Nemisa annual report 2011-2012 by PetrolBOMB™

ANNUAL REPORT

2011/2012

I IG

TAL

National Electronic Media Institute of South Africa Annual Report 2011/12

ISBN: 978-0-620-54328-6 Designed by PetrolBOMB Designs.

General Information

Chairperson’s Report

Acting CEO’s Report

Corporate Governance Report

Human Resources

Board of Directors

Executive Management

Organisational Structure

Human Resource Report

NEMISA Staff

Performance Report

Student Representative Council

Alumni Profiles

Annual Financial Statements

| 34

Directors' responsibilities and approval of the financial statements

Report of the Board Audit and Risk Management Committee

Chairperson’s Report

P. 18

NEMISA Staff

38 - 39

Report of the Directors

Company Secretary’s Certification

Statement of Financial Position

Statement of Financial Performance

Statement of Changes in Net Assets

Cash Flow Statement

Accounting Policies

49 - 54

Notes to the Annual Financial Statements

55 - 69

CONTENTS

P. 2

General Information

Report of the Auditor-General to Parliament

| 20

NEMISA Performance Report

Student Showcase

P. 29

SRC

P. 31

Student’s work

It gives me great pleasure to present the 2011/2012 Annual Report of the National Electronic Media Institute of South Africa (NEMISA) on behalf of our Board of Directors. NEMISA is playing a leading role in terms of developing skills for the creative industries in South Africa. Furthermore the organization is also major contributor in terms of providing the much needed advanced skills training for the broadcasting industry. NEMISA’s emphasis is on ensuring that students are equipped with the relevant broadcasting, animation, and graphic design skills which are market related and increase their employability and entrepreneurial abilities. The vision of NEMISA is to “become a transformational leader in the training and development of world class ICT and electronic media skills in pursuit of knowledge and innovation in South Africa, and the African continent.” It is from that note that NEMISA aims to achieve its vision in preparing professional, well-rounded graduates. The strategic priorities contained in the strategic plan are an effort to capitalize on our existing strengths as well as creating new avenues for building a world-class training institute that contributes to the developmental needs of a developmental state. The institution has been accredited by the MICT SETA for the five years. In addition our courses have been accredited for a further five years also. The institution has assumed

a leadership role in training and development in the creative industries. NEMISA has provided training to a number of FET Trainers on Multi-Media Skills. Our staff members are continuing to contribute to the advancement of the Industry by presenting papers at international ICT conferences. Our students have won trophies at the CIT:Y Awards ceremony. In addition we are about to release episodes of 3D animation series (Magic Cellar) internationally.

Subcommittees namely the Board Audit and Risk Management Committee and the Human Resources and Remuneration Committee to ensure effective oversight. These sub committees are functional and have satisfactorily fulfilled their responsibilities as set out in their respective charters. The Board and its sub-commitees have been overseeing the implementation of the NEMISA’s 2011-2014 Strategic plan and the 2011/12 Annual performance plan.

The Department of Communications (DoC) has set themselves targets to contribute towards growing ICT skills base in South Africa and the creation of employment opportunities in the sector. These two objectives are talking to the raison d^etre of NEMISA. In addition these focus areas show the critical role that DoC as the shareholder department of NEMISA is expecting NEMISA to play and the interesting challenges that lay ahead for the organization. NEMISA has been tasked to integrate e-skills, ISSA and NEMISA into one organisation.

I would like to extend my gratitude to my fellow board members for their selfless efforts and their invaluable contributions to the success of NEMISA.

We would like to commend the good leadership and role played by the Minister of Communications, Honorable Ms. Dinah Pule, and the Deputy Minister of Communications Honorable Ms. Stella Ndabeni, who continued to provide superior support to NEMISA in ensuring that the institution stays relevant in the industry. The NEMISA Board has been working in unison with the Executive Management to ensure good governance and leadership. The Board has established two Board

On behalf of the NEMISA Board, Management and staff we would like to recognize the great contribution made by the late Chairperson of the Board Mr. Tsediso Gcabashe towards the success of NEMISA. Tsediso has served in the board of NEMISA since 2004 until early 2012 when he passed on. May his soul rest in peace. His leadership and guidance will surely be missed at NEMISA. I would like to proudly mention the devotion of the NEMISA Management, staff and students for their commitment and hard work and dedication to lead and develop the ICT creative industry

Dr Molatelo Maloka Board Chairperson

CHAIRPERSON’S REPORT DR. MOLATELO MALOKA

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General Information

Dr Molatelo Maloka Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things toHello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to

General Information

INTRODUCTION This report provides a high level overview of the main achievements of NEMISA during the 2011/12 financial year, some of the challenges it faced and the way forward.

STUDENT ENROLLMENT In the period under review, 106 out of 128 full-time students were successful in their final examinations across the different courses that were offered. The 128 students was the maximum number of students that NEMISA could accommodate. The high pass rate, which was 3% higher than our target pass rate, was achieved in the face of serious challenges with regards to space and an increase in the demand for both human and financial resources. One hundred and four students received full bursaries.

courses, not only for the multimedia sector, but also for other training institutions. It developed 3 customised programmes for television and for the Further Education and Training (FET) sector. The latter created sustainability in the creative multi-media sector as we enhanced the capacity of the FET sector to train students in multi-media by training lecturing staff at FET colleges.

PRODUCTION Our students continued to fly the NEMISA flag, bagging trophies in the CIT:Y Awards. We also continued to provide production and marketing opportunities for our alumni, having established a channel on YouTube as well as participating in various productions. The final episode of a 3D animation series, the Magic Cellar, is set for international release.

NEMISA AND JOB CREATION ACCREDITATION We were able to make progress in dealing with a number of legacy issues, in particular the lack of stability in the certification of students. All past results have now been verified and students can be issued with MICT SETA accredited certificates. NEMISA also received full accreditation status for six full-time courses in radio and TV, animation and graphic design.

DEVELOPMENT OF QUALIFICATIONS NEMISA participated in creating academic

There is today widespread agreement of the importance of information and communication technologies (ICTs) and associated knowledge production for building a more equitable prosperity and globally competitive and inclusive knowledge economy in South Africa. There is also substantive evidence that in South Africa there is a serious shortage of skills that will enable an effective use of the contemporary ICTs. The approval of a new NEMISA strategy in 2011 is therefore a significant step forward in delivering students that will be employable, and that will be capable of creating new jobs

CEOâ&#x20AC;&#x2122;S REPORT DR. HAROLD WESSO

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General Information

in the emerging knowledge economy. NEMISA's new vision is: "To become a transformational leader in the training and development of world class ICT and electronic media skills in pursuit of knowledge and innovation in South Africa and the African continent.

CHALLENGES NEMISA currently faces a number of challenges, mainly due to a rapidly changing ICT environment. It is increasingly impacted by the unprecedented escalation in ICT capacity, availability, convergence, affordability and mobility. The following key challenges have been identified: - No or little high level research capacity; - The low level of qualifications that are offered, i.e. NQF Levels 4 and 5, impacting its competiveness in the broader academic environment in South Africa; - The delay in the verification of examination results by accreditation bodies, resulting in a delay in students receiving their accredited certificates; - Inadequate physical infrastructure; - Inadequate government funding and the inadequate generation of additional revenue to ensure financial sustainability.

WAY FORWARD Matters of great importance that must be addressed in the immediate to short term include: creating sustainable relations with partners in academia and the private sector to generate new modes for the funding of

programmes and projects; develop qualifications at a higher level that will respond to national developmental goals; attracting staff with senior degrees to support NEMISA's commitment to a new and relevant research agenda; secure new campus facilities to accommodate a growing number of students interested in multimedia studies.

Dr Harold Wesso Acting Chief Executive Officer

[FULL PAGE IMAGE OF CEO]

Dr Harold Wesso Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things toHello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to

General Information

INTRODUCTION This report sets out the key governance principles adopted by the directors in governing NEMISA. The stringent requirements for more effective corporate governance practices by organisations are rapidly escalating, both globally and in South Africa. The Board endorses the principles of accountability, integrity and transparency underlying the Code of Corporate Practices and Conduct as contained in the King III Report on Corporate Governance and also endorses the principles contained in the Protocol on Corporate Governance for State Owned Enterprises as well as the dictates of the Public Finance Management Act 1 of 1999, as amended. The Board fully appreciates the growing demand for accountability, honesty and transparency in fulfilling its fiduciary duties towards the shareholder and the Company. To this end, the Board is striving to comply with best corporate governance practices in order to: • • • • •

Promote informed and sound decision making; Mitigate against reputational impacts; Gain the trust and confidence of stakeholders; Lead to effectiveness and efficiency; and Enable legal compliance.

The Board is responsible for the ongoing assessment of the company’s policies relating to: • Strategic and annual plans • Reviews of management performance against objectives; • Ongoing assessment of policies, which include; - Delegation of powers of Board Committees; - Responsibilities and Terms of Reference of Board Committees; and - Level of authority of Board Committees In preparing the annual financial statements, NEMISA used appropriate accounting policies supported by reasonable and prudent judgements and estimates, and has complied with all applicable standards. The Board is of the opinion that the annual financial statements fairly present the financial position of the company as at 31 March 2012, and the results of operations and cash flows for the year then ended. In addition to King III, as referred to above, NEMISA takes cognisance of corporate governance requirements addressed in documents such as the: • • • • • •

Public Finance Management Act No. 1 of 1999, as amended; National Treasury Regulations in terms of Government Notice No. R740 in the Government Gazette No.23463, published on 25 May 2002; Protocol on Corporate Governance in the Public Sector, 2002; Annual Performance Plan Board Charter; and Memorandum and Articles of Association of the company

BOARD OF DIRECTORS The names of all Board members, as well as members of various Board Committees can be found on page 9 of the Annual Report. Information regarding directors’ attendance and remuneration can be found on page 41 of the Annual Report. In line with good corporate governance, it remains the policy of NEMISA to have more non-executive directors than executive directors serving on the Board. NEMISA has a unitary Board structure comprising of five (5) non executive directors and three (3) non-executive directors. All of the non-executive directors are independent, and are expected to contribute an unfettered and independent view on matters considered by the Board. They have significant influence in deliberations at meetings.

CORPORATE GOVERNANCE REPORT

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General Information

The Directors, appointed by the Minister of Communications, bring a wide range of experience and professional skills to the Board, and they are required to execute their duties properly and to participate actively at Board meetings. The directors are entitled, at NEMISA’s expense, to seek independent professional advice where there is doubt as to whether a proposed course of action by the Board is consistent with the director’s statutory and/or fiduciary duties and responsibilities.

tive Officer, the Chief Financial Officer and Chief Operations Officer are ex-officio members both committees. Due to changes in the composition of Board, both subcommittees were at some point de-constituted and this impacted on the proper functioning of the committees and Board as a whole. However, the committees have now been reconstituted.

BOARD AUDIT AND RISK COMMITTEE

MEETINGS AND RELATED MATTERS Board meetings are scheduled annually in advance. Special meetings and other activities are convened as and when required in order to address specific issues. The Board is responsible for monitoring management in the implementation of Board approved plans and strategies. The information needs of the directors are considered on a regular basis and directors are given unrestricted access to company information, records, documents and property.

BOARD COMMITTEES NEMISA currently has two permanent committees to assist the Board in the execution of its responsibilities. The committees are the Board Audit and Risk Committee and the Human Resources and Remuneration Committee. The reports and recommendations of the committees to the Board ensure transparency and full disclosure of committee and business related activities. Each committee operates within terms of references that set out the composition, role, responsibilities, delegated authority and the requirements for convening meetings. Committee meeting agendas, papers and minutes are made available to all members of the Board on request. Sub-committees may also be formed on an ad hoc basis to deal with specific matter. The composition of these committees is set out in page 9 of this report. The Chief Execu-

The Committee was established to assist in relation to the reporting of financial information, the appropriate application and amendment of accounting policies, the identification and management of risk, the internal control systems and governing external and internal audit. For the period under review, the Committee has performed its duties and responsibilities in line with its formal charter. The Chief Financial Officer, representatives of the Auditor General, and representatives of the Internal Audit and Risk Management team are invited to attend every meeting of the Committee. The external and internal auditors have unrestricted access to the Chairperson of the Committee, as well as the Chairperson of the Board and every non-executive board member. The attendance schedule for the meetings of the Committee is included on page 9 of this Annual Report. The report by the Chairperson of the Committee is included on page 36.

HUMAN RESOURCES COMMITTEE The primary responsibility of the Committee is to assist the Board in all matters related to Human Resources. The Committee is dedicated to supporting the strategic goals of NEMISA through guidance and support in areas such as the formulation, development and implementation of human resources strategies, policies, plans and programmes. The attendance schedule for the meetings of the Committee is included on page 9 of this Annual Report. A report by the Chairperson of the Committee is included on page 13. External Audit

The office of the Auditor-General performs audits and reports on the accounts, financial statements and financial management of NEMISA in terms of Chapter 2, section 4(3)(a) of the Public Audit Act, 2004 (Act 25 of 2004). Internal Audit The Internal Audit function plays an important role in ensuring effective corporate governance processes in a number of areas. Its main areas of focus include all aspects relating to internal controls and risk management, compliance, the reliability of the financial records and the safeguarding of assets. With the active involvement and support of the Board Audit and Risk Management Committee, the Internal Audit and Risk Management Committee, the Internal Audit team, which is currently outsourced, assist the Board in ensuring a sound system of risk management and internal control. In its day-to-day operations, NEMISA enjoys the full support of the Internal Audit function. It is fully mandated by and accountable to the Board Audit and Risk Management Committee as an independent appraisal activity for the review of all operations. The Audit and Risk Management Committee approves the Internal Audit workplan for the year and monitors the team’s performance against the plan. The Internal Audit Charter defines the purpose, authority and responsibility of the Internal Audit function.

MATERIALITY AND SIGNIFICANCE FRAMEWORK The Public Finance Management Act 1 of 1999 (as amended by the Act 29 of 1999) and the accompanying Treasury Regulations (TR) requires all public entities to develop a materiality framework for management and reporting purposes. Materiality and significance levels can be defined as a measure of materiality for management accountability and reporting purposes. The measure is applied by the Board to design, develop and implement

General Information

reasonable management policies and procedures in order to discharge its responsibilities in terms of the Public Finance Management Act. The measure is also judgment of the level at which errors (intentional/unintentional) either individual or in aggregate, might be considered material/significant in relation to the company’s annual financial statements taken as a whole

NEMISA’s materiality levels are as follows: Basic

Guideline

% Used

Value per Mar 2011 Financial Statements R’000

Materiality Amounts R’000

Total Expenditure

0,25% - 1%

1,0%

R39,229

R392

Total Assets

0,25% - 1%

2,0%

R15,579

R311,58

In addition to the above-mentioned guidelines, full particulars of the following are to be provided in the Annual Report: a)

Losses resulting from criminal conduct (without any threshold amount) Losses emanating from irregular, fruitless and wasteful expenditure.

