AnnuAl RepoRt - Provincial Government of South Africa RepoRt 2015-2016 II RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE ANNA RPRT 2015-2016 GATEWAY TO WORLD MARKETS About the RichARds bAy

AnnuAl RepoRt2 0 1 5 - 2 0 1 6

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE ANNUAL REPORT 2015-2016II

GATEWAY TO WORLD MARKETS

About the RichARds bAy industRiAl development Zone (RbidZ)

PurposeThe company’s summarised purpose ultimately guides the strategic direction of the organisation. The purpose of the RBIDZ is to develop an industrial estate in order to:

• AttractlocalandforeigninvestorswhowillbeneficiateSouthAfrica’srawmaterials;• Createproductioncapacity;• Provideservices;and• Create employment and improve the skills base.

VisionTo be the preferred special economic zone for quality investments while delivering value to our stakeholders.

MissionWe utilise the competitive advantage of the Richards Bay area to attract sustainable investments that stimulate economicgrowth,jobcreation,beneficiationofresourcesandtheempowermentofpeople.

ValuesRBIDZ’svisionissupportedbyfivecorevalues,whichunderpintheworkingsofthecompany(ERISI).

Excellence We shall conduct our business with our stakeholders and investors with the highest levels of professionalism, competence and responsibility.

Respect We shall embrace diversity by treating each other with respect, trust and dignity at all times.

Integrity We shall pursue ethical practices by being open, honest, sincere and consistent in actions and communications.

Sustainability We shall pursue the development of the RBIDZ to meet the present needs without compromising the ability of future generations to meet their own needs while promoting a health and safety culture.

Innovation We shall seek creative and novel solutions to ensure continued improvement and address the needs of RBIDZ and stakeholders.

Strategic GoalsGoal 1: Attract new sustainable investmentsGoal 2: Develop a fully serviced compliant industrial estateGoal 3:SecureadequatefinancialresourcestoensurethesustainabilityoftheRBIDZGoal 4: Contribute towards job creation and empowermentGoal 5:EstablishrobuststakeholderengagementGoal 6: Pursue best practice by ensuring good governance


REGISTERED NAME: Richards Bay Industrial Development Zone Company SOC Ltd REGISTRATION NUMBER: 2002/009856/07

PHYSICAL ADDRESS: Captains Walk Building Tuzi Gazi Waterfront Pioneer Road Richards Bay

POSTAL ADDRESS: Private Bag X 1005 Richards Bay 3900

TELEPHONE NUMBER/S: +27 35 788 0571

FAX NUMBER: +27 35 788 0578

EMAIL ADDRESS: [email protected]

WEBSITE ADDRESS: www.rbidz.co.za

EXTERNAL AUDITORS: Auditor-GeneralofSouthAfrica

BANKERS: ABSALtd

COMPANY/BOARD SECRETARY: Adv. KN Harvey


RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE ANNUAL REPORT 2015-2016 1

contentsGENERAL INFORMATION 1. Foreword by the MEC 22.TheRichardsBayDevelopmentZoneLeadership 43. Chairperson’s Foreword 84.RBIDZExecutiveManagement 105.ChiefExecutiveOfficer’sOverview 116.StatementofResponsibilityandConfirmationofAccuracyfortheAnnualReport 187.LegislativeandotherMandates 198.OrganisationalStructure 22

PERFORMANCE INFORMATION 231.PerformanceagainsttheAnnualPerformancePlan2015/2016 242. Highlights per Programme 32 BusinessDevelopmentandSupport 32 ZoneDevelopmentandOperations 36 Administration 39

GOVERNANCE 541. Introduction 552.ExecutiveAuthority 553. The Accounting Authority/Board 554.RiskManagement 585. Internal Audit and Audit Committees 586.CompliancewithLawsandRegulations 597. Fraud and Corruption 598.MinimisingConflictofInterest 609. Code of Conduct 6010.Health,SafetyandEnvironmentalIssues 6011.BBBEEActandtheCodesofGoodPractice 6112.CompanySecretary 6113. Audit Committee Report 62

HUMAN RESOURCE MANAGEMENT 631. Introduction 642.HumanResourceOversightStatistics 64

FINANCIAL INFORMATION 68ListofAbbreviations/Acronyms 98

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE ANNUAL REPORT 2015-2016


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1. FoReWoRd by the mec

South Africa has had its fair share of volatility, experiencing its lowest growth rate sincethe 2009 recession due to a slowdown in

manufacturingandfinance,realestateandbusinessservices.TheSouthAfricaneconomyadvanced1%year-on-year in the third quarter of 2015, easing from an upwardly revised 1.3% expansion in thepreviousperiodandlowerthanmarketexpectationsof a 1.3% rise. The government identified thateconomic change would not come about without far-reaching interventions.

The economy needed a major push forward by sharing the nine point plan to ignite growth and create jobs. In this regard, and in a bid to counter the ravages of unemployment and a dearth of skills, our government has continued to seek interventions aimed at promoting issues of localisation (local content), industrialisation,value addition (beneficiation), infrastructure, skillsand entrepreneurship development. Equally, arenewed focus was placed on the implementation of broad-based black economic empowerment, which is at the core of transformation policy in line with government policies of radically overhauling the economy such that it benefits all its citizens,

irrespective of their class, race, gender and spatial location.

The worsening global and domestic economic prospects have, however, lessened the pace at whichourcountry’seconomygrew.Ourcountry’sgrowth performance for the period under review hasbeendisappointing,averagingbelow1%.Thisis in stark contrast to growth trends observed in comparable emerging countries such as China and Indiawheregrowthhasaveragedmorethan5.0%.The inability to enhance the production activity at both the primary and secondary sectors, coupled withthesloweconomicrecovery inSouthAfrica’smajor trading partners, remain among the principal causes of the lacklustre growth performance in the country. Of course, there is a range of domesticissues, particularly in the energy sector and the labour market, which continue to place undue pressure on the economy.

Recent high frequency data also shows that economicactivityinSouthAfricaisnotrecoveringas quickly as it should. This is partly due to slowing consumer spending owing, but not limited to, persistently high unemployment, disappointing manufacturing production, as well as protracted

MR SIHLE ZIKALALA, MPPMEC:ECONOMICDEVELOPMENT,TOURISMandENVIRONMENTALAFFAIRS

In the reporting period, the government continued to intensify its campaign against the socio-economic challenges of unemployment, inequality and poverty – this, amid the tough economic climate experienced globally.



strikes, which offset the improvement of externalconditions. As stated earlier, these local issues are becomingextremelyimportantinthequesttoattractinvestments.Unlikebeforethecrisis,investorsarenolongerlookingatemergingcountriesasabasket;they now scrutinise internal issues in each country before they make investment decisions.

