NRF annual report 2008/09 · 2015. 1. 30. · 2 NRF annual report 2008/09 highlights In 2008/09 the NRF could record significant achievements in striving towards its strategic goals

b NRF annual report 2008/09

annualreport2009

The accomplishments and promise of African astronomy and the unique African skies have drawn global attention.

In 2009 we celebrate the International Year of Astronomy (IYA) as well as the National Research Foundation’s (NRF) 10th birthday. It is also

the year in which the SA Space Science Policy was launched.

These events provide a spectacular opportunity for us to, quite literally, “reach for the stars”.

Africa’s history in astronomical achievements is impressive and our accomplishments in this field rank with the best in the world.

The acronyms SALT, SKA, and MeerKAT bear further testimony to the significant physical advantage and mental prowess

that our continent holds.

The 2009 NRF Annual Report invites each of us to treasure this uniqueness, celebrate our achievements

and be motivated by the promise of unexplored territories.

09annualreport

1HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

BOARD REPORT: CORPORATE OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Governance functions of the NRF Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Committees of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Meetings of the Board and its committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Procurement Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Governance structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Governance support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Pertinent governance issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

NRF Board members as at 31 March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

NRF Executive Directors as at 31 March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Corporate finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Corporate human resources and transformation . . . . . . . . . . . . . . . . . . . . 9

Staff recruitment, turnover and succession planning . . . . . . . . . 9

Training and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

NRF staff profile and employment equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Labour relations climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Employee assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Health and safety policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

BOARD REPORT: OVERVIEW OF BUSINESS UNITS . . . . . . . . . . .13

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Mandate of the NRF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

The NRF values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Composition of the NRF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Research and Innovation Support and Advancement

(RISA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Purpose and scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

RISA services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Sources of funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Leveraging discretionary funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Investment policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

RISA structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

RISA programmes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

South African Agency for Science and Technology

Advancement (SAASTA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23


Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Main challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

National Research Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25


National Research Facilities services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

Main challenges generic to National Research Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

South African Astronomical Observatory (SAAO) . . . . . . . . . . . . . . . .27

Hartebeesthoek Radio Astronomy Observatory (HartRAO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

Hermanus Magnetic Observatory (HMO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

South African Institute for Aquatic Biodiversity (SAIAB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

South African Environmental Observation Network

(SAEON) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

National Zoological Gardens of South Africa (NZG) . 36

iThemba Laboratory for Accelerator Based Sciences

(iThemba LABS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

Corporate Support Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Information and Communication Technology (ICT) . . . 38

Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Main challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

New Business Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Corporate Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

FINANCIAL REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

Statement of responsibility by the

Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Report of the Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

Report of the Auditor-General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

Statement of financial performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

Statement of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

Statement of changes in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48

Cash flow statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50

Notes to the Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

ACRONYMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82

contentsNRF Annual Report 2008/09

ISBN 978-1-86868-067-2

PO Box 2600, Pretoria 0001

Tel: +27 12 481-4000 Fax: +27 12 349-1179 E-mail: info@nrf .ac .za www .nrf .ac .za

NRF annual report 2008/092 NRF annual report 2008/09

highlightsIn 2008/09 the NRF could record significant achievements in striving towards its strategic goals . Here is a selection of highlights .

Promote internationally competitive research as basis for a knowledge economyl 180 referred articles published by staff of the National Research Facilitiesl 5 354 peer-reviewed articles published through researchers sponsored by RISA

discretionary fundingl 14 patents granted to research sponsored by RISAl 254 international projects funded

Grow a representative science and technology workforce in South Africal 260 389 participants involved in science festivals under the SAASTA umbrella

·l 118 delegates from 16 countries attended the 2nd African Science Communication

Conference (ASCC) organised by SAASTAl 328 546 learners and 10 536 educators reached through the activities of SAASTAl 7 351 students supported by RISA (56% black and 47% women)l 1 971 students supported through THRIPl 420 Master’s and doctoral students supported through the DoL National Skills Fundl 2 031 doctoral students (52% black) supported through all RISA programmesl 26 postdoctoral Fellows were supported through the DST Innovation Post-Doctoral

Fellowship Programme

Provide cutting-edge research, technology and innovation platformsl R92,3m invested in research equipment at HEIs, of which R13,6m went to equipment for

Nanosciencel R36,5m invested in research infrastructure (excluding SKA) at the National Research

Facilities

Operate world-class evaluation and grant-making systemsl 2 650 grants to the amount of R321m made to researchersl number of rated researchers in South Africa increased from 1 653 in 2007/08 to 1 922

in 2008/09

Contribute to a vibrant national innovation systeml The Thuthuka and Research Niche Area Programmes that are geared towards researcher

development in previously disadvantaged groups have supported the training and

development of 1 375 students, including 779 Master’s-level students, 330 doctoral

candidates and 45 postdoctoral researchers through grantholder-linked bursaries and

fellowshipsl Eighty (80) Research Chairs are in operation and 380 students were supported through

the Chairs initiative during 2008/09; 58% were black and 43% womenl The NRF manages the DST/NRF Centres of Excellence programme, which disburses

almost R50 million per annum into seven Centres. Since inception (in 2005) this

initiative has trained more than 390 postgraduate students and has produced more than

570 journal articles.

3

boardreportcorporate overview

4 NRF annual report 2008/09

corporateoverviewGovernance function of the NRF Board

The three-year term of office of the NRF Board, which was

appointed in July 2005, ended on 30 June 2008 . A new Board was

appointed for the next term as from 1 July 2008 .

Committees of the Board

The Board appointed two standing committees – the Audit and

Risk Committee, and the Remuneration and Human Resources

Committee – to deal with relevant issues on a regular basis . During

2008/09, these committees comprised:

From 1 April 2008 – 30 June 2008

Audit and Risk CommitteeRemuneration and Human

Resources Committee

Dr FW Petersen (Chairman) Prof . CC Mokadi (Chairman)

Ms L Abrahams Prof . B Bozzoli

Mr TS Gcabashe Prof . PE Ngoepe

Mr MM Nxumalo Prof . T Nyokong

Prof . MP Mangaliso (ex officio) Dr GR Wesso

Prof . BD Reddy (ex officio) Prof . MP Mangaliso (ex officio)*

Prof . BD Reddy (ex officio)

From 1 July 2008 – 31 March 2009

Audit and Risk CommitteeRemuneration and Human

Resources Committee

Dr IR May (Chairman) Dr IR May (Chairman)

Mr TS Gcabashe Dr NM Magau

Prof . JW Fedderke Prof . T Nyokong

Prof . V Pillay Mr TM Netsianda

Ms NZ Yokwana Prof . MP Mangaliso (ex officio)

Prof . MP Mangaliso (ex officio)* Prof . B Bozzoli (ex officio)

Prof . B Bozzoli (ex officio)

* Prof. Mangaliso resigned from the NRF effective 30 November 2008. His position was temporarily

filled by Dr AS Van Jaarsveld.

Meetings of the Board and its committees

The NRF Board met four times during the 2008/09 financial year .

Over the same period, the Audit and Risk Committee as well as

the Remuneration and Human Resources Committee held three

meetings each . The dates of the meetings and the attendance of

Board members are shown in Table 1 (for the outgoing Board) and

Table 2 (for the incoming Board) .

5

n Absent with apology n In attendance Not a member of standing committee

Table 1: Meetings of the outgoing NRF Board and its committees: 1 April 2008 – 30 June 2008

NR

F B

oar

d

NRF BoardAudit and Risk

Committee

Remuneration and Human

Resources Committee

27/06/2008 12/06/2008 06/06/2008

Chairman Prof . BD Reddy n

Audit and Risk

Committee

Dr C Olver n

Mr NG Hendricks

[Transferred abroad]n n

Ms L Abrahams n n

Mr TS Gcabashe n n

Mr MM Nxumalo n n

Dr FW Petersen

[Chairman as of 10/2007]n n

Remuneration

and Human

Resources

Committee

Prof . CC Mokadi (Chairman) n n

Prof . B Bozzoli n n

Prof . PE Ngoepe n n

Prof . T Nyokong n n

Dr GR Wesso n n

Prof . MP Mangaliso n n n

Table 2: Meetings of the incoming NRF Board and its Committees: 1 July 2008 – 31 March 2009

NR

F B

oar

d

NRF BoardAudit and Risk

Committee

Remuneration and

Human Resources

Committee

18/08

2008

17/09

2008

07/11

2008

30/01

2009

23/10

2008

24/03

2009

30/10

2008

13/03

2009

Chairperson Prof . B Bozzoli n n n n

Audit and Risk

Committee

Prof . P Pillay n n n n

Prof . JW Fedderke n n n n n n

Mr TS Gcabashe n n n n n n

Prof . V Pillay n n n n n n

Ms NZ Yokwana n n n n n n

Dr IR May

(Chairman: Audit & Risk)

(Chairman: Remuneration &

Human Resources)

n n n n n n n n

Remuneration

and Human

Resources

Committee

Dr NM Magau n n n n n n

Mr TM Netsianda n n n n n n

Prof . T Nyokong n n n n n n

Prof . MP Mangaliso n n n

Dr AS van Jaarsveld n n n n n n n


Procurement Committee

The Board established a dedicated Procurement Committee to

deal with procurement matters as well as with the large-scale

infrastructure acquisitions required by the South African SKA

project . The Board recognises that high-value procurements require

stringent processes to mitigate risk and therefore appointed the

following as members of this committee:l Chairman of the NRF Board;l Chairman of the Audit and Risk Committee; andl Chairman of the Remuneration and Human Resources

Committee .

To expedite decision-making and ensure effective business

operations, the Procurement Committee meets at least once a

month or as required .

Governance structures

In accordance with the NRF Act, the NRF performs an agency

function on behalf of its line department, the Department of Science

and Technology (DST), and acts as service provider for several

government departments .

The relationship between the NRF and those government

departments that choose the NRF as an agency, is usually managed

through Memoranda of Understanding (MoU) that contain specific

service-level agreements . In accordance with, and/or in addition to

these formal agreements, the following governance structures are

in place: l the THRIP Board, appointed jointly by the NRF President and the

Director-General of the dti; andl various advisory boards/committees for the National Research

Facilities .

The role definitions of all governance support structures are

reviewed from time to time to streamline operations according to

best practice .

During the course of the 2008/09 financial year a new internal

governance structure was implemented within the NRF . The former

NRF Executive, which included executive directors of all business

units, was replaced by a Corporate Executive with decision-making

powers . This comprises the NRF President, two Vice-Presidents, the

Group Executive: Finance and Business Systems, and the Group

Executive: Human Resources and Stakeholder Relationships .

Governance support

The Board is supported by the Corporate Secretariat and the

NRF Corporate Executive . The Governance Directorate assists

the NRF Corporate Executive by ensuring that the NRF complies

with the relevant legislation and regulatory frameworks . It further

prepares corporate planning and reporting documents, such as

the NRF Business Plan, the Annual Report, the Key Performance

Indicator (KPI) report, the Shareholder Compact and quarterly

reports . To ensure proper corporate performance measurement,

the Governance Directorate assists the organisation in developing

appropriate and transparent indicators .

Pertinent governance issues

All business units have established structures to contribute

to the development of a sound culture of risk management,

including occupational health and safety as well as environmental

conservation .

The organisation complies with all safety and environmental

laws and regulatory requirements, and with the best international

practices for research facilities . The concept of sustainability is

becoming entrenched into the activities of the enterprise .

A materiality and significant framework has been developed for

reporting losses through criminal conduct and irregular, fruitless

and wasteful expenditure, as well as for significant transactions

(envisaged per section 54(2) of the PFMA) that require ministerial

approval . Due the nature of the business of the entity, the materiality

level has been selected at 0,25% of revenue, amounting to

R4,9 million .

During the year under review the NRF Board endorsed and

applied the relevant sections of the Code of Corporate Practices

and Conduct as set out in the King Report, namely those sections

that are in accordance with the National Research Foundation Act

(Act No . 23 of 1998) . The new Board that started its term on

1 July 2008 attended an induction workshop focusing on

governance issues .

NRF Board members as at 31 March 2009

l Prof . B Bozzoli (Chairman)l Prof . JW Fedderkel Mr TS Gcabashel Dr NM Magaul Dr IR May (Chairman: Audit & Risk Committee) (Chairman:

Remuneration and Human Resources Committee)l Mr TM Netsiandal Prof . T Nyokongl Prof . P Pillay l Prof . V Pillayl Ms NZ Yokwana

corporate overview (continued)

7NRF Executive Directors as at 31 March 2009

Prof . RS Booth Hartebeesthoek Radio Astronomy

Observatory (HartRAO)

Prof . PA Charles South African Astronomical Observatory

(SAAO)

Mrs BA Damonse South African Agency for Science and

Technology Advancement (SAASTA)

Dr RL Drennan Governance

Dr AM Kaniki Knowledge Fields Development (KFD)

Mr R Kriger International Relations

Dr R Maharaj Human and Institutional Capacity

Development (HICD)

Dr SB Malinga Hermanus Magnetic Observatory (HMO)

Dr G Mazithulela Vice-President: Research Infrastructure

and National Research Facilities

Prof . S Muhongo* ICSU Africa Regional Office

Dr C Nxomani National Zoological Gardens (NZG)

Mr J Pauw South African Environmental Observation

Network (SAEON)

Dr SD Selematsela Knowledge Management and Evaluation

(KM&E)

Mr B Singh Group Executive: Finance and Business

Systems

Dr NSR Skeef New Business Development

Prof . PH Skelton South African Institute for Aquatic

Biodiversity (SAIAB)

Mr PB Thompson Group Executive: Human Resources and

Stakeholder Relationships

Dr AS Van Jaarsveld Acting President: NRF and Vice-President

RISA

Dr VV Vilakazi iThemba Laboratory for Accelerator Based

Sciences (iThemba LABS)

* The NRF hosts Prof. Muhongo as the Regional Director of the International Council of Science

Regional Office for Africa (ICSU ROA).

Remuneration

NRF Board members are paid honoraria instead of remuneration

(Table 3) . The honoraria are paid in terms of the guidelines provided

by National Treasury .

Table 3: Actual remuneration of NRF Board members

Board memberTotal 2008/09

(R)

Total 2007/08

(R)

Reddy BD (Chairman) 6 668 26 672

Bozzoli B (Chairman) 22 500 10 002

Abrahams LA 2 500 10 002

Fedderke JW 7 501 –

Gcabashe TS* 10 002 10 002

Hendricks NG 2 500 11 669

Magau NM 7 501 –

May IR 12 501 –

Mokadi CC 3 334 13 336

Netsianda TM 7 501 –

Ngoepe PE 2 500 10 002

Nxumalo MM 2 500 10 002

Nyokong T 10 002 10 002

Olver CG 1 667 6 668

Petersen FW 3 334 11 669

Pillay P** – –

Pillay V 7 501 –

Wesso GR 2 500 10 002

Yokwana N 7 501 –

TOTAL 120 013 140 028

* Donated to Mathande Society for the Aged

* * Based abroad – non-attending member

NRF executive management and general staff are remunerated in

accordance with the total annual package approach .

To attract and retain high-calibre staff, the NRF ensures that

average salaries for good performers are positioned at the median

of the higher education market, and of the general market for

specific key positions . By implementing this policy and the NRF

Integrated Performance Management System, a portion of an

individual’s annual salary adjustment is based on performance .

The Chairman of the Board conducts an annual appraisal of

the performance of the President of the NRF and communicates

the result to the Board . The Board’s Remuneration and Human

Resources Committee takes these results into consideration when

evaluating the President . The Board also reviews and approves the

recommendations of the Remuneration and Human Resources

Committee on the remuneration of executive management (see

Table 4 on next page) .



Table 4: Remuneration packages of executive management (R’000)

Executive member

Total

2008/09

(R’000)

Total

2007/08

(R’000)

Mangaliso MP (President: NRF)

(contract commenced 1 September

2006; resigned 30 November 2008)

908 1 503

Bharuth-Ram K (from May 2005;

Retired 29 February 2009)774 840

Booth RS 858 749

Charles PA 814 750

Damonse BA 794 726

Drennan RL 900 827

Kaniki AM 899 876

Kriger R (from April 2008) 727 –

Lottering EA (resigned 31 July 2008) 368 1 110

Maharaj R (from September 2006) 900 827

Malinga SB (from October 2007) 654 293

Mazithulela G (from February 2009) 242 –

Muhongo S (ICSU ROA) 780 716

Nxomani C (from July 2007) 762 553

Pauw J 666 607

Selematsela SD (from August 2008) 443 –

Singh B 927 853

Skeef NSR 912 838

Skelton PH 779 715

Thompson PB 1 034 950

Van Jaarsveld AS (from January 2007) 1 281 1 102

Vilakazi ZZ (from January 2007) 763 751

TOTAL REMUNERATION 17 185 15 586

CORPORATE FINANCE

Income

During the financial year under review, the following amounts were

allocated to the NRF from the DST to enable the NRF to achieve

its objectives:

Table 5: Core funding from the DST

2008/09

R’000

2007/08

R’000

RISA 450 450 442 400

SALT Foundation 5 556 5 400

iThemba LABS 109 296 103 732

SAAO 26 479 25 122

HartRAO 17 345 16 456

SAIAB 10 113 9 595

HMO 8 118 6 754

SAASTA 13 922 13 134

SAEON 15 000 7 000

NZG 46 461 44 406

SKA 12 648 12 000

TOTAL

(Refer Note 6 to the AFS)715 388 685 999

The 4% overall increase in core funding from the DST is largely

attributed to an inflationary adjustment plus the doubling of SAEON

income to enable the roll-out of additional nodes .

In addition to the core funds allocated to the NRF from the DST,

the NRF received contract and other income of R1 033 million

(2008: R818 million) . This increase is mainly related to additional

contract funds received from the DST for the Research Equipment

Programme, Research Chairs and the Science and Technology

Agreements Fund (STAF) .

Figure 1: NRF income trend

ExpenditureThe NRF’s total expenditure, including Innovation Fund and THRIP,

increased from R1 410 million in 2008 to R1 694 million in 2009,

with expenditure per business unit as follows:

Other income

Contributions (contract funds)

200

400

600

800

1 000

1 200

1 400

1 600

1 800

0

Ran

d (’0

00

)

2005 2006 2007 2008 2009

Core parliamentary grant/discretionary funds

9Table 6: Expenditure per business unit

2008/09

R’000

2007/08

R’000

RISA 1 216 263 1 015 928

iThemba LABS 146 330 132 412

SAAO 46 754 37 511

HartRAO 21 420 18 080

SAIAB 22 727 19 695

HMO 16 504 12 948

SAASTA 36 932 30 113

NZG 91 519 84 259

SAEON 16 390 12 001

SKA 80 134 47 432

TOTAL ExPENDITURE

PER INCOME STATEMENT

1 694 973 1 410 379

Within the Research and Innovation Support and Advancement

(RISA), the increase in programme expenditure is mainly attributed

to increase in grant expenditure relative to additional income

contract received . The increase in the National Research Facilities’

expenditure is relative to additional contract income received for

research projects, while the escalation in SKA is due to the ramp-up

of KAT-7 project .

Figure 2: NRF Total expenditure split

CORPORATE HUMAN RESOURCES AND TRANSFORMATION

The Human Resource function played a key role in the initial roll-out

of Vision 2015 . It led, facilitated and coordinated the Values Sharing

workshops, which were intended to ensure that staff members,

functions and business units were aligned with the overall vision of

the organisation .

The following performance related to the key strategic objectives

set for 2008/09 can be reported:

Staff recruitment, turnover and succession planning

Recruitment activity in the organisation remains high, with a year-

on-year increase of some 19,8% . This is indicative of the continuing

volatile labour market, characterised by endemic skills shortages

and competition for talent . Some 240 staff members joined the

organisation in the year under review . This high activity can also

be ascribed to the SKA/MeerKAT project and the filling of long-

standing vacancies in most business units .

Overall staff turnover increased from 15,6% to 16,4% year-on-

year against an average national turnover of 13,4% . Controllable

turnover increased marginally from 7,6% to 8,3% . Table 7 provides

an analysis of the recruitment activity and the turnover movements

by reason, race and gender in the period under review .

Training and development

More than 400 employees across all business units and

employment levels received training on various topics, such as

employee relations, performance management and job evaluation

and grading . Corporate training and development is a growing

priority in the NRF and is receiving greater strategic focus . A suite

of programmes addressing common developmental needs across

business units was conceptualised, and will be implemented from

2009/10 . Quarterly employee induction workshops are included in

this focus area .

NRF staff profile and employment equity

Employment equity committees across business units are being

maintained and improved . An NRF-wide committee comprising

chairpersons of the local committees is also being established . The

committees are intended to work in partnership with management

to ensure that transformation and equity goals are met .

Adherence to the NRF shared values is being driven and

promoted through employee workshops undertaken across

work units . By the end of the 2008/09 financial year, some

400 employees in three of the business units had attended the

workshops . More workshops are planned for 2009/10 to cover the

remainder of the business units .

An employee survey is being undertaken to determine views

and perceptions of the values, leadership and management of

the NRF . The results of the survey will influence organisational

development initiatives in the 2009/2010 business planning cycle .

The NRF Code of Ethics has been updated to incorporate the new

organisational values .

