ANNUAL REPORT 2008/09 - Eastern Cape Liquor … › ... › eclb-annual-report-2008-2009.pdfANNUAL REPORT 2008/09 CONTENTS 3 CONTENTS Page Part 1: GENERAL INFORMATION 1.1 Board Members

A N N U A L R E P O R T 2 0 0 8 / 0 9

3C O N T E N T S

CONTENTS Page

Part 1: GENERAL INFORMATION

1.1 Board Members 51.2 Vision and Mission Statements 51.3 Legislative Mandate 51.4 Report of the Accounting Authority 61.5 Report of the Chief Executive Officer 7

Part 2: PROGRAMME PERFOMANCE

2.1 Organisational Programmes and Highlights 92.1.1 Programme 1: Licensing 92.1.2 Programme 2: Finance & Information Communication Technology 112.1.3 Programme 3: Human Resources Management 112.1.4 Programme 4: Inspectorate 122.2 Performance Information 132.2.1 Programme 1: Licensing 132.2.2 Programme 2: Finance & Information Communication Technology 162.2.3 Programme 3: Human Resources Management 182.2.4 Programme 4: Inspectorate 20

23Part 3: AUDIT COMMIT TEE REPORT

Part 4: ANNUAL FINANCIAL STATEMENTS

4.1 Report of the Auditor General 254.2 Statement of Responsibility by the Accounting Authority 284.3 Statement of Financial Position as at 31 March 2009 294.4 Statement of Financial Performance for the Year Ending 31 March 2009 304.5 Statement of Changes in Net Assets for the Year Ending 31 March 2009 304.6 Cash Flow Statement for the Year Ending 31 March 2009 314.7 Notes to the Annual Financial Statements 32

Part 5: HUMAN RESOURCE MANAGEMENT

5.1 Service Delivery 515.2 Expenditure 535.3 Employment and Vacancies 545.4 Employment Equity 565.5 Leave Utilisation 595.6 Labour Relations 605.7 Injury on Duty 615.8 Utilisation of Consultants 61

63Part 6: GENERAL

P A R T 1

G E N E R A L I N F O R M A T I O N

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Par t 1: General Information

1 . 1 B o a r d M e m b e r sThe following members were active during the financial year:

1 . 2 V i s i o n a n d M i s s i o n S t a te m e n t sVISION:To become a centre of operational excellence in regulating the liquor industry and creating a conducive environment for economic growth and development.

MiISSION:The Eastern Cape Liquor Board (ECLB) regulates the retail sales and micro-manufacturing of liquor in the province through the administration of the Eastern Cape Liquor Act 10 of 2003 (the Act) and special programmes thereby promoting entry of new participants, ensuring adequate standards of service delivery by new and existing liquor traders, taking into account community considerations, whilst also addressing the realities confronting the industry.

1 . 3 L e g i s l a t i ve M a n d a teThe ECLB is established in terms of the Eastern Cape Liquor Act 10 of 2003 to:• regulatetheregistrationofretailsalesandmicro-manufacturingofliquorintheprovince• encourageandsupporttheliquorindustryinthemanagementandreductionofthesocio-economicandothercostsofexcessive

alcohol consumption by creating an environment in which:

1. The entry of new participants into the liquor industry is facilitated; 2. Appropriate steps are taken against those selling liquor outside regulatory framework; 3. Those involved in the liquor industry may attain and maintain adequate standards of service delivery; 4. Participation by ward committees and communities in the consideration of applications for registration

certificates is encouraged and 5. The particular realities confronting the liquor industry in the province can be addressed.

Board Members Designation Sub-Committee Representative

Mr. M. Popo Chairperson Licensing Committee

Mrs B. Ntlangwini Deputy Chairperson Human Resources & Remuneration Committee

Mr Q. Mageza Member Human Resources & Remuneration Committee

Mr L. Madlingozi Member Audit Committee & Inspectorate Committee

Mr V. Gwebindlala Member Audit Committee & Inspectorate Committee

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1 . 4 . R e p o r t o f t h e A c c o u n t i n g A u t h o r i t yIn the year under review the ECLB embarked on a concerted effort to improve its overall performance. We can confidently claim that our achievements for the financial year ending 31 March 2009 provide demonstrable evidence that we have turned a corner. For the first time in its short four year history, the ECLB obtained an unqualified audit report, which is a significant improvement over the previous financial years.

It is also significant to note as matters of governance that ECLB had a functional Audit Committee and an Internal Audit function in the second half of the year. Responsibilities pertaining to financial and risk management and internal control raised in the previous financial year were substantially addressed.

During the year under review there has been a global economic meltdown which has inevitably had an adverse effect on the South African economy. The liquor industry sector has managed to retain a significant number of jobs although other sectors like the automotive and the financial services have shed a number of jobs. This economic trend has been evidenced by the increase in the number of licensed liquor traders as compared to the previous year in the Eastern Cape. The total number of liquor license fees collected for the financial year amounted to R 3.9 million as compared to R 4.0 million in the previous year ago. ECLB has collected a total of R 17.9 million in licence fees in the five years since its inception.

Consultative awareness campaigns were conducted in attempting to manage and reduce the socio-economic costs of excessive alcohol consumption.

We undertake to build on the gains that have been achieved thus far to ensure that the liquor industry is regulated in a socially responsible manner.

We wish to express our sincere gratitude for the dedication and commitment demonstrated by our staff in achieving these results.

We also wish to thank DEDEA for the unwavering support and guidance they provided to enable us to deliver on our mandate during the 2008/09 financial year.

Mr M PopoChairperson

R E P O R T O F T H E A C C O U N T I N G A U T H O R I T Y

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1 . 5 . R e p o r t o f t h e C h i e f E x e c u t i ve O f f i c e rI hereby present the ECLB organisational performance report for the 2008/09 financial year as indicated in Part 2 on pages 9 to 21 of this Annual Report.

Mr Gonza MatiChief Executive Officer

R E P O R T O F T H E C H I E F E X E C U T I V E O F F I C E R

P A R T 2

P R O G R A M M E P E R F O R M A N C E

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Par t 2: Programme Per formance

2 . 1 O r g a n i s a t i o n a l P r o g r a m m e s a n d H i g h l i g h t sThe ECLB operates through the following Programmes to conduct its activities in order to achieve its mandate: Programme 1: Licensing Programme 2: Finance and Information Communication Technology Programme 3: Human Resources Management Programme 4: Inspectorate

2 . 1 . 1 . P ro g ra m m e 1 : L i ce n s i n g

STRATEGIC OBJECTIVES • TolicenseandregulateliquortradingwithintheEasternCape; • ToinfluencethedevelopmentofsoundregulatoryframeworkforliquorenterpriseoperationsintheEasternCape; • Tocreateawarenessonhowtoapplyforaliquorlicenseandonthenegativeeffectsofalcoholabuse. STRATEGIC INTERVENTIONS AND PRIORITIES • Toestablishandmaintainanappropriatelicensingmanagementsystem; • Todeveloppolicies,guidelinesandproceduremanualstofacilitatespeedyadministrativeprocessingofapplications,

their consideration and decision making by the Board; • Provideapplicantswiththerelevantinformationanddocumentationnecessarytomeetlicenseapprovalqualification

requirements; • Conductqualificationassessmentandpre-approvalinspections; • Toassistlicenseholdersinaddressingallqueriesrelatingtotheirlicenses; • CommunicatedecisionsoftheBoardpertainingtolicenseapplicationsandotherrelatedmatters.

ACHIEVEMENTS During the year under review, the Eastern Cape Liquor Board and Kwazulu-Natal Liquor Board finalised and signed the cross-

boundary Memorandum of Agreement (MOA) on the hand-over of liquor licences issued in Umzimkhulu and Matatiele. This was followed by awareness campaign workshops with law enforcement, ward councillors and the licence holders where the chairpersons of both liquor authorities addressed the people from the affected municipalities on the procedures to be followed in transferring the files to each other.

As part of social responsibility, a multi-media campaign was successfully launched in June 2008. The campaign focused on the effects of alcohol abuse on income, livelihood, negative health, premature death, gender-based violence and road fatalities. The launch of the campaign received positive media coverage from Algoa FM and SABC Radio stations. The focus for the period under review was also on school youth, tertiary institutions and Foetal Alcohol Syndrome (FAS). The programme was successfully integrated with broader initiatives from the Department of Social Development, SANCA and non-governmental organisations that focus on substance abuse in general. A total number of twelve schools across the province were visited.

For the year under review, there has been a slight decline in revenue collections. Revenue collected during the year under review was R 3.909 million as compared to R 4.001 million in the previous financial year.

Public hearings were held during the year in the following areas:

O R G A N I S A T I O N A L P R O G R A M M E S & O P E R A T I O N S

Town Total number of cases

Port Elizabeth 9

East London 1

Cradock 1

1 0

The objectors included ward councillors, educational institutions, places of worship and community members. The nature of the objections were noise pollution, close proximity to educational institutions and places of worship, moral degradation and the effects thereof on crime, amongst others.



Yr 2008/9 ON & OFF 0FF TOTALON

1,068 92 143 1,303

0

200

400

600

800

1,000

1,200

1,400

LICENCES GRANTED ACCORDING TO CATEGORIES OF REGISTRATIONS - 1303

LICENCES ISSUED2004/2005

3253

0

1000

2000

3000

4000

5000

6000

2005/20063383

2006/20073755

2007/20084758

2008/20095696

COMPARISON OF LICENCES ISSUED PER YEAR

1 1

2 . 1 . 2 . P ro g ra m m e 2 : F i n a n ce & I n f o r m a t i o n Co m mu n i ca t i o n Te c h n o l o g y

STRATEGIC OBJECTIVES• Toensureefficientandeffectivefinancial,assetandprocurement(provisioning)management.• Toensuresoundexpendituremanagement• Toensureeffectiveandefficientrevenuecollection• ToprepareandmonitorcrediblebudgetfortheBoard• Toensureeffectiveriskmanagement• Toensureeffectivereportingprotocols• Toestablishandmaintainappropriateinformationmanagementsystems

STRATEGIC INTERVENTIONS AND PRIORITY AREAS• ToalignbudgetwiththeBoardprogrammesanddepartmentalpriorities• Toimplementgoodfinancialmanagementinordertooptimiserevenuecollectionandtoimproveexpenditurecontrols• Toemployefficientandcost-effectivemethodsintheprocurementofgoodsandservicestobenefitboththeBoard and its service providers• TodevelopinformationmanagementpolicieswiththeaimofsafeguardingandprotectingtheintegrityoftheBoard and its employees.

ACHIEVEMENTS• Unqualifiedauditreport• PositiveoutlookonthefinancialaffairsoftheECLB• Efficientfinancialmanagementandreportingmechanisms• ICTBusinessUnitestablished

2 . 1 . 3 . P ro g ra m m e 3 : H u m a n R e s o u rce s M a n a g e m e n t

STRATEGIC OBJECTIVES• Toattractandretainsuitablyskilledcandidates• Toeffectivelyandefficientlyadministeremployeeremunerationandbenefits• Toprovideopportunitiestofacilitatecareerprogressionwithintheorganisation• To create a working environment in which employees are encouraged to develop and implement their skills to their full potential.