The NDP cautions us that rapidly rising wages precedegrowthacceleration;hencetheyaremorelikely to follow the onset of a sustained acceleration by two-to-five years. As a province, our urgentfocus is on access to employment opportunities for the larger numbers of the unemployed. We all need tounderstandthatgrowthdemandstrade-offs.

However, the RBIDZ, as an organ of the KwaZulu-Natal Department of EconomicDevelopment, Tourism and Environmental Affairs,has soldiered on, proving itself, in recent years, to be a game changer within the provincial economic environment.

In the past year, though faced with slow regulatory approval processes, tough economic conditions and land assembly challenges, a number of important milestones were reached by the RBIDZ.

These included: • ApprovaloftheMarketingStrategyand

roll out of the Marketing Plan for investor attraction;

• SigningofpipelineinvestmentstothevalueorR2,5billion;

• The completion of the Phase 1A infrastructureupgrade;

• TheProclamationoftheSEZActandpromulgationoftheregulations;

• TransferbytheDeed’sOfficeofPhase1AfromtheMunicipalitytotheRBIDZ;

• Creation of more than 1 100 construction jobsbytheRBIDZandinvestors;

• Initiation of some infrastructure projects, includingMedwayRoad;

• Robust negotiations with landowners to acquireland;

• Improving stakeholder relations for value additiontoinvestorsandtheRBIDZ;

• ObtainingofISO9001qualityassurancecertification;

• Approval of the organisational structure by KZNPremier;

• Completion of 1,9 million man-hours workedwithoutanydisablinginjury;

• TransferofPhase1A(62ha)landbytheMunicipalitytotheRBIDZ;

• ImprovementtoLevel2BBB-EEContributor.

• Generationofownleaseincome;and• SecuringR272millionfromthedtiviathe

SEZFundingapplicationprocess.

All of this would not be possible without the financial support and unfailing commitment fromtheDepartmentofTradeandIndustry(thedti)andthe strategic leadership and support of the RBIDZ Board in transforming the vision into reality. The entity also enjoyed great partnerships with key players in the provincial business sector who have showngreatconfidenceintheRBIDZ.

Finally, we are grateful to the investors who have chosen to locate in the RBIDZ and invite other investors to consider Umhlathuze as the city ofchoice with all the RBIDZ incentives.

Ourquest for radical economic transformationcontinues!

MrSihleZikalala,MPPMEC:EconomicDevelopment,TourismandEnvironmentalAffairs



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2. the RichARds bAy industRiAl development Zone leAdeRship

TheRichardsBay IndustrialDevelopmentZone (RBIDZ) is ledat the topbyaBoardof12capableandcompetent members who oversee governance and performance of the organisation. Underneath theBoard is theexecutivemanagement ledbytheChiefExecutiveOfficer.Theexecutivemanagementare

responsible for the overall running and management of the RBIDZ including, but not limited to, and in consultation with the RBIDZ Board, crafting the strategic direction to deliver on the mandate of the organisation as derived from theManufacturingDevelopmentAct(ActNo.187of1993).

Qualifications: B.Soc.Sc,PgDipIR

Board Directorships • KZN Growth Fund Managers• Black Balance Projects• MarketDemandTrading429• GlobalPactTrading545• Aquaquad• VukaPlanningAfrica• BlackBalanceLogistics

• Black Balance Investments• Black Balance Consulting• Imvusa Trading 230• Coalition Trading 596• TheStablesWineEstateAirportCellar• Ventureworx

Qualifications:B.Com,BCompt(Hons),CTA,H.DipTax,H.DipIntTaxLaw,M.Comm(Tax),CA(SA)

Board Directorships: • JoziLiquorDistributors• LusikisikiLiquorDistributors• FlagstaffLiquorDistributors• XaxazeleProperties• Night Breeze Investments 205• EVICapitalFoundation• EVICapitalFacilitiesTrading• EVIPigFarms• EVILivestockFarms• EVIPoultryFarms• EVICapitalPartners• Pelchem• Export Credit Insurance Corporation of

SouthAfrica• MountainHeritageLodgeandResorts

• SiyalungisaProperties• Furnways Capital• Fihlani Investments• FurnwaysLodgeandResorts• Furnways Properties• EvidenceCapitalManco• EvicapAdvisory• EvidenceCapitalFund3GP• EvidenceCapitalMezzanineFundGP• Furnways Auto• ArturoCalleClothingSouthAfrica• EvidenceCapitalFund4GP• EvidenceCapitalFund2GP• Neema Africa Holdings

Mr Mel ClarkBoard Chairperson

(since 18 January 2016)

Mr Zola FihlaniAudit & Risk Committee

Chairperson



Qualifications:BSc(ApplMathematics),BSc(TextileEngineering),MBA,SeniorExecutiveProgramme(Harvard),CertificateinChangeManagement(Cornell)

Board Directorships: • StefanuttiStocksHoldings• OmniaHoldings• NTPRadioisotopesSOC

Qualifications: BA, Masters in Governance and Political Transformation

Board Directorships: • Bhambatha Investments• Musa Dladla Foundation• Rumdu Construction• UbheduHoldings• Kuzakahle Trading• BitlineSA797• EsikhawiniTraders

• CleancingLaboratory• Tradebush Investments No 27• Business Against Crime Zululand• EVIPigFarms• EVILivestockFarms• EVIPoultryFarms

Qualifications:LL.B,LL.M,Cert(LocalGovtMgt)

Board Directorships: • ImbasaLegalConsulting

Qualifications:MBA,MDP(BBBEE),BTech:HRMgt,NatDip:HRM,Nat.Dip:Transport Management

Board Directorships: • Ndlovu and Co Holding• TheSouthAfricanDentalAssociation• LamentationCreation• Iswati Trading• Siyamisana55

Qualifications:BSc(QS),MBL,DipCompanyDirection,M(FinMgt),CertificateinDevelopmentandManagementofNGOs(GallileeCollege)

Board Directorships: • UbudlelwaneCapitalInvestments• Bravorox100• UlwaziLunzuluConsult

Mrs Tina EbokaInfrastructure and

Investment Committee Chairperson

Mr Elphas MbathaSocial and Ethics

Committee Chairperson

Mrs Mbali NdlovuHuman Resources

Committee Chairperson

Mrs Joy NdlovuBoard Member

Mr Andile MahlalutyeBoard Member



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Qualifications:BCom,LLB,MBA

Board Directorships: • Up-FrontInvestments165• ThekweniOpenForBusiness• LegapaInvestmentHoldings

Qualifications: BAAdmin;MA in TownPlanning&Regional Planning; PGDiplomainShipping,Transportation&Logistics–InternationalMaritime&TransportAcademy(Rotterdam, Netherlands) & Executive Development Programme – Supply ChainManagement

Board Directorships: • Basia Afrique Artifacts • SeruisaGems• QaloConsultingServices• QedoConsultingServices

Qualifications:CA(SA)BCom,PostgraduateDiplomainAccountancy

Board Directorships: • None

Qualifications:BA,BAHonors(Econ),MSc(DevEconomics)