Salaries (remuneration)

Operating expenditure

200

400

600

800

1 000

1 200

1 400

1 600

1 800

0

Ran

d (’0

00

)

2005 2006 2007 2008 2009

Grants and bursaries



Table 7: Staff movements by reason, race and gender

Reason

Designated

Tota

l Des

igna

ted

Grou

p Non-Designated

Tota

l Non

- Des

igna

ted

Grou

p

Gran

d To

tal

Men WomenWhite

Men

Foreign Nationals

Afr Clrd Ind Total Afr Clrd Ind White Total Men Women

Resignations 27 10 2 39 21 7 2 12 42 81 16 3 1 20 101

Retirements 5 0 0 5 1 0 0 2 3 8 4 0 0 4 12

Contracts expiring 15 1 0 16 10 6 0 10 26 42 8 1 1 10 52

Dismissals 13 1 0 14 4 0 0 2 6 20 2 0 0 2 22

Death 6 0 0 6 3 0 0 1 4 10 0 1 0 1 11

TOTAL 66 12 2 80 39 13 2 27 81 161 30 5 1 37 198

Recruits 68 15 3 86 52 21 10 28 111 197 25 12 6 43 240

Progress towards achieving the NRF’s long-term

employment equity targets continues steadily . The overall

representation of designated groups stands at 79,7%, which is

well ahead of the target . Female representation increased from

37,7% year-on-year to 39,1%, which was marginally short of

the 40% target . Key challenges remain gender representation

at executive and senior management levels as well as the

representation of people with disabilities (Table 8 below and Figures

3 and 4 on page 15) .

Labour relations climate

The labour relations climate in the organisation is generally stable,

but challenges exist in key business units such as the NZG, RISA

and iThemba LABS where more investment in relationship-building

is required .

The 2008/09 round of substantive negotiations was slow to

conclude, thus impacting on the envisaged implementation

date . While no adverse labour relations occurrences have been

Table 8: The status and representation of the NRF employees by occupational level as at 31 March 2009

Occupational Level

Designated

Tota

l Des

igna

ted

Grou

p

Non-designatedTo

tal N

on

Desig

nate

d Gr

oup

Gran

d To

tal

Men Women White

Men

Foreign

Nationals

Afr Clrd Ind Total Afr Clrd Ind White Total Men Women

Top management 1 0 0 1 0 0 0 0 0 1 1 0 0 1 2

Senior

Management

Executive 4 2 2 8 0 1 1 0 2 10 4 0 0 4 14

Other 16 5 3 24 7 4 4 15 30 54 22 5 1 28 82

Professionally qualified and experienced

specialists and mid-management48 16 11 75 27 9 9 48 93 168 106 17 7 130 298

Skilled technical and academically qualified

workers, junior management, supervisors, foremen

and superintendents

57 49 1 107 41 22 1 29 93 200 55 1 0 56 256

Semi-skilled and discretionary decision-making 67 44 2 113 79 48 8 33 168 281 2 0 0 2 283

Unskilled and defined decision-making 141 0 0 141 61 0 1 1 63 204 5 0 0 5 209

Total Permanent 334 116 19 469 215 84 24 126 449 918 195 23 8 226 1 144

Non-permanent employees 17 4 0 21 10 7 2 4 23 44 13 4 2 19 63

TOTAL 351 120 19 490 225 91 26 130 472 962 208 27 10 245 1 207

11To

p an

d se

nior

man

agem

ent

Pro

fess

iona

l and

acad

emic

ally

qual

ified

Sem

i-ski

lled

Non

-per

man

ent

Uns

kille

d

0

50

100

150

200

250

300

350

400

Designated 2008/09 Non-designated 2008/09

Designated 2006/07 Non-designated 2006/07 Designated 2007/08 Non-designated 2007/08

Figure 3: Staff profile in terms of designated and non-designated groups by level

Top

and

seni

orm

anag

emen

t

Pro

fess

iona

l and

acad

emic

ally

qual

ified

Sem

i-ski

lled

Non

-per

man

ent

Uns

kille

d

0

50

100

150

200

250

300

350

400

Men 2008/09 Women 2008/09

Men 2006/07 Women 2006/07 Men 2007/08 Women 2007/08

Figure 4: Staff profile in terms of gender representation by level

experienced, the delay in concluding the negotiations may negatively

impact on employee morale and the retention of key staff .

Union membership in the organisation is increasing . Membership

by union at 31 March 2009 is shown in Table 9 below .

Table 9: Union membership among NRF staff members

UnionMembership

2008/09

Membership

2007/08

NEHAWU 369 310

SAMWU 96 104

PSA 52 70

Solidarity 32 37

DENOSA 0 7

TOTAL UNION

MEMBERSHIP 549 528

Employee assistance

Staff-led HIV/AIDS committees continue to be active across the

business units . The corporate HIV/AIDS policy and strategy is being

reviewed with a view to extending the focus to other critical areas of

employee health and wellness . Investigations are being undertaken

for a pilot outsourced employee assistance programme .

The Sports and Social Committee in RISA continues to drive

the social and health needs of staff . Similar initiatives are being

encouraged in the rest of the organisation .

Health and safety policy

The NRF is committed to the health and safety of its staff,

contractors and visitors, as well as to the protection of the

environment . All business units have established structures

responsible for contributing to the development of a sound

culture of risk management, including occupational safety and

environmental conservation .



NRF BOARD MEMBERS AS AT 31 MARCH 2009

Professor

Belinda Bozzoli

Deputy Vice-Chancellor

University of the

Witwatersrand

(Chairman)

Professor

Johannes Fedderke

School of Economics

University of Cape Town

Mr Thulani Gcabashe

Executive Chairman

Builtafrica Holdings

Dr Namane Magau

Consultant

Dr Ivan May

Consultant

Mr Michael Netsianda

Executive Director

Human Resources and

Support Services

Agricultural Reseach

Council

Professor

Tebello Nyokong

Department of Chemistry

Rhodes University

Professor

Pragasen Pillay

Electrical & Computer

Engineering Department

Concordia University

Professor

Venitha Pillay

Department of

Curriculum Studies

University of Pretoria

Ms Nozuko Yokwana

Chief Operations Officer

Department of Social

Development

13

boardreportoverview of

business units

13


overview of business unitsINTRODUCTION

The 2008/09 report of the NRF Board reflects the high-level

activities and performance of the respective business units of the

NRF against the NRF 2007/08 Business Plan . The 2008/09

period was a defining year for the NRF, one in which it began to

fully implement its new strategic plan, Vision 2015 .

MANDATE OF THE NRF

The NRF receives its mandate from the National Research

Foundation Act (Act No . 23 of 1998), which came into effect on

1 April 1999 and established the NRF as an autonomous statutory

body . According to Section 3 of the Act, the object of the NRF is to:

support and promote researchthrough

funding, human resource development and the provision of the necessary research facilities

in order to

facilitate the creation of knowledge, innovation and development in all fields of science and technology,

including indigenous knowledgeand thereby

to contribute to the improvement of the quality of life of all the people of the Republic.

The NRF Board, which is appointed by the Minister of Science

and Technology, provides strategic direction and monitors the

compliance of the NRF with the Act and other legal and regulatory

obligations that govern statutory bodies . The Board also exercises

its governance responsibility in terms of the Public Finance and

Management Act (Act No . 1 of 1999 as amended by Act No . 29

of 1999) and ensures compliance with the relevant requirements

of the King Report on Corporate Governance for South Africa .

The Chairperson of the Board participates actively in interaction

with the Minister, and a Shareholder Compact has been signed to

strengthen governance practices .

THE NRF VALUES

The NRF values are:l Passion for excellence;l World-class service;l Integrity;l Respect;l People-centred; andl Accountability .

15

SAASTA

There are three main business units in the NRF:l Research and Innovation Support and Advancement (RISA);l the South African Agency for Science and Technology

Advancement (SAASTA), which for reporting purposes is located

within RISA, but has a corporate cross-cutting science and

technology (S&T) advancement function; andl the National Research Facilities .

The business units are supported by the following corporate

services:

l Finance and Business Systems

– Finance

– Governance

– IT

– New Business Development; and l Human Resources and Stakeholder Relationships

– Human Resources

– Legal Services

– Corporate Communication .

NRF Board

Corporate SecretaryNRF President

Finance and Business Systems Human Resources and Stakeholder Relationships

Human Resources

Legal Services

Corporate Communication

IT

Finance

Governance

New Business Development

Int . Relations

KME

GMSA

HICD

ARI

KFD

SKA

SANAP

NITheP

SAEON

SAAO

HartRAO

HMO

iThemba LABS

NZG

SAIAB

Vice-President: Research and Innovation Support and Advancement (RISA)

Vice-President: Research Infrastructure and National Research Facilities

COMPOSITION OF THE NRF

KME: Knowledge Management and

Evaluation

GMSA: Grant Management and

Systems Administration

HICD: Human and Institutional

Capacity Development

ARI: Applied Research and Innovation

KFD: Knowledge Fields Development

SKA: Square Kilometre Array

SANAP: South African National

Antarctic Programme

NiTheP: National Institute for

Theoretical Physics

SAEON: South African Environmental

Observation Network

SAAO: South African Astronomical

Observatory

HartRAO: Hartebeesthoek Radio

Astronomy Observatory

HMO: Hermanus Magnetic Observatory

iThemba LABS: iThemba Laboratory

for Accelerator Based Sciences

NZG: National Zoological Gardens

SAIAB: South African Institute for

Aquatic Biodiversity

Figure 5: Composition of the NRF

Research Fellows – disciplinary inputs and strategy development

Social sciences

Humanities

Physical and Mathematical Sciences

Life Sciences

Engineering Sciences


overview of business units (continued)

Research and Innovation Support and Advancement (RISA)RISA is the intermediary between government strategies and

research institutions and researchers . Its key objective is to promote

and support the development of appropriately qualified people and

high-level infrastructure to produce the knowledge that makes

South Africa a global competitor .

Purpose and scope

RISA advances the promotion and support of research and research

capacity development in all fields of knowledge and technology

through:l investing, on a competitive basis, in knowledge, people and

infrastructure; l developing research capacity and advancing equity and equality

to unlock the full creative potential of researchers;l assisting with the development of institutional capacity; l facilitating strategic national and international partnerships and

knowledge networks; andl supporting science advancement through science awareness

platforms, communication and education .

RISA services

RISA provides a service to the National System of Innovation

(NSI) by:l running peer review systems for independent and objective

funding decisions;l managing a grant-making and administration service; l providing experience and expertise in research management

(Centres of Excellence (CoE); South African Research Chairs

Initiative) (SARChI);l facilitating partnerships between Higher Education Institutions

(HEIs) and several government departments (such as DST, DoL,

the dti, DEAT); l rendering administrative services to the Innovation Fund, the

South African Journal of Science, International Council for

Science (ICSU), Academy of Science of South Africa (ASSAf),

and others; and l implementing government policies (such as the DST 10-year

Innovation Plan) and managing appropriate initiatives .

Sources of funding

RISA receives the following funding from various sources:l core funds from the DST, which are to be used at the discretion

of the NRF; l ring-fenced funds from the DST for supporting programmes, such

as the CoE, the SARChI, and the STAF, among others;l contract funds received from various government departments,

for example:

– Department of Labour (DoL) for the National Skills Fund;

– Department of Trade and Industry (the dti) for the THRIP

programme; and the

– Department of Environmental Affairs and Tourism (DEAT)

for in-part support of the South African National Antarctica

Programme (SANAP) .

The ring-fenced and contract funds are managed according to

objectives laid down by the respective sponsors .

Figure 6 below illustrates the relative growth rates of the three

NRF funding streams . The average growth rate of 63% in nominal

terms was obtained for contract funding . Ring-fenced funding

has grown on average by 6% (less than the inflation rate) and the

discretionary funding has grown on average at 11% (almost equal

to inflation) .

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

Contract CoreRing-fenced

0

2007 200820062005

Figure 6: Growth rates of NRF funding streams (R million)

17Leveraging discretionary funding

As responsible stewards of public funds, it is vital that the NRF

uses its discretionary budget to leverage further investments

by external parties that contribute to the NRF mandate and the

national priorities . Through the Thuthuka and Research Niche Area

Programmes, that require matching funding, the NRF has managed

to leverage an additional R1,10 funding for every R1 it invested .

This practice is also extended to THRIP where the leverage rate

was 82% . The overall leveraged amount in 2008/09 was R354,5m

which is more than the entire discretionary budget .

Investment policy

The business of the NRF has changed significantly in the last

four years to a situation where the entity has proportionally less

discretionary funds and therefore less autonomy to act independently .

As ring-fenced funds are targeted at supporting specific strategic

imperatives, the NRF opted to start phasing out the Focus Area

Programmes (FAP) that focused on promoting strategic research .

The phasing out process is proceeding as follows: In 2007, 944

researchers were supported through an investment of R162 million

(new grants and carry forward provision) in the FAP . Projections

(see table 10 below) showed that if no new grants were made,

about R40 million could be released, through natural attrition, for

investment into other funding programmes over a period of four

years . This would essentially bring the investment to zero . The last

FAP grants would be terminated naturally in 2011 .

Table 10: Projected phasing out of the Focus Area Programmes

YearActual investment

(R million)

Decline in

investment (R million)

2007 162 –

2008 122 40

2009 82 40

2010 42 40

2011 2 40

The policy of the NRF is that funds becoming available through the

phasing out of the FAP are to be deployed in seven broad investment

areas that are complementary to the ring-fenced funding and

therefore aimed at promoting a fundamental disciplinary approach .

Table 11 indicates the proportion of the total NRF grant budget

spent per investment area during 2008/09 .

Table 11: RISA’s seven investment areas (amounts include grants and student scholarships)

Investment area2008/09

% of budget

Established researchers 30%

Human capital development and unrated

researchers15%

Strategic knowledge fields 19%

Strategic platforms (including research at the

National Research Facilities)10%

International initiatives 11%

Applied and industrial research and innovation 13%

Research on community SET engagement 1%

RISA structure

RISA is specifically structured to provide the programmes, services

and interventions required to achieve its objectives (see Figure 7

overleaf) .

RISA PROGRAMMES

Human and Institutional Capacity Development

The Human and Institutional Capacity Development (HICD)

Directorate aims to:l redress inequities in research capacities at the institutional level;l develop human capital for strengthening the academic sector and

advancing the objectives of the NSI; andl generate new knowledge and innovative technological capabilities

by creating an environment with quality infrastructure, including

state-of-the-art research equipment and research platforms .

The Directorate comprises the following five programmes that

are implemented in collaboration and partnership with government

departments, HEIs, research institutions, industry and other national

and international players:l The South African PhD Project aims to attract new doctoral

candidates and provide them and current doctoral students with

information and peer and mentor support mechanisms .l The Human Capacity Programme offers

– a range of bursaries and scholarships for student and

postdoctoral training;

– value-adding initiatives that aim to retain researchers within

the NSI;

– the DST-NRF Internship Programme for unemployed SET

graduates; and



Figure 7: Structure of RISA

THRIP: Technology and Human Resources for Industry Programme

SANHARP: South African Nuclear Human Asset and Research Programme

Personal assistant

HR

Finance

NRF Fellows: Specialist disciplinary inputs and strategy development

Executive

Director:

Knowledge

Management and

Evaluation (KME)

Executive

Director:

Human and

Institutional Capacity

Development (HICD)

Executive

Director:

Knowledge Fields

Development (KFD)

(including Strategic

Initiatives)

Executive

Director:

International

Relations

(IR)

Executive

Director:

Applied Research

and Innovation (ARI)

Manager:

Information

Resources and

Services

Manager:

Monitoring and

Evaluation Services

Programme Director:

SA PhD Project

Programme Director:

Strategic Initiatives B

Programme Director:

International Science

Liaison

Programme Director:

Projects

Programme Director:

Centres of

Excellence

Grants Director:

Strategic Knowledge

Fields

Grants Director:

Scholarships and

Fellowships

Grants Director:

SARChI and CoE

Grants Director:

International

Research Grants

Programme Director:

(SANHARP,

Transferable Skills)

Programme Director:

New Projects

Programme Director:

Strategic Initiatives A

Programme Director:

STAF

Programme

Director:

THRIP

Grants Director:

Capital and Strategic

Platforms

Executive

Director:

Grant Management

Systems and

Adminstration

(GMSA)

Vice-President: RISA

Programme Director:

Human Capacity

Programme

Programme Director:Institutional Capacity

Programme

Programme Director:

Strategic Platforms

Programme

Programme Director:

Research Chairs and

Rated and Unrated

Researchers

19 – strategic projects that aim to increase human resources in

scarce skills areas . l The SARChI is a human capacity-building intervention by the

government of South Africa, led by the DST and the NRF . It is

designed to significantly expand the scientific research base of

the country in a way that is relevant to national development and

in support of making South Africa an internationally competitive

global knowledge economy . SARChI is a knowledge and human

resource intervention with five main objectives: – to increase the number of world-class researchers in South

Africa; – to retain and/or attract back qualified research scientists to the

Higher Education sector;

– to help reverse the systemic decline in research outputs, focus

and capacity at publicly funded HEIs, Science Councils and

other research institutions;

– to strengthen and improve the capacity of research institutions

to generate and apply new knowledge; and

– to stimulate strategic research across the knowledge spectrum . l The Institutional Capacity Programme increasingly supports

researcher development geared towards previously

disadvantaged groups such as black, female and disabled

researchers . The Thuthuka and Research Niche Area

Programmes have supported the training and development of

1 375 students, including 779 Master’s-level students, 330

doctoral candidates and 45 postdoctoral researchers through

grantholder-linked bursaries and fellowships . l The funding programmes for rated and unrated researchers

provide a disciplinary-based application alternative to rated

and unrated researchers . Unrated researchers can use this

competitive option to compete for three years of research

support . Rated researchers can compete within a limited budget

to obtain funds for fundamental research .l The Strategic Platforms Programme promotes research and

human capital development by funding research equipment

and infrastructure platforms . A total of R37m was invested

in Strategic Research Infrastructure for state-of-the-art

equipment . Of this, R20m was spent on refurbishing the

National Research Facilities and R17m on supporting the DST

Science Missions .

Highlights

l The South African PhD Project hosted the first South African

PhD Project Conference and Fair in May 2008 . A total of 295

current and potential PhD students attended, half of whom were

female and 80% black . The Fair attracted a total of 34 exhibitors,

including two private companies, universities, Science Councils,

research institutions and three international funding agencies and

institutions . The latter encompassed Deutscher Akademischer

Austausch Dienst (DAAD), Fulbright and the Singapore SINGA

Alliance, which consisted of the Agency for Science, Technology

and Research (Singapore) (A*STAR), the National University

of Singapore and the Nanyang Technology University . Four

international partnerships have been formed for PhD training of

South African students in the international arena, either on a full-

time or sandwich programme . l Seven Nanotechnology Flagship Projects are being supported for

a three-year period commencing in 2009 as an implementation

instrument of South Africa’s National Nanotechnology Strategy .

In February 2009, a panel of international and local experts in

nanotechnology convened for the NRF peer-review process

to identify a manufacturer to commission a High Resolution

Transmission Electron Microscope (HRTEM) that would best be

able to address the research and training needs of the South

African Nanoscience community .l Strategic initiatives of HICD in 2008/09 included: F’SATIE (a

Franco-South African Partnership implemented at Tshwane and

Cape Peninsula Universities of Technology); a Biomathematics

Honours Programme established at the University of

Stellenbosch; the African Institute of Mathematical Sciences

(AIMS) Research centre established in Cape Town; the Black

Researchers/Academics Development (BRAD) programme

implemented at seven participating universities across South

Africa; as well as the Master’s programmes implemented by

iThemba LABS and coordinated by the University of the

Western Cape . The National Skills Fund of the DoL enabled

558 honours, 186 Master’s and 234 doctoral students to pursue

postgraduate studies .l In January 2009, the first annual research day was hosted for

interns who had completed a year of internship at the respective

host institutions . A total of 16 DST-NRF interns, comprising

almost 20% of the 2008/09 cohort, are now furthering their

studies through studentships and full-time study programmes . l The first annual postdoctoral research forum was also hosted,

attended by NRF-funded postdoctoral fellows and a number of

research directors from the academic sector .

Knowledge Fields Development

Knowledge Fields Development (KFD) promotes and supports

research by funding projects within the context of the Focus Area

Programme as well as through contract or ring-fenced funding . KFD

focuses on the basic research aspect of the research-innovation-

commercialisation value chain . KFD intends: l facilitating the advancement and pushing the frontiers of existing

knowledge in all fields of science and technology, including

indigenous knowledge;



l facilitating the creation of new knowledge;l promoting active interaction between researchers within and

across disciplines and knowledge fields;l strengthening the scientific and professional organisations in the

South African research community; andl investigating, mapping and analysing research interests and

trends within and across disciplines and knowledge fields .

Highlights

l A call for proposals for the extraordinary SANAP grant for the

creation of a Social Science, Law and Humanities platform, was

issued in February 2008 . Two consortia have received grants and

commended their projects . l A South African Biosystematics Initiative (SABI) student

workshop on proposal writing was held in Bloemfontein in

November 2008 . A SABI student network was established and

has developed its own website .l KFD supported the 4th International Geosphere-Biosphere

Programme (IGBP) Congress on Sustainable Livelihoods in a

Changing Earth System in Cape Town from 7–9 May 2008 . The

Congress aimed to support the UN Millennium Development

Goals of ensuring environmental sustainability and developing a

global partnership for development .l The NRF hosted the second meeting of the International Forum

of Funding Agencies (IFFA), which took place in Stellenbosch in

November 2008 . l An inaugural group of six researchers participated in a research

expertise training programme at Emory University (USA) from

February to July 2008 . This formed part of the Drug Discovery

Training Programme, which aims to support and accelerate

pharmaceutical research in South Africa through capacity

building and knowledge transfer .l The second SANAP symposium grant was awarded to the Marine

Research Institute at the University of Cape Town and held from

9–10 February 2009 . The symposium is a platform for SANAP

scientists and their students to present their research and is

regarded as a major networking platform . l The SANAP Bibliographic Database was launched in 2008 .

Intended as a resource and platform for researchers embarking

on sub-Antarctic and Antarctic research, it comprises a central

repository of 2 492 records, including books, scientific and

popular publications, as well as theses . The current records date

from 1847 to the present .l KFD supported the development of the South African Tree of

Life (SATOL) project . The main product of this project will be a

coordinated and consolidated, online, value-added catalogue of

South Africa’s biodiversity .

