Ingonyama Trust Board Schedule 3 A Public Entity In terms of the Public Finance Management Act Strategic Plan 2006/2007 Budget 2006/2007

Ingonyama Trust Board

Schedule 3 A Public EntityIn terms of the Public Finance Management Act

Strategic Plan 2006/2007Budget 2006/2007

2


Strategic Plan 2006/2007

Contents Page Background Map of Ingonyama Trust Land 3 Background to the Ingonyama Trust Board 4 Management Structure 5 Overview of Budget and Trust Funding 6 Background to Strategic Plan 8 Strategic Objectives Land Management

1. Development of Asset Register & Land Tenure Information System. 9 2. Transfer of former Kwazulu towns to local authorities. 11 3. Transfer of land used for State domestic purposes to relevant organs of State. 13 4. Registration of land vesting in the Trust and consolidation of Titles. 15 5. Privatisation of State Forests. 17 6. Implementation of Communal Land Rights Act,(Act 11 of 2004). 19 7. Identification and finalisation of Land claims on Trust land. 21 8. Assisting Communities in addressing fire break,alien vegetation and fencing 23

obligations. 9. Allocation and provision of land for housing and infrastructure facilities purposes. 25 10. Land identification on outskirts of townships. 27

Trading Activities & income administration

11. Granting of leases. 29 12. Agreeing to the granting of Permissions to Occupy. 31 13. Granting of various Mineral Rights and Royalties administration. 33

Expenditure /Disbursement Management

14. Payments to Traditional Authorities. 35 Budget 2006/2007 37 Notes to Budget 2006/2007 38/47

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4


Strategic Plan 2006/2007

Background to the Ingonyama Trust Board

The Ingonyama Trust was established in terms of the Kwazulu – Natal Ingonyama Trust Act,(Act 3 of 1994).This act was amended by Act 9 of 1997.Among other things, the Kwazulu- Natal Ingonyama Trust Amendment Act provided for the establishment of. the Ingonyama Trust Board.The primary objective of the Board is to function as landowner – in - law of Ingonyama Trust land ,which is in extent of three million hectares spread throughout Kwazulu-Natal.

The core business of the Trust is to manage land for the material benefit and social well being of the individual members of the communities.However , no alienation or burdening of the land may occur without the written permission of the relevant traditional authority.

5

Management StructureThe Board has the following management structure:

The Executive Authority in terms of the Public Finance Management Act.(Act 1 of 1999) (PFMA) is the Minister for Agriculture and Land Affairs.

The sole trustee of the Ingonyama Trust is His Majesty the King Goodwill Zwelethini ka- Bhekuzulu.

The Board is the accounting authority in terms of section 49 of the PFMA

6

Overview of Budget and Trust funding The budget has been aligned to the Strategic Plan for the year 2006/2007 . The Ingonyama Trust Boards’ income is obtained from two sources.

1 2


Ingonyama Trust Board Own Fund Income – (Trading activities)

Transfer Payment received from the Department of Land Affairs (Grant in aid)

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The Ingonyama Trust Board’s own fund income comprises of Income earned from Leases, Royalties and Investment Income. The Budgeted amount for 2006/2007 is R 14 151 077 which makes up 86.2% of the Total income budget.

In addition to the above, R 2 242 000 .00 is received from the Department of Land Affairs as a transfer payment which makes up the remaining 13.80 % of the total income budget.

In terms of the Board’s disbursement policy 90 % of the income earned from trading activities is to be utilised for the benefit of the communities. 10 % of the income earned is to be retained for Board expenses. The total budget amounting to R 16 399 870.00 is a 6.24 % increase on the budget prepared for 2005/2006.

The expenditure budgeted is funded from the above sources.The internal administration costs of the Board are met from the grant - in - aid received from the National Department of Land Affairs. Certain operational costs are met from the 10 % of funds accruing to the Trust.These arrangements are in terms of the Ingonyama Trust Act 1994 and the Regulations made under the Act.

The detailed budget and additional notes are attached on pages 37 to 47.

