioritised sectors None None Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of existing Co-ops non-financially supported in the prioritised sectors The target was overachieved due to a high demand for non-financial support to Co-ops and the expedited approval of received Business Development Support applications. Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of new Cooperatives non-financially supported in the prioritised sectors The target was over-achieved due to a high demand for non-financial support to Co-ops and the expedited approval of received Business Development Support applications. Gauteng Department of Economic Development Annual Report 2016/

38 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG ENTERPRISE PROPELLER Programme Name: Integrated Economic Development Services Sub-programme: Gauteng Enterprise Propeller Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of township based Informal Business Supported through Business Development Support (BDS) Interventions. # The target was over-achieved due to a high demand for non-financial support to Informal businesses and the expedited approval of received Business Development Support applications. Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of small businesses in the Industrial Parks supported through Business Development Support (BDS) Interventions. # The target was not achieved due to the low number of small businesses located in the Industrial Parks qualifying for the Business Development Support Interventions. 38 Gauteng Department of Economic Development Annual Report 2016/2017

39 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG ENTERPRISE PROPELLER Programme Name: Integrated Economic Development Services Sub-programme: Gauteng Enterprise Propeller Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of township businesses supported through the township business renewal programme. # The target was over-achieved due to a high demand for funding by township-based businesses and expedited approval of Township Business Renewal Programme applications. Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of Start- Up Businesses funded through the Community Fund. # The target was over-achieved due to a high demand for funding and the expedited approval of applications. Revitalise and modernised township economies reflecting radical transformation and re-industrialisation of Gauteng s economy. Number of Cooperatives funded through the Cooperative Assistance Programme (CAP). # The target was over-achieved due to a high demand for support through the Cooperative Assistance Programme and the expedited approval of applications. # New indicator that was not in the 2015/2016 financial year Gauteng Department of Economic Development Annual Report 2016/

40 part B performance information Gauteng Growth and Development Agency (GGDA) The GGDA is another implementing arm of the GDED, and is mandated to assist the Department in leading, facilitating and managing sustainable job creation and sustainable economic growth and development within the GCR. The GGDA achieves its mandate through the management of subsidiary companies that are involved in a number of industrial spaces. These include the Automotive Industry Development Centre (AIDC), The Innovation Hub (TIH), the Gauteng Industrial Development Zone (IDZ) and the Constitution Hill Development Company (ConHill). The GGDA itself focuses mainly on business enablement initiatives, regulatory reform, capital projects, land and development, and trade, investment promotion and facilitation activities. Skills Development AIDC Skills Development and Training Programme In terms of skills development, the AIDC undertook its Skills Development and Training Programme, where it is registered as the Supplier Park Development Company using AIDC as a trading name. In this sector, the AIDC aimed at providing economic infrastructure and sector development interventions. Under this initiative, economic infrastructure such as the Gauteng Automotive Learning Centre was developed. In addition to this, the AIDC s sectoral interventions include an Automotive Skills Advisory Forum, which was launched by The Authority of the South African Automotive Components Industry (NAACAM) and the National Association of Automobile Manufacturers of South Africa (NAAMSA). The objective of the Automotive Skills Advisory Forum during the period under review was to align all skills development requirements between government, industry and labour unions. Through the Advisory Forum, focused and demanddriven training academy output has become the norm, with skills and mentorship being provided by the Gauteng Automotive Learning Academy, which itself is a newly-accredited organisation. The AIDC s sector support programme is aimed at building human capacity specifically to address the needs of the automotive industry. This will assist to meet challenges pertaining to skills development and address the skills deficiency in line with the Skills Development Act, no. 97 of Sector Development AIDC Supplier Efficiency Programme The AIDC Supplier Efficiency Programme is focused on Sector Development, which feeds into the GGDA s overall mandate. The overriding objective of this particular programme is to improve the competitiveness of companies in the automotive component industry in the Gauteng Province. The aim is to enable component manufacturers in the Province to compete at a regional and an international supply chain level. Key focus areas of this programme therefore included quality control, cost reduction, productivity improvement and manufacturing/supply stability. During the period under review, the Supplier Efficiency Programme signed up the targeted 40 companies. Employees from these companies were extensively trained in a number of automotive quality assurance, manufacturing, energy savings and rapid improvement processes, among others. During the year 42 companies were signed onto the efficiency programme. The overachievement is due to additional two (02) SMMEs registered to operate through the hub. Enterprise Development Winterveldt Enterprise Hub (WEH) The aim of this project is to train and mentor SMMEs from the Winterveldt area, thus enabling them to grow their businesses into entities possessing the required operating accreditations. The Winterveldt Enterprise Hub processed 129 vehicles during the period under review against a target of 100, of which 102 were privately owned, 14 were Emergency Medical Services, 4 were from the Department of Labour, 4 were South African Police Services (SAPS), 2 were Department of Health and 3 were GDED vehicle, and 102 were private vehicles. There were 10 SMMEs operating through the hub, with training figures standing at 80 people against the annual target of 50. The Innovation Hub (TIH) The Innovation Hub (TIH) is managed by The Innovation Hub Management Company (SOC) Ltd (TIHMC), which itself was established by the Gauteng Provincial Government in order to establish a body to enhance the development of smart industries in the Province. TIH concentrates primarily on three sectors, which are ICT, bio-sciences and green economy. The total number of people trained in various skills development and training programmes during the period under review is against a planned annual target of with an over-achievement of the target by Gauteng Department of Economic Development Annual Report 2016/2017

41 performance information part B TIHMC Enterprise Development programmes consist of incubation programmes, which include the Maxum Incubator, the Climate Innovation Centre (CIC) and mlab. These programmes all offer incubation support to smart industry SMMEs and entrepreneurs in order to facilitate the building of sustainable businesses. In the long run, the expected objective was to establish businesses that would become central in the creation of a knowledge-based job market. Maxum Media Accelerator The Maxum Media Accelerator ( MMA ) is a media entrepreneurship acceleration programme that identifies, develops and supports newly formed media production companies in South Africa. The Maxum Media Accelerator (MMA) was established in partnership with Urban Brew and other industry partners, with a total of R2 million in funding by the GEP. The pilot year of the MMA ran from August 2014 until March As a pilot project, the strategic objective of this programme was to recruit 40 level 1 entrepreneurs, which is that of a start-up, 15 to 20 level 2, or pre-commercialised entrepreneurs, and 5 commercialised companies. The aim of the pilot was ultimately to graduate at least 1 entrepreneur to being sustainably commercialised. During the period under review, the CIC South Africa recruited 32 new entrepreneurs with technologies in the energy, waste, water and construction sectors. ekasi Programmes In line with the Province s TMR and TER strategies, ekasilabs were started with the objective of promoting innovation and entrepreneurship in the townships. Key strategic objectives were the encouragement of a new generation of entrepreneurs based in townships, skills development, and the promotion of high impact and high technology products and services which would create job opportunities for local communities. During the period under review, a total of 153 entrepreneurs were recruited and successfully enrolled into the ekasilab programmes established in townships where the programme has become active. To date, 245 individuals and start-ups have been trained in their craft through boot camps and start-up weekends, exceeding the target of 100. Many of the training exercises were planned to coincide with the Global Entrepreneurship Week celebrations worldwide. The programme was successful at attracting the target number of incubates, with all 10 incubates being acquired during Quarter 2 of the period under review. In line with the annual target, this number of incubates continues to undergo training as per the MMA s strategic objectives. Commercialisations Commercialisation is the process of introducing a new product or production method into market thereby making it available and or accessible to trade and create revenue. The TIH programme focuses on transitioning incubated companies to market for trading through a number of instruments that include but are not limited to access to market, access to finance and financial management and market analysis. A total of 33 successful commercialisations were recorded in the year under review. Climate Innovation Centre (CIC) The Climate Innovation Centre South Africa (CICSA) was established in order to provide a one-stop shop for enterprise development support to climatesmart or green technology SMMEs and researchers. This would, ideally, enable these players to engage in a more proactive approach to their work, with support comprising financial and non-financial services. Gauteng Department of Economic Development Annual Report 2016/

42 part B performance information TABLE 1.2 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG GROWTH AND DEVELOPMENT AGENCY Programme Name: Integrated Economic Development Services Sub-programme: Gauteng Growth and Development Agency Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Radically transforming the Gauteng economy through new, smart, knowledge-based economy. Number of innovations commercialised The GGDA had implemented tools such as the Commercialization Action Plan to monitor action items hence the target for the financial year was exceeded by six (6). Radically transforming the Gauteng economy through new, smart, knowledge-based economy. Number of entrepreneurs recruited in Ekasi Labs programmes. # Successful pitching sessions, start-up weekends and Boot Camps hosted during the year led to the over achievement of the target. Radically transforming the Gauteng economy through new, smart, knowledge-based economy. Number of Indigenous Knowledge System entrepreneurs recruited in Bio- Park. # The over achievement is due to the Coach Lab Entrepreneurship Programme used as a scouting tool for companies in the IKS space. Radically transforming the Gauteng economy through new, smart, knowledge-based economy. Number of new companies incubated in the Maxum Media Accelerator. # None. None. 42 Gauteng Department of Economic Development Annual Report 2016/2017

43 part B performance information TABLE 1.2 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG GROWTH AND DEVELOPMENT AGENCY Programme Name: Integrated Economic Development Services Sub-programme: Gauteng Growth and Development Agency Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Revitalised and modernised township economies reflecting radical transformation and reindustrialisation of Gauteng s economy. Number of vehicles repaired at the Winterveldt Enterprise Hub (WEH). # The target was over achieved due to marketing activities undertaken by the Hub to the surrounding communities. Revitalised and modernised township economies reflecting radical transformation and reindustrialisation of Gauteng s economy. Number of auto industry companies assisted in the efficiency programme The overachievment is due to additional two SMMEs registered to operate through the hub. Appropriately skilled human resource and businesses to radically transform and reindustrialise Gauteng economy. Number of BEE SMMEs incubated at Nissan Incubation Centre. # 8 8 None. None. Appropriately skilled human resource and businesses to radically transform and reindustrialise Gauteng economy. Number of BEE SMMEs incubated at Ford Incubation Centre. # 6 6 None. None. Appropriately skilled human resource and businesses to radically transform and reindustrialise Gauteng economy. Number of people participating in skills development and training programmes Successful marketing initiatives of the Learning Centre as well as continued relations with companies in the auto sector led to the over achievement of the target. Gauteng Department of Economic Development Annual Report 2016/

44 part B performance information TABLE 1.2 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG GROWTH AND DEVELOPMENT AGENCY Programme Name: Integrated Economic Development Services Sub-programme: Gauteng Growth and Development Agency Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Green industries contributing to energy security to radically transform and re-industrialise Gauteng economy. Number of green companies incubated at the Climate Innovation Centre The overachievement was a result of a healthy pipeline of companies from the GAP Competition which concluded during the financial year. # New Indicator that was not in the 2015/2016 financial year Sub-programme expenditure 2016/ /16 Sub- Programme Name Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Enterprise Development Regional and Local Economic Development (877) (707) Economic Empowerment (976) TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

45 performance information part B 4.3 Programme 3: Trade and Sector Development The purpose of the Trade and Sector Development Programme is to ensure that economic transformation that goes towards fulfilling the mandate of the Department to create decent work, an inclusive economy and equality. This programme and all its sub-programmes are all aimed towards improving the business environment for smaller and township-based business, thus enabling economic transformation : Tourism Unit (Dinokeng and Cradle of Humankind) The GDED strategic determination to separate the tourism demand and supply functions resulted in the latter being administered within the Cradle of Humankind World Heritage Site and Dinokeng Projects (COHWHS & Dinokeng) establishment, whilst the former was left with the Gauteng Tourism Authority. The key components that moved amongst others, were as follows: Tourism product and experience development; Tourism skills training; Tourism regulations and registrations; Tourism policy and planning; and Tourism stakeholder engagement. In the period 2016/17, 1489 people were enrolled in tourism and hospitality skills development initiatives, representing an underachievement of the annual planned target by 11 people. The participants in these programmes were young people from various Gauteng townships, and who were equipped with various hospitality and tourism skills, which enabled them to pursue careers in tourism and actively participate in the tourism sector, either as employees and/or as operators. This project directly contributes to the Radical Economic Transformation of the Transformation Modernisation and Reindustrialisation (TMR) approach and the Tourism Sector Transformation Agenda of Gauteng Tourism Sector Strategy, in that it seeks create employment and entrepreneurship opportunities for youth and provide meaningful support towards small, micro, medium and emerging (SMME) businesses based in townships with a view to ensuring an inclusive tourism economy. Gauteng Department of Economic Development Annual Report 2016/

46 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR Tourism Unit (Dinokeng and Cradle of Humankind) Programme Name: Trade and Sector Development Sub-programme: Tourism Unit (Dinokeng and Cradle of Humankind) Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Tourism workforce skills development that supports and facilitate radical economic transformation. Number of people enrolled in Tourism skills development. # The target was over-achieved as a result of the contribution made by and active participation of the private and public sector stakeholders in the tourism industry in Gauteng. # New indicator that was not in the 2015/2016 financial year 46 Gauteng Department of Economic Development Annual Report 2016/2017

47 performance information part B Gauteng Tourism Authority (GTA) Tourism Act No. 3 of 2014 provides for the effective domestic and international marketing of South Africa as a tourist destination; promotion of growth in development of the tourism sector; and responsibility of tourism, which seeks to generate greater economic benefits for local people and host communities. Gauteng Tourism Act No. 10 of 2001, Section 3 provides for the establishment of Gauteng Tourism Authority. Section 4 of the Act above provides for powers and duties of the Authority. The Act aims to provide for the promotion and sustainable development of tourism in Gauteng. The GTA derived its legislative mandate from the Act above, as amended in Towards the end of the 2015/16 financial year, the Agency s portfolio was reconfigured to separate the delivery on the dual mandate of marketing and managing destination Gauteng, as outlined in the Gauteng Tourism Sector Strategy; which is based on the National Tourism Sector Strategy. The GTA has been charged with the destination marketing core function while the Department of Economic Development (DED) assumes all destination management responsibilities. This thus repositioned the GTA as a Destination Marketing Organisation (DMO) whose mission is To brand, market and promote tourism in Gauteng to grow its visitor economy towards achieving the vision it shares with the department, i.e. Gauteng is Africa s must see, bigcity region experience! The GTA has successfully implemented its projects during the year under review. The projects were implemented though the following programmes: Destination Marketing - to market and promote Gauteng as the destination of choice for an African worldclass must see big-city region experience; Business and Leisure Event - to bid for, and host mega, major, significant, local and community events in Gauteng; and Visitor Information Services - to provide and manage visitor information services designed to enhance visitors experience including at the level of feeling safe and secure. The following marketing projects were successfully implemented: Attraction based marketing and promotions; Dedicated destination campaigns; Joint-marketing initiatives; Township based SMMEs, and youth township-based SMMEs promotions through the market access programme; and Destination promotions conducted in African, and BRICS markets platforms. The projects above are different promotional activities, but they shared a strategic objective, which was to bring people/tourists into tourism business, thereby working with different stakeholders in the tourism industry to inform both local and international tourists about destination Gauteng, and influence their judgements about different attractions in Gauteng. Through the implementation of market access programme, the GTA gave SMMEs opportunities to meet potential local and international businesses to learn and possibly partner with them, and exhibit their tourism offering to local and international platforms. During the year under review, the GTA supported events / event organisers through bidding for events, and providing both financial and non-financial support to events / event organisers. Through the hosting of events, people / tourists travelled for leisure, entertainment and business purposes as they attended conferences, workshops and other gatherings, thus contributed to the growth of the destination Gauteng. The GTA measured the economic benefit from events using rand value generated as a variable. As a niche market of the tourism sector, events contributed to the economic growth of the GCR in terms of rand value generated, labour market and through goods supply and provision of services. SMMEs were supported, jobs were created and infrastructure was improved, thus stimulating social-upliftment. As a support system to the tourism industry, the GTA implemented Tourism Services, thereby providing tourism information to different stakeholders of the tourism industry, including people / tourists in general. Through this programme, the GTA responded to the opponent of the tourism industry, i.e., crime, by providing support to tourists who experienced the hand of crime in Gauteng. Gauteng Department of Economic Development Annual Report 2016/

48 part B performance information Both destination promotion and events support projects were implemented to attract tourists positioning Gauteng in the world as a destination of choice. Statistically, the GTA successfully supported 52 business events and 7 signature events throughout the period under review. In addition, 7 regional events were incubated into signature events. This achievement is attributed to the continuous implementation of the Bidding and Hosting Strategy, as well as the improved means for dealing with stakeholders, and leveraging those strategic partnerships. The Agency promoted destination Gauteng in five SADC countries and two BRICS countries. The achievement is attributed to the improved means for engaging with stakeholders. 48 Gauteng Department of Economic Development Annual Report 2016/2017

49 part B performance information TABLE 1.2 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG TOURIMS AUTHORITY Programme Name: Trade and Sector Development Sub-programme: Gauteng Tourism Authority Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Increase Trade Activities Leading To Radical Economic Transformation of Gauteng s Economy. Number of business events supported The GTA improved its stakeholder management. As a result, partnerships with private sector assisted the Agency to over-achieve the annual targets by two (2). Increase Trade Activities Leading to Radical Economic Transformation of Gauteng s Economy. Number of signature events supported The GTA improved its stakeholder management. As a result, partnerships with South African tourism country managers and travel trade industry assisted the Agency to overachieve the annual targets by one (1). Increase Trade Activities Leading to Radical Economic Transformation of Gauteng s Economy. Number of regional events incubated. # The GTA improved its stakeholder management. As a result, partnerships with municipalities assisted the Agency to over-achieve the annual targets by two (2). Gauteng Department of Economic Development Annual Report 2016/

50 part B performance information TABLE 1.2 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG TOURIMS AUTHORITY Programme Name: Trade and Sector Development Sub-programme: Gauteng Tourism Authority Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Increase Trade Activities Leading to Radical Economic Transformation of Gauteng s Economy. Rand value of economic benefit generated from business and signature events. R R R R The overachievement is attributed to the increase in the number of visitors / participants in different events that the Agency supported. This is the result of successful marketing/ promotion of events during the year under review. Grow visitor economy by stimulating demand through effective Tourism Marketing and Promotion. Number of destination platforms promoted in Africa market. # 5 5 None. None. Grow visitor economy by stimulating demand through effective Tourism Marketing and Promotion. Number of destination platforms in BRICS market. # 2 2 None. None. # New indicator that was not in the 2015/2016 financial year 50 Gauteng Department of Economic Development Annual Report 2016/2017

51 performance information part B Gauteng Growth and Development Agency (GGDA) The purpose of this programme is to ensure reindustrialisation that addresses the triple policy imperatives of decent work, inclusive economy and equality. The programme s objective is to support, stimulate competitiveness of, and transform the eleven identified economic growth sectors (Finance, Automotive Industry, Manufacturing, ICT, Tourism, Pharmaceuticals, Creative Industries, Construction, Real Estate, Mineral Beneficiation and Agroprocessing). Furthermore, the objectives of the GGDA include the following: to maximise its job creation, economic inclusion and equality potential; to invest in strategic economic infrastructure that will facilitate and enhance increased economic activity, growth and development; to address the triple policy imperatives of job creation, economic inclusion and equality; to revitalise and modernise old industries that can assemble buses, trains and locomotives to respond to the opportunities created by the massive roll-out of transport infrastructure; and contribute to the triple policy imperatives of job creation, economic inclusion and equality; to procure 75% of government s goods and services from South African producers as a means of stimulating their growth and developing them as high end, high output producers; to attract and increase the amount of Domestic Direct Investment and Foreign Direct Investment especially in the 11 identified economic sectors, revitalising and modernising township economies and supporting the participation of SMME s, township entrepreneurs and co-operatives in the mainstream economy; and to increase trade, investment and export opportunities on the African Continent and globally towards increasing competitiveness an generating new growth and development which will contribute to the triple policy imperatives of job creation, economic inclusion and equality. Gauteng City Region (GCR) Incentives The GGDA, collaborating closely with the GDED, is developing the GCR Incentive Framework, which is aimed at providing a concise guide to all new and existing incentives available to companies that wish to, or are currently investing in the Province. The incentive framework was developed and presented to the Executive Management Team in February Export Development Programme Training Program The Export Ready Training Programme forms an essential part of the GGDA s Export Development initiatives. The focus of this particular programme lies in building capacity for exporting, and the training of both experienced and emerging exporters. The strategic objective is to ensure that products are internationally sustainable and export-ready at all times. As the development of sectors is central to the GGDA mandate, and therefore to the GDED, the role of this programme cannot be downplayed. The strategic objectives of the Training Programme are to enhance the market competitiveness of exporters, as well as to create a platform that enables these companies by addressing the stumbling blocks to market entry, giving them opportunities to grow and create employment opportunities in the long term. During Quarter 2, 157 companies were trained. The overall target was achieved successfully, with 247 companies being trained by the end of Quarter 4, against the annual target of 200. Foreign Direct Investment (FDI) In order to stimulate and maintain inward and outward trade and investment, the GGDA actively promotes the province s target sectors locally and internationally. It works with industry bodies to determine appropriate strategies for identified import and export markets. In order to support emerging entrepreneurs within the selected sectors, the GGDA actively seeks market entry points for qualifying companies through its export facilitation and strategic partnership units. During the period under review, 18 FDI projects were successfully concluded to the value of R2 billion thereby achieving the annual target. Domestic Direct Investment (DDI) GGDA continues to facilitate investment that supports the modernisation and re-industrialisalisation of the Gauteng economy and increase global trade activities for the Province. Furthermore, the Agency facilitates sector and business support in order to retain businesses in the province and assist businesses as they seek to expand their operations in Gauteng and South Africa by creating channels of interface with municipal and regulatory authorities. Six (06) DDI projects to the value of R1 billion were successfully claimed. This was as a results of successful completion of projects that were on the pipeline. Gauteng Department of Economic Development Annual Report 2016/

52 part B performance information Trade Facilitation The strategic focus is to assist Gauteng companies internationalise through trade and export activities. The target for 2016/17 was to assist 40 companies to secure trade deals to the value of R300 million. Eighty (80) companies recorded trade deals to the value of R325 million during the financial year meeting the annual target of R300 million. 52 Gauteng Department of Economic Development Annual Report 2016/2017

53 part B performance information TABLE 1.3 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG GROWTH AND DEVELOPMENT AGENCY Programme Name: Trade and Sector Development Sub-programme: Gauteng Growth and Development Agency Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Facilitate investment that supports modernisation and re-industrialisation of Gauteng Economy. Rand value of FDI facilitated. R R R None. None. Facilitate investment that supports modernisation and re-industrialisation of Gauteng Economy. Rand value of DDI facilitated. R R R None. None. Facilitate investment that supports modernisation and re-industrialisation of Gauteng Economy. GCR incentives framework developed. # GCR Incentives Framework developed. GCR incentives framework has been developed. None. None. Increase global trade activities in Gauteng. Number of enterprises assisted through export readiness programme The over achievement of the target was due to the partnership with DTI and additional resources supplied by them. Increase global trade activities in Gauteng. Number of trade deals facilitated for Gauteng based firms The target was over achieved through the various trade shows that GGDA was involved in. Companies supported by GGDA entered into more deals as was previously anticipated. # New indicator that was not in the 2015/2016 financial year Gauteng Department of Economic Development Annual Report 2016/

54 part B performance information Sub-programme expenditure 2016/ /16 Sub- Programme Name Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Trade and Investment Promotion Sector Development Strategic Initiative TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

55 performance information part B 4.4. Programme 4: Business Regulation and Governance The purpose of the Business Regulation and Governance Programme is to create a seamless environment of efficient business regulation and good governance. The aim is to ensure that ethical conduct is promoted, which will have a knock-on effect of transforming relevant industries while realising sustainable revenue generation and contributing toward the achievement of provincial TMR goals. The programme s objectives are to protect and promote the rights of consumers and facilitate ethical business practices in relation to customer service; regulate the liquor and gambling industries; maximise benefits from these industries that can accrue to broader socio-economic development in the Province; support and promote alignment of the work of GDED s agencies to that of the Department and ensure accountability of the agencies to the GDED Consumer Affairs The overall purpose of the Consumer Protection sub-programme is to protect and promote the rights of consumers in terms of the relevant legislative and regulatory frameworks. The fostering and promotion of ethical, consumer-centric business practices therefore, is central to the Consumer Protection subprogramme. Over the course of the period under review, the Department received a total of consumer complaints, and resolved a total of 2061 complaints against the target of The number of consumer complaints received and resolved can be attributed to the heightened awareness of the Consumer Complaints office within the Department, which was achieved by the implementation of the education and awareness campaigns, as well as increased exposure in general. As part of the increased exposure and awareness campaigns run by the Department, a total of 469 workshops and outreach events were conducted during the 2016/17 financial year, against a target of 350. These achievements are mainly due to invitations from the GPG Transversal-Financial Literacy Project, the increased focus on the elderly as well as disabled persons, and additional requests to host sessions of the School Olympiads Competition and ConHill Debating Competition, in addition to Ntirhisano Outreach events and the Qondisa Ishishini Lakho campaign. In addition, numerous appearances by Consumer Affairs representatives were made on the SABC 2 television show, Speak Out, which is a show centred on issues involving consumer affairs and rights. Gauteng Department of Economic Development Annual Report 2016/

56 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR CONSUMER AFFAIRS Programme Name: Business Relations and Governance Sub-programme: Consumer Affairs Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Increased consumer satisfaction that secures long term sustainability and facilitates the growth of businesses. Number of consumer affairs complaints received Heightened awareness through the Education and Awareness Campaigns and increased media exposure had contributed to the over-achievement of the target. Increased consumer satisfaction that secures long term sustainability and facilitates the growth of businesses. Number of consumer affairs complaints resolved Increased awareness by suppliers of the redress mechanism available to consumer, the capability of the Consumer Affairs Court as well as a voluntary compliance campaign aimed at suppliers in the form of blitz site inspections had contributed to the resolution of more consumer complaints. Increased consumer satisfaction that secures long term sustainability and facilitates the growth of businesses. Number of consumer affairs education programmes conducted Additional education programmes through the Qondisa Ishishini Lakho Campaign, Ntirhisano Programme and GPG Financial Wellness Programme attributed to the over-achievement of the planned targets. 56 Gauteng Department of Economic Development Annual Report 2016/2017