There are currently seven CoEs nationally . These are located

in South Africa’s HEIs in the following areas: Catalysis; Strong

materials; Invasion biology; Birds as keys to biodiversity; Tree

health biotechnology; Epidemiological modelling and analysis; and

Biomedical TB research . Two new Centres – in Global change and

Biosafety – are in the process of being established . This DST-

funded initiative has since inception (in 2005) trained more than

390 postgraduate students – an average of 55 students per Centre

– and has produced more than 570 journal articles .

Applied Research and Innovation

During 2008/09 the Applied Research and Innovation directorate

was established to promote and develop Applied Research within

the NSI . The notion of applied research is two-fold: firstly, research

that moves outcomes through the innovation value chain towards

commercialisation; and, secondly, research that informs the policy,

legislation and implementation that underpins societal well-being .

Societal well-being arenas include sustainability, poverty alleviation,

food security, community security issues, housing, good governance,

and community health .

The directorate has started initiatives that will: l provide practical solutions and responses to recognised societal

problems by engaging with government departments, parastatals

and other appropriate institutions; l enable promising innovation opportunities to be spun out to the

Technology Innovation Agency (TIA) for further development and

commercial exploitation; and l contribute to developing applied research career paths across the

South African innovation landscape .

The directorate is also responsible for managing the Technology

and Human Resources for Industry Programme (THRIP) .

Technology and Human Resources for Industry Programme

THRIP is a flagship research and development programme of the

the dti and the NRF . This government-private sector partnership

programme was established in response to the shortage of

high-level technical skills for industry and the need to improve

technologies and highly skilled people . All THRIP projects are jointly

funded by participating industries and government . Each THRIP

project leader supports at least one postgraduate student .

21Highlights

THRIP has a broad scope, hosting a total of 270 projects

across the areas of aerospace, agriculture, automotive

industry, biotechnology, clothing and textiles, cultural industries,

chemistry and biochemistry, energy, ICT, metals, paper and pulp,

pharmaceuticals and tourism .

Challenges

There has been a decrease in the number of applications to THRIP,

researchers participating in projects and concomitant outputs

such as publications . There are a number of possible reasons for

this, including a need to streamline application processes, make

available a wider range of funding mechanisms to applicants, as

well as the global economic downturn . Some industry partners have

not honoured their financial commitment to THRIP grants . This was

the main reason for 34 THRIP projects being cancelled, which were

initially approved for the 2008/09 funding cycle .

Over the past three years, efforts have been made to make

THRIP funding attractive to Small Medium and Macro Enterprises

(SMMEs) and Black Economic Empowerment (BEE) companies by

adjusting the ratio of industry-to-THRIP contributions . The number

of participating SMMEs has increased, but not as dramatically as

hoped, and the number of large industries has not grown . In 2009,

an investigation of co-investment programmes will be undertaken

with an emphasis on the possibility of differentiating the application

process for the respective categories of industry partners .

International Relations

International Relations (IR) was established as a separate

directorate in January 2009 . The role of the directorate is to:l advise the NRF on developing, negotiating and implementing

inter-agency research cooperation agreements;l service, implement and administer inter-governmental bilateral,

trilateral and multinational S&T agreements on behalf of the

Ministry and the DST; andl facilitate international networking and research partnerships

between individual researchers, postgraduate students, higher

education institutions and research institutes .l service and administer South Africa’s 50-plus adherence

responsibilities to such multilateral bodies as ICSU, International

Atomic Energy Agency (IAEA), International Institute for Applied

Systems Analysis (IIASA), International Centre for Genetic

Engineering and Biotechnology (ICGEB), Inter-continental

Drilling Programme (ICDP), as well as their member and

associated bodies .

Highlights

l The IR directorate currently administers 42 inter-governmental

and inter-agency agreements, and a further seven have been

signed and are to be implemented in 2009/10 . l The directorate negotiated the leveraging of €10,5m over five

years for a multidisciplinary flagship programme under the

auspices of the bilateral agreement between South Africa and

the Federal Republic of Germany . l In October 2008, the 29th ICSU General Assembly was

organised in Mozambique with assistance from NRF International

Relations . This was the first time in ICSU’s history that the

General Assembly met in Africa .

Knowledge Management and Evaluation (KM&E)

The role of KM&E is to develop and maintain the NRF as a

knowledge-based organisation . KME archives, provides access to

and promotes the utilisation of NRF data and information . These

objectives are executed through the Information Resources and

Services unit . The Monitoring and Evaluation unit administers the

evaluation and rating of individual researchers in the NSI in South

Africa . The unit also manages reviews commissioned by the NRF

Executive/management or entities external to the NRF . The findings

and recommendations of the reviews usually address strengths and

weaknesses, thereby giving the tools to improve weaknesses or to

exploit strengths of the entity/activity being reviewed .

Highlights

l A grant was received from the Carnegie Foundation for

establishing a Digitisation and Data Preservation Centre .

Significant progress has been made with an audit and the

compilation of a relevant manual . l A grant was received from ICSU for the World Data Centre and

the subsequent training of staff members in the United States .l A file plan was submitted to the National Archives of South

Africa .l Usage of the Nexus database system increased from 155 559 in

2006/07 to 183 256 in 2008/09 .l A pilot study on the h-index was conducted on applications for

individual ratings from researchers in various disciplines . The

h-index attempts to measure both the scientific productivity and

the apparent scientific impact of a scientist . Panels regarded this

as a valuable additional tool in the rating process .



Make call

Screen

applications

Assess and review

applications

Make

recommendations

Funding decisions

Financial

management

Communicate

decisions

Pre-award Award

GMSA RISA programme GMSA

Post-awardChoose strategy and set criteria

Figure 8: Grant management process

Grant Management and Systems Administration (GMSA)

GMSA supports the funding programmes of RISA by being

responsible for managing and administering awards .

Grant management can be broadly divided into pre-award

activities (also known as grant-making) and post-award activities

(called grant-paying) . (See Figure 8 .)

Monitor progress

23South African Agency for Science and Technology Advancement (SAASTA)Purpose and scope

The mandate of the South African Agency for Science and

Technology Advancement (SAASTA) is to advance public awareness

and appreciation of and engagement with science, engineering and

technology in South Africa . The activities involve: l developing SET human capital by building the quantity and quality

of mathematics and science outputs at school level;l strengthening the SET culture by raising the interest of the

general public (especially poorer communities) in science, as well

as their appreciation for its benefits; andl bringing science and scientists closer to civil society by

communicating about science to the South African citizenry .

Vision 2015 requires greater coordination and collaboration

across NRF business units in order to deliver more effectively and

impact fully on the NRF science advancement objectives . SAASTA

is responsible for fostering this coordination and collaboration .

SAASTA also works closely with science centres, HEIs, Science

Councils, and a host of other science-based entities . Several

national public awareness campaigns are managed on behalf of

the DST and SAASTA public engagement programmes increasingly

include other government departments .

Highlights

l SAASTA organised and hosted the 2nd African Science

Communication Conference (ASCC), which was attended by

118 delegates from 16 countries, thereby contributing to the

rapidly developing field of science communication and public

engagement with science on the African continent .l The NRF has set aside about 2% of its funds for research on

how researchers interact with their communities . The NRF

aims to establish a programme to which researchers can apply

for funding to conduct research on community engagement

in knowledge production . SAASTA has collaborated with NRF

Knowledge Fields Development and the Council on Higher

Education (CHE) to convene an initial community engagement

workshop . A concept paper was the first output of this initiative .l The Dinaledi school initiative, which forms part of the national

strategy for addressing skills shortages in mathematics and

science education, approached SAASTA for support; 18 Dinaledi

schools have been included in the DST/SAASTA National

Science Week programme and have attended two workshops .

The National Innovation Competition for Learner Entrepreneurs

(NICLE) was launched in 2009 and reached 21 Dinaledi schools

in KwaZulu-Natal and Mpumalanga . No further roll-out has been

possible due to lack of funding . l Six Media Round Tables (MRTs) were held to improve media

coverage as well as the understanding of the lay person on

selected science issues . The topics covered in 2008 included

Stem Cells and Cloning; Wine-related GMOs; Biotechnology in

Medical Research; Bioprospecting; Forensics and DNA Profiling;

and Nanotechnology . Each of these MRTs brought together

top scientists in their fields as well as media representatives .

Well-researched fact sheets on each topic were prepared for the

media to support them in their science reporting .l There were 12 nominations to the SAASTA/NSTF Science

Communicators Award .l SAASTA partnered with the South African committee for the

International Year of Planet Earth (IYPE), the South African

Schools Debates Board and the British Council to introduce a

national debating competition among the youth . Topics included

Biotechnology, Climate Change and other IYPE themes such

as earth conservation, non-renewable resources for Africa, and

water . A total of 184 learners and 37 educators were involved in

the provincial debating rounds, and the initiative culminated in a

gala awards event .l The DST, in collaboration with the Australian Government

Overseas Aid Programme (AUSAID), provided funding for a

training programme for science centre managers .

SAASTA organises many festivals and exhibitions to raise the interest of the general public (especially poorer communities) and school children in science and what it means to their lives.


Twenty-six delegates from South Africa and Lesotho attended

the presentation of the six Phase 1 modules in January/February

2009 . Phase 2 of the programme will be presented in Australia

over three months; six delegates from South Africa and two from

Lesotho have been selected to participate in this training .

Main challenges

l SAASTA acquired the Johannesburg Observatory site in

2003 and developed plans to refurbish it to accommodate a

multifaceted interactive Science Park with a specific focus on

astronomy and engineering . Some of the activities were put

on hold by the decision to reassess the development plans for

the future of the Observatory site . A private consultancy was

contracted to undertake a scoping exercise . Recommendations

have been made and further development will be guided by the

feedback of the NRF Board .l Funding constraints have delayed acquiring additional

infrastructure to develop the Johannesburg Observatory site

to the standard of a science centre . Exhibit development is

expensive, which has impacted on the number of new exhibits

that could be acquired for the site .l The SET Awareness Campaign Project is in its second year and

is due for completion in 2009/10 . Funding by the Chemical

Industries Education and Training Authority (CHIETA) has not

been renewed and this has impacted negatively on project roll-

out . However, refresher workshops with educators were held in

five provinces . Most of the activities targeting learners had to be

put on hold due to financial constraints . A pilot project has been

completed in six schools and its evaluation by an independent

evaluator will inform the final phase of the roll-out in 2009/10 .l The growth in SAASTA business over the last five years has been

exciting, but presents challenges related mostly to the growing

volume of work that the small staff complement is required

to handle . Much of the new work comes from the DST in the

form of contracts . Improved IT infrastructure and connectivity

are required, since the increasing volume of grant activity

to be managed on manual systems is placing strain on staff

capabilities .


SPLENDID THORAx

A spectacular close-up image of the thorax of a splendid wasp was adjudicated overall winner of the 2007/08 SA Science Lens Competition, organised by SAASTA. The photograph was taken by Dr Simon Van Noort, a researcher at the Iziko South African Museum, who is currently busy with a study of the systematics and evolution of fig wasps.

25National Research FacilitiesPurpose and scope

For a facility to qualify as one of the National Research Facilities, it

must reflect the following characteristics:l it should have a unique position in South African knowledge

production;l the core technologies, research methods, and data pools and

collections should live up to international standards;l the goals should be well-aligned with the overall objectives of the

NSI, especially with regard to the diffusion of new knowledge;l it should have critical mass of equipment, skills and users;l it must have potential for networking and attracting international

collaborators to South Africa;l it must offer opportunities for human resource development,

with special efforts to involve researchers from formerly

disadvantaged communities; and l it must provide opportunities for the advancement of science and

for the interface between science and society .

The National Research Facilities managed by the NRF are

clustered on the basis of their areas of specialisation into three

broad categories aligned with the science missions of the National

Research and Development Strategy, namely:

Astro/Space/Geosciences

l South African Astronomical Observatory (SAAO): This

National Research Facility performs fundamental research in

astronomy and astrophysics at a national and international level .

SAAO is the National Research Facility for optical and infrared

astronomy in South Africa . It is also responsible for managing the

operations of the Southern African Large Telescope (SALT) .l Hartebeesthoek Radio Astronomy Observatory

(HartRAO): This National Research Facility was established as

the national facility for radio astronomy research in South Africa .

Today its primary function is to support research and training in

radio astronomy and space geodesy .l Hermanus Magnetic Observatory (HMO): This National

Research Facility is part of a worldwide network of magnetic

observatories that monitor and model variations of the Earth’s

magnetic field . HMO’s activities also include fundamental and

applied space physics research, and the provision of geomagnetic

field-related services on a commercial basis .

Biodiversity/Conservation

l South African Institute for Aquatic Biodiversity (SAIAB):

This National Research Facility serves as a research hub for

aquatic biodiversity in southern Africa by housing and developing

the National Fish Collection and associated resource collections

as research tools and sources of aquatic biodiversity data . It also

generates knowledge on aquatic biodiversity through interactive

and collaborative scientific research, and disseminates scientific

knowledge at all levels .l South African Environmental Observatory Network

(SAEON): SAEON is an emerging research facility that

establishes and maintains nodes (environmental observatories,

field stations or sites) linked by an information management

network . These nodes serve as research and education platforms

for long-term studies of ecosystems that will provide incremental

advances in our understanding of ecosystems and our ability to

detect, predict and react to environmental change .l National Zoological Gardens of South Africa (NZG):

This is a National Research Facility for research in terrestrial

biodiversity and an active participant in terrestrial biodiversity

research . The NZG houses one of the largest animal collections

in the world, operates three breeding centres and has

7 103 hectares available at different locations for its respective

activities .

Nuclear Sciences

l iThemba Laboratory for Accelerator Based Sciences

(iThemba LABS): This National Research Facility provides

advanced, viable, multidisciplinary facilities for training, research

and services in the fields of sub-atomic nuclear science and

applied radiation medicine .

As science awareness platforms, the National Research Facilities

aim to promote a culture of science and to stimulate young people

to follow careers in science and technology .

National Research Facilities services

The National Research Facilities provide the following services to

the NSI:l large equipment, facilities, collections or datasets for research; l research expertise in areas of specialisation; l potential for networking;l access to international collaborators;l opportunities for human capital development; and l opportunities for the advancement of science awareness, science

communication and science education .



Figure 9: Structure of National Research Facilities

NRF Board

Corporate SecretaryPresident/CEO

NRF

Corporate Office National Research Facilities

Nuclear

Sciences

Astro/Space/

Geosciences

Biodiversity/

Conservation

SAIAB

NZG

SAEON

HartRAO

SAAO

HMO

iThemba LABS

Main challenges generic to National Research Facilities

In general the facilities operate in an environment where: l The national policy framework is uncertain or under development,

such as astronomy and science advancement; l The implementation of strategies and flagship programmes are

being slowed down or held back because of a lack of resources;

l Maintenance, refurbishment and renewal of infrastructure

platforms require constant attention and budgeting;l IT support is crucial and has to be upgraded and scaled up; and

where the l Recruiting, retaining and training of human resource capacity are

serious concerns .

27South African Astronomical Observatory (SAAO)Purpose and scope

SAAO is the National Research Facility for optical and infrared

astronomy . It undertakes and supports research in astronomy and

astrophysics through its suite of telescopes at Sutherland . This

includes SALT, the largest telescope in the southern hemisphere,

which SAAO operates on behalf of a consortium of 13 international

partners . SAAO is responsible for maintaining Sutherland as an

Astronomy Geographic Advantage (AGA) area in terms of the

AGA Act (Act No . 21 of 2007), which was signed into law in June

2008 . The Act provides for the protection of declared areas for

astronomical purposes .

Highlights

l Several SALT observing programmes were initiated in 2008

involving international collaboration:

– a study of dust extinction in nearby galaxies with Tel Aviv

University (Israel);

– a search for evidence of X-ray reprocessing in high mass X-ray

binaries with the University of Southampton (UK);

– an investigation of the mutual eclipse and occultation events

of the satellites of Uranus with Armagh Observatory (Northern

Ireland);

– a preliminary imaging study of likely galaxy clusters with

Rutgers University (USA); and

– a team of South African and Japanese astronomers completed

an extensive study of local group galaxies using the Japanese/

South African Infrared Survey Facility at Sutherland .l SAAO’s participation in an extensive international collaborative

network contributes to producing quality PhDs on the African

continent through the National Astrophysics and Space Science

Programme (NASSP) .

– the collaborations involve the use of SAAO and other

ground-based facilities as well as all the major space facilities

(including the Hubble, Spitzer and Chandra space telescopes) . l SAAO staff members participated in the formal teaching

components of NASSP by presenting courses on observational

techniques, astronomical spectroscopy, computational methods

and general astrophysics . The annual winter school serves to

introduce South African students from historically disadvantaged

universities to the possibility of studying astronomy as well as

opportunities for astronomers .

The NASSP extended

honours programme provides

disadvantaged South African

students with the learning

skills and basic mathematics

and physics tools they need to

pursue an honours degree in

astrophysics . The programme

started in 2008 with four

students, three of whom progressed to full honours in 2009 .

In 2009, seven students enrolled for the extended honours

programme . l During 2008, eight new students started Master’s or doctoral

research under the supervision of SAAO staff, which was a

significant increase over previous years . l The UN-ratified International Year of Astronomy 2009 offers

an opportunity to rally science outreach institutions to promote

astronomy in South Africa and champion activities in Namibia,

Lesotho, Kenya and Nigeria .l SAAO continued to host the secretariat of the inter-departmental

National Working Group on Space Science and Technology,

which played a central role in the development of the South

African Space Policy launched in March 2009 .

Main challenges

l SALT is not yet performing to specification . Various opto-

mechanical interventions are being implemented to remedy the

situation . The Robert Stobie (RS) spectrograph has undergone

major repairs in Wisconsin (USA) and will be returned later in

2009 . l Low internet bandwidth has compromised data delivery to SALT

partners as well as many other aspects of the SAAO’s activities .

New telescopes are coming online and are in the planning phase

at the Sutherland site, but some potential clients are hesitating

due to the lack of bandwidth .l The lack of an integrated strategy for astronomy prevents proper

planning to take advantage of available astronomical facilities

and also gives potential young astronomers the impression that

career opportunities in astronomy are limited .l One of the main challenges for SAAO telescope operations

remains the question of how to sustain the small telescopes

in the SALT era within the limited resources that are available,

given that most of SAAO’s resources are channelled to SALT . It is

anticipated that this problem will be greatly reduced once SALT

operates at close to specifications .l The loss of experienced astronomical staff through retirement

and resignations is a significant challenge .


l The Space Secretariat is liaising with colleagues in other African

countries and further abroad to further develop the African

Institute of Space Science, as envisaged in the NEPAD/AU

Science and Technology Consolidated Plan of Action .l The SAAO will continue to support the networks and

collaborations initiated through IYA2009, which has seen

growing interest in astronomy education and outreach among

science centres .

l The lack of funding for capital affects every aspect of SAAO’s

operations . There is an urgent need for more accommodation for

engineers at Sutherland . The SALT Collateral Benefits Division,

which does not have a dedicated vehicle, faces the challenge of

transport, since staff are required to travel to venues around the

country .


Below left and right: Learners view the solar eclipse at Sutherland during the launch of the International Year of Astronomy. Bottom left: The annual summer and winter schools serve to introduce South African students from historically disadvantaged universities to the possibility of studying astronomy as well as the opportunities for astronomers.

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29Hartebeesthoek Radio Astronomy Observatory (HartRAO)Purpose and scope

HartRAO is the National Research Facility for research and

training in radio astronomy and space geodesy . South African and

international scientists participate in research using the facilities at

HartRAO . The 26m diameter radio telescope was used either as

a single, independent instrument or as part of the global networks

of radio telescopes using the technique of Very Long Baseline

Interferometry (VLBI) for mapping astronomical radio sources with

ultra-high resolution of the order one 1 000th of an arc-second .

HartRAO is one of only five permanent fundamental space

geodesy stations in the world and participates in geodetic VLBI

through the International VLBI Service, satellite laser ranging

through the International Laser Ranging Service and the Global

Positioning System (GPS) through the International GPS Service .

Data products from these services are available to the international

community .

In the past few years, the observatory has become involved in

supporting the South African bid to host the Square Kilometre

Array (SKA) and to build the South African precursor telescope

array, MeerKAT . HartRAO has therefore set up a small scientific

Operations Group based at the SKA office in Cape Town to advise

on the initiative .

Highlights

l In May 2008, HartRAO achieved the first electronic VLBI

connectivity, transferring data at up to 64 Mb/s to the European

Joint Institute for VLBI and seeing VLBI fringes between

HartRAO and several European observatories as well as

observatories in Chile and Puerto Rico . However, a fault in the

main polar shaft bearing of the observatory’s 48-year-old 26m

antenna has curtailed such observations since October 2008 .

Since then, HartRAO has have been working to equip the

Experimental Development Model (XDM) antenna for similar

research, especially in geodesy where a smaller antenna is still

useful to continue the long geodesy series of measurements of

crustal dynamics .l HartRAO scientists and engineers have been involved in

developments leading to the construction of the MeerKAT array

of 80 antennas in the Karoo region and its seven-element

array prototype, KAT-7 . The original prototype antenna for these

arrays, the XDM, was built at HartRAO in 2007 and has been

undergoing testing since then . The Scientific and Technical

Operations Group lead the scientific operations of the Karoo

Array Telescope (KAT)-7 and MeerKAT instruments .l In-house studies of quasars and radio galaxies using the VLBI

technique are giving clues about the nature of the central

energising source, the black hole, and its interaction with the

surrounding medium . Another HartRAO-led programme uses

VLBI to derive information about the detailed structure of other

types of radio sources such as supernova remnants .l The International Geodesy Data Analysis Group congratulated

the HartRAO Geodesy Group on its excellent service to the

community, especially the consistency of its data across all

observational techniques .l The colloquium series offered at the Centre for Astronomy

that HartRAO has set up in Rosebank, Johannesburg, attracts

students from the universities of the Witwatersrand and

Johannesburg .l HartRAO organised an international conference on High Dynamic

Range Imaging with the SKA, which was well attended by the

international community as well as by South African researchers

and students .