8

Background to the Strategic PlanThe strategic plan has been prepared in conjunction with the Budget in order to achieve the Boards vision and mission.

The strategic plan focuses on the issues that need to be resolved over the next five years and has regard to the Government priorities such as poverty alleviation, provision of housing and infrastructure and black empowerment.

In particular the implementation of the Communal Land Rights Act and challenges faced by the Board with changes in other legislation such as the Mineral and Petroleum Resources Development Act have informed the content of this Strategic Plan.As the full implications of these two Acts unfold,the Plan will have to be revised.Similarly,the coming into operation of National and Provincial laws on traditional leadership will have to be taken into account.

The strategic issues raised in the Strategic Plan will facilitate achieving the objective of optimal land usage for the material benefit and social well being of the communities living on Ingonyama Trust land.

Furthermore, it will assist in extending security of tenure in accordance with both customary and statutory law.

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STRATEGIC OBJECTIVE 1: DEVELOPMENT OF ASSETS REGISTER / LAND TENURE INFORMATION SYSTEM

TARGET PERSPECTIVE

OUTCOME OUTPUTS INDICATORS 2006/2007

2007/2008

2008/2009

2009/2010

2010/2011

To identify and provide a record of all assets including titles, leases, PTOs and servitudes. This will enable rents to be updated, rent invoices to be issued and ownership queries to be dealt with.

A computerised Land Tenure Information System to be developed. Asset register to be updated to indicate property registered in the name of the Trust as well as other rights or interest on ITB land.

Number of assets identified and recordedMin of 3000 as others may come to light.Comprising :Title deedsLeases Developmental Rights agreementsLand AvailabilityAgreementsServitudesMining operationsPTO’S

3 000 (min)

1 500 200

60

10 10 36 1 184

500(min)

20 50 10 10 5 5 400

500(min)

20 50 10 10 5 5 400

500(min)

20 50 10 10 5 5 400

500(min)

20 50 10 10 5 5 400

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STRATEGIC OBJECTIVE 1: DEVELOPMENT OF ASSETS REGISTER / LAND TENURE INFORMATION SYSTEM

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

To identify and provide a record of all assets including titles, leases, PTOs and servitudes. This will enable rents to be updated, rent invoices to be issued and ownership queries to be dealt with.

Costs for the development and update of the Land Tenure Information System.Costs for updating the Asset register.

100 000

10 000

50 000

-

50 000

-

50 000

-

50 000

-

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STRATEGIC OBJECTIVE 2 : TRANSFER OF FORMER KWAZULU TOWNS TO LOCAL AUTHORITIES

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

To complete transfer of former KwaZulu Towns to local authorities in terms of section 4A(4) of the KwaZulu-Natal Ingonyama Trust Act, 1994 (as amended)

The Trust will continue to engage with municipalities to persuade them to take over land which vested in them in terms of the Ingonyama Trust Act,1994. (It is their responsibility to instruct the Registrar of Deeds to effect Transfer)

Original Number of Townships to be transferred to Municipalities was twenty six.Number of Townships already transferred is fifteen.Number of Townships still to be transferred is eleven.

6 5 - - -

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STRATEGIC OBJECTIVE 2 : TRANSFER OF FORMER KWAZULU TOWNS TO LOCAL AUTHORITIES

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

To transfer former KwaZulu Towns to local authorities in terms of section 4A(4) of the KwaZulu-Natal Ingonyama Trust Act, 1994 (as amended)

No direct financial implication for the Trust as any costs are payable by the Municipalities. ( Any administration costs will be contained within the ordinary day to day administration costs of the Trust).

- - - - -

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STRATEGIC OBJECTIVE 3: TRANSFER OF LAND USED FOR STATE DOMESTIC PURPOSES TO RELEVANT ORGANS OF STATE TARGET PERSPECTIVE OUTCOME

OUTPUTS

INDICATORS

2006/ 2007

2007/ 2008

2008/ 2009

2009/ 2010

2010/ 2011

To transfer land used for state domestic purposes prior to 1994 to relevant government departments and Municipalities.