STRATEGIC INTERVENTIONS AND PRIORITIES• Developanddesignjobdescriptions• Recruitappropriateandcompetentpersonnelintothekeyvacantposts• Provideforasafeandgoodworkingenvironment• DevelopHRpolicies,guidelinesandstandardoperatingprocedures

ACHIEVEMENTS• Successfulteambuildingexercisewasheld• ArecognitionagreementwasconcludedwithNEHAWU• LaunchedtheEmployeeHealthandWellnessProgramme• EstablishedaHealth,SafetyandWellnessCommittee• SubmittedtheorganisationsfirstEmploymentEquityPlantotheDepartmentofLabour• SuccessfullyheldaVoluntaryCounsellingandTestingdayforstaffmembers.



1 2

2 . 1 . 4 . P ro g ra m m e 4 : I n s p e c to ra te

STRATEGIC OBJECTIVES• Toconstantlymonitorandinspecttheliquorindustry• ToinvestigateallcomplaintsandqueriesarisingfromliquortradingandbringthosetotheattentionoftheBoard• Toeliminateillegalliquoroperations

STRATEGIC INTERVENTIONS AND PRIORITIES• Verifycompliancewithregistrationandlicenserequirements,monitortradeandindustryperformance,attendto compliance queries, investigate complaints and institute corrective measures• Compileinspectionreportsandmakerecommendations• Ensuregradualphasingoutofillegalliquortrading.• Provideadviceandassistancetoapplicants.• Adviseregisteredandlicensedoperatorsoncompliancerequirements.

ACHIEVEMENTS• Complianceinspectionsatregisteredliquoroutletsperformedandnon-complianceliquortraderswereissuedwith compliance notices• 846illegaloutletswereidentifiedandclosedascomparedto999inthepreviousyear• TwoblitzoperationswereconductedwithSouthAfricanPoliceServicesinEastLondon,asstretchedastheyare,they still find time to contribute in the efforts to ensure a compliant liquor industry• TheProvinceoftheEasternCapeitselfpresentschallengesfortheInspectorateProgrammeasmostoftheprovinceis rural and the location of certain outlets that are supposed to be inspected in terms of pre-registration proved to be unreachable, or that the physical addresses cannot be positively identified because of lack of street addresses in most villages• 102complaintswerereceivedfromthecommunitiescomparedto330inthepreviousfinancialyear



2 . 2 Pe r f o r m a n c e I n f o r m a t i o n

2 . 2 . 1 P ro g ra m m e 1 : L i ce n s i n g

STRATEGIC OBJECTIVE 1 To license and regulate liquor trading in the Eastern Cape Province in accordance with the Eastern Cape Liquor Act, No.10 of 2003

Strategic Objective Measurable Objective

Performance Measure / Indicator

Actual Performance Against Target Challenges / Reasons for Non-

performance

Plans to Address Challenges

and Non-performanceTarget Actual Output

To license and regulate liquor trading in the Eastern Cape Province in accordance with the Eastern Cape Liquor Act, No.10 of 2003

100% of applications which fully comply with the Act are considered by the Board within 60 days

100% of applications which fully comply with the Act are considered by the Board within 60 days

gazetted within seven All applications are days

2249 applications were received, processed and published in the government gazette within seven days as prescribed by the Act

Licensing process delays

Streamline licensing processes and minimise delays

All new applications considered by the Board within 60 days

956 new applications were considered within 60 days, and 1717 new applications were considered after 60 days

Licensing process delays

Streamline licensing processes and minimise delays

All granted conditional approvals are finalised within 12 months of granting if good cause shown

1332 conditional approvals were finalised within 12 months, and 202 conditional approvals are still outstanding pending inspection reports

Delays by inspectorate in submitting inspection reports

Inspectorate to monitor the Age Analysis of conditional approvals to ensure that inspection reports are compiled before the expiration of the conditional approvals

100% of renewal applications processed and finalised within time frames

100% renewal of licenses issued in accordance with regulations

Send renewal notices to all license holders by August 2008

5073 annual renewal notices were issued by August 2008

None None

Issue payments received from October to December with penalty provisions between Jan and Feb 2009

Payments received in respect of 4695 licences renewed. Revenue collected in terms of licences renewal fees - R2,206,925.00

378 licence holders failed to renew their registrations within the time frame stipulated in the Act

Ensure that non-renewed liquor license holders are de-registered

Provide effective and efficient administrative support in all districts

Decentralisation of the licensing administration function with supporting systems and mechanisms

Reconcile and forward list to Inspectorate of non-renewals for March to May for corrective action by the end of May. Publish list of non-renewals/renewals

A list of non-renewed registrants was compiled and forwarded to Inspectorate for verification before closure

None None

Training on licensing processes and procedures in line with the Licensing Manual

All employees dealing with the process of license applications were trained on licensing procedures

None None

P E R F O R M A N C E I N F O R M A T I O N 1 3


1 4

STRATEGIC OBJECTIVE 1 To license and regulate liquor trading in the Eastern Cape Province in accordance with the Eastern Cape Liquor Act, No.10 of 2003

Strategic Objective

Measurable Objective



performance



To ensure 100% revenue collection and efficient recording thereof

All fees related to applications received are collected and accounted for

All licensing fees are collected and reconciled to Finance

R661 300.00 revenue was collected and reconciled to Finance

None None

STRATEGIC OBJECTIVE 2 To influence the development of a sound regulatory framework for liquor enterprise operations in the Eastern Cape Province

Strategic Objective




performance



To influence the development of a sound regulatory framework for liquor enterprise operations in the Eastern Cape Province

Participating in the review and the improvement of the ECLB liquor legislation

Preparation and submission to DEDEA of the revision of the EC Liquor Act

Consultation with and participation in DEDEA Legislative review, and stakeholder process

Consultation with DEDEA on legislative review took place

None None

STRATEGIC OBJECTIVE 3 To encourage and support the liquor industry

Strategic Objective




performance



To encourage and support the liquor industry

Service delivery standards for the liquor industry in place

Roll out of ECLB code of conduct

Code of conduct applicable to all liquor outlets is developed

Code of conduct was developed and distributed to liquor outlets

None None

Implementation of the ECLB Public Education plan

Create awareness on liquor license procedures and systems in line with the ECLA

Implementation and roll out of the Public Education Plan

9 workshops were held with license holders and patrons in Mdantsane, Butterworth, Port Elizabeth, Cradock, Whittlesea, Matatiele, Umzimkhulu, Alice and Mthatha. The focus was on responsible drinking and the effects of alcoholism on health, the impact of alcohol abuse on road accidents, and the conditions of their registrations

None None

P E R F O R M A N C E I N F O R M A T I O N


1 5

STRATEGIC OBJECTIVE 4 To manage and reduce the socio-economic costs of excessive alcohol consumption

Strategic Objective Measurable Objective



performance

Plans to Address Challenges and

Non-performanceTarget Actual Output

To manage and reduce the socio-economic costs of excessive alcohol consumption

Implement Anti- Alcohol Abuse Plan

Consultative awareness meetings with all community Organisations and relevant stakeholders

Manage and contribute towards reduction of the negative socio-economic effects of alcohol abuse

Training and workshops conducted in East London, Komga, Butterworth, Grahamstown, Cofimvaba, Mthatha, Port Elizabeth and Cradock to address Foetal Alcohol Syndrome, in-school youth alcohol abuse, and road fatalities

None None

Multi-media campaign (newspapers, transit adverts and promotional material) focused on gender based violence, negative health impact due to excessive alcohol consumption, effects of alcohol abuse on income, livelihood and security, and motor vehicle fatalities and injuries

None None



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2 . 2 . 2 P ro g ra m m e 2 : F i n a n ce & I n f o r m a t i o n Co m mu n i ca t i o n Te c h n o l o g y



STRATEGIC OBJECTIVE 1 To ensure efficient and effective financial management

Strategic Objective




performance

Plans to Address Challenges and

Non-performanceTarget Actual Output

To ensure efficient and effective financial management

Budget is formulated in accordance with National, Provincial Treasury and statutory reporting requirements, and is linked to the departmental strategic goals

A consolidated 2009/10 budget to be completed within PFMA deadlines

ECLB budget for 2009/10 is prepared and submitted to DEDEA 6 months before the start of the financial year (Sec 53 of PFMA)

The budget proposal was prepared, submitted and approved

None None

Financial Reporting protocols observed timeously

Monitor expenditure accounts, and variance reports to be approved by Board

Financial Oversight Reports submitted and approved by the Board.

None None

Unqualified audit reports obtained with reduced management comments

Annual financial statements for 2007/08 produced timeously

Submit AFS for auditing in line with Sec 55 of the PFMA

AFS completed and submitted in line with Sec 55 of the PFMA. Qualified audit opinion received

Non disclosure of Finance leases in line with GRAP13 (Generally Recognised Accounting Practices)

Disclosure included in 2008/09 AFS

Audit queries addressed in time and adequately

All audit queries resolved in line with audit recommendations

Audit queries were addressed in line with audit recommendations

None None

Authorised, regular and cost effective budget expenditure

Sound financial and asset management policies and systems available in manual and automated format

Compliance with Sound Financial and asset management systems

Financial and asset management systems are in place

None None

Compliance with PFMA and other general accounting requirements, both in terms of standards and reporting requirements

Implementation of requirements set out in the PFMA and accounting principles

Requirements of the PFMA and legislative requirements were adhered to

None None

To ensure effective and efficient revenue collection

Reconciliation of all deposits received

Account for all deposits against licensing receipts

All revenue received via the Deposit Account has been accounted for

None None

Payment of revenue to DEDEA by the 25th monthly

Ensure all receipts reconciled and paid to the DEDEA

All receipts were paid to DEDEA accordingly

None None

1 7P E R F O R M A N C E I N F O R M A T I O N


STRATEGIC OBJECTIVE 2 To facilitate efficient asset management and rendering of integrated supply chain and fleet management

Strategic Objective



Actual Performance Against Target Challenges /

Reasons for Non-performance



To facilitate efficient asset management and rendering of integrated supply chain and fleet management

An efficient, effective, seamless, end to end procurement process through supply chain management unit

Reduce number of days of payment cycle from receipt of invoice

Payments effected within 30 days in line with PFMA

Invoices were processed after queries had been resolved

Inadequate supplier documents

Inform suppliers of minimum requirements

Active and accurate supplier database which promotes the upliftment of the historically disadvantaged

Departmental procurement directed to HDIs

80% of suppliers to be HDIs

60% of all procurement of goods and services done whilst taking into account the upliftment of the historically disadvantaged

Database to be revised to ensure that all suppliers are evaluated

The latest Database will be reviewed and ratified as the list of official suppliers

Maintain accurate and updated asset register

Maintenance of asset register

Physically verified Asset Register

All assets are recorded on the ECLB Asset Register

Internal movement of assets not adequately controlled

Record any movement of assets

Effective Fleet Management

Effective maintenance of ECLB fleet

Ensure that all vehicles are properly maintained

Vehicles are maintained regularly

None None

STRATEGIC OBJECTIVE 3 To ensure effective risk management

Strategic Objective




performance



To ensure effective risk management

Risk management strategies developed and implemented to mitigate the risks within the operating environment

Development and implementation of a risk framework

Ensure mitigation of Risk within the ECLB environment

Risk assessment conducted by Internal Audit

None None

Compliance with internal controls

Internal Audit and Audit Committee to monitor the ECLB internal controls

Internal Audits performed in line with the Internal Audit Plan, and approved by the Audit Committee

None None



STRATEGIC OBJECTIVE 4 To establish and maintain appropriate information management systems

Strategic Objective




performance



To establish and maintain appropriate information management systems

Establish ICT Unit Information and Communications Technology (ICT) Unit capacity in line with the funded organogram

Fully functional unit to support the operations of the organisation

Unit established in line with the funded organogram

None None

Ensure an effective ICT system, and policies are implemented

Development of a Information Management Systems (IMS) / ICT framework

IMS framework that supports the organisational requirements

ICT and IMS Strategy developed to prepare for the development of ICT and IMS framework. Policies and baseline standards in the process of being developed

No comprehensive ICT strategic plan

Comprehensive ICT strategic plan developed and approved

To improve computer literacy of employees on an annual basis

Availability of ICT training

Ensure a computer literate workforce

Comprehensive ICT skills audit conducted and report submitted

None None

2 . 2 . 3 P ro g ra m m e 3 : H u m a n R e s o u rce s M a n a g e m e n t

STRATEGIC OBJECTIVE 1 To attract and retain suitable skilled candidates

Strategic Objective




performance



To attract and retain suitably skilled candidates

Placement of qualified skilled employees in line with employment equity policy

Filling of vacancies within a reasonable period

Implement the recruitment strategy

Recruitment strategy implemented effectively

None None

All vacancies filled timeously All vacancies were filled None None

Filling of vacancies within a reasonable period

Probation confirmed after 12 months subject to requirements being met

Three employees qualified and their probation was confirmed.