This materiality framework has been prepared in consultation with NEMISA’s Internal Auditors, ORCA Services.

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General Information

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T-shirt design (B)

SCHEDULE OF MEETINGS Board Audit & Risk Management Committee

Board

Date Appointed

Date Teminated/Resigned

Meetings convened

Human Resources Committee

Meetings attended

Meetings convened

Meetings attended

Meetings convened

Meetings attended

Non-Executive Directors Mr. T. Gcabashe

01 Mar 2004

Ms. N. Majokweni

01 Apr 2008

Ms. D. Dube

01 Nov 2009

30 April 2012

Ms. L. Somo

01 Dec 2009

29 February 2012

Ms. P.M. Mohlate

01 Dec 2009

29 February 2012

Mr. G. Lenepa

01 Apr 2010

Passed on. 25 February 2012

Non-Executive Directors Mr. N.A. Tshidzumba (CEO)

01 Aug 2010

Ms. M. Malakalaka

08 Sep 2010

01 Oct 2010

(CFO)

Mr. T Nwedamutswu (CEO)

31 January 2012

SCHEDULE OF MEETINGS sdfBudget Vote Speech held on

31 May 2011 attended by:

Strategic Planning Sessions held on 22-23 July 2011 attended by:

Ad hoc Board Subcommittee: Investigation of an internal complaint held on 02 Aug. 2011 attended by

Mr Gaitsiwe Lenepa

Mr Tsediso Gcabashe

Ms Nomaxabiso Majokweni

Ms Pholoho Mohlathe

Mr Gaitsiwe Lenapa

Mr Tsediso Gcabashe

Ms Nomaxabiso Majokweni

Ms Dinkie Dube

Ms Dinkie Dube Ms Pholoho Mohlathe Ms Lahlang Somo

General Information

Preparation of an Annual General Meeting with Deputy Minister held on 06 September 2011 attended by:

Briefing to the PCC on Quarterly Performance Report held on 14 September 2011 attended by:

Annual General Meeting held on 09 September 2011 attended by:

Mr Gaitsiwe Lenepa

Mr Tsediso Gcabashe

Ms Nomaxabiso Majokweni

Ms Pholoho Mohlathe

Mr Gaitsiwe Lenapa

Mr Tsediso Gcabashe

Ms Lahlang Somo

Ms Dinkie Dube

Mr Tsediso Gcabashe

Ms Lahlang Somo

Ms Pholoho Mohlathe Ms Lahlang Somo

Presentation of the Annual Report to the PCC held on 14 October 2011 attended by:

HRRC: EXCO Performance Reviews held on 15 September 2011 attended by:

HRRC: EXCO Performance Reviews held on 24 September 2011 attended by:

Mr Gaitsiwe Lenepa

Mr Tsediso Gcabashe

Ms Lahlang Somo

Ms Dinkie Dube

Mr Tsediso Gcabashe

Ms Pholoho Mohlathe

Bilateral with Minister held on 15 November 2011 attended by:

Briefing to the PCC on Quarterly Performance Report held on 14 September 2011 attended by:

Bilateral with Minister held on 23 February 2012 attended by:

Mr Gaitsiwe Lenepa

Mr Tsediso Gcabashe

Ms Lahlang Somo

Mr Gaitsiwe Lenapa

Mr Tsediso Gcabashe

Ms Lahlang Somo

Parliamentary Study Group held on 11 October 2011 attended by:

Bilateral with Deputy Minister held 16 March 2012 attended by:

Bilateral with Minister held on 19 March 2012 attended by:

Mr Tsediso Gcabashe

Mr Gaitsiwe Lenepa

Mr Gaitsiwe Lenepa Dr Molatelo Maloka*

* Dr Molatelo Maloka: Appointed to the Board on 01 March 2012

General Information

Chairperson

Non - Executive Members

Dr Molatelo Maloka

Nomaxabiso Majokweni

Non - Executive Members

Gaitsiwe Lenepa

Chief Financial Officer

Moira Malakalaka

Prof. Roy Marcus

Thami ka Plaatjie

Chief Executive Officer [Acting]

Dr Harold Wesso

Chief Operations Officer

Takalani Nwedamutswu

The Board of Directors Dr Molatelo Maloka (Chairperson of the board), Nomaxabiso Majokweni, Thami ka Plaatjie, Gaitsiwe Lenepa, Prof. Roy Marcus, Dr Harold Wesso (Chief Executive Officer), Moira Malakalaka (Chief Financial Officer), Takalani Nwedamutswu (Chief Operations Officer).

Executive Management Dr Harold Wesso (Chief Executive Officer), Moira Malakalaka (Chief Financial Officer), Takalani Nwedamutswu (Chief Operations Officer).

The Board

PA Chief Executive Officer

Company Secretary

Board Coordinator PA

Chief Operating Officer

Head: Training & Development

Training Coordinator

HOD: Broadcast Training: Radio &Television

Head: Business, Development & Marketing

Head of Finance

Finance & Corporate Services Coordinator

Student Affairs/admin

HOD: Graphic Design For Multi-media & Animation

Resource Centre Assistant

Radio & Television Staff

Chief Financial Officer

HR Manager

Production Manager

Franschoek Campus

HR Officer

Admin

Lecturer

Graphic Design & Animation Staff Receptionist

Position Filled Position Vacant

Marketing Officer

Bookeeper / Accountant

Procurement/ Administration

IT Manager

Facilities Manager

Accounts Officer

Admin Support

IT / Admin Support

Facilities Coordinator

Credit Controller

Buyer

IT / Admin Support

Messanger/ Driver

Admin Support

General Assistant Payroll Services (Outsoured)

General Assistant

Canteen, Security, Cleaning (Outsoured)

Organisational Structure

INTRODUCTION As a training institution, NEMISA relies on human capital as a key driver of business. The human resource activities in the past financial year have largely been guided by NEMISA’s strategic direction as well as prevailing dynamics – all in an effort to remain relevant, effective and efficient. Our key staff is the lecturing staff in Radio and TV production, as well as Graphic design and Animation. Of the 4 (four) core teaching areas, Graphic Design and Animation are the areas where there is a high degree of scarcity in getting teaching staff, as most of the practitioners in this industry would mostly be actually employed in the production side of the industry rather than the training part. Of those that do training, it is imperative in order to be current with industry developments to be closely tied to the industry initiatives, including actual participation in production. Clearly the need for maintaining currency is relevant to all core focus areas that NEMISA trains in but priority is given to giving provision for those areas of skills scarcity as mentioned above.

strategy would be mediated through various change management processes into policies, strategies as well as business processes for achieving NEMISA’s key strategic objectives. The priority focus areas for HR in the financial year under review, was the change management strategy, where the institution would enhance its HR systems for effective support to the core business. Our core staff therefore is our training staff, followed closely by the business development staff that create the link between skills development for our students with experiential learning, then the minimum staff required for supporting the core business in corporate services; i.e. Finance and HR and Auxiliary services. The Operations report, which precedes the HR report, gives further substance into utilisation of NEMISA’s staff pursuant to our core mandate of skills development.

To this end, we encourage our lecturing staff to participate in industry initiatives that enhance their constant upgrading of their skills through various platforms of engagement, including skills development.

Thami Ka Plaatjie Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, HOur key staff is the lecturing staff in Radio and TV production, as well as Graphic design and Animation. Of the 4 (four) core teaching areas, Graphic Design and Animation are the areas where there is a high degree of scarcity in getting teaching staff, as most of the practitioners in this industry would mostly be actually employed in the production side of the industry rather than the training part. Of those that do training, it is imperative in order to be current with industry developments to be closely tied to the industry initiatives, including actual participation in production. Clearly the need for maintaining currency is relevant to all core focus areas that Nemisa trains in but...

NEMISA has subsequent to adopting a new strategy for 2010/14 also approved the implementation of a change management process whereby the imperatives of that

HUMAN RESOURCES REPORT

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Human Resources

EMPLOYMENT AND VACANCIES Figure 1 summarises the number of posts in the approved staff establishment, the number of filled posts, the vacancy rate, and the number of posts filled temporarily to the approved staff establishment.

CEO’S OFFICE

33%

34%

CEO’S OFFICE OUTSOURCED POSITION

CEO’S OFFICE NUMBER OF POST FILLED.

33% CEO’S OFFICE OUTSOURCED POSITION

COO’S OFFICE

TRAINING

TRAINING NUMBER OF VACANCIES

50% COO’S OFFICE NUMBER OF POST FILLED

5% FINANCE OUTSOURCED POSITION

95% TRAINING NUMBER OF POST FILLED

Human Resources

33%

17%

50% COO’S OFFICE NUMBER OF VACANTS

FINANCE

FINANCE VACANT POSITION

50% FINANCE NUMBER OF POST FILLED

COMMUNICATIONS AND MARKETING

33%

100% COMMUNICATIONS AND MARKETING NUMBER OF POSTS FILLED

CANTEEN

67%

HUMAN RESOURCES NUMBER OF VACANCIES

100% PROCUREMENT NUMBER OF VACANCIES

HUMAN RESOURCES NUMBER OF POSTS FILLED

INFORMATION TECHNOLOGY

FACILITIES

25% 100% CANTEEN NUMBER OF POSTS FILLED

75%

20%

INFORMATION TECHNOLOGY NUMBER OF VACANCIES

80%

INFORMATION TECHNOLOGY NUMBER OF POSTS FILLED

NUMBER OF POSTS FILLED

NUMBER OF VACANCIES

EMPLOYMENT CHANGES NEMISA’s attrition rate is within acceptable limits, only 13 terminations occurred during the period under review, five permanent employees and seven contract employees. •

Promotions of Staff by Salary Band

There has not been any employee that was promoted at the period under review.

Human Resources

EMPLOYMENT EQUITY Figure 2 in this section are based on the format prescribed by the Employment Equity Act, No. 55 of 1998

Number of staff in occupational levels Figure 2 in this section are based on the format prescribed by the Employment Equity Act, No. 55 of 1998

MALE

18% MIDDLE MAN

FEMALE

21% SEMI SKILLED

14%

SENIOR MAN

9% TOP MAN

23% SEMI SKILLED

54%

JUNIOR MAN

TOP MAN

4% 17% MIDDLE MAN

36% JUNIOR MAN

Recruitment of Staff Figure 3: Recruitment of staff as at 1 April 2011 to 31 March 2012

FEMALE

20%

SENIOR MAN

60% SEMI SKILLED

20% JUNIOR MAN

MALE

Human Resources

100% CANTEEN NUMBER OF POSTS FILLED

4% SENIOR MAN

STAFF TERMINATIONS Figure 4: Number of staff per Occupational level as at 1 April 2011 to 31 March 2012

MALE

FEMALE

25% 25%

TOP MAN

JUNIOR MAN

40%

25%

MID SKILLED

MID MAN

40%

50%

SEMI SKILLED

20% JUNIOR SKILLED

SKILLS DEVELOPMENT Training Provided Table 1: Training provided per department as at 1 April 2011 to 31 March 2012

Female

Male

Number of Staff

Training

R 36 432, 01

Marketing & Communications

R 7 821,72

EXCO

R 7 699,50

Corporate Services

R 15 005,68

Company Secretariat

R 9 063,00

Board

R 23 063,00

Total

R 76 021,91

Department

Total

* The BOARD and EXCO are members of the Institute of Directors to ensure Continuous Professional Development

INJURY ON DUTY No injuries on duty to report for the period under review.

Human Resources

Training, Operations & Support

Peter Ramatswana

Mary Moleke

Company Secretary Office

Lungile Xulu

Hulisani Murovhi

Jacqueline Jegels

Graphic Design & Animation

Tebogo Serobatse

[STAFF IMAGES] Kuben David

Robert Chrich

Graphic Design & Animation

Sibongile Imenda

Tapiwa Musasa

Louise Jardin

Television & Radio Production

Doc Fick

Sarienne Kersh

Wonderboy Peters

Bongi Kubheka

Marketing

Victoria Tau

Makgotso Sekete

Marketing, Communications & Production

Television & Radio Production

Jacky Tshokwe

Fidel Regueros

Simphiwe Ngcobo

Thabang Phetla

Information Technology

Jankie Ngobeni

Mohapi Moiloa

Selby Kgomo

Selby Kgomo Thembi Sibeko

Finance and Administration

Humbelani Ndou

Mpho Maedi

Human Resources

Ferial Adams

Secretary to Training

Phora Moshome

PA to the CEO

Facilities Management

[STAFF IMAGES]

Nokuzolisa Gqokoma

Audrey Mashamba

Gopolang Lebakeng

Facilities Management

Bheki Khumalo

Petrus Mojaki

Peter Jambula

Franschhoek

Jacques Fortuin

Antoinette Young

Franschhoek

Lizette Rudy

Theresa Jurries

Meet the staff Management

Training

Information Tech.

Finance

Marketing

Assets

Human Resource

Franschhoek

BACKGROUND Pursuant to its mandate from the Department of Communications to create access to the ICT industry, the National Electronic Media Institute of South Africa (NEMISA) provides training and development that provides knowledge and skills to especially young people to have access to the ICT industry. NEMISA’s training and development programme develops new entrants into the ICT sector with competencies that equip them to seek employment as well as create employment for themselves as entrepreneurs who run their own businesses.

NEMISA is therefore challenged to provide students with adequate support to reach quality educational outcomes as well as give additional life-skills support (counselling, motivation, role-modelling etc) which gives students an opportunity to develop into well-rounded individuals who have a better chance to changing their own life stories while contributing positively in society. The operations report covers issues relating to the core business of NEMISA which is training in the Full-Time (F/T) programmes in creative multi-media. Most of our training programmes are delivered from our Parktown campus. NEMISA offers the following accredited training programmes:

It is also due to the above-mentioned mandate that NEMISA deliberately recruits youth from disadvantaged backgrounds. Recruitment is also targeted at reaching youth in rural and outlying areas to ensure an even geographical spread of our student intake that promotes equitable access to youth nationally. Most of our students therefore display challenges associated with growing up in an environment where there is low socioeconomic development where there would be poor or minimal access to social facilities. The social problems associated with growing up in such social conditions are further compounded by inadequate educational support for such learners at the point where they leave school at grade 12 (twelve).