Main challenges

l The failure of the 26m antenna has negatively affected

HartRAO’s niche operation and its international roles and

responsibilities . HartRAO is therefore investigating the possibility

of involving local industry in a repair programme and is also

soliciting tenders to build a new telescope .l The niche of the facility is its role in the international VLBI

networks for radio astronomy and geodesy . Other techniques

were added later, although the HartRAO site in Gauteng is not

ideal for those using optical detectors because of frequent

cloud cover . HartRAO geodesists are therefore investigating

the establishment of an outstation near the small town of

Matjiesfontein in the Northern Cape, where national weather

statistics show that cloud cover is present less frequently .

Following the presentation of this proposal to the geodesy

community and the publication of a White Paper, the DST made

funds available to transport a redundant French optical telescope

to HartRAO for refurbishment and use in lunar laser ranging from

the Matjiesfontein site . A scientific proposal is being prepared

in the hope of finding funding to develop an outstation at

Matjiesfontein . This proposal has the backing of the international

community for geodesy .l The forthcoming MeerKAT project makes it imperative for South



Africa to grow its scientific and technical workforce, as does the

national bid to host the giant SKA radio telescope array . HartRAO

will continue its efforts in this regard by hiring and training

engineers and technicians for the Kat-7 and MeerKAT projects

and by taking in and training students from the Durban Technical

University (which already has an interest in radio astronomy) and

other universities of technology . A throughput of about

12 students per annum is expected . It is envisaged that the best

of these trainees will join the KAT project in the Karoo .l The number of school visits to HartRAO is decreasing because

of the rising cost of hiring buses to transport the learners to the

observatory . A suitable vehicle will therefore be purchased so that

the outreach team can transport teaching and display materials

to schools (particularly rural schools) to foster interest in radio

astronomy .

HartRAO scientists and engineers have been involved in developments leading to the construction of the MeerKAT array of 80 antennas in the remote Karoo region and its prototype seven-element array, KAT-7 (below).

31Hermanus Magnetic Observatory (HMO)Purpose and scope

The HMO is the National Research Facility for geomagnetism

and space physics research . HMO is part of a worldwide network

of geomagnetic and spaceobservatories that monitor and model

the variation of the Earth’s magnetic field and near-Earth space

enironment . Its activities include fundamental and applied space

physics research; the provision of magnetic and space-related

services on a commercial basis to the military as well as civilian

clients, including the design, development, integration and

maintenance of magnetic navigation systems; magnetic and electric

field signature management; and cathodic protection against

corrosion .

HMO’s unique focus on the physical Earth system from the

core to space makes a crucial contribution to the South African

Earth Observation Strategy (SAEOS), the South African Space

Programme and Grand Challenge, and the South African National

Space Agency (SANSA) . Through its geographically wide and

multifunctional observational network, the HMO contributes Earth

and space data to various global networks, including the International

Real-time Magnetic Observatory Network (INTERMAGNET), Digital

Ionogram DataBase (DIDBase), Super Dual Auroral Radar Network

(SuperDARN), Worldwide Lightning Location Network (WWLLN),

International Polar Year Data and Information Service (IPYDIS) and

other world data centres and repositories . The HMO is also a Space

Weather Regional Warning Centre for Africa under the International

Space Environment Service (ISES) . Nationally, the HMO provides

data and value-added data products for mapping, navigation, mineral

exploration, communication and electric power networks .

Highlights

l As part of the ISES Space Weather Regional Warning Centre for

Africa, the HMO has established a space weather website for

data distribution . l The HMO participated in the strategic planning and

implementation of the DST’s Space Grand Challenge and Global

Change Grand Challenge . l A sub-unit of the HMO was set up at the South African Navy

Base in Simonstown to offer magnetic and electric field signature

management and cathodic protection against corrosion .l As part of systematically increasing the HMO’s state-of-the-art

research platform, the Department of Communication donated a

new digital ionosonde and this has been installed . A new antenna

array for the SuperDARN HF

radar in Antarctica was installed

following damage caused to the

old array by very strong wind .

HMO researchers, support

staff, and students designed

and installed the new array .

This was made possible by an

emergency grant from SANAP .l Science outreach activities

were actively pursued . The

HMO initiated a partnership with

a community radio station, Whale

Coast FM, and conducted live

interviews with HMO researchers

and partners while they were in Antarctica in January/February

2009 . Some of the HMO’s promotional material has been

translated into Xhosa .

Main challenges

l A grant of R2,5m has been received for a security fence and

electricity generator upgrade . However, dedicated infrastructure

investment is required if the platform provision goals of Vision

2015 are to be realised . Funding for the Ihlabathi Core to Space

flagship project will be used to:

– increase the HMO observational network;

– fulfil the mandate of an ISES Space Weather Regional Warning

Centre by setting up a fully functional Space Weather Centre;

– improve office, laboratory and student accommodation

facilities; and

– employ a data manager .l The business model for the technology services offered by the

HMO needs to be revisited with a view to optimising the benefits

and the long-term sustainability of this income stream . Assistance

will be required to consider the input and output logistics,

operations, value chain, growth aspects and sustainability . l The HMO has been successful in recruiting students, but is

limited by the size of the bursary values . Students tend to be lost

to institutions that offer higher bursaries . Another limiting factor

is student accommodation and laboratory space . l HMO is required to take increasing responsibility for the South

African National Antarctic Expedition (SANAE) infrastructure

that was originally operated by other institutions . The universities

that previously drove these programmes are scaling down their

technical involvement as researchers retire or the research focus

changes . The HMO has already taken over the operation of the

HF radar from North-West University and is preparing to assume

responsibility for the riometer at SANAE in 2010 .

2008-2009 HMO take-over team and overwintering scientists in front of the

SANAE base.


South African Institute for Aquatic Biodiversity (SAIAB)Purpose and scope

The main functions performed by SAIAB are to:l serve as a resource hub to promote and coordinate research and

other scientific activities on aquatic biodiversity;l host the SAEON Elwandle Node and the Agullhas Somali

Currents Large Marine Ecosystems Programme (ASCLME)

Management Office;l manage the African Coelacanth Ecosystem Programme (ACEP);l conduct scientific research over a broad spectrum and

geographic range on African aquatic biodiversity;l curate the National Fish Collection and satellite collections; l house, develop and care for the Margaret M Smith research

library, a shared resource with Rhodes University;l generate and provide databases for national and international

information on African aquatic biodiversity;l train and educate students and other professionals in ichthyology

and aquatic biodiversity conservation;l provide scientific outreach and education, emphasising rural

communities; andl publish and provide information on African aquatic biodiversity

through various media including the Internet .

Highlights

l SAIAB’s major marine flagship is the ACEP, which is funded by

the DST and managed through the SAEON Elwandle Node as a

joint venture with Marine and Coastal Management (MCM) . The

ACEP II research programme was developed during 2008, and

eight proposals received funds . The programme is scheduled to

run from 2007/08 until 2011/12 .l ACEP serves as the South African national commitment to

the international Global Environmental Facility (GEF)-funded

ASCLME . The ASCLME Programme Management office is also

hosted by SAIAB . ASCLME is an initial five-year programme

running from 2008–2012, but could be extended for a further

five-year period under favourable circumstances . The vision for

this dynamic partnership is to provide facilities and opportunities

for large-scale biophysical science in the Western Indian Ocean .

The first major ASCLME cruise, encompassing four legs in the

Western Indian Ocean, took place between September and

December 2008 .

l DST approved a proposal to acquire a remote operational vehicle

and delivery platform (a 13m catamaran research ski-boat), which

is a high priority for servicing offshore marine research from

a shore-based perspective and will allow marine scientists to

undertake direct observation of marine offshore environments to

depths of 300m .l The DNA tissue bank is being extended by collecting the tissues

of organisms other than fishes as part of the expanded mandate

for SAIAB as an institute for aquatic biodiversity .l The planned refurbishment programme of the SAIAB building

began in 2008 and a new technical workshop, scientific stores,

a state-of-the-art otolith preparation laboratory and a Collection

Management Centre have been completed .l A training workshop in Specify collection management

software was presented to 30 internal and external collection

management specialists . Two biodiversity informatics proposals

were approved, one for digitisation of literature and the other

for specimen cataloguing . A consignment of scanned institute

publications was received from the service provider to which the

digitisation task was outsourced . A cataloguer was employed and

made good progress with the backlog of uncatalogued material . l SAIAB signed an agreement with the Council for Industrial and

Scientific Research (CSIR) to take control of the National Diatom

Collection, which will be housed at the North-West University in

terms of an agreement with SAIAB . l Courses on fish identification were offered to 25 MCM

inspectors as well as fisheries personnel from Mozambique .

Main challenges

l Within the Research Division, the essential challenge is that of

capacity to undertake the science and establish a high-level

chain of productivity across all sectors . Although SAIAB has a

balance of established and younger researchers, which allows

for some nurturing to take place, the team itself is small by

institutional standards . This means that all researchers are fully

engaged and there is limited capacity to take on new work .l Some of SAIAB’s initiatives involve national and international

projects such as the International Barcode of Life and the

Ocean Tracking Network projects . SAIAB researchers are

taking leadership roles in these projects and face significant

difficulties in securing international funding on a scale required

by the projects . The time and energy spent in generating the

local involvement in such projects handicap those researchers,

especially when they are relatively young and need to establish

their productivity chains . l SAIAB is facing challenges in establishing a world-class

collection-management team . The members of the collection

management team are relatively young and inexperienced,


33and the team has to handle a vital and very dynamic entity, the

National Fish Collection . Traditionally such a collection was

curated directly by systematic researchers . Creating a culture of

care among technical assistants is a challenge . l The growth of the National Fish Collection, especially the recent

tissue bank for molecular studies, is a serious challenge to the

capacity of SAIAB . The focus must be on ensuring that the

collection database is up to date and accurate, as befits a world-

class system .

l Biodiversity Informatics is an exciting new discipline

internationally . SAIAB has established a leadership position in the

South African and African institutional landscape in this respect .

SAIAB faces leadership challenges in the community, especially

as regards the training and education of database managers of

other collections . Internally SAIAB has to establish capacity in

the development and use of biodiversity databases as interfaces

between specialists, the researchers and collection managers . l Incomplete funding to refurbish the facility set the project back

by six months .

Clockwise from top left: Compliance Officers from Marine and Coastal Management attend regular fish identification courses at SAIAB. Biodiversity Informatics is an exciting new discipline that uses databases as interfaces between the specialists, the researchers and the collection managers. SAIAB researchers collected these specimens during a survey conducted from the Norwegian research ship Dr Fridtjof Nansen conducted by ASCLME, ACEP and SAIAB in November 2008. They are indicative of the diversity and abundance of life in marine ecosystems of the Western Indian Ocean.


South African Environmental Observation Network (SAEON)Purpose and scope

SAEON is mandated to implement a key resolution of the 2002

World Summit on Sustainable Development, by collecting accurate,

long-term, consistent and reliable data through environmental

observation systems and integrated information systems . The

data should be used to inform sustainable development through

policy formulation, decision-making and implementation at all

levels . SAEON is an emerging research facility that establishes

and maintains nodes as environmental observatories, field stations

or sites . Six SAEON nodes have been designated at distributed

geographical locations to represent the diverse landscapes, coastal

areas and offshore marine environment of South Africa .

Highlights

l The development of the core science plan has been completed .

The plan will be published and funds sourced for implemention .

The number of research projects more than doubled from the

previous financial year, with over one-fifth being of a contract

nature . l SAEON was involved in over 30 international science initiatives

with countries in Europe, North and South America, Australia

and Africa . The functional nodes were allocated seed-funding to

initiate projects with the Environmental Long-term Observatories

of Southern Africa (ELTOSA) . The Fynbos Node took part in

an international programme of the International Long-term

Ecological Research Network (ILTER) to assess the linkages

between ecosystem services and community livelihoods . l The SAEON Ndlovu and Elwandle nodes grew considerably

during 2008 . Scientific and technical staff were appointed,

research equipment was acquired, research projects increased

and outreach programmes expanded . The Node Liaison

Committees of the Ndlovu, Elwandle and Egagasini nodes are

fully operational, and the first meeting of the Node Liaison

Committee for the Fynbos Node is scheduled to take place

shortly after the beginning of the new financial year .l Ecological monitoring programmes have been established at

selected schools; learners are taught to monitor environmental

variables and capture and record long-term data on those

variables . l SAEON continues to support the activities of the Graduate

Students Network . During 2008, SAEON hosted its first summer

school for university students . Forty students (including 25

from the USA) took part in the two summer schools held at the

SAEON Ndlovu and Elwandle nodes .

Main challenges

l The lack of full status as a National Research Facility prevents

SAEON from taking its rightful place in the national and

international systems of innovation . This situation persists seven

years after the establishment of SAEON, even after exceeding

the minimum conditions required for a National Research Facility .l Putting in place all the required infrastructure for six nodes from

scratch is a challenge . Because the nodes are geographically

dispersed across the country, economies of scale do not apply .

The annual additions of equipment to each node are marginal

in terms of impact . SAEON is considering submitting a proposal

for new equipment to the DST’s National R&D Equipment

Programme .l The necessary groundwork to establish the two outstanding

SAEON nodes (the Arid Node and the Grassland-Forest-

Wetlands Node) has been completed . The posts for managers

were advertised, but suitable candidates could not be found . The

positions are to be re-advertised more extensively .l The National Office has moved three times in the last seven

years and does not have a long-term physical home . Office space

is currently being rented . The offices do not have a boardroom,

and SAEON has to hire a suitable venue from other institutions

for workshops and meetings .l The information systems management and governance function

faces several significant challenges, including:

– There is substantial value to stakeholders of SAEON and the

Collaborative Geographical Information System (CoGIS) portal

in the extension projects that are proposed for SAEOS and

the World Data Centre for Biodiversity and Human Health, but

resourcing them will be challenging .

– A skills base has to be built for managing the SAEON IT

function, as the current outsourcing model does not support

longer-term capacity building and skills retention .

– A large number of agreements have been reached with

stakeholders and partners on collaboration and sharing of data

or metadata, but these agreements have to become functional,

which is likely to require IT support to assist partners .

– IT service delivery has to be diversified to ensure delivery

according to specifications and within agreed timeframes .


35l New education officers at the nodes have tended to focus more

on creating awareness platforms than on establishing intensive

science projects with specific schools, which is the niche for the

SAEON science education programme . A strategic document has

been formulated to guide the efforts of the education officers

and give them a clear understanding of the thrusts and directions

of the SAEON education outreach programme .

Clockwise from top left: Land use transformations can encroach substantially into Fynbos vegetation and constitute a major threat to the species’ survival. A researcher at SAEON Elwandle Node collects water samples as part of water quality monitoring project. Students monitor fynbos vegetation at the Fynbos Node. School learners undertake ecological monitoring in the coastal waters in Eastern Cape as part of the SAEON Elwandle Node’s education outreach programme. Dr Juliet Hermes of SAEON’s Egagasini Node does oceanography research work on a research vessel in the Bermuda Islands. A researcher at the SAEON Elwandle Node does a reef fish visual census.

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36overview of business units (continued)

National Zoological Gardens of South Africa (NZG)Purpose and scope

The NZG is a National Research Facility focusing on ex-situ care

of Africa’s wildlife, while making significant contributions to in-situ

conservation of threatened wildlife species . The NZG manages

one the world’s largest ex-situ animal collections of over 10 000

specimens . The NZG has one of the largest disease monitoring and

epidemiology databases in Africa . By virtue of maintaining an animal

facility that is open to the public, the NZG has the additional role

of an ecotourism facility in a metropolitan environment . The NZG

receives over 600 000 visitors a year, making it the biggest paid

tourism attraction in Tshwane .

Highlights

l In line with modern world zoo trends a new and exciting initiative

resulted in the combination of the research and veterinary

capacity into a single centre . The Centre for Conservation

Science was launched by the Minister of Science and Technology

on 31 March 2009 and will develop as a CoE focusing on

conservation medicine, conservation biology and research

conducted at the public interface . The establishment of the

Centre for Conservation Science marks a milestone in the history

of this facility and places it among a select few zoos worldwide

that have dedicated research capacity .l A critical mass for research has now been achieved that will

enable the NZG to be at the forefront of innovation in zoo-based

research . Five PhD-level researchers in a disciplinary mix that

includes molecular genetics, ecology, epidemiology, wildlife

pathology and nutrition and a total of five veterinarians with

technical support staff and research internships make up the

research and scientific services component of the NZG . The

NZG has furthermore provided access to both state-of-the-art

equipment (genetic analyser and real-time Polymerase Chain

Reaction (PCR)) and an extensive animal collection for the

research and student community . A total of 72 research projects

was supported or facilitated by staff with 412 undergraduate and

postgraduate students utilising the facility . Twenty-four MSc and

PhD students are being supervised by NZG staff .l The Wildlife epidemiology programme of the NZG is associated

with the Wildlife Conservation Society (WCS) – Animal Health

for the Environment and Development (AHEAD) working

group of the Greater Limpopo

Transfrontier Conservation Area

(GLTFCA) . Funds were obtained from

WCS and the United States Fish and Wildlife Services for a NZG

initiative for 12 Mozambican, South African and Zimbabwean

wildlife veterinarians to attend the first wildlife diseases

diagnostics training course in collaboration with the Faculty of

Veterinary Science, University of Pretoria . Similarly, funding

grants to develop and hold experiential training courses in the

region to build pathology capacity for four pathologists from the

three countries were obtained . These initiatives are expected to

expand disease surveillance and the wildlife disease database of

in situ animals as well as collaboration with pathologists in other

provinces and in Africa . l The NZG joined the Heritage Environmental Rating Programme,

an environmental rating programme specifically designed for the

zoo industry, that aims to address the environmental performance

of the organisation . During 2008/09, the NZG’s environmental

status was upgraded to gold .

Main challenges

l The NZG has one rated scientist while the rest comprise a young

dedicated team that will now competitively apply for funding

grants in support of biodiversity conservation . The success rate of

funding applications should improve with the additional capacity

and focused research programmes .l The state of the ageing infrastructure at the NZG has affected the

organisation’s ability to achieve accreditation with the Pan African

Association of Zoos and Aquaria (PAAZAB) . During 2008/09,

the NZG was awarded an infrastructure maintenance grant, but

this was redirected to address the shortcomings identified by the

organisation’s accreditation . The infrastructure that was upgraded

included the aquarium and reptile park, the hippo pools, the birds of

prey enclosures and the bird breeding units . Securing sustainable

infrastructure maintenance funding from the Department of Public

Works will remain high on the NZG’s agenda .l Attracting students from Africa is difficult because of the

organisation’s inability to financially support them . A further

challenge is providing mobility across the continent for African

scientists and veterinarians for conducting research and sharing

expertise in Africa on biodiversity conservation and animal health . l IT infrastructure at the NZG is rudimentary . The vast majority of

staff members do not have access to IT facilities, which limits

the ability to communicate effectively and to use technology to

advance the core mandates . In addition, new IT infrastructure

is required to manage its ecotourism and public facility

responsibilities in a manner that allows the organisation to

comply with internal and external audit requirements .

37iThemba Laboratory for Accelerator Based Sciences (iThemba LABS)Purpose and scope

iThemba LABS provides highly specialised facilities as well as

skilled scientific and technical staff for research and training

in accelerator-based sciences, radiation medicine and related

technologies . It provides accelerated beams of charged particles

and neutrons using the Separated Sector Cyclotron (SSC), Van de

Graaf Accelerators and other technologies, and serves as a gateway

to access accelerator facilities at large international laboratories .

Some of the costs are recovered from the sale of radionuclides,

which brought in R12m during 2008/09 . iThemba LABS also

provides treatment for cancers using proton and neutron beams,

where its facilities include a 27-bed hospital .

Highlights

l iThemba LABS celebrated the 20th anniversary of SSC

operations in November 2008 with a two-day symposium on

Past Achievements and Future Plans . l In terms of a MoA with Essen University (Germany) for the

treatment of German cancer patients in South Africa using

neutron therapy, seven German patients were treated during

the year . The collaboration has been successful both in terms

of patient treatment and the development of internationally

acceptable treatment protocols .l A MoU between iThemba LABS and the Centre for Energy

Research and Development (CERD) (Nigeria) was signed in

May 2007 for the design and construction of an end-station for

ion beam analysis on Nigeria’s new 1 .7 MV tandem accelerator .

iThemba LABS successfully completed the project in April 2008,

and CERD will use the new facility for studies in biomedical and

materials sciences .l An international collaboration programme between the European

Centre for Nuclear Research (CERN), South African universities

and iThemba LABS was officially launched in December 2008,

although formal research visits to CERN commenced earlier

in March 2008 . The collaboration seeks to provide research

platforms for South African scientists and students to take full

advantage of the latest accelerator technologies offered at CERN .

The South African universities involved include Witwatersrand,

Cape Town, KwaZulu-Natal, Johannesburg and Rhodes .

