Vision of the ASB - National Government · The ASB has become a leader in Standard-setting by developing Standards where gaps exist for specific public sector issues in response to

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• SetStandardsofGenerallyRecognisedAccountingPractice(GRAP)forthefinancialstatementsofinstitutionsinallofgovernment;

• Prepareandpublishdirectives,guidelinesandinterpretationsconcerningtheStandardsofGRAP;• RecommendeffectivedatesofimplementationoftheseStandardsofGRAPforthedifferentcategoriesofinstitutionsto

whichtheseStandardsofGRAPapplytotheMinisterofFinance;• Performanyotherfunctionincidentaltoadvancingfinancialreportinginthepublicsector;• TakeintoaccountallrelevantfactorsinsettingStandardsofGRAP,includingbestpracticeandcapacitytoimplement;• SetdifferentStandardsofGRAPwherenecessaryfordifferentcategoriesofinstitutionstowhichtheseStandardsof

GRAPapply;and• Promoteaccountability,transparency,andeffectivemanagementofrevenue,expenditure,assetsandliabilitiesofthe

institutionstowhichtheseStandardsofGRAPapply.

Vision of the ASBTo developAccounting Standards that promote accountability, transparency and effective financialmanagementwithin allspheresofgovernment.

Mission of the ASBTheASBachievesthisthroughfocusedandtargetedstakeholderinteractionthatresultsintheprovisionofrelevant,credibleandimplementableAccountingStandards.

Objectives of the ASB• SetStandardsofGRAP• InfluencedevelopmentofinternationalStandards• PromotetheadoptionoftheStandardsofGRAP• MonitortheapplicationoftheStandardsofGRAP• Realisethepotentialofourpeople• Communicatewithstakeholders• Promotegoodgovernanceandfinancialmanagement

The ASB’s Mandate

TheprincipalfunctionsoftheBoardintermsofsection89ofthePFMAareto:

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Contents

TheASB’sMandate.................................................................................................................................... 2

VisionoftheASB....................................................................................................................................... 2

MissionoftheASB..................................................................................................................................... 2

ObjectivesoftheASB................................................................................................................................. 2

Section1

Chairperson’sReport.................................................................................................................................. 4

ReviewofOperationsbytheCEO................................................................................................................ 5

Section2

Performancereviewfor2014/15................................................................................................................. 8

StakeholderOutreach................................................................................................................................. 13

Engagementswithstakeholders..................................................................................................................... 15

Section3

Reportonsustainability................................................................................................................................ 19

Section4

Keystrategicobjectivesfor2015/16............................................................................................................ 21

Section5

Governance.............................................................................................................................................. 24

Humanresourcemanagementanddevelopment.............................................................................................. 30

ReportoftheAuditandRiskCommittee.......................................................................................................... 33

Independentassurancereport....................................................................................................................... 35

Section6

StatementofResponsibility........................................................................................................................... 38

AnnualFinancialStatements......................................................................................................................... 39

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Review of Operations by the CEOSignificantresourcesareallocatedtothepublicsector.Reportingontheuseofthoseresources,whetherthroughthedeliveryofservices,providinginfrastructuretoenabletheeconomytogrowandthrive,orensuringcitizenshaveasafeandsecurelivingenvironment,isacornerstoneofafunctioningpublicsector.ThecredibilityoffinancialreportingisfacilitatedbytheapplicationofappropriatefinancialreportingStandards,knowninthepublicsectorasStandardsofGRAP.StandardsofGRAParethecommonlanguageusedforfinancialreportinginthepublicsector.Theygiveeffecttotheconstitutionalrequirementtoestablishauniformreportingframeworkforthepublicsector.

This reportsetsouthowtheASB’soperations result indeveloping that language.Toenable theASB to fulfil itsmandate, itperformsthefollowingfunctions:

• SetStandardsofGRAP.• InfluencethedevelopmentofinternationalStandards.• PromotetheadoptionoftheStandardsofGRAPinSouthAfrica.• MonitortheimplementationoftheStandardsofGRAP.• Realisethepotentialofourpeople.• Communicatewithourstakeholders.• Managetheentity.

Set Standards of GRAP

IntheSouthAfricancontext,theASBhasdevelopedacomparableStandardforeverystandardissuedbyIPSASB,theinternationalpublicsectorstandard-setter,andthoseissuedbyIASB,theinternationalprivatesectorstandard-setter,thatarerelevanttothepublicsector.TheASBhasbecomealeaderinStandard-settingbydevelopingStandardswheregapsexistforspecificpublicsectorissuesinresponsetothedemandsoftheASB’sstakeholders.Influence the development of international Standards

ThePFMArequirestheASBtoconsiderbestpracticenationallyandinternationallyindevelopingStandardsofGRAP.Togiveeffecttothisrequirement,theASBusesIPSASsasabasisforthedevelopmentoflocalStandards.It is vital that theASB influences thedevelopment of Standards internationally to ensure that theyare relevant to theSouthAfricanenvironment.TheaimistoreducethechangesneededtobemadetointernationalStandardswhenadaptingthemforimplementationlocally.

TheASBparticipatesintheinternationalStandard-settingprocessintheseways:

• ParticipationinIPSASBboardmeetingsbyanASBstaffmemberservingontheIPSASBboard.• Membershipoftask-basedgroupsusedbyIPSASBtocoordinatethedraftingofIPSASs.• SubmissionofcommentlettersonExposureDraftsandDiscussionPapers.• ProvisionofstaffresourcestotheIPSASBSecretariatwhenaprojectisimportanttoSouthAfrica.

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Promote the adoption of the Standards of GRAP in South Africa

TheConstitutionofSouthAfricarequirestheadoptionofuniformreportingStandards,i.e.StandardsofGRAP,byallspheresofgovernment.

Publicentities,tradingentities,constitutionalinstitutionsandmunicipalitiesandboards,commissions,companies,corporations,funds or other entities under the ownership control of amunicipality haveall adoptedStandards ofGRAP. Parliament hasamendeditsfinancialmanagementlegislationtoincludetheprovinciallegislatures.Asaresult,legislatureswilladoptStandardsofGRAPwitheffectfrom1March2016,usingthetransitionalprovisionsdevelopedforthem.

Thatleavesonlynationalandprovincialdepartmentstofollowsuit.Thecompletionofthefinancialmanagementimprovementsprogramme,and theresulting implementationof transversalaccountingsystemsbynationalandprovincialdepartments,willenablethemtoadoptStandardsofGRAP.

Governmentbusinessenterpriseslistedinschedule2,3Band3DofthePFMAarerequiredtoapplyStatementsofGenerallyAcceptedAccountingPractice(GAAP),orInternationalFinancialReportingStandards(IFRS).TherevisionoftheCompaniesActhasresultedinthewithdrawalofGAAP.TheASBhasbeenresearchingappropriatereportingframeworkstoreplaceGAAP,andhasundertakenwidespreadconsultationinthisregard.OurBoardanticipatesmakingafinaldecisionontheappropriatereportingframeworkinthesecondhalfof2015.

Monitor the application of the Standards of GRAP

TheASBcompleted the firstpost-implementation reviewof theStandardsofGRAPonProperty, Plant and Equipment,andInvestment Property,which resulted in the identificationofareaswhereStandardsofGRAPcanbe improved.The reviewillustratedtheimportanceofaholistic,comprehensiveresponsetofinancialreportingbyensuringco-operationbetweentheASB,theNationalTreasuryandtheAuditor-General.

Realise the potential of our people

ThenatureofStandard-settingischangingandisincreasinglydrivenbyaneedtoincreaseresearchcapabilitiesandtorecruitstaffwithgoodlisteningskills,andwhocanproposepracticalimplementablesolutionsforthoseareaswheretherearestillgapsin theexistingsuiteofStandards. TheASBis fortunate inhavingexperiencedStandard-settersworking for it.Retaining thisexperience,anddevelopingmorepeoplewiththoseskills,iscriticaltothesustainabilityoftheASB.Ithankallmystafffortheircommitmentandhardworkintryingcircumstances.

Communicate with stakeholders

Thepost-implementation reviewprovided theopportunity toengagewithusersof financialstatements–our targetaudiencewhendevelopingStandards.TheASBcontinuedtheconversationwiththembyprovidingfeedbackontheinitiativesundertakenasaresultofthepost-implementationreviewand,inparticular,consultingthemonproposedsolutionstosomeofthedifficultiesexperienced.

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Section 2Performance review for 2014/15InaccordancewiththePFMA,publicsectorentitiesneedtoagreetheperformanceplanwiththeexecutiveauthoritybeforethestartofthefinancialyear,andthenreportonprogressagainsttheplaninitsannualreport.Theexternalauditorsconsiderthisreportwhenexpressinganopiniononperformanceinformation.

Influence the development of international Standards

Influence the development of international Standards to minimise differences between the public and private sector, and to reduce the need for amendments to international Standards in the development of Standards of GRAP.

TheASBinfluencesthedevelopmentofinternationalpublicsectorStandardsbyparticipatinginIPSASBactivities.DocumentsissuedforcommentbyIPSASBarepublishedconcurrentlytoenabletheASBtosubmitcomprehensivecommentlettersreflectingtheviewsoftheSouthAfricanstakeholders.Thefollowingcommentlettersweresubmittedduringthefinancialyear:

• IPSASBStrategyandWorkPlanConsultation(ED123),• IPSASBConsultationPaperonApplicabilityofIPSAStoGBEs(ED125),• ReportingonServicePerformanceInformation(ED121),and• IPSASBImprovementsproject.

MsJeaninePoggiolini,aStandard-setterandemployeeoftheASB,hasbeenappointedDeputyChairpersonofIPSASBforthe2015calendaryear.IPSASBBoardmembersareallocatedtospecifictask-basedgroups(TBGs)toassistthestaffoftheIPSASBtodevelopdocumentsfordiscussionatBoardmeetings.

The ASB participated in the following TBGs:

• Framework:MeasurementofAssetsandLiabilities,• Framework:PresentationinGeneralPurposeFinancialReports,• First-timeAdoptionofAccrualBasisIPSASs,and• PublicSectorSpecificFinancialInstruments.

MsAmandaBotha,aStandard-setterandemployeeoftheASB,providedtechnicalsupportforthedevelopmentofaStandardon the First-timeAdoption of Accrual IPSASs. The projectwas successfully completedwith the publication of the Standardin January 2015. Lessons learnedwill be consideredwhen developing transitional provisions for national and provincialdepartmentswhentheyadoptaccrualaccountingprinciplesandStandardsofGRAP.

TheASBalsoactivelymonitorsdevelopmentsintheprivatesector’sStandard-settingprocesstodeterminewhetheranyoftheiractivitiesmayberelevanttothepublicsector.ParticipationisfocusedontheAccountingPracticesCommittee(APC),atechnicalcommitteeoftheSouthAfricanInstituteofCharteredAccountants(SAICA)andtheFinancialReportingStandardsCouncil(FRSC),theprivatesectorStandard-settingbody.Bothbodiesmonitorandparticipateintheinternationalprivatesectorstandardsettingprocess.RelevantprojectsareaddedtotheASBworkprogrammetoensureadequateresourcesareallocatedtotheprojects.