• • • • •

Graphic Design; Animation; Radio broadcasting; TV broadcasting and; short skills development programmes

The report also covers the activities for our Marketing and Business Development unit. In addition to training programmes, NEMISA also delivers a number of production projects on behalf of the Department of Communications (DoC) and other clients to raise additional funding. Production projects are related to the aforesaid four core training areas. Furthermore, the production projects are used as a platform for skills application for our graduates and for our alumni to apply their learning under the guidance of established practitioners in the sector, thus gaining valuable experience

and insight under the tutelage of reputable producers, writers etc. In the period under review, NEMISA stabilised its accreditation platforms, gaining accreditation for 6 F/T programs. Our Bachelors Program in Graphic Design has been migrated to the Council on Higher Education (CHE) from MICT (formerly MAPPP) SETA. The migration came about at a time when NEMISA’s application for accreditation for the Bachelors Program in Graphic Design was still pending. This is posing a risk on NEMISA because this means that the institution needs to reapply, this time through the CHE to be accredited to provide this qualification. A draw-back in achieving the targets as set out in our strategic plan and annual performance plan (APP) was that a significant number of the entity’s targets were premised on the shareholder managing to secure additional funding from treasury to fund additional mandates. Most of the additional funding was not realised and therefore there was an impact on the ability of NEMISA to embark on new additional projects. NEMISA will have to consider differentiated levels of the training programmes on offer to meet the expectations of an entry-level client as well as clients who are already in the sector going forward. This will have an impact on the profile of faculty we have as well as a focussed human capital management and development strategy, including creative partnerships that unlock value for

NEMISA PERFORMANCE REPORT

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Programme Performance

NEMISA and its partners on the basis of a shared leveraging of complementary strengths. This conversation has already begun with the shareholder and the board where there is a common appreciation of the need to re-position NEMISA within a fast evolving ICT and creative multi-media sector.

TRAINING

The 2011 academic year was a success. A total of 128 students sat for the final assessments/exams. 83% of students passed their exams in 2011 compared to 81% in the previous year. Furthermore, NEMISA has been granted full accreditation for six (6) full-time programmes by MICT SETA for a five (5) year period beginning 14 November 2011 up to 14 November 2016. Of significance as well was the registration of nine (9) assessors and four (4) moderators among the full –time staff by MICT SETA across all the five (5) streams. In addition, Recognition of Prior Learning (RPL) and Level 4 Assessments for TV Level 4 for the 2009 and 2010 cohorts were successfully completed. Twenty (20) learners from the 2010 cohort were declared competent and their results were endorsed by MICT SETA. Verification results are still being awaited for the 2009 cohort. The following programmes and cohorts were also verified and endorsed by the MICT SETA: • • • •

2D & 3D Animation from 2007 -2009; 2007 Design Foundation; 2010 Radio Production and; Radio Journalism Skills programme delivered in partnership with Bush Radio.

Business Development / Marketing

Business Development / Productions The year ended on a good note with the signing of content contracts with the DoC to the value of more than R10.5m. These were in the areas of Animation Production and the National Digital Repository (NDR). Over 150 jobs are expected to be created for our graduates and the industry at large in the

execution of these projects during 2012/3. Further contracts in training were also signed with the DoC to the value of R15.2m. These contracts were for community radio (120 trainees to be delivered during 2012/13) and FET colleges training (13 trainees delivered in 2011/12). Productions activities included eleven (11) productions with clients including the DoC, SOWETO Hotel, SABC, SOMAFCO, Red Pepper, and the Embassy of Spain. These productions gave experience to more than thirty (30) NEMISA graduates / students. The NEMISA production team was involved in producing inserts and promos for the SABC during the new students’ campaign. The final episodes of the Magic Cellar – a 3D Animation series, were completed in the financial year, where our graduates of the Writers Master class were involved. The series is now ready for international release and NEMISA would start seeing income from its sales. NEMISA developed and offered three (3) customised programmes for the television industry and FET colleges. The television programmes were in pre-production and postproduction, while the FET Colleges course was in Multimedia level 3 for FET colleges’ lecturers. TV Pre-Production

Province

TV Pre-Production

KZN

Television Post Production

FET Multimedia level 3

EC/WC/LP /GP/NW/

ued with our relationship with the SABC around student recruitment. NEMISA conducted ten (10) radio interviews on SABC radio stations, and ran promos in all SABC TV and radio stations in all South African languages. NEMISA attracted around two thousand nine hundred (2900) applicants, of which ten (10) had disabilities, and 44% of the applicants were women. Applicants came from all provinces in South Africa. NEMISA participated in fourteen (14) exhibitions / outreach programmes held in the Western Cape, Gauteng, KwaZulu Natal and Mpumalanga. NEMISA interacted with thousands of prospective students through this exercise. As with the changing of scope in training to adapt to a changing environment, NEMISA’s marketing and business development strategy would need to change to meet the needs of an evolving entity. Our marketing strategy would need to be underpinned by a strengthened training and development portfolio that meets the needs of an expanded clientele within a sector that is rapidly changing. As such our marketing strategy will have to change in line with the conversation that NEMISA has already started with the shareholder and the Board.

No. of

learners

Marketing The alumni strategy is working as was shown during the last engagement with alumni in February 2012. An executive committee of the alumni has been elected and is functional. Alumni are very important in the marketing of the institution and the breeding of future lecturers and producers. NEMISA conducted a research which indicated that most of our students learn about from radio and TV instead of the exhibitions. We have cemented and contin-

Programme Performance

Performance against pre-determined objectives

STRATEGIC OBJECTIVE 1: To transform NEMISA into a technology, research and development organization Weighting: 30% 1.1 Expected Outcome: Establishing a reputable research and development Institute in multimedia technology KPA Establishing the research and development centre

Key Output Research Framework

Performance Indicator Research report

Annual Target Impact and landscape analysis

Not Achieved.

Shareholder-approved implementation plan

Implementation plan attached to strategic plan sent to the shareholder

Stakeholder agreements on research framework.

Achieved. Signed agreement with Meraka CSIR.

NEMISA and CSIR have had challenges with regards to the agreement on timelines to conclude the research framework. Funding for this not approved by Treasury, so the project on research did not get off the ground. This is an additional mandate for NEMISA so current funding does not provision for it.

Publication that has peer publishing, editing and review

Conduct feasibility study

Not achieved

Lack of funding and capacity to carry out the feasibility study.

Undertake research and development (in relation to Curriculum Development)

Publish ICT sector paper that stands for peer review

Publish at least 2 articles

Not achieved

Lack of funding and capacity

1.Publish article that can withstand peer review in mix of media platforms (online, periodical etc)

Publish at least 2 articles

Not achieved

Lack of funding and capacity

Deliver 1 paper in at least a national forum.

Achieved 100%, 1 Paper was delivered by HOD Animation and Graphic Design and a Lecturer at a Kenya, Nairobi International Conference in Design on 25 -27 May 2011;

Disseminate from a mix of media platforms at least 6 articles to peers in NEMISA as part of research dissemination

Not achieved

Lack of funding and capacity

2 X internal moderation,

Not achieved, 80% on internal moderation was achieved.

Only 1 internal moderation was conducted for Animation 2D and 3D, this is due to limited capacity in the department as the responsible moderator was incapacitated as she fell ill and had to work 3 days a week for the period under review.

Compliance Compliance with Assessment framework of the SETA

External Moderation report. (All 4 F/T programmes submitted to the SETA)

Internal l Moderation was conducted for all our full-time programmes in 2011 as follows; 1(one) internal Moderation for 2D Animation was conducted; 1(one) Internal Moderation for 3D Animation was conducted; 1(one) Moderation for Graphic Design was conducted;

Variance

Start Publication

2.Deliver paper in peer forum (conference, seminar, etc)

Accreditation with relevant SETA and other related bodies

Achievement

Programme Performance

Performance against pre-determined objectives (Continues)

Only 1 Internal moderation was conducted for Graphic Design, this is due to limited capacity in the department as the only moderator was not able to conduct the moderation due resignations which occurred,

Key Output

Performance Indicator

Annual Target

1 X external moderation for all full-time (F/T) programmes each year

Achievement

Variance

2(two) Internal Moderations for Radio Production were conducted; 2 (two) Internal Moderations for Film & TV Production were conducted

and as a result she had to take over the responsibility as the vacant posts could not be filled during the period under review.

100% Achieved on External Moderation was conducted for all our full-time programmes in 2011 as follows; 1 (one) External Moderation for 2D Animation was conducted; 1 (one) External Moderation for 3D Animation was conducted; 1 (one) External Moderation for Radio Production was conducted; iv) 1 (one) External Moderation for Film & TV Production was conducted 1 (one) External moderation was conducted for Graphic Design

Accredited Programmes

Accreditation Report. (Establish and maintain â&#x20AC;&#x2DC;Accreditedâ&#x20AC;&#x2122; status for NEMISA F/T programmes)

100% accreditation of NEMISA programmes by the SETA

Achieved 85%. A total of 6 (six) full time programmes were awarded accreditation and 1 (one) skills programme awarded provisional accreditation. NEMISA has therefore, 85% accreditation status. Below, are programmes awarded accreditation as indicated above;

Bachelor of Graphic Design is the only programme not accredited as it moved from SETA jurisdiction as the responsible quality assurer to Council for Higher Education (CHE). Its accreditation is being pursued with CHE

National Certificate in Radio Production; Further Education and Training Certificate in Film and Television Production; National Certificate in 2D Animation; National Certificate in 3D Animation and Visual Effects Further Education and Training Certificate in Design Foundation; Certificate in Broadcast Engineering and;

Programme Performance

Performance against pre-determined objectives (Continues)

Key Output

Performance Indicator

Achievement

Annual Target

Variance

Provisional Accreditation for Skills Programme in National Certificate in Journalism.

Certification of learners by the relevant Sector Education and Training Authority (SETA)

Certificates from SETA (NEMISA’s F/T learners certified on completion of programmes.)

All 4 accredited NEMISA’s Full-time programmes verified and certified.

Not achieved, 25% achieved. 1 (one) full-time programme was verified by MICT SETA and that is, National Certificate in Radio Production.

100% of F/T learners who completed their portfolios are certified

i) MICT SETA has not printed certificates as yet for National Certificate in Radio Production.

ii) 3 (three) of the programmes have not been verified as yet, for the following reasons; - Film and Television Production was only moderated recently and is to be presented to MICT SETA for verification. The delay in moderation was due to the resignation of the external moderator and as a result, another moderator had to be sought. Certification of Learners has been delayed as a result. -National Certificate in 3D Animation and Visual Effects, learners did not complete at the end of 2011 as planned and they carried some courses which they only completed in Jun 12). As a result; verification and certification has been delayed - National Certificate in 2D Animation will only be verified once moderated by July 12 as it’s an 18 months programme;

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Newtown Logo

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Website Landing Page

Programme Performance

Performance against pre-determined objectives (Continues)

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Advert

STRATEGIC OBJECTIVE 2: To ensure the financial viability and institutional sustainability Weighting: 10% 2.1 Expected Outcome: Sustainable and viable market production KPA

Demand creation

Business development and Fund raising

Key Output

Annual Target

Achievement

Variance

Identification of niche markets to counter risk of reduced funding from National Treasury.

Shareholder compact on alternative revenue generation

Conduct market research.

Not achieved

Strategy and Plan for new revenue streams

Funding model for alternative revenue streams

Sign agreements for revenue-generating projects to at least R8m.

Achieved .A total of R 25.8m was raised in the financial year through revenue generating projects. Animation- R5.5m. Community Radio R15m NDR- R5m FET Training- R249 000 SADC- R100 000

Maintain current sources of funds generation. Shareholder management compact.

Reports in line with Signed Shareholder compact/ agreement

Signed Shareholder compact/agreement on production proposals

Not achieved

Approved strategic plan

Shareholderapproved strategic plan annually

Approved strategic plan annually

Strategic plan was approved

Approved budget

Shareholderapproved budget annually

Approved budget annually.

Budget was approved.

Signed MOU/MOA for specific revenue generating projects annually

Secure an MOU/MOA(s) to the value of at least R6.3

MOA to the value of R15.2 m were secured.

Based on increased current student numbers and other funding sources including pricing strategy. Secure MOA to the value of R6.3 million

MOA to the value of R15,2 million were secured, and additional 57 students were trained.

120 students will be trained in 2012/13 from this income. This is Community Radio Training.

Develop funding proposals for 2 potential funders

Research and engage potential funders and donors.

Two proposals were sent to the Jobs Funds.

No funds were granted.

Generate additional funding to the value of R2m

Secure R2 million additional funding

Not achieved

Two proposals were sent to the Jobs Funds but no funding was granted.

Revenue generating MOA or Agreements signed

Undertake content productions to the value of R6 million

MoAâ&#x20AC;&#x2122;s for content production were signed to the value of R10.5m which is NDR (R5m) and Animation (R5.5m)

Identifying new sources of funding

Local content generation Hub

Performance Indicator

Undertake content productions

Market research was not conducted A Research tool (Meltwater news) was used to stay current with developments in industry.

Individual contracts were signed for Animation, NDR and Community Radio Training. , FET and SADC production. No shareholder compact was signed.

Programme Performance

Performance against pre-determined objectives (Continues)

STRATEGIC OBJECTIVE 3: To improve the organisational efficiency, security and effectiveness Weighting: 20% 3.1 Expected Outcome: To have an improved, secured environment. KPA

Revise the current model for effectiveness of the organizational structure

Talent management, recruitment, retention and development of human capital

Key Output

Functional and relevant business model

Performance Indicator

Annual Target

Achievement

Variance

HR Strategy. HR Plan.

Board Approved change management plan implemented.

Not achieved. There were delays due instability in the Board which delayed approval of change management plan before end of the financial year, although the documents were ready.

Instability of the Board led to delay in approving implementation of plan. We also require the services of a Senior HR Manager to develop HR strategy

Change management plan

Curriculum development plan adopted by EXCO and implemented

Not achieved.

The comprehensive curriculum review was not done, only running programmes were rolled out for the academic year

Implement and monitor talent management, recruitment and retention strategy for all teaching staff

Achieved, 17(seventeen) employees were sent on training,

Effective talent Training reports. management, recruitment and retention strategy to ensure achievement of strategy objectives

• 6 (six) in Animation for Moderation Programme and Adobe Flash CS 35; • 1 (one) Student Affairs for Student Development, • 2(two) Corporate Services for VIP HR Premier and VIP Tax Submission; • 3 (three) Business Development and Marketing for Web Design, Protocol and Diplomacy workshop; • 1 (one) Training for Technology and; • 4(four) EXCO for Institute of Directors to ensure that they have Continuos Professional Development.