Main challengesl During 2008/09, the five-year

Research Strategies for Nuclear

Physics, Materials Research

and iThemba LABS (Gauteng)

were approved by reviewers and

users, but implementation will be

extremely slow in the short term due

to lack of funding for infrastructure and

personnel .l iThemba LABS has carried out desperately

needed essential refurbishment or updating of

equipment, which has helped reverse the decline

in beam-delivery efficiency . iThemba LABS

also expanded the experimental facilities to

accommodate the increasing number of graduate

students (currently about 200) who make use of

the facilities . However, a major injection of capital

funding is needed to modernise the research

infrastructure . Partial funding towards the

purchase and development of the new Electron

Cyclotron Resonance (ECR) Ion Source has

been secured, while the Hahn-Meitner Institute in

Germany has donated a smaller ECR Ion Source

which will be operational during 2009 . l Interactions with universities have increased, as evidenced in the

establishment of the South Africa/CERN programme and the

discussions on a Master’s degree course in Nuclear Energy with

the University of South Africa, the University of Johannesburg

and the Tshwane University of Technology . However, lack of

funding has resulted in this course being postponed until 2010

and the current inactivity on the South Africa/CERN programme .l Staff retention in the face of the higher salaries and more

varied work experience offered by the private sector is a major

challenge . l The Radionuclide Production Group continues to benefit the

organisation from a cost-recovery and research perspective; new

methods and products are being developed .l The iThemba LABS Particle Therapy Centre was formally

registered with National Treasury as a public/private partnership

(PPP) project in October 2008, but progress has been

relatively slow due to the need to follow due processes for PPP

registration, as well as the lack of seed money . The centre would

include at least proton and neutron therapies and become a

major international centre of excellence for cancer and other

related treatments . A national steering committee has been

approved by both the DST and National Treasury, which has

awarded R2m for the appointment of a transaction advisor to

undertake a feasibility study .

Micro-Particle-induced x-ray emission (PIxE), a technique mastered at the Materials Research Group of iThemba LABS, has reached new levels of innovation, making the facility the first in the world with proven capabilities of PIxE microanalysis of biological material in the frozen-hydrated state.



Corporate Support ServicesInformation and Communication Technology (ICT)

The NRF Board approved the creation of a corporate IT unit as part

of the phased roll-out of Vision 2015 . The business operations of

RISA and the National Research Facilities are IT-intensive, whether

it entails the processing and analysing of research information or

the managing and reporting on the granting function . The aim of

the ICT unit is to ensure that systems development becomes a core

competence of the NRF . The IT infrastructure provides everyday

user support and a helpdesk function, facilitates the procurement

of all IT equipment and services, and maintains IT platforms for all

operations, including hosting external systems .

Highlights

l The NRF serves as a central node for infrastructure and data in

the national Research Information Management Systems (RIMS)

project . RIMS involves seven universities and nine Science

Councils and is intended to give government access to accurate

and up-to-date information on research inputs and outputs .

The InfoEd research management solution is being used as

the platform for RIMS; it provides modules such as intellectual

property management, clinical trials, and grant and contract

monitoring that can aid the work of the research manager . Three

modules have been fully customised for South African conditions,

and a further four are being customised . Two universities are

already using InfoEd to report their research outputs to the

Department of Education .l The HR system upgrade from Qdata Dynamique to Dynamique

Resource Link was commissioned in 2008 . The system is

workflow-based and will provide a wide range of functionality . The

expected completion date is August 2009 .

Main challenges

l The Electronic Documents and Management System project

is in the planning phase . IT has been in close contact with the

NRF Information Resources and Services team to establish the

requirements for implementing the system . l The online application procedure for NRF funding programmes

needs a major upgrade to make it more versatile, flexible and

reliable . A decision was therefore taken to shut down the system

and use an interim solution while a new generation Mark II NRF

online system is being built in-house .

New Business Development

The role of the New Business Development (NBD) unit is to expand

the sources of local and international funding for the NRF by

positioning the organisation as the agency of choice for research

promotion and innovation support .

The NRF Growth Strategy – an ambitious plan to double the

NRF revenue stream to about R4 billion by 2014 in order to realise

Vision 2015 – was approved by the NRF Executive and Board and

is being rolled out . The NRF has engaged with 64 organisations

in its efforts to source additional funding, including national

and provincial government departments, parastatal institutions,

foundations and the private sector . None of these has resulted

in funding commitments . A more focused strategy of targeting

potential funders will be pursued in future .

Corporate Communication

The role of Corporate Communication is to guide, facilitate and

coordinate communication and branding efforts across the NRF, as

well as to promote the NRF within the stakeholder community as

the agency of choice .

39

financialreport


statement of responsibilityby the board of directorsThe Board is responsible for the preparation, integrity and fair

presentation of the Annual Financial Statements of the NRF . The

Auditor-General is responsible for independently auditing and

reporting on these financial statements to Parliament .

The Auditor-General, in auditing the annual financial statements,

was given unrestricted access to all financial records and

related data and information . The Board believes that all the

representations made to the independent auditors during their audit

were valid and appropriate . The report of the Auditor-General is

presented on page 42 .

The annual financial statements also incorporate disclosure

in line with appropriate accounting policies, which have been

consistently applied and which are supported by reasonable and

prudent judgements and estimates . It should also be noted that the

NRF’s Annual Financial Statements exclude the financial activities

and transactions of two key programmes, namely the Innovation

Fund and THRIP, as the control over these two programmes

were exercised by the DST and the dti respectively while the

operational management is undertaken by the NRF on a contract

basis . Separate financial statements have been prepared for these

programmes .

The Board is aware of the marginal accumulated deficit of

R8,9 million which amounts to some 0,7% of total income . This

deficit is primarily due to key projects initiated and started in the

current financial year with the corresponding income materialising in

the subsequent financial year and the impact of NRF’s share of loss

in SALT . The NRF has not yet fully funded the Post Employment

Healthcare Liabilities . In this regard, a formal resolution was

adopted to fund the liability of R92 million at a risk level of 75%

based on the NRF going concern status .

The Board acknowledges that it is ultimately responsible for

the system of internal control established by the NRF . These

mechanisms are designed to provide reasonable but not absolute

assurance as to the reliability of the Annual Financial Statements

and to adequately safeguard, verify and maintain accountability

of assets . Therefore, directors are of the opinion, based on the

information and explanations given by management and the internal

auditors, that the system of internal control provides reasonable

assurance that the financial records may be relied upon .

The directors have reviewed the NRF’s financial performance and

future Medium Term Expenditure Framework (MTEF) allocations

as well as the longer-term budget and are satisfied that the NRF

has or has access to adequate resources to continue as a going

concern for the foreseeable future .

The annual financial statements were approved by the Board on

30 July 2009 and are signed on its behalf by:

Professor B Bozzoli Dr A van Jaarsveld

Chairperson: NRF Acting President: NRF

41report of theaudit committeeThe Audit Committee has adopted appropriate formal terms

of reference as its Audit Committee Charter, which have been

confirmed by the NRF Board . The committee has discharged its

responsibilities for the year in compliance with the charter .

The Audit Committee is satisfied that the systems of internal

controls that have been put in place have functioned effectively

during the period under review and considers the NRF’s internal

controls and systems appropriate in all material respects to: l reduce the entity’s risks to an acceptable level;l maximise business objectives of the entity;l ensure the entity’s assets are adequately safeguarded; andl ensure that the transactions undertaken are recorded in the

entity’s records .

The internal control systems contain self-monitoring mechanisms,

and actions are taken to correct deficiencies as they are identified .

Systems of internal control include, among others:l a documented delegation of authority and reasonable division of

responsibility;l established policies and procedures; andl established mechanisms to ensure compliance .

The Audit Committee has evaluated the Annual Financial

Statements of the NRF for the year ended 31 March 2009 . Based

on information provided, the Audit Committee concluded that the

NRF complies in all material respects with:l the requirements of the Public Finance Management Act, 1999

(Act 1 of 1999) as amended by Act 29 of 1999;l the South African Statements of Generally Accepted Accounting

Practice (GAAP), including any interpretations of such

Statements issued by the Accounting Practices Board; and l the prescribed Standards of Generally Recognised Accounting

Practice (GRAP) issued by the Accounting Standards Board

replacing the equivalent GAAP Statement .

The Audit Committee therefore recommends the adoption of the

Annual Financial Statements by the Board of Directors of the NRF .

Dr I May

Chairman

14 July 2009


report of the auditor-generalto Parliament on the annual financial statements and performance information of the National Research Foundation for the year ended 31 March 2009

REPORT ON THE FINANCIAL STATEMENTS

Introduction

I have audited the accompanying annual financial statements of

the National Research Foundation which comprise the statement

of financial position as at 31 March 2009 and the statement of

financial performance, the statement of changes in net assets and

the cash flow statement for the year then ended, and a summary of

significant accounting policies and other explanatory notes as set

out on pages 46 to 81 .

The accounting authority’s responsibility for the financial statements

The accounting authority is responsible for the preparation of the

financial statements in accordance with the basis of accounting

determined by the National Treasury as set out in accounting

policy note 1 .1 and in the manner required by the Public Finance

Management Act, 1999 (Act No . 1 of 1999) (PFMA) and section

18 of the National Research Foundation Act, 1998 (Act No . 23

of 1998) 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 responsibility

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) and section 18 of the National Research

Foundation Act, 1998 (No . 23 of 1998), my responsibility is to

express an opinion on these financial statements based on my audit .

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 .

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 .

I believe that the audit evidence I have obtained is sufficient and

appropriate to provide a basis for my audit opinion .

Opinion

In my opinion the financial statements present fairly, in all material

respects, the financial position of the National Research Foundation

as at 31 March 2009 and its financial performance and its cash

43

flows for the year then ended, in accordance with the basis of

accounting determined by the National Treasury, as set out in the

accounting policy note 1 .1 and in the manner required by the PFMA

and section 18 of the National Research Foundation Act, 1998 .

Emphasis of matters

Without qualifying my opinion, I draw attention to the following

matters that relate to my responsibilities in the audit of financial

statements .

Basis of accounting

The public entity’s policy is to prepare financial statements on the

basis of accounting determined by the National Treasury as set out

in accounting policy note 1 .1 .

Restatement of corresponding figures

As disclosed in note 30 to the financial statements, the

corresponding figures for the prior year have been restated as

a result of errors discovered during the 2008/09 financial year

in the financial statements of the National Research Foundation

at, and for the year ended, 31 March 2008 . The prior year errors

relate to restatement of the investment in associate as a result

of amendments made to the draft financial statements of the

associate (SALT), and a correction of grant income and grant

expenses as a result of incorrect cut off .

Other matter

Without qualifying my opinion, I draw attention to the following

matter that relates to my responsibilities in the audit of the financial

statements:

Governance framework

The governance principles that impact the auditor’s opinion on the

financial statements are related to the responsibilities and practices

exercised by the accounting authority and executive management

and are reflected in the internal control deficiencies and other key

governance requirements addressed below:

Key governance responsibilities

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:


report of the auditor-general – for the year ended 31 March 2009 (continued)

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 .4

Quality of financial statements and related management information

2 . The financial statements were not subject to any material amendments resulting from the audit . 4

3 . The annual report was submitted for consideration prior to the tabling of the auditor’s report . 4

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 . 4

5 . Key officials were available throughout the audit process . 4

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

6 . Audit committee

l The public entity had an audit committee in operation throughout the financial year . 4

l The audit committee operates in accordance with approved, written terms of reference . 4

l The audit committee substantially fulfilled its responsibilities for the year, as set out in section 77 of the PFMA and

Treasury Regulation 27 .1 .8 .4

7 . Internal audit

l The public entity had an internal audit function in operation throughout the financial year . 4

l The internal audit function operates in terms of an approved internal audit plan . 4

l The internal audit function substantially fulfilled its responsibilities for the year, as set out in Treasury

Regulation 27 .2 .4

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

management .4

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

applicable laws and regulations . 4

10 . The information systems were appropriate to facilitate the preparation of the financial statements . 4

11 .A 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 . 4

12 . Delegations of responsibility are in place, as set out in section 56 of the PFMA . 4

Follow up of audit findings

13 . The prior year audit findings have been substantially addressed . 4

14 . SCOPA resolutions have been substantially implemented . N/A N/A

Issues relating to performance information

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

complete .4

16 .Adequate control processes and procedures are designed and implemented to ensure the accuracy and completeness

of reported performance information .4

17 .

A 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 National Research Foundation against its mandate,

predetermined objectives, outputs, indicators and targets Treasury Regulation 29 .1 .4

18 .There is a functioning performance management system and performance bonuses are only paid after proper

assessment and approval by those charged with governance .4

45The public entity’s key officials were available during the audit

and the quality and timeliness of the financial statements and

management information was satisfactory . In order to enhance the

good practices the public entity should design their manual and

automated controls to ensure that the transactions that occur are

authorised and are complete and accurate when recorded .

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Report on performance information

I was engaged to review the performance information .

The accounting authority’s responsibility for the performance information

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 public entity .

The Auditor-General’s responsibility

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 .

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 .

I believe that the evidence I have obtained is sufficient and

appropriate to provide a basis for the audit findings reported below .

FINDINGS (PERFORMANCE INFORMATION)

Usefulness and reliability of reported performance information

The following criteria were used to assess the usefulness and

reliability of the information on the entity’s performance with respect

to the objectives in its strategic plan:l Consistency: Has the entity reported on its performance with

regard to its objectives, indicators and targets in its approved

strategic plan?

The following audit finding relate to the above criteria:l Inconsistently reported performance informationl Lack of source documentation

The public entity has not reported on its performance with regard

to its targets as per the approved strategic plan, due to changes

to the targets and indicators from the approved strategic plan . No

evidence could be provided that these changes had been approved .

APPRECIATION

The assistance rendered by the staff of the National Research

Foundation during the audit is sincerely appreciated .

Pretoria

31 July 2009

Notes2009

R’000

2008

Restated

R’000

Government grants 6 658 952 638 980

Contract income 549 213 305 873

Interest income 2 83 321 50 327

Sale of goods 25 344 25 344

Entrance fees (NZG) 16 917 15 100

Revenue 1 333 747 1 035 624

Other income 3 27 645 12 034

Total income 1 361 392 1 047 658

Grants and bursaries (763 446) (503 785)

Salaries (287 902) (242 846)

Other expenses (306 632) (245 787)

Operating surplus for the year 4 3 412 55 240

Share of loss in associate (2 745) (7 993)

Finance cost (647) (424)

Net surplus for the year 20 46 823


statement of financial performancefor the year ended 31 March 2009

47

Notes2009

R’000

2008

Restated

R’000

ASSETS

Non-current assets 365 698 289 005

Property and equipment 7 299 528 226 523

Intangible assets 8 20 024 13 588

Investment in associate 9 46 141 48 887

Long-term portion of staff loans 10 5 7

Current assets 1 025 116 786 508

Inventory 11 3 926 2 579

Grants and bursaries paid in advance 12 213 352 170 972

Trade and other receivables 13 51 587 105 605

Short-term portion of staff loans 10 47 18

Cash and cash equivalents 27 756 204 507 334

TOTAL ASSETS 1 390 814 1 075 513

FUNDS AND LIABILITIES

Funds and reserves 51 298 51 278

Income funds (8 985) (9 005)

SALT fund 60 283 60 283

Non-current liabilities 412 381 334 882

General capital fund 14 36 348 17 688

Deferred income 15 282 104 221 323

Long-term portion of finance leases 16 1 712 2 241

Employee benefits 17 92 217 93 630

Current liabilities 927 135 689 353

Short-term portion of finance leases 16 1 159 1 116

Trade and other payables 18 923 476 688 237

Provisions 19 2 500 -

TOTAL FUNDS AND LIABILITIES 1 390 814 1 075 513

statement of financial positionas at 31 March 2009


NoteAccumulated fund

R’000 *

Contingency fund

R’000 *

SALT fund

R’000

Total

R’000

Balance as at 31 March 2007 (72 618) 16 790 60 283 4 455

Net surplus for the year 46 823 – – 46 823

Transfer from Contingency Fund 2 015 (2 015) – –

Transfer to Contingency Fund (23 500) 23 500 – –


Net surplus for the year 20 – – 20

Transfer to Contingency Fund (30 725) 30 725 – –


Refer note 20 Refer note 21

Note:

* These balances are included under income funds totaling (R8,9m) (2008: (R9m)) .

statement of changes in net assetsfor the year ended 31 March 2009

49

Notes2009

R’000

2008

R’000

Operating activities

Cash receipts from government 738 394 668 533

Cash receipts from other sources 676 428 299 727

Cash paid to grant-holders (805 826) (617 179)

Cash paid to suppliers and employees (328 891) (204 603)

Cash generated from operations 27 280 105 146 478

Interest income 80 031 48 214

Finance cost (647) (424)

Net cash flow from operating activities 359 489 194 268

Investing activities

Acquisition of intangible assets (6 438) (13 588)

Acquisition of property and equipment (104 684) (46 180)

Replacement of property and equipment (11 651) (3 903)

Additions to property and equipment (93 033) (42 277)

Proceeds from sale of property and equipment 1 016 1 400

(Increase)/decrease in staff loans (27) 405

Net cash flow used in investing activities (110 133) (57 963)

Financing activities

Decrease in finance leases (486) (130)

Net cash flow used in financing activities (486) (130)

Increase in cash and cash equivalents 248 870 136 175

Cash and cash equivalents at the beginning of the year 507 334 371 159

Cash and cash equivalents at the end of the year 28 756 204 507 334

cash flow statementfor the year ended 31 March 2009


accounting policiesfor the year ended 31 March 2009

1 .1 Basis of preparation

The annual financial statements are prepared on the

historical cost basis, unless stated otherwise, and incorporate

the following principal accounting policies, which have been

consistently applied in all material respects unless stated

otherwise . The financial statements are prepared in South

African Rands (R) and all values are rounded to nearest

thousand (R’000), except when otherwise indicated .

The financial statements have been prepared in

accordance with 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 as follows:

Standard of GRAPReplaced Statement

of GAAP

GRAP 1: Presentation of

financial statements

AC101: Presentation of

financial statements

GRAP 2: Cash flow

statements

AC118: Cash flow

statements

GRAP 3: Accounting

policies, changes in

accounting estimates and

errors

AC103: Accounting policies,

changes in accounting

estimates and errors

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:

l Terminology differences:

Standard of GRAPReplaced Statement

of GAAP

Statement of financial

performanceIncome statement

Statement of financial

positionBalance 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

l The cash flow statement can only be prepared in

accordance with the direct method .l Specific information has been presented separately on the

statement of financial position such as:

a) receivables from non-exchange transactions, including

taxes and transfers;

b) taxes and transfers payable; and

c) trade and other payables from non-exchange

transactions .l Amount and nature of any restrictions on cash balances

is required .

Paragraphs 11-15 of GRAP 1 have not been implemented

due to the fact that the budget reporting standard (GRAP

24) as well as the international standard (IPSAS 24) 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 preparation of the financial statements requires

management to make judgements, estimates and assumptions

that affect the application of policies and reported amounts

51of assets and liabilities, income and expenditure . The

estimates and associated assumptions are based on historical

experience and various other factors that are believed to be

reasonable under circumstances, the result of which form the

basis of making judgements about carrying values of assets

and liabilities that are not readily apparent from other sources .

Actual results may differ from these estimates .

The financial statements have been prepared on a going

concern basis .

1 .2 Revenue recognition

Revenue is recognised to the extent that it is probable that the

economic benefits will flow to the NRF and the revenue can

be reliably measured . Revenue is measured at the fair value of

the consideration received, excluding discounts, rebates, and

other sales taxes or duty . The following specific recognition

criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when the

significant risks and rewards of ownership of the goods have

passed to the buyer, usually on delivery of the goods . Sale of

goods includes parking at the National Zoological Gardens

(NZG) and the sale of food, curios and tours .

Interest income

Revenue is recognised as interest accrues (using the

effective interest rate, which is the rate that exactly discounts

estimated future cash receipts through the expected life of

the financial instrument to the net carrying amount of the

financial asset) .

Entrance fees

The NZG charges patrons an entrance fee . This revenue is

recognised at the time the tickets are sold .

Government grants and contract income

Government grants and contract income are recognised in

the statement of financial performance in the period to which

the grant or contract income relates . The government grant

and contract income is recognised if there is reasonable

assurance that the entity will comply with the conditions

attached to the grant or contract and that the grant or

contract income will be received .

The portion of government grants utilised to acquire

non-depreciable property and equipment is transferred to

the general capital fund . The portion of government grants

utilised to acquire depreciable property and equipment and

intangible assets is transferred to deferred income and is

allocated to income in the proportions and over the periods

in which depreciation/amortisation on such property and

equipment or intangible asset is charged .

The portion of government grants relating to expenditure

that will be incurred in future financial years is transferred to

income received in advance . This is done in order to match

the income with the related costs which they are intended to

compensate .

1 .3 Property and equipment and depreciation

Owned assets

Property and equipment are shown at cost less any

accumulated depreciation and any accumulated impairment

losses . Depreciation on property and equipment are charged

so as to write off the cost of assets less their residual

values over their estimated useful lives, using the straight-

line method . The assets’ residual values, depreciation

methods and useful lives are reviewed, and adjusted if

appropriate, at each reporting date . Land is stated at cost

less any accumulated impairment in value . Land has an

unlimited useful life and therefore is not depreciated . Land

and buildings are separable assets and are accounted for

separately, even when they are acquired together . Buildings

have a limited useful life and therefore are depreciable assets .

Cost includes costs incurred initially to acquire or construct

an item of property and equipment (including directly

attributable costs in bringing the asset to its location and

condition necessary for it to be capable of operating in the

manner that management intended) and costs incurred

subsequently to add to, replace part of, or service it to the

extent it is probable that future economic benefits will flow

to the NRF and the cost can be measured reliably . Day-to

day servicing costs are expensed . If a replacement part is

recognised in the carrying amount of an item of property

and equipment, the carrying amount of the replaced part is

derecognised .

The estimated useful lives of the major categories of

property and equipment are:

Buildings 5 – 48 years

Research equipment 1 – 24 years

Administrative computer equipment 2 – 13 years

Office furniture and equipment 1 – 20 years

Motor vehicles 3 – 10 years

Exhibits 10 years

When the carrying amount of an asset is greater than the

estimated recoverable amount, it is written down immediately

to its recoverable amount .

Property and equipment is derecognised on disposal or


when no future economic benefits are expected from its use

or disposal . Gains and losses on derecognition of property

and equipment is determined by referring to their carrying

values and are charged or credited to the statement of

financial performance .