Board Directorships: • SanParks• Barahaka Investments• Masa-A-SeleEnergy• AgapeRemaElectricalWork• Barahaka Trading

Ms Nosipho SitholeBoard Member

Mr Phumelele MotsoahaeChief Executive Officer

Mr Mzamo KhuzwayoChief Financial Officer

since 1 July 2015

Ms Bongiwe KuneneBoard Chairperson

until 24 November 2015

Qualifications:BCom(Economics),Dip(CivilEng),HDip(CivilEng),PostGradDip(MarketingMng),MBA

Board Directorships: • Zululand Chamber of Commerce and Industry

Mr Sibusiso MakhanyaBoard Member



Mr Kumaran NaidooBoard Member

(deceased)

Qualifications: B Com, Cert (CompAud)

OBITUARYMr Kumaran Naidoo served as an outside member of the Company’s Audit and Risk Committee from 2009 until 2012. When the Company’s Board was restructured to comply with the Companies Act and the King III Report on Corporate Governance, Mr NaidoowasappointedasadirectoroftheCompany,anofficeheheldfrom1July2012until his untimely death on 12 April 2016, following a short illness. Mr Naidoo was a member of the Company’s Human Resources and Remuneration Committee from 2012 until he asked to step down from the Committee when he was seconded to act as the Director-GeneraloftheNationalDepartmentofEconomicDevelopment,apositionhewas still acting in at the time of his death.

Mr Naidoo represented the interests of the Department of Trade and Industry on the Board, a task he performed with great dedication and skill. Mr Naidoo was a straight talker who always contributed greatly to ensuring that the Company set realistic and challenging targets and that Management was held to account by the Board for the performance of the Company. He contributed greatly to the proper governance of the RBIDZandalwayssoughttoensurethatitactedbothethicallyandwithintheconfinesof the law. At the same time, Mr Naidoo showed great support for the RBIDZ and was alwaysreadytoputinextraefforttosupport it inachievingitsgoals,whetherintheform of going word-for-word through its public documents to ensure that they met the highest standards or supporting the Company in seeking funding. His role in the RBIDZ, going from undeveloped bush to developed land, cannot be underestimated and the RBIDZ will be poorer for his passing.



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3. chAiRpeRson’s FoReWoRd

During the reporting period the RBIDZ completed the development of the civil infrastructure on its existing property in

Phase 1A and signed recognition agreement with fivenewlocators,includingacausticsodafactoryand a calcium carbonate factory.

Agreements were signed with Provincial Treasury andtheUmfoloziTVETCollege,whichwill leadtotheestablishmentofatechnoparkonfivehectaresin Phase 1A. Two other tertiary institutions have also indicated an interest in establishing facilities in the technopark and should allow the technopark to foster innovation, education and training and allow Richards Bay to become a major player in the innovation and education sector, especially in regard to the marine industry.

Another key milestone for the Company was the commencement of construction of the SizabantuPipingSystems(SPS)plantwhereSPS,inconjunctionwithMolecorofSpain,willmanufacturehighpressurePVC-Opipingforthelocalandexportmarkets.

The Company continues to work with Nyanza Light Metals as it refines its processes for theproductionoftitaniumdioxide.

During the year, the Company continued to promoteOperationPhakisa,where it is looking to

MR MEL CLARKBOARDCHAIRPERSON

The 2015/2016 financial year has seen further development of the RBIDZ in its progress to both create the infrastructure needed to attract investment to the Richards Bay area and to attract the new investment and new investors who will locate there, all with the purpose of creating new sustainable jobs in the area.

work with Transnet to promote a ship and rig repair facility in Richards Bay. It is also working with the Department of Energy to promote Richards Bayas a gas to power hub, taking advantage of the existinggaslineandelectricalinfrastructureinthearea. The Company also looked to develop food exportstotheMiddleEastandhostedaworkshopfor local farmers, which was addressed by a major food importer from Dubai.

The RBIDZ continues to focus on the strengths of the Richards Bay area in targeting investment. These include an aluminium smelter, pig iron and titanium slag production, a large forestry industry, a deep water port, good rail links to inland mineral-rich areas, a local forestry and agricultural industry andagoodlocationforexporttotheworld.

The work of the RBIDZ cannot be achieved without thesupportandeffortsofmanypeople. Iwould like to thank Honourable Minister Davies and the staffat theDepartmentofTradeand Industry(dti), without whose financial support the RBIDZcould not continue developing infrastructure. In this regard, a special word of thanks must go to the late Mr Kumaran Naidoo, a director of the Company who died soon after the end of the reporting period. Mr Naidoo represented the dti on the Board and his



support and guidance, as well as this insistence on always setting high standards when holding management to account, played a great role in the success of the RBIDZ. He shall be sorely missed.

I would further like to thank the former MECof KZN Department of Economic Development,Tourism and Environmental Affairs (KZN EDTEA),MikeMabuyakhuluandhisstaffforallthesupport,both material and non-material, which they have provided the RBIDZ during the reporting period andfortheeffortsandkeeninteresttheyshowedinensuring its success. I furthermore congratulate our in-comingMEC,theHonourableMECSihleZikalala,and assure him of our wholehearted support from our Company in the pursuit of sustainable radical economic transformation in our region.

OurthanksalsogototheleadershipofuMhlatuzeMunicipality, as we have seen progressive growth in ourpartnershipwiththeCity.Similarly,thebusinesssector and wider community of uMhlatuze, and indeed the uThungulu district, have continued to support the RBIDZ initiative, and we look forward to stronger partnerships going forward. I would like to thanktheCEOoftheRBIDZandhisteamfortheirachievements.The totalstaffof theRBIDZduringthe reporting period never exceeded 28 people.

This small team has had great success in not only developing land with many challenges but also in attracting investment with a value of many billions ofRands.Thestaffworkedhardtoachievethisandwethankthemfortheirefforts.

Lastly,Iwouldliketothankmyfellowdirectors,who have always made themselves available for Company-related matters when needed. While we may not always have agreed on every point, any disputes have been debated in a robust but respectful manner as we have sought to make decisions that were in the best interests of the Company. In this regard, I would especially like to thank our former Chairperson Ms Bongi Kunene for her guidance and leadership and for allowing me to take over the Chair of a Board that is united in its dedication to the best interests of the Company and good corporate governance.Ithankyouforyourefforts.

Mr Mel ClarkBoard ChairpersonDate: 29 July 2016



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4. RbidZ executive mAnAgement

Standing: Left to right:MrMzamoKhuzwayo:Chief FinancialOfficer andActingExecutiveManager:BusinessDevelopment andSupport;MrJoeMuller:ExecutiveManager:ZoneDevelopmentandOperations;andMrKeithHarvey:HeadofLegalServicesandActingExecutiveManager:CorporateServices.Seated:MrPumiMotsoahae:ChiefExecutiveOfficerandMsGuguZwane:ExecutiveManager:OfficeoftheCEO(Strategy,M&E).