Facilitate the establishment of a secure NEMISA campus

Industry endorsed programmes

Upgrade of Technology

Secure NEMISA campus with an improved environment, appropriate for an educational institution with ICT focus Attract private sector investment into the proposed structure for mutually beneficial agreements

Shareholderapproved budget for physical infrastructure

Shareholder approves budget for physical infrastructure

Not achieved

There was no additional funding approved for this new mandate and thus the project did not get off the ground.

Treasury approved budget for physical infrastructure

Treasury approves budget for physical infrastructure

Not achieved

Budget request for design of plans was not approved by Treasury as this was a new (additional) mandate.

Appropriate structure acquired by Public Works for an educational institution.

Public Works acquires premises appropriate for an education and ICT facility

Not achieved

The entity had discussions with the Department of Communications on a secure NEMISA structure but so far Public Works has not secured new premises.

Customized programmes Customised, employer-endorsed training programmes

Customised, employer-endorsed training programmes

Two programmes

Three (3) tailor made programmes were offered in the areas of TV Preproduction, TV Post production and Multimedia for FET Colleges in KZN and E Cape. (Durban Film Office and ECDC)

2 MOU’s on tailor made programmes signed with employers in the ICT/ electronic media sector

Not Achieved

Negotiations were held with SABC, Ochre Media but were not concluded in the financial year.

Board-approved Digital Migration Plan

Develop integrated technology plan and strategy, board Approved technology plan and strategy

Not achieved

A draft was developed and it has not been tabled for approval.

Technology upgraded

Implement Digital Migration Plan

Not achieved as the draft was not yet tabled at Board level, so there would not be progress reports

The draft was not yet tabled at Board level, so there would not be progress reports.

Digital migration plan Updating of equipment to current industry standards

Programme Performance

Performance against pre-determined objectives (Continues)

STRATEGIC OBJECTIVE 4: To improve and align stakeholder and partner relations both internally and externally Weighting: 10% 4.1

Expected Outcome: achieve a healthy and ongoing relationship with stakeholders

KPA

Key Output

Performance Indicator

Annual Target

Formulate the stakeholder map and stakeholder strategy

Relevant strategy for stakeholders

Board approved stakeholder engagement strategy.

Develop and implement a stakeholder strategy. Engage stakeholders

Not achieved.

Agreements with key stakeholders for revenue generation or reputational enhancement.

4 key stakeholders sign agreements with NEMISA

11 MoU’s were signed with key stakeholders.

Achievement

Variance

The previous year’s stakeholder strategy was implemented. A new one will be submitted to the board for approval in the new financial year

1. DoC – Animation, 2. Urban Brew, 3. Red Pepper, 4. DoC – Community Radio, 5. Love Life, 6. DoC – NDR, 7. SOMAFCO, 8. DoC – FET, 9. Creopolis Media SA, 10. North West University 11. CSIR Meraka

Review NEMISA’s positioning with the shareholder

Recognised business with the shareholder and its partners (e.g. public service departments)

MOU signed between shareholder and other entities, departments SLA’s signed with entities, depts..

Strengthen the relationship. Participate in prominent government content related programmes

Achieved, NEMISA participated in all outreach programmes of the DoC • Ministers’ budget speech Vote • World Telecoms Day • Umsinga Exhibition _Tugela Ferry • PMB DigoConnect ICT Fair • ICT Career Fair • Umsinga Broadband Access

Improve the Alumni engagement strategy

Functional and effective Alumni programme

Alumni programme launched

Revise and formalize the current Alumni strategy. Commence implementation of the strategy

Achieved, Alumni strategy was revised and implemented, leading to the election of Alumni Executive Committee

Enhance economic participation of NEMISA graduates/alumni

At least 30% participation of NEMISA graduates in revenue generating projects (by staff complement)

Achieved, NEMISA graduates formed 60% on average of revenue generating projects. 11 alumni opportunities were created.

Institute a viable exchange and internship programme

Board-approved exchange programme

At least 2 internship agreement signed with employer body

Achieved, 2 internship agreements were signed with Urban Brew and Red Pepper

Reports on number of students in exchange and internship programme

Exchange programme strategy and budget approved by shareholder

Not achieved.

No exchange programme strategy was developed

At least 1 (one) donor/funder signs agreement on exchange programme

Not achieved.

No funder / donor signed agreement on exchange programme.

Programme Performance

Performance against pre-determined objectives (Continues)

STRATEGIC OBJECTIVE 5: Expand the accessibility and reach of NEMISA product offerings Weighing: 30% Expected Outcome: To be recognised as the training institution of choice from all over South Africa KPA Develop and implement an extensive student reach strategy

Key Output

NEMISA establishes strong presence in the rural areas for short courses and F/T programmes. Attain a 70% rural student intake Attain at least 60% representation of girls in enrolment

Performance Indicator Extended reach strategy and plan

Annual Target

Formalise and initiate implementation of an appropriate strategy to reach wider audience of prospective students

Achievement

Not achieved, NEMISA has established relationships with two (2) provinces namely:

â&#x20AC;˘ Eastern Cape Develop-

ment Corporation (ECDC)

This being a new mandate, there was no additional funding for it, so NEMISA could only offer once-off training in provinces to expand reach instead of establishing offices.

â&#x20AC;˘ Durban Film office Enrolment Report showing increase of rural student intake

At least 60% of students enrolled for the 2012 academic year are from rural areas

Not achieved 21% of enrolled students are from rural areas. A total of 130 Learners were enrolled and 27 of these Learners are from rural areas

Entrance requirements and low base of understanding NEMISA offerings is a limiting factor in admitting students from rural areas

Enrolment rate for girls in line with minimum 50% target

At least 50% of NEMISA students for the 2012 academic year are girls

Not Achieved, 38% of Learners enrolled were girls. This translates into a total of 49 girls.

Most of female applicants did not meet our minimum entry requirements.

Agreements signed with local government and provincial entities

Establish regional satellite offices in at least 3 provinces

Not achieved

NEMISA decided to partner with other institutions in provinces instead of opening satellite offices as it was cost effective.

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Students taking part in the Stay Alert! Stay Alive! campaign by Metrorail

Variance

Programme Performance

Performance against pre-determined objectives (Continues)

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Student Representative Council

Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things toHello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to

00:43

05:33

34:04

The SRC’s 67 Minutes of Joy NEMISA’s SRC organized to spend their 67 minutes (on Nelson Mandela Day) at the Orlando Children’s Home. The SRC rallied fellow students for the cause and packed themselves into the school buses. 55:22

67:00

The main 005,0 aim was to provide assistance; repaint some sections of the centre; and most importantly to spread joy amongst the kids. The event was overwhelming success.

Student Representative Council

001,0

002,0

Antoinette Mokgohloa

003,0

Annastasia Lehlakola

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FORMER TELEVISION STUDENT

Itumeleng Mokoena

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FORMER TELEVISION STUDENT

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FORMER ANIMATION STUDENT

CLASS OF 2004

CLASS OF 2006

CLASS OF 2009

Mokgohloa has a National Diploma in Journalism from Technikon Northern Gauteng (1997 - 2000). She started her career at Voice of Soweto Community Radio, Johannesburg in 1999 - 2000, as a Journalist and News Reporter. She then moved to work for Foxwood Productions as a Producer on religious TV programmes. She acquired an Advanced Diploma in Television Production from the NEMISA, specializing in Camera in 2003 and joined Reuters News Agency as a News Producer/ Camera Assistant (20032004).

Annastasia Lehlakola is from a small town called Parys in the Free State. She lived with her mother and two siblings. Lehlakola attended primary school in Selogilwe Intermediate and high school at Khutlo Tharo Secondary. She was forced to spend 2 years at home after completing her Grade 12. This was due to the lack of funds. This is made it more difficult to secure employment as tertiary education and work experience would be a prerequisite for most employers.

I studied Animation at NEMISA from 2007 to 2009, after graduating I worked as a junior designer/animator at spinning media production for a period of six months. I left Spinning Media production and worked as an Intern at Morula pictures doing character and back ground design for two month.

Antoinette extensive experience, she drew from working with Curious Pictures, ZSE TV/ Memar TV, BBC Africa, Urban Brew Studios, Uhuru Productions, Little Bird TV, Rapid Blue, and Ethniks InfoChannel. In 2007 – 2009 she worked for Pamuzinda Productions as a Production Co-ordinator & co- producing Eye on Africa, current affairs programme on Mnet/ Africa Magic. She got the opportunity to travel to African countries like Rwanda, Kenya, Uganda, Senegal and to the United States of America. She is involved with Eurovision News/ European Broadcasting Union as a Freelance Producer/ Production Planner on Special Events like the South Africa’s 2009 National Elections & the FIFA World Cup 2010. Antoinette is currently working a Freelance Content Researcher/ Archivist on the new People of the South with Dali Tambo, to be aired on SABC 3 in August 2012.

Alumni.

“This happened until NEMISA opened a door for me. I studied TV production and learned through various projects while I was there. I remember doing a project with Zola for Zola Seven productions during my time at NEMISA. I secured an internship at a company called Dzuguda productions. That is where I learned how it is in the real world as the production company was unable to offer me a permanent position after my internship. I could not get a job and was forced to relocate back home. It was really tough getting into the industry however I never gave up. I applied for many jobs that I without success until I got an internship at M-Net. I had to prove myself and after six months, I was the only intern offered a contract. Life became better. I built my mom a house and few months ago I rewarded myself with my dream car. All of which would not be possible had NEMISA not awarded me the opportunity to empower myself.”

After leaving Morula pictures I went to the Wildlife Film Academy and studied wildlife film making after completing I worked as a freelancer and a part time Data wrangler at Amarian Pictures. In June 2012, I came back to NEMISA and worked as an Intern 2D Animation Lecture.

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Women Writers Logo

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Poster Design

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Character Design for Animation

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Zukiswa Warner Logo

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Painting

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Women Writersâ&#x20AC;&#x2122; Notepad

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Character Design for Animation

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Women Writers Bookmaker

Student Showcase

004,0

006,0

000100001001

Character design

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Character design

004,0

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Character design

005,0

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Character design

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Character design

004,0

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Life Drawing

005,0

006,0

Jakes Thlapi

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Character design

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Drawing

Student Showcase

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Character design

Annual Financial Statements

General Information

Directors' responsibilities and approval of the financial statements

Report of the Board Audit and Risk Management Committee

Report of the Auditor-General to Parliament

38 - 39

Report of the Directors

Company Secretaryâ&#x20AC;&#x2122;s Certification

Statement of Financial Position

Statement of Financial Performance

Statement of Changes in Net Assets

Cash Flow Statement

Accounting Policies

49 - 54

Chairpersonâ&#x20AC;&#x2122;s Notes to the Annual Financial Statements

55 - 69

CONTENTS

FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2012 Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things toHello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to

Annual Financial Statements

GENERAL INFORMATION LEGAL FORM OF ENTITY:

Public Entity Section 21 Company State owned entity

REGISTERED OFFICE:

21 Girton Road, Parktown, Johannesburg 2193

BUSINESS ADDRESS:

21 Girton Road, Parktown, Johannesburg 2193

POSTAL ADDRESS:

21 Girton Road, Parktown, Johannesburg 2193

BANKERS:

Standard Bank of South Africa 5 St David's Place Parktown 2193

AUDITORS:

Auditor General of South Africa Registered Auditors Pretoria

COMPANY SECRETARY:

Mr. Hulisani Murovhi

COMPANY REGISTRATION NO.:

1998/014825/08

Annual Financial Statements

DIRECTORS' RESPONSIBILITIES AND APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS The Board of Directors is responsible for ensuring the maintenance of adequate accounting records and the preparation and integrity of the financial statements and related information. In order for the Board to discharge its responsibilities, management has developed, and continues to maintain, systems of internal controls. The Board of Directors has ultimate responsibility for the systems of internal controls and reviews its operation primarily through the Board Audit and Risk Management Committee. The internal controls include a risk based system of internal auditing and administrative controls designed to provide reasonable but not absolute assurance as to the reliability of the financial statements, and to adequately safeguard, verify and maintain accountability of assets, and to prevent and detect misstatement and loss. Nothing has come to the attention of the directors to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review. The financial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP) issued by the Accounting Standards Board. The auditors are responsible for independently auditing and reporting on the fair presentation of financial statements in conformity with International Auditing Standards. The annual financial statements have been prepared on a going concern basis, since the directors have every reason to believe that the company has adequate resources in place to continue in operation for the foreseeable future. The Board of Directors is also of the opinion that the Code of Corporate Practices and Conduct has been adhered to. The annual financial statements for the year ended 31 March 2012 as set on pages 40 to 75, were submitted for auditing on 31 May 2012 and were approved by the Board of Directors in terms of section 51(1)(f) of the Public Finance Management Act, 1999 (Act No.1 of 1999), as amended, and section 30(1 and (2)) of the Companies Act 71 of 2008, as amended: The annual financial statements for the year ended 31 March 2012 as set on pages 40 to 69, have been approved by the Board of Directors and are signed on its behalf by: The annual financial statements set out on pages 40 to 69, which have been prepared on the going concern basis, were approved by the accounting authority on 31 May 2012 and were signed on its behalf by:

Dr Molatelo Maloka

Mr G Lenepa

Board Chairperson

Board Audit and Risk Management Committee Chairperson

Annual Financial Statements

REPORT OF THE BOARD AUDIT AND RISK MANAGEMENT COMMITTEE We are pleased to present our report for the financial year ended 31 March 2012.