None None

STRATEGIC OBJECTIVE 2 To effectively and efficiently administer employee remuneration and benefits

Strategic Objective




performance



To effectively and efficiently administer employee remuneration and benefits

Payroll system in place to ensure sound management of employee payments payroll

Monthly reconciliations of employee benefits

Ensure that all benefits due to employees are reconciled and paid

All benefits due to employees reconciled and paid

None None



STRATEGIC OBJECTIVE 3 To provide opportunities to facilitate career progression within the organisation

Strategic Objective




performance



To provide opportunities to facilitate career progression within the organisation

Succession Plan in place

Identify critical position(s) for succession plan

Critical positions for succession plan identified

Succession plan policy was developed and approved by the Board

None None

STRATEGIC OBJECTIVE 4 To create a working environment in which employees are encouraged to develop and utilise their skills to their potential

Strategic Objective




performance



To create a working environment in which employees are encouraged to develop and utilise their skills to their potential

A fully skilled workforce, and compliance with the Skills Development Act and Skills Development Plan

Skills Development Plan Developed in line with IDP’s

Skills development plan in place

Skills development plan in place and in line with the IDP’s

None None

Individual development plans in place

IDP’s in place and training was implemented accordingly

None None

PMS cycle fully implemented Performance Management and development system in place

Performance Management and Development System in place

None None

Individual Performance Agreements

Individual Performance Agreements in place and implemented

None None

All posts graded All posts graded All posts were graded None None

Create a Safe and Healthy working environment

Development of integrated wellness programmes

Employee wellness programme in place

Employee health and wellness programme in place and implemented

None None



2 . 2 . 4 P ro g ra m m e 4 : I n s p e c to ra te

STRATEGIC OBJECTIVE 1 To ensure full compliance of licensed traders with the Eastern Cape Liquor Act, Act 10 of 2003

Strategic Objective




performance



To ensure full compliance of licensed traders with the Eastern Cape Liquor Act, Act 10 of 2003

To provide accessible customer informative environment

To provide support and accurate information to liquor license clients

Ensure a compliant liquor industry

Information Sharing Meetings were held with stakeholders regarding the liquor legislation

None None

To conduct pre-registration and compliance inspections

Ensure compliance and monitoring of the liquor industry in conjunction with other relevant authorities and stakeholders

Conduct 2400 compliance monitoring inspections per annum on licensed premises to ensure compliance with liquor license trading conditions and legislation

2520 compliance inspections at registered liquor outlets performed, and instances were found where liquor traders did not comply with trading conditions and legislation

Lack of adherence to trading conditions and liquor legislation

Compliance and closure notices issued and ultimately closures took place

STRATEGIC OBJECTIVE 6 Development and implementation of Liquor Board Service Charter

Strategic Objective




performance



Development and implementation of Liquor Board Service Charter

Service charter incorporating all service delivery within ECLB is developed and implemented

Service Charter in place Service Charter in place Draft service charter in place

Consultation on the draft document in order to finalise

Finalise service charter

STRATEGIC OBJECTIVE 5 Create a harmonious working environment

Strategic Objective




performance



Create a harmonious working environment

Implementation of Employee Relations Framework to reduce labour conflict

Implementation of Employment Relations policy framework and practices to strengthen the management of employment relations

Motivated work force Entered into Union Recognition Agreement. Review of employee related policies

None None

Disciplinary matters resolved timeously

Resolve disputes timeously

All disputes resolved timeously in terms of the policies

None None



STRATEGIC OBJECTIVE 1 To ensure full compliance of licensed traders with the Eastern Cape Liquor Act, Act 10 of 2003

Strategic Objective




performance



Conduct all pre-registration inspections in line with the ECLA and Regulations within 21 days from the day of request.

Ensure inspections of all applications and report to the Board

Pre-registration inspections were conducted with limited success

Reports not done within 21 days and incomplete reports submitted

Improve turnaround of inspection reports

Complete an accurate database of inspected premises is maintained

Information on inspected premises compiled by districts

Database not complete

Consolidate information into a database. Improving managerial capacity

STRATEGIC OBJECTIVE 3 To ensure closure of all illegal outlets

Strategic Objective




performance



To ensure closure of all illegal outlets

Identify and ensure the closure of all illegal outlets in the province

Closure of all identified illegal operators and monthly reports submitted to the Board

Zero tolerance against illegal liquor trading

846 illegal outlets were identified and closed

Lack of synchronisation of own and SAPS activities

Strengthening of our relationship with SAPS and regular joint operations to deal with illegal outlets

STRATEGIC OBJECTIVE 2 To attract and retain suitable skilled candidates

Strategic Objective




performance



To investigate all complaints and queries arising from liquor trading and bring those to the attention of the Board

Effective management of complaints raised against liquor traders in terms of the ECLA and its regulations

All complaints investigated and finalised within 30 days of receipt

Ensuring an effective and efficient customer service and complaints handling system in place

Draft complaints handling system is being developed. A standing practice is utilised in processing complaints

Capacity related impediments

Enhance capacity to finalise complaints handling system

P A R T 3

A U D I T C O M M I T T E E R E P O R T

2 3A U D I T C O M M I T T E E R E P O R T

A U D I T C O M M I T T E E R E P O R T

Par t 3: Audit Committee Report Report of the Audit Committee in terms of regulations 27(1)(1O)(b) and (a) of the Public Finance Management Act, 1 of 1999, as amended

The Chair of the committee and its members has considered and satisfied itself of the appropriateness of the experience and expertise of the Chief Financial Officer. We are indebted to the Chief Financial Officer and management for all the hard work and input to the achievement of an unqualified report. I also have to specifically commend the contribution made by members of the Audit Committee.

The committee recommended the financial statements for the year ended 31 March 2009, for approval, to the Board.

Mr. T MtatiChairperson: AUDIT COMMITTEE

P A R T 4

A N N U A L F I N A N C I A L S T A T E M E N T S

2 5R E P O R T O F T H E A U D I T O R G E N E R A L


Part 4: Annual Financial Statements

4 . 1 . R e p o r t o f t h e A u d i t o r G e n e r a lREPORT OF THE AUDITOR-GENERAL TO THE EASTERN CAPE PROVINCIAL LEGISLATURE ON THE FINANCIAL STATEMENTS AND PERFORMANCE INFORMATION OF EASTERN CAPE LIQUOR BOARD FOR THE YEAR ENDED 31 MARCH 2009

R e p o r t o n t h e Fi n a n c i a l S t a te m e n t s

INTRODUCTION1. I have audited the accompanying financial statements of the

Eastern Cape Liquor Board which comprise the statement of financial position as at 31 March 2009, the statement of financial performance, the statement of changes in net assetsandthecashflowstatementfortheyearthenended,a summary of significant accounting policies and other explanatory notes, as set out on pages 29 to 48.

THE ACCOUNTING AUTHORITY’S RESPONSIBILITY STATEMENTS2. The accounting authority is responsible for the preparation

and fair presentation of these financial statements in accordance with the basis of accounting determined by the National Treasury, as set out in accounting policy note 1 and in the manner required by the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and the Eastern Cape Liquor Act, 2003 (Act No. 1 of 2003) and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

THE AUDITOR-GENERAL’S RESPONSIBILITY3. As required by section 188 of the Constitution of the Republic

of South Africa, 1996 read with section 4 of the Public Audit Act, 2004 (Act No. 25 of 2004) (PAA), my responsibility is to express an opinion on these financial statements based on my audit.

4. I conducted my audit in accordance with the International Standards on Auditing read with General Notice 616 of 2008, issued in Government Gazette No. 31057 of 15 May 2008. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

OPINION7. In my opinion the financial statements present fairly, in

all material respects, the financial position of the Eastern Cape Liquor Board as at 31 March 2009 and its financial performance and cash flows for the year then ended, inaccordance with the basis of accounting as determined by the National Treasury, as set out in accounting policy note 1 and in the manner required by the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and the Eastern Cape Liquor Act, 2003 (Act No. 1 of 2003).

EMPHASIS OF MATTERSWithout qualifying my opinion, I draw attention to the following matters:

BASIS OF ACCOUNTING8. The Board’s policy is to prepare financial statements in

accordance with the basis of accounting determined by the National Treasury, as set out in accounting policy note 1.

RESTATEMENT OF CORRESPONDING FIGURES9. As disclosed in note 2 to the financial statements, the

corresponding figure for 31 March 2008 has been restated as a result of an error identified in the financial statements of the Eastern Cape Liquor Board for the year ended 31 March 2008, during the year ended 31 March 2009.

OTHER MATTERS Without qualifying my opinion, I draw attention to the

following matters that relate to my responsibilities in the audit of the financial statements:

GOVERNANCE FRAMEWORK10. The governance principles that impact the auditor’s

opinion on the financial statements relate to the responsibilities and practices of the accounting authority and executive management and are reflected in the internal controldeficiencies and key governance responsibilities addressed below.

2 6

KEY GOVERNANCE RESPONSIBILITIES11. The PFMA tasks the accounting authority with a number of responsibilities concerning financial and risk management

and internal control. Fundamental to achieving this is the implementation of key governance responsibilities, which I have assessed as follows:

No. Matter Y N

Clear trail of supporting documentation that is easily available and provided in a timely manner

1 No significant difficulties were experienced during the audit concerning delays or the availability of requested information.

Quality of financial statements and related management information

2 The financial statements were not subject to any material amendments resulting from the audit.

3 The annual report was submitted for consideration prior to the tabling of the auditor’s report.

Timeliness of financial statements and management information

4 The annual financial statements were submitted for auditing as per the legislated deadlines section 55 of the PFMA.

Availability of key officials during audit

5 Key officials were available throughout the audit process.

Development of and compliance with risk management, effective internal control and governance practices

6 Audit committee

• TheEasternCapeLiquorBoardhadanauditcommitteeinoperationthroughoutthefinancialyear.

• Theauditcommitteeoperatesinaccordancewithapproved,writtentermsofreference.

• Theauditcommitteesubstantiallyfulfilleditsresponsibilitiesfortheyear,assetoutinsection77ofthePFMAandTreasuryRegulation27.1.8.