57 performance information part B Gauteng Liquor Board (GLB) The purpose of this sub-programme is to regulate the liquor trade industry, ensure ethical business practice and empowered stakeholders, promote and maintain an effective and efficient regulatory system for the liquor industry, maximise the benefits derived from the liquor industry and minimise the potential negative impact thereof and generate revenue from the industry and the regulation services offered for socio-economic development in Gauteng. The Gauteng Liquor Board developed projects for records management of the Department and GLB as well as the Gauteng Liquor Board System Automation, which is currently at its final phase of testing and it is awaiting the launch date in the new financial year. The target on the number of social responsibility programmes conducted was set at 2 per annum and this target was achieved. This is attributed to the partnerships established with GLB stakeholders and the planning and resources set aside for social responsibility programmes. The Gauteng Liquor Board hosted a Women s Empowerment event for women in liquor trade in partnership with Spotong magazine. This involved female liquor traders being empowered on mechanisms to expand their businesses, given opportunity to advertise and showcase their business through the Spotong magazine and introduced to liquor industry players amongst other financial and non-financial business opportunities. Furthermore, GLB conducted a Men s Dialogue Event. This event targeted men in Liquor Trade. GLB, in partnership with SAB, hosted the event to empower male liquor traders on growing their businesses, financial management, general business skills development, responsible trading, responsible drinking, eradicating alcohol abuse, mental health and exposed liquor traders to many other personal and business development initiatives offered by South African Breweries. Gauteng Liquor Board achieved all its targets during this reporting year. The target on CSI was fully met, a contribution to the sum of R was distributed to six beneficiaries who were each given an equal amount of R The recipients of the CSI fund are organisations that seek to redress the ills and scourge of alcohol and drug abuse within Gauteng region. The CSI contribution will further expand their programmes and increase their footprint within the Gauteng City Region. The annual revenue collection target for the Gauteng Liquor Board was set at R40m for the financial year. The annual target of R40m set was exceeded as R was collected. The enabling factor was that the renewal period for most of the traders falls within the fourth quarter. Furthermore, the amendment tariff regulations on the new fee structure that came into effect on 2 December 2016, played a pivotal role in increasing revenue. The enhanced revenue management strategies applied by the GLB also contributed towards achieving and exceeding the target on revenue collected. The GLB will work towards implementing the Automation System and finalising the Records Management project. Finalising these projects will further contribute towards modernisation of the public service and access to services offered by GLB and will further enhance the efficiency and turnaround time on the services rendered. Gauteng Department of Economic Development Annual Report 2016/

58 part B performance information TABLE 1.2 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG LIQUOR BOARD Programme Name: Business Regulation and Governance Sub-programme: Gauteng Liquor Board Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations A properly regulated liquor industry in Gauteng that generates revenue towards the socio-economic development of the Province. Number of liquor social responsibility programmes supported None. None. A properly regulated liquor industry in Gauteng that generates revenue towards the socio-economic development of the Province. Rand Value of CSI expanded. R R R None. None. A properly regulated liquor industry in Gauteng that generates revenue towards the socio-economic development of the Province. Rand value generated from regulation processes. R R R R The target was exceeded due to large volumes of renewals and the new application. 58 Gauteng Department of Economic Development Annual Report 2016/2017

59 performance information part B IGR and Strategic Partnerships The Department entered into a partnership with Sun International as part of sponsoring the Township Entrepreneurship Awards that took place on 8 April Sun International provided the following: Sponsorship of the Township SMME awards under the Tourism, Hospitality and Entertainment related category. Provided a total cash prize of R to the winner and two finalist nominees in the Tourism, Hospitality and Entertainment related category. Venue sponsorship, including venue and catering as agreed between the parties, to a maximum value of R , which amount was calculated at Sun International s sole discretion. The Department has finalised a partnership with South African Breweries (SAB) as part of the Township Revitalisation Program and Township Entrepreneurship Awards. The SAB provided a R sponsorship towards the Township Entrepreneurship Awards in order to enable sustainable township-based businesses that impact the economy in a positive manner. The Department entered into a partnership with Nedbank in driving the Township Entrepreneurship Awards. The objectives of the Township Entrepreneurship Awards were as follows: To recognise entrepreneurial talent in townships, a first in Gauteng and the country; To build and cement confidence in township based businesses by showcasing the variations, capabilities and expertise that exists in township businesses; To celebrate and promote entrepreneurship; and To assist in creating sustainable businesses that impact the economy in a positive manner. A sponsorship to the value of R was made available by Nedbank, in sponsoring a category in the retail and financial sector. The Department entered into a partnership with Pick n Pay in driving a program aimed towards the revitalisation of Spaza shops. A MOU was signed which defines 2 actions to support the initiative. The initiatives are as follows: Spaza Buying Club; and PnP Spaza concept pilot. The parties have entered into a Memorandum of Understanding for the non-exclusive provision of integrated offers to the Spaza shops and other businesses participating in the TER program throughout the Gauteng province. The solution aggregates physical and virtual products, as well as services to optimise the Spaza shop value chain; with business training, technology platform and mentoring and support to benefit the TER participants The Department in partnership with IBM is implementing the Corporate Service Corps (CSC) programme. The CSC programme is an innovative corporate volunteer initiative intended to expose IBM employees to the 21 st century context of doing business with a focus on emerging markets, global teams, diverse cultures and more sustainable business practices. The programme is intended to contribute to economic and social development priorities in emerging markets. It is operated along the same model as Peace Corps, pro bono community service program and is highly competitive, making a direct economic impact in over 20 countries where over 100 teams have been deployed as of Under this CSC programme, a team of 15 IBM volunteers from all around the world was deployed to South Africa from 7 October to 15 November 2016, to undertake a voluntary assignment and collaborate with local host organisations in the City of Johannesburg. The Gauteng Department of Economic Development was selected as one of the host organisations to receive a team of 3 IBM CSC participants to provide pro bono consulting over a 4 week period, from 10 October 4 November The issues tackled by the IBM volunteers will be based on priorities identified by the Department and the Gauteng Enterprise Propeller in the area of revitalisation of township economies and SMME development with focus on youth and women empowerment. The Johannesburg Chamber of Commerce and Industry (JCCI) entered into a Memorandum of Understanding with the GDED to help emerging business in Gauteng townships to be more profitable, efficient and competitive through training, assessment and exposure to the market. As part of the partnership between the Department and JCCI the following service will be delivered by the JCCI: Providing access to market opportunities and to the JCCI Export Incubator; JCCI to screen and recommend suitable township participants within the Province to the established business sector; Gauteng Department of Economic Development Annual Report 2016/

60 part B performance information Providing administrative and marketing support for the project as and when required to the extent possible; and Providing a list of suitable township businesses within Gauteng throughout the duration of the contract. 60 Gauteng Department of Economic Development Annual Report 2016/2017

61 part B performance information TABLE 1.3 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR IGR AND STRATEGIC PARTNERSHIPS Programme Name: Business Regulations and Governance Sub-programme: IGR and Strategic Partnerships Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Stakeholders from all three spheres of government and from other sectors of society working jointly to radically transform and re-industrialise Gauteng s economy. Number of JSE listed companies collaborated through Strategic Partnerships. # 6 6 None. None. Stakeholders from all three spheres of government and from other sectors of society working jointly to radically transform and re-industrialise Gauteng s economy. Number of projects supported in line with Strategic Partnerships. # 6 6 None. None. # New indicator that was not in the 2015/2016 financial year Gauteng Department of Economic Development Annual Report 2016/

62 part B performance information Gauteng Gambling Board (GGB) The Gauteng Gambling Board (GGB) is a statutory body established in terms of Section 3 of the Gauteng Gambling Act, No 4 of 1995 as amended. The Agency strives to regulate the industry in a transparent, fair, equitable and competent manner for the benefit of all stakeholders. The main functions of the Board are to oversee and control gambling activities in Gauteng, including: licensing of individuals and entities to conduct gambling and related activities; registering of persons engaged in such activities; approval and registering of all gambling devices ; and collecting of prescribed taxes and levies for the Gauteng Province and other specified beneficiaries. The tax revenue collected for the year ended 31 March 2017 was R985,9 million. The tax revenue collected was under the annual budgeted amount by 2% for the year. This is indicative of the overall economic climate which has shown growth of under 2% over the last period. A total of 691 inspections were conducted for the year against a target of 678 as per the 2016/17 annual performance plan. The achievement of this target was due to the collaboration between the GGB and licensees during the inspection process. The Board completed 190 compliance audits during the period under review, exceeding the target of 180 planned audits. The achievement of this target was due to the availability and cooperation received from licensees during the audits. The Corporate Social Investment (CSI) spend for the period under review was in excess of R24 million, against a target of R12 million. This was due to a saving on operational expenses, which were approved for reallocation to the CSI budget. 62 Gauteng Department of Economic Development Annual Report 2016/2017

63 part B performance information TABLE 1.4 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR GAUTENG GAMBLING BOARD Programme Name: Business Regulations and Governance Sub-programme: Gauteng Gambling Board Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations A properly regulated gambling and betting industry that generates revenue towards the socio-economic development of the Province. Number of gambling compliance audits conducted The over-achievement of this target was due to the availability and cooperation received from licensees during the audits process. A properly regulated gambling and betting industry that generates revenue towards the socio-economic development of the Province. Number of gambling inspections conducted The over-achievement of this target was due to the collaboration between the GGB and licensees during the inspection process. A properly regulated gambling and betting industry that generates revenue towards the socio-economic development of the Province. Rand value spent on Corporate Social Investment. R R R R Unspent budget reallocated to CSI and distributed to worthy projects in line with policy attributed to the overachievement of the target. A properly regulated gambling and betting industry that generates revenue towards the socio-economic development of the Province. Rand value of tax collected. R R R R The reason for the underachievement was indicative of the economic climate which has shown growth of under 2% over the last period. Gauteng Department of Economic Development Annual Report 2016/

64 part B performance information Sub-programme expenditure 2016/ /16 Sub- Programme Name Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Governance IGR and Strategic Partnership Consumer Protection (3) Gauteng Liquor Board TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

65 performance information part B 4.5 Programme 5: Economic Planning The purpose of this programme is to provide thought leadership to transform and re-industrialise the economy of the Gauteng City Region through policy and strategy development Economic Planning Four quarterly intelligence reports (Quarterly Economic Bulletins) have been produced for the 2016/17 financial year, focusing on the analysis of the movement of macro-economic variables such as employment, growth, inequality and poverty. As of the 2 nd quarter report, there has been a remarkable improvement through cooperation and partnership with GGDA and GCRO through data and information provision and joint compilation. One annual thematic report on the TER Baseline for the Sedibeng Region and Ekurhuleni Region analysing township enterprise patterns were compiled. Data was collected through a census methodology covering all the enterprises for that specific township. Two Bi-annual Job Creation Reports have been submitted to EXCO. These are based on data and information from municipalities, agencies and provincial departments on public sector employment and on the Quarterly Labour Force Survey. The GCR Bi-annual Monitoring Reports have been developed to measure and monitor the impact of all GCR Economic Development Plan interventions emanating from the approved policies, strategies, plans and programmes. These progress reports are important to collect data and information on the implementation of GEDP, and will be an input in the impact assessment of the GEDP implementation at the end of the current government term of office. The TER Mid-Term Impact Assessment was developed for 2016/17 in Quarter 4. The Impact Assessment records the progress on the implementation of the TER Strategy for each Key Focus Area. This report is the baseline towards the development of the TER full impact assessment at the end of term for the 5 th Administration. Gauteng Department of Economic Development Annual Report 2016/

66 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR ECONOMIC PLANNING Programme Name: Economic Planning Sub-programme: Economic Planning Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Number of economic intelligence reports produced None. None. To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Economic intelligence report produced. # Economic intelligence report (annual thematic report) produced. Economic intelligence report (annual thematic report) produced. None. None. To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Number of job creation reports submitted to EXCO None. None. To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Number of youth placement The funding allocated for the placements allowed for additional youth to benefit from the programme. To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Bi-annual GCR Monitoring Economic Plan developed. # Bi-annual GCR Monitoring Economic Plan developed. Bi-annual GCR Monitoring Economic Plan developed. None. None. 66 Gauteng Department of Economic Development Annual Report 2016/2017

67 part B performance information TABLE 1.1 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR ECONOMIC PLANNING Programme Name: Economic Planning Sub-programme: Economic Planning Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. TER impact assessment conducted. # TER impact assessment conducted. TER impact assessment conducted. To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Impact assessment on Gauteng Automotive investment conducted. # Impact assessment on Gauteng Automotive investment conducted. Conducted the impact assessment on Gauteng Automotive investment. # New indicator that was not in the 2015/2016 financial year Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations None. None. None. None. Gauteng Department of Economic Development Annual Report 2016/

68 part B performance information Sector and Industry Development The aim of the TMR Strategy is to shift the structure of the provincial economy in terms of ownership and addressing the issue of de-industrialisation to achieve an integrated, knowledge-based GCR economy. In order to achieve this, the Gauteng Industrial Policy Action Plan, and the 11 Sector Strategies that were mooted by the aforementioned Action Plan became the basis for the Gauteng Industry Policy Action Plan (IPAP) / GCR EDP implementation plan. The process of drafting the Gauteng IPAP involved thorough consultation between sector departments, government entities and industrial stakeholders. The aim of the Gauteng Black Industrial Policy is to involve black entrepreneurs in the manufacturing space. The initial stages of the programme have met their targets, with 12 high industrialisation projects business cases having been developed to date. The completed and developed business cases have been submitted to their relevant Departments for implementation and the sourcing of funding for these projects. Monthly reporting and consultation is conducted to ensure progress and to remedy any deviations prior to their occurrence. The Gauteng Black Industrial Policy Framework was developed. The target was achieved due to a consultative processes that involved the DTI and related stakeholders. The process thus aligned itself with the DTI-developed National Black Industrial Policy, which streamlined the consultative process. 68 Gauteng Department of Economic Development Annual Report 2016/2017

69 part B performance information TABLE 1.2 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR SECTOR AND INDUSTRY DEVELOPMENT Programme Name: Economic Planning Sub-programme: Sector and Industry Development Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Gauteng Industrial Policy Action Plan (IPAP) developed. # Gauteng Industry Policy Action Plan (IPAP) developed. Gauteng Industrial Policy Action Plan (IPAP) was developed. None. None. To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Gauteng Black Industrialists Policy Framework developed. # Gauteng Black Industrialist Policy Framework developed. Gauteng Black Industrialists Policy Framework was developed. None. None. To have comprehensive, informative policies and strategies for implementing strategic economic development programmes in Gauteng. Number of high impact industrialisation projects packaged. # None. None. # New indicator that was not in the 2015/2016 financial year Gauteng Department of Economic Development Annual Report 2016/

70 part B performance information Strategic Economic Infrastructure The revitalisation of township economies has been prioritised by the Gauteng Provincial Government. In keeping with the strategic perspective towards Transformation, Modernisation and Reindustrialisation (TMR), the Department has committed to creating an enabling environment through the establishment of strategic economic infrastructure and refurbishing and revitalising existing industrial parks and business hubs with the aim to ensure that the provincial economy thrives. ASP Infrastructure Projects Mini Factory The Mini Factory concept is one that was developed to accommodate tenants that may not have a need for large manufacturing spaces to operate. The overall objective with this project was to deliver smaller factory spaces to accommodate the aforementioned category of manufacturers, with Small Manufacturers Enterprise (SME) factory design and construction being paired with central office space for administrative work. This project was 100% completed during the year under review. De-snagging was completed, with the works completion certificate being issued on 26 th November All relevant certificates were obtained, and the facility was successfully handed over to the tenant. Nissan SA Incubation Centre (ICN) The Nissan SA approached GPG seeking support to assist it in alleviating the two prong challenge with which it is faced and to be competitive in its bid to assemble the new Nissan Navara at their Rosslyn vehicle assembly facility. The GPG (through DED) agreed to assist Nissan SA by proposing to invest R200m in the project. The objective of the project was to design and construct a facility to be located within Nissan s vehicle assembly plant site for an area to accommodate eight (8) incubates at a time. The size of the facility would be in the region of square metres. The incubates will subsequently support the automotive industry s vision 2020 requirement of increased local content. This project was successfully completed after the GPG, through the GDED and its implementing agents, proposed to invest R200 million in the project. The construction of the Incubation Centre is 100% complete. Eight (8) SMME incubates were appointed and will commence incubation in the new financial year. The Innovation Hub (TIH) Bio Park Facility Project The development and expansion of the Innovation Hub, in the northern corridor, continue to be a priority for the Department. The Bio-Science Park facility was established as an incubation centre for SMMEs and small manufacturers in the pharmaceutical and bio-chemicals industries. The aims of the Bio- Science Park are to provide nurturing environment for biotechnology start-ups to develop, thrive, and eventually become important commercial players; and contribute to economic growth. The progress with the construction of the Biopark Phase 2 is reported to be 80% completed. Adverse weather conditions led to a cumulative delay of 40 days in the construction site. Industrial Development Zone (IDZ) The Gauteng IDZ was a Special Purpose Vehicle (SPV) established to develop and operationalise the designated IDZ at OR Tambo International Airport. In line with its establishment mandate as well as the application made to the National Department of Trade and Industry (DTI) for consideration and approval of its operator permit, the Gauteng IDZ is required to promote the beneficiation of pre-selected minerals in South Africa through the establishment of a Jewellery Manufacturing Precinct. The Gauteng IDZ is further required to identify scope, design, construct and operationalise programmes that will contribute to job creation, foreign direct investment as well as inclusive and competitive economic growth and development. As a subsidiary of the GGDA, it is the objective of the Gauteng IDZ to also contribute to the promotion and realisation of Gauteng as a competitive Global City Region. To this end, the Gauteng IDZ will: Identify, design and enable focused exportdriven manufacturing and beneficiation programmes in and within the proximity of OR Tambo International Airport. These programmes will serve to increase industrialisation and manufacturing capability in targeted, exportdriven sectors in the region, whilst promoting foreign direct investment and skills development, job creation and technological advancement and diversification of the province s economy; Contribute to the socio-economic development of the Gauteng Global City Region by ensuring the identification and implementation of projects that have synergies and linkages with programmes driven by all spheres of government viz. the home metropolitan municipality s development framework (i.e. the Aerotropolis framework), the province s strategic economic development framework (encompassing the five corridor approach) and national government s strategic infrastructure programme. 70 Gauteng Department of Economic Development Annual Report 2016/2017

71 performance information part B JMP Bulk Infrastructure The Gauteng IDZ is presently developing a Jewellery Manufacturing Project on land identified for such purposes within the OR Tambo International Airport IDZ. At the end of the financial year, progress with the construction of bulk infrastructure is reported to be at 70% against a planned target of 90%. Initial delays arose due to a community protest on the use of Bonaero Drive as the entrance to the park. Another delay was a result of having to adjust the site development plan (planning and design) to the investors / tenant s requirements (delivery of a food processing plant) to suit the tenant building specifications. The impact of this change on the precinct as a whole led to a 3-month delay in completing the project. This has stalled the project at a physical construction percentage of 70% against a planned target of 90%. Industrial Parks The Township Enterprise Hub programme is a turnkey solution that is aimed at addressing the objectives of the TER Strategy. The aim of the refurbishment programme is to enhance the effectiveness of the role of SMMEs in the growing of township economies. During the period under review, three (3) of the five (5) sites reached practical completion. These are the Vosloorus, Sebokeng and Eldorado industrial hubs. The Pennyville site, which is at 70%, experienced delays due to heavy rainfall and the Orlando site was delayed as a result of a discovery of ground water. Gauteng Department of Economic Development Annual Report 2016/

72 part B performance information TABLE 1.3 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR ECONOMIC INFRASTRUCTURE Programme Name: Economic Planning Sub-programme: Economic Infrastructure Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Revitalise and modernised township economies reflecting radical transformation and reindustrialisation of Gauteng s economy. Number of Industrial Parks in townships refurbished Two (2) Parks experienced delays in the refurbishment being completed. Pennyville Industrial Park was affected due to heavy rainfall. Orlando Industrial Park was affected as a result of ground water and rain delays. Strategic economic infrastructure that supports and facilitates radical economic transformation and reindustrialisation of Gauteng. Phase 2 Mini Factory 11 at the Rosslyn ASP constructed. The contractor has been appointed. Construct Phase 2 Mini Factory 11 at the Rosslyn ASP. Construct Phase 2 Mini Factory 11 at the Rosslyn ASP completed. None None Strategic economic infrastructure that supports and facilitates radical economic transformation and reindustrialisation of Gauteng. Phase 2 JMP bulk infrastructure at Airport City IDZ constructed. The contractor has been appointed. Site clearance, earthworks, platforms and trenches for services installation completed. Construct Phase 2 JMP bulk infrastructure at Airport City IDZ. Construct Phase 2 JMP bulk infrastructure at Airport City IDZ was 70% completed. Redesign of bulk requirements for identified tenant necessitated the redevelopment of the site development plan resulting in a 3 month delay. Completion of bulk infrastructure will be in the 2017/2018 financial year. 72 Gauteng Department of Economic Development Annual Report 2016/2017

73 part B performance information TABLE 1.3 PROVINCIAL TARGETS FOR 2016/2017 ANNUAL PERFORMANCE PLAN FOR ECONOMIC INFRASTRUCTURE Programme Name: Economic Planning Sub-programme: Economic Infrastructure Strategic objectives Performance Indicator Actual Achievement 2015/2016 Planned Target 2016/2017 Actual Achievement 2016/2017 Strategic economic infrastructure that supports and facilitates radical economic transformation and reindustrialisation of Gauteng. Phase 2 Bio-Sciences Park Facility at The Innovation Hub constructed. None. Construct Phase 2 of the Bio- Sciences Park Facility at The Innovation Hub. The target was not fullly achieved. First and second floor concrete works were at 100%, roof slap was at 90%, lift shaft at 100%, water reticulation at 40%, factory warehouse at 90%. Strategic economic infrastructure that supports and facilitates radical economic transformation and reindustrialisation of Gauteng. Phase 2 AIDC Nissan Incubation Centre constructed. None. Phase 2 AIDC Nissan Incubation Centre constructed. Phase 2 AIDC Nissan Incubation Centre has been constructed. Deviation from planned target to Actual Achievement for 2016/2017 Comment on deviations Adverse weather conditions have led to parallel and cumulative delays of 40 days on the project. An acceleration plan has been developed to address the time shortfall on the project. None. None. Gauteng Department of Economic Development Annual Report 2016/

74 part B performance information Sub-programme expenditure 2016/ /16 Sub- Programme Name Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Policy and Planning Research and Development Monitoring and Evaluation Economic Infrastructure Development Sector and Industry Development Inclusive Economy TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

75 performance information part B 5. TRANSFER PAYMENTS 5.1 Transfer payments to public entities Name of Public Entity Services rendered by the public entity Amount transferred to the public entity Amount spent by the public entity Achievements of the public entity Gauteng Enterprise Propeller (GEP) Gauteng Tourism Authority (GTA) As per APP 2016/2017 R R As per performance information As per APP 2016/2017 R R As per performance information Cradle of Humankind As per APP 2016/2017 R R As per performance information Dinokeng As per APP 2016/2017 R R As per performance information GGDA As per APP 2016/2017 R R As per performance information Gauteng Liquor Board (GLB) As per APP 2016/2017 R R As per performance information 5.2 Transfer payments to all organisations other than public entities There were no payments made to all organisation other than public entities by the Department. 6. CONDITIONAL GRANTS 6.1 Conditional grants and earmarked funds paid There were no conditional grants and earmarked funds paid by the Department. 6.2 Conditional grants and earmarked funds received There were no conditional grants transferred by the Department. 7. DONOR FUNDS There were no donor funds transferred by the Department. 8. CAPITAL INVESTMENT There were no capital investments Capital investment, maintenance and asset management plan There were no capital investments. Gauteng Department of Economic Development Annual Report 2016/

76 76 Gauteng Department of Economic Development Annual Report 2016/2017

77 C governance Gauteng Department of Economic Development Annual Report 2016/

78 part C governance 1. INTRODUCTION The GDED adopts its risk management principles and approach in alignment with the Gauteng Provincial Treasury s Risk Management Framework, with the GDED s own Risk Management Unit overseeing this function. During the 2015/16 financial year, the Department established the Risk and Audit Management Committee (RAMC), while risk management progress reports began to be tabled at Senior Management and Executive Management Team monthly meetings. During the 2016/17 financial year, these processes continued to be implemented to ensure that risk and compliance were given the requisite attention at management level. Quarterly Risk Management Unit reports continue to be submitted to the externally-chaired Cluster Audit Committee. Oversight of procurement transactions amounting to R or more involving the Department is the mandate of the Bid Acquisition Council (BAC). The BAC also manages the oversight of procurement secured through any deviations from the prescribed procurement procedures regulating the Department. Heads of Branches, as well as the Director of Risk Management, the Chief Director responsible for Legal Advisory Services and the Chief Director responsible for Inclusive Economy are members of the BAC, and the latter continues to be tasked with the investigation of any irregular, fruitless or wasteful expenditure before such expenditure can be approved by the Accounting Officer of the Department. All Senior Management Service (SMS) members of the Department led by example during the 2016/17 financial year, in compliance with the requirements stated by the Department of Public Service and Administration (DPSA) Senior Management Service Handbook. The Handbook requires all SMS members to declare their financial interests during any year under review, a requirement that was duly fulfilled by all members during the 2016/17 financial year. 2. RISK MANAGEMENT The GDED is currently implementing its own risk management policy and strategy. The Risk Management Strategy was formulated after key risks were reviewed through a comprehensive engagement with all SMS members. The review of key strategic risks was conducted once again during the 2016/17 financial year. During Quarter 4 of the period under review, the GDED embarked on a process to develop a risk appetite statement, a risk threshold statement and risk tolerance levels. This process was aimed towards the enhancement of existing risk management processes. Part of the Risk Management Strategy of the Department is to conduct department-wide operational risk assessments on a regular basis. These assessments were conducted throughout all GDED Branches, as well as within the Gauteng Liquor Board, Dinokeng Projects and the Cradle of Humankind World Heritage Site. The RAMC tracks potential risks to business units, as well as strategises on the mitigation of those risks through effective risk reduction strategies to ensure that the aforementioned risks are managed down to tolerable levels for the Department. 3. FRAUD AND CORRUPTION The GDED s Fraud Prevention Plan was reviewed and updated process during the period under review. The Fraud Risk Registers for all business units underwent review, alongside the development of a new matrix of tasks and responsibilities which was tracked throughout the year. Presentations by the Risk Management Unit touching on anti-corruption and the Code of Conduct were made during induction sessions held throughout the year. In addition to the review of the Fraud Prevention Plan, the Whistle Blowing Policy was reviewed and approved during the 2016/17 financial year. Under the new Policy, employees are encouraged to report any irregular or fraudulent activity. As a member of the Provincial Anti-Corruption Coordinating Committee (PACCC), the GDED participated in the review of progress reports on fraud and corruption matters on a quarterly basis. All corruption matters referred to the Department by the National Anti-Corruption Hotline were duly investigated. 4. MINIMISING CONFLICT OF INTEREST As stated above, in order to reduce any instances of conflict of interest, all SMS members disclosed their financial interests for the period under review. In addition to this measure, all GDED employees were requested to submit forms for conducting remunerative work outside the ambit of the Public Service, which work must be approved by the MEC. In accordance with the Public Service Regulations dated August 2016, any employees conducting business with an organ of state are now requested to disclose the nature of such business, and elect either to cease the conduct of that business, or to resign as public servants. Any conflicts of interest are declared by members of the Bid Adjudication, Bid Specification and Bid Evaluation Committees and interview panels. The members of the aforementioned Committees are appointed to them by the Accounting Officer. 78 Gauteng Department of Economic Development Annual Report 2016/2017