AUDIT AND RISK MANAGEMENT COMMITTEE The Audit and Risk management committee consists of the members listed hereunder and should meet 6 times per annum as per its approved terms of reference. During the current year, 3 meetings were held. Name of Member

Meetings

Gaitsewe Lenepa

Nomaxabiso Majokweni

Lahlang Somo

Tsediso Gcabashe (Alternate member)

RESPONSIBILITIES We report that we have adopted appropriate formal terms of reference in our charter in line with the requirements of section 55(1)(a) of the PFMA and Treasury Regulation 27.1. We further report that we have conducted our affairs in compliance with this charter. The Board of Directors has the general responsibility to ensure that the company has and maintains effective, efficient and transparent systems of risk management and internal control. The responsibility to ensure the adequacy and effectiveness of these systems are delegated to the Board Audit and Risk Management Committee, acting in an advisory capacity to the Board and operating as overseer with an independent and objective stance. BOARD AUDIT AND RISK MANAGEMENT COMMITTEE CHARTER The Board Audit and Risk Management Committee (BARC) has adopted the BARC Charter to assist the Board in discharging its

duties relating to the safeguarding of assets, the operation of adequate systems of internal controls, control processes and the preparation of accurate financial reporting and statements in compliance with all applicable legal requirements, corporate governance and accounting standards. The committee has discharged its responsibilities in terms of the BARC charter. INTERNAL CONTROL SYSTEM The system of internal controls applied by the NEMISA over financial and risk management is effective, efficient and transparent. In line with the PFMA and the King III Report on Corporate Governance requirements, Internal Audit provides the Audit and Risk Management Committee and management with assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. From the various reports of the Internal Auditors, the Audit Report on the annual financial statements, and the management letter of the Auditor General South Africa, it was noted that no matters were reported that indicate any material deficiencies in the system of internal control or any deviations there from. Accordingly, we can report that the system of internal control over financial reporting for the period under review was efficient and effective. The members of the Board Audit and Risk Management Committee concur with the directors’ assessment of the internal control processes as described in the financial statements and the notes thereto. COMBINED ASSURANCE In determining the need for combined assurance in terms of King III, the Board Audit Risk Management Committee has taken into account the three pillars of

Annual Financial Statements

combined assurance being Management, Internal Assurance providers and External Assurance providers. RISK MANAGEMENT Risk governance operates within a strongly defined structure that is agreed by the NEMISA Board and monitored by the Executive Committee and the Board Audit and Risk Management Committee. Growing recognition and acceptance of risk management as a central element of good corporate governance and as a valid management tool to support strategic and operational planning, has many potential benefits for NEMISA. The approach encourages a more outward looking examination of NEMISA, thereby increasing strategic focus, including a greater emphasis on outcomes, and concentrating on resource priorities and performance assessment as part of management decisions. Risk governance operates within a strongly defined structure that is agreed by the Board and senior management and is monitored by the Board Audit and Risk Management Committee. A risk profile is prepared on the basis of the value drivers and mandates of NEMISA. The challenge is to ensure that risk management is aligned to the strategic objectives at the various levels of NEMISA. The risk profile addresses the following elements: • Key risk areas (e.g. strategic, operational and projects); • Strengths and weaknesses of NEMISA; • Major opportunities and threats; • Risk tolerance levels; • Capacity to manage risks; • Learning needs and tools; • NEMISA’s risk tolerance, priority setting and ability to

•

mitigate risks, and Linkages with management processes.

•

• The NEMISA executive management has established a Risk Management Committee which convened twice during the financial year. The committee met to discuss its terms of reference, risk policies, risk strategy and status of risks identified and the development of divisional risk registers that have to be identified within operations of the business. Internal Audit was invited to the meeting to assist as advisers to the committee. During the period under review, divisional risk assessment workshops were conducted with management of NEMISA. These workshops were to: •

• •

re evaluate the strategic and operational risks identified in the previous risk workshops, identify any new and any emerging risks, and update the risk registers and to enable risk management to be elevated to a strategic level, thus ensuring the progression of risk management maturity.

In order to further improve the company’s risk management maturity, regular assessment, evaluation and prioritisation of risks with a view to ensure optimal risk management and related results should be conducted, and entity wide risk management within the strategic and operational activities of the company should be embedded so that it becomes part of the corporate culture. EVALUATION OF ANNUAL FINANCIAL STATEMENTS We have: • Reviewed and discussed the audited annual financial statements to be included in the annual report, with the Auditor General and the internal auditors; • Reviewed the Auditor General of South Africa's management letter and management’s response thereto;

Reviewed the entity's compliance with legal and regulatory provisions; Reviewed significant adjustments resulting from the audit.

We concur with and accept the Auditor General of South Africa's report on the annual financial statements, and are of the opinion that the audited annual financial statements should be accepted and read together with the report of the Auditor General of South Africa. Having reviewed and evaluated the financial statements for the year ended 31 March 2012, the members of the Board Audit and Risk Management Committee believe that the financial statements fairly present the state of affairs of the company, its business, financial results and its financial position at the end of the financial year, and that the company is a going concern. INTERNAL AUDIT Internal auditing provides a supportive role to management and the Board Audit and Risk Management Committee to achieve its objectives by identifying and evaluating significant exposures to risk and contributing to the improvement of risk management and control systems. The internal audit function, which is currently outsourced, is responsible for independently and objectively evaluating the company’s system of internal controls and for bringing significant business risks and exposures to the attention of management and the Board Audit and Risk Management

Committee via comprehensive internal audit reports. LEGAL AND REGULATORY COMPLIANCE. Legal and regulatory compliance is monitored by the members of the Board Audit and Risk Management Committee in respect of the relevant legislation applicable to the company’s operations. Major legislation and regulations under consideration (for which the company has achieved compliance except for those instances detailed in the Director’s Report) include the Company’s Act 71 of 2008,as amended, and the Public Finance Management Act 1 of 1999 as amended, and Treasury Regulations. Funding Finance required to fund the operational overheads of the company is provided for by the Department of Communications and the National Treasury. Funding is also made available for specific projects from external sources. AUDITOR GENERAL OF SOUTH AFRICA We have met with the Auditor General of South Africa to ensure that there are no unresolved issues.

Mr G Lenepa Board Audit and Risk Management Committee Chairperson

Gaitsiwe Lenepa Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things toHello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been Hello, It has been awhile since our last meetup, lets do this, we have things to do and make, Hello, It has been awhile since our last meHello, It has been awhile since our last meetup, lets do this, we have thing Hello, It has been awhile since our last meetup, lets do this, we have things to

Annual Financial Statements

REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE FINANCIAL STATEMENTS OF NEMISA INTRODUCTION 1. I have audited the financial statements of the National Electronic Media Institute of South Africa (NEMISA) set out on pages 40 to 69, which comprise the statement of financial position as at 31 March 2012, the statement of financial performance, statement of changes in net assets and the cash flow statement for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information. ACCOUNTING AUTHORITY’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS 2. The accounting authority is responsible for the preparation and fair presentation of these financial statements in accordance with South African Standards of Generally Recognised Accounting Practice( SA Standard of GRAP) and the requirements of the Public Finance Management Act, 1999( Act No.1 of 1999) (PFMA) and the Companies Act of South Africa, 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. AUDITOR-GENERAL’S RESPONSIBILITY 3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the General Notice issued in terms thereof and International Standards on Auditing. 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.

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

regulations and internal control, but not for the purpose of expressing an opinion. Predetermined objectives 8. I performed procedures to obtain evidence about the usefulness and reliability of the information in the report on performance against predetermined objectives as set out on pages 20 to 28 of the annual report. 9. The reported performance against predetermined objectives was evaluated against the overall criteria of usefulness and reliability. The usefulness of information in the annual performance report relates to whether it is presented in accordance with the National Treasury annual reporting principles and whether the reported performance is consistent with the planned objectives. The usefulness of information further relates to whether indicators and targets are measurable (i.e. well defined, verifiable, specific, measurable and time bound) and relevant as required by the National Treasury Framework for managing programme performance information.

6. In my opinion, the financial statements present fairly, in all material respects, the financial position of NEMISA as at 31 March 2012, and its financial performance and cash flows for the year then ended in accordance with the SA Standards of GRAP and the requirements of the Public Finance Management Act, 1999( Act No.1 of 1999) (PFMA).

The reliability of the information in respect of the selected objectives is assessed to determine whether it adequately reflects the facts (i.e. whether it is valid, accurate and complete).

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

MEASURABILITY

10. The material findings are as follows: USEFULNESS OF INFORMATION

PERFORMANCE TARGETS NOT SPECIFIC 7. In accordance with the PAA and the General Notice issued in terms thereof, I report the following findings relevant to performance against predetermined objectives, compliance with laws and

Annual Financial Statements

11. The National Treasury Framework for managing programme performance information (FMPPI) requires that performance targets be specific in clearly identify-

ing the nature and required level of performance. A total of 45% of the targets relevant to the entity’ selected strategic objectives were not specific in clearly identifying the nature and the required level of performance. This was due to the fact that information included in the strategic plan was not reviewed against the requirements contained in the FMPPI. PERFORMANCE TARGETS NOT MEASURABLE 12. The National Treasury Framework for managing programme performance information requires that performance targets be measurable. The required performance could not be measured for a total of 45% of the targets relevant to the entity’ selected strategic objectives. This was due to the fact that information included in the strategic plan was not reviewed against the requirements contained in the FMPPI. PERFORMANCE INDICATORS NOT WELL DEFINED 13. The National Treasury Framework for managing programme performance information requires that indicators should have clear unambiguous data definitions so that data is collected consistently and is easy to understand and use. A total of 44% of the indicators relevant to the entity’ selected strategic objectives were not well defined in that clear, unambiguous data definitions were not available to allow for data to be collected consistently. This was due to the fact that information included in the strategic plan was not reviewed against the requirements contained in the FMPPI ADDITIONAL MATTER 14. I draw attention to the following matter below. This matter does not have an impact on the predetermined objectives audit findings reported above.

ACHIEVEMENT OF PLANNED TARGETS

INTERNAL CONTROL

15. Of the total number of planned targets, only nineteen (19 of 45) were achieved during the year under review. This represents 58% of total planned targets that were not achieved during the year under review. This was as a result of the entity not considering the available capacity in relation to the planned performance during the annual strategic planning process.

19. I considered internal control relevant to my audit of the financial statements, report on performance against predetermined objectives and compliance with laws and regulations. The matters reported below under the fundamentals of internal control are limited to the significant deficiencies that resulted in the findings on the report on performance against predetermined objectives and the findings on compliance with laws and regulations included in this report.

COMPLIANCE WITH LAWS AND REGULATIONS 16. I performed procedures to obtain evidence that the entity has complied with applicable laws and regulations regarding financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key applicable laws and regulations as set out in the General Notice issued in terms of the PAA are as follows:

LEADERSHIP 20. Procedures for collecting, collating, recording and reporting performance against predetermined objectives were not formally developed and approved by the accounting authority for implementation. FINANCIAL AND PERFORMANCE MANAGEMENT

PROCUREMENT 17. The preference point system was not applied in all procurement of goods and services above R30 000 as required by section 2(a) of the Preferential Procurement Policy Framework Act and Treasury Regulations 16A6.3(b). STRATEGIC PLANNING AND PERFORMANCE MANAGEMENT

21. Internal controls developed and implemented by management did not adequately identify and prevent non-compliance with applicable laws and regulations

AUDITOR-GENERAL Pretoria 31 July 2012

18. The accounting authority did not ensure that the entity had and maintained an effective, efficient and transparent system of internal control regarding performance management, which described and represented how the entity’s processes of performance planning, monitoring, measurement, review and reporting were conducted, organised and managed as required by section 51(1)(a)(i) of the PFMA

Annual Financial Statements

REPORT OF THE DIRECTORS.

The directors present their report for the year ended 31 March 2012. This report forms part of the audited financial statements.

1. COMPANY MEMBERS The members of the company are ex officio: •

The Minister of the Department of Communications;

•

The Director General of the Department of Communications;

•

The Director General of the Department of Arts and Culture;

•

The Director General of the Department of Education;

•

The Group CEO of the South African Broadcasting Corportion;

•

The CEO of the Meraka Institute;

•

The Chairperson of the South African Communications Forum.

2. COMPANY DIRECTORS In terms of the Memorundum of Association the main business which the Company is to carry on is to establish a national broadcasting school. The Articles of Association require that, unless otherwise determined by a meeting of the members of the company, the number of directors shall not be less than ten. Emoluments for the members of Board, its sub committee and Senior managment for the financial year ended 31 March 2012 are detailed below. The directors marked with an asterisk (*) have attended less than required convened meetings for the year ended 31 March 2012. This indicates either that director's term of office expired before the end of the financial year, or a new director was appointed during the financial year. The number of convened meetings for each director is therefore aligned with either the termination/resignation date or the appointment date of the director. The Acting Chairperson of the Board also serves as an alternate member of Audit and Risk Management Committee in the event that a member is not available to attend.

Annual Financial Statements Report of the Directors

DIRECTORS/SENIOR MANAGEMENT EMOLUMENTS 2012 for the financial year ended 31 March 2012

ASSETS

2012

Remuneration

Retainer Fees

Travel Subsistance

Termination of leave

Reimbursement (*)

Company Contributions

TOTAL

Mr T Gcabashe(*)

66 000

18 337

78 000

1 623

163 960

Ms N Majokweni

42 000

15 000

19 000

760

76 760

Ms D Dube

42 000

15 000

33 000

900

90 900

Ms L S Somo(*)

32 000

13 750

45 000

907

91 657

Ms P M Mohlathe(*)

45 000

13 750

35 000

938

94 688

Mr H G Lenepa

45 000

15 000

64 000

1 090

124 090

5 000

1 250

6 250

Prof Roy Marcus (*)

1 250

Mr Thami Plaatjie (*)

277 000

93 337

274 000

6 218

650 555

Mr N A Tshidzumba (*)

827 420

67 892

105 127

10 889

1 011 328

Ms M M Malakalaka

830 502

33 000

10 132

873 634

Mr T Nwedamutswu

830 502

33 000

10 132

873 634

2 488 424

133 892

105 127

31 153

2 758 596

Mr S Ngcobo

699 456

107 352

9 349

816 157

Mr P Ramatswana

612 912

106 222

8 046

736 180

Mr H Murovhi

685 200

21 477

7 994

714 671

Ms H Ndou

433 241

14 000

5 471

452 712

2 439 809

249 051

30 860

2 719 720

5 205 233

93 337

382 943

105 127

274 000

68 231

6 128 871

NON EXECUTIVE DIRECTORS

Dr Molatelo Maloka(*)

Total EXECUTIVE DIRECTORS

Dr H M Wesso Total SENIOR MANAGEMENT

Total

(*) Reimbursements and other payments includes fees paid in compensation for time spent rendering services of a specific nature on behalf of the board to the company. These include attending the following: • • • • •

Parliament Portfolio Committee meetings Bilateral meetings with Minister of communication Ministers' Budget speech NEMISA 2010/2011 Annual General Meeting (AGM) Performance appraisal of Executive directors

Annual Financial Statements Report of the Directors (Continues)

DIRECTORS/SENIOR MANAGEMENT EMOLUMENTS 2012 for the financial year ended 31 March 2011

ASSETS

2011

Remuneration

Retainer Fees

Travel Subsistance

Incentive payments

Reimbursement (*)

Company Contributions

TOTAL

Mr T Gcabashe

92 000

20 000

63 375

1 754

177 129

Ms N Majokweni

68 000

15 000

19 000

1 020

103 020

732

Ms D Dube

60 000

15 000

53 375

1 283

129 658

Ms L S Somo

60 000

15 000

25 000

1 000

101 000

Ms P M Mohlathe

65 000

15 000

54 375

1 344

135 719

Mr H G Lenepa

65 000

15 000

30 000

1 100

111 100

410 000

95 000

732

245 125

7 501

758 358

Mr V Makaya (*)

317 177

26 000

94 057

5 177

497 411

Ms K de Wet

523 494

53 500

95 213

7 056

679 263

Mr N A Tshidzumba

608 960

54 000

7 564

670 524

NON EXECUTIVE DIRECTORS

Ms M Malaku

Total EXECUTIVE DIRECTORS

Ms M M Malakalaka

483 464

19 019

5 898

508 381

Mr T Nwedamutswu

388 223

16 500

4 796

409 519

2 376 318

169 019

189 270

30 491

2 765 098

Mr S Ngcobo

670 758

12 773

104 750

9 169

797 450

Mr P Ramatswana

596 053

22 677

104 750

8 012

731 492

Ms M Malakaka

258 575

22 677

8 500

3 521

293 273

Mr H Murovhi

294 886

35 915

3 723

334 524

1 820 272

58 127

253 915

24 425

2 156 739

4 606 590

153 127

423 666

189 270

269 550

62 417

5 680 195

Total SENIOR MANAGEMENT

Total

Annual Financial Statements Report of the Directors (Continues)

4. REVIEW OF ACTIVITIES PRINCIPAL ACTIVITIES OF THE COMPANY The company's mandate is to position NEMISA as a sustainable and industry relevant provider of advanced multimedia and technical skills for content generation and to establish NEMISA as the electronic content development centre for the Government of South Africa, while its vision is to become a leader in the development of world class electronic media skills in the ICT sector. OPERATING RESULTS The company's net deficit amounted to R 5,437,427 (2011: R 4,289,635) for the year ended 31 March 2012. REVIEW OF OPERATIONS Total income received for the year (in the form of government funding, interest receivable and sundry income) amounted to R35,675,895 (2011 R34,939,482). These funds are recognised on a systematic basis over the periods necessary to match the grants with the related costs which they are intended to compensate. Operational expenditure amounted to R41,113,322 (2011 R39.229,117) for the period.