5. chieF executive oFFiceR’s oveRvieW

MR PHUMELELE MOTSOAHAECHIEFEXECUTIVEOFFICER

There is an overriding sense of contentment about the manner in which the Company is poised to step up into its long-held potential of attracting significant industrial investments.

On behalf of the employees and the Board of Directors of the Richards Bay Industrial Development Zone (RBIDZ), we hereby

submit to the KwaZulu-Natal Legislature, throughthe Executive Authority of theMEC of EconomicDevelopment, Tourism and Environmental Affairs(EDTEA)Hon.MrSihleZikalala,theAnnualReport,which includes the performance information and theauditedfinancialstatementsofthepublicentityforthefinancialyearended31March2016.

The RBIDZ has delivered its outputs in the said financial year in accordance with the stipulatedmandate as per the Manufacturing Development Act (Act no. 187 of 1993), and as required bythe Public Finance Management Act, 1999 (Actno. 1 of 1999, as amended). This Annual Reportfairly represents the work of RBIDZ along with its partnersandthegovernmentofSouthAfricaduringthe reporting period.

The outputs in this Annual Report were in accordance with the predetermined objectives that are contained in the Annual Performance Plan for the financial year 2015/2016 approved by theBoard, and tabled in the KZN Legislature by theMEC of Economic Development, Tourism andEnvironmentalAffairs.

General OverviewIn reflecting on the history and evolution of theRBIDZ, there is an overriding sense of contentment about the manner in which the Company is poised to step up into its long-held potential of attracting significantindustrialinvestments.Thelastfewyearshave really been about setting up the institutional structures, securing the required land portfolio for industrialisation, sourcing funding to roll out key industrial infrastructure, thereby ensuring that there is a functional enterprise zone geared towards investment attraction in the Richards Bay area.

There has also been an encouraging performance of the RBIDZ as evidenced by the achievement of a number of key milestones for the Company and itspartners.Oneofthehighlightswastheapprovalof the 50-year Master Plan by the KwaZulu-Natal Provincial Cabinet.

Strong organisational performance, a focuson infrastructure development and commitment to our people, have all demonstrated resilience to challenges such as a very trying economic landscape triggered by the Chinese market crash during the last quarter of 2015, and evidenced by low commodity and oil prices; prevailing severedrought conditions, and subdued domestic growth.



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Changes implemented in the last two years have established a sound organisational base that should be able to withstand the rigours of the more complexinvestmentrecruitmentterrain.

The RBIDZ has become a more focused and less obscure organisation. This is evidenced through collaborative participation with a diverse stakeholder base and harmonised relationships with various regulatory authorities.

More heartening is the increased funding allocationthatisfavouredbythedtiandEDTEA.

The new approach of working and the streamlined organisational structure has resulted in the rationalisation of regulatory functions such as the Safety, Health, Environment and Qualityportfolio being placed in an independent stream undertheCorporateAffairsbusinessunit.Theneworganisational structure was approved, in spite of the toughfiscalenvironment,tosupporttheoperatingmodel. This is the hallmark of an investor-focused organisation, which the RBIDZ has become.

Fulfilment of the 50-year Master PlanLand AcquisitionOneofthekeyobjectivesoftheMasterPlanwastochart a long-term plan for the future sustainability of the RBIDZ. An inherent aspect of addressing the organisation’s future was the need to focus on acquisition of land to house the vaunted industrial roll-out. At the top of the RBIDZ’s priority list has beenarelentlessefforttosecureanidentified1200hectares of land in the KwaMbonambi Municipality. This process, however, has unfortunately been delayed due to a protracted land negotiation with the landowner. Applications for development approvals in terms of Act 70 of 1970, that is, the legislative requirement preceding the subdivision of agricultural land and KwaZulu-Natal Planning and Development Act, have been prepared and are ready for submission to the authorities for approval.

Land Development and Infrastructure DeliveryComplementingthelandassemblyeffortshasbeen

anassertivedrive todeploypurpose-builtandfit-for-purpose industrial infrastructure in line with the Master Plan, where locators would then establish their enterprises.

The Master Plan has an overall target of developing at least 522 hectares by March 2023. Phase1A(62ha)civilandengineeringinfrastructurewas completed in October 2015, and in January2016,thelandwastransferredbytheDeed’sofficeto the RBIDZ.

The Master Plan target was to complete all engineering infrastructureforPhase1F(110ha)by31 March 2017, but this process has been delayed dueto thedelayedfinalisationof theEnvironmentImpactAssessment (EIA)and issuanceofaWaterUseLicense(WULA).Infrastructureimplementationis expected to commence in the third quarter of2016/2017.

Another target was to develop at least 50ha of serviced land per annum of the Phase 2A area commencing in the2016/2017financial year.Thistarget is, however, dependent on obtaining all the development approvals and funding for the installation of infrastructure.

Considering the targets, we can say that we havestartedmakingasignificantimpactinprovidingindustrial infrastructure. This would be most assisted by a streamlined regulatory approval regime that is able to provide the required approvals timeously.

Profiling and Delivery of Key Strategic Business Opportunities The RBIDZ continues to make strides by focusing on some of the key drivers of the economy and theirpotentialtocreateemployment,withaspecificfocus on the outcomes related to the national Nine PointPlantogrowtheeconomy.Overthepastyear,the management team has focused its attention on distilling business opportunities through a sectoral approach of key focus areas that would thrive by being best located in the Richards Bay area. This endeavour complements the business opportunities initially identified in the 50-year Master Plan andfurther amplified in the Marketing Strategy. Ouranalysis of the market opportunities for the Richards



Bay area was based on the contention that there are various comparative advantages possessed by the Richards Bay and surrounding region that could be optimised through the creation of a suitable industrial environment to yield tangible competitive advantages for the RBIDZ. These chosen priority business opportunities are:

Revitalisation of the agriculture and agri-processing value chain:Theexistenceofhighyieldagricultural producing areas such Makhathini Flats, Nkwalini citrus orchards, and vegetable production in the Vryheid area present most attractiveopportunities to streamline strong linkages between these production points and the RBIDZ to optimise processing opportunities and export through theport of Richards Bay. Importantly, the establishment of this major agricultural stream addresses the supply of fresh produce to food insecure markets in Africa and theMiddle East. At the same time,through enhanced agricultural practices, there is an opportunity for the RBIDZ to steward impactful rural development growth by creating export marketsfor local farmers. The RBIDZ is investigating an opportunity of channelling fresh produce to supply latent markets in the Gulf region via Dubai.