On-going identification of properties. Negotiate transfer of properties to relevant departments or municipalities to assist them to take ownership of the properties which vest in them in terms of the Ingonyama Trust Act, 1994. Note : Whether or not a particular property qualifies for transfer is not always straight forward eg.in some cases a community claims that they bore the costs of erecting improvements.

Number of properties to be transferred out for state domestic purposes is two thousand seven hundred. Number of state domestic properties transferred to date is one. State domestic properties include :

Schools Clinics Hospitals courts police stations

500 (min)

500 (min)

500 (min)

500 (min)

500 (min)

Constraints : Implementation of the transfers is the responsibility of the relevant organs of state. The ITB only identifies land used for the state domestic purposes and informs and co-operates with relevant departments.

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STRATEGIC OBJECTIVE 3: TRANSFER OF LAND USED FOR STATE DOMESTIC PURPOSES TO RELEVANT ORGANS OF STATE

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

To transfer land used for state domestic purposes prior to 1994 to relevant government departments and Municipalities.Note : On a careful analysis of the ITB Act, after this objective has been accomplished some of the land falling into this category will still remain an asset of the Trust, depending on the date first used and occupied.

Administration cost will be incurred by the Trust, as Trust staff will be required to manage this process. Specialist service providers may be required where necessary to help unravel usage and ownership.Note :Complex conveyancing processes may be required to finalise certificates of registered titles but many transfers cannot however be completed pending transfer from other Government Departments.

50 000 30 000 30 000 30 000 30 000

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STRATEGIC OBJECTIVE 4: REGISTRATION OF LAND VESTING IN THE TRUST AND CONSOLDATION OF TITLES

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

To identify,consolidate and register all vested assets in the name of the Trust plus those still to be transferred from the Department of Land Affairs.

Negotiate Land Transfers with the Department of Land Affairs and attend to necessary conveyancing and registration of land vested in the name of the Trust.Consolidation of titles once transfers effected.Note: It is not certain how much land destined for ITB remains registered in the name of the Minister or other departments. Neither is it known what other rights are registered on such land.This exercise thus requires an in depth study of various legislation and searches in the deeds office and elsewhere to establish the extent of other rights which affect ITB land.

Number of properties to be vested in the Trust and registered is estimated at three hundred. ( no costs to the Trust for these transfers)andNumber of properties to be consolidated is a minimum of 1478.

200

500

100

500

-

478

-

-

-

-

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STRATEGIC OBJECTIVE 4: REGISTRATION OF LAND VESTING IN THE TRUST AND CONSOLDATION OF TITLES

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

To identify, consolidate and register all vested assets in the name of the Trust plus those still to be transferred from the Department of Land Affairs.

Ongoing conveyancing, deeds searches,land survey,and other related costs including registration of servitudes and consolidation of titles once transfers effected.

150 000(min)

150 000 (min)

150 000 (min)

- -

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STRATEGIC OBJECTIVE 5: PRIVATISATION OF STATE FORESTS TARGET PERSPECTIVE OUTCOME

OUTPUTS

INDICATORS

2006/ 2007

2007/ 2008

2008/ 2009

2009/ 2010

2010/ 2011

To assist Traditional Authorities/ communities in the restructuring and privatisation of State Forests which are on Trust owned land so that communities may benefit.

Stake Holders consultation. Appointment of transaction advisers for the privatisation of state forests. Finalisation of Land claims. Setting up joint ventures with community and land claimants. There are four forests on Trust Land. Each Forest has a standing timber value of approximately R 20 m. One forest is already the subject of a Long term lease.

Granting of long term leases to Privatised forest operators. Finalisation of joint ventures between communities and forest operators concluded after assurance is obtained that communities will benefit. Various models will be looked at before agreements are finalised. .

1 1

1 1

1 1

- -

- -

Note : it is worth noting from experience that privatisation of state forests /community forests is very complex, labourious and financially costly.To date one application has taken on for three years and there are no precedents.

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STRATEGIC OBJECTIVE 5: PRIVATISATION OF STATE FORESTS

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

To assistTraditional Authorities /Communities in the restructuring and privatisation of State Forests which are on Trust owned land so that communities may benefit.