79 governance part C 5. CODE OF CONDUCT Code of Conduct awareness sessions were held with employees. The Code of Ethics and Business Conduct Policy was reviewed and approved by the Accounting Officer during the year under review. The Risk Management Unit also presented on the Code of Ethics and Business Conduct during induction sessions. GDED conducted an ethics risk assessment, facilitated by an independent service provider in February The outcome of the assessment will inform the department s ethics program for the 2017/18 financial year. 6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES The Corporate Management Branch oversees the management of health and safety in the Department. Appointments in line with Section 17 and 18 of the Occupational Health and Safety Act, No. 85 of 1993 as amended were approved by the Head of the Department. A Health and Safety Committee in terms of Section 19 has also been constituted. In the year under review, Occupational Health and Safety risk assessments were conducted and duly mitigated. Two unannounced evacuation drills were conducted at Head Office and its satellites and the recommendations of the findings were implemented. Generated waste is segregated from the source of origin; a service provider was engaged to ensure waste recycling. 7. PORTFOLIO COMMITTEES The GDED presented the Annual Performance Plan for the FY2016/17 to the Standing Committee on Public Accounts (SCOPA) as part of the Appropriation Bill presentation. All quarterly reports for the 2016/17 financial year were submitted on time, and presentations for each quarter were completed accordingly. In addition to the above, the GDED also presented its specific plans and programmes to SCOPA. Responses to questions based on these plans, quarterly reports and finances were addressed. Committee resolutions were responded to with improvement plans where these were requested. Finally, input into Focus Intervention Studies was submitted to the SCOPA as required. 8. SCOPA RESOLUTIONS There were no SCOPA resolutions for the Department. The following table outlines SCOPA resolutions applicable to the Gauteng Liquor Board: Resolution No. Subject Details Response by the department Resolved (Yes/No) 1 Responses to House Resolutions emanating from Public Accounts Standing Committee s report on the Financial Statements and Performance Information of the Gauteng Liquor Board for the year ended 31 March The Entity provide the Committee with a progress report on the measures put in place to ensure proof of carrying out of monthly reconciliations in compliance with Section 40 (1) of the PFMA within 30 days of adoption hereof In order to ensure compliance with Section 40 (1) of the PFMA, monthly financial reconciliation and financials are prepared and submitted internally. The preparation of monthly financial reconciliation and financials are in accordance with GRAP standards and informs the quarterly review which is submitted to Provincial Treasury for assessment. To date, Quarterly reports have been submitted to Provincial Treasury. Yes Gauteng Department of Economic Development Annual Report 2016/

80 part C governance Resolution No. Subject Details Response by the department Resolved (Yes/No) 2. The Accounting Officer to ensure that transparent financial and performance management reporting systems are regularly maintained. This should be led and managed by staff with strong technical skills and experience and provide the Committee with a progress report detailing the effectiveness of measures put in place in addressing matters related to annual financial statements within 30 days of adoption hereof and thereafter every quarter continuing up until the end of June The MEC provides the Committee with a progress report detailing the effectiveness of measures put in place in addressing findings related to revenue management within 30 days of adoption hereof and continuing up until the end of June 2017 The measures put in place include inter alia the compilation of monthly financials and compliance to the PFMA to ensure that quarterly financials are prepared, reviewed and submitted to Treasury. The preparation of quarterly financials is in line with the Annual Financial Statements and all supporting documents are submitted to ensure accuracy of reported information. The quarterly submissions have shown an improvement on the number of findings emanating from the submission as they have reduced compared to the previous periods The reconciliation of revenue is done on a monthly basis and the completion of the document management and automation system will ensure that records will be easily and readily accessible in order to ensure accuracy of information regarding the revenue collected by the end of June The Department is currently ensuring that the internal controls are in place and that the implementation of the AG s findings is monitored on a monthly basis and proof of evidence is availed against the monthly performance reports. The measures put in place ensured AG findings are addressed and the risk of reoccurrence reduced Yes Yes 80 Gauteng Department of Economic Development Annual Report 2016/2017

81 governance part C Resolution No. Subject Details Response by the department Resolved (Yes/No) 4. The MEC provides the Committee with a monthly progress report on the effectiveness of measures put in place to address poor leadership in the Department within 30 days of adoption hereof and thereafter every quarter continuing up until the end of June 2017 The Accounting Officer exercises oversight of financial reporting and compliance with key legislation, however there were weaknesses in the GLB management that resulted in the sanctioning of GLB management. A new Chief Director has been appointed with effect from 1 October 2016 after the resignation of the previous Chief Director. All vacant positions have been advertised and will be filled by 1 March Training has been identified to address shortcomings of managers resulting in poor leadership skills. The Performance Management System is utilised to assist in identifying and addressing the poor leadership displayed Yes Gauteng Department of Economic Development Annual Report 2016/

82 part C governance 9. PRIOR MODIFICATIONS TO AUDIT REPORTS There were no material audit findings raised by the Auditor General in the 2015/16 financial year as the department achieved a clean audit. The following is a summary of prior year significant audit findings and progress achieved in resolving them, in relation to the Gauteng Liquor Board: Nature of qualification, disclaimer, adverse opinion and matters of noncompliance Financial year in which it first arose Progress made in clearing / resolving the matter The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of Section 40 (1)of the PFMA a material adjustment was identified during the audit. Contractual obligations and money owed by the entity were not always settled within 30 days or an agreed period, as required by Section 38(1)(f) of the PFMA and Treasury Regulations Revenue Management Penalties were not always charged on late renewals as required by section 100 of the Gauteng Liquor Act. The compliance unit did not always ensure that liquor license traders with lapsed licenses complied with Section 98 of the Gauteng Liquor Act and renewed their licences. Furthermore inspections were not done to ensure that liquor license holders with lapsed licenses stopped trading. Due to the number of unaccounted assets that had to be written off, the Accounting Officer did not adequately safeguard assets in contravention of Section 38(1) d of the Public Finance Management Act No.1 of The accounting officer did not take adequate steps to prevent irregular expenditure, as required by Section 38(1) (c)(ii) of the PFMA and Treasury Regulation A significant portion of this expenditure related to contracts awarded in the previous year. 2015/16 Implemented: Financial Statements were prepared quarterly for review by the Provincial Treasury and the Audit Committee. No material adjustments were identified. 2015/16 Implemented: Invoices received by the Department were paid within 30 days as required. 2015/16 In Progress: Penalties were added to the renewal fee when a renewal advice is issued. An automated license application system has been developed for implementation in 2017/18 financial year. The system is designed to calculate penalties payable. In progress: The Compliance Unit had a weekly target of inspections. Work is in progress to ensure a complete list of renewals is generated for the Compliance Unit to conduct inspections 2015/16 Implemented: A full verification exercise was undertaken in 2015/16 to ensure all assets are accounted for. 2015/16 Implemented: Monthly tracking sheet was used to monitor and report to the CFO and the HOD on any irregular expenditure. All unauthorised, irregular, fruitless and wasteful expenditure incurred in prior years was investigated and condoned where appropriate. 10. INTERNAL CONTROL UNIT The Department does not have an Internal Control Unit. However, internal control issues are the responsibility of the relevant business units. The Risk Management Unit conducted quarterly reviews of key controls. The reports were validated by Gauteng Audit Services and were submitted to the Cluster 1 Audit Committee. The implementation of action plans emanating from the reviews was tracked by the Risk Management Unit, Gauteng Audit Services (GAS) and the Cluster 1 Audit Committee. There were no major internal control deficiencies identified for the period under review. 82 Gauteng Department of Economic Development Annual Report 2016/2017

83 governance part C 11. INTERNAL AUDIT AND AUDIT COMMITTEES Internal audit work for the Department is conducted by Gauteng Audit Services (GAS), a unit within the Gauteng Department of Finance. GAS provides internal audit services to all the Departments in the Province on a shared services model. GAS provides assurance on the Department s effectiveness and efficiency of internal controls, governance and risk management. During the year under review, GAS conducted all the audits that were planned and these were approved in line with its Annual Internal Audit Plan. The Department proactively mitigated internal audit findings raised by GAS throughout the year. The Audit Committee serves a cluster of Departments and provides oversight on audit, risk management, financial and performance management issues. The Audit Committee approved the Department s three-year rolling Internal Audit Plan, Internal Audit Charter and the Auditor General s Audit Strategy and Budget. All the meetings of the Audit Committee took place as scheduled and were attended by representatives of the Department and external members. The table below discloses relevant information on the audit committee members: Name Qualifications Internal or external If internal, position in the department Date appointed Date Resigned No. of Meetings attended Vishnu Naicker Mandla Ncube Masaccha Mbonambi B. Com. Higher Diploma in Taxation; Business Management Diploma; Systems Administration Diploma; Certified Internal Auditor; Quality Assurance Reviewer (Internal Audit) Certified Corporate Fraud Manager; Diploma in Accounting; Certificate in Accounting B. Accounting B. Com. Honours Certificate in Board Governance External 01 October 2012 Current External 01 October 2014 Current External 01 October 2014 Rotated to Cluster 04 from 01 September 2016 Gauteng Department of Economic Development Annual Report 2016/

84 part C governance Priscilla Mateta B. Com. Degree Post Graduate Diploma in Engineering Business Management External 01 September 2016 Current Post Graduate Certificate in Compliance Management Post Graduate Certificate in Corporate Governance Environmental Law 12. THE PROMOTION OF ACCESS TO INFORMATION ACT, 2000 (ACT NO. 2 OF 2000) (PAIA) The PAIA is intended to foster a culture of transparency and accountability in public and private institutions by giving effect to the right of access to information as enshrined in section 32(1) of the Constitution of the Republic. The Department of Economic Development has complied with the requirements of the PAIA during the 2016/17 financial year. The Department has appointed a Deputy Information Officer, Chief Director: Legal Advisory Services, Ms Funeka Njobe as required by Section 17 of the Promotion of Access to Information Act. A report was submitted by the Department to the South African Human Rights Commission as required by Section 32 of the Act. A section 14 Manual which deals with the functions, contact details and index of records held by the Department as required by Section 15 of the Act was compiled and submitted to the Department of Justice and Constitutional Development and published in the Government Gazette. The Manual is available in four official languages (English, Afrikaans, isizulu and Sepedi). 84 Gauteng Department of Economic Development Annual Report 2016/2017

85 Gauteng Department of Economic Development Audit Committee REPORT part C Report of the Audit Committee Cluster 01 Gauteng Department of Economic Development We are pleased to present our report for the financial year ended 31 March Audit Committee and Attendance The Audit Committee consists of the external Members listed hereunder and is required to meet a minimum of at least two times per annum as per provisions of the Public Finance Management Act (PFMA). In terms of the approved Terms of Reference (GPG Audit Committee Charter), five meetings were held during the current year, i.e. three meetings to consider the Quarterly Performance Reporting (financial and non-financial) and two meetings to review and discuss the Annual Financial Statements and the Auditor-General of South Africa s (AGSA) Audit and Management Reports. Non-Executive Members: Name of Member Number of Meetings Attended Vishnu Naicker 02 Mandla Ncube 05 Priscilla Mateta 04 Executive Members In terms of the GPG Audit Committee Charter, officials listed hereunder are obliged to attend meetings of the Audit Committee: Compulsory Attendees Number of Meetings Attended Phindile Mbanjwa (Accounting Officer) 03 Khomotso Mojapelo (Chief Financial Officer) 05 Oupa Tshule (Chief Risk Officer) 05 Lorraine Francois (Chief Audit Executive) 03 The Audit Committee noted that the Accounting Officer attended three (03) out of five (05) scheduled Audit Committee meetings. However, a letter of apology was tendered with a duly authorized representative attending on behalf of the Accounting Officer. Therefore, the Audit Committee is satisfied that the Department adhered to the provisions of the GPG Audit Committee Charter in relation to ensuring that there is proper representation for the Accounting Officer. The Members of the Audit Committee met with the Senior Management of the Department and Internal Audit, collectively to address risks and challenges facing the Department. A number of in-committee meetings Audit Committee Responsibility The Audit Committee reports that it has complied with its responsibilities arising from section 38(1) (a) of the PFMA and Treasury Regulation The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with this Charter and has discharged all its responsibilities as contained therein. The effectiveness of internal control and Information and Communication Technology (ICT) Governance The Audit Committee has observed that the overall control environment of the department has continued to improve during the year under review. Some deficiencies in the system of internal control and deviations were reported in the Internal Audit Reports. The Department continues to make significant improvements in the control environment. SCM and ICT Governance still remains an area of focus in light of the external audit findings. The verification of predetermined objectives continues to remain a significant challenge for the department and needs to be a greater focus area in the forthcoming financial year. The department continues to improve its ability to implement Auditor-General and Internal Audit findings raised in previous years. The Audit Committee also reviewed the progress with respect to the ICT Governance in line with the ICT Framework issued by the Department of Public Services and Administration. Although there were some significant progress in improving the ICT internal control, access control, Disaster Recovery Plan and the Business Continuity Plan continues to high risk focus areas. Internal Audit The Audit Committee was satisfied that the Internal Audit plan fairly represented assurance required in managing the risk profile and control environment of the of the Department and identified a number risk-based, mandatory, performance, computer and follow-up audits to be performed during the year. The Audit Committee has noted considerable improvement in the communication between the Executive Management, the AGSA and the Internal Audit Function, which has strengthened the Corporate Governance initiatives within the Department. The Audit Committee still remains concern about the available capacity and resourcing within the Internal Audit Function and acknowledges the initiatives that are currently under way to strengthen the Unit. Gauteng Department of Economic Development Annual Report 2016/

86 part C Gauteng Department of Economic Development Audit Committee REPORT Risk Management Progress on the departmental risk management was reported to the Audit Committee on a quarterly basis. The Audit Committee was pleased with the effort made by the department to improve risk management, although there are areas that still require improvement. Management should take full responsibility for the entire Enterprise Risk Management Process and continue to support the Chief Risk Officer to even further enhance the performance of the Department. Forensic Investigations Investigations into alleged financial irregularities, financial misconduct and fraud were performed during the year under review. There was no officials held liable however the Provincial Treasury has requested that forensic investigations be conducted with regards to irregular expenditure and there was also no official held accountable for unauthorised expenditure as they were no longer in the employ of the Department. The quality of quarterly reports submitted in terms of the PFMA and the Division of Revenue Act The Audit Committee is satisfied with the content and quality of financial and non-financial quarterly reports prepared and submitted by the Accounting Officer of the Department during the year under review and confirms that the reports were in compliance with the statutory reporting framework. One-on-One Meeting with the Accounting Officer The Audit Committee has met with the Accounting Officer for the Department to address unresolved issues. One-on-One Meetings with the Executive Authority The Audit Committee has met with the Executive Authority for the Department to apprise the MEC on the performance of the Department. Auditor-General of South Africa The Audit Committee has met with the AGSA to ensure that there are no unresolved issues. Mr. Vishnu Naicker Chairperson of the Audit Committee 04 August 2017 Evaluation of Annual Financial Statements The Audit Committee has: Reviewed and discussed the audited Annual Financial Statements to be included in the Annual Report, with the AGSA and the Accounting Officer; Reviewed the Audit Report of the AGSA; Reviewed the AGSA s Management Report and Management s response thereto; Reviewed the Department s compliance with legal and regulatory provisions; and Reviewed significant adjustments resulting from the audit. The Audit Committee concurs with and accepts the AGSA s conclusions on the Annual Financial Statements, and is of the opinion that the audited Annual Financial Statements be accepted and read together with the report of the AGSA. The department must once again be commended for having no material misstatements. 86 Gauteng Department of Economic Development Annual Report 2016/2017

87 Gauteng Department of Economic Development Audit Committee REPORT part C Report of the Audit Committee Cluster 01 Gauteng Liquor Board We are pleased to present our report for the financial year ended 31 March Audit Committee and Attendance The Audit Committee consists of the external Members listed hereunder and is required to meet a minimum of at least two times per annum as per provisions of the Public Finance Management Act (PFMA). In terms of the approved Terms of Reference (GPG Audit Committee Charter), five meetings were held during the current year, i.e. three meetings to consider the Quarterly Performance Reporting (financial and non-financial) and two meetings to review and discuss the Annual Financial Statements and the Auditor-General of South Africa s (AGSA) Audit and Management Reports. Non-Executive Members Name of Member Number of Meetings attended Vishnu Naicker 02 Mandla Ncube 05 Priscilla Mateta 04 Executive Members In terms of the GPG Audit Committee Charter, officials listed hereunder are obliged to attend meetings of the Audit Committee: Compulsory Attendees Number of Meetings Attended Phindile Mbanjwa (Accounting Officer) 03 Khomotso Mojapelo (Chief Financial Officer) 05 Oupa Tshule (Chief Risk Officer) 05 Lorraine Francois (Chief Audit Executive) 03 The Audit Committee noted that the Accounting Officer attended three (03) out of five (05) scheduled Audit Committee meetings. However, a letter of apology was tendered with a duly authorized representative attending on behalf of the Accounting Officer. Therefore, the Audit Committee is satisfied that the Department adhered to the provisions of the GPG Audit Committee Charter in relation to ensuring that there is proper representation for the Accounting Officer The Members of the Audit Committee met with the Senior Management of the Department and Internal Audit, collectively to address risks and challenges facing the Department. A number of in-committee meetings were held to address control weaknesses and deviations within the Department. Audit Committee Responsibility The Audit Committee reports that it has complied with its responsibilities arising from section 38(1) (a) of the PFMA and Treasury Regulation The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with this Charter and has discharged all its responsibilities as contained therein. The effectiveness of internal control and Information and Communication Technology (ICT) Governance The Audit Committee has observed that the overall control environment of the Entity has not shown significant improvement during the year under review. Some deficiencies in the system of internal control and deviations are reported in the External and Internal Audit Reports. The Committee continues to remain concerned, despite its attempts and that of the management of the Department, about internal control around revenue recognition and recording. To improve the overall control environment, the Entity has been encouraged to put in more effort in implementing the agreed action plans to address the previously reported Auditor-General and Internal Audit findings. The Audit Committee also reviewed progress with respect to the ICT Governance in line with the ICT Framework issued by the Department of Public Services and Administration and was satisfied with the improvements made during the course of the financial year. The Entity is encouraged to continue with its improvement plan which should be informed by the External Audit and Internal Audit findings. Internal Audit The Audit Committee is satisfied that the Internal Audit plan represents a clear alignment with the key risks, has adequate information systems coverage, and a good balance across the different categories of audits, i.e. risk-based, mandatory, performance, computer and follow-up audits. The Audit Committee has noted considerable improvement in the communication between the Executive Management, the AGSA and the Internal Audit Function, which has strengthened the Corporate Governance initiatives within the Department. The Audit Committee wishes to stress that in order for the Internal Audit Function to operate at optimal level as expected by the Audit Committee, the shortage in human resources and skills should be addressed. Gauteng Department of Economic Development Annual Report 2016/

88 part C Gauteng Department of Economic Development Audit Committee REPORT Risk Management Progress on the departmental risk management was reported to the Audit Committee on a quarterly basis. The Audit Committee is satisfied that the actual management of risk is receiving attention, although there are areas that still require improvement. Management should take full responsibility for the entire Enterprise Risk Management Process and continue to support the Chief Risk Officer to even further enhance the performance of the Department. Forensic Investigations Investigations into alleged financial irregularities, financial misconduct and fraud were completed during the year under review. Various measures were recommended, including taking action against any identified officials found guilty. The quality of quarterly reports submitted in terms of the PFMA and the Division of Revenue Act The Audit Committee is satisfied with the content and quality of financial and non-financial quarterly reports prepared and submitted by the Accounting Officer of the Department during the year under review and confirms that the reports were in compliance with the statutory reporting framework. One-on-One Meeting with the Accounting Officer The Audit Committee has met with the Accounting Officer for the Department to address unresolved issues. One-on-One Meetings with the Executive Authority Whilst the committee has met with the Executive Authority for the Department to apprise the MEC on the performance of the Department it believes that the frequency of these interactions would be more beneficial to the Executive Authority. Auditor-General of South Africa The Audit Committee has met with the AGSA to ensure that there are no unresolved issues. Mr. Vishnu Naicker Chairperson of the Audit Committee 04 August 2017 Evaluation of Annual Financial Statements The Audit Committee has: Reviewed and discussed the audited Annual Financial Statements to be included in the Annual Report, with the AGSA and the Accounting Officer; Reviewed the Audit Report of the AGSA; Reviewed the AGSA s Management Report and Management s response thereto; Reviewed the Department s compliance with legal and regulatory provisions; and Reviewed significant adjustments resulting from the audit. The committee continues to express its concerns on the areas of material misstatements that continue to occur every year. The Department to whom the Entity reports is encouraged to assess the going concern status of Entity as the committee notes the technical insolvency issue raised by the AG. This will be an ongoing focus of the committee. The Audit Committee concurs with and accepts the AGSA s conclusions on the Annual Financial Statements, and is of the opinion that the audited Annual Financial Statements be accepted and read together with the report of the AGSA. 88 Gauteng Department of Economic Development Annual Report 2016/2017

89 D human CAPITAL management Gauteng Department of Economic Development Annual Report 2016/

90 part D human CAPITAL management 1. INTRODUCTION The Human Capital Management Chief Directorate is responsible for the provision of the strategic and transactional human capital management framework for the Department (from strategy and policy development to implementation and monitoring and evaluation), with the aim of enabling the Department to achieve its objectives. The Department endeavours to continuously contribute to this mandate by attracting, recruiting and retaining a skilled and capable workforce to ensure the provision of an effective and efficient service delivery. 2. OVERVIEW OF HUMAN RESOURCES Status of Human Resources in the Department The Department has identified key priority areas as interventions to ensure that its workforce is highly skilled, capacitated and ready to implement its mandate accordingly. These programmes range from recruitment and selection, retention, rewards, induction and orientation as well as training and development. The Department has therefore observed great improvements in areas of compliance and excellence in service delivery. Human Resource Development Skills development training for the financial year included generic and technical short courses for the various occupational categories and levels within the Department. The key highlights in terms of the development of the Department s human capital were as follows: Financial Skills for Non-Financial Managers; Advanced Business Writing Skills; Stakeholder and Client Relations Management; Risk Appetite and Tolerance; COSO 2013: Implementing the Framework; Compulsory Induction Programme (CIP); Microsoft; Supply Chain Management; and POPI Act. To further ensure that an all-round approach to personnel development is applied, cognitive learning was supplemented by behaviour-enhancing programmes, with the likes of Sign Language, Ethics and the Senior Management Development Programme being implemented throughout the period under review. The Department is continuously developing and skilling its staff members through the awarding of bursaries. The bursary scheme is not only limited to financial aid but also caters to the provision of adequate study leave to ensure that staff members are fully supported throughout their studies. Performance Management In the year under review, performance management was duly managed on a continuous and consistent basis, in order to ensure that strategic objectives are met by the reviewing, assessing and improving of performance, setting of performance objectives, and determination of recognition and rewards. The Department has implemented the Performance Management Development System (PMDS) to contract and assess staff against the performance of the Department. Outstanding achievers were awarded notch increments and performance bonuses based on annual assessments. This provides a platform to recognise and incentivise outstanding performance in the department. Employee Relations The Department has dealt with labour matters in accordance with the relevant policies, legislation and regulations, and has further improved on turnaround times in resolving these cases. The Departmental Standing Committee (DSC) was established, and serves as the Departmental bargaining forum. DSC meetings were held as per the relevant meetings calendar. The Department has thus taken adequate steps towards the prioritisation of sound labour practises through collaboration with the Departmental Standing Committee. 90 Gauteng Department of Economic Development Annual Report 2016/2017

91 human CAPITAL management part D In addition, the Department continued to comply with timeous reporting to the Public Service Commission (PSC), the Department of Public Service and Administration (DPSA) as well as including National and Provincial Treasury in all policy and compliance reporting matters. Employee Wellness Programme The Employee Wellness Programme was coordinated and managed in the Department with the support of Senior Management. The Wellness Committee, Peer Educators and Wellness Champions were duly appointed by the Accounting Officer. The Employee Wellness Committee meetings were held throughout the year as planned. An annual budget was set aside for Employment Equity and health promotion initiatives in the department. The Department ensured that its policies were non-discriminatory and that they did not unfairly discriminate against employees on the basis of their HIV and AIDS status. Health and wellness screenings such as Diabetes, HIV/AIDS, High Blood Pressure, etc. were conducted through Independent Counselling Advisory Services (ICAS) and Government Employees Medical Scheme (GEMS). Key Achievements The Department will continue to focus on identifying and retaining scarce and critical skills that contribute towards the achievement of the departmental mandate and listed below are the achievements and successes for the period under review: Achieved annual reporting and compliance. Approval and implementation of Human Resource Plan and Recruitment Plan, Workplace Skills Plan, HIV and AIDS Strategy. Implemented the review of the Performance Management Development System (PMDS) to align with the broader GPG PMDS philosophy and principles. Improved the management of misconduct; dispute management; and grievance management. Improved the Management of Performance Assessment Tool (MPAT) 1.6 scores of the Department. Future Plans Plans for the next financial period include: Finalisation of the skills audit. Continuous SMS development. Continuous implementation of Online Payroll Certification. Employee Satisfaction Survey. In the year under review, the Department faced challenges in improving the vacancy rate due to a high number of promotions of staff within the department. In our endeavour to maximise service delivery, the department had to balance the releasing of staff for skills development initiatives versus implementation of programmes to communities. 3. HUMAN RESOURCES OVERSIGHT STATISTICS 3.1 Personnel-related expenditure The following tables summarise the final audited personnel-related expenditure by programme and by salary band. In particular, it provides an indication of the following: amount spent on personnel; and amount spent on salaries, overtime, homeowner s allowances and medical aid. Gauteng Department of Economic Development Annual Report 2016/

92 part D human CAPITAL management Table Personnel expenditure by programme for the period 1 April 2016 and 31 March 2017 Programme Total expenditure (R 000) Personnel expenditure (R 000) Training expenditure (R 000) Professional and special services expenditure (R 000) Personnel expenditure as a % of total expenditure Average personnel cost per employee (R 000) Administration Business Regulation & Governance Economic Planning Integrated Economic Development Services Trade And Sector Development Total Table Personnel costs by salary band for the period 1 April 2016 and 31 March 2017 Salary band Personnel expenditure (R 000) % of total personnel cost No. of employees Average personnel cost per employee (R 000) Contract (Levels 13-16) Contract (Levels 3-5) Contract (Levels 6-8) Contract (Levels 9-12) Contract Other Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Periodical Remunerations Senior management (Levels 13-16) Skilled (Levels 3-5) TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

93 part D human CAPITAL management Table Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for the period 1 April 2016 and 31 March 2017 Salaries Overtime Home Owners Allowance Medical Aid Programme Amount (R 000 Salaries as a % of personnel costs Amount (R 000) Overtime as a % of personnel costs Amount (R 000) HOA as a % of personnel costs Amount (R 000) Medical aid as a % of personnel costs Economic Planning Administration Business Regulation & Governance Integrated Economic Development Services Administration (7/8) Integrated Economic Development Services (Ieds) 7/ Business Regulation & Governance (Brg) 7/ Trade And Sector Development TOTAL Gauteng Department of Economic Development Annual Report 2016/

94 part D human CAPITAL management Table Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for the period 1 April 2016 and 31 March 2017 Overtime Salaries Home Owners Allowance Medical Aid Salary band Amount (R 000 Salaries as a % of personnel costs Amount (R 000) Overtime as a % of personnel costs Amount (R 000) HOA as a % of personnel costs Amount (R 000) Medical aid as a % of personnel costs Contract (Levels 13-16) Contract (Levels 3-5) Contract (Levels 6-8) Contract (Levels 9-12) Contract Other Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Periodical Remuneration Senior Management (Levels 13-16) Skilled (Levels 3-5) TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