(GRAP) and in the manner required by the Companies Act 71, 2008.

8. PRIOR YEAR AUDIT REPORT The financial statements for the previous financial year were unqualified by the Auditor General of South Africa.

9. MANAGEMENT AND CONTROL NEMISA is wholly owned by the State through the Department of Communications.

10. LEASES During the prior financial period ended 31 March 2011, the company renewed the agreement for the company’s leased premises for a period of three years commencing on 1 December 2010. The operating lease costs have, accordingly, been recognised at a fixed rental based on the time pattern of the benefits rather than any financial benefit that may arise from the transaction, in terms of GRAP 13 Leases, resulting in the equalisation of rental costs for the duration of the agreement. 11. ACCREDITATION

5. TAXATION No provision for Income tax has been made since the company is tax exempt and qualifies as a Public Benefit Organisation (PBO) in terms of section 10(1)(cN) of the Income Tax Act. The company is also exempt from Value Added Tax (VAT). 6. FUNDING Finance required to fund the operational overheads of the company is provided by the Department of Communications and the National Treasury. Project funding is also forthcoming from various sources to facilitate the skills development within the sector.

7. NOTE ON ACCOUNTING STANDARDS The financial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice

NEMISA has recieved full accreditation ( status from the MICT SETA and offer the accredited courses shown on Table 1.

14. EXTERNAL AUDITORS In terms of Chapter 2, section 4 of the Public Audit Act, 2004 ( Act 25 of 2004) the Auditor General of South Africa must audit and report on the accounts, financial statements and financial management of all national state departments and accounting entities. The Auditor General of South Africa is therefore responsible for the auditing of NEMISA.

15. EVENTS SUBSEQUENT TO BALANCE SHEET DATE The directors are not aware of any other material circumstances arising subsequent to the end of the financial year, not otherwise dealt with in the annual financial statements and the notes thereto, that would affect the operations or the results of operations significantly.

16. GOING CONCERN The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

12. DIRECTORS’ INTERESTS

17. AUDITORS

At 31 March 2012, the directors had no interest in the capital of the company. No contracts involving directors’ interests were entered into in the current period.

Auditor General of South Africa will continue in office for the next financial period.

13. COMPANY SECRETARIAT The company secretariat duties performed by Mr Hulisani Murovhi.

are

Table 1: Accreditation QUALIFICATION

REF No:

EXPIRY DATE:

Further Education and Training in Design Foundation

49127

November 2016

Further Education and Training in film, Television and Video

49120

November 2016

National Certificate Radio Production

49127

November 2016

National Certificate in Broadcast Engineering

48792

November 2016

National Certificate 2D Animation

57611

November 2016

National Certificate 3D Animation and Visual Effects

57607

November 2016

Annual Financial Statements Report of the Directors (Continues)

COMPANY SECRETARYâ&#x20AC;&#x2122;S CERTIFICATION

Declaration by the company secretary in respect of Section 88(2)(e) of the Companies Act. In terms of Section 88(2)(e) of the Companies Act 71 of 2008, as amended, I certify that the company has lodged with the Commissioner all such returns as are required of a public company in terms of the Companies Act and that all such returns are true, correct and up to date.

Mr. Hulisani Murovhi Company Secretary

Annual Financial Statements

STATEMENT OF FINANCIAL POSITION for the financial year ended 31 March 2012

2012

Notes

2011

ASSETS CURRENT ASSETS Inventories

132 613

Receivables from exchange transactions

2 911 936

3 672 886

Cash and cash equivalents

9 793 954

4 287 142

12 838 503

7 960 028

Property, plant and equipment

5 072 801

7 249 230

Intangible assets

174 165

370 055

Totals

5 246 974

7 619 285

Total Assets

18 085 477

15 579 313

Other financial liabilities

520 246

171 725

Payables from exchange transactions

3 432 764

3 907 260

Exchange revenue liability

7 627 300

2 539 202

2 096 936

Totals

14 119 512

6 175 921

Total Liabilities

14 119 512

6 175 921

NET ASSETS

3 965 965

9 403 392

3 965 965

9 403 392

Totals NON CURRENT ASSETS

LIABILITIES CURRENT LIABILITIES

Provisions

NET ASSETS Accumulated surplus

Annual Financial Statements

STATEMENT OF FINANCIAL PERFORMANCE for the financial year ended 31 March 2012

2012

Notes

2011

REVENUE Non exchange revenue

33 473 000

32 602 000

Exchange revenue

1 972 910

1 994 821

Interest received

229 985

342 661

36 675 895

34 939 482

Staff costs/staff training expenses

(14 039 974)

(11 905 331)

Directors emoluments and travel expenses

(3 829 343)

(3 927 115)

Audit Fees external

(440 762)

(310 679)

Networks expenses

(105 665)

(326 566)

Depreciation and amortisation

(2 674 775)

(2 807 861)

Total Revenue NON CURRENT ASSETS

Finance activities

21 042

(38 692)

Debt impairment

(73 895)

186 783

Repairs and maintenance

(142 185)

(462 247)

Consulting

(1 047 525)

(1 017 122)

Profesional fees outsourced services

(1 281 791)

(1 646 911)

(17 498 449)

(16 973 376)

Total Expenditure

(41 113 322)

(39 229 117)

Deficit for the year

(5 437 427)

(4 289 635)

Operating expenses

Annual Financial Statements

STATEMENT OF CHANGES IN NET ASSETS for the financial year ended 31 March 2012

Accumulated surplus

BALANCE AT 01 APRIL 2010

Total net assets

13 693 027

(4 289 635)

9 403 392

(5 401 868)

4 001 524

Changes in net assets Deficit for the year Total Changes BALANCE AT 01 APRIL 2011 Changes in net assets Deficit for the year Total Changes Balance at 31 March 2012

Annual Financial Statements

CASH FLOW STATEMENT for the financial year ended 31 March 2012

2012

Notes

2011

CASH FLOWS FROM OPERATING ACTIVITIES RECEIPTS Sale of goods and services

2 932 006

3 905 353

33 473 000

32 602 000

229 985

342 661

36 634 991

36 850 014

Employee costs

(20 441 141)

(15 832 446)

Suppliers

(10 715 619)

(29 148 706)

20 042

(38 692)

(31 135 718)

(45 019 844)

5 499 273

(8 169 830)

Purchase of property, plant and equipment

(289 767)

(3 095 471)

Purchase of other intangible assets

(51 215)

(90 361)

(340 982)

(3 185 832)

Net movement on other financial liabilities

348 521

(118 851)

Net cash flows from financing activities

348 521

(118 851)

NETINCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS

5 506 812

(11 474 513)

Cash and cash equivalents at the beginning of the year

4 287 142

15 761 655

9 793 954

4 287 142

Grants Interest income Cash (used in) generated from operations PAYMENTS

Finance costs

Net cash from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

Annual Financial Statements

ACCOUNTING POLICIES 1. STATEMENTS OF COMPLIANCE The annual financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board as stipulated by section 91 of the Public Finance Management Act (Act 1 of 1999). The annual financial statements have been prepared on a accrual basis of accounting and are in accordance with the historical costs convention unless specified otherwise. All figures are presented in South African Rands.

1.1 BASIS OF PREPARATION The annual financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practice (GRAP) on a basis consistent with the prior year except for the adoption of the following new or revised standards. These GRAP statements are approved but the effective date has not yet been determined: GRAP 20: Related Party disclosures GRAP 25: Employee benefits GRAP 105: Transfer of Functions between entities under common control GRAP 106: Transfer of Functions between entities not under common control

ment has been issued but not yet effective. The entity elects to continues applying IAS 32, 39 and IFRS 7:

1.2 INVENTORIES Inventories are initially measured at cost except where inventories are acquired at no cost, or for nominal consideration, then their costs are their fair value as at the date of acquisition. Subsequently, inventories are measured at the lower of cost and net realisable value. Inventories are measured at the lower of cost or net replacement cost where they are held for; •

distribution at no charge or for a nominal charge; or • consumption in the production process of goods to be distributed at no charge or for a nominal charge. Current replacement cost the entity incurs to acquire the asset on the reporting date. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.3 PROPERTY, PLANT AND EQUIPMENT An item of property, plant and equipment is recognised as an asset when: •

GRAP 107: Mergers The following statement has been issued but entities are not required to apply: GRAP 18: Segment Reporting GRAP statements 104 on Financial Instru-

•

it is probable that future economic benefits or service potential associated with the item will flow to the entity; and the cost or fair value of the item can be measured reliably.

On initial recognition, an item of property, plant and equipment is measured at cost. Where an asset is acquired at no cost, or for

a nominal cost, its cost is its fair value as at date of acquisition. Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management. Property, including buildings, plant and equipment are stated at cost, less accumulated depreciation and impairment losses. The costs of self constructed assets include the cost of materials, direct labour and other costs incurred directly in the construction of the asset. SUBSEQUENT EXPENDITURE The company recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the economic benefits embodied in the item will flow to the company and the cost of the item can be measured reliably. All other costs are recognised in the Statement of Financial Performance as an expense in the period that they are incurred. The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. DEPRECIATION Improvements and interior decorating, signage and canteen equipment costs relate to the costs of revamping and preparing the office building leased under an operating lease for its intended use and are amortised over the lease period. Furniture, fittings and motor vehicles are wholly owned, while equipment consists of both wholly owned assets as well as assets subject to financial leases which are capitalised. These assets

Annual Financial Statements

ACCOUNTING POLICIES for the financial year ended 31 March 2012 are stated at historical cost less depreciation calculated on a straight line basis to write off the cost of each asset (less its residual value) over its estimated useful life,as follows: Item

Average useful life

Land and Buildings

20 Years

Improvements and interior decorating

10 Years

Signage

10 Years

Canteen equipment

10 Years

Furniture and fittings

6 Years

Office equipment

5 Years

Television equipment

5 Years

Radio equipment

5 Years

Motor vehicles

4 Years

Non-linear editing labs

4 Years

Computer equipment

3 Years

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment, lease and intangible assets is determined as the difference between the sales proceeds and the carrying value and is recognised in the Statement of Financial Performance. Where appropriate, and if significant, expected residual values are taken into account in determining the depreciable values of assets. Where parts of an item have different useful lives, they are accounted for as separate items of property, plant and equipment. Residual values, methods of depreciation and useful lives of all assets are reassessed annually. Depreciation of an item of property, plant and equipment begins when it is available for use and ceases at the earlier of the date it is classified as held for sale or the date it is derecognised.

1.4 LEASES Leases of property, plant and equipment, where the company assumes substantially all the benefits and risks of ownership, are classified as financial leases. Assets leased in terms of financial lease agreements are capitalised at amounts equal at the inception of the lease to the fair value of the property or, if lower, at the present value of the minimum lease payments and are

depreciated in accordance with the policies applicable to equivalent items of property, plant and equipment. The corresponding rental obligations, net of finance charges, are included in other long term payables. Lease finance charges are amortised over the duration of the leases by using a constant periodic rate of interest on the remaining balance of the liability for each period. Leases under which the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Obligations incurred under operating leases are charged to expenses in equal instalments over the period of the lease. In keeping with International Accounting Standards, operating lease costs are recognised on the time pattern of the benefits of the lease as opposed to recognition of any financial benefit arising from the transaction.

1.5 INTANGIBLE ASSETS An asset is identified as an intangible asset when it: •

•

is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, assets or liability; or arises from contractual rights or other legal rights, regardless whether those rights are transferable or separate from the entity or from other rights and obligations.

An intangible asset is recognised when: it is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the entity; and • the cost or fair value of the asset can be measured reliably. Intangible assets are initially recognised at cost.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses. Amortisation begins when the intangible asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Amortisation ceases at the earlier of the date that the asset is classified as held for sale in accordance with GRAP 100: Non current assets held for sale and discontinued operations, and derecognised. The amortisation method used reflects the pattern in which the intangible assetís future economic benefits are expected to be consumed by the entity. If that pattern cannot be determined reliably, the straight line method is used. The amortisation charge for each period is recognised in the Statement of Financial Performance. The residual value of an intangible asset with a finite useful life is assumed to be zero, unless there is a commitment by a third party to purchase the asset at the end of its useful life or there is an active market for the asset, the residual value can be determined by reference to that market and it is probable that such a market will exist at the end of the assetís useful life. An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an intangible asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset. The gain or loss arising from the derecognition is included in the surplus or deficit when the asset is derecognised. Gains are not classified as revenue.