Toenableustomonitorthedevelopmentofprivatesectorstandardsandtheidentificationofpotentialdifferencethatmayariseinthepublicsector,anASBemployeeattendsboththemeetingsoftheAPCandtheFRSC.WheretherearenoIPSASstousewhendevelopingStandardsofGRAP,weconsiderprivatesectorstandards.TheAPCprovidessecretarialsupporttotheFRSC.TheASBreportsonthoseactivitiesoftheBoardthatmayberelevanttotheprivatesectorstandardsettersatthesemeetings.

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DuringthisperiodtheASBparticipatedinthefollowingAPCsub-committeemeetingsresponsibleforpreparingcommentletterstotheIASBandotherinternationalbodiesforthedevelopmentofprivatesectorfinancialreportingStandards:

• FinancialEffectsofRateRegulation,• ProposedamendmentstoIAS1PresentationofFinancialStatements,• DisclosureInitiative:ProposedAmendmentstoIAS7StatementofCashFlows

Theseprojectseitherhaveapublicsectorimplication,oracurrentStandardofGRAPisbasedontheinternationalequivalentbeingamended.

Set Standards of GRAP

Develop Standards of GRAP which provide accounting and reporting requirements for all material transactions and events that are understandable and implementable.

EachyeartheBoardissuestheGRAPReportingFrameworkinadvanceofthenewreportingperiodtooutlinetheStandardsthatshouldbeappliedbyentitiesinpreparingtheirfinancialstatementsincompliancewithStandardsofGRAP.TheproposedGRAPReportingFrameworkfor2015/2016wasissuedduringthisyear.TheBoardapprovedtheamendmentstotheannexurestobeincludedinDirective5atitsMarch2015meeting.

Asreportedlastyear,theBoardapprovedanExposureDraftoftheproposedStandardofGRAPonAccounting by Principals and Agents.TheBoardconsideredthecommentfromrespondentsinDecember2014andmadechangesinresponsetothecomment received.TheBoardagreedtore-expose thedocument for furthercomment toenablerespondents toconsider theimpactofthesechanges.TherevisedExposureDraftwaspublishedinJanuary2015anditisanticipatedthattheStandardofGRAPwillbeapprovedlaterduring2015.

The Board published aDiscussion Paper on living and non-living resources for comment. The comment is currently beingevaluatedtodeterminewhetherornotaproposedStandardofGRAPshouldbedeveloped.OtherprojectsthatmayarisefromthisprojectincludeanaccountingguidelineandamendmentstoexistingStandardsofGRAP.

TheMinisterapprovedthefollowingStandardsofGRAPforimplementationwitheffectfrom1April2015:

• Segment Reporting,• Transfer of Functions Between Entities Under Common Control,• Transfer of Functions Between Entities Not Under Common Control, and• Mergers.

ThedeterminationbytheMinisterofFinanceoftheimplementationdatesforthefollowingStandardsofGRAPareawaited:

• Statutory Receivables,• Service Concession Arrangements: Grantor and the related Interpretation of the Standard of GRAP on Service

Concession Arrangements Where a Grantor Controls a Significant Residual Interest in an Asset, and• Related Party Disclosures

Animplementationdateoffinancialyearscommencingonorafter1April2016hasbeenproposedafterconsultationwiththeNationalTreasuryandtheAuditor-General.

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Asreportedpreviously,theASBmonitorstheIASB’sprojectstoassesswhetheranyitemsonitsworkprogrammearerelevantto theSouthAfricanpublic sector. Currentlyprojectson the revisionof theStandardson Leasesand Insurancearebeingmonitored.ItisunlikelythattheASBwillissueaStandardofGRAPforInsurance,buttheexistingStandardofGRAPonLeases willbeaffectedbytheIASBproject.TheASBencouragedpublicentitiesthathaveinsurancetypeactivitiestoreviewtheirownaccountingpoliciesandalignthemwiththeinternationalstandard.

TheIASBcompletedtheprojectonRevenuefromContractswithCustomerswiththepublicationofIFRS15.TheASBpreparedaresearchreportwiththeaimofdeterminingwhetherthecurrentthreeStandardsofGRAP,namely,Revenue from Exchange Transactions, Revenue from Non-exchange TransactionsandConstructions Contracts,couldberevisedbyissuingasingleStandardofGRAPbasedonIFRS15.TheresearchwillbemadeavailabletotheIPSASBtouseaspartoftheprojecttoreviewtherevenueStandards.Theresearchisalsobeingsharedwiththenationalstandard-settersofNewZealandandAustralia.Theresearchreportwillassistinensuringthatthecontributionswemakeinternationallyaresound.

Thecompletionofthepost-implementationreviewoftheStandardsofGRAPonProperty, Plant and EquipmentandInvestment PropertyresultedinanumberofprojectsontheASBworkprogramme:

• ADiscussionPaperonMateriality-ReducingComplexityandImprovingReportingwaspublishedforcomment.• AnExposureDraftproposingAmendmentstoGRAP21andGRAP26waspublishedforcomment.• AnExposureDraftproposingAmendmentstoGRAP16andGRAP17waspublishedforcomment.• AnExposureDraftInterpretingRecognition and Derecognition of Landisbeingdeveloped.• Researchintodevelopinganaccountingguideonhousingisbeingconducted.

Theamendments toGRAP16and17wereapprovedbytheBoardat theMarchmeeting.RecommendationsonactivitiesarisingfromtheMaterialityprojectwerealsoapproved.Workontheotherprojectsiscontinuing.

Facilitate the implementation of Standards of GRAP

Monitor and facilitate the implementation of these Standards by public sector entities through the development of transitional provisions and transitional arrangements when the Minister of Finance approves a new Standard.

MembersofParliament,theLegislaturesandmunicipalcouncillorsaretheelectedrepresentativesofSouthAfricans.Theyareidentifiedasprimaryusersof financial statements issued in thepublic sector.Abrochureexplaining the roleof theASB indevelopingfinancialreportingStandardswasdevelopedanddistributedtoMembersofParliamentandthelegislatures.Thebrochurewillalsobedistributedtomunicipalcouncillorsafterthelocalgovernmentelectionsin2016.

Inthecurrentyear,theASBstartedthetranslationoftheStandardsofGRAPintoisiZulu,SeSothoandAfrikaans.BytranslatingtheStandardswehopetoenablepreparersoffinancialstatementsforthepublicsectorwhosefirstlanguageisnotEnglish,toobtainabetterunderstandingofthem.Thisinitiativeisbothtimeconsumingandexpensive,butessentialinacountrywith11officiallanguagesandwhereEnglishfirstlanguageusersapproximateonly9.6%.

TheConstitutionofSouthAfricamandates theNationalTreasury to implementauniformreportingframework forallspheresofgovernment.TheCompaniesActof2012resultedinthewithdrawalandreplacementofStatementsofGAAPwithIFRS.GovernmentBusinessEnterprises(GBEs)havebeenaffectedbythischangeandneedtoadoptanewreportingframework,eitherIFRSorGRAP.TheASBhasconductedresearchontheappropriatereportingframeworkforGBEsandissuedproposalsforconsideration.Basedonthecommentreceivedfromrespondents,theASBhasdevelopedcriteriatoenableGBEstoperformaself-assessment.ThecriteriaarecurrentlybeingtestedinthefieldbyGBEs.TheresultswillbeconsideredbytheBoardinJuly2015.

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Monitor the application of the Standards of GRAP

Monitor and evaluate the consistent application of the Standards of GRAP on an ongoing basis by considering the implications of non-compliance.

TheASBreliesontheGeneralReportsissuedbytheAuditor-GeneralforinformationontheapplicationofStandards.TheASBalsoreliesonfeedbackfromalltheinteractionwithpreparers,auditorsandotherusers.Duringthetwoauditcycles,firstlythePFMAandthereaftertheMFMA,theASBmeetregularlywiththestaffoftheOAGandtheAGSAtodiscussissuesarisingduringtheaudit.

Fromtheseexchanges,theASBdevelopsfrequentlyaskedquestions(FAQs)toprovideurgentguidance,ifneeded.Inthecaseofminorandnon-urgentissuestheStandardsofGRAParealsoamendedduringtheImprovementsProjecteverytwoyears.MoresignificantissuesthatmayresultinanamendmenttoaStandardoraninterpretationareaddedtotheworkprogramme,withtheconsentoftheBoard.Furthertothis,theASBisrequiredtoconsiderthecapacityoftheentitiesinthepublicsectortoimplementStandardsofGRAP.ThisisdonebydevelopingtransitionalprovisionstoassistwiththeimplementationoftheStandards.

OtherinitiativestopromotetheapplicationofStandardsofGRAPincluded:

• LiaisonwiththeNationalTreasuryonthedevelopmentofastandardchartofaccountsforlocalgovernment,and• ThesubmissionofarticlesforpublicationbySAICA,IMFOandSAIGA.

Realising the potential of the employees of the Accounting Standards Board

Realising the potential of the employees of the ASB by continuing to focus on employee retention and improving employees’ knowledge, skill and capabilities.

Each staffmember of theASB has a personal development plan to ensure that their training and development needs aremonitored.Thereisregularreportingagainsttheirdevelopmentplans.

RetentionofkeystaffisasignificantriskoftheASB.ThisismonitoredandmanagedbytheBoard.ThecurrentorganisationalchartoftheASBhascapacityforfourStandard-setters.TheASBhasnovacanciesatpresent.

Communicate with our stakeholders

Ongoing communication with our stakeholders.

ApartfromaregularnewslettersenttoregisteredrecipientsaftereachBoardmeeting,articlesaresubmittedforpublicationoncurrenttopicalissues.Adetailedstakeholderoutreachprogrammehasbeenimplemented.Thedetailsofwhicharediscussedinthisannualreportonpage13.

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Manage the ASB as a public entity in an efficient, effective and economical way

To ensure that Standards are developed in an efficient, effective and economical way by operating within the fiscal parameters established by the transfer of funds from the National Treasury Vote.

TheASB’scompliancewithgoodcorporategovernance,appropriatetothesizeofouroperations,iscoveredinaseparatereport.

Receivinga so-called “cleanaudit”, i.e. an unqualifiedaudit report for financial information, performance informationandcompliancewithlawsandregulations,isanimportantobjectivefortheASB.NotonlydoestheASBwanttosetStandardsforfinancialreporting,itwishestodosointhemostefficientandeffectiveway.

TheinternalauditfunctionandtheauditandriskcommitteearesharedwiththeNationalTreasury.Nofeesarepaidfortheseservices.

Internalauditperformedthefollowingaudits.Allthefindingswerehousekeepinginnatureandhavebeenaddressed:

• AnassessmentofthestateofreadinessoftheASBforthe2013/14auditwasperformed.• Auditofperformanceinformation.Alltherecommendationshavebeenimplemented.