Metals beneficiation: Recognising the geographical advantage of Richards Bay as a nexuspointbetweenthe‘heavyminerals’northerncorridor fromPhalaborwa,LimpopoandWitbank-Ermelo,whichexportsvariousmineralsthroughtheport of Richards Bay, and the established shipping in the port, there is a strong argument to position RichardsBayasaplatformformetalsbeneficiation.Correspondingly, the RBIDZ is advancing negotiationstoacquiretheformerBaysideSmeltersite tocreateaplatformformineralsbeneficiationsuch as aluminium downstream processing, iron ore pelletingand titaniumbeneficiation. Furthermore,project feasibility for establishment of a titanium dioxideplantisunderway.

Renewable energy challenges: The RBIDZ has assumed a lead role in stewarding the establishment of an energy production hub. Notably, some 20 hectares have been nominated at the Bayside site to host significant gas-to-power operations in anefforttoyielddiversifiedenergygenerationcapacity

from renewable sources. Ongoing collaborationwiththeDepartmentofEnergywillensurethattheProvinceofKwaZulu-Natalcontributessignificantlyto the amelioration of the burdensome load shedding phenomenon. The gas-to-power ventures are preceded by concluding biomass production agreement with a locator, which is undertaking various feasibility studies to bring some 60 megawatts of electricity generation on stream. This electricity will be extended to the RBIDZ tenantswho would be assured of the security of energy supply generated by one of the RBIDZ locators.

Growing the ocean economy: Part of the relevanceofanRBIDZistheendeavourtoexploitand optimise marine economy opportunities as espousedintheOperationPhakisaBigFastResultsprogramme.Togiveeffecttothisintent,theRBIDZteamhasbeenanactiveparticipantintheOperationsPhakisa laboratory process, and significantly, hasspearheaded the registration of marine projects in the Operation Phakisa programme. Undoubtedly,accessing these marine and port-based projects requires a strong collaborative engagement with Transnet,whohasgraciouslyaffordedsomeleewayin discussing partnership opportunities to optimise the marine economic sector with the RBIDZ. Notable opportunities comprise port optimisation in sectors such as containerisation, oil and gas, ship and rig repair, boat building, aquaculture, etc.

Science and technology: RBIDZ has made significantstridesinconceptualisingandestablishingits Techno-Park in Phase 1A. In quarter 3 of 2016, there will be a formal launch of the Techno-park, and it is most pleasing to note that the primary tenancy is ledbyacademicinstitutionssuchasUmfoloziTVETCollege, which proposes to establish a Maritime Training Campus; and Mangosuthu University ofTechnology (Renewable Energy Centre) and it isenvisaged that the Techno-park will attract a lot more young people into the technology space.

Focus on Infrastructure DevelopmentThe full 62-hectare Phase 1A industrial estate has been fully serviced in terms of civil and



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electrical infrastructure, advancing the ideal of a seamless integration of the industrial estate and the adjoining port. Construction of superstructure and factories commenced, as witnessed by the pipe manufacturing enterprise, logistics capability andonsetoftheTechno-park.Anexcessof1100construction jobs were created for the year.

There were over R2,7 billion new investments during the year, namely the R1,5 billion Techno-park, which aims to support innovation and enterprisedevelopment;aR500mchemicalplant;aR500m plant for the manufacture of energy storage with micro grid system; and a R200m cementmanufacturing factory. All these have been signed by the RBIDZ in 2015/2016, bringing the total of signedinvestmentstoR6,8billion,includingaR4,5billion titanium plant. In addition, the RBIDZ is in advanced discussions with both the Department of Energy and various gas to power operatorsin preparation for the much anticipated bidding processtoyieldtheestablishmentofsome400MWto 3 000MW gas-to-power plant. Furthermore, one investor has been secured in RBIDZ Phase 1F that is bidding to establish a 280MW gas-to-Power plant.

The RBIDZ programme has been registered to theSIP1programme toensurea swiftdeliverymechanismandexpeditingthenecessaryapproval.More so, engagements have been initiated with Transnet to ensure commitment in respect of yielding containerisation in Richards Bay, availing space for diverse marine activities such as ship and rig repair, boat building, as well as the establishment of an oil and gas hub.

Supply Chain, SMME Enterprise and Development Following the extensive growth of the RBIDZ inthe last few years, there has been a corresponding obligation to preside over an equally rapidly growing procurement environment. As an organisation, we are guided and compelled to abide by, inter alia, the Preferential Procurement Policy Framework Act and other empowerment regulations. In meeting our empowerment requirements, we have ensured that

there is adherence to the short payment period to providecashflowsustainabilitytosmallenterprisestransacting with the RBIDZ. To support enterprise and SMME development, there are ongoing andtargeted training programmes to provide emerging contractors with the required skills to ensure their readiness in bidding for RBIDZ opportunities. Another dimension to empowerment commitment isthecollaborationwithalliedpartnersintheSMMEterrain such as the uThungulu District Municipality, Zululand Chamber of Commerce and Industry (ZCCI),andShandukaBlackUmbrellas.

The RBIDZ continues to play a crucial role by paying attention to the marginalised groups in fulfillment of Contract Participation Goals (CPG),thereby ensuring increasing empowerment and application of the transformation agenda. The RBIDZholds a level 2B-BBEEstatus and strivesto attract service providers from the marginalised groups such as the youth, women and people with disabilities. A significant amount of capitalexpenditure has been awarded to BlackWomen-owned and Black Youth-owned enterprises.

We would also like to see further empowerment growth in the following initiatives: • ImplementationoftheEmergingContractor

andSupplierDevelopmentProgrammesincorporatingSMMEincubationforyouthandwomen;

• OngoingimplementationofContractParticipationGoals;and

• Closer working collaboration with allied partners, namely the Department of Small BusinessEnterprises,otherState-ownedEnterprisesandlocalEconomicDevelopmentAgencies.

Corporate Social Investment CommitmentsThe commitment towards social upliftment of the surrounding communities continues to be an integral programme for the RBIDZ, and this is evidentthroughthecommunity-basedCSIthroughwhich the Company donated and sponsored various projects that are aimed at improving the socioeconomic landscape of the region.



Corporate Social Investment (CSI) placesan emphasis on initiatives that promote the empowerment of youth and women, particularly focusing on the SMMEs, disabled people, artsand culture, skills development (that promotestechnology, innovation and ICT), and integratedhealth and environmental awareness programmes that include HIV/Aids, recycling and sustainabledevelopment.

With limited funding, theCSIhas reachedandtouched the lives of many people around and beyond uThungulu by providing much needed donations to initiatives such as buying sanitary pads in support of the Caring for Girls campaign, contributing towards the building of classes for the crèche in Mandlanzini on Mandela Day, donating sewingmachinestoNaweZifunzeDisabledSocietyin Mzinganzi, and various donations of school uniforms for needy school children, disabled people andpeopleaffectedbyHIVandAids.

Guided by the CSI Policy, RBIDZ thereforealigns its core strategies and priorities to benefitpeoplewithinthe localdistrictofuThungulu.Overthepastfiveyears,thedemandfortheCSI-fundedinitiatives has risen sharply, owing to the role played by RBIDZ as a community builder in the region.