7 Internal audit

• TheEasternCapeLiquorBoardhadaninternalauditfunctioninoperationthroughoutthefinancialyear.

• Theinternalauditfunctionoperatesintermsofanapprovedinternalauditplan.

• Theinternalauditfunctionsubstantiallyfulfilleditsresponsibilitiesfortheyear,assetoutinTreasuryRegulation27.2

8 There are no significant deficiencies in the design and implementation of internal control in respect of financial and risk management.

9There are no significant deficiencies in the design and implementation of internal control in respect of compliance with applicable laws and regulations.

10 The information systems were appropriate to facilitate the preparation of the financial statements.

11A risk assessment was conducted on a regular basis and a risk management strategy, which includes a fraud prevention plan, is documented and used as set out in Treasury Regulation 27.2.

12 Powers and duties have been assigned, as set out in section 56 of the PFMA

Follow-up of audit findings

13 The prior year audit findings have been substantially addressed.

14 SCOPA resolutions have been substantially implemented.

Issues relating to the reporting of performance information

15 The information systems were appropriate to facilitate the preparation of a performance report that is accurate and complete.

16Adequate control processes and procedures are designed and implemented to ensure the accuracy and completeness of reported performance information.

17A strategic plan was prepared and approved for the financial year under review for purposes of monitoring the performance in relation to the budget and delivery by the Eastern Cape Liquor Board against its mandate, predetermined objectives, outputs, indicators and targets (Treasury Regulation 29.1/30.1)

18There is a functioning performance management system and performance bonuses are only paid after proper assessment and approval by those charged with governance.


R E P O R T O F T H E A U D I T O R G E N E R A L

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12. The control environment within the entity is conducive to good governance and accountability as the leadership had ensured that the control environment has received the appropriate attention. However, management attention is specifically drawn to the following key governance responsibilities which according to the above table have not been effectively addressed:

• Althoughthefinancesection,particularlythefinancialreportingsection,hasadequateskillsandcompetencies,there is a lack of monitoring over the financial accounting processes. As a result material amendments were made to the financial statements in order to avoid qualifications. • Thefraudpreventionplanimplementedin2005wasnotupdatedtosupplementthecurrentriskmanagementstrategy

which included a risk assessment performed during the year under review. • Theinternalauditfunctionwasoutsourcedtoanexternalserviceproviderfromtheperiod01/08/2008tothe

31/07/2011, due to this there was no internal audit process in place for the first four months of the current financial year.

R e p o r t o n O t h e r Le g a l a n d R e g u l a ro t y R e q u i re m e n t s

REPORT ON PERFORMANCE INFORMATION

13. I have reviewed the performance information as set out on pages 13 to 21.

THE ACCOUNTING AUTHORITY’S RESPONSIBILTY FOR THE PERFORMANCE INFORMATION14. The accounting authority has additional responsibilities as required by section 55(2)(a) of the PFMA to ensure that the annual report and audited financial statements fairly present the performance against predetermined objectives of the board.

THE AUDITOR-GENERAL’S RESPONSIBILITY15. I conducted my engagement in accordance with section 13 of the PAA read with General Notice 616 of 2008, issued in Government Gazette No. 31057 of 15 May 2008.

16. In terms of the foregoing my engagement included performing procedures of an audit nature to obtain sufficient appropriate evidence about the performance information and related systems, processes and procedures. The procedures selected depend on the auditor’s judgement.

AUDIT FINDINGS (performance information) 17. I believe that the evidence I have obtained is sufficient and appropriate to report that no significant findings have been identified as a result of my audit.

APPRECIATION

18. The assistance rendered by the staff of the Eastern Cape Liquor Board during the audit is sincerely appreciated.

East London31 July 2009


R E P O R T O F T H E A U D I T O R G E N E R A L

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4 . 2 . S t a te m e n t o f r e s p o n s i b i l i t y by t h e A c c o u n t i n g A u t h o r i t yThe annual financial statements are the responsibility of the Accounting Authority. The Auditor General is responsible for independently auditing and reporting on the financial statements.

The annual financial statements have been prepared in accordance with the South African Statements of Generally Accepted Accounting Practice (GAAP) including any interpretations of such statements issued by the Accounting Practices Board, with the effective standards of Generally Recognised Accounting Practice (GRAP) issued by the Accounting Standards Board replacing the equivalent GAAP Statement.

TheAccountingAuthorityhasreviewedtheentity’sbudgetandcashflowforecastsfortheyearended31March2010.Onthebasisof this review, and in light of the current financial position, the Accounting Authority has every reason to believe that it will continue operating as a going concern in the year ahead and has prepared the annual financial statements on a going concern basis.

The ECLB was established in terms of the Eastern Cape Liquor Act No. 10 of 2003 and came into operation as from 1 April 2005, at which point the Accounting Authority began setting policies to enable management to meet its responsibility in terms of the Public Finance Management Act (Act No.1 of 1999) by implementing systems of internal control and risk management that are designed to provide reasonable, but not absolute assurance against material misstatements and losses. The entity has implemented internal financial controls to provide assurance regarding:

• Thesafeguardingofassetsagainstunauthoriseduseordisposition,• Themaintenance of proper accounting records and the reliability of financial information usedwithin the business or for

publication.• Compliancewithapplicablelegislation

In the opinion of the Accounting Authority, based on information available to date, the annual financial statements fairly present thefinancialpositionoftheEasternCapeLiquorBoardat31March2009andtheresultsofitsoperationsandcashflowinformationfor the year then ended.

The annual financial statements for the year ended 31 March 2009, set out on pages 27 to 47, were approved by the Accounting Authority in terms of section 51 (1) (f ) of the Public Finance Management Act 1999, (Act No. 1 of 1999) on 29 May 2009, and are signed on its behalf by:

________________________ ________________________Mr V G Mati M. PopoChief Executive Officer Chairperson

S T A T E M E N T O F R E S P O N S I B I L I T Y O F T H E A C C O U N T I N G A U T H O R I T Y

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4 . 3 S t a te m e n t o f f i n a n c i a l p o s i t i o n a s a t 3 1 M a r c h 2 0 0 9

S A T E M E N T O F F I N A N C I A L P O S I T I O N

Notes 2008/09 2007/08

R R

ASSETS

Non-current assets 4,608,781 5,855,733

Property, plant and equipment 3 4,608,781 5,855,733

Current assets 4,967,170 2,601,487

Trade and other Receivables 5 89,017 129,587

Cash and cash equivalents 6 4,878,153 2,471,900

TOTAL ASSETS 9,575,951 8,457,220

LIABILITIES

Non-Current Liabilities 4,973,951 6,539,298

Deferred Income 7 4,608,781 5,855,733

Non Current Portion of Finance Leases 8 365,170 683,565

Current liabilities 2,420,635 3,147,817

Current Portion of Finance Leases 8 318,395 331,343

Trade and other Payables 9 2,102,240 2,203,147

Provisions 10 - 613,327

NET ASSETS

Total Net Assets 2,181,365 -1,229,895

Accumulated Surplus (Deficit) 2,181,365 -1,229,895

TOTAL NET ASSETS AND LIABILITIES 9,575,951 8,457,220

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4 . 4 . S t a te m e n t o f f i n a n c i a l p e r f o r m a n c e f o r t h e ye a r e n d e d 3 1 M a r c h 2 0 0 9

Notes 2008/09 2007/08

R R

REVENUETransfers and subsidies received 11 27,472,887 21,697,184

Other Income 12 668,192 258,794

Deferred government grant released to income 1,911,065 1,902,766

30,052,144 23,858,744

LESS EXPENDITURE

Depreciation 4 1,911,065 1,902,766

Administrative expenses 13 5,793,705 4,787,084

Personnel 14 14,010,352 10,548,502

Marketing costs 15 319,914 96,559

Audit Fees 16 856,259 963,337

Other operating expenses 17 3,419,836 2,829,468

Finance Costs 20 329,465 377,239

TOTAL EXPENDITURE 26,640,596 21,504,955

SURPLUS FOR THE YEAR 3,411,548 2,353,789

4 . 5 S t a te m e n t o f c h a n g e s i n n e t a s s e t s f o r t h e ye a r e n d e d 3 1 M a r c h 2 0 0 9

Note Accumulated Surplus/(Deficit)

R

CAPITAL AND RESERVES

Balance as at 1 April 2007 -2,476,288

- correction of prior period error 2 -1,107,684

As restated Balance as at 1 April 2007 -3,583,972

Surplus for the year 2,334,202

- correction of prior period error 2 19,587

Balance as at 1 April 2008 -1,230,183

Surplus for the year 3,411,548

Balance as at 31 March 2009 2,181,365

S T A T E M E N T O F F I N A N C I A L P E R F O R M A N C E & C H A N G E S I N N E T A S S E T S

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4 . 6 C a s h f l ow s t a te m e n t f o r t h e ye a r e n d e d 3 1 M a r c h 2 0 0 9

Note 2008/09 2007/08

R R

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from customers 28,177,571 22,182,034

Cash paid to suppliers and employees -25,087,417 -19,042,447

Cash generated from operations 18 3,090,154 3,139,587

Interest paid -5,026 -37,044

Interest Received 645,127 285,306

Net cash flows from operating activities 3,730,255 3,387,849

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of property plant and equipment 20 -664,113 -521,446

Proceeds from disposal of computer equipment 1,206 2,436

Net cash flows from investing activities -662,907 -519,010

CASH FLOWS FROM FINANCING ACTIVITIES

Payment of finance lease liability capital -331,630 -259,315

Finance Charges -329,465 -377,239

Net cash flows from financing activities -661,095 -636,554

Net increase in cash and cash equivalents 2,406,253 2,232,285

Cash and cash equivalents at the beginning of the year 2,471,900 239,615

Cash and cash equivalents at the end of the year 6 4,878,153 2,471,900

3 2N O T E S T O T H E A N N U A L F I N A N C I A L S T A T E M E N T S


4 . 7 N o te s to t h e a n n u a l f i n a n c i a l s t a te m e n t s

A summary of significant accounting policies and other explanatory notes is set out below on pages 30 to 47:

1 . A cco u n t i n g p o l i c i e sThe principal accounting policies adopted in the preparation of these financial statements, applied consistently from the prior year, are set out below:

1 . 1 B a s i s o f p re p a ra t i o nThe financial statements have been prepared in accordance with the South African Statements of Generally Accepted Accounting Practices (GAAP) including any interpretations of such Statements issued by the Accounting Practices Board, with the effective Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board replacing the equivalent GAAP Statement as follows:

Standard of GRAP Replaced Statement of GAAP

GRAP 1:Presentation of Financial Statements AC101:Presentation of Financial Statements

GRAP 2:Cashflow Statements AC118:Cashflow Statements

GRAP 3:Accounting policies,changes in accounting estimates and errors

AC103:Accounting policies,changes in accounting estimates and errors

The financial statements are presented in South African Rands.

Currently the recognition and measurement principles in the above GRAP and GAAP Statements do not differ or result in material differences in items presented and disclosed in the financial statements. The implementation of GRAP 1, 2 & 3 has resulted in the following changes in the presentation of the financial statements:

a. Terminology Differences

Standard of GRAP Replaced Statement of GAAP

Statement of Financial Performance Income Statement

Statement of Financial Position Balance Sheet

Statement of changes in net assets Statement of changes in equity

Net Assets Equity

Surplus/deficit Profit/Loss

Accumulated surplus/Deficit Retained Earnings

Contributions from owners Share Capital

Distribution to owners Dividends

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b.Thecashflowstatementcanonlybepreparedinaccordancewiththedirectmethod.c. Specific information (where applicable) has been presented separately on the statement of financial position such as:I. Receivables from non-exchange transactions, including taxes and transfers;II. Taxes and transfers payable;III. Trade and other payables from non-exchange transactions;d. The amount and nature of any restrictions on cash balances is required.