IndependentassuranceisprovidedbyNexiaSAB&T.Thisreportappearsonpage35oftheannualreport.

TheASBhasprocessesinplacetomonitorcompliancewithlawsandregulations.Newlegislationpromulgatedisreviewedtodeterminewhetherornotadditionalprocedurestoensurecomplianceareneeded.Inthepastfinancialyear,TheUseofOfficialLanguagesresultedinasignificantburdenbeingplacedontheASBasallStandardsofGRAParetobepublishedinEnglish,isiZulu,SeSothoandAfrikaans.TheProtectionofPersonalInformationActalsorequiredsomechanges,butthefinancialimpactislesssignificant.ThepublicationoftheRevisedTreasuryRegulationsisawaited.Itmayresultinadditionalrequirementsforcompliancewithlawsandregulations.

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Stakeholder OutreachDuringtheyeartheASBhasactivelyengagedanumberofitskeystakeholders,includingpreparers,users,auditorsandotherinterestedparties.NotonlydotheseengagementsenhancetherelevanceoftheStandardsofGRAPandthecredibilityoftheStandard-settingprocess,buttheycontributemorebroadlytoimprovedfinancialmanagementinthepublicsector.

TherelevanceoftheStandards,andthecredibilityoftheStandard-settingprocess,isenhancedbyengagingwithstakeholdersabout proposedStandards ofGRAP, potential revisions of those Standards, and how theseare applied in practice. ThisengagementensuresthattherequirementsoftheStandardsareappropriateandrelevanttotheSouthAfricanpublicsector,andenableproperassessmentsofaccountabilityanddecision-making.Financialmanagementoftheresourcesentrustedtopublicsectormangers isenhancedbyengagingwithstakeholdersabout resolvingapplication issues,andhowfinancialstatementinformationlinkswithotherdisciplines.

Thisisthebroadclassificationofengagementsundertakenduringtheyear:

• Dueprocessactivities,i.e.discussingExposureDraftsandotherproposalswithstakeholdersindevelopingpronouncementsoftheBoard.

• Outreach activities, i.e. disseminating information about the work of the Board, including the role of AccountingStandardsandnewdevelopments.

• Roundtablediscussions,i.e.discussionsonspecificnationalandinternationaltopicstoprovidefeedbackintotherelevantStandard-settingprocesses.

TheASBundertook its firstpost-implementation reviewof theStandardsonProperty, Plant and Equipmentand Investment Property lastyear.ThefeedbackreceivedduringtheengagementswithusersandpreparersresultedinanumberofprojectsbeingundertakenbytheBoardtoaddresstheissuesraised.Thecommentsreceivedaspartofthisprocess,aswellastheBoard’sresponsestothem,areavailableontheASB’swebsiteonwww.asb.co.za.

TheBoardhasagreedthatpost-implementationreviewswillnotbeundertakeneveryyear,andareviewofeveryStandardwillalsonotbedone.DecisionsbytheBoardonwhethertoconductsuchareviewandwhichStandardsofGRAPtobereviewedwillbedeterminedusing information suchas that contained in theGeneral Reportof theAuditor-General. TheBoardwillconsiderwhetheranyreviewsneedtobeundertakenin2015/16.

The resultsof thepost-implementation reviewof theStandardsonProperty, Plant and Equipmentand Investment PropertyindicatedthattheBoardneedstodomoretoengageandconsultwithusersofthefinancialstatements.Thisincludeseducatingusersonthevalueanduseoftheinformationinthefinancialstatements.TheBoardalsoneedstoensurethatusersreceivealltheinformationtheyneedtomakedecisions.

Itisoftendifficultandresourceintensivetoconsultwithusersonanindividualbasis.TheBoardisthereforeexploringalternativewaystoaccessspecificusersasacollective,suchasthroughanadvisorygrouporsimilarway.ThepurposeofsuchagroupwouldbetoprovidefeedbacktotheBoardontheusefulnessofinformation.Suchconsultationcouldbelimitedtoonceayear.Duringthe2014/15period,39engagementswereundertakenwitharangeofstakeholders(2014:56engagements).Thisrepresentsareductionof30%comparedtothepreviousyear.Thereductionisduetotheincreasednumberofengagementsintheprioryearaspartofthepost-implementationreview.Adetailedlistoftheengagements,therelevantstakeholdersinvolvedandthenatureoftheengagementsisincludedonpages15to17.

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Engagements with stakeholders

Topic Constituency Region meeting held

Due process engagements

ED122AccountingbyPrincipalsandAgents

SARS Gauteng

PublicSectorAccountingForum(representingstakeholdersacrossthecountry)

Gauteng

SAICA Southern,EasternandNorthernRegions,andtheNorth-WestProvince

ED124TheApplicationoftheStandardsofGRAPtoGBEs


FinancepractitionersemployedatGBEs(representingstakeholdersacrossthecountry)

Gauteng


Gauteng

ED126ProposedAmendmentstoGRAP16InvestmentPropertyandGRAP17Property,PlantandEquipment


IMFO WesternCape

ProvincialTreasuryTechnicalForum WesternCape

SALGA Gauteng,FreeState

ED127ProposedAmendmentstoGRAP21ImpairmentofNon-cashGeneratingAssetsandGRAP26ImpairmentofCash-generatingAssets


IMFO KwaZulu-Natal


SALGA Gauteng,FreeState

ED129AccountingbyPrincipalsandAgents

ICASA Gauteng

DiscussionPaper9Materiality–ReducingComplexityandImprovingReporting


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IMFO KwaZulu-Natal


Financepractitioners,consultants,auditorsandotherinterestedparties(representingstakeholdersacrossthecountry)

Gauteng

SAICAAssuranceGuidanceCommittee(Nationalcommittee) Gauteng

IRBACommitteeforAuditingStandards(Nationalcommittee) Gauteng

DiscussionPaper10–LivingandNon-livingResources


IMFO KwaZulu-Natal


Financepractitioners,consultants,auditorsandotherinterestedparties(representingstakeholdersacrossthecountry)

Gauteng

TshwaneMetropolitanMunicipality Gauteng

Outreach activities

UpdateoftheactivitiesoftheASB Non-delegatedmunicipalCFOForum(representingstakeholdersacrossthecountry)

Gauteng

IMFOAuditandAccountingConference KwaZulu-Natal

IMFORegionalConference KwaZulu-Natal,WesternCape

LegislativeSectorFinanceForum(representingstakeholdersacrossthecountry)

KwaZulu-Natal

AGSAProductChampions(representingstakeholdersacrossthecountry)

Gauteng

SALGAFinanceWeek Gauteng,KwaZulu-Natal

PublicEntityForum(NationalForum) Gauteng

ProvincialAccountant-GeneralForum(NationalForum) Gauteng

RoleoftheASB AssociationofPublicAccountsCommittees(NationalForum) Gauteng

Interpretingfinancialstatements CityofJoburg Gauteng

Sharingbestpracticedevelopmentsonaccountingforassets

ProvincialTreasury FreeState

IsAfricareadyforIPSASs? EasternandSouthernAfricanAssociationofAccountants-General

Regional

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Roundtable Discussions

IPSASB’sProposedRecommendedPracticeGuidelineonReportingServicePerformanceInformation

NationalTreasuryandDepartmentofPerformanceMonitoringandEvaluation

Gauteng

Financepractitioners,auditorsandfirms(representingstakeholdersacrossthecountry)

Gauteng

AGSA Gauteng

IPSASB’sStrategyandWorkPlan PublicSectorAccountingForum(representingstakeholdersacrossthecountry)

Gauteng

IPSASB’sConsultationPaperonTheApplicabilityofIPSASstoGBEsandOtherPublicSectorEntities


Financepractitioners,auditorsandfirms(representingstakeholdersacrossthecountry)

Gauteng

Gauteng

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Schedule of Project Groups and Participants

Participant Organisation

Accounting by Principals and

AgentsMateriality DP

Accounting for Living and Non-living Resources

Amendments to GRAP 16, 17, 21

& 26

1 meeting 1 meeting 3 meetings 2 meetingsDAnandlal Cityof

Johannesburg1of2

ZBeseti KPMG 1of3LBodewig NationalTreasury 1of3CBraxton PwC 1of2GBurger SAICA 1of1 1of3 1of2AColyvas EY 1of1 1of1BColyvas WConsulting 1of3RD’Alessandro EY 2of2JdeRidder CityofCapeTown 1of2SADube Mbombela 1of2CduPlooy Ekurhuleni 1of2MGerber Deloitte 2of3 1of2AMHaji KPMG 2of3CHenning Altimax 1of1GHiggins EY 1of2KKgatuke Cityof

Johannesburg1of2

IKotze IMFO 1of1 1of2KKramer NelsonMandela 1of2WLinden EY 2of3KMaree NationalTreasury 1of2SMajola NationalTreasury 1of1NMakhuvha Deloitte 2of2JMajapelo SAICA 1of2NMaphosa Cityof

Johannesburg1of2

JMatsie SALGA 1of1 2of2MMentz AGSA 1of1 2of3 2of2FMudua Polokwane 1of2MMuller Altimax 1of1 2of3INchoe SAICA 2of3JPelser CityofTshwane 2of2RPeterson NationalTreasury 1of1 1of3KPillay FSB 1of1ERichards CityofTshwane 2of2WJJSmit EY 1of2ASmith SANBI 2of3BvanderMerwe Protect-A-Partner 1of3 2of2BvanderMerwe Polokwane 1of2

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Section 3Report on sustainabilityThesustainabilityoforganisationsisgenerallyassessedbasedonthreeaspects:financialviability,impactontheenvironment,andimpactoncommunities.GiventhenatureoftheASB’sactivitiesanditssize,itisoftendifficulttoassesssustainabilityusingonlythesethreeelements.Inparticular,becausetheASBisfundedthroughallocationsfromtheNationalTreasury,whichareindirectlyfundedthroughtaxpayerandotherpubliccontributions,andthereisinsufficientfundingavailabletoundertakesocialresponsibilityinitiatives.

MeasuringsustainabilityattheASBoverthepastyearshasfocusedontheimpactontheenvironment.ThesharpfocusoverthelasttwoyearsbytheNationalTreasuryongovernmentspending,however,hasimpactedboththeeconomicviabilityoftheASB,aswellasthedecisionsabouthowresourcesareusedtoachieveitsactivities.ThishashadbothpositiveandnegativeeffectsontheASB:

• Positively,theefforttoreducespendinghas,generally,hadapositiveimpactontheASB’sefforttoreduceitscarbonfootprint,withadditionalpositiveimpactslikelyintheupcomingyears.

• Negatively,thefocusongovernmentspendinghasresultedinreductionsintheallocationsfromtheNationalTreasury,whichmeansthatcertainactivitiesmayneedtobecurtailedfrom1April2015.