95 human CAPITAL management part D 3.2 Employment and Vacancies This section summarise the position of the Department with regard to employment and vacancies. The following tables summarise the number of posts on the establishment, the number of employees, the vacancy rate, and whether there are any staff that are additional to the establishment. This information is presented in terms of three key variables: programme salary band; and critical occupations (see definition in notes below). Departments have identified critical occupations that need to be monitored. In terms of current regulations, it is possible to create a post on the establishment that can be occupied by more than one employee. Therefore, the vacancy rate reflects the percentage of posts that are not filled. Gauteng Department of Economic Development Annual Report 2016/

96 part D human CAPITAL management Table Employment and vacancies by programme as on 31 March 2017 Programme Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Economic Planning, Permanent Administration, Permanent Busines Regulation & Governance, Permanent Integrated Economic Development Services, Permanent Administration (7/8), Permanent Integrated Economic Development Services (Ieds)7/8, Permanent Econ and Develop Plan (06/07), Permanent Busines Regulation & Governance (Brg) 7/8, Permanent Trade And Sector Development, Permanent TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

97 part D human CAPITAL management Table Employment and vacancies by salary band as on 31 March 2017 Salary band Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment 01 Lower Skilled (Levels 1-2), Permanent Skilled (Levels 3-5), Permanent Highly Skilled Production (Levels 6-8), Permanent Highly Skilled Supervision (Levels 9-12), Permanent Senior Management (Levels 13-16), Permanent Other, Permanent Contract (Levels 3-5), Permanent Contract (Levels 6-8), Permanent Contract (Levels 9-12), Permanent Contract (Levels 13-16), Permanent TOTAL Gauteng Department of Economic Development Annual Report 2016/

98 part D human CAPITAL management Table Employment and vacancies by critical occupations as on 31 March 2017 Critical occupation Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Administrative Related, Permanent Architects Town and Traffic Planners, Permanent Civil Engineering Technicians, Permanent Cleaners In Offices Workshops Hospitals Etc., Permanent Client Inform Clerks(Switchb Recept Inform clerks), Permanent Communication and Information Related, Permanent Engineering Sciences Related, Permanent Finance and Economics Related, Permanent Financial and Related Professionals, Permanent Financial Clerks and Credit Controllers, Permanent Head Of Department/Chief Executive Officer, Permanent Human Resources & Organisat Developm & Relate Prof, Permanent Human Resources Clerks, Permanent Human Resources Related, Permanent Information Technology Related, Permanent Language Practitioners Interpreters & Other Commun, Permanent Legal Related, Permanent Library Mail and Related Clerks, Permanent Gauteng Department of Economic Development Annual Report 2016/2017

99 part D human CAPITAL management Table Employment and vacancies by critical occupations as on 31 March 2017 Critical occupation Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Logistical Support Personnel, Permanent Material-Recording and Transport Clerks, Permanent Messengers Porters and Deliverers, Permanent Other Administrat & Related Clerks and Organisers, Permanent Other Administrative Policy and Related Officers, Permanent Other Information Technology Personnel., Permanent Other Occupations, Permanent Secretaries & Other Keyboard Operating Clerks, Permanent Senior Managers, Permanent TOTAL Gauteng Department of Economic Development Annual Report 2016/

100 part D human CAPITAL management 3.3 Filling of SMS Posts Table SMS post information as on 31 March 2017 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant Director-General/ Head of Department Salary Level Salary Level Salary Level Salary Level Total Table SMS post information as on 30 September 2016 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant Director-General/ Head of Department Salary Level Salary Level Salary Level Salary Level Total Gauteng Department of Economic Development Annual Report 2016/2017

101 part D human CAPITAL management Table Advertising and filling of SMS posts for the period 1 April 2016 and 31 March 2017 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant Director-General/ Head of Department Salary Level Salary Level Salary Level Salary Level Total Table Reasons for not having complied with the filling of funded vacant SMS - Advertised within 6 months and filled within 12 months after becoming vacant for the period 1 April 2016 and 31 March 2017 Reasons for vacancies not advertised within six months Not Applicable Reasons for vacancies not filled within six months DIRECTOR: DEVELOPMENT COMMUNICATIONS AND OUTREACH : The post was advertised however there was no suitable candidate. The post has been re-advertised and the process of appointment in underway. Table Disciplinary steps taken for not complying with the prescribed timeframes for filling SMS posts within 12 months for the period 1 April 2016 and 31 March 2017 Reasons for vacancies not advertised within six months Not Applicable Reasons for vacancies not filled within six months Not Applicable Gauteng Department of Economic Development Annual Report 2016/

102 part D human CAPITAL management 3.4 Job Evaluation Table Job Evaluation by Salary band for the period 1 April 2016 and 31 March 2017 Salary band Number of posts on approved establishment Number of Jobs Evaluated % of posts evaluated by salary bands Posts Upgraded Posts downgraded Number % of posts evaluated Number % of posts evaluated Lower Skilled (Levels1-2) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior Management Service Band A Senior Management Service Band B Senior Management Service Band C Senior Management Service Band D Total Table Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1 April 2016 and 31 March 2017 Gender African Asian Coloured White Total Female Male Total Employees with a disability Gauteng Department of Economic Development Annual Report 2016/2017

103 part D human CAPITAL management Table Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2016 and 31 March 2017 Occupation Number of employees Job evaluation level Remuneration level Reason for deviation N/A None N/A None N/A None N/A None Total number of employees whose salaries exceeded the level determined by job evaluation 0 Percentage of total employed 0 Table Profile of employees who have salary levels higher than those determined by job evaluation for the period 1 April 2016 and 31 March 2017 Gender African Asian Coloured White Total Female Male Total Employees with a disability Total number of Employees whose salaries exceeded the grades determine by job evaluation None Gauteng Department of Economic Development Annual Report 2016/

104 part D human CAPITAL management 3.4 Employment Changes Table Annual turnover rates by salary band for the period 1 April 2016 and 31 March 2017 Salary band Number of employees at beginning of period-1 April 2016 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate 01 Lower Skilled (Levels 1-2) Permanent Skilled (Levels 3-5) Permanent Highly Skilled Production (Levels 6-8) Permanent Highly Skilled Supervision (Levels 9-12) Permanent Senior Management Service Band A Permanent Senior Management Service Band B Permanent Senior Management Service Band C Permanent Senior Management Service Band D Permanent Other Permanent Contract (Levels 3-5) Permanent Contract (Levels 6-8) Permanent Contract (Levels 9-12) Permanent Contract Band A Permanent Contract Band B Permanent Contract Band C Permanent Contract Band D Permanent TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

105 part D human CAPITAL management Table Annual turnover rates by critical occupation for the period 1 April 2016 and 31 March 2017 Critical occupation Number of employees at beginning of period-april 2016 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate Administrative Related Permanent Architects Town and Traffic Planners Permanent Civil Engineering Technicians Permanent Cleaners In Offices Workshops Hospitals Etc. Permanent Client Inform Clerks (Switchb Recept Inform Clerks) Permanent Communication and Information Related Permanent Engineering Sciences Related Permanent Finance and Economics Related Permanent Financial and Related Professionals Permanent Financial Clerks and Credit Controllers Permanent Food Services Aids and Waiters Permanent Head Of Department/Chief Executive Officer Permanent Human Resources & Organisational Development & Related Prof Permanent Human Resources Clerks Permanent Human Resources Related Permanent Information Technology Related Permanent Language Practitioners Interpreters & Other Communicators Permanent Legal Related Permanent Gauteng Department of Economic Development Annual Report 2016/

106 part D human CAPITAL management Table Annual turnover rates by critical occupation for the period 1 April 2016 and 31 March 2017 Critical occupation Number of employees at beginning of period-april 2016 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate Library Mail and Related Clerks Permanent Logistical Support Personnel Permanent Material-Recording and Transport Clerks Permanent Messengers Porters and Deliverers Permanent Other Administrators & Related Clerks and Organisers Permanent Other Administrative Policy and Related Officers Permanent Other Information Technology Personnel. Permanent Other Occupations Permanent Secretaries & Other Keyboard Operating Clerks Permanent Senior Managers Permanent TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

107 part D human CAPITAL management Table Reasons why staff left the department for the period 1 April 2016 and 31 March 2017 Termination Type Number % of Total Resignations Death 0 0 Resignation Expiry of contract 0 0 Dismissal operational changes 0 0 Dismissal misconduct 0 0 Dismissal inefficiency 0 0 Discharged due to ill-health 0 0 Retirement 3 10 Transfer to other Public Service Departments 0 0 Other 0 0 Total Total number of employees who left as a % of total employment Gauteng Department of Economic Development Annual Report 2016/

108 part D human CAPITAL management Table Promotions by critical occupation for the period 1 April 2016 and 31 March 2017 Occupation Employees 1 April 2016 Promotions to another salary level Salary level promotions as a % of employees by occupation Progressions to another notch within a salary level Notch progression as a % of employees by occupation Administrative Related Architects Town and Traffic Planners Civil Engineering Technicians Cleaners In Offices Workshops Hospitals Etc Client Inform Clerks (Switchboard Recept Information Clerks) Communication and Information Related Engineering Sciences Related Finance and Economics Related Financial and Related Professionals Financial Clerks and Credit Controllers Food Services Aids and Waiters Head Of Department/Chief Executive Officer Human Resources & Organisational Development & Related Professions Human Resources Clerks Human Resources Related Information Technology Related Language Practitioners Interpreters & Other Communications Legal Related Library Mail and Related Clerks Logistical Support Personnel Material-Recording and Transport Clerks Gauteng Department of Economic Development Annual Report 2016/2017

109 part D human CAPITAL management Table Promotions by critical occupation for the period 1 April 2016 and 31 March 2017 Occupation Employees 1 April 2016 Promotions to another salary level Salary level promotions as a % of employees by occupation Progressions to another notch within a salary level Notch progression as a % of employees by occupation Messengers Porters and Deliverers Other Administrators & Related Clerks and Organisers Other Administrative Policy and Related Officers Other Information Technology Personnel Other Occupations Secretaries & Other Keyboard Operating Clerks Senior Managers TOTAL Gauteng Department of Economic Development Annual Report 2016/

110 part D human CAPITAL management Table Promotions by salary band for the period 1 April 2016 and 31 March 2017 Salary Band Employees 1 April 2016 Promotions to another salary level Salary bands promotions as a % of employees by salary level Progressions to another notch within a salary level Notch progression as a % of employees by salary bands 01 Lower Skilled (Levels 1-2), Permanent Skilled (Levels 3-5), Permanent Highly Skilled Production (Levels 6-8), Permanent Highly Skilled Supervision (Levels 9-12), Permanent Senior Management (Levels 13-16), Permanent Other, Permanent Contract (Levels 3-5), Permanent Contract (Levels 6-8), Permanent Contract (Levels 9-12), Permanent Contract (Levels 13-16), Permanent TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

111 part D human CAPITAL management 3.5 Employment Equity Table Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2017 Male Female Occupational category Total African Coloured Indian White African Coloured Indian White Legislators, senior officials and managers Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations Employees with disabilities Total Gauteng Department of Economic Development Annual Report 2016/

112 part D human CAPITAL management Table Total number of employees (including employees with disabilities) in each of the following occupational bands as on 31 March 2017 Male Female Occupational band Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making Total Gauteng Department of Economic Development Annual Report 2016/2017

113 part D human CAPITAL management Table Recruitment for the period 1 April 2016 to 31 March 2017 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Contract (Top Management), Permanent Contract (Senior Management), Permanent Contract (Professional Qualified), Permanent Cotract (Skilled Technical), Permanent Contract (Semi-Skilled), Permanent Unskilled and defined decision making Employees with disabilities Total Gauteng Department of Economic Development Annual Report 2016/

114 part D human CAPITAL management Table Promotions for the period 1 April 2016 to 31 March 2017 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top management Senior management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Contract (Top Management), Permanent Contact (Senior Management), Permanent Contract (Professional qualified), Permanent Unskilled and defined decision making Employees with disabilities Total Gauteng Department of Economic Development Annual Report 2016/2017

115 part D human CAPITAL management Table Terminations for the period 1 April 2016 to 31 March 2017 Male Female Occupational band Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Not available, Permanent Contract (Top Management), Permanent Contract (Senior Management), Permanent Contract (Professional Qualified), Permanent Contract (Skilled Technical), Permanent Contract (Semi-Skilled), Permanent Unskilled and defined decision making Employees with Disabilities Total Table Disciplinary action for the period 1 April 2016 to 31 March 2017 Male Female Disciplinary action Total African Coloured Indian White African Coloured Indian White None to report on Gauteng Department of Economic Development Annual Report 2016/

116 part D human CAPITAL management Table Skills development for the period 1 April 2016 to 31 March 2017 Occupational category Male Female Total African Coloured Indian White African Coloured Indian White Legislators, senior officials and managers Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations Employees with disabilities Total Signing of Performance Agreements by SMS Members All members of the SMS must conclude and sign performance agreements within specific timeframes. Information regarding the signing of performance agreements by SMS members, the reasons for not complying within the prescribed timeframes and disciplinary steps taken is presented here. Table Signing of Performance Agreements by SMS members as on 31 May 2016 SMS Level Total number of funded SMS posts Total number of SMS members Total number of signed performance agreements Signed performance agreements as % of total number of SMS members Director-General/ Head of Department Salary Level Salary Level Salary Level Salary Level Total Gauteng Department of Economic Development Annual Report 2016/2017

117 part D human CAPITAL management Table Reasons for not having concluded Performance agreements for all SMS members as on 31 March 2016 Reasons Not Applicable Table Disciplinary steps taken against SMS members for not having concluded Performance agreements as on 31 March 2016 Reasons Not Applicable 3.7 Performance Rewards Table Performance Rewards by race, gender and disability for the period 1 April 2015 to 31 March 2016 Beneficiary Profile Cost Race and Gender Number of beneficiaries Number of employees % of total within group Cost (R 000) Average cost per employee African Male Female Asian Male Female Coloured Male Female White Male Female Total Gauteng Department of Economic Development Annual Report 2016/

118 part D human CAPITAL management Table Performance Rewards by salary band for personnel below Senior Management Service for the period 1 April 2015 to 31 March 2016 Salary band Number of beneficiaries Beneficiary Profile Cost Total cost as a % of the total personnel Number of employees % of total within salary bands Total Cost (R 000) Average cost per employee expenditure Lower Skilled (Levels 1-2) Skilled (level 3-5) Highly skilled production (level 6-8) Highly skilled supervision (level 9-12) Total Table Performance Rewards by critical occupation for the period 1 April 2016 to 31 March 2017 Critical occupation Number of beneficiaries Number of employees Beneficiary Profile Cost % of total within occupation Total Cost (R 000) Average cost per employee Administrative Related Architects Town and Traffic Planners Civil Engineering Technicians Cleaners In Offices Workshops Hospitals Etc Client Inform Clerks(Switchb Recept Inform Clerks) Communication and Information Related Engineering Sciences Related Finance and Economics Related Financial and Related Professionals Financial Clerks and Credit Controllers Head Of Department/Chief Executive Officer Human Resources & Organisat Developm & Relate Prof Gauteng Department of Economic Development Annual Report 2016/2017

119 part D human CAPITAL management Table Performance Rewards by critical occupation for the period 1 April 2016 to 31 March 2017 Critical occupation Number of beneficiaries Number of employees Beneficiary Profile Cost % of total within occupation Total Cost (R 000) Average cost per employee Human Resources Clerks Human Resources Related Information Technology Related Language Practitioners Interpreters & Other Commun Legal Related Library Mail and Related Clerks Logistical Support Personnel Material-Recording and Transport Clerks Messengers Porters and Deliverers Other Administrat & Related Clerks and Organisers Other Administrative Policy and Related Officers Other Information Technology Personnel Other Occupations Secretaries & Other Keyboard Operating Clerks Senior Managers TOTAL Gauteng Department of Economic Development Annual Report 2016/

120 part D human CAPITAL management Table Performance related rewards (cash bonus), by salary band for Senior Management Service for the period 1 April 2016 to 31 March 2017 Salary band Number of beneficiaries Beneficiary Profile Cost Total cost as a % of the total personnel Number of employees % of total within salary bands Total Cost (R 000) Average cost per employee expenditure Band A Band B Band C Band D Total Foreign Workers Table Foreign workers by salary band for the period 1 April 2016 and 31 March 2017 Salary band 01 April March 2017 Change Number % of total Number % of total Number % Change Lower skilled Highly skilled production (Lev. 6-8) Highly skilled supervision (Lev. 9-12) Contract (level 9-12) Contract (level 13-16) Total Table Foreign workers by major occupation for the period 1 April 2016 and 31 March 2017 Major occupation 01 April March 2017 Change Number % of total Number % of total Number % Change Administrative Office workers Professional and managers Total Gauteng Department of Economic Development Annual Report 2016/2017

121 part D human CAPITAL management 3.9 Leave utilisation Table Sick leave for the period 1 January 2016 to 31 December 2016 Salary band Total days % Days with Medical certification Number of Employees using sick leave % of total employees using sick leave Average days per employee Estimated Cost (R 000) Contract (Levels 13-16) Contract (Levels 3-5) Contract (Levels 6-8) Contract (Levels 9-12) Contract Other Lower Skills (Level 1-2) Skilled (levels 3-5) Highly skilled production (levels 6-8) Highly skilled supervision (levels 9-12) Top and Senior management (levels 13-16) Total Table Disability leave (temporary and permanent) for the period 1 January 2016 to 31 December 2016 Salary band Total days % Days with Medical certification Number of Employees using disability leave % of total employees using disability leave Average days per employee Estimated Cost (R 000) None to report on Gauteng Department of Economic Development Annual Report 2016/

122 part D human CAPITAL management Table Annual Leave for the period 1 January 2016 to 31 December 2016 Salary band Total days taken Number of Employees using annual leave Average per employee Contract (Levels 13-16) Contract (Levels 3-5) Contract (Levels 6-8) Contract (Levels 9-12) Contract Other Lower skilled (Levels 1-2) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision(levels 9-12) Senior management (Levels 13-16) Total Table Capped leave for the period 1 January 2016 to 31 December 2016 Salary band Total days of capped leave taken Number of Employees using capped leave Average number of days taken per employee Average capped leave per employee as on 31 March 2017 Contract (Levels 13-16) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision(levels 9-12) Senior management (Levels 13-16) Total Gauteng Department of Economic Development Annual Report 2016/2017

123 part D human CAPITAL management Table Leave payouts for the period 1 April 2016 and 31 March 2017 Reason Total amount (R 000) Number of employees Average per employee (R 000) Leave payout for 2015/16 due to non-utilisation of leave for the previous cycle Leave payout for 2016 due to non-utilisation of leave for the previous cycle Capped leave payouts on termination of service for 2016/ Total Gauteng Department of Economic Development Annual Report 2016/

124 part D human CAPITAL management 3.10 HIV/AIDS & Health Promotion Programmes Table Steps taken to reduce the risk of occupational exposure Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any) 10 employees were identifies to be at high risk of contracting HIV and related disease Key steps taken to reduce the risk Engaging employees in individual counselling. Referral and employees to a disease management programme. Referral of employees to support groups. Table Details of Health Promotion and HIV/AIDS Programmes Maintaining regular communication with employees to encourage and support them to maintain a healthy lifestyle. Question Yes No Details, if yes 1. Has the department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position. 2. Does the department have a dedicated unit or has it designated specific staff members to promote the health and well-being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose. 3. Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme. X X X Fikile Maoka Director: Human Capital Management The Department has one designated staff member to promote the well-being of the employees. The budget for 2017/2018 FY is R Yes, the focus of the Awareness Programme is the following: Reproductive Health Breast Cancer Prostate Cancer Substance abuse Financial literacy HIV and AIDS and TB Stress Management Conflict resolution and Management Relationship building skills Resilience Training 124 Gauteng Department of Economic Development Annual Report 2016/2017

125 human CAPITAL management part D Table Details of Health Promotion and HIV/AIDS Programmes Question Yes No Details, if yes 4. Has the department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent. 5. Has the department reviewed its employment policies and practices to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed. 6. Has the department introduced measures to protect HIVpositive employees or those perceived to be HIV-positive from discrimination? If so, list the key elements of these measures. X X X Departmental Managers are members as follows: F. Maoka M. Viljoen A. Scott Z. Zwane S.Hlophe N. Leballo S. Matseke S. Mthembu G. Mashigo C. Bodibe-Lushaba Recruitment Policy Employment Equity Act Yes, these are: HIV and AIDS and TB Management Policy 7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved. 8. Has the department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators. X X Training Managers and Labour representatives on prevention of HIV and AIDS stigma and discrimination. 53 Females tested HIV negative and 1 Female positive. 32 Males tested HIV negative. The monitoring and evaluation of the programme is conducted quarterly Labour Relations Table Collective agreements for the period 1 April 2016 and 31 March 2017 Subject matter Date N/A N/A Total number of Collective agreements None Gauteng Department of Economic Development Annual Report 2016/

126 part D human CAPITAL management Table Misconduct and disciplinary hearings finalised for the period 1 April 2016 and 31 March 2017 Outcomes of disciplinary hearings Number % of total Correctional counselling - - Verbal warning Written warning Final written warning Suspended without pay - - Fine - - Demotion - - Dismissal Not guilty - - Case withdrawn Total Total number of Disciplinary hearings finalised None Table Types of misconduct addressed at disciplinary hearings for the period 1 April 2016 and 31 March 2017 type of misconduct Number % of total Non-Compliance with legislation Negligence Poor Performance other than incapacity Insurbordination Absenteeism Total Table Grievances logged for the period 1 April 2016 and 31 March 2017 Grievances Number % of Total Number of grievances resolved Number of grievances not resolved - - Total number of grievances lodged Table Disputes logged with Councils for the period 1 April 2016 and 31 March 2017 Disputes Number % of Total Number of disputes upheld - - Number of disputes dismissed Total number of disputes lodged Gauteng Department of Economic Development Annual Report 2016/2017

127 human CAPITAL management part D Table Strike actions for the period 1 April 2016 and 31 March 2017 Total number of persons working days lost - Total costs working days lost - Amount recovered as a result of no work no pay (R 000) - Table Precautionary suspensions for the period 1 April 2016 and 31 March 2017 Number of people suspended - Number of people who s suspension exceeded 30 days - Average number of days suspended - Cost of suspension (R 000) - Gauteng Department of Economic Development Annual Report 2016/

128 part D human CAPITAL management 3.12 Skills development Table Training needs identified for the period 1 April 2016 and 31 March 2017 Occupational category Gender Number of employees as at 1 April 2016 Training needs identified at start of the reporting period Learnerships Skills Programmes & other short courses Other forms of training Total Legislators, senior officials and managers Female Male Professionals Female Male Technicians and associate professionals Female Male Clerks Female Male Service and sales workers Female Male Skilled agriculture and fishery workers Female Male Craft and related trades workers Female Male Plant and machine operators and assemblers Female Male Elementary occupations Female Male Sub Total Female Male Total Gauteng Department of Economic Development Annual Report 2016/2017

129 part D human CAPITAL management Table Training provided for the period 1 April 2016 and 31 March 2017 Occupational category Gender Number of employees as at 1 April 2016 Training provided within the reporting period Learnerships Skills Programmes & other short courses Other forms of training Total Legislators, senior officials and managers Female Male Professionals Female Male Technicians and associate professionals Female Male Clerks Female Male Service and sales workers Female Male Skilled agriculture and fishery workers Female Male Craft and related trades workers Female Male Plant and machine operators and assemblers Female Male Elementary occupations Female Male Sub Total Female Male Total Gauteng Department of Economic Development Annual Report 2016/

130 part D human CAPITAL management 3.13 Injury on duty Table Injury on duty for the period 1 April 2016 and 31 March 2017 Nature of injury on duty Number % of total Required basic medical attention only - - Temporary Total Disablement - - Permanent Disablement - - Fatal - - Total - - Utilisation of Consultants Table Report on consultant appointments using appropriated funds for the period 1 April 2016 and 31 March 2017 Project title Total number of consultants that worked on project Duration (work days) Contract value in Rand Appointment of a service provider to develop job descriptions for 70 newly created positions 1 2 weeks R Total number of projects Total individual consultants Total duration Work days Total contract value in Rand R Table Analysis of consultant appointments using appropriated funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2016 and 31 March 2017 Project title Percentage ownership by HDI groups Percentage management by HDI groups Number of consultants from HDI groups that work on the project Appointment of a service provider to develop job descriptions for 70 newly created positions 100% 100% Gauteng Department of Economic Development Annual Report 2016/2017

131 part D human CAPITAL management Table Report on consultant appointments using Donor funds for the period 1 April 2016 and 31 March 2016 Project title Total Number of consultants that worked on project Duration (Work days) Donor and contract value in Rand Not Applicable Total number of projects Total individual consultants Total duration Work days Total contract value in Rand Not Applicable Table Analysis of consultant appointments using Donor funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2016 and 31 March 2017 Project title Percentage ownership by HDI groups Percentage management by HDI groups Number of consultants from HDI groups that work on the project Not Applicable 3.15 Severance Packages Table Granting of employee initiated severance packages for the period 1 April 2016 and 31 March 2017 Salary band Number of applications received Number of applications referred to the MPSA Number of applications supported by MPSA Number of packages approved by department Lower skilled (Levels 1-2) Skilled Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision(levels 9-12) Senior management (Levels 13-16) Total Gauteng Department of Economic Development Annual Report 2016/

132 part D human CAPITAL management Table Advertising and filling of SMS posts for the period 1 April 2016 and 31 March 2017 Filling of Posts SMS Level Number of vacancies per level advertised in 6 months of becoming vacant Number of vacancies per level filled in 6 months of becoming vacant Number of vacancies per level not filled in 6 months but filled in 12 months Director-General/ Head of Department Salary Level Salary Level Salary Level Salary Level Total Table Reasons for not having complied with the filling of funded vacant SMS - Advertised within 6 months and filled within 12 months after becoming vacant for the period 1 April 2016 and 31 March 2017 Reasons for vacancies not advertised within six months Not Applicable Reasons for vacancies not filled within twelve months DIRECTOR: DEVELOPMENT COMMUNICATIONS AND OUTREACH : The post was advertised however there was no suitable candidate. The post has been re-advertised and the process of appointment is underway. CHIEF DIRECTOR: SECTOR AND INDUSTRY DEVELOPMENT: The post was advertised and the interviews were held however there was no suitable candidate. The post was re-advertise and has been filled. DIRECTOR: ORGANISATIONAL EFFICIENCY: The post was advertised twice and in both occasions both candidates declined the offer on the basis of the post being on a five year fixed-term contract. Approval to headhunt was granted and the post has been filled. 132 Gauteng Department of Economic Development Annual Report 2016/2017

133 E Financial information Gauteng Department of Economic Development Annual Report 2016/

134 part E Annual Financial Statements Table of Contents Report of the Auditor-General 135 Appropriation Statement 138 Notes to the Appropriation Statement 172 Statement of Financial Performance 173 Statement of Financial Position 174 Statement of Changes in Net Assets 175 Cash Flow Statement 176 Notes to the Annual Financial Statements (including Accounting policies) 177 Annexures Gauteng Department of Economic Development Annual Report 2016/2017