Expenditure payable by the Trust :

Training for communitiesObtaining expertise requiredObtaining legal adviceIdentifying the rightful owner/entityLease negotiations

30 000 30 000 30 000 - -

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STRATEGIC OBJECTIVE 6: IMPLEMENTATION OF COMMUNAL LAND RIGHTS ACT,(ACT 11 OF 2004).

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

Transfer of Land to rightful claimants or provision of comparable redress.

1.Receipt of claims2.Cadastral survey of land.3.Validation of claims.4.Consideration of claims by Board and/or Minister.5.Gazette determination of claim.Note : A mapping exercise has been commissioned by the Board. A final report has now been submitted to the Board forconsideration.

Award tenure or redress to successful claimants.Number of old order rights identifiedA clear definition of old/new order rights and policy.Established new order rights granted

To be determined once data is available.

Same as Previous year

Same as previousyear

Same Previousyear

Same As previous year

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STRATEGIC OBJECTIVE 6: IMPLEMENTATION OF COMMUNAL LAND RIGHTS ACT,(ACT 11 OF 2004).

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

Transfer of Land to rightful claimants or provision of comparable redress.

Full utilisation of appropriated funds.Number of hectares alienated from the Trust.New order rights granted

Funding will be provided in the Budget of the Department of Land Affairs.





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STRATEGIC OBJECTIVE 7: MONITORING LAND CLAIMS ON TRUST LAND

TARGET PERSPECTIVE

OUTCOME OUTPUTS INDICATORS

2006/2007

2007/2008

2008/2009

2009/2010

2010/2011

Resolution of all land claims on Trust Land in order that the Trust can perform its functions as Landowner-in- law.

Provision of details of all claims.Settlement agreement Transfer of titleNote :It should be noted in this objective that because of the delay by the Land Claims Commission in processing claims some owners to date including ITB have not been notified of the claims and the extent thereof.This together with the slow progress by some state departments in transferring land destined to ITB makes it almost impossible for the Board to determine realistic targets.

Titles transferred

Number of Transfers will depend on the number of claims resolved





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STRATEGIC OBJECTIVE 7: MONITORING LAND CLAIMS ON TRUST LAND

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

Resolution of all land claims on Trust Land in order that the Trust can perform its functions as Landowner-in- law.

Internal administration costs to the Trust .No additional costs identified

Issues relating to claims will be borne by utilising existing resources.



Issues relating to claims will be borne by utilising existing resources

Issues relating to claims will be borne by utilising existing resources

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STRATEGIC OBJECTIVE 8: ASSISTING COMMUNITIES IN ADDRESSING FIRE BREAK,ALIEN VEGETATION AND FENCING OBLIGATIONS TARGET PERSPECTIVE OUTCOME

OUTPUTS

INDICATORS

2005/ 2006

2006/ 2007

2007/ 2008

2008/ 2009

2009/ 2010

Firebreaks cut ,alien vegetation cleared and fencing provided and maintained

Confirmation of

legal liability Community

participation Sourcing of funding

and technical assistance from organs of state and NGO’s.

Identification of land which has fire breaks vulnerability.

Quantification of risk in financial terms and deploying resources.

Firebreaks

cut Alien

vegetation cleared

Fencing erected and maintained.

Assistance will be granted in this year




Assistance will be granted

in this year

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STRATEGIC OBJECTIVE 8: ASSISTING COMMUNITIES IN ADDRESSING FIRE BREAK,ALIEN VEGETATION AND FENCING OBLIGATIONS.

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

Firebreaks cut ,alien vegetation cleared and fencing provided and maintained

Additional funding to be sourced externally, ie from Working for Fire Project.Administration costs to the Trust only.

100 000 105 000 110 250 115 762 121 550

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STRATEGIC OBJECTIVE 9: ALLOCATION AND PROVISION OF LAND FOR HOUSING AND INFRASTRUCTURE PURPOSES

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

Allocation of land for rural housing projects and community facilities. Provision of access for the provision of infrastructure on Ingonyama Land (i.e. roads, dams, powerlines, telecommunications and other Public Works and Municipal initiatives). Negotiations with service providers and tenure formalisation.