Forthe2015/16period,thebudgetedreductionsinallocationsfromtheNationalTreasurymeansthattheASBislikelytohaveashortfallinthefundingofitsoperationalexpenditure,whichiscurrentlyestimatedatR438,000.ThisshortfallisexpectedtoincreasetoR657,000forthe2016/17period.Thereafter,theoperationalexpenditureisexpectedtobefullyfunded.

MostoftheASB’scostsarefixed.Thereisthereforealimitedabilitytoreducediscretionaryspending.Consequently,activities,such as outreach and stakeholder engagement which require air travel, need to be curtailed. Outreach and stakeholderengagementiscriticaltotherelevanceoftheStandardstheASBdevelops,andlendscredibilitytotheprocesstheASBfollowstosetthoseStandards.Inanefforttobalancetheneedforoutreachandengagementwithconstituentsandthecostthereof,theASBwillendeavourtopartnerwithorganisationsduringthe2015/2016year inundertakingwebinarsandsimilar interventions to interactwithitsconstituents.ThisshouldnotonlyreducetravelcostsandtheASB’simpactontheenvironment,butwillalsomeanthattheSecretariatwillbeabletoreachmoreconstituentsthroughasingleintervention.Whiletheseinterventionswillassistinreducingthecostofoutreachactivities,travelisunavoidableincertaininstances.TheASBcontinuestoengagewiththeNationalTreasurytoassesshowthesecostscanbefunded.

TheASBhas,initsfocusonreducingitscarbonfootprint,raisedvariousconcernswiththelandlordofthepropertyitoccupiesontheamountofwaterandelectricityconsumedinpreviousyears.Asaresult,thelandlordinspectedandreplacedboththewaterandelectricitymeters.Theeffectisthatboththeconsumptionofwaterandelectricityhasbeensignificantlyreducedfortheyearunderreview:waterconsumptionhasbeenreducedby52%,andelectricityby22%(seeTable1onthenextpageforthedetailedconsumption).

Despiteeffortstoreducetheconsumptionofpaper,suchassettingthedefaultsettingsonallprinterstodoublesided,therewasa20%increaseinpaperusage.Todate,papersfortheASB’sBoardandManagementCommitteemeetingshavebeenprintedandsenttomembers.FromthebeginningofMarch2015,theASBdecidednottoprintmeetingpapers,butinsteadtomakethemavailableelectronicallytomembersonitswebsite.

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Asindicatedearlier,travelisanessentialpartoftheASB’sactivities.Domesticairtravelisnecessarytoensurethatadequateconsultationwithstakeholderstakesplace.InternationalairtravelisnecessaryforparticipationintheIPSASBmeetings,almostallofwhichareheldinNorthAmericaeachyear.Whereverfeasible,teleconferencesareheldtoreducetheextentofinternationaltravel,butthisisnotalwayspossible.Thevolumeofairtravelundertakendependsonspecificprojectsandactivitiesundertakenduringthereportingperiod.

Duringthe2013/14reportingperiod,theSecretariattravelledextensivelyinSouthAfricatoobtaintheviewsofstakeholdersforthepost-implementationreview.Thisresultedinahigherthanusuallevelofdomestictravelintheprioryear.Asaresult,a14%reductionisseenindomestictravelinthe2014/15reportingperiodwhencomparedtothepreviousyear.TheASBprovidedtechnicalresourcestotheIPSASBfortheFirst-timeAdoptionofIPSASsprojectduring2013/14andpartof2014/15,whichalsoresultedinanincreasedlevelofinternationalairtravelintheprioryear.TheprojectwascompletedinSeptember2014,resultinginareductionof16%ininternationalairtravel.

Thenegativeeffects thatair travelhasontheenvironmenthavenotbeenoffset inanyway,ascontributingtocarbonoffsetprogrammesofferedbyairlinesisoftenprohibitiveintermsofcost,andtheBoardhasinsufficientresourcestospendonsuchprogrammes.

Thetablebelowsetsouttheusageofthoseresourcesthatwecanmeasuredirectly.Itisincomplete,becausewecannotmeasurethecarbonfootprintoftheconstructionofthebuildingwerent,ortheresourcesconsumedbysomeofourstakeholderswhoattendourBoardmeetingsorprojectgroupmeetings.

Table1-Consumptionlevelsfortheyearunderreview,comparedtothoseoftheprioryear

2014/15 2013/14 Change

Water 88kL 184kL 52%decrease

Electricity 19784kW 25314kW 22%decrease

Paper 407kg 338kg 20%increase

Internationalairtravel 181184km 214586km 16%reduction

Domesticairtravel 41324km 47784km 14%reduction

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Section 4Key strategic objectives for 2015/16TheASBcontinuesthedeliveryonitsstrategysetoutinthestrategicplan,tabledinParliament.

Strategic outcome oriented Goal 1

Improvefinancialreporting.

Goal statement Toenhancefinancialreportinginallthreespheresofgovernmentonacontinuousbasistoengenderconfidenceinfinancialreportingandimproveaccountabilityanddecision-making.

Strategic objectives •SetStandardsofGRAP.•InfluencethedevelopmentofinternationalStandards.•FacilitatetheimplementationoftheStandardsofGRAP.•MonitortheapplicationoftheStandardsofGRAP.•RealisethepotentialoftheemployeesoftheAccountingStandardsBoard.•Communicatewithourstakeholders.•Promotegoodgovernanceandfinancialmanagement

Impact to be achieved To strengthen democracy by engendering confidence in financial reporting in the publicsector.

ThefollowingisasummaryofthestrategicinitiativesthattheASBwillbeundertakingduringthe2015/16performanceyeartoensuretheachievementofourgoalstat.

Strategic Objectives

Strategic initiatives

SetStandardsofGRAP

•Research the SouthAfrican implications of the IPSASBConceptual Framework to identify SouthAfricanspecificactivitiesandtherelatedprojectsforinclusionintheworkprogramme.

•ResearchpublicsectorandSouthAfricanimplicationswhenIASBissuesanew/revisedstandardonLeasesandInsurance.

•Respondtoissuesarisingfromtheresearchintointernationalamendments,whichincludesreplacingthe Conceptual Framework, and issuing replacement Standards for Revenue from Exchange Transactions, Construction ContractsandLeases,andamendingtheStandardonRevenue from Non-exchange Transactions (Taxes and Transfers).

•RespondtothecommentsreceivedontheDiscussionPaperonLivingandNon-livingresources.•RespondtocommentsreceivedontheDiscussionPaperonMateriality–ReducingComplexityand

ImprovingReporting.

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•DevelopanInterpretationonOwnershipofLandandaGuidelineonHousing,projectsarisingfromthepost-implementationreview.

•ClarifythemandateoftheASBwithregardstotheexpansionoffinancialreportingfromfinancialstatementsthroughtheactivitiesofthead-hoccommitteeoftheBoard.

•MaintainexistingsetofStandardsforminorimprovementsarisingfromstakeholderconsultation.•Research the process needed to enable government to prepare a “whole-of-government”

consolidation.•Respond to internationalamendmentsby IASBand IPSASB toStandardsofGRAPbasedonan

internationalequivalent.

InfluencethedevelopmentofinternationalStandards

•IdentifyapersontobenominatedasapotentialmemberofIPSASBwhenthecurrentmember’stermexpiresin2016.

•IntheabsenceofarepresentativeonIPSASB,attendmeetingsasapublicobserver.•ParticipateintaskbasedgroupsestablishedbyIPSASBtoprovidetechnicalsupporttotheSecretariat

whendraftingpronouncements.•ProvideresourcestotheIPSASBsecretariatonprojectsthathaveanimpactontheASB’sstandard-

settingprocess.•Continue attending the Financial Reporting Standards Council as a public observer to monitor

private sector developments in standard-setting thatmay havean impact onour own standard-settingprocess.

•Publishconcurrently,forcomment,anydocumentspublishedforcommentbyIPSASBtoenableustosubmitacommentletter.

•ActivateaSouthAfricanStandard-settingprocesswhendocumentspublishedbyIPSASBareissuedasfinalpronouncements.

•ParticipateinSAICA’sAccountingPracticesCommitteetounderstandSouthAfricanissuesthatarerelevanttothestandard-settingprocess.

•MonitorIASBprojectsthathaveaSouthAfricanpublicsectorimpact.•SubmitacommentletteronIASBdocumentsthathaveanimpactonpublicsectorfinancialreporting.•Submit,inconjunctionwithSAICA,commentlettersonIASBdocumentsissuedforcomment.

FacilitatetheimplementationoftheStandardsofGRAP

•Consider the implicationsof the IPSASonFirst-timeAdoptionofAccrualBasis IPSASsoncurrentdirectivesissuedbytheASBfortransitiontoStandardsofGRAPwhencompletedbyIPSASB.

•ResearchthedisclosuresthatcanbemadewithouthavingaccesstotheplannedIFMStoenablethenationalandprovincialdepartmentsandcomponentstocommencetheadoptionofStandardsofGRAP.

•Develop a programme of workshops to create awareness amongst national and provincialdepartmentstoadoptStandardsofGRAP.

•Commentonanydevelopmentsthatinfluencefinancialreportinginthepublicsector.

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•Advocatetheadoptionofaccrualaccountingingeneral,andStandardsofGRAPinparticular,bythoseentitiesthathavenotyetmovedtoaccrualaccountingortheadoptionofStandardsofGRAP.

•Provideresources,whenavailable,totheNationalSchoolofGovernmentwhenrollingoutGRAPtrainingtoofficials.

MonitortheapplicationoftheStandardsofGRAP

•DevelopaframeworktobeusedwhenselectingaStandardofGRAPforapost-implementationreview.

•Institutionalisepost-implementationreviewsinthefunctionsoftheASB.•AnalysethefollowingtodeterminewhetherpotentialguidanceonStandardsofGRAPisneeded

basedon:•consolidatedgeneralreportsissuedbytheAuditor-General;and•feedbackfromstakeholderoutreach.

•DevelopandupdateFrequentlyAskedQuestionsasandwhenaneedisidentified.•Promotetheneedforacademicresearchintoidentifiedareasofpublicsectorfinancialreporting.

RealisethepotentialoftheemployeesoftheAccountingStandardsBoard

•RecommendtotheMinisterofFinancetheappointmentofBoardmemberswhenvacanciesexistontheBoard.

•Implementdevelopmentplansforallstaff.•Monitorstaffsatisfactionofkeystaffandinitiateactionswhendeemedappropriate.•ParticipateintheHeadsofEntityForumtomaximiseopportunitiestofindskilledfinancialstaffand

providetrainingopportunities.•Fillanyvacanciespromptly.•ArrangeinductiontrainingforallnewBoardmembers.

Communicatewithourstakeholders

•To enhance financial reporting in all three spheres of government over the next 5-10 years toimprove accountability and decision-making, target our outreach to users, and any other gapsidentifiedannuallyinthecommunicationstrategy.

•FocusontheconsultationprocessduringthedevelopmentoftheStandardsandpost-implementationreviews.