135 Report of the auditor-general part E Report of the auditor-general to the Gauteng Provincial Legislature on vote no. 3: Gauteng Department of Economic Development Report on the financial statements Opinion 1. I have audited the financial statements of the Gauteng Department of Economic Development set out on pages 138 to 217, which comprise the appropriation statement, the statement of financial position as at 31 March 2017, and the statement of financial performance, statement of changes in net assets and cash flow statement 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 Gauteng Department of Economic Development as at 31 March 2017, and its financial performance and cash flows for the year then ended in accordance with the Modified Cash Standards (MCS), 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, 2016 (Act No. 3 of 2016) (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 my report. 4. I am independent of the Department in accordance with the International Ethics Standards Board for Accountants Code of ethics for professional accountants (IESBA code) together with 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 matter 6. I draw attention to the matter below. My opinion is not modified in respect of this matter. Restatement of corresponding figures 7. As disclosed in note 33 to the financial statements, the corresponding figures for 31 March 2016 have been restated as a result of errors discovered in the financial statements of the department at, and for the year ended, 31 March Other matter 8. I draw attention to the matter below. My opinion is not modified in respect of this matter. Unaudited supplementary schedules 9. The supplementary information set out on pages 209 to 217 does not form part of the financial statements and is presented as additional information. I have not audited these schedules and, accordingly, I do not express an opinion thereon. Responsibilities of the accounting officer for the financial statements 10. The accounting officer is responsible for the preparation and fair presentation of the financial statements in accordance with and the requirements of the MCS prescribed by the National Treasury and the requirements of the PFMA and the DoRA, and for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 11. In preparing the financial statements, the accounting officer is responsible for assessing the Gauteng Department of Economic Development 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 there is an intention to either liquidate the department or to cease operations, or there is no realistic alternative but to do so. Gauteng Department of Economic Development Annual Report 2016/

136 part E Report of the auditor-general Auditor-general s responsibilities for the audit of the financial statements 12. 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 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 13. A further description of my responsibilities for the audit of the financial statements is included in the annexure to the auditor s report. Report on the audit of the annual performance report Introduction and scope 14. 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. 15. My procedures address the reported performance information, which must be based on the approved performance planning documents of the department. 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. 16. 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 department for the year ended 31 March 2017: Programmes Programme 2 Integrated Economic Development Services Programme 3 Trade and Sector Development Programme 5 Economic Planning Pages in the annual performance report 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. 18. I did not identify any material findings on the usefulness and reliability of the reported performance information for the following programmes: Programme 2 Integrated Economic Development Services Programme 3 Trade and Sector Development Programme 5 Economic Planning Other matter 19. I draw attention to the matter below. Achievement of planned targets 20. Refer to the annual performance report on page 22 to 75 for information on the achievement of planned targets for the year. 136 Gauteng Department of Economic Development Annual Report 2016/2017

137 Report of the auditor-general part E Adjustment of material misstatements 21. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Programme 2: Integrated Economic Development Services and Programme 3: Trade and Sector Development. As management subsequently corrected the misstatements, I did not report any material findings on the usefulness and reliability of the reported performance information. Report on the audit of compliance with legislation Internal control deficiencies 27. 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 thereon. I did not identify any significant deficiencies in internal control. Johannesburg 31 July 2017 Introduction and scope 22. 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 department with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance. 23. I did not identify any instances of material noncompliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA. Other information 24. The Gauteng Department of Economic Development accounting officer is responsible for the other information. The other information comprises the information included in the annual report. The other information does not include the financial statements, the auditor s report thereon and those selected programmes presented in the annual performance report that have been specifically reported on in the auditor s report. 25. 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. 26. 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. If, based on the work I have performed on the other information obtained prior to the date of this auditor s report, I conclude that there is a material misstatement of this other information, I am required to report that fact. No other material inconsistencies were identified in the other information. Gauteng Department of Economic Development Annual Report 2016/

138 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Appropriation per programme 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Programme 1.ADMINISTRATION INTEGRATED ECONOMIC DEVELOPMENT SERVICES (23) TRADE AND SECTOR DEVELOPMENT (375) BUSINESS REGULATION AND GOVERNANCE (37) ECONOMIC PLANNING (3 946) Programme sub total Statutory Appropriation TOTAL Reconciliation with Statement of Financial Performance Add: Departmental receipts and NRF receipts Actual amounts per Statement of Financial Performance Add: - - Prior year unauthorised expenditure approved without funding -- Actual amounts per Statement of Financial Performance Expenditure Gauteng Department of Economic Development Annual Report 2016/2017

139 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Appropriation per economic classification 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (316) (74) Compensation of employees (677) Salaries and wages Social contributions (2 952) Goods and services (74) Administrative fees (863) (93) Advertising Minor assets Audit costs: External (126) Bursaries: Employees Catering: Departmental activities (1 637) Communication (G&S) Computer services (2 167) Consultants: Business and advisory services (271) Infrastructure and planning services Legal services (1 856) (12) Contractors (5 997) Agency and support / outsourced services (1 010) Entertainment 9 (2) Fleet services (including government motor transport) (1 899) Inventory: Food and food Supplies Inventory: Materials and Supplies Consumable supplies (685) (162) Consumable: Stationery printing and office supplies (218) Gauteng Department of Economic Development Annual Report 2016/

140 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Operating leases (6 626) Property payments (944) Travel and subsistence (1 231) (1 689) Training and developmentw Operating payments Venues and facilities (1 051) Rental and hiring Transfers and subsidies Provinces and municipalities 500 (500) Provinces 500 (500) Provincial Revenue Funds 500 (500) Departmental agencies and accounts Departmental agencies (non-business entities) Non-profit institutions Households Social benefits Other transfers to households Payments for capital assets Machinery and equipment Transport equipment Other machinery and equipment (12 142) Software and other intangible assets (1 390) Payment for financial assets Total Gauteng Department of Economic Development Annual Report 2016/2017

141 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Programme 1: ADMINISTRATION 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Sub programme 1.OFFICE OF THE MEC (1 083) OFFICE OF THE HOD (1 206) FINANCIAL MANAGEMENT (2 032) CORPORATE SERVICES Economic classification Current payments (144) Compensation of employees (677) Salaries and wages (432) (148) Social contributions (245) Goods and services Administrative fees Advertising Minor assets Audit costs: External (126) Bursaries: Employees Catering: Departmental activities Communication (G&S) Computer services (2 167) Consultants: Business and advisory services Legal services (1 563) (173) Contractors (3 503) Agency and support / outsourced services (1 010) Entertainment Gauteng Department of Economic Development Annual Report 2016/

142 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Fleet services (including government motor transport) (1 899) Inventory: Food and food Supplies 1 (1) Inventory: Materials and supplies Consumable supplies (1 334) (95) Consumable: Stationery printing and office supplies (100) Operating leases (5 124) Property payments Travel and subsistence (783) Training and development Operating payments Venues and facilities Rental and hiring 550 (24) Transfers and subsidies Provinces and municipalities 500 (500) Provinces 500 (500) Provincial Revenue Funds 500 (500) Non-profit institutions Households Social benefits Other transfers to households Payments for capital assets Machinery and equipment Transport equipment Other machinery and equipment (12 142) Software and other intangible assets (1 500) Payment for financial assets Total Gauteng Department of Economic Development Annual Report 2016/2017

143 part E Annual Financial Statements appropriation statement for the year ended 31 march : Office Of The MEC 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (1 083) Compensation of employees (1 160) Salaries and wages (1 085) Social contributions 813 (75) Goods and services Administrative fees Catering: Departmental activities 40 (26) Agency and support / outsourced services 120 (3) Entertainment Consumable supplies Travel and subsistence Venues and facilities 21 (21) Payments for capital assets Total (1 083) Gauteng Department of Economic Development Annual Report 2016/

144 part E Annual Financial Statements appropriation statement for the year ended 31 march : Office Of The HOD 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (1 246) Compensation of employees (1 321) Salaries and wages (1 396) Social contributions Goods and services Administrative fees Catering: Departmental activities 40 (2) Consultants: Business and advisory services Agency and support/outsourced Services 100 (48) Entertainment Consumable supplies Travel and subsistence Venues and facilities Transfers and subsidies Households Social benefits Payments for capital assets Total (1 206) Gauteng Department of Economic Development Annual Report 2016/2017

145 part E Annual Financial Statements appropriation statement for the year ended 31 march : Financial Management 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (2 026) Compensation of employees Salaries and wages (99) Social contributions Goods and Services (3 293) Administrative fees Advertising Minor Asset Audit costs: External (126) Catering: Departmental activities 35 (8) Computer services Communication (G&S) Consultants: Business and advisory services Contractors Agency and support / outsourced services 250 (250) Fleet services (including government motor transport) (1 899) Inventory: Food and food Supplies 1 (1) Inventory: Materials and supplies Consumable supplies 790 (681) Consumable: Stationery printing and office supplies (337) Operating leases (818) Property payment Travel and subsistence Operating payments Venues and facilities Gauteng Department of Economic Development Annual Report 2016/

146 part E Annual Financial Statements StatementS appropriation statement for the year ended 31 march 2017 Rental and Hiring 350 (1) Transfers and subsidies Provinces and municipalities 500 (500) Provinces 500 (500) Provincial Revenue Funds 500 (500) Non-profit institutions Households Social benefits Other transfers to households Payments for capital assets Machinery and equipment Transport equipment Other machinery and equipment Payment for financial assets 10 (6) Total (2 032) Gauteng Department of Economic Development Annual Report 2016/2017

147 part E Annual Financial Statements appropriation statement for the year ended 31 march : Corporate Services 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments Compensation of employees (46) Salaries and wages (101) Social contributions (1 118) Goods and services Administrative fees Advertising Minor assets Bursaries: Employees Catering: Departmental activities Communication (G&S) Computer services (2 167) Consultants: Business and advisory services Legal services (1 563) (173) Contractors (3 504) Agency and support / outsourced services (709) Inventory: Materials and supplies Consumable supplies (660) (104) Consumable: Stationery printing and office supplies Operating leases (4 306) Property payments Travel and subsistence (972) Training and development Operating payments Venues and facilities Gauteng Department of Economic Development Annual Report 2016/

148 part E Annual Financial Statements StatementS appropriation statement for the year ended 31 march 2017 Rental and hiring 200 (23) Transfers and subsidies Households Social benefits Other transfers to households Payments for capital assets Other fixed structures Machinery and equipment Transport equipment Other machinery and equipment (12 142) Software and other intangible assets (1 500) Payment for financial assets Total Gauteng Department of Economic Development Annual Report 2016/2017

149 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Programme 2: INTEGRATED ECONOMIC DEVELOPMENT SERVICES Sub programme Annual Appropriation Shifting of Funds Virement Final Appropriation 2016/ /16 Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R ENTERPRISE DEVELOPMENT REGIONAL AND LOCAL ECONOMIC DEVELOPMENT (556) (877) 3.ECONOMIC EMPOWERMENT (23) (23) Economic classification Current payments Compensation of employees Salaries and wages (556) Social contributions Goods and services Administrative fees Advertising Catering: Departmental activities Consultants: Business and advisory service Contractors Travel and subsistence Operating payments Venues and facilities Transfers and subsidies (23) Departmental agencies and accounts Departmental agencies (non-business entities) Households 50 - (23) Social benefits 50 - (23) Other transfers to households Payment for financial assets Total (23) Gauteng Department of Economic Development Annual Report 2016/

150 part E Annual Financial Statements StatementS appropriation statement for the year ended 31 march : Enterprise Development 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments Compensation of employees Salaries and wages Social contributions Goods and services Advertising Transfers and subsidies Departmental agencies and accounts Departmental agencies (non-business entities) Households Social benefits Total Gauteng Department of Economic Development Annual Report 2016/2017

151 part E Annual Financial Statements appropriation statement for the year ended 31 march : Regional and Local Economic Development 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (556) (877) Compensation of employees 925 (556) (954) Salaries and wages 880 (556) (775) Social contributions (179) Goods and services Administrative fees Travel and subsistence Venues and facilities Payment for financial assets Total (556) (877) Gauteng Department of Economic Development Annual Report 2016/

152 part E Annual Financial Statements StatementS appropriation statement for the year ended 31 march : Economic Empowerment 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments Compensation of employees Salaries and wages Social contributions (45) Goods and services Administrative fees Advertising Catering: Departmental activities Consultants: Business and advisory services Contractors Travel and subsistence Operating payments Venues and facilities Transfers and subsidies 50 - (23) Households 50 - (23) Social benefits 50 - (23) Other transfers to households Total (23) Gauteng Department of Economic Development Annual Report 2016/2017

153 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Programme 3: TRADE AND SECTOR DEVELOPMENT 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Sub programme 1.TRADE AND INVESTMENT PROMOTION (375) SECTOR DEVELOPMENT STRATEGIC INITIATIVES (375) Economic classification Current payments (375) Compensation of employees (375) Salaries and wages (375) Social contributions Goods and services Catering: Departmental activities Travel and subsistence Venues and facilities Transfers and subsidies Departmental agencies and accounts Departmental agencies (non-business entities) Payment for financial assets Total (375) Gauteng Department of Economic Development Annual Report 2016/

154 part E Annual Financial Statements StatementS appropriation statement for the year ended 31 march : Trade And Investment Promotion 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (375) Compensation of employees (375) Salaries and wages (375) Social contributions Goods and services Catering: Departmental activities Travel and subsistence Venues and facilities Payment for financial Assets Total (375) Gauteng Department of Economic Development Annual Report 2016/2017

155 part E Annual Financial Statements appropriation statement for the year ended 31 march : Sector Development 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments Transfers and subsidies Departmental agencies and accounts Departmental agencies (non-business entities) Payment for financial Assets Total Gauteng Department of Economic Development Annual Report 2016/

156 part E Annual Financial Statements StatementS appropriation statement for the year ended 31 march : Strategic Initiatives 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments Transfers and subsidies Departmental agencies and accounts Departmental agencies (non-business entities) Payment for financial assets Total Gauteng Department of Economic Development Annual Report 2016/2017

157 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Programme 4: BUSINESS REGULATION AND GOVERNANCE 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Sub programme 1.GOVERNANCE (1 917) IGR AND STRATEGIC PARTNERSHIPS (4) CONSUMER PROTECTION (37) LIQUOR REGULATION (37) Economic classification Current payments (2) Compensation of employees Salaries and wages Social contributions (1 140) Goods and services (2) Administrative fees Advertising Catering: Departmental activities Communication (G&S) Consultants: Business and advisory services Legal service 454 (293) Contractors Agency and support /outsourced services Entertainment Consumable supplies Consumable: Stationery printing and office supplies Operating leases 26 (2) Gauteng Department of Economic Development Annual Report 2016/

158 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Travel and subsistence (26) Venues and facilities Rental and hiring Transfers and subsidies (37) Departmental agencies and accounts Departmental agencies (non-business entities) Households 87 - (37) Social benefits 87 - (37) Payment for financial assets Total (37) Gauteng Department of Economic Development Annual Report 2016/2017

159 part E Annual Financial Statements appropriation statement for the year ended 31 march : Governance 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (1 924) Compensation of employees (1 696) Salaries and wages (1 806) Social contributions Goods and services (228) Administrative fees 6 (6) Advertising Catering: Departmental activities Communication (G&S) Consultants: Business and advisory services (198) Travel and subsistence 329 (25) Venues and facilities 49 (49) Rental and hiring Transfers and subsidies Households Social benefits Payment for financial assets Total (1 917) Gauteng Department of Economic Development Annual Report 2016/

160 part E Annual Financial Statements appropriation statement for the year ended 31 march : IGR And Strategic Partnerships 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (4) Compensation of employees Salaries and wages (250) Social contributions Goods and services (4) Administrative fees Advertising Catering: Departmental Activities 476 (59) Consumable: Stationery, printing and office supplies Communication (G&S) Agency and support / outsourced services Travel and subsistence (161) Venues and facilities Rental and hiring Payment for financial assets Total (4) Gauteng Department of Economic Development Annual Report 2016/2017

161 part E Annual Financial Statements appropriation statement for the year ended 31 march : Consumer Protection 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments Compensation of employees Salaries and wages (92) Social contributions (1 500) Goods and services Administrative fees Advertising Catering: Departmental activities Consultants: Business and advisory services Legal services 454 (293) Contractors Consumable supplies Consumable: Stationery printing and office supplies Travel and subsistence Venues and facilities Rental and hiring 25 (25) Transfers and subsidies 87 (7) (37) Households 87 (7) (37) Social benefits 87 (7) (37) Payment for financial assets Total (37) Gauteng Department of Economic Development Annual Report 2016/

162 part E Annual Financial Statements appropriation statement for the year ended 31 march : Liquor Regulation 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 26 (2) Goods and Services 26 (2) Catering: Departmental activities Operating leases 26 (2) Transfers and subsidies Departmental agencies and accounts Departmental agencies (non-business entities) Payment for financial assets Total Gauteng Department of Economic Development Annual Report 2016/2017

163 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Programme 5: ECONOMIC PLANNING 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Sub programme 1.POLICY AND PLANNING (582) RESEARCH AND DEVELOPMENT (3 046) (847) MONITORING AND EVALUATION ECONOMIC INFRASTRUCTURE DEVELOPMENT (562) SECTOR AND INDUSTRY DEVELOPMENT (6 825) (2 077) INCLUSIVE ECONOMY (3 946) Economic classification Current payments (170) (3 946) Compensation of employees Salaries and wages Social contributions (2 123) (28) Goods and services (170) (4 321) Administrative fees (1 368) (93) (92) Advertising Catering: Departmental activities (1 692) Communication (G&S) Computer services Consultants: Business and advisory services (271) Infrastructure and planning services Contractors (2 494) Entertainment 5 (5) Inventory: Food and food Supplies Consumable supplies (67) Gauteng Department of Economic Development Annual Report 2016/

164 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Consumable: Stationery printing and office supplies (273) Operating leases (1 500) Property payments (2 469) (944) Travel and subsistence (422) (1 689) Training and development Operating payments Venues and facilities (208) (1 051) Rental and hiring Transfers and subsidies Households Social benefits Other transfers to households Departmental agencies and account Social security funds Payments for capital assets Machinery and equipment Other machinery and equipment Software and other intangible assets Payment for financial assets Total (3 946) Gauteng Department of Economic Development Annual Report 2016/2017

165 part E Annual Financial Statements appropriation statement for the year ended 31 march : Policy And Planning 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (582) Compensation of Employees Salaries and wages Social contributions (1 473) (1) Goods and services (760) (582) Administrative fees 229 (91) Catering: Departmental activities 552 (401) Consultants: Business and advisory services (268) (9) Infrastructure and planning services Consumable: Stationery printing and office supplies Travel and subsistence 788 (77) (438) Operating payments Venues and facilities (135) Payment for financial assets Total (582) Gauteng Department of Economic Development Annual Report 2016/

166 part E Annual Financial Statements appropriation statement for the year ended 31 march : Research And Development 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (3 156) (847) Compensation of employees (1 369) Salaries and wages (934) Social contributions 764 (435) (2) Goods and services (1 787) (847) Administrative fees (1 353) Catering: Departmental activities 243 (135) Computer services Consultants: Business and advisory services Entertainment 5 (5) Consumable supplies 191 (189) Consumable: Stationery printing and office supplies 300 (15) (273) Travel and subsistence 182 (90) (57) Venues and facilities 517 (517) Transfers and subsidies Non-profit institutions Households Social benefits Gauteng Department of Economic Development Annual Report 2016/2017

167 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Payments for capital assets Machinery and equipment Other machinery and Equipment Software and other intangible Assets Payment for financial assets Total (3 046) (847) Gauteng Department of Economic Development Annual Report 2016/

168 part E Annual Financial Statements appropriation statement for the year ended 31 march : Monitoring And Evaluation 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (1) Compensation of employees (385) Salaries and wages (1) Social contributions 904 (456) Goods and services (1) Administrative fees Catering: Departmental activities Consultants: Business and advisory services Travel and subsistence (2) Transfers and subsidies Households Social benefit Payments for capital assets Machinery and equipment Other machinery and equipment Total Gauteng Department of Economic Development Annual Report 2016/2017

169 part E Annual Financial Statements appropriation statement for the year ended 31 march : Economic Infrastructure Development 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (562) Compensation of employees Salaries and wages (371) - Social contributions Goods and services (562) Advertising Catering: Departmental activities Consultants: Business and advisory services (262) Contractors (2 150) Property payments Travel and subsistence 351 (51) (300) Transfers and subsidies 150 (44) Households 150 (44) Social benefits 150 (44) Total (562) Gauteng Department of Economic Development Annual Report 2016/

170 part E Annual Financial Statements appropriation statement for the year ended 31 march : Sector And Industry Development 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments (6 912) (2 077) Compensation of employees (2 041) (1) Salaries and wages (2 282) Social contributions (250) Goods and services (4 871) (2 077) Administrative fees 157 (57) (93) (93) Catering: Departmental Activities 325 (272) Communication (G&S) Consultants: Business and advisory services (1 135) Contractors 354 (344) Inventory: Food and food supplies Consumable supplies (67) Consumable: Stationery printing and office supplies Operating leases (1 500) Property payments (2 469) (944) Travel and subsistence (641) Training and development Venues and facilities 893 (208) (399) Gauteng Department of Economic Development Annual Report 2016/2017

171 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 Transfers and subsidies Households Social benefits Other transfers to households Total (6 823) (2 077) : Inclusive Economy 2016/ /16 Annual Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments Compensation of employees Salaries and wages (224) Social contributions Goods and services (253) Administrative fees Catering: Departmental activities (895) Consultants: Business and advisory services Consumable: Stationery printing and office supplies Travel and subsistence (232) (253) (60) Venues and facilities Rental and hiring Total Gauteng Department of Economic Development Annual Report 2016/

172 part E Annual Financial Statements NOTES TO THE APPROPRIATION STATEMENT for the year ended 31 march Detail of transfers and subsidies as per Appropriation Act (after Virement): Detail of these transactions can be viewed in the note on Transfers and subsidies disclosure notes and Annexure1 (A-H) to the Annual Financial Statements/. 2. Detail of specifically and exclusively appropriated amounts voted (after Virement): Detail of these transactions can be viewed in note 1 (Annual Appropriation) to the Annual Financial Statements. 3. Detail on payments for financial assets Detail of these transactions per programme can be viewed in the note on Payments for financial assets to the Annual Financial Statements. 4. Explanations of material variances from Amounts Voted (after Virement): 4.1 Per programme Final Appropriation Actual Expenditure Variance R 000 Variance as a % of Final Appropriation Administration Integrated Economic Development Services Trade and Sector Development Business Regulation and Governance Economic Planning Total Per economic classification Final Appropriation Actual Expenditure Variance Variance as a % of Final Appropriation R 000 R 000 R 000 % Current payments Compensation of employees Goods and services Transfers and subsidies Departmental agencies and accounts Non -profit institution Households Payments for capital assets Buildings and other fixed structures Machinery and equipment Intangible assets Payment for financial assets Total Gauteng Department of Economic Development Annual Report 2016/2017

173 Annual Financial Statements part E STATEMENT OF FINANCIAL PERFORMANCE for the year ended 31 march 2017 Note 2016/ /16 R 000 R 000 REVENUE Annual appropriation Departmental revenue TOTAL REVENUE EXPENDITURE Current expenditure Compensation of employees Goods and services % Commission to GGB Total current expenditure Transfers and subsidies Transfers and subsidies Total transfers and subsidies Expenditure for capital assets Tangible assets Intangible assets Total expenditure for capital assets Unauthorised expenditure approved without funding Payments for financial assets TOTAL EXPENDITURE SURPLUS/(DEFICIT) FOR THE YEAR Reconciliation of Net Surplus/(Deficit) for the year Voted funds Annual appropriation Departmental revenue and NRF Receipts SURPLUS/(DEFICIT) FOR THE YEAR Gauteng Department of Economic Development Annual Report 2016/

174 part E Annual Financial Statements STATEMENT OF FINANCIAL POSITION for the year ended 31 march 2017 Note 2016/ /16 ASSETS R 000 R 000 Current assets Unauthorised expenditure Cash and cash equivalents Prepayments and advances Receivables Non-current assets 4 4 Investments TOTAL ASSETS LIABILITIES Current liabilities Voted funds to be surrendered to the Revenue Fund Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund Payables TOTAL LIABILITIES NET ASSETS Represented by: Capitalisation reserve 4 4 Recoverable revenue TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

175 Annual Financial Statements part E STATEMENT OF CHANGES IN NET ASSETS for the year ended 31 march 2017 NET ASSETS Note 2016/ /16 R 000 R 000 Capitalisation Reserves Opening balance 4 4 Closing balance 4 4 Recoverable revenue Opening Balance Transfers 18 (107) Irrecoverable amounts written off Debts revised (1) (170) Debts recovered (included in departmental receipts) Debts raised (294) - Closing balance TOTAL Gauteng Department of Economic Development Annual Report 2016/

176 part E Annual Financial Statements CASH FLOW STATEMENT for the year ended 31 march 2017 Note 2016/ /16 CASH FLOWS FROM OPERATING ACTIVITIES R 000 R 000 Receipts Annual appropriated funds received Departmental revenue received Interest received Net (increase)/decrease in working capital (8235) Surrendered to Revenue Fund ( ) ( ) Current payments ( ) ( ) Payments for financial assets (107) (2) Transfers and subsidies paid ( ) ( ) Net cash flow available from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payments for capital assets 7 (17 555) (15 008) Proceeds from sale of capital assets 30 - Net cash flows from investing activities (17 525) (15 008) CASH FLOWS FROM FINANCING ACTIVITIES Increase / decrease in net assets 18 (107) Net cash flows from financing activities 18 (107) Net increase/(decrease) in cash and cash equivalents (6 311) Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Gauteng Department of Economic Development Annual Report 2016/2017

177 Annual Financial Statements part E ACCOUNTING POLICIES for the year ended 31 march 2017 Summary of significant accounting policies The financial statements have been prepared in accordance with the following policies which have been applied consistently in all material aspects unless otherwise indicated. Management has concluded that the financial statements present fairly the department s primary and secondary information. The historical cost convention has been used except where otherwise indicated. Management has used assessments and estimates in preparing the annual financial statements. These are based on the best information available at the time of preparation. Where appropriate and meaningful additional information has been disclosed to enhance the usefulness of the financial statements and to comply with the statutory requirements of the Public Finance Management Act (PFMA) Act 1 of 1999 (as amended by Act 29 of 1999) and the Treasury Regulations issued in terms of the PFMA and the annual Division of Revenue Act. 1 Basis of preparation The financial statements have been prepared in accordance with the Modified Cash Standard. 2 Going concern The financial statements have been prepared on a going concern basis. 3 Presentation currency Amounts have been presented in the currency of the South African Rand (R) which is also the functional currency of the department. 4 Rounding Unless otherwise stated financial figures have been rounded to the nearest one thousand Rand (R 000). 5 Foreign currency translation Cash flows arising from foreign currency transactions are translated into South African Rands using the exchange rates prevailing at the date of payment / receipt. 6 Comparative information 6.1 Prior period comparative information Prior period comparative information has been presented in the current year s financial statements. Where necessary figures included in the prior period financial statements have been reclassified to ensure that the format in which the information is presented is consistent with the format of the current year s financial statements. 6.2 Current year comparison with budget A comparison between the approved final budget and actual amounts for each programme and economic classification is included in the appropriation statement. 7 Revenue 7.1 Appropriated funds Appropriated funds comprises of departmental allocations as well as direct charges against the revenue fund (i.e. statutory appropriation). Appropriated funds are recognised in the statement of financial performance on the date the appropriation becomes effective. Adjustments made in terms of the adjustments budget process are recognised in the statement of financial performance on the date the adjustments become effective. The net amount of any appropriated funds due to / from the relevant revenue fund at the reporting date is recognised as a payable / receivable in the statement of financial position. 7.2 Departmental revenue Departmental revenue is recognised in the statement of financial performance when received and is subsequently paid into the relevant revenue fund unless stated otherwise. Any amount owing to the relevant revenue fund at the reporting date is recognised as a payable in the statement of financial position. Gauteng Department of Economic Development Annual Report 2016/