Administrative computer equipment, office furniture

and equipment, exhibits and motor vehicles are not

componentised . These assets do not have significant parts

that are considered to have an estimated useful life different

to the estimated useful life of the asset as a whole .

Research equipment and buildings are divided into their

component parts that are depreciated separately over

their estimated useful lives on a straight-line basis to their

estimated residual value .

Leased assets

Assets acquired by way of finance lease are stated at an

amount equal to the lower of their fair value and their present

value of the minimum lease payments at inception of the

lease, less accumulated depreciation and any accumulated

impairment losses . Assets held under finance leases are

depreciated over their expected useful lives on the same

basis as owned assets or, where shorter, the term of the

relevant lease .

Biological assets

Biological assets comprise zoo animals which have not been

included as an asset on the statement of financial position .

The reason is that the essential recognition criteria of

measurement for recognising assets cannot be met .

The majority of zoo animals are received as donations,

transfers from other zoos or from births . As a result, they do

not have a cost price .

In addition it is considered impracticable to assign a fair

value to the animals due to a variety of reasons . These

reasons include considerations such as the lack of a

market for the majority of the animals because they are

not commodities, the lack of an active market, as well as

restrictions on trade of exotic animals which precludes the

determination of a fair value .

The animals for which it may be possible to determine

an arbitrary value will be affected by the age, health, blood

line and other related issues . It is therefore considered

impractical to determine a reliable value as a result of the

variables involved .

Therefore, on the basis that many species cannot be valued

and that a reliable value cannot be obtained for other species,

it was considered that any assessment of value would be

misleading to users of financial statements . This assessment is

considered to be a significant judgment by management .

1 .4 Impairment of non-financial assets

At each reporting date, the NRF reviews the carrying

amounts of its assets to determine whether there is any

indication that those assets have suffered an impairment

loss . If any such indication exists, the recoverable amount of

the asset is estimated in order to determine the extent of the

impairment loss (if any) .

Recoverable amount is the higher of fair value less

costs to sell and value in use . In assessing value in use, the

estimated future cash flows are discounted to their present

value using a pre-tax discount rate that reflects current

market assessments of the time value of money and the

risks specific to the asset for which the estimates of future

cash flows have not been adjusted . The fair value less costs

to sell is the price in a binding arms-length sales agreement .

If the recoverable amount of an asset is estimated to be

less than its carrying amount, the carrying amount of the

asset is reduced to its recoverable amount . An impairment

loss is recognised as an expense immediately .

Where an impairment loss subsequently reverses, the

carrying amount of the asset is increased to the revised

estimate of its recoverable amount, but such that the

increased carrying amount will not exceed the carrying

amount that would have been determined had no impairment

loss been recognised for the asset in prior years . A reversal

of an impairment loss is recognised as income immediately .

An impairment loss that was previously recognised is

only reversed if there is a change in the estimate used to

determine the recoverable amount .

1 .5 Intangible assets

Cost includes costs incurred initially to acquire or

construct an intangible asset . Expenditure associated

with the development of identifiable and unique software

products is capitalised only if development costs can be

measured reliably, the product or process is technically and

commercially feasible, future economic benefits are probable,

and the NRF intends to and has sufficient resources to

complete development and to use or sell the software

product . The expenditure capitalised includes the cost of

materials, direct labour and overhead costs that are directly

attributable to preparing the asset for its intended use .

Expenditure on research activities, undertaken with the

accounting policies – for the year ended 31 March 2009 (continued)

53prospect of gaining new scientific or technical knowledge

and understanding, is recognised in surplus or deficit when

incurred .

Intangible assets are measured at cost less accumulated

amortisation and accumulated impairment losses .

Subsequent expenditure on capitalised intangible assets

is capitalised only when it increases the future economic

benefits embodied in the specific asset to which it relates

and the costs can be measured reliably . All other expenditure

is expensed as incurred .

Intangible assets are derecognised on disposal or when

no future economic benefits are expected from its use or

disposal . Gains or losses arising from derecognition of an

intangible asset are measured as the difference between the

net disposal proceeds and the carrying amount of the asset

and are recognised in surplus or deficit when the asset is

derecognised .

The software products are considered to have a definite

useful life . Amortisation is calculated on cost less residual

value and using the straight-line method at rates considered

appropriate to write off carrying values over the estimated

useful lives of the intangible assets with definite useful

lives . Intangible assets are amortised from the day they are

available for use . During the period of development, the asset

is tested for impairment annually . The amortisation period,

residual value and amortisation method are reviewed at each

reporting period following the day they are available for use .

Changes in the expected useful life or the expected pattern

of consumption of future economic benefits embodied in the

asset is accounted for by changing the amortisation period

or method, as appropriate, and are treated as changes in

accounting estimates .

The estimated useful lives on intangible assets are:

Computer Software: 3 years

1 .6 Inventory

Inventories are valued on the first-in-first-out basis at the

lower of cost and net realisable value . Net realisable value

represents the estimated selling price less all estimated

costs to make the sale and the estimated cost of completion .

1 .7 Financial instruments

Recognition

The NRF’s financial assets and financial liabilities are

recognised on the statement of financial position when the

NRF becomes a party to the contractual provisions of the

instrument . All “regular way” purchases and sales of financial

assets are initially recognised using trade date accounting,

i .e . the date the NRF commits to the purchase of the asset .

Initial measurement

The NRF’s financial instruments are initially measured

at fair value, which includes transaction costs if financial

instruments are not measured at fair value through profit or

loss . Subsequent to initial recognition these instruments are

measured as set out below .

Financial assets

The NRF’s principal financial assets are bank balances and

cash, trade and other receivables, loans receivable, staff

loans and investments .

Trade receivables are stated at amortised cost as reduced

by appropriate allowances for estimated irrecoverable

amounts, which approximate their fair value due to the short-

term nature thereof . Each receivable is reviewed individually

at year-end .

Cash and cash equivalents are measured at amortised

cost using the effective interest rate method .

Loans are measured at amortised cost using the effective

interest rate method if they have a fixed maturity or at cost if

there is no fixed maturity .

Financial liabilities

Financial liabilities are classified according to the substance

of the contractual arrangements entered into . Significant

financial liabilities include trade and other payables . Trade

and other payables are measured at amortised cost .

Fair value considerations

Where market values are not available, fair values have been

calculated by discounting expected future cash flows at

prevailing interest rates . The fair values have been estimated

using available market information and appropriate valuation

methodologies, but are not necessarily indicative of the

amounts that the NRF could realise in the normal course of

business .


Impairment of financial assets

The NRF assesses at each reporting date whether a financial

asset or group of financial assets is impaired .

Assets carried at amortised cost

If there is objective evidence that an impairment loss on assets

carried at amortised cost has been incurred, the amount of

the loss is measured as the difference between the asset’s

carrying amount and the present value of estimated future

cash flows (excluding future expected credit losses that have

not been incurred) discounted at the financial asset’s original

effective interest rate (i .e . the effective interest rate computed

at initial recognition) . The carrying amount of the asset is

reduced through use of an allowance account . The amount of

the loss shall be recognised in surplus or deficit .

If, in a subsequent period, the amount of the impairment

loss decreases and the decrease can be related objectively

to an event occurring after the impairment was recognised,

the previously recognised impairment loss is reversed, to the

extent that the carrying value of the asset does not exceed its

amortised cost at the reversal date . Any subsequent reversal

of an impairment loss is recognised in surplus or deficit .

In relation to trade receivables, a provision for impairment

is made when there is objective evidence (such as the

probability of insolvency or significant financial difficulties

of the debtor) that the NRF will not be able to collect all of

the amounts due under the original terms of the invoice . The

carrying amount of the receivable is reduced through use

of an allowance account . Impaired debts are derecognised

when they are assessed as uncollectible .

Derecognition

Financial assets (or a portion thereof) are derecognised

when the NRF realises the rights to the benefits specified

in the contract, the rights expire or the NRF surrenders or

otherwise loses control and does not retain substantially

all risks and rewards of the asset . On derecognition, the

difference between the carrying amount of the financial

asset and proceeds receivable is included in the statement of

financial performance .

Financial liabilities (or a portion thereof) are derecognised

when the obligation specified in the contract is discharged,

cancelled or expires . On derecognition, the difference

between the carrying amount of the financial liability and

amount paid for it is included in the statement of financial

performance .

Gains and losses

Gains and losses are recognised in the statement of

financial performance when the financial instruments

are derecognised or impaired, as well as through the

amortisation process .

1 .8 Foreign currency transactions

Transactions in foreign currencies are initially accounted for

at the rates of exchange ruling on the date of the transaction .

Assets and liabilities in foreign currencies are retranslated at

the rates of exchange ruling at the reporting date . Exchange

differences arising from conversion are recognised in the

statement of financial performance in the period in which

they occur .

1 .9 Grants and bursaries

Grants and bursaries are recognised in the statement

of financial performance in the period to which the

commitments relate .

1 .10 Retirement benefit costs

Pension/Provident funds

The NRF operates a defined contribution plan for its

employees with the exception of employees of the National

Zoological Gardens who are currently on the National

Zoological Gardens of South Africa Pension Fund; the

Governments Temporary Employees Pension Fund and

the Associated Institutions Pension Fund . The National

Zoological Gardens of South Africa Pension Fund is a

defined benefit plan, whereas the Governments Temporary

Employees Pension Funds and the Associated Institutions

Pension Fund are controlled by the state .

With regards to the NRF pension and provident funds, the

assets are held in a separate trustee-administered fund . The

benefits payable by the fund in the future, due to retirements

and withdrawals from the fund, are contributions by members

to the fund together with fund interest at a rate determined

by the valuator with the consent of the trustees . The rate is

so determined that the value of the total of the fund shall

not exceed the value of the total assets of the fund . The

NRF’s contribution to the plan is charged to the statement of

financial performance when incurred .

With regards to the NZG defined benefit pension fund,

the best estimate valuation basis is used to determine the


55present value of the defined benefit plan obligation, related

current service cost and, where applicable, past service

cost . An independent actuary performs valuations at least

every three years . This method recognises expected costs

of providing benefits over the employee’s period of service

to the NRF . Actuarial gains and losses are recognised in

surplus or deficit . Past service costs are expensed on a

straight-line basis until benefits become vested . Past service

costs relating to vested benefits are recognised immediately .

The defined benefit asset or liability comprises the present

value of the defined benefit obligation, plus actuarial gains

(less actuarial losses) not recognised, less past service cost

not yet recognised, less the fair value of plan assets out of

which the obligations are to be settled directly .

Post-retirement medical benefits

The NRF provides post-retirement medical benefits to

qualifying employees . The expected costs of these benefits

are determined using the projected unit credit method, with

actuarial valuations being carried out at least every three years .

The liability is charged to the statement of financial

performance in full when actuarially determined . Actuarial

gains and losses are recognised in full in the statement of

financial performance in the year when actuarially determined .

The amount recognised in the statement of financial position

represents the present value of the post-retirement medical

aid contribution . Funds are set aside as and when available

in order to fund this liability . The liability is funded at a 75%

risk level and any additional coverage beyond this level is

dependant on the availability of funding .

1 .11 Taxation

The NRF is exempt from paying normal taxation .

1 .12 Provisions

Provisions are recognised when the following conditions

have been met:l the NRF has a present legal or constructive obligation

to transfer economic benefits as a result of past events;

andl a reasonable estimate of the obligation can be made .

When the effect of time value of money is material, the

amount of a provision shall be the present value of the

amount expected to be required to settle the obligation . The

discount rate (or rates) shall be a pre-tax rate (or rates) that

reflect(s) current market assessments of the time value of

money . The risks specific to the liability should be reflected

either in the discount rate or in the estimation of the amounts

required to settle the obligation, but not both .

A present obligation is considered to exist when the

NRF has no realistic alternative but to make the transfer of

economic benefits . The amount recognised as a provision is

the best estimate at the reporting date of the expenditure

required to settle the obligation . Only expenditure related

to the purpose for which the provision is raised is charged

against the provision .

1 .13 Leases

NRF as a lessee

Leases 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 . Leased assets are capitalised at the

fair value of the assets or, if less, at the present value of the

minimum lease payments at commencement of the lease .

They are depreciated in relation to the policy applicable

on similar items of property and equipment or, if lower, the

lease term . The lease liability, net of finance cost, is included

in liabilities . Finance costs on leases are amortised over

the period of the lease by using a constant interest rate on

the remaining balance of the commitment for each period .

Finance costs are recognised in the statement of financial

performance .

NRF as lessor/lessee

Leases where the NRF does not transfer or receive

substantially all the risks and benefits of ownership of the

asset are classified as operating leases . Payments and

receipts of operating leases are recorded in the statement of

financial performance in equal payments over the period of

the lease .

The determination of whether an arrangement is,

or contains, a lease is based on the substance of the

arrangement at inception date of whether the fulfillment

of the arrangement is dependent on the use of a specific

asset or assets or the arrangement conveys a right to use

the asset . The classification of the lease is determined using

IAS7/(AC105) Leases .


1 .14 Investment in associates

An associate is an entity over which the NRF is in a position

to exercise significant influence, but not control, through

participation in the financial and operating policy decisions

of the investee . The NRF’s share of the total recognised

gains and losses of associates is incorporated in the

financial statements, from the date that significant influence

commences until the date that significant influence ceases,

using the equity method of accounting . The carrying amount

of such interests is reduced to recognise any impairment,

other than a temporary impairment, in the value of individual

investments . The financial statements of the associate are

calculated using uniform accounting policies .

1 .15 Non-current assets held for sale

Non-current assets that are expected to be recovered

primarily through sale rather than through continuing use are

classified as held for sale . Immediately before classification

as held for sale, the assets are re-measured in accordance

with the NRF’s accounting policies . Thereafter generally the

assets are measured at the lower of their carrying amount

and fair value less cost to sell .

1 .16 Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits

held at call with banks, other short-term highly liquid

investments with original maturities of three months or less .

1 .17 Related parties

The NRF operates in an economic environment currently

denominated by entities directly or indirectly owned by the

South African government . As a result of the constitutional

independence of all three spheres of government in South

Africa, only parties within the national sphere of government

will be considered to be related parties .

Key management is defined as being individuals with

the authority and responsibility for planning, directing and

controlling the activities of the entity . All individuals from the

level of Executives up to the Board of Directors are regarded

as key management .

Close family members of key management are considered

to be those family members who may be expected to

influence, or be influenced by key management individuals or

other parties related to the entity .

1 .18 Comparative figures

When necessary, comparative figures have been adjusted to

conform to changes in presentation in the current period .

1 .19 Significant accounting judgments, estimates and assumptions

The preparation of the financial statements requires

management to make judgments, estimates and assumptions

that affect the reported amounts of revenues, expenses,

assets and liabilities, and the disclosure of contingent

liabilities, at the reporting date . However, uncertainty about

these judgments, assumptions and estimates could result

in outcomes that could require a material adjustment to the

carrying amount of the asset or liability affected in the future .

Judgments

In the process of applying the NRF’s accounting policies,

management has made the following judgments which have

the most significant effect on the amounts recognised in the

financial statements:

NZG animals

NZG animals have not been included as an asset on

the statement of financial position due to the essential

recognition criteria of measurement that cannot be met .

On the basis that many species cannot be valued and that

a reliable value cannot be obtained for other species, it

was considered that any assessment of value would be

misleading to the users of the financial statements .

Estimates and assumptions

The key assumptions concerning the future and other key

sources of estimation uncertainty at the reporting date, that

have a significant risk of causing a material adjustment to

the carrying amounts of assets and liabilities within the next

financial year, are discussed below .

Impairment of non-financial assets

The NRF assesses whether there are any indicators of

impairment for all non-financial assets at each reporting

date . Non-financial assets are tested for impairment when

there are indicators that the carrying amounts may not be

recoverable .


57Pension and other post-employment benefits

The cost of defined benefit pension plans and other

post-employment medical benefits is determined using

actuarial valuations . The actuarial valuation involves making

assumptions about discount rates, expected rates of return

on assets, future salary increases, mortality rates and future

pension increases . Due to the long-term nature of these

plans, such estimates are subject to significant uncertainty .

Development costs

Development costs are capitalised in accordance with the

accounting policy in Note 1 .5 . Initial capitalisation of costs

is based on management’s judgment that technological and

economical feasibility is confirmed, usually when a product

development project has reached a defined milestone

according to an established project management model .

Property and equipment

Estimation is used in approximating the useful lives and

residual values of property and equipment and intangible

assets . These assessments are made on an annual basis

and use historical evidence and current economic factors to

estimate the values .

1 .20 Standards issued but not yet effective

Standard or InterpretationEffective Date

# Name

Applicable to the NRF:

IAS 1 (AC 101)

Presentation of Financial Statements 1 January 2009

The Standard separates owner and non–owner changes in equity. The statement of changes in equity will include only details of transactions with owners, with non–owner

changes in equity presented as a single line. In addition, the Standard introduces the statement of comprehensive income: it presents all items of recognised income and

expense, either in one single statement, or in two linked statements. The NRF is still evaluating whether it will have one or two statements.

IFRS 7 (AC 144)Financial Instruments: Disclosures – Improving Disclosures about Financial Instruments 1 January 2009

The amendments require enhanced disclosures about fair value measurements and liquidity risk. These changes will have no material effect on the financial statements.

Not applicable to the NRF:IFRS 1 (AC138) First–time Adoption of IFRS 1 January 2009

IFRS 2 (AC 139) Amendments to IFRS 2 Share–based Payment – Vesting Conditions and Cancellations 1 January 2009

IFRS 3 (AC 140) Business Combinations 1 July 2009

IFRS 8 (AC 145) Operating Segments 1 January 2009

IAS 23 (AC 114) Borrowing Costs 1 January 2009

IAS 27 (AC 132) Consolidated and Separate Financial Statements 1 July 2009

IAS 32 (AC 125)

& IAS 1 (AC 101)

Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements – Puttable Financial Instruments and Obligations Arising on

Liquidation1 January 2009

IAS 39 (AC133) Financial Instruments: Recognition and Measurement 1 July 2009

IFRIC 9 Reassessing Embedded Derivatives – Embedded Derivatives 30 June 2009

IFRIC 13 Customer Loyalty Programmes 1 July 2008

IFRIC 15 Agreements for the Construction of Real Estate 1 January 2009

IFRIC 16 Hedges of a Net Investment in a Foreign Operation 1 October 2008

IFRIC 17 Distributions of Non–Cash Assets to Owners 1 July 2009

IFRIC 18 Transfers of Assets from Customers 1 July 2009


notes to the annual financial statementsfor the year ended 31 March 2009

2009

R’000

2008

R’000

2 . Interest incomeBanking institutions 82 881 49 212

Debtors 1 990

Impaired financial assets 43 115

Other 396 10

83 321 50 327

3 . Other incomeServices rendered 2 569 1 156

Rent received 2 281 2 236

Donations received 3 744 1 763

Actuarial gain on post-retirement pension benefits 2 612 –

Sundry income 16 439 6 879

27 645 12 034

4 . Operating surplus includes the following items

Amortisation 2 –

Audit fees 2 243 1 481

Current year audit 53 37

Prior year audit 2 140 1 359

Other services 50 85

Bad debts 1 014 871

Cost of sales 5 553 5 212

Depreciation (refer note 7) 30 939 28 649

Buildings 1 944 1 508

Research equipment 19 199 18 267

Administrative computer equipment 5 009 4 558

Office furniture and equipment 3 580 3 317

Motor vehicles 1 145 997

Exhibits 62 2

592009

R’000

2008

R’000

4 . Operating surplus includes the following items (continued)

Loss/(surplus) on disposal of property and equipment (276) 167

Buildings (45) –

Research equipment 14 309

Administrative computer equipment (33) 74

Office furniture and equipment (8) (99)

Motor vehicles (204) (117)

Loss on foreign exchange transactions 1 226 11

Operating lease payments 664 688

Post-retirement healthcare benefits 2 873 2 051

Service cost 650 1 165

Interest cost 7 578 6 140

Contribution payments (5 261) (5 192)

Net actuarial gain recognised in the current year (94) (62)

Post-retirement pension benefits (2 612) 2 612

Professional fees 49 741 35 199

Technical 47 982 33 521

Administrative 1 759 1 678

Research costs 5 032 6 674

5 . Board and Executive members’ remunerationShort-term

benefits

R’000

Post-

retirement

benefits

R’000

Other

benefits

R’000

Total

2009

R’000

Total

2008

R’000Board members (Non-executive):Reddy BD (Chairperson Up to 30 June 2008) 7 – – 7 27

Bozzoli B (Chairperson) 23 – – 23 10

Abrahams LA (Up to 30 June 2008) 3 – – 3 10

Fedderke JW 8 – – 8 –

Gcabashe TS 10 – – 10 10

Hendricks NG (Up to 30 June 2008) 3 – – 3 12

Magau NM 8 – – 8 –

May IR 13 – – 13 –

Mokadi CC (Up to 30 June 2008) 3 – – 3 13

Netsianda TM 8 – – 8 –

Ngoepe PE (Up to 30 June 2008) 3 – – 3 10

Nxumalo MM (Up to 30 June 2008) 3 – – 3 10

Nyokong T 10 – – 10 10

Olver CG (Up to 30 June 2008) 2 – – 2 7

Petersen FW (Up to 30 June 2008) 3 – – 3 12

Pillay V 8 – – 8 –

Wesso GR (Up to 30 June 2008) 3 – – 3 10

Yokwana N 8 – – 8 –

126 – – 126 141


notes to the annual financial statements – for the year ended 31 March 2009 (continued)

5 . Board and Executive members’ remuneration (continued)

Short-term

benefits

R’000

Post-

retirement

benefits

R’000

Other

benefits

R’000

Total

2009

R’000

Total

2008

R’000

Executive members:* Mangaliso M (President: NRF) (Up to November 2008) 752 110 46 908 1 503

Bharuth-Ram K (Up to January 2009) 764 10 – 774 840

Booth RS 807 1 50 858 749

Charles PA 494 276 44 814 750

Damonse BA 675 92 27 794 726

Drennan RL 782 70 48 900 827

Kaniki AM 763 70 66 899 876

Kriger R (From 1 April 2008) 566 67 94 727 –

Lottering E (Up to July 2008) 309 46 13 368 1 110

Maharaj R 747 126 27 900 827

Malinga SB (From October 2007) 548 51 55 654 293

Mazithulela G (From February 2009) 222 13 7 242 –

Muhongo S 683 61 36 780 716

Nxomani C (From July 2007) 649 60 53 762 553

Pauw J 537 80 49 666 607

Selematsela SD (From August 2008) 403 34 6 443 –

Singh B 757 115 55 927 853

Skeef NSR 750 77 85 912 838

Skelton PH 643 118 18 779 715

Sutcliff PR (Up to September 2007) – – – – 278

Thompson PB 862 111 61 1 034 950

Van Jaarsveld A 1 095 144 42 1 281 1 102

Vilakazi ZZ 661 50 52 763 751

Von Gruenewaldt G (Up to June 2007) – – – – 145

14 469 1 782 934 17 185 16 009

Total remuneration: Board and Executive members 14 595 1 782 934 17 311 16 150

* Denotes ex-officio member of the NRF Board .