•ContinuetoencourageNationalandProvincialDepartmentstoparticipateeventhoughtheyareunlikelytowanttoparticipateuntiltheyarerequiredtodoso.

Promotegoodgovernanceandfinancialmanagement

•Maintainunqualifiedauditreportsforbothperformanceandfinancialinformation.•Continue to maintain efficient and effective governance structures (Board, audit committee,

managementcommittee)andinternalaudit.•Co-operatewithotherheadsofentitiesreportingtotheMinisterofFinancetoidentifyareaswhere

wecanshareresources.•DevelopimplementationplansforanynewlegislationapplicabletotheASB.

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Section 5GovernanceTheimplementationofeffectivegovernanceprocessesandsystemshasensuredthattheASBanditsemployeesaredirected,controlledandheldtoaccount.ThesestructuresaresupportedbytheASB’sstrategicandannualperformanceplan.TheASBisresponsibleforestablishingitsownoperatingprocedures.

TheBoard,whichistheaccountingauthorityoftheASB,isresponsibleforcorporategovernance.TheBoardfulfilsthisresponsibilitybyapprovingandimplementingthenecessarypoliciestoensurethattheASBadheresnotonlytothelegislativerequirementsassetoutinthePublicFinanceManagementAct,butalsototheprinciplesintheProtocolonCorporateGovernanceencapsulatingtheprinciplesoftheKingReportonCorporateGovernance.

Portfolio committees

ParliamentexercisesitsrolethroughevaluatingtheperformanceoftheASBbyconsideringitsannualfinancialstatementswhich,togetherwithotherdocuments,havetobetabledfromtimetotime.TheStandingCommitteeonPublicAccounts(SCOPA)isrequiredtoreviewtheASB’sannualfinancialstatementsandtheauditreportsoftheexternalauditoronaperiodicbasis.

Executive authority

TheMinisterof Finance is theexecutiveauthority responsible for theASB.TheMinister is responsible forappointingBoardmembersandforensuringthatthoseappointedhavethenecessaryskillsandexpertiseinaccountingandpublicsectorfinance.BoardmembersshouldalsohavetheknowledgeandunderstandingoffinancialreportingandgovernancetoguidetheASBasapublicentity.

Audit and risk committee

Theauditandriskcommitteeisresponsiblefor,amongothers,improvingmanagementreportingbyoverseeingtheinternalandexternalauditfunctions,ensuringtheeffectivenessofinternalcontrolsystemsandensuringtheadequacy,reliabilityandaccuracyoffinancialandperformanceinformationprovidedbymanagementtotheusers.DuetothesizeandnatureoftheASB,itsharestheNationalTreasury’sauditandriskcommittee.NationalTreasuryremuneratesthemembersoftheauditandriskcommittee.

ThepreviouschairmanoftheBoard,MrVJack,wasalsothechairmanoftheNationalTreasury’sauditandriskcommittee.TheauditandriskcommitteeelectedadifferentchairpersonwhenitconsideredmattersrelatedtotheASB.InformationonattendanceofauditandriskcommitteemembersatmeetingsandremunerationareincludedintheannualreportoftheNationalTreasury.WiththeappointmentofanewBoard,someoftheBoardmemberswillbenominatedtofillvacanciesontheNationalTreasuryauditandriskcommittee.

The Board

TheBoardconsistsof10non-executivemembers.TheyareresponsiblefortheperformanceoftheASBandensuringthatitmeetstheobjectivessetoutinthestrategicplan.

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The primary functions of the Board, in its capacity as Standard-setter, are to develop and approve Standards of GRAP,InterpretationsofStandardsofGRAP,Directives,DiscussionPapers,ExposureDrafts,andguidelinesforthoseentitiesrequiredto complywith the Standards.Once a Standard has been approved by the Board, an implementation date needs to berecommendedtotheMinisterofFinance.SucharecommendationfollowsconsultationwiththeAuditor-GeneralandNationalTreasury.

TheBoardisalsobroadlyresponsibleforpromotingtransparencyinandeffectivefinancialmanagementofrevenue,expenditure,assetsandliabilitiesinthepublicsector.ToensurethattheBoardmaintainsitsintegrityandfulfilsitsaccountabilityresponsibility,ithasdelegatedsomeofitsfunctionstotheManagementCommitteetoassistwiththeeffectiveperformanceofitsfunctions.TheManagementCommitteecurrentlyconsistsofthechairpersonandthreeotherBoardmembers.Thefunctionsthathavebeendelegatedinclude:

• Formulate,monitorandreviewthestrategicplan,majorplansofactionandriskpoliciesforrecommendationtotheBoard.• MonitortheoperationsoftheASB,asdelegatedtotheCEO,toensurethatitcomplieswithallapplicablelaws,

regulationsandothergovernmentpolicy.• Monitortheimplementationandongoingcompliancewithapprovedpoliciesandstrategies.• MonitorcompliancewiththedelegationofauthoritiestotheCEO.• ConsiderandrecommendthebudgettotheBoardforapproval.• MonitortheASB’sactualperformanceagainsttheapprovedbudgetthroughthereviewofmanagementreports.• EnsurethetimelypreparationofannualfinancialstatementsandsubmissiontotheBoardasrequiredinlegislationand

throughotherprescripts.• ConsiderandrecommendactiontotheBoardinresolvinginternalandexternalauditfindings.• ManagepotentialconflictofinterestandreportsinstancestotheBoardwhereappropriate.• ReviewthematerialityandsignificanceframeworkannuallyandrecommendamendmentstotheBoard.• MonitortheSecretariat’sperformanceagainsttheapprovedworkprogramme.• Considerremunerationandincentiveawardsforemployees,recommendingtheirapprovaltotheBoardandoverseeing

compliancewithhumanresourcepolicies.

Composition and remuneration of Board members

RemunerationofBoardmembersisdeterminedbytheMinisterofFinance.EmployeesofNationalandProvincialGovernmentandanyoftheiragencies,entitiesororgansofStatearenotremunerated.TheseareKKumar,SBadatandhisalternate,LLeRoux,theAccountant-General,MrMichaelSassandhisalternate,LBodewig,GPaulandRRasikhinya.WiththeappointmentofthenewBoardon1March2015,thefollowingmembersarenotremunerated:RRasikhinya,SBadatandhisalternate,LLeRoux,theAccountant-General,MrMichaelSassandhisalternate,LBodewig.

ActualexpensesincurredbyBoardmemberstoattendmeetingsarerefunded.

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Composition and attendance of Board meetings

Name of Board member

Designation in terms of Public Entity Board structure

Date appointed Qualifications Area of Expertise No. of Board meetings attended

VJack ChairpersonoftheBoard Re-appointedforasecondtermon1

CA(SA) Publicsectorfinance

3of4

Independentnon-executivememberChairpersonoftheauditandriskcommitteeChairpersonoftheManagementCommittee

March2012

Termendedon28February2015

TCoetzer Deputy-ChairoftheBoardfrom1December2014to28February2015ChairpersonoftheBoardfrom1March2015Independentnon-executivememberChairpersonoftheManagementCommitteefrom1March2015

Re-appointedforasecondtermon1March2015

CA(SA) Publicandprivatesectorfinance

4of4

BColyvas Independentnon-executivememberMemberoftheManagementCommittee


CA(SA) TechnicalDirector:WConsulting

4of4

CJKujenga Independentnon-executivememberMemberoftheManagementCommittee

Re-appointedforasecondtermon1March2012Termendedon28February2015

CA(SA) Auditpartner:Ernst&Young

2of4

KKumar Independentnon-executivemember


BComAccounting

Municipalaccounting

2of4

SBadat(Alternate:LLeRoux)

IndependentNon-executivemember

March2014 CA(SA) Publicsectoraudit 1of4

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LLeRoux Independentnon-executivemember

March2014 CA(SA) Publicsectoraudit 1of4

MSass(Alternate:LBodewig)

Non-executivemember March2014 CA(SA) Publicsectoraccounting

2of4

LBodewig(AlternatetoAccountant-General)

Non-executivemember February2007 CA(SA) Publicsectoraccounting

3of4

GPaul Independentnon-executivemember


BSC,FCA,MBA

Publicsectoraccounting

3of4

NRanchod Independentnon-executivemember


CA(SA) Accountingandaudittechnicalpartner:Deloitte

3of4

RRasikhinya Independentnon-executivememberMemberoftheManagementCommittee


CA(SA) Publicsectoraccounting

4of4

Composition and attendance of Management Committee meetings


Date appointed No. of meetings attended

VJack(chairperson) Re-appointedforasecondtermon1March2011Termendedon28February2015

4of4

TCoetzer Re-appointedforasecondtermon1March2015 1of1

BColyvas Re-appointedforasecondtermon1March2011 5of5

CJKujenga Re-appointedforasecondtermon1March2011Termendedon28February2015

1of4

RRasikhinya Re-appointedforasecondtermon1March2011 5of5

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Remuneration of Board members


Board fee Manage-ment committee fee

Project and ad hoc fee

Chair-person fee

Total2015

Total2014

Paidtomembers

TCoetzer 92892 5090 8907 8734 115624 9438

BColyvas 92892 25450 12725 131068 43472

Paidtoemployer

VJack 71807 17408 14507 109525 213247 173029

CKujenga 62499 11393 73891 39451

NRanchod 68906 18133 87039 41081

Total 388997 59341 54272 118259 620869 306471

Internal control and risk management

TheBoard,withtheassistanceoftheinternalauditandtheauditandriskcommittee,needstoensurethataneffective,efficientandtransparentsystemofinternalcontrolisimplementedandmaintainedsothattheASBcanmeetitsstrategicobjectivesandgoals.Thisisdonethroughtheestablishmentofanappropriatecontrolenvironment.DuetothesizeandthenatureoftheASB’soperations,acompletesystemofinternalcontrolandriskmanagementisnotfeasible.The CEO is responsible for supervising the day-to-day operations of the ASB while the Management Committee monitorscompliancewithapplicablelawsandregulationsagainsttheASB’sapprovedoperatingandpolicyprocedurestoensurethatgoalsandobjectiveareachieved.

Relianceisalsoplacedontheinternalandexternalaudit,asthesefunctionsplayanimportantroleinprovidingassurancethattheeffectiveinternalcontrolsystemsaremaintained.

TheBoardhasensuredthatthenecessarypolicies,proceduresandpracticesareinplacetoidentifyandrespondtoallrisksfacedbytheASBinatimelyandadequatemanner.ThisincludesanannualassessmentofrisksassociatedwiththefunctionsandoperationsoftheASB,andfrequentlyupdatingitsriskmanagementstrategyinresponsetotheserisks.