•

Annual Financial Statements

Library information systems and computer software, classified as intangible assets, are wholly owned and are stated at historical cost less amortisation. Amortisation is calculated on a straight line basis to write off the cost of each asset (less its residual value) over its estimated useful life as follows

ACCOUNTING POLICIES for the financial year ended 31 March 2012 Item

Average useful life

Computer Software

3 Years

Licenses Information Systems

5 Years

1.6 FINANCIAL INSTRUMENTS Financial instruments recognised on the Statement of Financial Position include cash and cash equivalents, trade receivables and trade payables. Fair value adjustments to the annual financial statements are recognised in the Statement of Financial Performance in the period in which they occurred. Financial instruments are initially measured at fair value plus, in the case of financial instruments not at fair value through surplus or deficit, transaction costs. The fair value of a financial instrument that is initially recognised is normally the transaction price, unless the fair value is evident from the observable market data. A discounted cash flow model, which incorporates entity specific variables, is used to determine the fair value of financial instruments that are not traded in an active market. Differences may arise between the fair value initially recognised (which, in accordance with IAS 39, is generally the transaction price) and the amount initially determined using the valuation technique. Any such differences are subsequently recognised in surplus or deficit only to the extent that they relate to a change in the factors (including time) that market participants would consider in setting the price. Financial assets are classified into the following categories: • at fair value through surplus or deficit • held to maturity • loans and receivables, and • available for sale. FINANCIAL ASSETS Financial assets are recognised when the company becomes a party to the contractual provisions of the financial asset. Such assets consist of cash and cash equivalents, a contractual right to receive cash or

another financial asset, or a contractual right to exchange financial instruments with another entity on potentially favourable terms. Trade and other receivables are carried at anticipated realisable value. An estimate is made for doubtful receivables based on a review of all outstanding amounts at year end. Bad debts are provided for during the year in which they are identified. Amounts that are receivable within 12 months from the reporting date are classified as current and are present value adjusted. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash balances and are recognised at fair value. Fair value adjustments are recognised in surplus and deficit. Cash includes cash on hand and cash with banks. Cash equivalents are short term highly liquid investments that are held with registered banking institutions with maturities of three months or less and are subject to insignificant risk of change in value. FINANCIAL LIABILITIES Financial liabilities are recognised when the entity becomes a party to the contractual provisions of the instrument. Financial liabilities consist of obligations to delivery of cash or another financial asset or to exchange financial instruments with another entity on potentially unfavourable terms. Financial liabilities, other than derivative instruments, are measured at amortised cost. Trade and other payables are stated at their nominal value. INITIAL RECOGNITION AND MEASUREMENT Financial instruments are recognised initially when the entity becomes a party to the contractual provisions of the instruments. The entity classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available for sale financial assets. For financial instruments which are not at fair value through surplus or deficit, transaction costs are included in the initial measurement of the instrument. Regular way purchases of financial assets are accounted for at trade date. FAIR VALUE DETERMINATION The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the entity establishes fair value by using valuation techniques. These include the use of recent armís length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity specific inputs. TRADE AND OTHER RECEIVABLES Trade receivables are initially measured at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in surplus or deficit when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the assetís carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the deficit is recognised

Annual Financial Statements

ACCOUNTING POLICIES for the financial year ended 31 March 2012 in surplus or deficit within operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in surplus or deficit. Prepayments are classified under Trade and other receivables. Trade and other receivables are classified as loans and receivables. TRADE AND OTHER PAYABLES Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. DERIVATIVES Derivative financial instruments, which are not designated as hedging instruments, consisting of foreign exchange contracts and interest rate swaps, are initially measured at fair value on the contract date, and are re measured to fair value at subsequent reporting dates. Derivatives embedded in other financial instruments or other non financial host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contract and the host contract is not carried at fair value with unrealised gains or losses reported in surplus or deficit. Changes in the fair value of derivative financial instruments are recognised in surplus or deficit as they arise. Derivatives are classified as financial assets at fair value through surplus or deficit held for trading.

1.7 IMPAIRMENT OF NON FINANCIAL ASSETS Non financial assets are assessed at each reporting date to determine whether there is an indication that the carrying amount of the asset may be impaired. If such an indication exists, the recoverable amount of the asset is determined. The recoverable

amount of an asset is the higher of its fair value less costs to sell and its value in use. In determining the value in use, the estimated cash flow of the asset is discounted to the present value based on the time value of money and the risks that are specific to the asset. If the value in use of an individual asset for which there is an indication of impairment cannot be determined, the recoverable amount of the asset is determined. An impairment loss is recognised in surplus or deficit when the carrying amount of an individual asset exceeds its recoverable amount. Impairment losses are reversed if there has been a change in the estimates used to determine the recoverable amount of the asset. Impairment losses are reversed only to the extent of the carrying amount that would have been determined if no impairment loss had been recognised in the past. Reversal of impairment losses are recognised directly in surplus or deficit.

1.8 IMPAIRMENT OF FINANCIAL ASSETS Impairment losses are recognised on loans and receivables when there is objective evidence of impairment. An impairment loss is recognised in surplus and deficit when the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is calculated as the present value of the estimated future cash flows discounted at the original effective interest rate of the instrument.

1.9 PROVISIONS AND CONTINGENCIES A provision is recognised in the Statement of Financial Position when the company has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Annual Financial Statements

ONEROUS CONTRACTS A provision for onerous contracts is recognised when the expected benefits to be derived from a contract are lower than the unavoidable costs of meeting its obligations under the contract. CONTINGENT LIABILITIES Contingent liabilities are not recognised. Contingent liabilities are disclosed in the notes to the financial statements unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent liabilities are continually assessed to determine whether an outflow of resources embodying economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognised in the financial statements in the period in which the change in probability occurs, unless a reliable estimate can be made.

1.10 EMPLOYEE BENEFITS SHORT TERM EMPLOYEE BENEFITS The cost of short term employee benefits is recognised during the period in which the related service is rendered. Accruals for employee entitlements to salaries, performance incentives and annual leave represent the amounts which the company has a present obligation to pay as a result of employees services provided to the reporting date. The accruals have been calculated at undiscounted amounts based on current salary rates. The expected cost of incentives payments is recognised as an liability when there is a legal or constructive obligation to make such payments as a result of past performance. LONG TERM SERVICE BENEFITS The companyĂs net obligation in respect of long term service benefits is the amount of benefit that employees have earned in return for their service in the current and prior periods.

ACCOUNTING POLICIES for the financial year ended 31 March 2012 1.11 TAXATION No provision for taxation has been made since the company is directly funded by the government and exemption from taxation has been granted by South African Revenue Service (SARS). The company has also been exempted from Value Added Tax (VAT) registration.

1.1 REVENUE RECOGNITION Revenue comprises appropriation income from government, interest income, hire of equipment/facilities, courses rendered, fees from students, project administration fees and project income. Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates. NON EXCHANGE REVENUE: Appropriation Income from Department of Communications Appropriation income is recognised at fair value where there is reasonable assurance that the income will be received and all attached conditions will be complied with. When the income relates to an expense item, it is recognised as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. EXCHANGE REVENUE: Interest income Revenue is recognised as the interest accrues (using the effective interest method, that 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. Equipment/facilities hire Revenue from Equipment/facilites hire is recognised in the accounting period in which they are hired out to customers.

Courses rendered Revenue on courses rendered is recognised in the accounting period in which the courses are rendered. Project Administration Fees Project administration fees are recognised on completion of the project. Conditional Project Funding Revenues received from project funding are not conditional grants and are recognised as revenue to the extent that the company has complied with general criteria, conditions or obligations embodied in the agreement. To the extent that the criteria, conditions or obligations have not been met, a liability is recognised. Student fees Student course fees is accounted for on an accrual basis. The registration fee is recognised upon enrolment of a student, and the course fee is recognised over the period of the presentation of the course.

1.13 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include: TRADE RECEIVABLES / HELD TO MATURITY INVESTMENTS AND/OR LOANS AND RECEIVABLES The entity assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the entity makes judgements as to whether there is observable data indicating a measurable decrease in the estimated

future cash flows from a financial asset. The impairment for trade receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period. FAIR VALUE ESTIMATION The fair value of financial instruments traded in active markets (such as trading and available for sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the entity is the current bid price. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the entity for similar financial instruments. PROVISIONS Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 22 Provisions. EFFECTIVE INTEREST RATE The entity used the prime interest rate to discount future cash flows. ALLOWANCE FOR DOUBTFUL DEBTS On debtors, an impairment loss is recognised in surplus and deficit when there is objective evidence that it is impaired. The impairment is measured as the difference between the debtors carrying amount and the present value of estimated future cash flows discounted at the effective interest rate, computed on initial recognition.

Annual Financial Statements

ACCOUNTING POLICIES for the financial year ended 31 March 2012 1.14 BUDGET INFORMATION Budget information is disclosed in terms of GRAP 1 (Presentation of Financial Statements) and GRAP 24 which requires that entities, in their general purpose financial reporting, provide information on whether resources were obtained and used in accordance with their legally adopted budgets.

1.15 INVESTMENT INCOME

A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. Related party transactions exclude transactions with any other entity that is a related party solely because of its economic dependence on the reporting entity or the government of which it forms part.

Investment income is recognised on a time proportion basis using the effective interest method.

Related party transaction and outstanding balances or committments owing between the reporting entity and related parties are disclosed in note 17 to the financial statements.

1.16 BORROWING COSTS

1.18 COMPARATIVE FIGURES

It is inappropriate to capitalise borrowing costs when, and only when, there is clear evidence that it is difficult to link the borrowing requirements of an entity directly to the nature of the expenditure to be funded i.e. capital or current. Borrowing costs are recognised as an expense in the period in which they are incurred.

Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current year.

1.17 RELATED PARTIES Parties are considered related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions or if the related party entity and another entity are subject to common control.

The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.20 FRUITLESS AND WASTEFUL EXPENDITURE Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised. All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.19 UNAUTHORISED EXPENDITURE Unauthorised expenditure means: â&#x20AC;˘ overspending of a vote or a main division within a vote; and â&#x20AC;˘ expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with the purpose of the main division. All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred.

Annual Financial Statements

1.21 IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation, including the Public Finance Management Act 1 of 1999 (as amended by Act 29 of 1999). All irregular expenditure is charged against income in the period in which it is incurred.

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

2012

2011

R 2.

INVENTORIES

Consumable stores

132 613

3 305 253

4 319 968

(1 974 364)

(2 248 789)

1 330 889

2 071 179

RECEIVABLES FROM EXCHANGE TRANSACTIONS

Trade debtors LESS: Provision for doubtful debts

Property, plant and equipment Intangible assets

228 965

249 625

1 352 082

2 911 936

3 672 886

The deposit is the requirement in terms of the renewed lease agreement for the premises. Accounts payable include the receivables present value calculation amounting to R135 832.34 (2011: R156 875).

CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash flow statement comprise the following amounts: Cash on hand

3 000

Bank balances

1 546 298

1 138 486

Corporation for Public Deposits Balance

8 244 656

3 145 656

9 793 954

4 287 142

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012 5.

2012

2011

PROPERTY, PLANT AND EQUIPMENT

ACCUMULATED DEPRECIATION / IMPAIRMENT

COST/ VALUATION

CARRYING VALUE

COST/ VALUATION

ACCUMULATED DEPRECIATION / IMPAIRMENT

CARRYING VALUE

OWNED ASSETS PROPERTY/PLANT Land and buildings

189 396

(40 214)

149 182

189 396

(30 744)

158 652

9 436 280

(8 727 981)

708 299

9 366 978

(8 606 353)

760 625

217 916

(197 931)

19 985

217 916

(178 203)

39 713

Radio equipment

1 659 096

(1 090 267)

568 829

1 726 157

(920 672)

805 485

Television equipment

4 708 722

(3 407 624)

1 301 098

4 824 772

(2 884 740)

1 940 032

Improvements and interior decorating Canteen equipment PRODUCTION EQUIPMENT

OFFICE FURNITURE AND EQUIPMENT 4 739 637

(3 899 459)

840 178

4 704 606

(3 110 280)

1 594 326

Office equipment

Computer equiment

893 586

(440 512)

453 074

867 630

(295 176)

572 454

Furniture and fittings

915 501

(430 386)

485 115

756 022

(322 399)

433 623

1 580 237

(1 033 188)

547 049

1 580 237

(647 803)

932 434

24 340 371

(19 267 562)

5 072 809

24 233 714

(16 996 370)

7 237 344

833 852

(821 966)

11 886

24 340 371

(19 267 562)

5 072 809

25 067 566

(17 818 336)

7 249 230

VEHICLES Motor vehicles Total owned assets Leased assets Leased office equipment TOTAL ASSETS

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012 5.

PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

OPENING BALANCE

ADDITIONS

DISPOSAL

DEPRECIATION

TOTAL

Reconciliation of property, plant and equipment 2012 OWNED ASSETS PROPERTY / PLANT Land and buildings

158 652

(9 470)

149 182

Improvements and interior decorating

760 625

69 302

(121 628)

708 299

39 713

(19 728)

19 985

Canteen equipment PRODUCTION EQUIPMENT Radio equipment Television equipment

805 485

(16 129)

(220 527)

568 829

1 940 032

(10 500)

(628 434)

1 301 098

OFFICE FURNITURE AND EQUIPMENT 1 594 326

35 030

(789 178)

840 178

Office equipment

Computer equipment

572 454

25 955

(145 335)

453 074

Furniture and fittings

433 623

159 480

(107 988)

485 115

VEHICLES Motor vehicles Total Owned Assets

932 434

(385 385)

547 049

7 237 344

289 767

(26 629)

(2 427 673)

11 886

(11 886)

7 249 230

289 767

(38 515)

(2 427 673)

5 072 809

LEASED ASSETS Leased assets TOTAL ASSETS

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012 5.

PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

OPENING BALANCE

ADDITIONS

DEPRECIATION

TOTAL

Reconciliation of property, plant and equipment 2011 OWNED ASSETS PROPERTY / PLANT Land and buildings

168 121

(9 469)

158 652

Improvements and interior decorating

871 252

186 319

(296 946)

760 625

60 651

(20 938)

39 713

Canteen equipment PRODUCTION EQUIPMENT Radio equipment Television equipment

209 510

767 318

(171 343)

805 485

1 300 448

1 142 420

(502 836)

1 940 032

OFFICE FURNITURE AND EQUIPMENT Computer equipment

2 020 168

678 750

(1 104 592)

1 594 326

Office equipment

718 322

(145 868)

572 454

Furniture and fittings

158 279

320 664

(45 320)

433 623

VEHICLES Motor vehicles

1 317 818

(385 384)

932 434

Total Owned Assets

6 824 569

3 095 471

(2 682 696)

7 237 344

36 657

(24 771)

11 886

6 861 226

3 095 471

(2 707 467)

7 249 230

LEASED ASSETS Leased assets TOTAL ASSETS

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012 6.