Performance Against the Annual Performance Plan (APP)Thecompanyachieved61%ofitsAPPobjectiveswhich is a decline from the 70% achieved in theprevious year. It is, however, important to note that 22%of the targetsnot achievedwereasa resultof factors outside of the RBIDZ’s control. These include, amongst others, land assembly, WULAsand EIAs. Throughout the year, the RBIDZ hasmade several attempts as a means to resolve issues perceived to be bottlenecks by working closely with the departments concerned. In some instances, the Executive Authority was informed to seek itscounsel and intervention where applicable. These have resulted in under expenditure onCAPEX asinfrastructure projects could not commence without the approvals.

GovernanceRegardless of the challenges, the RBIDZ has remained ahead in maintaining the highest level of conduct in delivering on expectations, fiscaldiscipline and sound financial management,eliminating fraud and corruption. The entity has yet again upheld a Clean Audit status to provide assurance of premium conduct and governance oftheRBIDZ.Earlierintheyear,wewereawardedan ISO 9001 quality assurance certification togive confidence and delight to investors andstakeholders that the RBIDZ operates with world-class management systems. In addition, Phase 1A was completed with 1,9 million man-hours worked without any disabling injuries on duty.

ChallengesNotwithstanding the milestones and planned activities to take the strategy forward, there are challenges hampering the RBIDZ’s ability to deliver on its targets and also have long-term implications for the overall strategy and its mandate. Below is a brief outline of the main challenges facing the RBIDZ:

a)Streamlined regulatory approval of the development programme: The development terrain is caught between ensuring a sustainability balance that seeks to preserve ecological capitals such as proper use of limited water and environmental resources against pressures to delivery on projects. In order to effect anydevelopment,thediverseandextensiveapprovalprocess requires consent of any projects that will likely impact on future water usage. We continue to uphold the principle of striving for balance between the regulatory approvals and developmentexecution.

b)Availability of industrial land: While RBIDZ was nominated to establish a functional industrial estate to create jobs, the limited availability of industrial land has imposed a real risk to the realisationof the industrialisationdrive.Limitedtracts of land in Phases 1A and F are rapidly being committed and we are running out of industrial



16

land. Explorations of accessing additional landhavenowbeenratcheteduptosecureidentifiedland in the KwaMbonambi district.

Conclusion In conclusion, I must express my everlastinggratitude to Ms Bongi Kunene, who resigned her post as the Chairperson of the RBIDZ at the end of 2015. It is under her leadership and vision that the solid foundation of the RBIDZ was laid. Achievements of the RBIDZ during her tenure have included presiding over the approval of the 50-year Master Plan, securing increased funding for the RBIDZ, overseeing the completion of Phase 1A infrastructure as well as launching the initial factories, blending and smoothing out relationships with shareholders and the dti, and importantly, achieving all of this while retaining premium governance standards of a Clean Audit.

The RBIDZ is now under the Chairmanship of Mr Mel Clark, who will lead the Company at arguably its nextmost exciting period. On behalfoftheemployeesoftheRBIDZ,weherebyexpressour gratitude for good governance and the support given to the RBIDZ by the shareholder, the Board and the dti during this period. Furthermore, management and staff hereby express theirappreciation for the oversight and stewardship of the Board committees.

Further praise must go to the most important

crew,whichisthestaffoftheRBIDZ,whohasbeenthe backbone of the Company driving organisational performance. Your hard work must continue to talk for itself as your outputs contribute towards the creation of jobs for fellow citizens keenly searching for an employment opportunity that will bring dignity to them and their households.

I must thank our valued stakeholders who have madeourexistenceandexecutionofourmandatethat much more tolerable in sometimes difficultcircumstances. RBIDZ is part of the urban and rural landscape of uMhlatuze, uThungulu, broader Zululand and the province of KwaZulu-Natal, and we therefore appeal once more to your good hearts to welcome us as we forge ahead with the transformative economic development agenda.

The past financial year has been challengingfor the RBIDZ, however, analysis of performance for this reporting period indicates that the RBIDZ succeeded in delivering on the majority of the predetermined outputs within the allocated, albeit limited, resources (people, finances, equipment,infrastructureetc)availabletotheCompany.

Mr Phumelele MotsoahaeChiefExecutiveOfficerDate: 29 July 2016





18

6. stAtement oF Responsibility And conFiRmAtion oF AccuRAcy FoR the AnnuAl RepoRt

Tothebestofmyknowledgeandbelief,Iconfirmthefollowing:• AllinformationandamountsdisclosedintheAnnualReportisconsistentwiththeannualfinancialstatements

audited by the Auditor-General.• The Annual Report is complete, accurate and is free from any omissions.• The Annual Report has been prepared in accordance with the annual report guidelines as issued by National

Treasury.• Theannualfinancialstatementshavebeenpreparedinaccordancewiththestandardsapplicabletothe

public entity.• Theaccountingauthorityisresponsibleforthepreparationoftheannualfinancialstatementsandforthe

judgements made in this information. • The accounting authority is responsible for establishing and implementing a system of internal control that

has been designed to provide reasonable assurance as to the integrity and reliability of the performance and humanresourcesinformationandtheannualfinancialstatements.

• Theexternalauditorsareengagedtoexpressanindependentopinionontheannualfinancialstatements.• Inouropinion,theAnnualReportfairlyreflectstheoperations,theperformanceinformation,thehuman

resourcesinformationandthefinancialaffairsofthepublicentityforthefinancialyearended31March2016.

Mr Phumelele MotsoahaeChiefExecutiveOfficerDate: 29 July 2016

Mr Mel ClarkChairperson of the BoardDate: 29 July 2016



7. legislAtive And otheR mAndAtes

7.1 Legislative Mandate

TheRBIDZisaSchedule3DentityintermsofthePFMA.

The Industrial Development Zone (IDZ)programmewasoriginallyestablishedbytheSouthAfricancabinetinSeptember2002bypromulgatingIDZ-specific regulations (Government NoticeNo: R1224 of 1 December 2002 in GovernmentGazetteNo:21803) in termsof theManufacturingDevelopment Act, 1993 (Act No. 187 of 1993).These regulations were subsequently amended by GovernmentNoticeNo.R1065of27October2002(GovernmentGazetteNo.29320).TheRBIDZwasseparately established by Government Notice No. 644of 26April 2002GovernmentGazette23369)and its area was later extended by GovernmentNotice No. 1045 of 4 August 2006 (GovernmentGazette29094).