178 part E Annual Financial Statements ACCOUNTING POLICIES for the year ended 31 march Accrued departmental revenue Accruals in respect of departmental revenue (excluding tax revenue) are recorded in the notes to the financial statements when: it is probable that the economic benefits or service potential associated with the transaction will flow to the department; and the amount of revenue can be measured reliably. The accrued revenue is measured at the fair value of the consideration receivable. Accrued tax revenue (and related interest and / penalties) is measured at amounts receivable from collecting agents. Write-offs are processed in terms of the department s debt write-off policy 8 Expenditure 8.1 Compensation of employees Salaries and wages Salaries and wages are recognised in the statement of financial performance on the date of payment Social contributions Social contributions made by the department in respect of current employees are recognised in the statement of financial performance on the date of payment. Social contributions made by the department in respect of ex-employees are classified as transfers to households in the statement of financial performance on the date of payment. 8.3 Accruals and payables not recognised Accruals and payables not recognised are recorded in the notes to the financial statements when the goods are received or, in the case of services, when they are rendered to the department or in the case of transfers and subsidies when they are due and payable. Accruals and payables not recognised are measured at cost. 8.4 Leases Operating leases Operating lease payments made during the reporting period are recognised as current expenditure in the statement of financial performance on the date of payment. The operating lease commitments are recorded in the notes to the financial statements Finance leases Finance lease payments made during the reporting period are recognised as capital expenditure in the statement of financial performance on the date of payment. The finance lease commitments are recorded in the notes to the financial statements and are not apportioned between the capital and interest portions. Finance lease assets acquired at the end of the lease term are recorded and measured at the lower of: cost being the fair value of the asset; or the sum of the minimum lease payments made including any payments made to acquire ownership at the end of the lease term excluding interest. 178 Gauteng Department of Economic Development Annual Report 2016/2017

179 Annual Financial Statements part E ACCOUNTING POLICIES for the year ended 31 march Aid Assistance 9.1 Aid assistance received Aid assistance received in cash is recognised in the statement of financial performance when received. In-kind aid assistance is recorded in the notes to the financial statements on the date of receipt and is measured at fair value. Aid assistance not spent for the intended purpose and any unutilised funds from aid assistance that are required to be refunded to the donor are recognised as a payable in the statement of financial position. 9.2 Aid assistance paid Aid assistance paid is recognised in the statement of financial performance on the date of payment. Aid assistance payments made prior to the receipt of funds are recognised as a receivable in the statement of financial position. 10 Cash and cash equivalents Cash and cash equivalents are stated at cost in the statement of financial position. Bank overdrafts are shown separately on the face of the statement of financial position. For the purposes of the cash flow statement cash and cash equivalents comprise cash on hand deposits held other short-term highly liquid investments and bank overdrafts. 11 Prepayments and advances Prepayments and advances are recognised in the statement of financial position when the department receives or disburses the cash. Prepayments and advances are initially and subsequently measured at cost. 12 Loans and receivables Loans and receivables are recognised in the statement of financial position at cost plus accrued interest where interest is charged less amounts already settled or written-off. Write-offs are made according to the department s write-off policy. 13 Investments Investments are recognised in the statement of financial position at cost. 14 Financial assets 14.1 Financial assets (not covered elsewhere) A financial asset is recognised initially at its cost plus transaction costs that are directly attributable to the acquisition or issue of the financial. At the reporting date a department shall measure its financial assets at cost less amounts already settled or written-off except for recognised loans and receivables which are measured at cost plus accrued interest where interest is charged less amounts already settled or written-off Impairment of financial assets Where there is an indication of impairment of a financial asset an estimation of the reduction in the recorded carrying value to reflect the best estimate of the amount of the future economic benefits expected to be received from that asset is recorded in the notes to the financial statements. 15 Payables Loans and payables are recognised in the statement of financial position at cost. 16 Capital Assets Gauteng Department of Economic Development Annual Report 2016/

180 part E Annual Financial Statements ACCOUNTING POLICIES for the year ended 31 march Immovable capital assets Immovable capital assets are initially recorded in the notes to the financial statements at cost. Immovable capital assets acquired through a non-exchange transaction are measured at fair value as at the date of acquisition. Where the cost of immovable capital assets cannot be determined reliably, the immovable capital assets are measured at fair value for recording in the asset register. Immovable capital assets are subsequently carried at cost and are not subject to depreciation or impairment. Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project unless the immovable asset is recorded by another department in which case the completed project costs are transferred to that department Movable capital assets Movable capital assets are initially recorded in the notes to the financial statements at cost. Movable capital assets acquired through a non-exchange transaction is measured at fair value as at the date of acquisition. Where the cost of movable capital assets cannot be determined reliably, the movable capital assets are measured at fair value and where fair value cannot be determined; the movable assets are measured at R1. All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R1. Movable capital assets are subsequently carried at cost and are not subject to depreciation or impairment. Biological assets are subsequently carried at fair value. Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project unless the movable asset is recorded by another department/entity in which case the completed project costs are transferred to that department Intangible assets Intangible assets are initially recorded in the notes to the financial statements at cost. Intangible assets acquired through a non-exchange transaction are measured at fair value as at the date of acquisition. Internally generated intangible assets are recorded in the notes to the financial statements when the department commences the development phase of the project. Where the cost of intangible assets cannot be determined accurately the intangible capital assets are measured at fair value and where fair value cannot be determined; the intangible assets are measured at R1. All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R1. Intangible assets are subsequently carried at cost and are not subject to depreciation or impairment. Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project unless the intangible asset is recorded by another department/entity in which case the completed project costs are transferred to that department. 17 Provisions and Contingents 17.1 Provisions Provisions are recorded in the notes to the financial statements when there is a present legal or constructive obligation to forfeit economic benefits as a result of events in the past and 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 of the obligation can be made. The provision is measured as the best estimate of the funds required to settle the present obligation at the reporting date Contingent liabilities Contingent liabilities are recorded in the notes to the financial statements when there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not within the control of the department or when there is a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the obligation cannot be measured reliably. 180 Gauteng Department of Economic Development Annual Report 2016/2017

181 Annual Financial Statements part E ACCOUNTING POLICIES for the year ended 31 march Contingent assets Contingent assets are recorded in the notes to the financial statements when a possible asset arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the department Commitments Commitments (other than for transfers and subsidies) are recorded at cost in the notes to the financial statements when there is a contractual arrangement or an approval by management in a manner that raises a valid expectation that the department will discharge its responsibilities thereby incurring future expenditure that will result in the outflow of cash. 18 Unauthorised expenditure Unauthorised expenditure is recognised in the statement of financial position until such time as the expenditure is either: approved by Parliament or the Provincial Legislature with funding and the related funds are received; or approved by Parliament or the Provincial Legislature without funding and is written off against the appropriation in the statement of financial performance; or Transferred to receivables for recovery. Unauthorised expenditure is measured at the amount of the confirmed unauthorised expenditure. 19 Fruitless and wasteful expenditure Fruitless and wasteful expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the total value of the fruitless and or wasteful expenditure incurred. Fruitless and wasteful expenditure is removed from the notes to the financial statements when it is resolved or transferred to receivables for recovery. Fruitless and wasteful expenditure receivables are measured at the amount that is expected to be recoverable and are de-recognised when settled or subsequently written-off as irrecoverable. 20 Irregular expenditure 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 impracticable to determine in which case reasons therefor are provided in the note. Irregular expenditure is removed from the note when it is either condoned by the relevant authority transferred to receivables for recovery or not condoned and is not recoverable. Irregular expenditure receivables are measured at the amount that is expected to be recoverable and are derecognised when settled or subsequently written-off as irrecoverable. 21 Changes in accounting policies accounting estimates and errors Changes in accounting policies that are effected by management have been applied retrospectively in accordance with MCS requirements except to the extent that it is impracticable to determine the periodspecific effects or the cumulative effect of the change in policy. In such instances the department shall restate the opening balances of assets liabilities and net assets for the earliest period for which retrospective restatement is practicable. Changes in accounting estimates are applied prospectively in accordance with MCS requirements. Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with MCS requirements except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the error. In such cases the department shall restate the opening balances of assets liabilities and net assets for the earliest period for which retrospective restatement is practicable. 22 Events after the reporting date Events after the reporting date that are classified as adjusting events have been accounted for in the financial statements. The events after the reporting date that are classified as non-adjusting events after the reporting date have been disclosed in the notes to the financial statements. Gauteng Department of Economic Development Annual Report 2016/

182 part E Annual Financial Statements ACCOUNTING POLICIES for the year ended 31 march Principal-Agent arrangements The department is party to a principal-agent arrangement for directing another entity. In terms of the arrangement the department is the principle and is responsible for directing another entity (an agent) through a binding arrangement to undertake transactions with third parties on its behalf and for its own benefit. All related revenues, expenditures, assets and liabilities have been recognised or recorded in terms of the relevant policies listed herein. Additional disclosures have been provided in the notes to the financial statements where appropriate. 24 Departures from the MCS requirements Management has concluded that the financial statements present fairly the department s primary and secondary information; that the department complied with the Standard 25 Capitalisation reserve The capitalisation reserve comprises of financial assets and/or liabilities originating in a prior reporting period but which are recognised in the statement of financial position for the first time in the current reporting period. Amounts are recognised in the capitalisation reserves when identified in the current period and are transferred to the National/Provincial Revenue Fund when the underlying asset is disposed and the related funds are received. 26 Recoverable revenue Amounts are recognised as recoverable revenue when a payment made in a previous financial year becomes recoverable from a debtor in the current financial year. Amounts are either transferred to the National/ Provincial Revenue Fund when recovered or are transferred to the statement of financial performance when written-off. 27 Related party transactions A related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party. Related party transactions within the MEC s portfolio are recorded in the notes to the financial statements when the transaction is not at arm s length. Key management personnel are those persons having the authority and responsibility for planning directing and controlling the activities of the department. The number of individuals and their full compensation is recorded in the notes to the financial statements. 29 Public-Private Partnerships Public Private Partnerships are accounted for based on the substance of the partnership. The transaction is accounted for as either capital assets finance or operating leases in accordance with the relevant accounting policies. A summary of the significant terms of the PPP agreement the parties to the agreement and the date of commencement thereof together with the description and nature of the concession fees received the unitary fees paid rights and obligations of the department are recorded in the notes to the financial statements. 30 Employee benefits The value of each major class of employee benefit obligation (accruals, payables not recognised and provisions) is disclosed in the Employee benefits note. 182 Gauteng Department of Economic Development Annual Report 2016/2017

183 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Annual Appropriation 1.1 Annual Appropriation Included are funds appropriated in terms of the Appropriation Act (and the Adjustments Appropriation Act) for National Departments (Voted funds) and Provincial Departments: Final Appropriation Actual Funds Received 2016/ /16 Funds not requested/not received Final Appropriation Appropriation received R 000 R 000 R 000 R 000 R 000 Administration Integrated Economic Development Services Trade and Sector Development Business Regulation and Governance Economic Planning Total Departmental revenue *Restated 2016/ /16 R 000 R 000 Tax revenue * Sales of goods and services other than capital assets Interest dividends and rent on land Sales of capital assets Transactions in financial assets and liabilities (5 215) Departmental revenue collected Note:*The Prior year tax revenue has been restated as it was previously disclosed at net of commission and not at gross and this resulted in the understatement of revenue collected. In the 2016/17 financial year revenue has been disclosed in accordance to the Modified Cash Standard which requires revenue to be measured at gross. Gauteng Department of Economic Development Annual Report 2016/

184 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Sales of goods and services other than capital assets Note 2016/ /16 2 R 000 R 000 Sales of goods and services produced by the department Sales by market establishment Administrative fees Sales of scrap waste and other used current goods Total Interest dividends and rent on land Interest Total Sale of capital assets Tangible assets 30 - Machinery and equipment 30 - Total Transactions in financial assets and liabilities Receivables Other Receipts including Recoverable Revenue 941 (5 265) Total (5 215) 184 Gauteng Department of Economic Development Annual Report 2016/2017

185 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Compensation of employees 3.1 Salaries and Wages 2016/ /16 R 000 R 000 Basic salary Performance award Service Based Compensative/circumstantial Non-pensionable allowances Total Social contributions Employer contributions Pension Medical Bargaining council Total Total compensation of employees Average number of employees * Note *The total average number of employees is inclusive of the Ga-Rankuwa Hotel School employees who were previously accounted for under the Gauteng Tourism Agency. Gauteng Department of Economic Development Annual Report 2016/

186 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Goods and services Note 2016/ /16 R 000 R 000 Administrative fees Advertising Minor assets Bursaries (employees) Catering Communication Computer services Consultants: Business and advisory services Legal services Contractors Agency and support / outsourced services Entertainment 4 2 Audit cost - external Fleet services Consumables Operating leases Property payments Rental and hiring Travel and subsistence Venues and facilities Training and development Other operating expenditure Total Minor assets Tangible assets Machinery and equipment Total Computer services SITA computer services External computer service providers Total Gauteng Department of Economic Development Annual Report 2016/2017

187 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Audit cost External Note 2016/ /16 R 000 R 000 Regularity audits Total Consumables Consumable supplies Uniform and clothing Household supplies Building material and supplies IT consumables Departmental accessories Stationery printing and office supplies Total Property payments Municipal services Property maintenance and repairs Cleaning services Total Travel and subsistence Local Foreign Total Operating expenditure Professional bodies, membership and subscription fees 1 - Resettlement costs Freight services Total Gauteng Department of Economic Development Annual Report 2016/

188 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Payments for financial assets Note 2016/ /16 R 000 R 000 Debts written off Total Debts written off Nature of debts written off Staff debt written off( interest) Total Total debt written off *107 2 Note *In the 2016/17 a supplier debt with the value of R107k has been written off as the suppliers could not be traced resulting in the monies not recovered after the relevant debt collection process were followed. 6. Transfers and subsidies Departmental agencies and accounts Annex1B Non-profit institutions Households Annex1G Total Unspent funds transferred to the above beneficiaries Provinces and municipalities - - Departmental agencies and accounts Total * Note: * As at 31 March 2017 no determination was made on the unused funds of R85,7m as to whether they will be surrendered back or rolled over (retained). The approval to surrender or retain the funds is the prerogative of the Provincial Treasury. 7. Expenditure for capital assets Tangible assets Machinery and equipment Intangible assets Software Total Gauteng Department of Economic Development Annual Report 2016/2017

189 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Analysis of funds utilised to acquire capital assets 31 March 2017 Voted funds Aid assistance Total R 000 R 000 R 000 Tangible assets Machinery and equipment Intangible assets Software Total Analysis of funds utilised to acquire capital assets 31 March 2016 Voted funds Aid assistance Total R 000 R 000 R 000 Tangible assets Machinery and equipment Intangible assets Software Total Finance lease expenditure included in Expenditure for capital assets Tangible assets Machinery and equipment Total Gauteng Department of Economic Development Annual Report 2016/

190 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march / /16 R 000 R Unauthorised expenditure Opening balance As restated Less: Amounts approved by Legislature with funding (3 195) - Less: Amounts approved by Legislature without funding - - Current - - Unauthorised expenditure awaiting write off Analysis of awaiting authorisation per economic classification Current Total * Note* A total amount of R10,7m has been approved/condoned without funding in the year under. The amount will be a first charge against the 2017/18 allocated budget for the Department and this is as per section 34(2) of the Public Finance Management Act. These amounts will therefore be included in the Department s 2017/18 budget. 8.1 Analysis of unauthorised expenditure awaiting authorisation per economic classification Current Total Analysis of unauthorised expenditure awaiting write off per type Unauthorised expenditure relating to overspending of the vote or a main division within a vote Total Cash and cash equivalents Consolidated Paymaster General Account Disbursements (5 156) (3277) Cash on hand Total Prepayments and advances Travel and subsistence Total Gauteng Department of Economic Development Annual Report 2016/2017

191 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march 2017 Note 2016/ / Receivables R 000 R / /16 Note Current Noncurrent Total Current Noncurrent Total R 000 R 000 R 000 R 000 R 000 R 000 Claims recoverable 11.1 Annex Staff debt Other debtors Total Claims recoverable 2016/ /16 Note R 000 R 000 Provincial departments Public entities Annex Total Staff debt Current Employees Ex- Employees Sal: Reversal Control - 77 Sal: Tax debt Other debtors Supplier Debt Total Impairment of receivables Estimate of impairment of receivables Total Gauteng Department of Economic Development Annual Report 2016/

192 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march 2017 Note 2016/ / Investments R 000 R 000 Non-Current Shares and other equity Blue IQ Investment t/a GGDA 4 4 Total 4 4 Analysis of non-current investments Opening balance 4 4 Closing balance Voted funds to be surrendered to the Revenue Fund Opening balance Prior period error - - As restated Transfer from statement of financial performance (as restated) * Paid during the year (34 768) (40 836) Closing balance Note: * During the 2015/16 year the transfer from statement of financial performance was understated by R85k for a supplier debt that was erroneously recognised and amount has resulted in an increase of voted funds to be surrendered Prior period error Statement of Financial Position Restated amount for voted funds to be surrendered Transfer from prior period financial performance that was understated by a supplier debt that was raised. (34 681) Net effect Gauteng Department of Economic Development Annual Report 2016/2017

193 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march 2017 Note 2016/ /16 R 000 R Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund Opening balance Prior period error - - As restated Transfer from Statement of Financial Performance (as restated) * Paid during the year ( ) ( ) Closing balance Note* The total of transfer from Statement of Financial Performance represents the Departmental Revenue at net and other NRF receipts. This is after the 8% commission has been paid to GGB. 15. Payables current Note 2016/ /16 R 000 R 000 Clearing accounts Other payables Total Clearing accounts Sal-Pension Fund: CL 8 - Salary Income Tax 3 10 Salary ACB Recall Other payables Municipal deposits-refundable Total Gauteng Department of Economic Development Annual Report 2016/

194 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march 2017 Note 2016/ /16 R 000 R Net cash flow available from operating activities Net surplus/(deficit) as per Statement of Financial Performance Add back non cash/cash movements not deemed operating activities ( ) ( ) (Increase)/decrease in receivables current (3 174) (Increase)/decrease in prepayments and advances 40 (58) (Increase)/decrease in other current assets Increase/(decrease) in payables current (144) (5 003) Proceeds from sale of capital assets (30) - Expenditure on capital assets Surrenders to Revenue Fund ( ) ( ) Net cash flow generated by operating activities Reconciliation of cash and cash equivalents for cash flow purposes Consolidated Paymaster General account Disbursements (5 156) (3277) Cash on hand Total Contingent liabilities and contingent assets 18.1 Contingent liabilities *Restated Liable to nature Housing loan guarantees Employees Intergovernmental payables (unconfirmed balances) Annex 3A Annex Total - 71 Note* The housing loan guarantees relates to two employees, one was released by the bank, while the other official has resigned from the Department resulting in the guarantee being terminated. 194 Gauteng Department of Economic Development Annual Report 2016/2017

195 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Commitments Current expenditure 2016/ /16 R 000 R 000 Approved and contracted Approved but not yet contracted Capital expenditure Approved and contracted Approved but not yet contracted Total Commitments Current: Longer than a year Current: Shorter than a year Capital: Shorter than a year Total Accruals and payables not recognised Accruals Listed by economic classification 30 Days 30+ Days Total Total Goods and services Total Listed by programme level Administration Integrated Economic Development Services - 64 Business Regulation and Governance Economic Planning Total * *The 2015/16 accruals have been restated due to a total amount R495k that was erroneously disclosed,this then resulting in a reduction of the accruals. Gauteng Department of Economic Development Annual Report 2016/

196 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march / / Payables not recognised Listed by economic classification R 000 R Days 30+ Days Total Total Goods and services Transfer and Subsidies Capital Assets Interdepartmental Claims Total Listed by programme level Administration Trade and Sector Development Business Regulations and Governance 549 Economic Planning Total ** Confirmed balances with other departments Annex Confirmed balances with other government entities Annex Total Note**The total of payables not recognised has been restated due to transfers and subsidies that was erroneously disclosed as R20,2m in the prior year as oppose to R20,9m resulting in an understatement of R700k. 196 Gauteng Department of Economic Development Annual Report 2016/2017

197 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march 2017 Note 2016/ / Employee benefits R 000 R 000 *Restated Leave entitlement * Service bonus (Thirteenth cheque) ** Performance awards *** Capped leave commitment Long service award **** Total ***** *Included in the leave entitlement is the negative leave balance of R93k(2016: R76k),which is as a result of resolution 7 of 2000 which allows employees to accrue leave days on the 1st of January every year irrespective of the employment date. ** The service bonus, amount is inclusive of the employees based at Ga-Rankuwa Hotel School. ***Performance awards is estimated based on the Departments compensation budget and calculated at 1.5% of the overall budget. **** Long Service Award is calculated based on the cash award figures provided by DPSA as per the PSCBC resolution 1 of *****Employee benefit has been restated due to long service awards not being disclosed in the prior year, Employee benefits was previously disclosed as R16,3k instead of R16,4k. 22. Lease commitments 22.1 Operating leases expenditure 2016/17 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Total Not later than 1 year Later than 1 year and not later than 5 years Total lease commitments /16 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Total Not later than 1 year Later than 1 year and not later than 5 years Total lease commitments Gauteng Department of Economic Development Annual Report 2016/

198 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Finance leases expenditure 2016/17 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Total R 000 Not later than 1 year Later than 1 year and not later than 5 years Total lease commitments /16 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Total R 000 Not later than 1 year Later than 1 year and not later than 5 years Total lease commitments Accrued departmental revenue 2016/ /16 R 000 R 000 Tax revenue Municipal Deposit Debts * Total Note* R1,1m is debt raised for Municipal deposits for the Gauteng Planning Commission unit. The functions has been migrated to the Office of the Premier Analysis of accrued departmental revenue Opening balance Less: amounts received (96 370) (70 304) Add: amounts recognised Closing balance Gauteng Department of Economic Development Annual Report 2016/2017

199 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march / / Irregular expenditure 24.1 Reconciliation of irregular expenditure R 000 R 000 Opening balance Prior period error - - As restated Add: Irregular expenditure relating to current year Less: Prior year amounts condoned - (16 400) Closing balance Analysis of awaiting condonation per age classification Current year Prior years Total Details of Irregular expenditure added current year(relating to current and prior year) Incident Disciplinary steps taken /criminal proceedings 2016/17 Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None 127 Contravention of TR 16A6.1 None Incident Disciplinary steps taken /criminal proceedings 2015/16 Contravention of TR 16A6.1 None 347 Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Contravention of TR 16A6.1 None Gauteng Department of Economic Development Annual Report 2016/

200 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Fruitless and wasteful expenditure 25.1 Reconciliation of fruitless and wasteful expenditure 2016/ /16 R 000 R 000 Opening balance As restated Fruitless and wasteful expenditure relating to current year Less: Amounts resolved (3 325) (42 462) Fruitless and wasteful expenditure awaiting resolution Analysis of awaiting resolution per economic classification Current Total Analysis of Current Year s Fruitless and wasteful expenditure Incident Disciplinary steps taken/criminal proceedings Cancellation of a contract 747 Total Gauteng Department of Economic Development Annual Report 2016/2017

201 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march / / Related party transactions R 000 R 000 Tax revenue (GGB) Total % Commission paid (GGB) Total Year end balances arising from revenue/payments Receivables from related parties (GGB) Payables to related parties (GGB) Total The Gauteng Department of Economic Development is related to all Gauteng Provincial Government Departments and entities by virtue of being under the same control by Gauteng Premier and Gauteng Legislature. The entities and agencies are enlisted as follows: Gauteng Gambling Board Gauteng Growth Development Agency Gauteng Enterprise Propeller Gauteng Tourism Authority Cradle of humankind (Trading Entity) Dinokeng (Trading entity) Gauteng Liquor Board (Trading entity) 27. Key management personnel No. of Individuals Political office bearers (provide detail below) Officials: Level 15 to Level 14 (incl. CFO if at a lower level) Family members of key management personnel - - Total Impairment Debtors Total Gauteng Department of Economic Development Annual Report 2016/

202 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march / / Provisions R 000 R 000 Provision for doubtful debts Total Reconciliation of movement in provisions 2016/17 Provision 1 Provision 2 Provision 3 Total provisions R 000 R 000 R 000 R 000 Increase in provision Closing balance Movable Tangible Capital Assets MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2017 Opening balance Value adjustments Additions Disposals Closing Balance R 000 R 000 R 000 R 000 R 000 MACHINERY AND EQUIPMENT (5 517) Transport assets Computer equipment (300) (2 808) Furniture and office equipment Other machinery and equipment (2 548) (161) TOTAL MOVABLE TANGIBLE CAPITAL ASSETS (5 517) Gauteng Department of Economic Development Annual Report 2016/2017

203 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Additions ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2017 Cash Non-cash (Capital Work in Progress current costs and finance lease payments) Received current not paid (Paid current year received prior year) Total R 000 R 000 R 000 R 000 R 000 MACHINERY AND EQUIPMENT (1 670) Computer equipment Furniture and office equipment Other machinery and equipment (1 670) TOTAL ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS (1 670) Disposals DISPOSALS OF MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2017 Sold for cash Non-cash disposal Total disposals Cash Received Actual R 000 R 000 R 000 R 000 MACHINERY AND EQUIPMENT Computer equipment Furniture and office equipment Other machinery and equipment TOTAL DISPOSAL OF MOVABLE TANGIBLE CAPITAL ASSETS Gauteng Department of Economic Development Annual Report 2016/

204 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Movement for 2015/16 MOVEMENT IN TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2016 Opening balance Prior period error Additions Disposals Closing Balance R 000 R 000 R 000 R 000 R 000 MACHINERY AND EQUIPMENT (131) (1 830) Transport assets Computer equipment (49) (594) Furniture and office equipment Other machinery and equipment (18) (1 218) (64) (18) TOTAL MOVABLE TANGIBLE CAPITAL ASSETS (131) (1 830) Minor assets MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED AS AT 31 MARCH 2017 Specialised military assets Intangible assets Heritage assets Machinery and equipment Biological assets Total R 000 R 000 R 000 R 000 R 000 R 000 Opening balance Additions Disposals (1 584) - (1 584) TOTAL MINOR ASSETS Gauteng Department of Economic Development Annual Report 2016/2017

205 Annual Financial Statements part E NOTES TO THE Annual financial STATEMENTs for the year ended 31 march 2017 MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED AS AT 31 MARCH 2016 Specialised military assets Intangible assets Heritage assets Machinery and equipment Biological assets Total R 000 R 000 R 000 R 000 R 000 R 000 Opening balance Value Adjustment (705) - (705) Additions Disposals (168) - (168) TOTAL MINOR ASSETS Intangible Capital Assets MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2017 Opening balance Value adjustments Additions Disposals Closing Balance R 000 R 000 R 000 R 000 R 000 SOFTWARE TOTAL INTANGIBLE CAPITAL ASSETS Additions ADDITIONS TO INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2017 Cash Non-Cash (Development work in progress current costs) Received current year not paid (Paid current year received prior year) Total R 000 R 000 R 000 R 000 R 000 SOFTWARE TOTAL ADDITIONS TO INTANGIBLE CAPITAL ASSETS Gauteng Department of Economic Development Annual Report 2016/