Note: Executive members are considered to be key management personnel .

612009

R’000

2008

R’000

6 . Government grantsGovernment grants received 709 832 680 599

SALT allocation 5 556 5 400

715 388 685 999

Unspent ring-fenced funds released/(carried forward) 1 812 9 338

Grant awards (committed)/released 21 194 (26 804)

Portion of government grants utilised to acquire depreciable property, equipment and intangibles

during the year allocated to deferred income (refer note 7 and 8)(92 462) (59 768)

Portion of government grants utilised to acquire land during the year allocated to capital fund

(refer note 7 and 8) (18 660) –

Portion of deferred income recognised in the statement of financial performance 31 681 30 215

Government grants 658 952 638 980

Cost

R’000

Accumulated

Depreciation

R’000

Carrying

Amount

R’000

7 . Property and equipment2009

Land 36 348 – 36 348

Buildings 94 793 13 246 81 547

Research equipment 231 474 91 094 140 380

Administrative computer equipment 34 968 23 453 11 515

Office furniture and equipment 38 043 16 483 21 560

Motor vehicles 13 617 6 059 7 558

Exhibits 684 64 620

449 927 150 399 299 528

2008

Land 17 688 – 17 688

Buildings 66 115 11 302 54 813

Research equipment 194 807 72 047 122 760

Administrative computer equipment 30 307 20 840 9 467

Office furniture and equipment 29 254 13 155 16 099

Motor vehicles 10 523 5 509 5 014

Exhibits 684 2 682

349 378 122 855 226 523


Land

R’000

Buildings

R’000

Research

equipment

R’000

Administrative

computer

equipment

R’000

Office

Furniture

and

Equipment

R’000

Motor

Vehicles

R’000

Exhibits

R’000

Total

R’000

7 . Property and equipment (continued)

2009

Opening carrying

value17 688 54 813 122 760 9 467 16 099 5 014 682 226 523

Transfers during the

year– (26) 26 – – – – –

Acquisitions during

the year 18 660 28 704 36 889 7 458 9 089 3 884 – 104 684

Disposals during the

year– – (96) (401) (48) (195) – (740)

Depreciation for the

year (refer note 4)– (1 944) (19 199) (5 009) (3 580) (1 145) (62) (30 939)

Closing carrying

value36 348 81 547 140 380 11 515 21 560 7 558 620 299 528

2008

Opening carrying value 12 415 56 448 114 693 8 079 14 126 4 798 – 210 559

Transfers during the

year 5 273 (8 175) 2 902 – – – – –

Acquisitions during the

year – 8 048 24 050 6 414 5 770 1 214 684 46 180

Disposals during the

year – – (618) (468) (480) (1) – (1 567)

Depreciation for the

year (refer note 4) – (1 508) (18 267) (4 558) (3 317) (997) (2) (28 649)

Closing carrying value 17 688 54 813 122 760 9 467 16 099 5 014 682 226 523

A change in the depreciation estimate due to a change in the residual values and useful lives of assets had an impact of R0,2m decrease on

the current financial year figures (2008: R 8,558m) .

Transfers during the year consist of a correction in classification .


632009

R’000

2008

R’000

7 . Property and equipment (continued)Land and buildings

Portion 1 of the farm Scientia No 627, Pretoria, with buildings thereon 14 741 12 235

Land 1 277 1 277

Building 13 464 10 958

Portion 4 of the farm No 996, Blue Downs, Stellenbosch, with buildings thereon 30 244 30 244

Land 9 717 9 717

Building 20 527 20 527

Portion 6 of the farm Kuilenburg No 96, Sutherland, with buildings thereon 6 079 6 079

Land 336 336

Building 5 743 5 743

Erf 26423, Observatory, Cape Town, with buildings thereon 5 159 2 460

Land 273 273


Erf 9875, Hermanus, with buildings thereon 7 440 6 943

Land 4 308 4 308


Stand No 2859, Pretoria, with buildings thereon 1 600 1 600

Land 92 92


Observatory, Johannesburg 11 089 10 850

Land 1 685 1 685


Portion 1 of the farm Losberg No . 73, Fraserburg Regional District 29 426 –

Land 8 860 –

Building 20 566 –

Mey’s Dam Farm No . 68, Fraserburg Regional District 9 800 –

Leasehold premises, HartRAO 90 64

Leasehold premises, SAIAB 15 473 13 328

Total cost of land and buildings 131 141 83 803

Land and buildings were valuated by an independent valuator as at 1 April 2007 . The market values of

land and buildings:

Portion 1 of the farm Scientia No 627, Pretoria 33 183

Portion 4 of the farm No 996, Blue Downs, Stellenbosch 31 093

Portion 6 of the farm Kuilenburg No 96, Sutherland 8 674

Erf 26423, Observatory, Cape Town 27 007

Erf 9875, Hermanus 16 770

Stand No 2859, Pretoria 13 704

Portion 1 of Erf 1 Observatory, Johannesburg 6 941

Total market value 137 372


7 . Property and equipment (continued)

The split of the cost between land and buildings have been adjusted in accordance with the valuation dated 1 April 2007 .

The land and buildings situated in Pretoria are subject to a pre-emptive right in favour of the CSIR should the NRF decide to sell the

property and will revert back to the CSIR for no consideration should the NRF be disbanded .

Zoo animal collection

2009

No . of

specimens

2008

No . of

specimens

Mammals 2 990 3 136

Aves 1 330 1 382

Reptiles 374 320

Pisces 3 081 3 871

Amphibia 51 44

Invertebrates 739 388

Total 8 565 9 141

Cost

R’000

Accumulated

Amortisation

R’000

Carrying

Amount

R’000

8 . Intangible assets2009

Computer Software 127 2 125

Computer Software in development 19 899 – 19 899

20 026 2 20 024

2008

Computer Software in development 13 588 – 13 588

2009

Carrying amount at the beginning of year 13 588

Additions 6 438

Amortisation charge (2)

Carrying amount at the end of year 20 024

2008

Carrying amount at the beginning of year –

Additions 13 588

Amortisation charge –

Carrying amount at the end of year 13 588


652009

R’000

2008

R’000

9 . Investment in Associate Unlisted:

SALT Foundation (Pty) Ltd (7 405 355 ordinary shares, 33,77% shareholding) (2008: 7 405 355

ordinary shares, 33,77% shareholding)

60 283 60 283

Accumulated share of post-acquisition losses (14 142) (11 396)

Shares at carrying value 46 141 48 887

Directors’ valuation of investment 46 141 48 887

Summary of associate’s financial statements:

SALT Foundation (Pty) Ltd

Current assets 41 265 32 756

Long-term assets 137 039 136 106

Current liabilities 5 649 3 480

Long-term liabilities – –

Revenue 13 009 14 284

(Loss)/profit for the year after taxation (8 130) (23 672)

Details of associate at 31 March 2009 are as follows:

Name of

associatePrincipal activity

Portion of

ownership

interest

Portion of

voting power

held

Carrying valueFinancial

Year-end2009

R’000

2008

R’000

SALT

Foundation

(Pty) Ltd

(7 405 355

ordinary

shares)

Construction and

operation of an

11m telescope for

optical astronomy

research

33,77% 33,77%46 141 48 887 March

46 141 48 887

2009

R’000

2008

R’000

10 . Staff loansTotal staff loans 52 25

Short-term portion (47) (18)

Long-term portion 5 7

29% (2008: 100%) of the total staff loans consists of interest-bearing loans, at an average interest rate of 12,5% (2008: 10,5%) . The short-

term portion of staff loans is repayable within the next 12 months, while the long-term portion is repayable within the next 24 months .

11 . Inventory Consumable stores and maintenance spares 3 926 2 579

12 . Grants and bursaries paid in advance Grant and bursary payments in advance to HEIs 213 352 170 972

213 352 170 972


2009

R’000

2008

R’000

13 . Trade and other receivablesTrade receivables 25 151 21 130

Provision for impairment (1 495) (1 796)

23 656 19 334

Prepayments 12 588 26 159

Other receivables 15 343 60 112

Total trade and other receivables 51 587 105 605

Movements in the provision for impairment of receivables were as follows:

Opening balance 1 796 1 725

Charged to the statement of financial performance 1 014 871

Debtors written off (1 315) (800)

Closing balance 1 495 1 796

14 . General capital fundOpening balance 17 688 15 351

Acquisition of land (refer note 6) 18 660 –

Transfer of land to capital fund – 5 272

Transfer of building to deferred income – (2 935)


15 . Deferred incomeOpening balance 221 323 194 107

Transfer of land to capital fund – (5 272)

Transfer of building to deferred income – 2 935

Acquisition of property, equipment and intangibles (refer note 6) 92 462 59 768

Allocation to income (refer note 6) (31 681) (30 215)



672009 2008

R’000 R’000

16 . Finance leasesLong-term portion of finance leases 1 712 2 241

Short-term portion 1 159 1 116

Total finance leases 2 871 3 357

Contracts for finance leases are entered into over a period of either 36 or 60 months and at an

average interest rate of 13% p .a . (2008: 12% p .a .) .

Reconciliation of minimum lease payment – finance leases:

Minimum lease payments 3 501 4 246

Payable within 1 year 1 494 1 493

Payable within 1 – 5 years 2 007 2 753

Less: Interest portion (630) (889)

Present value of lease liability 2 871 3 357

Payable within 1 year 1 159 1 116

Payable within 1 – 5 years 1 712 2 241

17 . Employee benefits

National Research Foundation Pension Fund

Retirement benefits are provided for employees through the

National Research Foundation Pension and Provident Funds .

All employees contribute to these funds with the exception of:l Employees who are on fixed-term contracts of a short

duration; and l The National Zoological Gardens’ (NZG) employees who

are currently on the National Zoological Gardens of South

Africa Pension Fund; the Governments Temporary Employees

Pension Fund and the Associated Institutions Pension Fund .

The NRF has renegotiated the benefit structure for all

members of the inherited NRF Defined Benefit funds to

a Defined Contribution arrangement with effect from

1 December 2004 .

The fund is administered by Alexander Forbes Consultants

and Actuaries in terms of the Pension Fund Act No . 24 of

1956, as amended . The NRF’s liability to the fund is limited to

paying the employer contributions .

Employer contributions (which are part of the employees’

total package) for the year amounted to R18,3m (2008:

R15,3m) . The employer contributions are charged against

income when incurred .

National Zoological Gardens Pension Funds

Pensions are provided for employees of the NZG by means of

three separate pension funds to which contributions are made .

The National Zoological Gardens of South Africa Pension

Fund (NZGSAPF), a defined benefit plan, came into effect

from 1 April 1994 . Previous and current service costs are

shown in the statement of financial performance on an

actuarial basis . Any adjustments on the basis of experience and

additional funding for retired employees are acknowledged in

the statement of financial performance as soon as the liability

is known . The expected contribution to this plan is expected to

be R4,9m in the next financial year .

With regard to employees who opted to remain on

the Associated Institutions Pension Fund (AIPF) and the

Temporary Employees Pension Fund (TEPF), only the employer

contributions to the pension funds are recognised in the

statement of financial performance . The fund is controlled by

the State, which has assumed responsibility for the unfunded

portion .

The total employer contributions for the year amounted to

R6m (2008: R3,9m) . The employer contributions are charged

against income when incurred .

Negotiations are still pending regarding the transfer and

conversion of the defined benefit arrangements of the NZG

staff to the National Research Foundation Pension Fund .


17 . Employee benefits (continued)

Post-retirement medical benefits

Post-retirement medical benefits are provided for qualifying retirees . The entitlement of these benefits is usually based on the employee

remaining in service up to retirement age and the completion of the minimum service period . The expected contribution to this plan is

expected to be R5,5m in the next financial year .

The NRF recognises the importance of providing for this liability . To date the NRF has set aside R69m towards this liability providing a

funding coverage level of 75% .


2009

R’000

2008

R’000

The employee benefit obligations are made up as follows:

Post-retirement pension benefits – 2 612

Post-retirement medical benefits 92 217 91 018

92 217 93 630

Retirement pension fund benefits

The NZG defined benefit plan was actuarially valued on 1 October 2008 by an independent actuary .

The expected cost of these benefits is accrued over the period of employment, using the best estimate valuation basis . Actuarial gains and

losses are recognised as they arise . This is a final-salary-defined benefit plan located in South Africa .

2009

R’000

2008

R’000

Present value of funded obligations 35 018 23 024

Fair value of plan assets 35 023 20 412

Net liability/(asset) (5) 2 612

Net liability/(asset) recognised in the statement of financial position – 2 612

The amounts recognised in surplus:

Contributions paid to the fund 6 085 3 228

Actuarial (gain)/loss recognised (2 612) 2 612

Total included in operating surplus 3 473 5 840

Net liability at beginning of the period 2 612 –

Net amount recognised in surplus (2 612) 2 612

Net liability at end of the period – 2 612

Surplus/deficit in the plan for the past 5 years:

2009

R’000

2008

R’000

2007

R’000

2006

R’000

2005

R’000

Present value of obligation 35 018 23 024 11 420 11 420 11 420

Fair value of plan assets 35 023 20 412 13 547 13 547 13 547

Net surplus/(deficit) 5 (2 612) 2 127 2 127 2 127


2009

%

2008

%Principle actuarial assumptions used:

Discount rate 9,0% 8,4%

Real rate of interest 2,0% 2,0%

Future salary increases 7,0% 6,4%

Future pension increases 5,9% 5,7%

Active membership of fund at 1 October 2005 and 2008 were respectively 234 members 291 members

Post-retirement medical benefits:

The liability was actuarially valued at 31 March 2008 by an independent actuary . The expected costs of these benefits are accrued over the

period of employment, using the projected unit credit method . Actuarial gains and losses are recognised as they arise .

2009

R’000

2008

R’000

Liability recognised in the statement of financial position 92 217 91 018

Liability at beginning of the period 91 018 88 967

Amounts charged to income:

Current service cost 650 1 165

Interest cost 7 578 6 140

Actuarial gain (94) (62)

Contribution payments (5 261) (5 192)

Additional provision (1 674) -

Liability at end of the period 92 217 91 018

Deficit in the plan for the past 5 years:

2009

R’000

2008

R’000

2007

R’000

2006

R’000

2005

R’000

Present value of obligation (92 217) (91 018) (88 967) (88 060) (94 624)

Net deficit (92 217) (91 018) (88 967) (88 060) (94 624)

Principle actuarial assumptions used:

Consumer Price Inflation (CPI) 6% p .a . 6%p .a .

Discount rate 8,75% p .a . 8,75% p .a .

Annual increase in healthcare costs 7,5% p .a . 7,5% p .a .

Real discount rate 1,16% p .a . 1,16% p .a .

Salary inflation 7% p .a . 7% p .a .

Normal retirement age (NRF) 65 65

Normal retirement age (NZG) 65 65



Sensitivity analysis

Health care cost inflation

The effect of a 1% increase and decrease in the health care cost inflation assumption on the contractual liability and the annual expense

is shown in the table below .

Assumption VariationChange in past-service

contractual liability

Change in service cost plus

interest cost

Health care cost inflation +1% +11,71% +12,86%

-1% -9,91% -10,77%

Mortality

The longevity of members in retirement is an important assumption, dictating the expected length of time over which benefits are paid . The

effect of using heavier or lighter mortality assumptions post-employment is shown in the table below .

Assumption VariationChange in past-service

contractual liability

Change in service cost plus

interest costPost-employment mortality

ratesPA(90) -3,70% -3,78%

PA(90)-2 +3,75% +3,83%

2009

R’000

2008

R’000

18 . Trade and other payablesTrade payables 24 702 23 926

Income received in advance 865 707 629 608

Leave pay accrual 21 313 17 904

Other payables 11 754 16 799

Total trade and other payables 923 476 688 237

19 . Provisions

Opening balance – –

Additional provision: Water and electricity 2 500 –

Closing balance 2 500 –

The provision represents a portion of the municipal billing in respect of water and electricity, which is in dispute . The dispute is expected to

be resolved within the next 12 months after which the account will be settled .

20 . Contingency fund

The contingency fund comprises of funds that have been set aside to fund the Post-Retirement Medical Liability . This fund may also be

utilised to set aside funds for any possible unforeseen incidents .


7121 . SALT fund

The SALT fund represents income received from the Department of Science and Technology for the purpose of investing the funds in the

SALT Foundation (Pty) Ltd .

2009

R’000

2008

R’000

22 . Operating leasesThe NRF has entered into commercial property leases for office space . These non-cancellable leases

have remaining terms of between 1 and 3 years . The leases escalate between 10% and 11% annually .

The lease with the remaining term of 3 years has no renewal option .

The following lease payments are due under the operating leases:

Payable within 1 year 1 260 535

Payable within 1 – 5 years 1 738 –

The NRF has entered into commercial property leases, consisting mainly of surplus office space . These

non-cancellable leases have remaining terms of between 1 and 6 years . The leases escalate between

6% and 10% annually . Renewal options are included in all the contracts .

The following lease payments are receivable under the operating leases:

Receivable within 1 year 708 254

Receivable within 1 – 5 years 187 183

Receivable within 5 – 10 years 90 144

23 . Capital commitmentsApproved projects 71 217 20 247

The capital expenditure will be financed from internal funds .

24 . Contingent liabilities Future grant commitments awarded 1 506 868 1 340 904

The NRF has awarded multi-year grants for up to 5 years with subsequent years’ payments conditional

upon receipt of progress reports .

City of Johannesburg 1 252 –

The amount represents municipal billing in respect of rates, taxes and water charges which is in dispute .

The NRF’s attorneys are of the opinion that should legal action be taken by either party, the NRF should

be successful in not being liable for the amount claimed .



2009

R’000

2008

R’000

25 . Related party transactions

Transactions with associate (refer note 9)

The NRF paid the following levy to SALT Foundation (Pty) Ltd for the use of the telescope 4 849 5 024

SALT Foundation (Pty) Ltd paid NRF for the recovery of monthly services 13 031 10 684

SALT Foundation (Pty) Ltd: Balance receivable at 31 March 1 291 944

The outstanding balance at year-end is unsecured, interest-free and settlement occurs in cash . There

have been no guarantees received . No impairment has been recorded of the amount owed .

The NRF manages THRIP on behalf of the Department of Trade and Industry and the Innovation Fund

on behalf of the Department of Science and Technology . The NRF has recovered operating expenditure

as follows:

THRIP 6 983 8 004

Innovation Fund 28 939 17 029

By virtue of the fact that the NRF is a national public entity and controlled by national government any other controlled entity of the

national government is a related party . All transactions with such entities are at arm’s length and on normal commercial terms .

26 . Financial Instruments

The NRF classifies its financial assets and liabilities in the following categories:

– Loans and receivables, and

– Financial liabilities measured at amortised cost .

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market .

Such financial assets are carried at amortised cost using the effective interest rate method .

After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rate method .

The classification depends on the purpose for which the financial assets were acquired . Management determines the classification of

its financial assets at initial recognition .

7326 . Financial Instruments (continued)

Categories of financial instruments

2009

Loans and

receivables

R’000

Financial liabilities at

amortised cost

R’000

Non-financial

instruments

R’000

Total

R’000

Assets

Property and equipment 299 528 299 528

Intangible asset 20 024 20 024

Investment in associate # 46 141 46 141

Staff loans 52 52

Inventory 3 926 3 926

Grants and bursaries paid in advance 213 352 213 352

Trade and other receivables 38 999 12 588 51 587

Cash and cash equivalents 756 204 756 204

795 255 – 595 559 1 390 814

Liabilities

Finance leases # 2 871 2 871

Employee benefits 92 217 92 217

Trade and other payables 897 380 28 596 925 976

– 897 380 123 684 1 021 064

# Investments in associates and finance leases are disclosed as non-financial instruments due to the fact that they are not in the scope of

IAS39 and IFRS7 .

2008

Loans and

receivables

R’000

Financial liabilities at

amortised cost

R’000

Non-financial

instruments

R’000

Total

R’000

Assets

Property and equipment 226 523 226 523

Intangible asset 13 588 13 588

Investment in associate # 48 887 48 887

Staff loans 25 25

Inventory 2 579 2 579

Grants and bursaries paid in advance 170 972 170 972

Trade and other receivables 79 446 26 159 105 605


586 805 – 488 708 1 075 513

Liabilities

Finance leases # 3 357 3 357

Employee benefits 93 630 93 630

Trade and other payables 667 119 21 118 688 237

– 667 119 118 105 785 224

# Investments in associates and finance leases are disclosed as non-financial instruments due to the fact that they are not in the scope of

IAS39 and IFRS7 .