Provision of housing, community facilities and services on Trust land.

Development Rights Agreements, Leases and servitudes agreed, signed and recorded.

50 50 50 50 50

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STRATEGIC OBJECTIVE 9: ALLOCATION AND PROVISION OF LAND FOR HOUSING AND INFRASTRUCTURE PURPOSES

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

Allocation of land for rural housing projects and community facilities. Provision of access for the provision of infrastructure on Ingonyama Land (i.e. roads, dams, powerlines, substations).

Costs borne by other organs of State.External administration costs only for the Board in employing expertise.Note : The subsequent years’ expenditure may escalate substantially more than provided after the first year,but the Boards view is that excesses beyond its budget must be borne by other stakeholders.

50 000 52 500 55 125 57 881 60 775

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STRATEGIC OBJECTIVE 10: LAND IDENTIFICATION ON OUTSKIRTS OF TOWNSHIPS

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

Identification of land for Land Reform Projects and commercial development in Ingonyama Trust owned peri-urbanareas.

Preparation of desk top inventory of all parcels of land within and on the outskirts of 1.Umlazi2.Kwamashu3.Ezakheni4.Madadeni5.Folweni6.Esikhawinii.Site inspections to prepare reports on suitability for land reform or commercial development.Submission of reports to Board on suitability including town planning requirements.

All parcels of land identified.Site inspections completed.Land transferred or leased.

4 Towns

2 Towns

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STRATEGIC OBJECTIVE 10: LAND IDENTIFICATION ON OUTSKIRTS OF TOWNSHIPS

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

Identification of land for Land Reform Projects and commercial development in Ingonyama Trust owned peri-urban areas.

Specialist service providers will be required to identify and inspect land.Internal administration costs will be incurred by the Trust in managing the projects.

300 000 200 000 - - -

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STRATEGIC OBJECTIVE 11 : GRANTING OF LEASES

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

Extension of security of tenure, Registered leases can be used as security for funding of development projects.Employment and joint venture opportunities for Communities leading to poverty alleviation.

Investigations and vetting of applications.Negotiating heads of terms.Rent collection.Monitoring and evaluation. Issuing of invoices.

Monitoring of existing lease terms and conditions.Number of new leases to be issued to generate income for the benefit of the communities.

150

30

180

35

215

40

255

45

300

50

30

STRATEGIC OBJECTIVE 11: GRANTING OF LEASES

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

Extension of security of tenure, Registered leases can be used as security for funding of development projects.Monitoring of existing lease terms and conditions

Income derived from new leases for the benefit of the communities.Income derived from existing leases for the benefit of the communities.

60 000

757 176includes new leases

70 000


80 600


90 860

1 007 802includes new leases

100 000

1 108 582includes new leases

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STRATEGIC OBJECTIVE 12: AGREEING TO GRANTING OF PERMISSIONS TO OCCUPY – COMMERCIAL & RESIDENTIAL

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

Extending security of tenure for Residential and Commercial activities on Ingonyama Trust land.

Investigations;Validation consultations with other stake holders; updating of data base;issuing of PTO’S;Rent collection;Monitoring and evaluation;issuing of invoices.Note : The coming into operation of the Communal Land Rights Act No 11 of 2004 will probably lead to the system of P.T.O ‘s falling away.

Number of Commercial PTO’s to be issued based on previous years averages.

75

85 95 105

110

Number of residential PTO’s to be issued based on previous years averages.

450 500 550 600 650

32

STRATEGIC OBJECTIVE 12: AGREEING TO THE GRANTING OF PERMISSIONS TO OCCUPY – COMMERCIAL & RESIDENTIAL

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

Extending security of tenure for residential and Commercial activities on Ingonyama Trust land

Income receivablefrom issuing of commercial PTO’s.Note:No rental payable in respect of residential PTO’S.

7 583 7 963 8 361 8 779 9 218

Admin fee receivablefrom issuing of non- commercial / residential PTO’s.