206 part E Annual Financial Statements NOTES TO THE Annual financial STATEMENTs for the year ended 31 march Movement for 2016/2017 MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2017 Opening balance Prior period error Additions Disposals Closing Balance R 000 R 000 R 000 R 000 R 000 SOFTWARE TOTAL INTANGIBLE CAPITAL ASSETS Principal-agent arrangements 32.1 Department acting as the principal Note 2016/ /16 R 000 R 000 *Commission paid to Gauteng Gambling Board Total *Gauteng Gambling Board is an agent of the Department that collects casino taxes horse racing taxes and book makers licence on behalf of the department. The Gauteng Gambling Board receives an 8% commission of the collected revenue. 206 Gauteng Department of Economic Development Annual Report 2016/2017

207 Annual Financial Statements part E NOTES TO THE APPROPRIATION STATEMENT for the year ended 31 march Prior period errors Expenditure 2015/16 R 000 Operating Expenditure decrease as a result of supplier debt (100) Less: Operating Expenditure as at 2015/ Increase in commission paid Net effect *supplier debt amount was understated by 15k, this will have an effect on the operating expenditure for the prior year. Assets 2015/16 R 000 Supplier Debt restated 197 Less: Supplier Debt disclosed as at 2015/2016 (182) Net effect *15 *Supplier debt amount was understated by R15k, this was reported as R 182k instead of 197k Revenue 2015/16 Increase in Departmental Revenue as at 2015/16 disclose at gross ( ) Decrease in Departmental Revenue as at 2015/16 disclosed at net Net effect *(75 739) **In the prior year the amount of R disclosed as revenue was understated by R as a result of revenue being recognised at net instead of gross. The revenue increased to R as a result of revenue being reported at gross in 2015/16 financial year. The R was the commission paid to GGB. Net Effect 15 Employee Benefits Decrease in Employee benefits (16 353) Increase in employee benefits *****Employee benefit has been restated due to long service awards not being disclosed in the prior year, Employee benefits was previously disclosed as R16,3k instead of R16,4k. Gauteng Department of Economic Development Annual Report 2016/

208 part E Annual Financial Statements NOTES TO THE APPROPRIATION STATEMENT for the year ended 31 march 2017 Commitments 2015/16 R 000 Decrease in commitments ( ) Increase in commitments Net effect (2 957) The 2015/16 commitments were erroneously disclosed as R as oppose to R resulting in an understatement of R Accruals Decrease in accruals (14 778) Increase in accruals Net effect (495) The 2015/16 accruals have been restated due to a total amount R495k that was erroneously disclosed,this then resulting in a reduction of the accruals. Payables not recognised Decrease in payables not recognised (22 921) Increase in payables not recognised **The total of payables not recognised has been restated due to transfers and subsidies that was erroneously disclosed as R20,2m in the prior year as oppose to R20,9m resulting in an understatement of R700k Net Effect Gauteng Department of Economic Development Annual Report 2016/2017

209 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 1B (NOTE 6) STATEMENT OF TRANSFERS TO DEPARTMENTAL AGENCIES AND ACCOUNTS TRANSFER ALLOCATION TRANSFER 2015/16 Annual Appropriation Roll Overs Adjustment Total Available Actual Transfer % of Available funds Transferred Appropriation Act DEPARTMENT/ AGENCY/ ACCOUNT R 000 R 000 R 000 R 000 R 000 % R 000 Gauteng Growth Development Agency % Gauteng Tourism Authority % Gauteng Enterprise Propeller % Cradle of Humankind (7 700) % Dinokeng (6 000) % Gauteng Liquor Board % % Gauteng Department of Economic Development Annual Report 2016/

210 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 1F STATEMENT OF TRANSFERS TO NON-PROFIT INSTITUTIONS TRANSFER ALLOCATION EXPENDITURE 2015/16 NON-PROFIT INSTITUTIONS Adjusted appropriation Act Roll Overs Adjustments Total Available Actual Transfer % of Available funds transferred Appropriation Act R 000 R 000 R 000 R 000 R 000 % R 000 Transfers Gauteng Department of Social Development Total Gauteng Department of Economic Development Annual Report 2016/2017

211 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 1G (NOTE 6) STATEMENT OF TRANSFERS TO HOUSEHOLDS ANNUAL TRANSFER ALLOCATION EXPENDITURE 2015/16 Adjusted Appropriation Act Roll Overs Adjustments Total Available Actual Transfer % of Available funds Transferred Appropriation Act HOUSEHOLDS R 000 R 000 R 000 R 000 R 000 % R 000 Transfers H/H Injury on duty H/H Leave gratuity H/H Claim against State (cash) Total Gauteng Department of Economic Development Annual Report 2016/

212 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 2A (NOTE 12) STATEMENT OF INVESTMENTS IN AND AMOUNTS OWING BY PROVINCIAL PUBLIC ENTITIES AS AT 31 MARCH 2017 Name of Public Entity State Entity s PFMA Schedule type (state year end if not 31 March) % Held 2016/17 Net Asset value of Number of shares held Cost of investment investment Profit/(Loss) for the year Losses guaranteed R 000 R 000 R 000 % Held 2015/ / / / / / / / /16 Yes/No National/ Provincial Public Entity Blue IQ (PTY) LTD t/a GGDA Subtotal TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

213 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 3A (NOTE 18) STATEMENT OF FINANCIAL GUARANTEES ISSUED AS AT 31 MARCH 2017 LOCAL Guarantor institution Guarantee in respect of Original guaranteed capital amount Opening balance 1 April 2016 Guarantees draw downs during the year Guarantees repayments/ cancelled/ reduced/ released during the year Revaluations Closing balance 31 March 2017 Guaranteed interest for year ended 31 March 2016 Realised losses not recoverable i.e. claims paid out R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 Nedbank Housing NP Development Housing Subtotal TOTAL Gauteng Department of Economic Development Annual Report 2016/

214 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 3B STATEMENT OF CONTINGENT LIABILITIES AS AT 31 MARCH 2017 NATURE OF LIABILITY Opening balance 1 April 2016 Liabilities incurred during the year Liabilities paid/ cancelled/ reduced during the year Liabilites recoverable (Provide details hereunder) Closing balance 31 March 2017 R 000 R 000 R 000 R 000 R 000 Claims against the department Antoine Johannes Else/ Malcom Gordon & the MEC (car accident) Department of Agriculture and Rural Development Subtotal TOTAL Gauteng Department of Economic Development Annual Report 2016/2017

215 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 4 (NOTE11) CLAIMS RECOVERABLE Confirmed balance outstanding Unconfirmed balance outstanding Total Cash in transit at year end * Government Entity 31/03/ /03/ /03/ /03/ /03/ /03/2016 Receipt date up to six (6) working days after year end Amount R 000 R 000 R 000 R 000 R 000 R 000 R 000 Provincial Department Gauteng Office of the Premier Other Government Entities Gauteng Liquor Board Gauteng Growth Development Agency Gauteng Enterprise Propeller Gauteng Tourism Authority Cradle of Humankind Dinokeng Gauteng Gambling Board TOTAL Gauteng Department of Economic Development Annual Report 2016/

216 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 5 (NOTE 20) INTER-GOVERNMENT PAYABLES Confirmed balance outstanding Unconfirmed balance outstanding TOTAL Cash in transit at year end 2016/17 * GOVERNMENT ENTITY 31/03/ /03/ /03/ /03/ /03/ /03/2016 Payment date up to six (6) working days before year end Amount R 000 R 000 R 000 R 000 R 000 R 000 R 000 NATIONAL DEPARTMENTS Current Department of Justice Department of Agriculture and Development Department of Public Enterprise Subtotal Total Gauteng Department of Economic Development Annual Report 2016/2017

217 part E Annual Financial Statements appropriation statement for the year ended 31 march 2017 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENT for the year ended 31 march 2017 ANNEXURE 5 (NOTE 20) INTER-GOVERNMENT PAYABLES Confirmed balance outstanding Unconfirmed balance outstanding TOTAL Cash in transit at year end 2016/17 * GOVERNMENT ENTITY 31/03/ /03/ /03/ /03/ /03/ /03/2016 Payment date up to six (6) working days before year end Amount R 000 R 000 R 000 R 000 R 000 R 000 R 000 Current G-Fleet World Heritage Site Gauteng Tourism Authority Gauteng Liquor Board Gauteng Growth Development Agency The Innovation Hub Government Printing Subtotal Total *The total confirmed amount for GGDA has been restated due to the confirmed balances that was erroneously disclosed as R 20,2m in the 2015/16 instead of R20,9m resulting in an understatement of R700k Gauteng Department of Economic Development Annual Report 2016/

218 part E Gauteng Liquor Board Annual Financial StatementS Table of Contents Report of the Auditor-General 219 Statement of Financial Position 222 Statement of Financial Performance 223 Statement of Changes in Net Assets 224 Statement of Cash Flows 225 Notes to the Annual Financial Statements (including Accounting Policies) Gauteng Department of Economic Development Annual Report 2016/2017

219 Gauteng Liquor Board Report of the auditor-general part E Report of the auditor-general to Gauteng Provincial Legislature on the Gauteng Liquor Board Report on the audit of the financial statements Opinion 1. I have audited the separate financial statements of the Gauteng Liquor Board set out on pages 222 to 247, which comprise the statement of financial position as at 31 March 2017, the statement of financial performance, statement of changes in net assets and cash flow statement 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 Gauteng Liquor Board as at 31 March 2017, and its financial performance and cash flows for the year then ended in accordance with South African Standards of Generally Recognised Accounting Practise (SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa of 1999 (Act No ) (PFMA). 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 my report. 4. I am independent of the trading entity in accordance with the International Ethics Standards Board for Accountants Code of ethics for professional accountants (IESBA code) together with 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. Material uncertainty related to going concern 6. I draw attention to note 26 in the financial statements, which indicates that the trading entity has an accumulated loss of R and current liabilities exceeded its total assets by R as at 31 March As stated in note 26, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the trading entity s ability to continue as a going concern. My opinion is not modified in respect of this matter. Emphasis of matter 7. I draw attention to the matter below. My opinion is not modified in respect of this matter. Restatement of corresponding figures 8. As disclosed in note 22 to the financial statements, the corresponding figures for 31 March 2016 have been restated as a result of an error in the financial statements of the trading entity at, and for the year ended, 31 March Material Impairments 9. As disclosed in note 2 and 3 to the financial statements, material impairments to the amount of R were incurred as a result of impairment of receivables due to poor collection practices. Responsibilities of the accounting officer for the financial statements 10. The accounting officer is responsible for the preparation and fair presentation of the financial statements in accordance with SA Standards of GRAP and the requirements of the PFMA, and for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 11. In preparing the financial statements, the accounting officer is responsible for assessing the Gauteng Liquor Board 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 there is an intention either to liquidate the entity or to cease operations, or there is no realistic alternative but to do so. Auditor-general s responsibilities for the audit of the financial statements 12. 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 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 13. A further description of my responsibilities for the audit of the financial statements is included in the annexure to the auditor s report. Gauteng Department of Economic Development Annual Report 2016/

220 part E Gauteng Liquor Board Report of the auditor-general Report on the audit of the annual performance report Introduction and scope 14. 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. 15. My procedures address the reported performance information, which must be based on the approved performance planning documents of the trading 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. 16. 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 programme presented in the annual performance report of the entity for the year ended 31 March 2017: We are pleased to present our report for the financial year ended 31 March Programme Programme 4 - Business regulation and governance. Pages in the annual performance report 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. 18. I did not identify any material findings on the usefulness and reliability of the reported performance information for the selected programme. Other matter 19. I draw attention to the matter below. Achievement of planned targets 20. Refer to the annual performance report on page(s) 209 to 217 for information on the achievement of planned targets for the year and explanations provided for the overachievement of one target. Report on the audit of compliance with legislation Introduction and scope 21. 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 trading entity with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance 22. The material findings in respect of the compliance criteria for the applicable subject matters are as follows: Annual financial statements 23. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting as required by section 40(1) (b) of the PFMA. Material misstatements of revenue, current liabilities, current assets, cash flow statement and statement of changes in net assets identified by the auditors in the submitted financial statement were corrected, resulting in the financial statements receiving an unqualified audit opinion. Revenue management 24. Penalties were not always charged on late renewals as per section 100 of the Gauteng Liquor Act 2 of Effective and appropriate steps were not taken to collect all money due, as required by section 38(1) (c)(i) of the PFMA and treasury regulations , (a) and (e). Other information 26. The Gauteng Liquor Board s accounting officer is responsible for the other information. The other information comprises the information included in the annual report. The other information does not include the financial statements, the auditor s report thereon and those selected programmes presented in the annual performance report that have been specifically reported on in the auditor s report. 27. 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. 220 Gauteng Department of Economic Development Annual Report 2016/2017

221 Gauteng Liquor Board Annual Financial StatementS part E 28. 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. If, based on the work I have performed on the other information obtained prior to the date of this auditor s report, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. Internal control deficiencies 29. 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 thereon. 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 Financial and performance management 31. Management did not implement sufficient monitoring controls to ensure that the financial statements were supported by credible information. Furthermore, compliance with legislation was not adequately monitored, resulting in material instances of noncompliance with key legislation. Johannesburg 31 July 2017 Leadership 30. The accounting officer did not always exercise adequate oversight of financial reporting, compliance and related internal controls, which resulted in material amendments to the annual financial statements and non-compliance with key legislation. Gauteng Department of Economic Development Annual Report 2016/

222 part E Gauteng Liquor Board Annual Financial StatementS Statement of Financial Position for year ended 31 March 2017 Restated Note R 000 R 000 ASSETS Current Assets Trade and other receivables from exchange transactions Receivables from non-exchange transactions Prepayments Cash and cash equivalents Non-Current Assets Property, plant and equipment Total Assets LIABILITIES Current liabilities Trade and other payables from exchange transactions Provisions Total liabilities Net assets (7 260) (18 169) Accumulated surplus / (deficit) (7 259) (18 169) 222 Gauteng Department of Economic Development Annual Report 2016/2017

223 Gauteng Liquor Board Annual Financial StatementS part E Statement of Financial Performance for year ended 31 March 2017 Restated Note R 000 R 000 Revenue Revenue from exchange transactions Licences and Permits Recoveries 8-14 Garnishee order Rental of parking Total revenue from exchange transactions Revenue from non-exchange transactions Transfer revenue Government grants & subsidies Penalties Total revenue from non-exchange transactions Total revenue Expenditure Employee related costs 12 (47 087) (43 036) Depreciation and amortisation (245) (290) Impairment loss 2 (4 977) (914) Interest paid (35) (10) Repairs and maintenance - (117) General Expenses 13 (24 293) (18 746) Total expenditure (76 637) (63 113) Operating surplus (deficit) (10 324) Loss on disposal of assets and liabilities (48) (15) Surplus (deficit) for the year (10 339) Gauteng Department of Economic Development Annual Report 2016/

224 part E Gauteng Liquor Board Annual Financial StatementS Statement of Changes in Net Assets for year ended 31 March 2017 Accumulated Surplus Total Net Assets R 000 R 000 Balance at April 01, 2015 (8 848) (8 848) Changes in net assets Surplus/ (deficit) for the year (10 339) (10 339) Total changes (10 339) (10 339) Opening balance as previously reported (19 187) (19 187) Adjustments Correction of errors Restated* Balance at April 01, 2016 as restated* (18 169) (18 169) Changes in net assets Surplus for the year Total changes Balance at March 31, Gauteng Department of Economic Development Annual Report 2016/2017

225 Gauteng Liquor Board Annual Financial StatementS part E Statement of Cash Flows for year ended 31 March 2017 Restated Note(s) R 000 R 000 Cash flows from operating activities Receipts Penalties Licence fees Grants Garnishees and rentals Payments Compensation of employees (46 722) (39 160) Goods and services (26 984) (21 804) Finance costs (35) (10) (73 741) (60 974) Total receipts Total payments (73 741) (60 974) Net cash flows from operating activities (8 185) Net increase/(decrease) in cash equivalents (8 185) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Gauteng Department of Economic Development Annual Report 2016/

226 part E Gauteng Liquor Board Annual Financial StatementS Accounting policies for year ended 31 March Presentation of Annual Financial Statements The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act (Act 1 of 1999). These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention as the basis of measurement, unless specified otherwise. Figures have been rounded to the nearest thousand rand. Assets, liabilities, revenues and expenses were not offset, except where offsetting is either required or permitted by a Standard of GRAP. A summary of the significant accounting policies, which have been consistently applied in the preparation of these annual financial statements, are disclosed below. These accounting policies are consistent with the previous period. 1.1 Presentation currency These annual financial statements are presented in South African Rand, which is the functional currency of the Gauteng Liquor Board. 1.2 Going concern assumption These annual financial statements have been prepared based on the expectation that the Gauteng Liquor Board will continue to operate as a going concern for at least the next 12 months. 1.3 Significant judgements and sources of estimation uncertainty 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 judgement is 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. Significant judgements include: Impairment of financial assets The carrying value less impairment provision of trade receivable and payables are assumed to approximate their fair values. Provisions Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 7 - Provisions. 1.4 Property, plant and equipment Property, plant and equipment are tangible non-current assets that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period. The cost of an item of property, plant and equipment is recognised as an asset when: it is probable that future economic benefits or service potential associated with the item will flow to the entity; and the cost of the item can be measured reliably. Property, plant and equipment is initially measured at cost. The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost. Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition. Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item s fair value was not determinable, it s deemed cost is the carrying amount of the asset(s) given up. Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. 226 Gauteng Department of Economic Development Annual Report 2016/2017

227 Gauteng Liquor Board Annual Financial StatementS part E Accounting policies for year ended 31 March 2017 The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories. Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management. Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. The useful lives of items of property, plant and equipment have been assessed as follows: Item Depreciation method Average useful life Furniture Straight line 5-10 years Computer equipment Straight line 3-5 years The residual value, and the useful life and depreciation method of each asset are reviewed at the end of each reporting date. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. Reviewing the useful life of an asset on an annual basis does not require the entity to amend the previous estimate unless expectations differ from the previous estimate. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset. Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use of the asset. The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. 1.5 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity. cash; a residual interest of another entity; or a contractual right to: - receive cash or another financial asset from another entity; or - exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity. Initial recognition The Gauteng Liquor Board recognises a financial instrument in its statement of financial position when it becomes a party to the contractual provisions of the instrument. Initial measurement of financial assets and financial liabilities Gauteng Department of Economic Development Annual Report 2016/

228 part E Gauteng Liquor Board Annual Financial StatementS Accounting policies for year ended 31 March 2017 The Gauteng Liquor Board measures a financial instrument at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Subsequent measurement of financial assets and financial liabilities All financial assets measured at amortised cost, are subject to an impairment review. The statement of financial position include the financial assets and liabilities classified as financial instrument at amortised cost andthey include: (a) Trade and other receivables Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for irrecoverable amounts. (b) Cash and cash equivalents Cash and cash equivalents comprise of bank balance. Cash and cash equivalents are recognised initially at fair value and subsequently at amortised cost. (c) Trade and other payables Trade and other payables comprise accruals for services that have been acquired in the ordinary course of business. Trade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method. Impairment and uncollectibility of financial assets The entity assess at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired. Financial assets measured at amortised cost: If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed directly OR by adjusting an allowance account. The reversal does not result in a carrying amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in surplus or deficit. Derecognition Financial assets The entity derecognises financial assets using trade date accounting. The entity derecognises a financial asset only when the contractual rights to the cash flows from the financial asset expire, are settled or waived; On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit. Financial liabilities The entity removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished - i.e. when the obligation specified in the contract is discharged, cancelled, expires or waived. For financial instruments measured at amortised cost, a gain or loss is recognised in surplus or deficit when the financial instrument is derecognised, and through the amortisation process. Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Liquidity risk is the risk encountered by an entity in the event of difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. 1.6 Employee benefits Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees. The accounting policy in terms of the compensation of employees is in line with the policy of the Gauteng Provincial 228 Gauteng Department of Economic Development Annual Report 2016/2017

229 Gauteng Liquor Board Annual Financial StatementS part E Accounting policies for year ended 31 March 2017 Department of Economic Development; and is as follows: Long-term employee benefits Other long term employee benefits (such as capped leave and long service awards) are recognised as expenditure in the statement of financial performance. Short-term employee benefits Short-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service. The cost of short-term employee benefits are expensed in the statement of financial performance in the year in which it occurs. Short term employee benefits that gives rise to a present or constructive obligations are recognised and disclosed in the notes to the financial statements. This is limited to leave pay accrual and service bonus as set out in note 8. Salaries and wages shown in the statement of financial performance comprise payments to employees(including leave entitlements,thirteenth cheque and performance bonuses). Short-term employee benefits include items such as: wages, salaries and social security contributions; short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service; bonus, incentive and performance related payments payable within 12 months after the end of the reporting period in which the employees render the related service; and non-monetary benefits (for example, medical care, and free or subsidised goods or services such as housing, cars and cellphones) for current employees. The entity recognise the expected cost of bonus, incentive and performance related payments when the entity has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the entity has no realistic alternative but to make the payments. Post-employment benefits Post-employment benefits are employee benefits (other than termination benefits) which are payable after the completion of employment. Employer contributions are expensed in the statement of financial performance. No provision is made for retirement benefits in the financial statements of the Board, or in the financial statements of the parent depaartment. Any potential liabilities are disclosed in the financial statement of the National Revenue Funds and not in the statements of the employer department. This policy is in line with the Gauteng Provincial Department of Economic Development policy. Termination benefits Termination benefits such as severance packages are recognised as an expense in the statement of financial performance. 1.7 Provisions and contingencies Provisions are recognised when: the entity 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 of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date. Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. Gauteng Department of Economic Development Annual Report 2016/

230 part E Gauteng Liquor Board Annual Financial StatementS Accounting policies for year ended 31 March 2017 Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the obligation. A provision is used only for expenditures for which the provision was originally recognised. Provisions are not recognised for future operating deficits. Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 25. The amount of the fee initially recognised less, where appropriate, cumulative amortisation recognised in accordance with the Standard of GRAP on Revenue from Exchange Transactions. 1.8 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. Measurement Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates. Sale of goods Revenue from the sale of goods is recognised when all the following conditions have been satisfied: the entity has transferred to the purchaser the significant risks and rewards of ownership of the goods; the entity 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. 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 end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: the amount of the revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the entity; the stage of completion of the transaction at the end of the reporting period 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. Interest, royalties and dividends Revenue arising from the use by others of entity assets yielding interest, royalties and dividends or similar distributions is recognised when: It is probable that the economic benefits or service potential associated with the transaction will flow to the entity, and The amount of the revenue can be measured reliably. 230 Gauteng Department of Economic Development Annual Report 2016/2017

231 Gauteng Liquor Board Annual Financial StatementS part E Accounting policies for year ended 31 March Revenue from non-exchange transactions Revenue comprises gross inflows of economic benefits or service potential received and receivable by an entity, which represents an increase in net assets, other than increases relating to contributions from owners. Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be returned to the transferor. Control of an asset arise when the entity can use or otherwise benefit from the asset in pursuit of its objectives and can exclude or otherwise regulate the access of others to that benefit. Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange. Fines are economic benefits or service potential received or receivable by entities, as determined by a court or other law enforcement body, as a consequence of the breach of laws or regulations. Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an entity either receives value from another entity without directly giving approximately equal value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange. Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes. 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 expense recognised that are recoverable. Recognition An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow. As the entity satisfies a present obligation recognised as a liability in respect of an inflow of resources from a nonexchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction. Measurement Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity. When, as a result of a non-exchange transaction, the entity recognises an asset, it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When a liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the liability is recognised as revenue. Transfers Apart from Services in kind, which are not recognised, the entity recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset. Transferred assets are measured at their fair value as at the date of acquisition. Fines Penalties Penalties from fines are recognised as revenue when the receivable meets the definition of an asset and satisfies the criteria for recognition as an asset. Assets arising from penalties from fines are measured at the best estimate of the inflow of resources to the entity Comparative figures Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current year Fruitless and wasteful expenditure Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised. Gauteng Department of Economic Development Annual Report 2016/

232 part E Gauteng Liquor Board Annual Financial StatementS Accounting policies for year ended 31 March 2017 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 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 - (a) this Act; or (b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or (c) any provincial legislation providing for procurement procedures in that provincial government. National Treasury practice note no. 4 of 2008/2009 which was issued in terms of sections 76(1) to 76(4) of the PFMA requires the following (effective from 1 April 2008): Irregular expenditure that was incurred and identified during the current financial and which was condoned before year end and/or before finalisation of the financial statements must also be recorded appropriately in the irregular expenditure register. In such an instance, no further action is also required with the exception of updating the note to the financial statements. Irregular expenditure that was incurred and identified during the current financial year and for which condonement is being awaited at year end must be recorded in the irregular expenditure register. No further action is required with the exception of updating the note to the financial statements. Where irregular expenditure was incurred in the previous financial year and is only condoned in the following financial year, the register and the disclosure note to the financial statements must be updated with the amount condoned. Irregular expenditure that was incurred and identified during the current financial year and which was not condoned by the National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accounting officer or accounting authority may write off the amount as debt impairment and disclose such in the relevant note to the financial statements. The irregular expenditure register must also be updated accordingly. If the irregular expenditure has not been condoned and no person is liable in law, the expenditure related thereto must remain against the relevant programme/expenditure item, be disclosed as such in the note to the financial statements and updated accordingly in the irregular expenditure register Events after reporting date Events after reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Two types of events can be identified: those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); and those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting date). The entity will adjust the amount recognised in the financial statements to reflect adjusting events after the reporting date once the event occurred. The entity will disclose the nature of the event and an estimate of its financial effect or a statement that such estimate cannot be made in respect of all material non-adjusting events, where non-disclosure could influence the economic decisions of users taken on the basis of the financial statements. 232 Gauteng Department of Economic Development Annual Report 2016/2017

233 Gauteng Liquor Board Annual Financial StatementS part E NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March R 000 R Receivables from non-exchange transactions Penalties Provincial government Impairment of penalties on license renewal fees (1 422) Trade and other receivables from exchange transactions Impairment of overdue license renewal fees (3 556) (914) Recoveries of staff expenses - 94 Employee advances 9 14 Provincial government Overdue license renewal fees Trade and other receivables past due but not impaired Trade and other receivables which are less than 2 months past due are not considered to be impaired. At March 31, 2017, R (2016: R -0) were past due but not impaired. The ageing of amounts past due but not impaired is as follows: 1 month past due Reconciliation of provision fo impairment of trade and other receivables Opening balance Provision for impairment (914) (82) Provision untilised Cash and cash equivalents Reconciliation of cash and cash equivalents: Bank balances Outstanding disbursement (261) Outstanding balance as at 31 March is due to late payments interface of SAP system into the bank account. Payments were cleared in April Gauteng Department of Economic Development Annual Report 2016/