Internal audit

InternalauditprovidesassurancethattheBoardmaintainsaneffectiveandefficientinternalcontrolenvironment.InternalauditisresponsibleforevaluatingtheASB’scontrolsindeterminingitseffectiveness,efficiencyandeconomy.Internalauditisalsoresponsibleforimprovingandenhancingexistingcontroland,whereappropriate,developingnewrecommendations.Aswiththeauditandriskcommittee,theASBsharesitsinternalauditfunctionwiththeNationalTreasury.Duringtheperiodunderreview,theinternalauditconductedvariousreviewsandassessmentsoftheASB’scontrolenvironment.Theresultsweredirectlyreportedtotheauditandriskcommittee.Nosignificantdeviationsfrominternalauditwerereportedduringtheseassessments.

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External audit

NexiaSAB&TwereappointedasexternalauditorsoftheASB.Nonon-auditserviceswereprovidedbytheexternalauditors.Theirreportissetoutonpages35to37.

Compliance with laws and regulations

TheASBhasestablishedandimplementedvariouspoliciestoconsidercompliancewiththeapplicablelawsandregulationsonaregularbasis.

Fraud and corruption

TheBoardhasdevelopedandimplementedafraudpreventionplantoaddresstheriskoffraudandcorruption.Duringtheyearunderreview,theinternalaudithasconductedafollow-upauditontheassessmentoftheASB’sfraudpreventionstrategyandfoundthattheASBhassufficientlyimplementeditsrecommendations.

Minimising conflict of interest

Inordertominimiseconflictsofinterest,theBoardhasdevelopedandimplementedappropriateprocedurestodealwiththismatter.AllBoardmembersandtheSecretariatarerequiredtocompleteanannualdeclarationofinterests.

AteachBoardmeeting,thedeclarationsofBoardmembersareupdated.Newlyappointedemployeesarerequiredtodeclareallactualorperceivedconflictsof interestonappointment.Whennewconflictsof interestarise,employeesarerequired todeclaresuchinterestintheappropriateregister,afterwhichitisreportedtotheBoard.

Code of conduct

TheBoardhasapprovedandimplementedacodeofconductthatrequiresallBoardmembersandtheSecretariattoconductitsoperationsfairly,impartially,inanethicalandpropermanner,andinfullcompliancewithallknownandapplicablelawsandregulations.TheASBexpectsallemployeestoshareitscommitmenttohighmoral,ethicalandlegalStandards.AnyviolationsoftheCodearereportedtotheCEO,thechairpersonoftheBoardandtointernalauditandexternalaudit,whereapplicable.

Health, safety and environmental issues

TheBoardhasapprovedanoccupationalhealthandsafetypolicyaimedatprovidingandmaintainingasafeandhealthyworkingenvironmentforallitsemployees.Thispolicyisregularlyreviewed.

DuringtheperiodunderreviewnobreakdownsintheASB’spolicyconcerninghealth,safetyandotherenvironmentalissueswerenoted.

Social responsibility

As theASB is financed indirectlyby taxes, througha transferpayment from theNationalTreasury, itspolicy is tomakenodonationsorcontributionsforsocialresponsibility.Employeesmayfromtimetotimemakevoluntarycontributionsintheirpersonalcapacity.

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Human resource management and developmentIntroductionTheemploymentofdedicatedandcompetentemployeesisfundamentaltotheASBmeetingitsgoalsandobjectives.TheASBiscommittedtoemploy,train,utiliseandretainthebestpersonnelavailable,andtomakediligenteffortstodevelopandmotivateallemployees towardshigherStandardsofperformance.TheASBprovidesemployeeswithopportunities toattain their fullpotentialandtoserveatthehighestlevelofresponsibilityconsistentwiththeirowninterestsandabilities.

TheemploymentofpersonnelistheoperationalresponsibilityoftheCEO.TherecruitmentofprofessionalqualifiedemployeesistheresponsibilityoftheManagementCommittee.TheBoardhasdevelopedandimplementedvariouspoliciesrelatingtotheappointment,evaluationanddevelopmentofprofessionalemployeesaimedatprotectingandadvancingallemployees.Policy development and challenges faced by the ASB

TheBoard,throughtheManagementCommittee,regularlyreviewsexistingpoliciesandproceduresinaddressingallhumanresourcerelatedmattersandanychallengesfacedbytheASB.OneofthebiggestchallengesremainstherecruitmentandretentionofskilledtechnicalemployeesinordertomeettheASB’sobjectivesassetoutinitsstrategicplan.

Theprofessional employees comprisequalified charteredaccountantswho specialise in technicalaccounting researchanddevelopment.Potentialcandidatesarescarce.

Asanalternate toemployingstaff, theASBcontractssomeof theStandards-developmentwork toexternalserviceproviderswhentherearevacanciesamongstprofessionalstaff.Thisisnotcosteffective,astheserviceproviderworksonasingleproject,whileemployeesareexpectedtoworkconcurrentlyonaminimumofthreeprojectsandmaintainaworkingknowledgeofanyprojectcurrentlyontheASBworkprogramme.Itissometimesnecessarytodothis,however,toenabletheASBtoachieveitsstrategicobjectives.

Recruitmentincludesheadhuntingtechnicalemployeesfromaccountingfirms,advertisementsinnationalnewspapersandtheuseofemploymentagencies.

Employment equity

TheASBsupportsemploymentequity in theworkplace.Thedemographiccompositionof theASBat reportingdatewasasfollows.

African Coloured Indian White

Board:

Female 2 0 1 1

Male 1 0 3 2

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Secretariat – operational employees:

Female 1 0 0 3

Male 0 0 1 1

Secretariat – support employees:

Female 0 2 0 2

Male 0 0 0 0

Total:

Female 3 2 1 4

Male 1 0 4 2

Grandtotal 4 2 5 6

Human resource oversight statistics

Remuneration of employees

TheASBremuneratesemployeesatmarket-relatedlevels,benchmarkedagainstapplicableremunerationpoliciesinthemarket.AllthepositionsintheASBhavebeengradedusingthePattersonscaleofgradingasthisgradingscaleissufficientlyflexibletodeterminepayscalesforeachemployee.RemunerationisbasedontotalcosttotheASB,whichincludescontributionstomedicalaids,providentfundsandretirementannuityfunds.Salaryincreasesaredeterminedbyworkperformance,growthinthejobprofileandanannualcostoflivingadjustment.

Personnel cost by salary band

Level Personnel Expenditure

(R’000)

% of personnel exp. to total

personnel cost (R’000)

No. of employees Average personnel cost per employee

(R’000)

TopManagement 2274 29.7% 1 2274

Professionalqualified 4788 62.6% 4 1197

Skilled 588 7.7% 2 294

TOTAL 7650 100% 7

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Performance Rewards

TheASBacknowledgestheneedforaneffectiveincentiveschemeandpolicythatallowsfortherecognitionandrewardofbothorganisationalandindividualperformance.Thisispartofthedevelopmentandimplementationofaperformancemanagementprocesswithin theASB. TheManagementCommitteehas therefore implementedan incentiveschemeofwhichavariablecomponentisallocatedbasedon40%infavouroforganisationalperformanceand60%infavourofindividualperformance.Incentivestoamaximumof30%ofguaranteedremunerationarepaid,atthediscretionoftheManagementCommittee.

The Chairperson evaluates the Chief Executive’s performance and the Management Committee oversees the performancereviewsandremunerationoftheSecretariat.

Performance rewards Personnel Expenditure (R’000)

% of performance rewards to total personnel cost

(R’000)TopManagement 372 2274 4.9%Professionalqualified 776 4788 10.1%Skilled 97 588 1.3%TOTAL 1245 7650

Employment and vacancies

2013/2014 No. of Employees

2014/2015 Approved Posts

2014/2015No. of Employees

2014/2015 Vacancies

% of vacancies

TopManagement 1 1 1 0 0%Professionalqualified

4 4 4 0 0%

Skilled 2 2 2 0 0%TOTAL 7 7 7 0 0%

Development of employees

TheASBiscommittedtodeliveringqualityservicesthroughitsemployees.Itthusensuresthatallemployeesreceiveup-to-date,relevantandeffectivetraininganddevelopmentsothattheASBcanfulfilitsmissionandvision.VariouspoliciesandproceduresconcerningthetraininganddevelopmentofemployeeshavethereforebeendevelopedandapprovedbytheBoard.Thesepoliciesandproceduresareaimedatensuringthatemployeesareprovidedwiththenecessaryknowledgeandskillstodevelopatbothapersonalandcareerlevel.

Personnel Expenditure (R’000)

Training Expenditure(R’000)

Training Expenditure as a % of Personnel

Cost.

No. of employees trained

Average training cost per employee

7650 233 3% 7 33.3%

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Report of the Audit and Risk CommitteeWearepleasedtopresentourreportforthefinancialyearended31March2015.

Audit and Risk Committee Responsibility

TheCommitteeoverseestheeffectivenessoftheASBsfinancialreporting,internalcontrolandriskmanagement.Italsooverseestherelationshipoftheexternalauditor,monitorstheintegrityofthefinancialstatementsandtheeffectivenessoftheinternalauditfunction.

TheCommitteeisregulatedbyitsapprovedtermsofreferenceandauditandriskcommitteecharter,andhasdischargeditsresponsibilitiessetouttherein.TheAuditandRiskCommitteecompliedwithsection51(1)(a)ofthePFMAandTreasuryRegulation27.1.

Membership and meetings

InformationonattendanceofauditandriskcommitteemembersatmeetingsandremunerationareincludedintheannualreportoftheNationalTreasury.WiththeappointmentofthenewBoard,someoftheBoardmemberswillbenominatedtofillvacanciesonthesharedNationalTreasuryauditandriskcommittee.

Role of the Audit and Risk Committee

• EffectivenessofInternalControl TheAuditandRiskCommitteehas,amongothers,reviewedthefollowing:

* theeffectivenessoftheinternalcontrolsystems;* thereportsissuedbyinternalandexternalauditandtheresponseofmanagementtospecificrecommendations;* theriskareasoftheentity’soperationscoveredinthescopeofinternalandexternalaudits;* theadequacy,reliabilityandaccuracyoffinancialinformationprovidedtomanagementandusersofsuch

information;* accountingandauditingconcernsidentifiedasaresultofinternalandexternalaudits;* compliancewithlegalandregulatoryprovisions;and* theindependenceandobjectivityofbothinternalandexternalauditors.

TheAuditandRiskCommitteeisoftheopinion,basedontheinformationandexplanationsgivenbymanagement,theinternalauditor,anddiscussionswiththeindependentexternalauditorontheresultofitsaudit,thatthesystemofinternalcontrolfortheperiodunderreviewwasefficientandeffective.

• InternalAuditTheAuditandRiskCommitteeconsiderstheinternalauditfunctiontobefunctioningeffectivelyandhasaddressedtheriskspertinenttotheASBinitsaudit.Duringtheyeartheinternalauditfunctionperformedthefollowingactivities:

* Reviewofauditreadiness.* Auditofperformanceinformation

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Opinion

Inouropinion,theannualfinancialstatementspresentfairly,inallmaterialrespects, thefinancialpositionoftheAccountingStandardsBoardasat31March2015anditsfinancialperformanceandcashflowsfortheyearthenended,inaccordancewith theSouthAfricanStandardsofGenerally RecognisedAccounting Practiceand the requirements of the Public FinanceManagementActofSouthAfrica.