There was a major change during the year under review when the Special Economic Zones (SEZ)Act,2014(ActNo.16of2014)cameintooperationon 9 February 2016 together with its regulations. TheSEZActlargelyfollowstheIDZprogrammeinthatthepurposeofestablishingSEZ’sincludes:

a. Facilitating the creation of an industrial complex,havingstrategicnationaleconomic advantage for targeted investments and industries in the manufacturing sector and tradable services;

b. Developing infrastructure required to support the development of targeted industrialactivities;

c. Attracting foreign and domestic direct investment;

d. Providing the location for the establishmentoftargetedinvestments;

e. Enablingthebeneficiationofmineralandnaturalresources;

f. Takingadvantageofexistingindustrialand technological capacity, promoting integration with local industry and increasing value-added production;

g. Promotingregionaldevelopment;h. Creating decent work and other economic

andsocialbenefitsintheregioninwhichit is located, including the broadening of economic participation by promoting small, micro and medium enterprises and co-operatives, and promoting skills and technologytransfer;and

i. Generating new and innovative economic activities.

TheSEZprogrammediffersfromtheIDZprogrammein that it allows zones to be established in areas away from airports and sea ports, concentrates on services as well as manufacturing and is not restrictedtoexportsinthatincentivescanalsobeobtainedforthedevelopmentofspecificindustries,withnoexportrequirement.

TheSEZAct,readwiththeIncomeTaxAct,1962forthefirsttimeintroducesSEZspecificincentives,namelya10-yearreducedincometaxrateof15%for qualifying entities and an accelerated 10 year depreciation on new buildings. The youth wage subsidy is also provided to employees in SEZsirrespective of their age. On the other hand, theIncomeTaxActspecificallyexcludesincentivestoentities in SEZs that produce alcohol, weapons,tobacco products and biofuels impacting on food production, indicating that these industries should notbelocatedinSEZs.

The RBIDZ is, in conjunction and collaboration with SARS: Customs and Excise Division,responsible for facilitating compliance by SEZEnterprises,with allSEZ-specific legislation, rulesand regulations regarding movement of goods, persons and vehicles into and out of the proclaimed RBIDZ, as well as with legislation, guidelines and standards, specifically pertaining to safety, healthand environment.

In short, therefore, the purpose of the RBIDZ is to develop an industrial estate in order to attract local and foreign investors who will create production capacity to beneficiate South Africa’s



20

rawmaterials, with an emphasis on exports, andwill thereby create employment and improve the skills base.

It is thus an integral part of Government’s macro-economic policy to develop South Africa’smanufacturing sector by encouraging investment in the manufacturing industries, centred on beneficiationofthecountry’snaturalresources.

7.2 Policy MandatesTheIndustrialDevelopmentZone(IDZ)Programmewas established by a South African GovernmentCabinet Resolution in September 2000, and isessential to Government’s strategic initiative of policy measures to: “...elicit a higher level of investments that contribute to the growth of the economy and creation of jobs”.

It is thus an integral part of Government’s macro-economic policy to develop South Africa’smanufacturing sector by encouraging investment in the manufacturing industries, centred on beneficiationofthecountry’snaturalresources.

7.3 Relevant Court Rulings The nature of the IDZ was considered by the Constitutional Court in Offit Enterprises (Pty) Ltdand Another v Coega Development Corporation (Pty)LtdandOthers(CCT15/10)[2010]ZACC20;2011(1)SA293(CC);2011(2)BCLR189(CC)(18November 2010). The Constitutional Court statedin regard to the Coega Development Corporation (andthesameprovisionsapplytotheRBIDZ)“The CDC is a private company incorporated in terms of the Companies Act. However, the CDC is in reality a public entity acting in the public interest; Government has ownership in the company; and it complies with the definition of “organ of state” in section 239 of the Constitution. The CDC is, in principle, no different from other entities in which the government has a measure of shareholding.” The Courtnoted,withoutdissenting,thattheSupremeCourtofAppealhadheldthatanexpropriationforthebenefitoftheCDCwouldbepermissibleintermsofbothsections2and3(2)(h)of theExpropriationAct. The same considerations apply to the RBIDZ.

7.4 Planned Policy Initiatives

Public EntityA Notice has been published in the Government Gazette 35759 of 12 October 2012 listing the“Richards Bay Industrial Development Zone”, (ratherthantheoperatingcompany)asaSchedule3D entity in terms of the PFMA.

Special Economic Zones Act, 2014 (Act No. 16 of 2014) (“the SEZ Act”) (signed by President in May 2014, but not yet proclaimed)

InMay2014thePresidentsignedtheSEZActof2014butithasnotyetbeenproclaimed.TheDraftSEZRegulationsdocumentwas issued for publiccomment on 20 March 2015.

IntermsofSection4oftheSEZAct,thepurposeof an IDZ is:

a. To be an economic development tool to promote national economic growth and exportby using support measures in order to attract targeted foreign and domestic investments and technology, by:

• Facilitating the creation of an industrial complex,havingstrategicnationaleconomicadvantage for targeted investments and industries in the manufacturing sector and tradableservices;

• Developing infrastructure required to support the development of targeted industrialactivities;

• Attracting foreign and domestic direct investment;

• Providing the location for the establishment oftargetedinvestments;

• Enabling the beneficiation of mineral andnaturalresources;

• Taking advantage of existing industrialand technological capacity, promoting integration with local industry and increasingvalue-addedproduction;

• Promotingregionaldevelopment;• Creating decent work and other economic

and social benefits in the region inwhichit is located, including the broadening



of economic participation by promoting small, micro and medium enterprises and co-operatives, and promoting skills and technologytransfer;and

• Generating new and innovative economic activities.

The policy motivating the SEZ Act seeks toachieve the enhancement of domestic and regional demand, increased foreign direct investment and extendedexportpromotiontogrowingeconomies,while at the same time strengthening the SouthAfrican industrial base and promoting a labour-absorbing industrialisation path. It is a response to challenging global and domestic economic conditions that demand a focus on new sources of competitiveness that lie in innovation and productivity, with an entrenched base in skills, infrastructureandefficient,responsivestateaction.The overall goal is thus one of achieving economic growth and development.

TheSEZActwouldretaintheIDZasasectionofSEZand,intermsoftheSEZAct,themandateof RBIDZ is to develop the zone in a manner which attracts investment while ensuring sustainability and benefittosociety,ratherthanoutrightprofitability.

7.5 Constitutional Mandate

In the light of its goals of growth, development and job creation, the IDZ programme relates to the constitutional goal of improving the quality of life of allcitizensandfreeingthepotentialofeachperson;buildingaunitedanddemocraticSouthAfricaableto take its rightful place as a sovereign state in the familyofnations;and, increating jobs,enhancingthe dignity of all. In order to achieve this, RBIDZ advocates for the employment of a larger percentage ofSouthAfricansineachinvestmentprojectwithinthezone.Furthermore,itwillmaximisedownstreamopportunitiesforthebenefitofSMMEs.

Industrial Development Zones directly relate to the functions of industrial promotion, regional planning and development and urban and rural development, set out in Schedule 4 of theConstitutionoftheRepublicofSouthAfrica,1996.