234 part E Gauteng Liquor Board Annual Financial StatementS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March Property, plant and equipment Cost/ Valuation Accumulated depreciation and accumulated impairment Carrying value Cost/ Valuation Accumulated depreciation and accumulated impairment Carrying value Furniture (938) (900) 536 Computer equipment (1 748) (1 611) 588 Total (2 511) Reconciliation of property, plant and equipment Opening balance Disposals Depreciation Total Furniture 536 (9) (86) 441 Computer equipment 588 (38) (159) (47) (245) 832 Reconciliation of property, plant and equipment Opening balance Disposals Depreciation Total Furniture (90) 536 Computer equipment 804 (16) (200) 588 Total (16) (290) Trade and other payables from exchange transactions Trade payables Income received in advanced Pension fund - 1 Staff leave accrual* Service bonus accrual** Sal: ACB recalls 6 - Sa: Income tax *Staff leave accrual calculation is based on the current salary rate and is inclusive of current leave cycle, previous leave cycle and future leave taken ornegative staff leave. This liability will be realised as employees take leave or on the termination of employment. **Service bonus is accrued and calculation is based on employee s full month gross basic salary and paid out on the employee s elected anniversary date. 234 Gauteng Department of Economic Development Annual Report 2016/2017

235 Gauteng Liquor Board Annual Financial StatementS part E NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March Provisions Reconciliation of provisions Opening balance Additions Utilised during the year Reversed during the year Perfomance bonus* (250) (130) 610 Provision for capped leave** Provision for long service awards*** (27) - 10 Total (277) (130) Reconciliation of provisions Opening balance Additions Utilised during the year Reversed during the year Perfomance bonus (331) (123) 380 Provision for capped leave Provision for long service awards Total (331) (123) 763 Total Total *Provision for performance bonus was calculated at 1.5% of total compensation for all staff members. This bonus liability is paid to qualifying employees based on the performance award policy and the bonus is anticipated to be paid within 6 to 12 months. **Provision for capped leave is the leave accrued until 30 June 2000 and was audited, calculated and capped (i.e. not forfeited). The capped leave increases annually as the gross basic salaries are adjusted, also when an entitled employee get a promotion and the new appointeesn with capped leave also affect the decrease. The cash value payable in respect of personnel with capped and audited leave credits is determined using the formula included in the DPSA guide: Determination on leave of absence in the public service, Any unused capped leave shall be utilised where an employee have insufficient annual leave days;or paid out in the event of death or retirement. ***Provision for long service awards calculation is based on the DPSA calculation. Gauteng Department of Economic Development Annual Report 2016/

236 part E Gauteng Liquor Board Annual Financial StatementS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March Other revenue Reconciliation of property, plant and equipment R 000 R 000 Recoveries - 14 Garnishee order Rental of parking Licenses and Permits The Gauteng Liquor Board is responsible for regulating Liquor trading in Gauteng and is also responsible for the collection of License fees in terms of the Gauteng Liquor Act and Regulations. The main sources of revenue are as follows: Activations 1, Alteration of structure Copies Duplicate of license Financial controlling interest 1 12 Inspectors reports 16 7 Management reports New applications Occasional licenses Pending lodgement Renewals Restoration fees Shebeen 5 34 Tasting 5 - Transfer of license Conversions and other - 65 Unallocated receipts In 2015/16 financial year license fees were classified as non-exchange revenue, this has been reclassified as exchange revenue in accordance with GRAP 9. The change has been done retrospectively. An amount of R2m for Penalties were incorrectly classified under license and permits fees in 2015/16 financial year. In 2016/17 financial year Penalties are disclosed separately on note 10, the effect of the correction is that license fees is R2m lesser than reported 2016/ Penalties Penalties Penalties Gauteng Department of Economic Development Annual Report 2016/2017

237 Gauteng Liquor Board Annual Financial StatementS part E NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March R 000 R Government grats and subsidies Operating Grats Goverment grant (operating) Employee related costs Basic salary Performance Bonus Pension - company contributions Leave pay provision charge Overtime payments 16-13th cheque Non-pensionable allowances Housing benefits and allowances Long service award Bargaining council - company contribution 8 7 Medical aid - company contribution Compensation 4 2 Leave gratuity Gauteng Department of Economic Development Annual Report 2016/

238 part E Gauteng Liquor Board Annual Financial StatementS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March R 000 R General expenses Advertising 4 37 Audit fees Bank charges Cleaning Professional fees Consumables Departmental consumption Conferences and delegations External comp ser: infor services Levies paid Printing and stationery Security costs License fees - computers Telephone costs Travel and subsistence - local Travel and subsistence- foreign Electricity Thefts and losses Legal expenses Transport claims Rental of buildings Contracted maintenance Cash generated from (used in) operations Surplus (deficit) (10 339) Adjustments for: Depreciation and amortisation Gain on sale of assets and liabilities Financial costs 35 - Impairment loss Movements in provisions relating to employee costs 376 (46) Non-cash adjustments (553) - Provisions 16 - Changes in working capital: Trade and other receivables from exchange transactions (1 713) Other receivables from non-exchange transactions (5 240) - Prepayments (460) - Trade and other payables from exchange transactions (2 654) (8 185) 238 Gauteng Department of Economic Development Annual Report 2016/2017

239 Gauteng Liquor Board Annual Financial StatementS part E NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March Commitments R 000 R 000 Authorised operational expenditure Already contracted for but not provided for Records Management & Archiving Strategy Office lease rental Security Cleaning Total operational commitments Already contracted for but not provided for This committed expenditure relates to records management and rental of offices and will be financed by existing cash resources. Operating leases - as lessee (expense) Minimum lease payments due -within one year in second to fifth year inclusive Operating lease payments represent rentals payable by the entity for certain office properties and for record management. Leases are negotiated for an average term of six years and rentals are subject to an annual increase of 9% as stipulated in the main lease agreement. No contingent rent is payable. 16. Taxation Gauteng Liquor Board is exempted from income tax in terms of section 10 (1) of the IncomeTax Act. 17. Related parties Controlling entity Gauteng Department of Economic Development 17.1 Department of Economic Developmnent The Gauteng Liquor Board is a trading entity of the Department of Economic Development and its business operations are regulated as per Gauteng Liquor Act no. 2 of The entity reports to the MEC for Economic Development. Gauteng Liquor Board receives a subsidy from the Gauteng Department of Economic Development to run its operational costs. Gauteng Department of Economic Development Annual Report 2016/

240 part E Gauteng Liquor Board Annual Financial StatementS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March Related party balances R 000 R 000 Amounts included in Trade receivable (Trade Payable) regarding related parties Gauteng Department of Economic Development (162) - Department of Justice (180) - Government Printing Works (88) - Gauteng Department of Economic Development Related party trasactions In the 2016/17 financial year Gauteng Department of Economic Development rendered the services listed below at no cost to the entity: Human resource, Finance and Coporate services. Remuneration of management Executive management 2017 Senior Managers Remuneration Basic Salary Service Bonus Name Other Contributions/ Income Grand Total Motlhake MM* Bodibe-Lushaba CK** Malebo JM*** Nzimande RN**** Martin R***** Motlhake MM* Bodibe - Lushaba CK** Malebo JM*** Nzimande RN * Motlhake MM : Director -Administration and Registration.Resigned in October **Bodibe -Lushaba CK : Director - Client Relations Management. ***Malebo JM : Director - Inspectorate Compliance ****Nzimande RN : Chief Director resigned in August *****Martin R : Chief Director appointed in November Gauteng Department of Economic Development Annual Report 2016/2017

241 Gauteng Liquor Board Annual Financial StatementS part E NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2017 In the financial year 2016/17 Gauteng Department of Economic Development senior management rendered the services listed below at no cost to the entity : Finance Corporate Services Strategy, Monitoring and evaluation. 18. Members emoluments The Gauteng Liquor Board is a juristic person established in terms of Section 2 of the Gauteng Liquor Act, Act No. 2 of 2003 (the Act). The Board does not perform the powers and functions of an executive board but performs the functions of an application board. In this regard the Board considers applications for liquor licenses and either grant or refuse such applications. The Board meets two (2) days per week. Local Committees meet one (1) day per week. Because of its status as a juristic person the Board is sued directly and may institute legal action. In this regard the Board members are also required to attend legal consultations and all matters relating to legal actions instituted by and against the Board. In terms of Section 3 of the Act the Board has the following powers and functions: (1) The Board shall receive applications referred to in section 21 from the local committees and after considering such applications, refuse or grant the application concerned; (2) The Board may, after the consideration by it of any other matter contemplated in this Act: (a) suspend for (an indefinite time or for such period as it may determine) or withdraw from such date as it may determine, a licence which is the subject of a report, complaint or objection concerned, or any right or privilege which is attached thereto; (b) declare the license concerned to be subject to such conditions or further conditions as it may in its discretion impose; (c) rescind the suspension of the licence concerned or of any right or privilege which is attached thereto, with immediate effect or from such date as it may determine, subject to such conditions as it may in its discretion impose; or (d) take any such other steps as it may think fit. The Board consists of nine (9) members appointed in terms of Section 4 of the Act. In addition the Act also make provision for the established local committees of the Board in (each) of the areas of the municipalities in the Province, known as Metropolitan Councils and District Councils. Section 5 of the Act stipulates that the a member shall be appointed for a term not exceeding five (5) years and shall be eligible for reappointment at the lapse of the initial term. No person shall be reappointed as a member of the Board for more than two (2) terms. A member of the Board shall be paid such remuneration and allowances out of the funds of the Board as the Member of Executive Council may determine. Section 16 of the Act stipulates that the funds of the Board shall consist of: (a) money appropriated by the Provincial Legislature; and (b) money accruing to the Board from any other source approved by the Member of the Executive Council, including fees paid in terms of this Act. Gauteng Department of Economic Development Annual Report 2016/

242 part E Gauteng Liquor Board Annual Financial StatementS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2017 Non-executive R 000 Members fees Total Chiba B Chiba BG Daniel J Els L Gxilishe DP Khoza MP Mabe E Maja MS Manoko RA Masenya LM Masilela LM Masilo AS Masina P Mboweni MC Modise EM Molebatsi DS Molokwane DP Oakenfull LM Williams JS Chabedi KJ Van der Westhuizen FJ Selepe MD Pandelane FR (Chairperson) Ngakatau IS Ngoma GYW (Deputy Chairperson) Gauteng Department of Economic Development Annual Report 2016/2017

243 Gauteng Liquor Board Annual Financial StatementS part E NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March R Members fees Total Chiba B Chiba BG Daniel J Els L Gxilishe DP Khoza MP Mabe E Maja MS Manoko RA Masenya LM Masilela LM Masilo AS Masina P Mboweni MC Modise EM Molebatsi DS Molokwane DP Ngakatau IS Ngoma GYW Oakenfull LM Pandelane FR Radebe KJ Selepe MD Van der Westhuizen FJ Williams JS Gauteng Department of Economic Development Annual Report 2016/

244 part E Gauteng Liquor Board Annual Financial StatementS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March R 000 R Irregular expenditure Opening balance Less: Amounts condoned - (7 787) Fruitless and wasteful expenditure Fruitless and wasteful expenditure Interest on overdue account - current year Amounts written off - current year (7 566) Investigations were conducted in 2016/17 financial year and an amount of R7 566 was written off due to the fact that supporting documentation for the amount under investigations could not be found and it was confirmed by human resource and administration officer that the two officials responsible for the fruitless and wasteful expenditure are no longer employed by the entity. 21. Financial instruments disclosure Categories of financial instruments 2017 Financial assets At amortised cost Total Trade and other receivables from exchange transactions Other receivables from non-exchange transactions Cash and cash equivalents Prepayments Financial assets At amortised cost Total Trade and other payables from exchange transactions Financial assets At amortised cost Total Trade and other receivables from exchange transactions Cash and cash equivalents Gauteng Department of Economic Development Annual Report 2016/2017

245 Gauteng Liquor Board Annual Financial StatementS part E NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2017 Financial assets R 000 R 000 At amortised cost Trade and other payables from exchange transactions Total 22. Prior period errors During the financial year 2016/17 the following prior period errors were discovered: Current liabilities The liability relating to long service awards was not recognised in 2015/16 financial year hence the provision is recognised in the financial year 2016/17. The impact of the employee benefit provision has therefore been corrected retrospectively. Please refer note 7. Current assets In the 2015/16 financial year the negative leave was incorrectly classified as trade receivables instead of trade payables.this has been corrected retrospectively. Financial instuments disclosure In the financial year 2016/17, employee cost benefits and income received in advance was disclosed under Financial liabilities, this has been corrected retrospectively. Revenue In 2015/16 financial year, unallocated deposits were recognised as payables, in 2016/17 financial year unallocated The correction of the error(s) results in adjustments as follows: Statement of financial position Decrease in Trade and other payables - (1 044) Decrease in Trade and other payables - (1) Increase in provisions - 27 Decrease in trade receivables - (1) - (1 017) Statement of financial performance Deficit as previously reported - (10 339) Increase in revenue Decrease in employee cost - (27) Restated surplus as per statement of changes in net assets - (9 322) Gauteng Department of Economic Development Annual Report 2016/

246 part E Gauteng Liquor Board Annual Financial StatementS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March Comparative figures Certain comparative figures have been reclassified. Trade and other receivables Trade and other receivables have increased as a result of reclassification of negative leave balance from receivables to staff leave accrual in compliance with GRAP standard. Trade and other payables Trade and other payables have decreased as a result of reclassification of negative leave days to staff leave accrual from receivables in accordance with GRAP standard. General Expenses In 2015/16 financial year private legal fees were incorrectly classified as Proffessional service and are reclassified to Legal expenses in 2016/17 financial year. During 2015/16 financial year repairs by contractors were erroneously classified as Research and development fees. In 2016/17 financial year repairs by contractors are reclassified as Contracted maitenance. 24. Change in estimate Property, plant and equipment In the current year there was no change in the estimated useful life of property, plant and equipment. 25. Contingencies Contingent liabilities Litigation is in the process against Gauteng Liquor Board relating to a dispute whereby the plaintiff has instituted a claim for an amount of R2m for the loss of income as a result of closure of liquor store. 26. Going concern The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. Theannual financial statements reflect that their liabilities exceed the assets for the year under review. However, the Department of Economic Development will carry the costs that cannot be funded by the GLB, through a reprioritisation of the appropriated budget. 27. Risk management Liquidity risk The entity s risk to liquidity is a result of the funds available to cover future commitments. The entity manages liquidity risk through an ongoing review of future commitments and credit facilities.the entity's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due under both normal and stressed conditions,without incurring unacceptable losses.the DED has in prior years,assisted the GLB with regards to payments or obligations to be made. At March 31, 2017 Less than 1 month Between 1 and 2 months Between 2 and 3 months Over 3 months Trade and other payables At March 31, 2016 Less than 1 month Between 1 and 2 months Between 2 and 3 months Over 3 months Trade and other payables Gauteng Department of Economic Development Annual Report 2016/2017

247 Gauteng Liquor Board Annual Financial StatementS part E NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2017 Credit risk Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and trade debtors. The entity only deposits cash with major banks with high quality credit standing and limits exposure to any one counterparty. Financial assets exposed to credit risk at year end were as follows: Financial instrument Trade and other receivables Entity did not individually rate its customers, due to its diverse customer base. Gauteng Department of Economic Development Annual Report 2016/

248 G OUTlook for the coming financial year 248 Gauteng Department of Economic Development Annual Report 2016/2017

249 OUTlook for the coming financial year part G OUTLOOK FOR THE COMING FINANCIAL YEAR (2017/18) PILLAR 1: RADICAL ECONOMIC TRANSFORMATION Gauteng Enterprise Propeller (GEP) The department will, through GEP, provide financial support to SMMEs in line with the Township Economy Revitalisation (TER) Strategy. These businesses will mainly be funded through loans, the Community Fund and the Township Business Renewal (TBR) programme. Non-financial support interventions will be provided to SMMEs. To address the high demand for formalisation of informal businesses, informal businesses will benefit from Business Development Support interventions. These are aimed at providing business management skills to SMMEs, access to markets and profiling small businesses in the province to attract investment and other funding mechanisms. It is envisaged that the SMMEs will subsequently be better positioned to become active participants in the mainstream economy and positively contribute to job creation and the reduction of poverty. Gauteng Tourism Authority (GTA) The GTA will continue to implement its strategies as a DMO by bidding for and hosting business and signature events and promoting Gauteng as a destination of choice in South Africa and in Africa. The organisation will improve tourism support services by working with relevant stakeholders in the tourism industry. Through the implementation of events support programmes, township-based SMMEs will have access to markets. Gauteng Growth and Development Agency(GGDA) AIDC Supplier Efficiency Programme Under this programme, the following seven key programmes will be implemented: Total Productive Maintenance Programme (TPM); Cleaner Production Programme; Rapid Process Improvement Programme (RPIW); Lean Manufacturing Programme, including collaboration initiatives with the Japanese Government Quality and Environmental Management Systems Automotive Centre for Competitiveness; and Support and services for BMW suppliers (new). Commercialisations There are existing MoUs signed with research and academic institutions in Gauteng. TIHMC has also created a platform with research councils and various universities to interact with them on matters of research and commercialisation. These agreements envisage that TIHMC will provide commercialisation support for the research outputs of these institutions. The research institutions near TIHMC Science Park also provide infrastructure space (e.g. laboratory and technical facilities for startup companies in incubation). During the financial year 2017/18, TIHMC plans to strengthen these relationships to improve the pipeline of spinoffs from the universities and research institutions into TIHMC incubation programmes. The Innovation Hub (TIH) To increase its impact on industry and other partners, TIHMC plans to streamline its current programmes and activities to focus on three cluster areas: Smart Industries, Green and Bio-Sciences. As these sectors are in themselves broad, TIHMC has identified subsectors where the organisation has internal capabilities and established linkages with industry, academic, government and research partners as subsectors in which the chance of developing viable cluster is enhanced. Large, medium size and small companies including the start-ups in the incubation programmes will be recruited into becoming cluster members. A cluster strategy and value proposition is currently being developed for recruiting potential members. There is also a plan to recruit some of these cluster members into the Science and Technology Park as rental or anchor tenants of the park. ekasi Programmes ekasi Labs are extensions of TIHMC in the townships to promote the culture of innovation and entrepreneurship and innovative output in the community in line with the provincial economic policies of TMR/TER. The facilities will incorporate Mobile Application development and aspects of Fablab (Fabrication Laboratories) activities and programmes whose main objectives are to promote entrepreneurship in the area of product design and manufacturing. It will also promote high tech skills for local entrepreneurs in the townships, provide access to infrastructure for entrepreneurs to develop new products that can be tested and modified in the market place according to customer needs, increase the diffusion and adoption of technology, and provide research, development of new tools for entrepreneurs and infrastructure to produce small batches of niche products. The key outcomes of the programme include new generation entrepreneurship, high impact/high tech product and services, skills development and job opportunities for local communities. The budget will Gauteng Department of Economic Development Annual Report 2016/

250 part G OUTlook for the coming financial year be reprioritised to expand the programme to the five corridors of Gauteng. In the 20I7/18 financial year ekasilabs will be expanded to the West Rand and Sedibeng. Consumer Affairs In the 2017/18 financial year, there will be no changes in the services delivered. However, Consumer Affairs will be starting new projects in consumer education and awareness, in particular the Financial Education for Young Entrepreneurs Schools Competition, the Varsity Financial Literacy Programme and seminars for businesses. Consumer Affairs will continue to contribute to and facilitate revitalisation of Gauteng s township economies by supporting the development of township enterprises, co-operatives and SMMEs in its education and awareness programmes focusing on the consumer protection regulatory environment. Increased consumer satisfaction will ensure a conducive environment to increase the participation of SMMEs and co-operatives in the province s mainstream economy and contribute to the growth and development of the eleven identified sectors by developing capabilities, knowledge and awareness of the regulatory environment in which these businesses operate. Gauteng Liquor Board (GLB) The Gauteng Liquor Board will continue to collect revenue from its processes and move towards being self-sustainable. New liquor tariffs came into effect in December 2016 enabling the GLB to generate more revenue. Liquor compliance inspections will continue to be undertaken including education on application procedures, responsible drinking and compliance and non-compliance issues. Penalties for non-compliance notices will be implemented and this will contribute towards revenue collection. The agency will finalise the business model for the Corporate Social Investment (CSI) expanded programme. Industry partners such as brewing companies and large retail chain stores will be brought on board to contribute towards CSI. The automation and records management projects will be fully implemented in 2017/18. The automation system is central to the Gauteng Liquor Board processes as it migrates the manual process to an automated platform. Automation will modernise the GLB processes, enhance the potential for revenue collection and contribute to the creation of a credible data base. Gauteng Gambling Board (GGB) Technology is a key driver of products and services in the gambling industry, therefore the agency has identified the importance of technical audits in the gambling industry. In that, the agency will continue with it efforts in conducting gambling compliance audits, inspections and gambling tax revenue from gambling regulatory processes to ensure the accuracy and completeness of revenue due to the fiscus. The board will be embarking on a projects to deal with all problems relating to illegal gambling in the Province. Cradle of Humankind World Heritage The Cradle of Humankind World Heritage will continue to maintain and improve the management of the fossil sites twice a year. Educational and awareness-creation projects will continue to be a key focus area with sponsored school visits to the visitor centres of Maropeng and Sterkfontein being a key project. The natural resources and cultural management of the site will continue with fire and vegetation maintenance and overall management of natural and cultural resources in the site. Landscape character assessment and a visual assessment will be undertaken including a land use audit. These technical assessments will assist with planning and development of site specific regulations in terms of the World Heritage Convention Act, 1999 and the National Environmental Management: Protected Areas Act, Strategic Partnerships, Special Projects and International Relations Strategic Partnerships will continue to facilitate partnerships on behalf of the Department to foster relations with the private sector which may result in more projects being identified. Through strategic partnerships and special projects, the department will engage with private sector companies to solicit sponsorship for the Township Entrepreneurship Awards and the budget speech networking session. Through special projects, International Relations will identify SMMEs within the township and provide them with international market exposure. This process may lead to market access for some of the SMMEs. Conversion of spaza shops will be finalised as part of radically transforming the economy. Dinokeng Project The Dinokeng Project will continue to engage with established businesses within the Dinokeng Game Reserve (DGR) to procure goods and services from enterprises in the surrounding townships. The DGRMA is currently developing a database of service providers within the local communities that are being used by all tourism product owners in the DGR. The Dinokeng Project also plans to establish a Dinokeng Community Development Trust to create an inclusive economy based on the Dinokeng Game Reserve tourism activities. Political instability in the area has negatively impacted the implementation of this project in the past. 250 Gauteng Department of Economic Development Annual Report 2016/2017

251 OUTlook for the coming financial year part G The Dinokeng Project will also conduct awareness campaigns, train communities in tourism skills and place trainees for work experience. As part of stakeholder management, regular annualised dialogue with stakeholders in the broader Dinokeng project area will be conducted; these are referred to as Tourism Information Meetings (TIMs) and are in addition to project based stakeholder management. The TIMS are intended to provide feedback to stakeholders on progress that the Dinokeng Project is making in implementing its projects, and to receive feedback from stakeholders on the impact of these projects on their operations. The DGR is implementing the Working on Fire programme, an EPWP programme supporting biodiversity management and facilitating the economic viability of the DGR through the operational funding. The Dinokeng Project will update the current Environmental Management Plan for the game reserve, which serves as a guideline for property development and management in the game reserve. The national Department of Environmental Affairs requires this update every five years. The Dinokeng Project will continue to facilitate engagements with landowners to potentially incorporate their properties into the game reserve. PILLAR 9: RE-INDUSTRIALISATION OF GAUTENG PROVINCE Gauteng Growth and Development Agency Automotive Supplier Park (ASP) Infrastructure projects The ASP will continue to be promoted as an attractive manufacturing and investment destination for the automotive sector and +10,000 square meters of new facilities in respect of the new facilities construction for Phase 1 and 2 of the ASP will be secured. Nissan SA Incubation Centre During 2017/18 financial year, the Nissan SA Incubation Centre will see the start of a BEE SMME incubation intervention. Shared services for newly established companies will be put in place. Bio Park Facility Project During 2017/18, TIHMC will prioritise the recruitment of R&D anchor tenants at the Science Park to increase the output of R&D from the Park. TIHMC will also initiate clusters in the sectors of Smart industries, Bio-Sciences to promote research, development of new products and services amongst cluster members, and promote spin offs with universities and research institutions. In the satellite innovation programmes, TIHMC will implement incubation programmes in film and gaming as part of the creative sectors. Dinokeng Project The infrastructure projects namely the design of the picnic sites, ablution facilities at Roodeplaat Dam, the design of the riverboat cruise operation facility at Roodeplaat Dam and the design of the two gateways in Cullinan by Dinokeng will be managed by the GGDA The upgrade of Roodeplaat Dam site is anticipated to increase visits to Roodeplaat and the construction of the gateways in the town will give a sense of arrival to the town of Cullinan and the township of Refilwe. The gateways are also expected to transform and modernise the public space through beautification of the space. The Dinokeng Project will work closely with the GTA to promote and market the Dinokeng Game Reserve as a preferred destination of choice, using the tagline of Only free roaming big five game reserve in the province. The marketing plans include setting up a Local Tourism Association for Dinokeng, developing a Dinokeng brand strategy and implementing Dinokeng brand specific exhibitions and campaigns. Marketing of the other two hubs will be intensified as soon as the infrastructure work was completed. REPRIORITISATION The department has reprioritised the budget baselines on compensation of employees over the MTEF in line with the organisational structure which is currently under review. The review of this structure took place to reposition the department to carry out its mandate appropriately. The department is also in progress of developing job profiles and conducting job evaluation for the newly created posts including Branch: Trade and Sector under Programme: 2, as such, an amount of R24.4 million has been reprioritised over the outer years. In order to allow finalization of DPSA processes, it therefore anticipated that the implementation of the new structure will be during the 2017/18 financial year. The R20 million per annum for the next 2 years of the MTEF for the Youth Project Management Office (PMO) which was allocated under Economic Planning was shifted to GEP for implementation. The main focus of the Youth PMO is the development of skills through placement in on-the-job training, giving youth an opportunity to get into formal employment as well as the entrepreneurial stream. An amount of R46.9 million is reprioritised over the MTEF from the Business Regulation and Governance programme to Administration programme for the mobile satellite buses project. This project ensures access to government services by going directly to communities and assisting them with various administrative functions as part of TER implementation. Gauteng Department of Economic Development Annual Report 2016/

252 part G OUTlook for the coming financial year The department has also transferred implementation of the Township industrial parks from Economic Planning programme to GGDA and the budget amounting to R168 million was shifted to follow the function over the MTEF. PROCUREMENT The department will ensure that all contracts are subjected to market price analysis and the concept of value for money is the core driver when negotiating contracts. The department will also continue to ensure that procurement of goods and services is done timeously. The department has allocated funds over the MTEF to ensure that all projects critical to its mandate are delivered on time. Some of the initiatives that will impact on the procurement process are: Heightened public participation and outreach; Mid-term impact assessment; PMO for unemployed youth; Enterprise Building 2 and 3; Constitution Hill Visitor Centre and redevelopment of precinct; ICT PMO; Refurbishment of industrial parks; Tourism marketing; Bidding and hosting Joy of Jazz festival; Bidding and hosting Joburg Shopping festival; and Bidding and hosting the Summer Cup. 252 Gauteng Department of Economic Development Annual Report 2016/2017

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