159 021 166 972 175 321 184 087 193 291

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STRATEGIC OBJECTIVE 13: GRANTING OF MINING RIGHTS AND ROYALTIES ADMINISTRATION

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

To maximise the mining potential on Trust Land for the benefit of the communities including BEE/Joint ventures.

Prospecting permits and mining leases issued and royalties collected.Appointment of service providers.

Number of mining leases/permits to be issued.

10 15 20 25 30

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STRATEGIC OBJECTIVE 13: GRANTING OF MINING RIGHTS AND ROYALTIES ADMINISTRATION

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

To maximise the mineral potential on Trust land.

Income derived from royalties and surface leases.

7 320 454 7 686 477 8 070 801 8 474 341 8 898 058

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STRATEGIC OBJECTIVE 14: DISBURSEMENT OF FUNDS TO THE TRADITIONAL AUTHORITIES

TARGET PERSPECTIVE


2007/2008

2008/2009

2009/2010

2010/2011

Disbursement of funds to Traditional Authorities in terms of the Disbursement policy of the Board.These projects in certain instances are not finalised within one year and are demand driven.

Payments for expenses and projects which are for the material and social well being of the relevant communities and which meet appropriate accountability standards.

Number of Traditional Authorities qualifying for project funding from Royalty Income is thirty seven.Number of Traditional authorities for which projects are already approved is six.Number of Traditional authorities for which projects need to be approved is thirty-one.This is a continuous process, approval may depend on the number of T/a’s requesting approval.

18 13 16new projectsto be identified by traditional authorities to whom royalties already accrue

15new projects to be identified by traditional authorities to whom royalties accrue.

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STRATEGIC OBJECTIVE 14: DISBURSEMENT OF FUNDS TO THE TRADITIONAL AUTHORITIES

BUDGET PERSPECTIVE

OUTCOME OUTPUTS 2006/07 2007/08 2008/09 2009/10 2010/11

Disbursement of funds to Traditional Authorities in terms of the Disbursement policy of the Board.

Amount to be disbursed to Traditional Authorities

13 053 334 13 682 423 14 623 025 15 484 404 16 308 976

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Operating & Capital Budget - 2006/2007

reference reference ApprovedSection to to

INCOME budget strategic 2006/2007notes objective

A ITB Own Fund Income 14,151,077.48

PTO - General 1 12 159,021.45 PTO - Commercial 2 12 7,583.81 Leases 3 11 757,176.85 Royalties and Prospecting Income 4 13 7,320,454.72 Investment Income 5 5,886,955.84 Other Income 19,884.81

B Department of Land Affairs Funding 2,248,792.52

Transfer Payments - Current 6 2,242,000.00 Investment Income 7 6,792.52

TOTAL INCOME 16,399,870.00

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EXPENSES

C ITB Own Fund Expenditure 14,151,077.48

Advertisement and promotions 8 15,775.34 Legal fees 9 3 200,000.00 Bank charges 10 14,495.00 General expenses 11 12,473.00 Privatisation of State forests 12 30,000.00 Provision for doubtful debts 13 260,000.00 Payment to Traditional Authorities 14 14 13,053,334.14 Firebreaks,alien vegetation 15 8 100,000.00 Housing admin expenses 16 9 50,000.00 Capital expenditure 17 100,000.00 Staff Training 15,000.00 Land reform projects -excluding "CLARA" 18 10 300,000.00

D Departmental Funding Expenditure 2,248,792.52

Board Members remuneration 19 240,000.00

Bank Charges 20 3,000.00 Board members accomodation & meetings 21 300,000.00 Salaries 22 1,030,000.00 Land Tenure Information system 23 1 100,000.00 Audit fees - external & internal 181,500.00 Insurance 24 16,500.00 Minerals administration 25 288,000.00 Entertainment 2,000.00 Stationery 18,792.52 Advertising 10,000.00 Crockery & cutlery 1,000.00 Equipment 3,500.00 Motor vehicle expenses 26 18,500.00 Personnel agency fees 27 30,000.00 Computer software 6,000.00

TOTAL EXPENDITURE 16,399,870.00

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Budget notes for 2006/2007

The budget is prepared in terms of paragraph 7 of the Financial Regulations of the Kwazulu-Natal Ingonyama Trust Act, 1994 and the Public Finance Management Act, 1999.