Paragraph 11 – 15 of GRAP 1 has not been implemented due the fact that the budget reporting standard has not been developed by the local standard setter and the international standard is not effective for this financial year. Although the inclusion of budget information would enhance the usefulness of the financial statements, non-disclosure will not affect the objective of the financial statements.

The following prescribed standards of General Recognised Accounting Practice (GRAP) in terms of Section 91 have been issued but not yet adopted:

Reference Topic

GRAP 4 The Effects of Changes in Foreign Exchange Rates

GRAP 5 Borrowing Costs

GRAP 6 Consolidated and Separate Financial Statements

GRAP 7 Investments in Associates

GRAP 8 Investment in Joint Ventures

GRAP 9 Revenue from Exchange Transactions

GRAP 10 Financial Reporting in Hyperinflationary Economies

GRAP 11 Construction Contracts

GRAP 16 Investment property

GRAP 12 Inventories

GRAP 13 Leases

GRAP 14 Events After the Reporting Date

1 . 2 . G o i n g co n ce r nThe financial statements have been prepared on the going concern basis.

1 . 3 . R e ve nu e re co g n i t i o nRevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheentityandtherevenuecanbereliably measured. Revenue is measured at the fair value of consideration received or receivable.

Interest is recognised on a time proportion basis which takes into account the effective yield on the asset over the period it is expected to be held.

Revenue includes grant funding received from Provincial Government and sundry income and is recognised on an accrual basis.

Revenue of fees charged for applications, appeals, registrations, transfers, fines, removals and annual licence fees in respect of liquor licences in accordance with the Eastern Cape Liquor Act (No. 10 of 2003) is paid to, and recognised by, the Department of Economic Development and Environment Affairs.

N O T E S T O T H E A N N U A L F I N A N C I A L S T A T E M E N T S

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Where it has not been possible to allocate a receipt to a specific category of revenue or to match the same with a specific licensee, the receipt is allocated to the Licence Fee Control account pending reconciliation and subsequent allocation to the revenue pay over account.

Other income (commission and interest received) is recognised in the Statement of Financial Performance.

1 . 4 . P ro p e r t y, p l a n t a n d e q u i p m e n tProperty Plant and Equipment are initially recorded at cost less accumulated depreciation less any accumulated impairment loss losses. Cost includes all costs directly attributable to bringing the assets to its working condition for its intended usage.

Property, plant and equipment is recognised if it is probable that future economic benefits associated with the item will flowtotheentity,andwherethecostoftheitemcanbereliablemeasured.

Depreciation is calculated on a systematic basis over their useful lives and charged to the Statement of Financial Performance for the periods under review. 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 rates applicable to each category of property, plant and equipment are as follows:

Motor Vehicles 5 YearsComputer Equipment: Hardware 3 Years Software 2 YearsOffice Furniture and Fittings 8 YearsOffice Equipment 5 YearsLeasehold Improvements 5 Years

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the sales proceeds and the carrying amount of the asset and are recognised in the statement of financial performance as realised.

Depreciation methods applied to assets are reviewed after the financial year-end. Any significant change in the expected pattern of consumption of the future economic benefits embodied in assets will be accounted for through disclosure as a change in accounting estimates.

Property, plant and equipment are reviewed annually for impairment losses and whenever events indicate that the carrying amount may not be recoverable. An impairment loss is recognised in respect of the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of an asset’s net selling price and value in use. An impairment loss or a reversal of an impairment loss is

recognised as an expense/income in the statement of financial performance as incurred.

The carrying amount of an item of property, plant and equipment is derecognised either on disposal or when no future economic benefits are expected from its use or disposal.

The gains and losses arising from these de-recognition of property, plant & equipment are included in surplus or deficit when the asset is derecognised. The net proceeds from these de-recognition of assets are determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

The residual value and estimated useful lives of property, plant and equipment is assessed at the reporting date.

1 . 5 . Le a s e sLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases:

1.5.1. Operating Leases:Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

1.5.2. Finance Leases:Assets held under finance leases are initially recognised as assets of the ECLB at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to Statement of Financial Performance.

1 . 6 . F i n a n c i a l i n s t r u m e n t sFinancial instruments recorded in the annual financial statements relate to cash and bank balances, receivable, trade creditors, leases and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.

1.6.1. Financial assetsThe entity’s financial assets are bank balances and cash and trade receivables.Trade receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts as no interest is charged on overdue accounts.


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Cash and cash equivalents are carried in the statement of financial position at cost.

1.6.2. Financial liabilitiesFinancial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Significant financial liabilities are trade and other payables.Trade and other payables are stated at their nominal value and not the amortised value as the payables for which interest is paid is insignificant.The accounting policy adopted for lease obligations is outlined above.Borrowings are stated at their nominal valueAnnual Leave pay is regarded as accumulating compensated absence and is included in accruals. Sick leave, maternity leave, paternity leave and family responsibility leave are regarded as non-accumulating compensated absences and are thus not included in accruals.

1 . 7 . P rov i s i o n sProvisions are recognised when the ECLB has a present legal or constructive obligation as a result of past events, when it is probable thatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamount of the obligation can be made.

1 . 8 . G ove r n m e n t a l g ra n t sGovernment grants relating to the acquisition of assets are included in non-current liabilities as deferred income and are released to the statement of financial performance over the expected lives of the related assets to the extent that there are no further obligations arising from the receipt of the grant.

1 . 9 . R e t i re m e n t b e n e f i t sThe policy of the ECLB is to provide retirement benefits through an established fund governed by the Pension Funds Act. The pension fund is a defined contribution fund which does not require an actuarial valuation. Contributions to the pension fund are charged to the statement of financial performance in the year to which they relate. The ECLB has no obligations to fund post - retirement medical benefits.

1 . 1 0 . Ta xa t i o nNo provision has been made for income tax as the ECLB is exempted in terms of section 10(1) (c A) (1) of the Income Tax Act, 1962 (Act No. 58 of 1962).

1 . 1 1 . Ke y s o u rce s o f e s t i m a t i o nNo assumptions were made at the reporting date that might cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

1 . 1 2 . Co m p a ra t i ve sWhere necessary, comparative figures have been adjusted to conform with changes in presentation in the current financial year.


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2 . P r i o r p e r i o d e r ro r s

‘2007/08 2006/07

R R

2.1. During the financial year ended 31 March 2009, the entity reversed accruals that were incorrectly raised at the financial year end 31 March 2008. This reversal has been accounted for retrospectively and comparative amounts have been appropriately restated. The effect of the prior period error is as follows:

Increase in expenses 46,670

Increase in accruals -46,670

Net effect is an:

Increase in Accumulated deficit 200708 46,670

Decrease in legal expenses -13,400

Increase in sundry receivables 13,400

Net effect is an:

Decrease in Accumulated deficit 200607 -13,400

2.2. During the financial year ended 31 March 2009, the entity discovered that payments in respect of lease deposits had been incorrectly recorded as an expense in respect of the 2006/7 financial year. This prior period error has been accounted for retrospectively and comparative amounts have been appropriately restated. The effect of the prior period error is as follows:

2.3. During the financial year ended 31 March 2009 it was confirmed that amounts raised in 2006/7 as payables were incorrect. This prior period error has been accounted for retrospectively and comparative amounts have been appropriately restated. The effect of the prior period error is as follows:

Decrease in General Expenses -2,315

Decrease in Sundry Payables 2,315

Net effect is an:

Decrease in Accumulated deficit 200607 -2,315


2.4. During the financial year ended 31 March 2009, the entity discovered that it had outstanding penalty interest due to SARS as a result of late payments of PAYE and UIF. This prior period adjustments have been accounted for retrospectively and comparative amounts have been appropriately restated. The effect of the prior period adjustment is as follows:

Increase in expenses 15,304 25,279

Increase in accruals -15,304 -25,279

Net effect is an:



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2.5. During the financial year ended 31 March 2009, the entity resolved the dispute on payment of an amount owed to Dev Construction. This resulted in an additional expenses classified as interest paid. This prior period adjustments have been accounted for retrospectively and comparative amounts have been appropriately restated. The effect of the prior period adjustment is as follows:

Increase in expenses 1,673

Increase in accruals -1,673

Net effect is an:


2.6. During the financial year ended 31 March 2009, the entity reported Finance Leases in line with GRAP 13. This prior period adjustments have been accounted for retrospectively and comparative amounts have been appropriately restated. The effect of the prior period error is as follows:


(Increase) / decrease in revenue: DEDEA 232,815 1,471,177

(Increase) / decrease in Accumulated Depreciation -332,598 -305,313

Increase / (decrease) in Depreciation 332,598 305,313

Increase / (decrease) in Ofiice Equipment Rental -653,742 -440,586

(Increase) / decrease in Grant released -372,144 -446,720

Increase in Finance Charges 377,239 208,936

(Increase) / Decrease in Lease Liability 170,560 -1,185,467

Increase in Computer Equipment 105,923 1,471,177

(Increase) / Decrease in Deferred Income 59,869 -944,977

Net effect is an:

Increase in Accumulated deficit 200607 1,098,120

Decrease in Accumulated deficit 200708 83,234

Overall effect is an:

Decrease in Accumulated deficit 200607 1,107,684

Decrease in Accumulated deficit 200708 19,587

‘2007/08 2006/07

R R

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3 . P ro p e r t y, P l a n t a n d Eq u i p m e n t

Property, plant and equipment 2009 Motor Vehicles Computer equipment

Office furniture & fittings

Office equipment

Leasehold Improvements

Total as at 31 March 2009

R R R R R R

Opening net carrying amount 1,427,052 407,556 980,909 93,624 2,061,465 4,970,606

-Carrying Amount 2,510,941 1,274,889 1,240,998 183,601 2,569,215 7,779,644

-Accumulated Depriciation -1,083,889 -867,333 -260,089 -89,977 -507,750 -2,809,038

Additions - 233,058 291,754 38,869 95,395 659,076

Depreciation -502,188 -331,208 -171,390 -40,843 -526,845 -1,572,474

924,864 309,406 1,101,273 91,650 1,630,015 4,057,208

Carrying value:

Opening Carrying Amount 2,510,941 1,507,947 1,532,752 222,470 2,664,610 8,438,720

Accumulated Depreciation -1,586,077 -1,198,541 -431,479 -130,820 -1,034,595 -4,381,512

Closing carrying amount 924,864 309,406 1,101,273 91,650 1,630,015 4,057,208

Property, plant and equipment 2008 Motor Vehicles Computer equipment

Office furniture & fittings

Office equipment

Leasehold Improvements

Total as at 31 March 2008

R R R R R R

Opening net carrying amount 1,929,240 631,475 936,800 119,866 2,508,848 6,126,229

-Carrying Amount 2,510,941 1,115,607 1,056,191 173,513 2,508,848 7,365,100

-Accumulated Depreciation -581,701 -484,132 -119,391 -53,647 - -1,238,871

Additions - 160,261 202,597 18,638 34,027 415,523

Disposal - -979 - - - -979

Transfers - - -17,790 -8,550 26,340 -

Depreciation -502,188 -383,201 -140,698 -36,330 -507,750 -1,570,167

1,427,052 407,556 980,909 93,624 2,061,465 4,970,606

Carrying value:

Opening Carrying Amount 2,510,941 1,274,889 1,240,998 183,601 2,569,215 7,779,644

Accumulated Depreciation -1,083,889 -867,333 -260,089 -89,977 -507,750 -2,809,038

Closing carrying amount 1,427,052 407,556 980,909 93,624 2,061,465 4,970,606


3 9


Leased Assets 2009 COPIERS FAXES CELLULAR PHONES PABX PREMICELLS Total as at 31

March 2009

R R R R R R

Opening net carrying amount 442,465 33,979 2,058 383,330 23,295 885,127

-Gross Carrying Amount 844,185 49,191 7,429 582,300 39,935 1,523,040

-Accumulated Depreciation -401,720 -15,212 -5,371 -198,970 -16,640 -637,913

Additions - - 5,037 - - 5,037

Depreciation -170,797 -9,838 -1,900 -136,089 -19,967 -338,591

271,668 24,141 5,195 247,241 3,328 551,573

Carrying value:

Gross 844,185 49,191 12,466 582,300 39,935 1,528,077

Accumulated Depreciation -572,517 -25,050 -7,271 -335,059 -36,607 -976,504

Closing carrying amount 271,668 24,141 5,195 247,241 3,328 551,573

Leased Assets 2008 COPIERS FAXES CELLULAR PHONES PABX PREMICELLS Total as at 31

March 2008

R R R R R R

Opening net carrying amount 572,431 36,808 1,512 501,052 - 1,111,803

-Gross Carrying Amount 804,987 42,408 3,629 566,093 - 1,417,117

-Accumulated Depreciation -232,556 -5,600 -2,117 -65,041 - -305,314

Additions 39,198 6,783 3,800 16,207 39,935 105,923

Depreciation -169,164 -9,612 -3,254 -133,929 -16,640 -332,599

442,465 33,979 2,058 383,330 23,295 885,127

Carrying value:

Gross 844,185 49,191 7,429 582,300 39,935 1,523,040

Accumulated Depreciation -401,720 -15,212 -5,371 -198,970 -16,640 -637,913

Closing carrying amount 442,465 33,979 2,058 383,330 23,295 885,127

3 a . Le a s e d A s s e t s


4 0


2008/09 2007/08

R R

Motor Vehicles 502,188 502,188

Computer equipment 331,208 383,201

Office furniture and fittings 171,390 140,698

Office equipment 40,843 36,330

Leasehold Improvements 526,845 507,750

Leased Assets 338,591 332,599

Total depreciation 1,911,065 1,902,766

4 . D e p re c i a t i o n

5 . R e ce i va b l e sReceivables 115,626 90,498

Prepayments - 17,509

Other Receivables 18,582 21,580

134,208 129,587

Less: Provision for Bad Debts -45,191 -

Total Receivables 89,017 129,587

The carrying amounts of trade and other receivables approximates their fair value.

6 . Ca s h a n d ca s h e q u i va l e n t sCash and cash equivalents consist of cash on hand and balances with First National Bank. Cash and cash equivalents included in thecashflowstatementcomprisethefollowingstatementofamountsindicatingtheECLBfinancialposition:

Petty cash 7,453 6,067

Balances with banks 4,870,700 2,465,833

Total cash and cash equivalents 4,878,153 2,471,900

7 . D e f e r re d I n co m eOpening Balance 5,855,733 7,071,206

Released in respect of depreciation -1,911,065 -1,902,766

Increase in respect of purchases 664,113 687,293

Closing Balance 4,608,781 5,855,733


4 1



8 . F i n a n ce l e a s e sThe ECLB entered into finance lease arrangements with different lessors in respect of various office equipment. The period of the lease agreements range from 24 months to 60 months respectively with the liability repayable in equal monthly instalments. The liabilities are repayable in equal monthly instalments on the 1st day of the month at prime interest rates respectively.

2008/09 2007/08

R R

Total lease liability 683,565 1,014,908

-

Total lease liability 683,565 1,014,908

Current portion of lease liability 318,395 331,343

Non current portion as at 31 March 365,170 683,565

Reconciliation of minimum lease payments with their present values:

2008 / 09

Up to 1 year 2 - 5 years Total Total

R R R R

Minimum Lease payments 417,784 417,846 835,630

Finance Charges -99,389 -52,676 -152,065

Present Value 318,395 365,170 683,565

2007 / 08

Up to 1 year 2 - 5 years Total

R R R

Minimum Lease payments 494,437 835,630 1,330,067

Finance Charges -163,094 -152,065 -315,159

Present Value 331,343 683,565 1,014,908

9 . Pa ya b l e s

2008/09 2007/08

R R

Payable to suppliers 118,180 2,362

Payable to Department of Economic Development and Environmental Affairs with regard to Revenue received 173,021 196,944

Salary related 352,139 161,914

Accruals 1,458,900 1,841,927

Total Payables 2,102,240 2,203,147

4 2



1 0 . P rov i s i o n s

2008/09 2007/08

R R

Provision for consulting fees - 598,327

Provision for Cellphone expense - -

Provision for legal fees - 15,000

- 613,327

Reconciliation:

Opening balance 613,327 598,327

Released during the year -613,327 -

Provisions made during the year - 15,000

Closing balance - 613,327

1 1 . Tra n s f e r s a n d S u b s i d i e s re ce i ve dDepartment of Economic Development and Environmental Affairs 28,137,000 22,217,651

Transferred from Deferred Income -664,113 -520,467

Total transfers and subsidies received 27,472,887 21,697,184

1 2 . O t h e r I n co m eInterest Received 645,127 258,306

Commission Received 2,628 488

Other Income 20,437

Total 668,192 258,794

1 3 . A d m i n i s t ra t i ve e x p e n s e sGeneral and administrative expenses 1,575,487 1,187,418

Board Members - Administrative 187,783 324,705

Board Members - Fees for services 744,900 840,100

Audit Committee - Administrative (including Internal Audit) 226,055 20,424

Travel and subsistence 847,100 441,808

Rentals in respect of operating leases 2,212,380 1,972,629

Total administrative costs 5,793,705 4,787,084

4 3



1 4 . Pe r s o n n e l 2008/09 2007/08

R R

Wages and salaries

- Basic salaries 13,357,515 9,746,570

- Temporary staff 323,241 449,284

- Leave payments 241,628 292,263

- Workmens Compensation 14,743 8,938

- UIF 73,225 51,447

Total Personnel costs 14,010,352 10,548,502

1 5 . M a r ke t i n g co s t sAdvertising 319,914 96,559

Total marketing costs 319,914 96,559

1 6 . Au d i t f e e sStatutory audit 856,259 963,337

Total audit fees 856,259 963,337

1 7 . O t h e r o p e ra t i n g e x p e n s e sStaff training and development 345,168 110,359

Consultants, contractors and special services 111,574 223,739

Legal costs 424,828 499,881

Maintenance, repairs and running costs 212,851 154,168

Fuel and oil 415,459 294,359

Equipment Rental 2 72,884

Staff Recruitment 251,512 159,503

Social Responsibility outreach programme 726,339 880,308

Utilities 244,538 205,532

Other 678,565 228,735

Total other operating costs 3,419,836 2,829,468

4 4



1 8 . Ca s h i n f l ow s f ro m o p e ra t i o n s 2008/09 2007/08

R R

Surplus fot the year 3,411,548 2,353,789

Adjustments for: 1,599,223 2,030,286

Depreciation, impairments and amortisation 1,911,065 1,902,766

Profit on disposal of Property, Plant and Equipment -1,206 -1,457

Interest Paid 5,026 37,044

Interest Received -645,127 -285,306

Finance Charges 329,465 377,239

Changes in Working Capital -1,920,617 -1,244,488

Increase / (Decrease) in Non-Current Liabilities 40,571 -35,617

(Increase) / Decrease in Receivables -714,236 6,602

Increase / (Decrease) in Payables -1,246,952 -1,215,473

Net Cash flows from operating activities 3,090,154 3,139,587

Acquisition of Property, plant and equipment 659,076 415,523

Lease Equipment 5,037 105,923

Net cash flows from investing activities 664,113 521,446

1 9 . Ca s h I n f l ow s f ro m I nve s t i n g A c t i v i t i e s

2 0 . F i n a n ce Co s t s :Lease obligation 329,465 377,239

Total Finance Costs 329,465 377,239

The finance costs relate to finance charges for office equipment finance leases.

2 1 . O p e ra t i n g l e a s e a r ra n g e m e n t sAt statement of financial position date the Board had outstanding commitments under non-cancellable

- up to 1 year 1,893,751 2,205,882

- 2 to 5 years 2,065,614 3,955,033

- -

Total operating lease commitments 3,959,365 6,160,915

4 5



2 2 . S e n i o r m a n a g e m e n t e m o l u m e n t s

2008/09 2007/08

R R

Executive Directors

Mr. D. Lefutso (Chief Executive Officer) - Resigned

Salary - Excluding allowances - 214,351

Expense Allowances - 4,159

- 218,510

Ms. A. Jenneker (Chief Executive Officer) - Resigned


Expense Allowances - -

- 303,917

Ms. N. Bisiwe (Chief Executive Officer) - Resigned

Salary - Excluding allowances 839,723 -

Expense Allowances 20,000 -

859,723 -

Mr. G. Mati (Chief Executive Officer)



120,808 -

Mr. M. Daku (Chief Financial Officer) - Resigned



- 2,264

Mr. L. Giba (Acting Chief Financial Officer) - Resigned


Acting Allowance - 63,955


- 143,773

Mr. M. Mclaren (Chief Financial Officer)

Salary - Excluding allowances 642,852 413,550


642,852 413,550

4 6



2008/09 2007/08

R R

Mr. E. Mashile (Senior Manager: Licensing)


Acting Allowance - 70,490

Expense Allowances 60,000 11,212

656,556 698,166

Mr. M. Giwu (Chief Inspector)


Expense Allowances 60,000 12,000

656,556 631,379

Mrs. V. Tsako (Senior Manager: Corporate Services)



412,985 -

Total Emoluments 3,349,480 2,411,559

2 2 . S e n i o r m a n a g e m e n t e m o l u m e n t s ( co n t i nu e d )

2 3 . N o n - e xe c u t i ve D i re c to r sMr. M. Popo

Fees for services as board of directors 359,600 356,700

Reimbursive expenses 3,200 22,467

362,800 379,167

Miss B.Ntlangwini



312,755 251,335

Mr Q.Mageza



124,645 146,761

Mr V. Gwebindlala



43,389 194,422

Total emoluments 843,589 971,685

4 7



2 4 . R e l a te d p a r t y t ra n s a c t i o n sThe ECLB did not have any related party transcations for the period under review.