2012

2011

INTANGIBLE ASSETS

ACCUMULATED DEPRECIATION /IMPAIRMENT

COST/ VALUATION

CARRYING VALUE

ACCUMULATED DEPRECIATION /IMPAIRMENT

COST/ VALUATION

CARRYING VALUE

OWNED ASSETS PROPERTY/PLANT Owned assets Computer Software TOTAL ASSETS

1 131 879

(957 714)

174 165

1 080 664

(710 609)

370 055

1 131 879

(957 714)

174 165

1 080 664

(710 609)

370 055

RECONCILIATION OF INTANGIBLE ASSETS - 2012

OPENING BALANCE

ADDITIONS

AMORTISATION

TOTAL

Owned Assets Computer Software TOTAL ASSETS

370 0551

51 215

(247 105)

174 165

370 0551

51 215

(247 105)

174 165

559 258

90 361

(279 564)

370 055

559 258

90 361

(279 564)

370 055

RECONCILIATION OF INTANGIBLE ASSETS - 2012 Owned Assets Computer Software TOTAL ASSETS

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

OTHER FINANCIAL LIABILITIES

2012

2011

7.1 Long-term liability under operating property lease Adjustment iro straight-lined property lease

520 246

171 725

LESS: Current portion of liability under operating property lease

520 246

171 725

Accounts payables

1 482 004

1 462 285

Prepaid student fees/Income received in advance

1 950 760

2 416 775

28 200

3 432 764

3 907 260

PAYABLES FROM EXCHANGE TRANSACTIONS

Deposits students rentals

EXCHANGE REVENUE LIABILITY

Movement during the year Cash on hand

3 000 000

Bank balances

(3 000 000)

Corporation for Public Deposits Balance Balance carried forward Non-current liabilities Current liabilities

10.

7 627 300

33 473 000

32 602 000

33 473 000

32 602 000

NON EXCHANGE REVENUE

Appropriation Income received

7 627 300 7 627 300

Department of Communications

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

11.

EXCHANGE REVENUE

2012

2011

Training and development

909 583

944 846

Sundry income - students

1 045 255

995 164

18 072

54 811

1 972 910

1 994 821

229 985

342 661

(21 042)

38 692

3 091 592

1 520 619

Other income

12.

INTEREST RECEIVED

Interest revenue Bank

13.

FINANCE COSTS

Fair value adjustments: Accounts receivable

14.

OPERATING EXPENSES

DIRECT EXPENDITURE Student accommodation

266 957

608 962

Student training/examination costs

63 256

138 414

Student stationery and printing costs

97 096

100 200

Student stipends

24 000

31 774

Student transportation costs

41 240

66 106

2 569 093

4 174 672

38 451

(157 910)

871 534

1 300 591

Student meals

Lecturer/facilitation fees Accreditation/membership fees OVERHEAD EXPENDITURE Business development/marketing/communications

39 910

41 988

Insurance

1 331 100

1 426 992

Property rates and taxes

2 011 191

956 641

Stationery costs

259 209

347 410

Transportation costs

131 541

126 029

Travel and accommodation costs

492 711

360 228

5 982 001

4 943 766

Bank charges

Property rental costs Subsistence allowances Equipment costs

13 936

187 567

972 958

17 498 449

16 973 376

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

15.

LEASES

2012

2011

OPERATING LEASE COMMITMENTS Not later than one year

6 148 634

5 633 476

The lease agreement for the companyĂs premises was renewed during the course of the financial period ended 31 March 2011 for a period of three years, commencing on 1 December 2010, at an initial rental of R455 570 per month. Rentals are recognised on a straight line basis in keeping with GRAP 13, whereby the operating lease costs are recognised based on the time pattern of the benefits rather than any financial benefit that may arise from the transaction, resulting in an equalisation of the rental recognised. OPERATING LEASE COMMITMENTS Not later than one year

6 148 634

5 633 476

Later than 1 year and not later than 5 years

4 341 614

10 491 247

10 490 247

16 124 723

(5 437 427)

(4 289 635)

2 674 775

2 807 861

442 266

66 813

38 514

16.

CASH GENERATED FROM (USED IN) OPERATIONS

Deficit before taxation ADJUSTMENT FOR: Depreciation Movements in provisions Scrapped assets CHANGES IN WORKING CAPITAL: Inventories

(132 613)

760 954

(1 068 857)

Payables from exchange transactions

(474 496)

(2 686 012)

Exchange revenue liability

7 627 300

(3 000 000)

5 499 273

(8 169 830)

Receivables from exchange transactions

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

17.

RELATED PARTY TRANSACTIONS

2012

2011

The main related party with whom the company has interacted is the Department of Communications, who is the sole shareholder and provides finance to fund the operational overheads of the company. The Minister of Communications is the Executive Authority of NEMISA. NEMISA is ultimately controlled by the national executive. NEMISA recieved a transfer payments of R33 473 million funding for its administrative activities from the Department of Communications. There were amounts owing to and by NEMISA to the Department of Communications. NEMISA provides training on behalf of the Department of Communications in respect of Community Radio and National Digital Repository (NDR). Transactions are also undertaken on an ad hoc basis with various other parastatal companies, as listed below. Transactions are undertaken on an armís length basis. The revenue from these transactions is included in the Statement of Financial Perfomance as at 31 March 2012. RELATED PARTY TRANSACTIONS Sentech - DoC entity Department of Communications (DoC) MICT SETA – Government entity SABC – DoC entity

(389 456)

(7 734 718)

107 418

(114 000)

142 500

(7 627 300)

RELATED PARTY BALANCES Department of Communication - Gross amount - Gross Amount - Deferred Income - Doubtful debts provision MICT SETA

28 500

142 500

- Gross amount

(389 456)

- Doubtful debts provision

- Gross amount - Doubtful debt provision

SENTECH

SABC - Gross amount - Doubtful debt provision

153 842

(153 842)

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

17.

RELATED PARTY TRANSACTIONS (Continued)

2012

2011

RELATIONSHIPS NEMISA is governed by the Board of directors, during the financial year 9 members were appointed by the Minister of Communications. Five (5) of the nine (9) were active as at 31 March 2012. The 5 members along with the CEO,CFO and COO are reponsible for planning, directing and controlling the activities of the entity. Emoluments paid to the Board of Directors is reflected in the Report of the directors (page 40). 18.

FINANCIAL INSTRUMENTS

In the course of the organisation’s operations, it is exposed to interest rate risk, credit risk and liquidity risk. LIQUIDITY RISK. The entity’s risk to liquidity is a result of the funds available to cover future commitments. The entity manages liquidity risk through an ongoing review of future commitments and credit facilities. INTEREST RATE RISK The company’s exposure to interest rate risk at reporting date is: ASSETS Cash and cash equivalents Trade and other receivables from exchange transactions TOTAL FINANCIAL ASSETS

2 674 775

2 807 861

442 266

66 813

12 705 890

7 960 028

3 432 756

3 907 265

3 432 756

3 907 265

LIABILITIES Trade and payables TOTAL FINANCIAL LIABILITIES

CREDIT RISK Financial assets which potentially subject the company to concentrations of credit risk consist principally of cash, short term deposits and trade receivables. The organisation’s cash equivalents are held by high credit quality financial institutions. Credit risk with regard to receivables is limited. This is because the nature of the companyís activities for the period focused on providing training to previously disadvantaged persons. Accordingly, the company has no significant concentration of credit risk. The carrying amounts of financial assets included in the balance sheet represent the company’s exposure to credit risk in relation to these assets. Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. NEMISA only deposits cash with major banks with high quality credit standing and limits exposure to any one counter party.

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

18.

2012

FINANCIAL INSTRUMENTS (Continued)

2011

Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Sales to retail customers are settled in cash or using major credit cards. Credit guarantee insurance is purchased when deemed appropriate. THE MAXIMUM EXPOSURE TO CREDIT RISK AT THE REPORTING DATE: Carrying amount Cash and cash equivalents

9 793 954

4 287 142

Trade debtors

3 305 253

4 319 968

13 099 207

8 607 110

IMPAIRMENT LOSSES The aged trade receivables at reporting date was: IMPAIRMENT LOSS

GROSS AMOUNT YEAR ENDED 31 MARCH 2012 Past due: 31-60 days

42 689

Past due: 61-90 days

360

3 262 204

(1 974 364)

3 305 253

(1 974 364)

Current: 0-30 days

715 040

Past due: 31-60 days

818 680

2 789 648

(2 248 789)

4 323 368

(2 248 789)

2 248 789

2 023 991

224 798

(274 425)

1 974 364

2 248 789

More than 90 days TOTAL YEAR ENDED 31 MARCH 2011

More than 90 days TOTAL Movement in the allowance for impairment in respect of trade receivables during the year was:

Opening balance Impairment loss recognised Impairment loss utilised CLOSING BALANCE The fair values of financial assets and financial liabilities at reporting date are:

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012 18.

FINANCIAL INSTRUMENTS (Continued) 1 year or less

Total

Cash

9 793 954

Trade receivables

2 911 936

12 705 890

Trade payables

3 432 765

3 907 265

TOTAL FINANCIAL LIABILITIES

3 432 765

3 907 265

Cash and cash equivalents

4 287 142

Trade and other receivables from exchange transactions

3 672 886

Total financial assets

7 960 028

Trade payables

3 432 765

3 907 265

TOTAL FINANCIAL LIABILITIES

3 432 765

3 907 265

Cash

9 793 954

Trade receivables

2 911 936

12 705 890

Trade payables

3 432 765

3 907 265

TOTAL FINANCIAL LIABILITIES

3 432 765

3 907 265

Cash

4 287 142

Trade receivables

3 672 886

TOTAL FINANCIAL ASSETS

7 960 028

Trade payables

3 432 765

3 907 265

TOTAL FINANCIAL LIABILITIES

3 432 765

3 907 265

YEAR ENDED 31 MARCH 2012 ASSETS

TOTAL FINANCIAL ASSETS LIABILITIES

YEAR ENDED 31 MARCH 2011 ASSETS

LIABILITIES

MATURITY PROFILE The maturity profile of financial assets and liabilities is as follows:

YEAR ENDED 31 MARCH 2012 ASSETS

TOTAL FINANCIAL ASSETS LIABILITIES

YEAR ENDED 31 MARCH 2011 ASSETS

LIABILITIES

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

19.

COMPARATIVE FIGURES

The comparative figures have been restated to reflect the reclassification of certain categories where necessary. For the current period, no restatements have been made. 20.

GOING CONCERN

The annual financial statements have been prepared on a going concern basis, since the directors have every reason to believe that the company has adequate resources in place to continue in operation for the foreseeable future. 21.

LOSSES THROUGH CRIMINAL CONDUCT

No losses through criminal conduct were incurred during the period. 22.

PROVISIONS

RECONCILIATION OF PROVISIONS - 2012 OPENING

ADDITIONS

UTILISED DURING THE YEAR

TOTAL

509 681

1 361 826

988 541

95 840

(168 215)

916 166

256 250

261 210

(256 250)

261 210

2 096 936

866 731

(424 465)

2 539 202

Staff incentive payments

852 145

Leave pay 13th cheque

RECONCILIATION OF PROVISIONS - 2011 OPENING

ADDITIONS

UTILISED DURING THE YEAR

TOTAL

Staff incentive

675 018

852 145

(675 018)

852 145

Leave pay

892 701

95 840

988 541

CCMA payment

245 216

13th Cheque

217 188 2 030 123

(245 216)

39 062

256 250

987 047

(920 234)

2 096 936

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

23.

ACTUAL EXPENDITURE VERSUS BUDGETED EXPENDITURE

The total appropriation funding due to NEMISA by way of Transfer payments from the Department of Communications for the current financial year amounts to R33 473 million. The adverse variance of R 11 million relating to other income, is mainly due to the company not being awarded certain projects from major stakeholders including the Department of Communication (DoC). BUDGET

ADJUSTED

R 000

ADJUSTED BUDGET R 000

ACTUAL

DIFFERENCES

R 000

REVENUE Appropriation Income Interest received

Other income

33 473

288

230

13 409

12 193

1 216

1 973

757

47 170

12 193

34 977

35 676

699

Compensation of employees

(28 261)

(9 416)

(18 845)

(20 441)

1 596

Goods and services

(17 913)

(1 776)

(16 137)

(17 997)

1 860

(2 310)

440

(2 750)

(2 675)

(75)

(1 314)

1 441

(2 755)

(5 437)

(2 682)

Total Revenue

Other expenditure - non cash items DEFICIT FOR THE PERIOD

The deficits is due to increased Direct and Overhead costs such as property rental costs, property rates and taxes which could not be supplemented by the baseline allocation. NEMISA received an additional income in a form of projects which were signed off at the end of the last quarter of the financial year. Although this is income minimal, it assists in supplementing the deficit.

Annual Financial Statements

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the financial year ended 31 March 2012

24.

RECONCILIATION BETWEEN BUDGET AND STATEMENT OF FINANCIAL PERFORMANCE

2012

2011

NET DEFICIT PER THE STATEMENT OF FINANCIAL PERFORMANCE Adjusted for:

(5 437)

Impairment recognised/reversed

(73)

Surplus/deficit on sale of assets

(38)

Increase/decrease in provisions

442

2 330

(2 755)

Fair value adjustment

Difference in Actual vs Budget

Reconcialition of budget deficit with the net cash generated from operating, investing and financing activities: 25.

WORLD CUP EXPENDITURE

The institute did not incur any expenditure relating to the 2011 IRB rugby world cup. 26.

IRREGULAR EXPENDITURE

RECONCILIATION OF IRREGULAR EXPENDITURE Current year

256 123

Expenditure condoned

Transfer to receivables

256 123

IRREGULAR EXPENDITURE AWAITING CONDONEMENT

Irregular expenditure amounting to R256 122.56 was incurred during the 2011/12 financial year. 27.

FRUITLESS AND WASTEFUL EXPENDITURE

There was no fruitless and wasteful expenditure during the period.

Annual Financial Statements

Notes.

*burnt.

*Burnt

34:28 00:01

National Electronic Media Institute of South Africa 21 Girton Road Parktown Johannesburg P O Box 545 Auckland Park 2006 Tel: +27 (011) 484 0583 Fax: +27 (011) 484 0615 email: info@nemisa.co.za

ISBN: 978-0-620-54328-6

www.nemisa.co.za

I IG

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