Fair values

At 31 March 2009, the carrying amount of bank balances and cash, deposits, trade and other receivables and trade and other payables

approximated their fair values due to the short-term maturities of these assets and liabilities .

The fair value of other long-term interest-bearing loans receivable approximates the carrying value as market related rates of interest are

charged on these outstanding amounts .

Risks arising from financial instruments

In the course of the NRF’s operations it is exposed to foreign currency, credit, liquidity and market risk . The risk management process

relating to each of these risks is discussed under the headings below .

Foreign currency risk

There were no foreign currency transactions covered by forward exchange contracts at the end of the year . The NRF transacts with foreign

entities on a minimal basis and therefore the balance on foreign exchange debtors and creditors are considered immaterial and therefore

minimal risk involved .

The NRF does not use derivative financial instruments for speculative purposes .

Credit risk

Financial assets, which potentially subject the NRF to concentrations of credit risk, consist principally of bank balances, cash, short-term

deposits and trade and other receivables . The NRF’s cash equivalents and short-term deposits are placed with high-credit quality financial

institutions . Trade receivables presented in the statement of financial position are net of allowances for doubtful receivables, estimated by

management based on prior experience and the current economic environment . Credit risk with respect to trade receivables is limited due

to the large number of customers comprising the NRF’s customer base and their dispersion across different industries and geographical

areas . Other receivables are presented net of impairment losses . Accordingly the NRF has no significant concentration of credit risk . The

carrying amounts of financial assets included in the statement of financial position represent the NRF’s exposure to credit risk in relation to

these assets . The NRF does not have any significant exposure to any individual customer or counterparty . The maximum exposure to credit

risk with regards to trade and other other receivables at the reporting date was:

2009Fully performing

R’000

Past due but not impaired

R’000

Impaired

R’000

Total

R’000

Trade receivables:

– Current 19 194 – 281 19 475

– 30 days 752 955 27 1 734

– 60 days – 288 2 290

– 90 days – 199 – 199

– 120 days 12 2 256 1 185 3 453

Other receivables:

Bank interest receivable 3 290 – – 3 290

Contract income receivable 9 868 – – 9 868

Other 2 140 45 – 2 185

35 256 3 743 1 495 40 494


Liquidity risk

The NRF manages liquidity risk through proper management of working capital, capital expenditure and actual vs . forecasted cash flows

and its Investment Policy . Adequate reserves and liquid resources are also maintained .

Maturity profile

2009Within one year

R’000

One to five years

R’000

More than five years

R’000

Total

R’000

Assets

Staff loans 47 5 52

Trade and other receivables 38 999 38 999


795 250 5 – 795 255

Liabilities

Trade and other payables 897 380 897 380

Finance leases 1 159 1 712 2 871

898 539 1 712 – 900 251

2008Within one year

R’000

One to five years

R’000

More than five years

R’000

Total

R’000

Assets

Staff loans 18 7 25

Trade and other receivables 79 446 79 446


586 798 7 – 586 805

Liabilities

Trade and other payables 667 119 667 119

Finance leases 1 116 2 241 3 357

668 235 2 241 – 670 476

Market risk

No significant risks have been identified with regards to interest rate or changes in market prices .

Interest rate exposure and investment strategies are evaluated by management on a regular basis . Interest-bearing investments are held

with reputable banks in order to minimise exposure . The NRF furthermore manages its interest rate risk by obtaining competitive rates

from different banks . The NRF’s exposure to interest rate risk on financial instruments at reporting date is as follows:



Interest rate risk

Floating interest rate

R’000

Non–interest Bearing

R’000

Total

R’000

2009

Assets

– Bank balances and cash 756 094 110 756 204

– Trade and other receivables 23 656 15 343 38 999

– Staff loans 15 37 52

Total financial assets 779 765 15 490 795 255

Liabilities

– Trade and other payables – (897 380) (897 380)

Total financial liabilities – (897 380) (897 380)

779 765 (881 890) (102 125)

2008

Assets

– Bank balances and cash 507 221 113 507 334

– Trade and other receivables 19 334 60 112 79 446

– Staff loans 25 – 25

Total financial assets 526 580 60 225 586 805

Liabilities

– Trade and other payables – (667 119) (667 119)

Total financial liabilities – (667 119) (667 119)

526 580 (606 894) (80 314)


7727 . Reconciliation of net unspent funds for the year to cash generated from operations

2009

R’000

2008

R’000

Net surplus funds for the year 20 46 823

Adjusted for:

Deferred income on assets 79 441 29 552

Interest received (83 321) (50 327)

Depreciation 30 941 28 649

Finance cost 647 424

Share of loss in associate 2 745 7 993

(Profit)/loss on disposal of property and equipment (276) 167

Operating surplus funds before working capital changes 30 197 63 281

Working capital changes 249 908 83 197

(Increase)/decrease in inventory (1 347) 117

(Increase)/decrease in grants and bursaries paid in advance (42 380) (113 393)

Decrease/(increase) in trade and other receivables 57 308 (58 624)

Increase in trade and other payables 236 327 255 097

Cash generated from operations 280 105 146 478

28 . Cash and cash equivalents at the end of the year

Cash and cash equivalents consist of cash on hand and balances with banks and investments in money market instruments . Cash and cash

equivalents included in the cash flow statement comprise the following statement of financial position amounts:

Funds on call and on deposit 734 410 429 887

Current account balances and cash 21 794 77 447


29 . Events subsequent to year-end

None .


30 . Prior year errors

Investment in associate

The NRF’s share in the loss in the associate was understated in the prior year due to the change in the final reported results of SALT

Foundation (Pty) Ltd . The effect of this adjustment on the results of 2008 is as follows:

2008

R’000

Loss in associate increased 3 159

Investment in associate decreased 3 159

Payments in advance

Grant expenditure claimed in 2008 was transferred to payments in advance in the prior year with a related deferral of the income . The

claims should have been expensed in 2008 . The effect of this adjustment on the results of 2008 is as follows:

2008

R’000

Grant expenditure increased 21 860

Payments in advance decreased 21 860

Income received in advance decreased 19 267

Contract income increased 102

Government grant income increased 19 165

Deferred income

Income received in 2008 that will only be expended in future financial years was accounted for as income . The more appropriate manner

in which to treat this income is considered to be as income received in advance . The effect of this adjustment on the results of 2008 is as

follows:

2008

R’000

Contract income decreased 81 343

Income received in advance increased 81 343

Government grant income decreased 1 445

Sundry income decreased 1 302

Income received in advance increased 2 747


7931 . Financial information by business segment

For management purposes, the NRF is currently organised

into the following segments and these segments are the basis

on which the NRF reports its primary segment information .

All segment revenue and expenses are directly attributable to

the segments . Segment assets include all operating assets

used by a segment and consist principally of property and

equipment, as well as current assets . Segment liabilities

include all operating liabilities and consist principally of trade

creditors . These assets and liabilities are all directly attributable

to the segments . Segment revenue, expenses and results

include transfers between business segments and between

geographical segments . Such transfers are accounted

for at competitive market prices charged to unaffiliated

customers for similar goods . These transfers are eliminated on

consolidation .

Research and Innovation Support and Advancement

(RISA): This segment’s main business is to provide for

the promotion of research and research capacity in all

fields of knowledge and technology . RISA supports the

full range of activities in the innovation chain, from building

the knowledge base (by developing human resources,

generating and applying knowledge, and providing research

infrastructure) to technology development, innovation and

eventual commercialisation . The budget and expenditure of

RISA includes the South African Environmental Observation

Network (SAEON), which is still being developed to attain

National Research Facility status .

iThemba Laboratory for Accelerator Based Sciences

(iThemba LABS): This National Research Facility provides

advanced, viable, multidisciplinary facilities for training,

research and services in the fields of sub-atomic nuclear

science and applied radiation medicine .

South African Astronomical Observatory (SAAO): This

National Research Facility performs fundamental research in

astronomy and astrophysics at a national and international

level . SAAO is the National Research Facility for optical/

infrared astronomy in South Africa . SAAO is also responsible

for managing the operations of the Southern African Large

Telescope (SALT) .

Hartebeesthoek Radio Astronomy Observatory

(HartRAO): This National Research Facility was established

as the national facility for radio astronomy research in South

Africa . Today its primary function is the support of research

and training in radio astronomy and space geodesy .

South African Institute for Aquatic Biodiversity

(SAIAB): This National Research Facility serves as a research

hub for aquatic biodiversity in southern Africa by housing

and developing the National Fish Collection and associated

resource collections as research tools and sources of aquatic

biodiversity data . It also generates knowledge on aquatic

biodiversity through interactive and collaborative scientific

research, and disseminates scientific knowledge at all levels .

Hermanus Magnetic Observatory (HMO): This National

Research Facility is part of a worldwide network of magnetic

observatories that monitor and model variations of the Earth’s

magnetic field . HMO’s activities also include fundamental

and applied space physics research, and the provision of

geomagnetic field-related services on a commercial basis .

South African Agency for Science and Technology

Advancement (SAASTA): SAASTA is positioned as an

agency in advancing the public awareness, appreciation and

understanding of science, engineering and technology in

South Africa, as well as the integration of science promotion

activities across the NRF .

National Zoological Gardens of South Africa (NZG):

It is a national facility for research in terrestrial biodiversity and

an active participant in terrestrial biodiversity research . The

NZG houses one of the largest animal collections in the world,

operates three breeding centres and covers an area of over

7 000 hectares .

South African Environmental Observatory Network

(SAEON): SAEON is a research facility that establishes and

maintains nodes (environmental observatories, field stations or

sites) linked by an information management network to serve

as research and education platforms for long-term studies of

ecosystems that will provide for incremental advances in our

understanding of ecosystems and our ability to detect, predict

and react to environmental change .

South African Square Kilometre Array (SKA) Project:

The international astronomy community is developing

proposals for a major (€1,5 billion) investment in a new radio

telescope, the Square Kilometre Array (SKA) . It will be the

largest telescope in the world for the foreseeable future .

South Africa and Australia have been shortlisted as potential


sites for this telescope . Both South Africa and Australia

are building smaller versions of the SKA as “pathfinders”,

aimed partly at developing and testing the new science and

technology for the SKA as well as showcasing the countries’

competence with regard to bulk infrastructure delivery and

mission-driven innovation . These pathfinders (the MeerKAT

in South Africa and ASKAP in Australia) are designed to be

world-class instruments in their own right . The South African

SKA pathfinder project includes the construction of the KAT-7

prototype telescope array (7 Antennae) and the MeerKAT

radio telescope (80 Antennae) in the Karoo . Once operating,

MeerKAT will be the largest radio telescope in the world for

many years . The MeerKAT is a project of the Department

of Science and Technology, executed through the National

Research Foundation and the South African SKA project .


31 . Financial information by business segment (continued)

RISA iThemba LABS SAAO HartRAO SAEON

2009

R’000

2008

R’000

2009

R’000

2008

R’000

2009

R’000

2008

R’000

2009

R’000

2008

R’000

2009

R’000

2008

R’000

Revenue

Government grants 469 558 410 575 105 325 108 223 21 164 24 324 15 305 11 941 12 398 11 972

Contract income 401 269 213 673 – 3 158 15 071 11 984 21 – 1 342 –

Other revenue 55 037 46 663 12 440 12 512 4 10 (15) 19 3 002 –

925 864 670 911 117 765 123 893 36 239 36 318 15 311 11 960 16 742 11 972

Other income 7 004 4 833 4 053 4 055 4 230 (1 615) 763 1 438 15 29

Total income 932 868 675 744 121 818 127 948 40 469 34 703 16 074 13 398 16 757 12 001

Expenses

Salaries 64 632 52 791 82 616 75 445 30 794 24 770 13 674 10 419 4 101 2 399

Grants and bursaries 749 300 492 834 (785) (413) 430 372 – – – –

Other expenses 65 802 52 770 64 433 57 114 15 442 12 287 7 741 7 645 12 289 9 584

Share of loss/(profit) in associate 2 745 7 993 – – – – – – – –

Finance cost 10 1 247 244 54 64 17 23 – –

Total expenses 882 489 606 389 146 511 132 390 46 720 37 493 21 432 18 087 16 390 11 983

Net (deficit) unspent funds 50 379 69 355 (24 693) (4 442) (6 251) (2 790) (5 358) (4 689) 367 18

Property, equipment and intangible asset

Additions 15 595 19 342 23 167 14 464 6 934 2 316 3 269 4 099 – –

Depreciation (3 177) (2 592) (19 099) (18 613) (1 600) (1 215) (1 139) (785) – –

Assets 710 217 648 757 121 850 123 379 27 318 23 475 16 828 15 812 – –

Investment 46 141 48 887 – – – – – – – –

Liabilities 604 538 554 771 135 946 128 824 27 849 22 933 17 911 13 665 – –

Post-retirement Medical Liability 10 645 11 988 42 937 41 599 12 508 12 118 9 373 9 081 – –

Number of employees 233 199 292 300 114 101 50 48 7 7

81

31 . Financial information by segment (continued)

SKA SAIAB HMO SAASTA NZG TOTAL

2009

R’000

2008

R’000

2009

R’000

2008

R’000

2009

R’000

2008

R’000

2009

R’000

2008

R’000

2009

R’000

2008

R’000

2009

R’000

2008

R’000

Revenue

Government grants (35 662) 6 350 8 032 7 673 3 780 6 604 13 761 6 868 45 291 44 450 658 952 638 980

Contract income 91 292 35 945 7 417 9 397 7 081 4 477 18 173 15 672 7 547 11 567 549 213 305 873

Other revenue 25 244 2 623 – – – 4 2 1 29 868 28 939 125 582 90 771

80 874 44 918 15 449 17 070 10 861 11 085 31 936 22 541 82 706 84 956 1 333 747 1 035 624

Other income 288 38 363 (73) 3 810 1 378 2 796 2 195 4 323 (244) 27 645 12 034

Total income 81 162 44 956 15 812 16 997 14 671 12 463 34 732 24 736 87 029 84 712 1 361 392 1 047 658

Expenses

Salaries 16 485 10 366 11 748 10 914 8 795 7 234 9 579 8 477 45 478 40 031 287 902 242 846

Grants and bursaries 7 747 4 547 65 – 1 324 879 5 365 5 566 – – 763 446 503 785

Other expenses 55 885 32 518 10 906 8 775 6 375 4 853 21 981 16 061 45 778 44 180 306 632 245 787

Share of loss/(profit) in associate – – – – – – – – – – 2 745 7 993

Finance cost 18 2 8 5 23 18 8 9 262 58 647 424

Total expenses 80 135 47 433 22 727 19 694 16 517 12 984 36 933 30 113 91 518 84 269 1 361 372 1 000 835

Net (deficit) unspent funds 1 027 (2 477) (6 915) (2 697) (1 846) (521) (2 201) (5 377) (4 489) 443 20 46 823

Property, equipment and intangible asset

Additions 49 904 7 013 3 428 3 023 5 119 800 1 014 6 766 2 692 1 945 111 122 59 768

Depreciation (1 594) (1 363) (1 216) (1 090) (767) (651) (846) (459) (1 501) (1 881) (30 939) (28 649)

Assets 338 282 104 280 37 673 33 246 20 533 11 145 42 831 40 461 29 141 26 071 1 344 673 1 026 626

Investment – – – – – – – – – – 46 141 48 887

Liabilities 338 282 104 280 34 769 30 398 19 001 11 201 39 844 37 062 29 159 30 083 1 247 299 933 217

Post-retirement Medical Liability – – 1 309 1 268 – – – – 15 445 14 964 92 217 91 018

Number of employees 54 41 59 55 33 33 35 34 329 349 1 207 1 167


List of acronymsA*STAR Agency for Science, Technology and Research

(Singapore)ACEP African Coelacanth Ecosystem ProgrammeADSL Asymmetric Digital Subscriber LineAfr AfricanAGA Astronomy Geographic AdvantageAHEAD Animal Health for the Environment and

DevelopmentAIDS Acquired Immune Deficiency SyndromeAIMS African Institute of Mathematical SciencesAIPF Associated Institutions Pension FundARI Applied Research and InnovationASKAP Australian Square Kilometre Array ProgrammeASSAf Academy of Science of South AfricaASCC African Science Communication ConferenceASCLME Agulhas Somali Currents Large Marine

Ecosystem programmeAU African UnionAUSAID Australian Government Overseas Aid

ProgrammeBEE Black Economic EmpowermentBRAD Black Researchers/Academics DevelopmentCERD Centre for Energy Research and DevelopmentCERN European Centre for Nuclear ResearchCHE Council on Higher EducationCHIETA Chemical Industries Education and Training

AuthorityClrd Colouredcm centimetreCoE Centre of ExcellenceCoGIS Collaborative Geographical Information SystemCPI Consumer Price InflationCSIR Council for Scientific and Industrial Research DAAD Deutscher Akademischer Austausch Dienst

(German Academic Exchange Service)DEAT Department of Environmental Affairs and

TourismDENOSA Democratic Nursing Organisation of South

AfricaDIDBase Digital Ionogram DataBaseDNA Deoxyribonucleic AcidDoL Department of LabourDST Department of Science and TechnologyECR Electron Cyclotron ResonanceELTOSA Environmental Long-Term Observatories of

Southern Africa

ESRC Economic and Social Research CouncilESRF European Synchrotron Radiation FacilityFAP Focus Area ProgrammesF’SATIE French South Africa Technology Institute in

ElectronicsFM Medium frequencyGAAP Generally Accepted Accounting PracticeGEF Global Environmental FacilityGLTFCA Greater Limpopo Transfrontier Conservation

AreaGMO Genetically Modified OrganismGMSA Grant Management and Systems AdministrationGPS Global Positioning SystemGRAP Generally Recognised Accounting PracticeHartRAO Hartebeesthoek Radio Astronomy ObservatoryHEI Higher Education InstitutionHF High frequencyHICD Human Institutional Capacity DevelopmentHIV Human Immunodeficiency VirusHMO Hermanus Magnetic ObservatoryHR Human ResourcesHRTEM High Resolution Transmission Electron

MicroscopeIAEA International Atomic Energy AgencyIAS International Accounting StandardsICDP Inter-continental Drilling ProgrammeICGEB International Centre for Genetic Engineering

and BiotechnologyICSU International Council for ScienceICT Information and communication technologyIFFA International Forum of Funding AgenciesIFRIC International Financial Reporting Interpretation

CommitteeIFRS International Financial Reporting StandardsIGBP International Geosphere-Biosphere ProgrammeIIASA International Institute for Applied Systems

AnalysisILTER International Long-term Ecological Research

Network Ind IndianInt InternationalINTERMAGNET International Real-time Magnetic Observatory

NetworkIPR Intellectual Property RightsIPSAS International Public Sector Accounting

Standards

83IPY International Polar YearIPYDIS International Polar Year Data and Information

ServiceIR International RelationsISES International Space Environnent ServiceISO International Organisation for StandardisationIT Information TechnologyiThemba LABS iThemba Laboratory for Accelerator Based

SciencesIYA International Year of AstronomyIYPE International Year of Planet EarthKAT Karoo Array TelescopeKFD Knowledge Fields DevelopmentKM&E Knowledge Management and EvaluationKOSEF Korea Science and Engineering Foundationm Millionm MetreMb MegabyteMCM Marine and Coastal ManagementMoA Memorandum of AgreementMoU Memorandum of UnderstandingMRT Media Round TablesMTEF Medium Term Expenditure FrameworkMV Motion vectorNASSP National Astrophysics and Space Science

ProgrammeNBD New Business DevelopmentNEHAWU National Education, Health and Allied Workers’

UnionNEPAD New Partnership for Africa’s DevelopmentNICLE National Innovation Competition for Learner

EntrepreneursNRF National Research FoundationNSI National System of InnovationNSTF National Science and Technology ForumNZG National Zoological Gardens of South AfricaNZGSAPF National Zoological Gardens of South Africa

Pension FundOECD Organisation for Economic Cooperation and

Developmentp .a . per annumPAAZAB Pan African Association of Zoos and AquariaPFMA Public Finance Management ActPhD Doctor of PhilosophyPPP Public/private partnershipPSA Public Servants Association(Pty) Ltd Proprietary LimitedR RandR&D Research and DevelopmentRIMS Research Information Management SystemsRISA Research and Innovation Support and

AdvancementROA Regional Office AfricaRS Robert Stobie spectrograph

RT-PCR Real-time polymerase chain reactionRWC Regional Warning Centre s SecondS&T Science and TechnologySAAO South African Astronomical ObservatorySAASTA South African Agency for Science and

Technology AdvancementSABI South African Biosystematics InitiativeSAEON South African Environmental Observation

NetworkSAEOS South African Earth Observation StrategySAIAB South African Institute for Aquatic Biodiversity SALT Southern African Large TelescopeSAMWU South African Municipal Workers UnionSANAE South African National Antarctic ExpeditionSANAP South African National Antarctic ProgrammeSANHARP South African Nuclear Human Asset and

Research ProgrammeSANReN South African Research NetworkSANSA South African National Space AgencySARChI South African Research Chairs InitiativeSATOL South African Tree of LifeSEA COM Undersea cableSET Science, Engineering and TechnologySINGA Singapore International Graduate AwardSKA Square Kilometre ArraySLR Satellite Laser RangingSMMEs Small Medium and Macro EnterprisesSSC Separated Sector CyclotronSTAF Science and Technology Agreements FundSuperDARN Super Dual Auroral Radar NetworkTENET Tertiary Education and Research Network of

South AfricaTEPF Temporary Employees Pension Fundthe dti Department of Trade and IndustryTHRIP Technology and Human Resources for Industry

ProgrammeTIA Technology Innovation AgencyUK United KingdomUN United NationsUSA United States of AmericaUZ University of ZululandVLBI Very Long Baseline InterferometryWAZA World Association of Zoos and AquariaWCS Wildlife Conservation SocietyWWLLN Worldwide Lightning Location NetworkxDM Experimental Development Model& and€ Euro% percentR Rand

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