REPORTONOTHERLEGALANDREGULATORYREQUIREMENTS

InaccordancewiththePublicAuditActofSouthAfrica,2004(ActNo.25of2004)andthegeneralnoticeissuedintermsthereof,wehavearesponsibilitytoreportfindingsonthereportedperformanceinformationagainstpredeterminedobjectivesforselectedobjectivespresentedintheannualperformancereport,non-compliancewithlegislationandinternalcontrol.Weperformed tests to identify reportable findings as described under each subheading but not to gather evidence to expressassuranceonthesematters.Accordingly,wedonotexpressanopinionorconclusiononthesematters.

Predetermined Objectives

Weperformedprocedurestoobtainevidenceabouttheusefulnessandreliabilityofthereportedperformanceinformationforthefollowingselectedobjectivespresentedintheannualperformancereportoftheentityfortheyearended31March2015:

• Objective1:Influencedevelopmentofinternationalstandardsonpages8to9• Objective2:SetStandardsofGRAPonpages9to10• Objective3:FacilitatetheimplementationoftheStandardsofGRAPonpage10• Objective4:MonitortheapplicationoftheStandardsofGRAPonpages11• Objective5:ManagingtheASBasanentityonpages12

Weevaluated the reportedperformance informationagainst theoverallcriteriaofusefulnessandreliability. WeevaluatedtheusefulnessofthereportedperformanceinformationtodeterminewhetheritwaspresentedinaccordancewiththeNationalTreasury’sannualreportingprinciplesandwhetherthereportedperformancewasconsistentwiththeplannedobjectives.Wefurtherperformed tests todeterminewhether indicatorsand targetswerewelldefined,verifiable, specific,measurable, timeboundandrelevant,asrequiredbytheNationalTreasury’sFramework for managing programme performance information (FMPPI).Weassessedthereliabilityofthereportedperformanceinformationtodeterminewhetheritwasvalid,accurateandcomplete.

Wedid not identify anymaterial findings on the usefulness and reliability of the reported performance information for thefollowingobjectives:

• Objective1:Influencedevelopmentofinternationalstandards• Objective2:SetStandardsofGRAP• Objective3:FacilitatetheimplementaionoftheStandardsofGRAP• Objective4:MonitortheapplicationoftheStandardsofGRAP• Objective5:ManagingtheASBasanentity.

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Annual Financial StatementsSTATEMENTOFFINANCIALPOSITIONASAT31MARCH2015

FiguresinRand Note 2015 2014

AssetsNon-currentassetsProperty,plantandequipment 5 197 878 282 140

CurrentassetsReceivablesfromexchangetransactions 6 89 876 98 334Cashandcashequivalents 7 907 998 2 736 405

997 874 2 834 739Totalassets 1 195 752 3 116 879

NetassetsandliabilitiesLiabilitiesCurrentliabilitiesUnusedfundstobesurrenderedtotheNationalRevenueFund 8 - 1 249 514Employeebenefitprovisions 9 319 051 250 059Payablesfromexchangetransactions 10 678 823 1 259 326Netassets 997 874 2 758 899Accumulatedsurplus 11 197 878 357 980Totalnetassetsandliabilities 1 195 752 3 116 879

STATEMENTOFFINANCIALPERFORMANCEFORTHEYEARENDED31MARCH2015

RevenueNon-exchangerevenueTransfer 1 11 499 514 9 951 123ExchangerevenueInterest 182 507 117 569Profitondisposalofassets 5 - 3 000Otherincome 150 300 98 761

332 807 219 33011 832 321 10 170 453

ExpenditureDepreciationandimpairment 5 (84 262) (65 578)Employeebenefits 2 (7 650 460) (6 674 668)Operatingexpenditure (4 257 701) (3 278 857)

(11 992 423) (10 019 103)(Deficit)/surplusfortheyear (160 102) 151 350

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STATEMENTOFCHANGESINNETASSTESFORTHEYEARENDED31MARCH2015

FiguresinRand Note Accumulatedsurplus

Totalnetassets

Balanceat01April2013 206 630 206 630

Surplusfortheyear 151 350 151 350

Balanceat01April2014 357 980 357 980

Deficitfortheyear (160 102) (160 102)

Balanceat31March2015 11 197 878 197 878

CASHFLOWSTATEMENTFORTHEYEARENDED31MARCH2015

FiguresinRand Note 2015 2014

Cashflowfromoperatingactivities

Cashreceipts

Transfer 10 250 000 10 061 000

Other 150 300 98 76110 400 300 10 159 761

Cashpaid

Employees (8 577 454) (5 689 472)

Suppliersandother (3 833 761) (3 532 312)(12 411 215) (9 221 784)

Netcashfromoperatingactivities 12 (2 010 915) 937 977

Cashflowsfrominvestingactivities

Purchaseofproperty,plantandequipment 5 - (141 087)

Proceedsfromsaleofproperty,plantandequipment 5 - 3 000

Interestincome 182 507 117 569

Netcashfrominvestingactivities 182 507 (20 518)

Totalcashmovementfortheyear (1 828 408) 917 459Cashatthebeginningoftheyear 2 736 405 1 818 946

Totalcashatendoftheyear 7 907 997 2 736 405

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STATEMENTOFCOMPARISONOFBUDGETANDACTUALAMOUNTSFORTHEYEARENDED31MARCH2015

Note Actual Budget Variance

Revenue

Transfer 17a 11 499 514 10 250 000 1 249 514

Interest 182 507 70 000 112 507

Otherincome 150 300 80 000 70 30011 832 321 10 400 000 1 432 321

Less:operatingexpenditure 11 908 161 10 400 000 1 508 161Employeebenefits 7 650 460 7 724 686 (74 226)

Boardremuneration 628 360 667 203 (38 843)

Domestictravel 161 796 203 326 (41 530)

Foreigntravel 557 071 484 629 72 442

Trainingandrefreshments 241 870 92 419 149 451

Communicationandmarketing 17b 1 134 226 160 471 973 755

Printingandpublications 114 211 117 133 (2 922)

Administration 17c 1 420 167 950 133 470 034(Deficit)/Surplusfortheyearbeforedepreciationandimpairment

(75 840) - (75 840)

Add:Depreciationandimpairment 17d (84 262) (85 817) (1 555)

(Deficit)/Surplusfortheyear (160 102) (85 817) (77 395)

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STATEMENTOFACCOUNTINGPOLICIES

General information

TheAccountingStandardsBoardisajuristicpersonestablishedinaccordancewiththePublicFinanceManagementAct,ActNo1of1999,asamended(PFMA).TheprincipalactivityoftheASBisthesettingofStandardsofGenerallyRecognisedAccountingPractice(GRAP).

Basis of preparation

Theannual financialstatementshavebeenprepared inaccordancewithStandardsofGRAP.Theyarepresented inSouthAfricanRand,whichisthefunctionalcurrencyoftheRepublicofSouthAfrica.

Thehistoricalcost conventionhasbeenused,exceptwhereotherwise indicated. Managementhasusedassessmentsandestimates in preparing the annual financial statements. These are based on the best information available at the time ofpreparation.Thefinancialstatementshavebeenpreparedonagoingconcernbasis.

Adoption of new and revised Standards

Standards in issue but not effective

ThefollowingStandardsofGRAPthathavebeenissued,butarenotyeteffective,arenotlikelytoaffecttheannualfinancialstatementswhentheyareadoptedastheseStandardshavebeenusedtoformulateandinformthecurrentaccountingpoliciesanddisclosures:

GRAP20 RelatedPartyDisclosures;andGRAP108 StatutoryReceivables.

Comparative figures

Noreclassificationofcomparativefigureshasbeenmade.

Comparison to budget

Thefinancialstatementsandthebudgetarepreparedonthesamebasisofaccounting.Comparativeinformationisnotrequiredforthisreport.

Key accounting policies

Thekeyaccountingpoliciesaresetoutbelow.ThekeyaccountingpoliciesrelatetotherevenueoftheASBandpoliciesrelatedtoemploymentcosts,themainactivitiesoftheASB.AcompletelistofaccountingpoliciesisavailableontheASBwebsiteonwww.asb.co.za.

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Employee benefits

Shorttermemployeebenefits

Thecostofshorttermemployeebenefitsisrecognisedintheperiodinwhichtheserviceisrendered.

Provisionforemployeebenefits

Provision foremployeeentitlement toannual leave represents thepresentobligation that theASBhas topayasa resultofemployees’servicesprovidedtothereportingdate.Theprovisionhasbeencalculatedatundiscountedamountsbasedonsalaryrateseffectiveatthereportingdate.

Postretirementemployeebenefits

TheASBoperatesadefinedcontributionplanforitsemployeesandisnotliableforanyactuariallosssustainedbythefund.Accordingly,noprovisionhasbeenmadeforanysuchlossesandcontributionspaidareexpensed.

Transfer from the National Treasury

ThetransferfromtheNationalTreasuryisrecognisedwhenitisprobablethatfutureeconomicbenefitswillflowtotheASBandwhentheamountcanbereliablymeasured.Revenueisrecognisedtotheextentthatthereisnofurtherobligationarisingfromthereceiptofthetransferpayment.

Services received in kind

TheASBreceivesservicesinkindfromtheNationalTreasureforthesharedinternalauditfunctionandremunerationpaidtothemembersoftheAuditandRiskCommittee.ItalsoreceivesservicesinkindfrommembersofprojectgroupswhoarenotremuneratedbytheASBfortheircontributionstostandard-setting.TheASBcannotreliablydetermineafairvaluefortheservicesitreceivedinkind.AccordinglynoamountisrecognisedintheStatementofFinancialPerformanceforthevalueoftheseservicesreceived.

Critical accounting judgements

Aspectswherejudgementhasbeenexercisedthatmayhaveasignificantriskofcausingamaterialadjustmenttothecarryingvalueofassetsandliabilitieswithinthenextfinancialperiodarediscussedbelow.

Determinationofusefullivesforproperty,plantandequipment

ThenatureoftheASB’soperationsresultsindifficultiesindeterminingtheusefullivesofitemsofproperty,plantandequipment.Theassetlivesexceedindustrynormsforsimilarassets.Inre-assessingusefullives,thedepreciationchargeintheStatementofPerformanceisadjusted.

Adequacyoftheleavepayprovision

Theleavepayprovisionisbasedonactualdaysaccruedattherateofremunerationatthereportingdate.Changesintherateofremunerationaredeterminedannuallyandareeffectivefromthefirstdateofthefinancialyear.Theprovisionisonlyneededwhenstaffresign,asunusedleaveisforfeitedayearaftertheyearinwhichitaccrued.