The budget has been prepared on the basis that the Trust will continue operating with its current activities.

The budget includes the grant- in-aid income received from the Department of Land Affairs and expenditure incurred thereon.

The notes below indicate the purpose of the expenditure and the basis for arriving at the amountsbudgeted for.

The Budget does not include costs for the implementation of the Communal Land Rights Act.

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Income

The 2005/2006 budget and the actual income earned for 2004/2005 are used as a guide to determine the 2006/2007 budgeted income amounts.

1. Permissions to occupy income - General ( PTO)

These fees are charged in terms of the Kwazulu Land Affairs Act No 11 of 1992and administered by the Department of Local Government & Traditional Affairs.( Ulundi)

A one-off administration fee is charged in terms of Regulation 5(1) (a)

Residential, school or public purposes 100.00 Other purposes 250.00 Agricultural 50.00

The budgeted amount receivable is based on a 5 % increase on the 2005 actual income amount.

2. Permissions to occupy - rental income - (PTO )- Commercial

This income relates to a yearly rental from granting of commercial PTO's.This income is administered by the Department of Traditional & Local Government Affairs - Ulundi.

The budgeted amount receivable is based on a 5 % increase on the 2005 actual income amount.

41

3. Rental income - leases A large percentage of lease income is received from MTN & Vodacom.

Rental income is based on a 10 % increase on the 2005 actual amountas these leases in most cases provide for a 10 % annual escalation.

4 Royalty income

Royalty income is received from prospecting rights and mining of minerals on Trust land.

The royalty income budget is prepared on the basis that the Trust retains its entilement toroyalty income on old order rights.

The Budget for royalty income is based on an increase of 5% on the 2005 actual amount.

Almost 80 % of the royalty income is received from the Zululand Anthracite Collieries.

42

5. Investment income

This relates to interest earned on investments and curent accounts.The budgeted anmount is calculated on the basis that the capitalamounts are not utilised and the interest being capitalised at a rate of 6.9% which is the current rate of return.

Investment balances as at 01.04.2005

Fnb - 90 Day investment 37,804,741.00 Fnb - Daily Call 1,999,996.00 Nedbank - 88 day investment 40,006,489.00

79,811,226.00 Calculations

FNB - 90 day investment

Balance at 01.04.2005 37,804,741.00 Add : interest capitalised at 6.9% per anum 2,608,527.13 Balance at 01.04.2006 40,413,268.13 Add : interest capitalised at 6.9% per anum 2,788,515.50 Balance at 31.03.2007 43,201,783.63

FNB - 90 day investment

Balance at 01.04.2005 1,999,996.00 Add : interest capitalised at 6.9% per anum 137,999.72 Balance at 01.04.2006 2,137,995.72 Add : interest capitalised at 6.9% per anum 147,521.70 Balance at 31.03.2007 2,285,517.43

NEDBANK - 88 day investment

Balance at 01.04.2005 40,006,489.00 Add : interest capitalised at 6.9% per anum 2,760,447.74 Balance at 01.04.2006 42,766,936.74 Add : interest capitalised at 6.9% per anum 2,950,918.64 Balance at 31.03.2007 45,717,855.38

Fnb - 90 Day investment 2,788,515.50 Fnb - Daily Call 147,521.70 Nedbank - 88 day investment 2,950,918.64

5,886,955.84

The investment rate of return could fluctuate between 6.00% to 7.50 % per anum. A flat rate of 6.90 % is used for capitalisation purposes.

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The investment rate of return could fluctuate between 6.00% to 7.50 % per anum. A flat rate of 6.90 % is used for capitalisation purposes.

Section B

Department of Land Affairs Funding ( Note 6 )

6 Transfer payment

This refers to the actual cash transferred to the Trust by the Department of Land Affairs.The Department has allocated an amount of R 2 242 000.00 for 2006/2007.