2 5 . S t a t u to r y i n f o r m a t i o n i n te r m s o f t h e Pu b l i c F i n a n ce M a n a g e m e n t A c t , 1 9 9 9 (A c t n o. 1 o f 1 9 9 9 )

25.1 Fruitless and wasteful expenditure

Reconciliation of fruitless and wasteful expenditure 2008/09 2007/08

Opening balance - 4,232

Fruitless and wasteful expenditure – current year 49,849 22,667

Fruitless and wasteful expenditure condoned - -

Transfer to receivables for recovery - -

Fruitless and wasteful expenditure awaiting condonement (49,849) (26,899)

Closing Balance - -

Analysis of Fruitless and wasteful expenditure

INCIDENT DISCIPLINARY STEPS TAKEN/CRIMINAL PROCEEDINGS

Interest and penalties of R45 699 (R20 067: 2008) paid to SARS in respect of late payment of PAYE None

Accrual of R4 150 (R2 600: 2008) raised in respect of traffic fines None

Reconciliation of fruitless and irregular expenditure R R

Opening balance before condonation 1,481,090 1,221,351

Irregular expenditure condoned included in opening balance (232,739)

Opening balance 1,248,351

Irregular expenditure – current year 9,846 264,096

Irregular expenditure condoned (1,221,351) (4,357)

Transfer to provision for Bad Debts (27,000) -

Irregular expenditure awaiting condonement (9,846) (232,739)

Closing Balance - 1,248,351

25.2 Reconciliation of irregular expenditure

Analysis of irregular expenditure and wasteful expenditure

INCIDENT DISCIPLINARY STEPS TAKEN/CRIMINAL PROCEEDINGS

Additional expenses of R 3 846 incurred with regard to procurement processes not being followed None

Cancelation fee of R 6 000 with regard to a disciplinary proceedings put on hold None

25.3 Disciplinary steps taken as a consequence of material losses Nil

25.4 Losses recovered or written off Nil

4 8N O T E S T O T H E A N N U A L F I N A N C I A L S T A T E M E N T S


2 6 . R i s k M a n a g e m e n t

2 6 . 1 . L i q u i d i t y r i s k Liquidity risk is the risk that the entity will not be able to meet its financial obligations as they fall due.

The entity ensures that adequate funds are available to meet its expected and unexpected financial commitments through an ongoingreviewofcashflowsandfuturecommitments.

2 6 . 2 . Cre d i t r i s k Credit risk refers to the risk that the counter party will default on its contractual obligations resulting in financial loss to the entity. The entity has adopted a policy of only dealing with creditworthy parties.

Credit risk consists mainly of cash deposits and cash equivalents. The Entity’s cash and cash equivalents and short-term deposits are placed with high credit quality financial institutions. Credit risk with regard to trade and other receivables is limited as all balances are strictly managed.

2 6 . 3 . M a r ke t r i s k Theentity’sactivitiesexposeitprimarilytotherisksoffluctuationsininterestrates.

Interestrateriskreferstotheriskthatthefairvalueoffuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesin market interest rates.

The entity manages interest rate risk through negotiating preferential rates with lenders on all amounts borrowed, as well as the use of fixed interest rates.

2 7 . Po s t B a l a n ce S h e e t e ve n t sThere were no significant events which occurred during this period

4 9

N o te s :



P A R T 5

H U M A N R E S O U R C E S M A N A G E M E N T

5 1S E R V I C E D E L I V E R Y

H U M A N R E S O U R C E M A N A G E M E N T

Par t 5: Human Resources Management

5 . 1 S e r v i c e D e l i ve r yThefollowingtablesreflectthecomponentsoftheServiceDeliveryImprovementPlanoftheOrganisation,aswellasprogressmade in the implementation of the plan.

Ta b l e 1 . 1 : M a i n s e r v i ce s p rov i d e d a n d s t a n d a rd s

Main services Customers Standard of service Actual achievement against standard

Human Resources provisioning

Departments Effective recruitment and selection

•CEOappointedonthe1April2008•Manager:ICT,Cleaner;Inspectors(3)assumeddutieson2June2008•18Inspectors(CPFmembers)assumeddutyon30June2008•SeniorManager:CorporateServicesassumeddutieson1August2008•AdminOfficer(PE)assumeddutieson4August2008•SeniorManager:StrategicPlanningassumeddutieson4September2009•CostAnalystassumeddutieson15September2008•SeniorInspector(AlfredNzodistrict)assumeddutieson29September2008•Cleaner(PE)assumeddutieson22September2008•SecretarytotheBoard,PAtoExecutiveManager,AdminOfficer:Licensingassumedduties on 1 October 2008•2AdminOfficers(PEandCradock)assumeddutieson3November2009•CEOappointmenteffective4February2009•FinancialAccountantappointmenteffective1March2009

Skills development All employees Effective training and development programmes

•2PA’sweresentonOfficeExecutive/PAtraining•15employees(SeniorManagersandMiddleManagersattendedtrainingonworkplacediscipline•3employeesattendedtrainingonVIPreportwriting•9HealthandSafetyRepsreceivedtrainingonHealthandSafety•8HealthandSafetyRepsreceivedtrainingforthemonthofFebruaryonFirstAid•1employeereceivedtrainingonVIPPayroll•11employeesreceivedExcellevel2training•14employeesreceivetrainingonHRfornonHRManagers•5employeesattendedminute-takingtraining

Occupational Health and Safety

All employees Ensuring health and safety in the workplace

Employee Health, Safety and Wellness representatives received training on Health and Safety, and First Aid

Labour relations Management and employees

Ensuring sound labour relations

Administration of leave and benefits

Management, current employees and ex-employees

Ensuring proper administration of leave and benefits

A total of 759 annual , 169.5 sick leave and 23 family responsibility leave days were taken for the period, and were reconciled

A challenge with accumulative leave is being addressed

All permanent employees are contributing to the Pension fund

Only eight employees of the ECLB are contributing to the company medical aid

5 2

Ta b l e 1 . 2 : Co n s u l t a t i o n a r ra n g e m e n t s w i t h c u s to m e r s

Type of arrangement Actual Customers Potential Customers Actual achievements

Seven meetings Employees Employees Employees were made aware of the status of the union, and the manner in which they should channel their grievances

Employees Employees Employees were consulted on several issues including Employment Equity declaration

EHW Committee with ATTIC

All Employees Development a TOR for the committee. Developed EHW Program for the year, checklist for inspections, and program for VCT Campaign that was held on 27/02/09

Employment Equity Committee

Employees Drafting of EE Plan

Senior Managers Employees Input received on HR Policies

Middle Managers Employees Workshop on PMDS

Ta b l e 1 . 3 : S e r v i ce d e l i ve r y a cce s s s t ra te g y

Types of information tool Actual achievements

Personnel files Personnel files updated and maintained on a regular basis. VIP Payroll system information received on a regular basis

Ta b l e 1 . 4 : Co m p l a i n t s m e c h a n i s m

Complaints Mechanism Actual achievements

Grievance and Disciplinary procedure

5 disciplinary hearings took place in October 2008, on the offence of insubordination a written warning was given, on the offence of abscondment the employee was dismissed, on the offence of absent without leave the employee was dismissed. One outcome still outstanding

Two appeals have been received against the sanction of written warnings

Three grievances received for the period. The outcome of these grievances were communicated to the employees affected

Counselling sessions conducted with 5 employees

5 employees received verbal warning

Two referrals to the CCMA, one case pending for arbitration at CCMA, and one resolved

One employee on suspension pending a disciplinary enquiry

S E R V I C E D E L I V E R Y


5 3E X P E N D I T U R E


5 . 2 E x p e n d i t u r eProgrammes budget in terms of clearly defined programs. The following tables summarise final expenditure per programme (table 2.1), and by occupational levels (table 2.2). In particular, it provides an indication of the amount spent on personnel costs in terms of each of the programmes or salary levels within the ECLB.

Ta b l e 2 . 1 : Pe r s o n n e l co s t s by p ro g ra m m e

Programme Total personnel Expenditure (R) Training Expenditure (R) Professional and

Special Services (R) *

Personnel cost as a percent of total

expenditure %

Average personnel cost per employee (R)

Corporate Services 2 827 864 24 502 38 000 20.74 282 787

Inspectorate 6 876 338 47 318 0 50.43 185 847

Finance 1 698 960 13 031 0 12.46 283 160

Licensing 2 231 765 9 993 0 16.36 371 961

TOTAL 13 634 927 94 843 38 000

• Professionalandspecialservicesarecomprisedofconsultingfees

Ta b l e 2 . 2 : Pe r s o n n e l co s t s by o cc u p a t i o n a l l e ve l s

Salary bands Total Personnel Expenditure (R)

% of total personnel cost No of employees Average personnel

cost per employee (R)

Top Management (e.g. CEO) 980 282 7.18 2 490 141

Senior management (e.g. all Senior Managers) 2 259 539 16.57 4 564 885

Professionals (e.g. Senior Inspectors, managers, financial acc) 4 194 183 30.76 13 322 629

Skilled (e.g. practitioners, inspectors) 1 602 340 11.75 5 320 468

Semi-skilled (e.g. clerks, PA, Receptionist, drivers) 3 842 792 28.18 32 120 087.

Unskilled (e.g. cleaners) 537 338 3.94 7 76 763

Temporary workers 218 453 1.60 18 12 136

TOTALS 13 634 927 81

Ta b l e 2 . 3 : S a l a r i e s, O ve r t i m e, H o m e O w n e r s’ A l l owa n ce a n d M e d i ca l A s s i s t a n ce by p ro g ra m m e

Programme Salaries Overtime Allowance Medical Assistance & Provident Fund

Amount (R)Salaries as a %

of personnel cost

Amount (R)Over-time as a % of personnel

costAmount (R)

HOA as a % of personnel cost

Amount (R)Contributions

as a % of personnel cost

Corporate Services 2 827 864 20.74 6 594 0.048 0 0 0 0

Inspectorate 6 876 338 50.43 1 713 0.013 0 0 0 0

Finance 1 698 960 12.46 0 0 0 0 0 0

Licensing 2 231 765 16.36 36 127 0.26 0 0 0 0

TOTALS 13 634 927 100 44 434 0.33 0 0 0 0

The above table (table 2.3) provides a summary per programme of expenditure incurred as a result of salaries, overtime, home owners’ allowances and medical assistance. In each case, the table provides an indication of the percentage of the personnel budget that was used for these items.

5 4

5 . 3 E m p l oy m e n t a n d va c a n c i e sThe following tables summarise the number of funded posts in 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 (table 3.1), salary levels (table 3.2) and critical occupations (table 3.3). Critical occupations that need to be monitored have been identified. Table 3.3 provides establishment and vacancy information for the key critical occupations of the ECLB. The vacancyratereflectsthepercentageofpoststhatarenotfilled.