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NOTESTOTHEFINANCIALSTATEMENTSFORTHEYEARENDED31MARCH2015

2015 2014

1.Transfers

Operatingexpenses 11 992 423 10 019 103

Depreciationandimpairment (84 262) (66 578)

Purchaseofproperty,plantandequipment - 141 087

Proceedsondisposalofproperty,plantandequipment - (3 000)

Straightliningoflease (75 840) 75 840

Interestincome (182 507) (117 569)

Otherincome (150 300) (98 761)

Amountutilisedduringtheyear 11 499 514 9 951 123

2.Employeebenefitcosts

Basicsalaries–permanentstaff 7 639 348 6 663 643

ContributiontotheUIF 11 112 11 0257 650 460 6 674 668

3.Operatingexpenseshasbeenarrivedataftercharging

Auditors’remuneration-Fees 98 872 93 257Depreciation 84 262 65 578Legaladvice 118 238 20 000Feespaidtoconsultantsforstandard-settingresearch 175 000 450 000Feespaidtoconsultantsforhumanresourceservices 8 835 133 722

4.Taxation

TheASBisexemptfromincometaxasmorethan80%ofitsexpenditureisdefrayedfromfundsvotedbyParliament.TheASBisexemptfromthepaymentofValueAddedTax(VAT)onthetransferreceived.Asaresult,anyVATpaidbytheASBisalsonotrefundablebySARS.

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5.Property,plantandequipment

2015 2014

Cost Accumulateddepreciation

Carryingvalue Cost Accumulateddepreciation

Carryingvalue

Furnitureandfittings

390 618 (269 140) 121 478 393 981 (239 983) 153 998

Officeequipment

226 991 (150 591) 76 400 238 203 (110 061) 128 142

Total 617 609 (419 731) 197 878 632 184 (350 044) 282 140

Reconciliation of property, plant and equipment

Furnitureandfittings Officeequipment Total

Balance1April2013 137 107 69 523 206 630

Additions 45 625 95 462 141 087

Disposalsatcost - (124 577) (124 577)

Depreciationondisposals - 124 578 124 578

Depreciationandimpairment (28 734) (36 844) (65 578)

Balance1April2014 153 998 128 142 282 140

Additions - - -

Disposalsatcost (3 363) (11 212) (14575)

Depreciationondisposals 3 365 11 210 14 575

Depreciationandimpairment (32 522) (51 740) (84 262)

Balance1April2015 121 478 76 400 197 878

2015 2014

Proceedsondisposal - 3 000

Costoffullydepreciatedassetsstillinuse - 47 148

6.Receivablesfromexchangetransactions

Financialassetsatamortisedcost

Prepayments 34 669 36 400

Deposits 55 207 61 93489 876 98 334

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Refertonote14onfinancialinstrumentsonhowriskismanagedinrelationtothefinancialassetslistedabove.

2015 2014

7.Cashandcashequivalents

Cashandcashequivalentsconsistofthefollowing:

Financialassets

Cashonhand 213 384

Cashatbank 74 637 998 859

Depositsheldininvestmentaccounts 833 147 1 737 162907 997 2 736 405

Refertonote14onfinancialinstrumentsonhowriskismanagedinrelationtothefinancialassetslistedabove.

8.UnusedfundstobesurrenderedtotheNationalRevenueFund

Openingbalance (1 249 514) (1 139 637)

Transferpaymentreceived (10 250 000) (10 061 000)

Transferpaymentutilisedduringtheyear 11 499 514 9 951 123

Closingbalance 0 (1 249 514)

Inaccordancewithsection53(3)ofthePFMAtheunusedtransferpaymentcannotberetainedwithoutpriorwrittenapprovalfromtheNationalTreasury.

9.Employeebenefitprovision

Openingbalance 250 059 257 901

Increaseinprovision 549 671 485 921

Changeinestimate 22 301 18 815

Leavepaidout - (16 848)

Amountsutilisedduringtheyear (502 980) (495 730)

Closingbalance 319 051 250 059

IntermsoftheASB’sleavepaypolicy,employeesareentitledtoaccumulatedvestedleavepaybenefitsnottakenwithinaleavecycle,providedthatanyleavepaybenefitsnottakenwithinaperiodofoneyearaftertheendofaleavecycleareforfeited.

10.Payablesfromexchangetransactions

Payablesatamortisedcost 83 216 51 962

Accrualsforgoodsandservices 590 177 130 108

Payrollrelatedaccruals 5 430 1 001 416678 823 1 183 486

Straight-liningofoperatingleases - 75 840678 823 1 259 326

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2015 2014

11.Accumulatedsurplus

Openingbalance 357 980 206 630

(Deficit)/surplusfortheyear (160 102) 151 350

Closingbalance 197 878 357 980

Madeupasfollows:

Netbookvalueofnon-currentassets 197 878 282 140

Straight-liningofoperatingleases - 75 840197 878 357 980

12.Netcashfromoperatingactivities

(Deficit)/surplusfortheyear (160 102) 151 350

Adjustmentsfor:

Depreciationandimpairment 84 262 65 578

Increase/(Decrease)inprovisions 68 992 (7 842)

Interestincome (182 507) (117 569)

Profitondisposalofproperty,plantandequipment - (3 000)

Changesinworkingcapital:

Receivablesfromexchangetransactions 8 457 226

Payablesfromexchangetransactions (580 503) 739 357

UnusedfundstobesurrenderedtotheNationalRevenueFund (1 249 514) 109 877

(2 010 915) 937 977

13.Financialinstruments

Financialassets

Cashandcashequivalents 907 997 2 736 405

Financialliabilities

Payablesfromexchangetransactions 678 823 1 183 486

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14.FinancialriskmanagementCreditrisk

ReceivablesfromexchangetransactionsThereceivablesareexposedtoalowcreditriskandnoamountsareoverdue.CashandcashequivalentsCashanddepositsareheldwithanAAratedregisteredbankinginstitutionandareregardedashavinginsignificantcreditrisk.ThebalanceisheldattheCentralPublicDepository(CPD),whichhasthesameratingastheSouthAfricanReserveBank.Cashininvestmentaccountsarekeptatamaximuminordertomaximiseinterestearned.TheASBhasinvestedanycashneededinapproximatelyamonthinashorttermmoneymarketaccount,andthebalanceintheCPD.Theinterestratesontheseaccountsfluctuateinlinewithmovementsincurrentmoneymarketrates.RatesearnedonfundsdepositedwiththeCPDarehigherthanthoseearnedonfundsintheshort-termmoneymarketaccount.

LiquidityriskPayables from exchange transactionsTheBoardisonlyexposedtoliquidityriskwithregardtothepaymentofitspayables.Thesepayablesareallduewithintheshort-term.TheASBmanagesitsliquidityriskbyholdingsufficientcashinitsbankaccount,supplementedbycashavailableininvestmentaccounts.

InterestrateriskReceivables from exchange transactions

Thereceivablesareexposedtoaninsignificantamountofinterestraterisk.

15.RelatedParties 2015 2014

Compensationtokeymanagement–ChiefExecutiveOfficer’sremuneration

Salary 1 900 000 1 765 000

Performancebonus 371 868 332 808

UIFcontributions 1 785 1 785

2 273 653 2 099 593

TheBoardappointedtheChiefExecutiveOfficer,MsESwart,on1March2003.HerperformancebonusisdeterminedafteranannualperformanceevaluationofbothherperformanceandthatoftheASBasawhole.

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Chairperson’sfee 2015 2014

Fee 118 259 113 039

Boardmeetings 71 807 41 081

ManagementCommitteemeetings 17 408 11 085

Projectgroupmeetings - 7 824

Other 14 507 -

221 981 173 029

OtherBoardmembers’fees

Boardmeetings 317 189 117 529

ManagementCommitteemeetings 41 933 15 913

Projectgroupmeetings 3 627 -

Other 36 139 -

398 888 133 442

620 869 306 471

ThoseBoardmembersemployedbynationalorprovincialgovernmentorotherorgansofstatearenotremunerated.

Averagenumberofmembers

Board 10 9

ManagementCommittee 4 4

Averagenumberofemployees

Secretariat 7 6

TheNationalTreasuryactsonbehalfoftheMinisterofFinanceasExecutiveAuthorityandhastheresponsibilitytomakeprovisionforfundingtheactivitiesoftheASBbywayofagrantlistedintheEstimatesofNationalExpenditure(seenote6).TheASBalsoreceivesAuditandRiskCommitteeandinternalauditservicesthatarepaidforbytheNationalTreasury.

ByvirtueofthefactthattheASBisanationalpublicentityandcontrolledbythenationalgovernment,anyothercontrolledentityofthenationalgovernmentisarelatedparty.Alltransactionswithsuchentitiesareatarm’slengthandonnormalcommercialterms,exceptwhereemployeesofnationaldepartmentsornationalpublicentitiesparticipateintheASB’sprocessesanddonotreceiveanyremuneration.

TheASBdoesnotfullycompensateBoardorManagementCommitteeforthepreparationrequiredformeetings.Projectgroupmembersarealsonotremuneratedforeitherattendanceorpreparationtime.

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16.Commitments Atthereportingdate,theASBhadcommitmentsoutstandingunderanoncancellableoperatinglease,whichfalldueasfollows:

Officebuildingandparking 2015 2014

Duewithinoneyear 583 311 543 098

Duewithin2-5years 2 333 242 -

2 916 553 543 098

TheASBenteredintoafiveyearleaseagreement,whichcommencedon1April2010andterminatedon31March2015.TheASBhasrenewedtheleaseforanother5yeartermandwithnoincreaseintherentalinthefirstyearandanescalationofrentalof5.5%perannumthereafter.Thecostoftheleaseisstraightlinedovertheperiodofthelease.

17.Budgetvariances

ThebudgetwasapprovedbytheBoardandsubmittedtotheexecutiveauthorityintermsofsection53(1)ofthePFMA.

Inaccordancewiththerevenuerecognitionpolicy,thetransferpaymentreceivedisreducedbytheamountnotusedandthatamounthastobesurrenderedtotheNationalRevenueFund.

Explanationsforothersignificantvariancesare:

a.Consenttoretaintheprioryearsurplus,resultedintheincreaseinrevenue.b.InaccordancewiththerequirementsoftheUseofOfficialLanguagesAct,StandardsofGRAParebeingtranslatedinto isiZulu,SesothoandAfrikaanswithaninitialexpenseofR864255.InthecurrentyearwetranslatedalltheStandardsthat havebeenissuedtodate.InfutureonlychangestoStandardsornewstandardswillneedtobetranslated.c. InaccordancewiththeTreasuryRegulations,anumberofcontractsenteredintobytheASBweresubmittedforreviewby thelegaladvisorresultinginanexpenseofR124763.ConsultantswerecontractedtoperformresearchfortheASBto thevalueofR175000.ThecostofrecruitmenttofillavacancywithintheASBcostR164160.Thesurplusfromtheprior yearwasretainedwithapprovaloftheNationalTreasurytofundtheseexpenses.d.Thenetdeficitisanoncashdeficitattributabletodepreciationandchangesintheprovisionforleavepay.

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