7 Investment income

This refers to the interest earned from Departmental funds invested.

Investment income is based on an increase of 5% on the 2005 actual amount.

Section C

Ingonyama Trust Board - own expenses

8 Advertisements & promotions

The advertisement costs of staff recruitment, public relations, tenders,and publicationscan be made from this budget.

An amount of R 15 775.34 is budgeted for which is reasonable.

9 Legal fees

Relates to payment for legal opinions, consolidation of titles andTraditional area conveyancing.

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Registration of land vesting in the Trust and consolidation of titles 150,000.00 strat no 4Transfer of land for state domestic purposes 50,000.00 strat no 3

200,000.00

10 Bank chargesThis refers to the bank charges incurred on ITB own fund tranactions.Bank charges are increasing on a yearly basis due to normal increases inbanking costs. A 5% increase on the actual amount of 2005 has been budgeted for.

This does not include the bank charges on the grant-in-aid account.( refer to note 24 )

11 General expenses

Relates to general petty cash costs of the Trust.A 5 % increase on the budgeted amount of 2005 has been budgeted.

12 Privatisation of state forests.

This is the costs for the privatisation of the state forests.

13 Provision for doubtful debts

An adequate provision of R 260 000 .00 has been made in line with the auditors recommendationto provide for debts outstanding for sixty days and over.

14 Payment to Traditional Authorities

The Board is entitled to utilise up to 10% of Royalty income.90 % of the money which accrues to a Traditional authority from business activities in its area is available to fund approved projects which it desires to undertake. This amount represents the 90%.plus additional funding available from the Boards' 10 %.These funds are not appropriated but flow to the Trust from assets and thus "belong" to the beneficiary communities.

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15 Firebreak and alien vegetation

This is the conservative budgeted cost in the event of fires and removal of alien vegetation on Ingonyama land. In 2005/2006 R 80 000.00 had been committed.

16 Housing administration expenditure

This relates to the administration costs that will be incurred when Trust Land is made availablein terms of legal agreements with municipalities to enable the latter to pursue housing projects.

17 Capital Expenditure

Costs to be incurred for purchase of computers,furniture & equipment and other costs of a capital nature.

18 Land Reform Projects - Land identification on outskirts of Townships

These costs relate to identification of land for projects on the outskirts of Umlazi,Kwamashu,Ezakheni,Madadeni,Folweni and Esikhawini. See strat plan - objective no : 10

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Section D

Budgeted expenditure from Departmental Funding

The expenditure budgeted in this section is paid from the cash that is transferred to the Trust by the Department of Land Affairs.

For 2006/2007 the Department has made R 2 242 000.00 as a baseline amount available to the Trust.

Refer to item 6 above for further information.

19 Board members' remuneration

This expenditure relates to payment to non - official Board members who render services to the Trust.

20 Bank charges

These are bank charges payable on the Grant-in-aid account.

21 Board members accomodation and meetings expenses

This expenditure relates to the travel and accomodation expenses of Board members and Board meetings.

22 Salaries

This is the amount available from Departmental funding for staff salaries.

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23 Land Tenure Information systyem

This is the amount that is required for the completion of the development of the Land tenure information system and the monthly service fee.

24 Insurance This payment relates to the insurance of the Trust's vehicle.The current payment is R 1172.10 per month.An adequate provision of R 16 500.00 accounting for the annual increase has been made.

25 Minerals Administration costs

This is the cost for the administration of mining activities within Ingonyama Trust Land.The cost is based at R 24 000.00 per month. Previously the Department of Minerals and Energyadministered this on behalf of the Trust.

26 Motor vehicle expenses

Relates to the cost of repairs , oil and maitenance of the Trust's vehicle.

27 Personnel agency fees

This is the amount payable to the personnel agency for the recruitment of staff.

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Documents

Ingonyama Trust Board Schedule 3 A Public Entity In terms of the Public Finance Management Act Strategic Plan 2006/2007 Budget 2006/2007