Ta b l e 3 . 1 : Em p l oy m e n t a n d va ca n c i e s by p ro g ra m m e

Programme No of funded posts No of posts filled Vacancy Rate Number of posts filled additional to the establishment

Inspectorate 40 40 0 18 CPF members were contracted until 31 December 2008

One position of Senior Inspector(Office of the Chief Inspector) is not in establishment, however the position is funded through TAP

Corporate Services 9 9 0 The position for Senior Manager: Corporate Services in on the establishment but not funded

One position of PA to Executive Management is on the establishment but not funded

One position for Senior Manager: Strategic Planning is not in the establishment

Finance 6 6 0

Licensing 7 7 0

TOTALS 62 62 0

E M P L O Y M E N T & V A C A N C I E S


Ta b l e 3 . 3 : Em p l oy m e n t a n d va ca n c i e s by c r i t i ca l o cc u p a t i o n

Critical occupations No of posts No of posts filled Vacancy Rate Number of posts filled additional to the establishment

Chief Executive Officer 1 1 0 0

Manager – Marketing 1 1 0 0

Manager – ICT 1 1 0 0

Manager – Licensing 1 1 0 0

Chief Financial Officer 1 1 0 0

Financial accountant 1 1 0 0

Senior Manager – Corporate Services 1 1 0 0

Chief Inspector 1 1 0 0

Senior Inspectors 9 9 0 0

Receptionist 9 9 0 0

Driver 1 1 0 0

HR Practitioner 1 1 0 0

Bookkeeper 1 1 0 0

PA to Executive Managers 1 1 0 0

PA to CEO 1 1 0 0

TOTALS 32 32 0 0

5 5


E M P L O Y M E N T & V A C A N C I E S

Theinformationineachcasereflectsthesituationasfortheperiodunderreview(April‘08-March’09)foranindicationofchangesin staffing patterns over the year under review

Ta b l e 3 . 4 : M o n t h l y t u r n ove r ra te s by c r i t i ca l o cc u p a t i o n

Occupation Number of employees per occupation as at March 2009

Appointments and transfers into the department

Terminations and transfers Turnover rate

Chief Executive Officer 1 0 0 0

Manager – Marketing 1 0 0 0

Manager – ICT 1 0 0 0

Manager – Licensing 1 0 0 0

Chief Financial Officer 1 0 0 0

Financial accountant 1 0 1 3.3

Senior Manager – Corp. Services 1 0 0 0

Chief Inspector 1 0 0 0

Senior Inspectors 9 0 0 0

Receptionist 9 0 0 0

Driver 1 0 0 0

HR Practitioner 1 0 0 0

Bookkeeper 1 0 0 0

PA to Executive Managers 1 0 0

PA to CEO 1 0 0 0

TOTALS 31 0 1 0

Ta b l e 3 . 5 : R e a s o n s w hy s t a f f i s l e a v i n g t h e E C L B

Termination Type Number % of total

Death 2 6.45

Resignation 4 12.90

Expiry of contract 22 70.96

Dismissal – operational changes 0

Dismissal – misconduct 4 12.90

Dismissal – inefficiency 0

Discharged due to ill-health 0

Retirement 0

Transfers to other Public Service Departments 0

Other 0

Total 32

Total number of employees who left as a % of the total employment 50.79

5 6


E M P L O Y M E N T E Q U I T Y

5 . 4 E m p l oy m e n t E q u i t yThe tables below are based on the formats prescribed by the Employment Equity Act, 55 of 1998.

Ta b l e 4 . 1 : To t a l nu m b e r o f e m p l oye e s ( i n c l u d i n g e m p l oye e s w i t h d i s a b i l i t i e s ) i n e a c h o f t h e f o l l ow i n g o cc u p a t i o n a l ca te g o r i e s

Occupational Categories Male Female Total

African Coloured Indian White African Coloured Indian White

Legislators, senior officials 2 2 0 0 2 0 0 0 6

Professionals 6 1 0 2 4 1 0 0 14

Technicians and associate professionals 2 1 0 0 1 0 0 1 5

Clerks 4 1 0 0 23 1 1 0 30

Service and sales workers 0 0 0 0 0 0 0 0 0

Skilled agriculture and fishery workers 0 0 0 0 0 0 0 0 0

Craft and related trades workers 0 0 0 0 0 0 0 0 0

Plant and machine operators and assemblers

0 1 0 0 0 0 0 0 1

Elementary occupations 0 0 0 0 6 1 0 0 7

TOTALS 14 6 0 2 36 3 1 1 63

EMPLOYEES WITH DISABILITIES 0 1 0 0 1 0 0 0 2

Ta b l e 4 . 2 : To t a l nu m b e r o f e m p l oye e s ( i n c l u d i n g e m p l oye e s w i t h d i s a b i l i t i e s ) i n e a c h o f t h e f o l l ow i n g o cc u p a t i o n a l ca te g o r i e s

Occupational Bands Male Female Total


Top Management 1 0 0 0 1 0 0 0 2

Senior Management 2 1 0 0 1 0 0 0 4

Professionally qualified and experienced specialists, and mid-management

6 1 0 2 4 1 0 0 14

Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents

2 1 0 0 1 0 0 1 5

Semi-skilled and discretionary decision making 4 2 0 0 23 1 1 0 31

Unskilled and defined decision making 0 0 0 0 6 1 0 0 7

Temporary employees

Total 15 5 0 2 36 3 1 1 63

5 7



Ta b l e 4 . 3 : R e c r u i t m e n t






1 0 0 1 0 0 0 0 2


3 0 0 0 2 0 0 0 5

Semi-skilled and discretionary decision making

0 1 0 0 3 1 0 0 5


TOTALS 5 1 0 1 8 2 0 0 17


Ta b l e 4 . 4 : Te r m i n a t i o n s






0 0 1 1 0 0 0 0 2


0 0 0 0 0 0 0 0 0

Semi-skilled and discretionary decision making 13 0 0 0 13 1 0 0 28


TOTALS 14 1 1 1 14 1 0 0 32


5 8





Legislators, senior officials and managers 0 1 0 0 0 0 0 0 1



Clerks 5 0 0 0 6 0 0 0 11




Plant and machine operators and assemblers 0 0 0 0 0 0 0 0 0


TOTALS 6 2 0 1 7 0 0 1 17


Ta b l e 4 . 5 : D i s c i p l i n a r y a c t i o n

Ta b l e 4 . 6 : S k i l l s d e ve l o p m e n t



Legislators, senior officials and managers 2 1 0 0 0 0 0 0 3



Clerks 2 3 0 0 13 0 1 0 19




Plant and machine operators and assemblers 0 0 0 0 0 0 0 0 0


TOTALS 3 3 0 0 17 0 0 0 37


5 9

5 . 5 L e a ve u t i l i s a t i o nThe following tables provide an indication of the use of sick leave (Table 5.1), annual leave (Table 5.2), and Family Responsibility leave (Table 5.3). In all cases, the estimated cost of the leave is also provided.

Ta b l e 5 . 1 : S i c k l e a ve

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)

Semi & Lower skilled 122 81.96 29 46 4 35 943

Skilled 16.5 100 3 4.7 5.5 10 326

Highly skilled supervision 23 100 4 17.4 5.7 6 286

Senior management 8 100 2 3.2 4 19 726

TOTALS 169.5 38 72 281

Ta b l e 5 . 2 : A n nua l Le a ve


L E A V E U T I L I S A T I O N

Salary Bands Total days taken No of employees Average per employee

Semi & Lower Skilled 508.5 37 13.7

Skilled 56.5 5 11.3

Highly Skilled supervision 136 12 11.3

Top/ Senior management 58 5 11.6

TOTALS 759 59 13.55

Ta b l e 5 . 3 : Fa m i l y R e s p o n s i b i l i t y Le a ve

Salary Bands Total days taken No of employees Average per employee

Semi & Lower Skilled 16 9 1.7

Skilled 0 0 0

Highly Skilled supervision 5 3 1.6

Top/ Senior management 2 2 1

TOTALS 23 14

Ta b l e 5 . 4 : A n nua l Le a ve t a ke n by p ro g ra m m e

Programme No of days No of employees

Inspectorate 477 40

Corporate 110 7

Licensing 103.5 6

Finance 65.5 6

TOTALS 756 59

6 0


Ta b l e 5 . 5 : S i c k Le a ve t a ke n by p ro g ra m m e

Programme No of days No of employees

Inspectorate 96 23

Corporate 19 6

Licensing 35 6

Finance 19.5 3

TOTALS 169.5 38

Ta b l e 5 . 6 : Le a ve p a yo u t s

Reason Total Amount (R’000) Number of Employees

Average payment per employee (R’000)

Leave payout (April ’08 to March 09) non-utilisation of leave for the previous cycle 0 0 0

Capped leave payouts on termination of service for April’08- March’09 0 0 0

Leave payout on termination of service for April 08-March 09 91 709 6 15 285

L E A V E U T I L I S A T I O N

5 . 6 L a b o u r r e l a t i o n sThe following table summarises the outcome of disciplinary hearings conducted within the ECLB for the Month under review.

Ta b l e 6 . 1 : M i s co n d u c t a n d d i s c i p l i n a r y h e a r i n g s f i n a l i ze d

Outcomes of disciplinary hearings Number % of total

Correctional counselling 5 29.41

Verbal warning 5 29.41

Written warning 2 11.76

Final written warning 0 0

Suspended without pay 0 0

Fine 0 0

Demotion 0 0

Dismissal 4 23.52

Not guilty 1 5.9

Case withdrawn 0

TOTALS 17

6 1

Ta b l e 6 . 2 : Ty p e s o f m i s co n d u c t a d d re s s e d a t d i s c i p l i n a r y h e a r i n g s

Types of misconduct Number % of total

Absent without leave 3 100

Irregular expenditure(breach of tender policy) 0 0

Gross dishonesty 0 0

Gross misconduct 0 0

Financial misconduct 0 0

Breach of confidentiality policy 0 0

TOTALS 3 0


L A B O U R R E L A T I O N S

5 . 7 I n j u r y o n d u t y The following tables provide basic information on injury on duty.

Ta b l e 7 . 1 : I n j u r y o n d u t y

Nature of injury on duty Number % of total

Required basic medical attention only 0 0

Temporary Total Disablement 0 0

Permanent Disablement 0 0

TOTALS 0 0

5 . 8 U t i l i s a t i o n o f c o n s u l t a n t s

Ta b l e 8 . 1 : R e p o r t o n co n s u l t a n t a p p o i n t m e n t s u s i n g a p p ro p r i a te d f u n d s

Project Title Total number of consultants that worked on the project. Contract value (R)

n/a 1 38 000

P A R T 6

G E N E R A L

6 3

G E N E R A L

G E N E R A L

Par t 6: GENERAL

Domicilium: Octoproc House 34 Argyle Street CBD East London

Jurisdiction of operation: To make provision for the registration of retail sales and micro-manufacturing of liquor in the Province of the Eastern Cape. Legal form: Section 4 of the Eastern Cape Liquor Act 10 of 2003 provides for the establishment of the Eastern Cape Liquor Board (ECLB).

Controlling entity: Eastern Cape Department of Economic Development and Environmental Affairs (DEDEA)

6 4G E N E R A L

G E N E R A L

N o te s :

PR number: PR80/2009ISBN number: 978-0-621-38533-5

CONTACT NUMBERS38 Grey Street QUEENSTOWN Tel: 045-838-5557 Fax: 045-839-3709

790 Goven Mbeki Street NORTH TOWERSGround Floor NORTH END•PORTELIZABETH•Tel:041-4842149Fax: 041-484 2136(Also servicing Uitenhage area)

37a Grey Street ALIWAL NORTH Tel: 051-634-2244 Fax: 051-634-1510

5th Floor Botha Sigcau Building MTHATHA Tel: 047-531-0242 Fax: 047-531-0226

Cnr Victoria & Frere CRADOCK Tel: 048-881-3756 Fax: 048-881-4927

Shoprite Shopping Mall Hope Street KOKSTAD Tel: 039-727-1341 Fax: 039-727-1474

20 High Street GRAHAMSTOWN Tel: 046-622-4037 Fax: 046-622-4063

Octoproc House34 Argyle StreetEAST LONDONTel: 043-701-8500Fax: 043-722-1942

Documents

ANNUAL REPORT 2008/09 - Eastern Cape Liquor … › ... › eclb-annual-report-2008-2009.pdfANNUAL REPORT 2008/09 CONTENTS 3 CONTENTS Page Part 1: GENERAL INFORMATION 1.1 Board Members