AsanorganoftheState,theRBIDZismandatedto ensure that its procurement processes are fair, equitable, transparent, competitive and cost- effectiveandisinaccordancewiththerightoffairadministrative action.

It is also required to ensure that, in developing the zone, it recognises that everyone has a right to an environment that is not harmful to their health or well-being and to have the environment protected, forthebenefitofpresent and future generations.



22

8. oRgAnisAtionAl stRuctuRe

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32

2. highlights peR pRogRAmme

Business Development and SupportThe Business Development and Supportprogramme supports three of the organisation’s strategicgoals,namely;• StrategicGoal1:Attractnewsustainable

investments;• StrategicGoal3:Secureadequatefinancial

resources to ensure the sustainability of the RBIDZ;and

• StrategicGoal4:Contributetowardsjobcreation and empowerment.

This is achieved through formulating strategies and measuresaimedatattractingfixed investment fortheproductionofexportandimportsubstitutesintothe Zone. The principal intention of the Programme is to assist the RBIDZ to fulfill its mandate ofattracting meaningful investment that creates jobs and enhances productive capacity.

Techno-park set to boost technology innovation in RBIDZ

The RBIDZ has set its sights on driving technological innovation with the Richards Bay Techno-park being positioned within its latest industrial estates Phase 1A, which is located 2km from the deep water port of Richards Bay.

The Techno-park in Richards Bay will increase the attractiveness of the IDZ and will support industries locatedwithintheindustrialcomplexthroughresearchand innovation activities.

RBIDZ is taking leadership in promoting platforms to integrate technology and innovation with economic development in order to create exciting economicopportunitiesthatwillbenefittheyouth,smallandmedium

enterprises, and the broader stakeholders in the region. Technology has also compelled a revolutionary shift

in the way people work, play, interact and even think. Evolving technology has opened up new businessmodels and driven the emergence of futuristic allied devices. The driving force behind all of these changes is a move toward knowledge, economy and digital transformation.

In the twenty-first century, entrepreneurs areleaning towards the utilisation of technology in order to develop ideas into products and services that can compete within the flourishing global ICT industry.However, according to Statistics South Africa, over



80% of new Small, Micro and Medium Enterprises(SMMEs) failwithin the first five years of operationsdue to financial restraints and security of assets, asSMMEs are subjected to higher interest rates onlending.

A number of technology-focused cooperative communities, commonly referred to as Innovation Hubs,TechnologyLabsorScience&TechnologyParks(Techno-parks),havesinceemergedwiththeobjectiveof fuelling innovation by becoming incubators for such entrepreneurs. A noticeable trend, both nationally and internationally, has been the recognition of the value generated from hosting a successful Techno-park in that it promotes the GDP of an area, resulting in economic growth.

The concept of a Techno-park is not a foreign model to theSouthAfricanlandscape.Thereareafewtechnologyand innovation hubs situated across the country, with themost famous being the Innovations Hub, the firstinternationally accredited science and technology park insub-SaharanAfricabasedinGauteng.

The main aim of the Richards Bay Techno-park is to promote research and development of innovation and act as an incubation facility wherein both theoretical andpracticalknowledgeisexplored.

As a long-term economic development strategy, the RBIDZ community must ensure that the Techno-park facilitates job creation, increases the attractiveness of the region to potential investors, and nurtures ideas that stimulategrowthandfinancialsuccess.

During the year, the RBIDZ hosted Dr Clive Coetzee, General Manager of KwaZulu-Natal Treasury: Infrastructure Management & Economic Serviceswith his Techno-park team, and he pointed out that opportunities created by technology are massive. Expectationsarethatinthenexthalf-century,machineryand technology will dominate the workplace, with current careers and jobs becoming irrelevant.

Robots or machinery may be able to perform specifictasks,however,theylackthecognitiveaspectsuch as programming, which is what humankind needs to focus on in order to be aligned to the paradigm shift. It is therefore imperative that we embrace technology andshapeittobenefitusall.

Business incubation, research, hi-tech development and engineering are some of the major

pillarsofinnovation.Understandingthefundamentalsof incubation, the synergies between parks and incubators, and the different ways in which thisinteraction can happen is essential to design cost-effectivefacilities.Throughadynamicandinnovativefusion of policies, programmes, facilities and high value-added services, Techno-parks contribute to economic development by:

• Stimulatingandmanagingtheflowofknowledge and technology between universitiesandcompanies;

• Facilitating the communication between companies,entrepreneursandtechnicians;

• Providing environments that enhance a culture ofinnovation,creativityandquality;

• Focusing on companies and research institutions as well as on people: the entrepreneursand‘knowledgeworkers’;and

• Facilitating the creation of new businesses throughincubation,spin-offmechanismsandacceleratingthegrowthandsizeofSMMEs.

The top structure of a Techno-park need not be hi-tech, however, it is essential to have a facility that harbours individuals who challenge and change ideas. For example,agroupofentrepreneurscanshareworkspace,but access to infrastructure, internet, specialised equipment and researchers should be ample.

An important goal for Techno-parks is to attract and keep organisations and companies coming to their sites. This has to be achieved while stimulating and supporting the creation of new technology-based firms through incubation and spin-off mechanisms.Having the right commercial strategy and making the rightoffertothemarketisalsoabsolutelyessentialforthe success of any Techno-park.

Furthermore, a tertiary institution is central to the survival of a Techno-park. Throughout the world, technology parks and innovation hubs are linked to academic institutions, either on site or in close proximityforinnovationandresearch.

The RBIDZ has all these elements in place with the core focus of the Richards Bay Techno-park being shaped by the key economic sectors in the region such as maritime, renewable energy, agro-processing andmineralsbeneficiation.



34

The Richards Bay Techno-park has secured the interest of two academic institutions namely, uMfolozi TVET College, which plans to establish a maritimeacademy, andMangosuthuUniversity of Technology(MUT)thatisplanningtoestablishaGreenTechnologyand Renewable Energy Research Centre within theTechno-park.

R300 Million Project Launch The formerMEC for Economic Development, TourismandEnvironmentalAffairsinKwaZulu-NatalHonourableMichael Mabuyakhulu officially launched constructionat a ribboncuttingceremony for theSizabantuPipingSystem (SPS) Manufacturing Plant, which is the firstplant to be constructed in the Phase 1A of the RBIDZ.

SPSManufacturing(SouthAfricanbasedcompany)is in a joint venture with Molecor Canalizaciones (Spanish based company), investing R300 millionin theprojectand theyareaworld leader inPVC-Otechnology development. They will be manufacturing a new technology Bi-Axle Orientated PVC pressurepipe and they already run distribution operations in Johannesburg, Cape Town and Durban.

Sam-Lib Civils is a local construction companycontracted to build the new facility over two phases on a two-hectare RBIDZ plot, forecasting completion bySeptember2016,and furthergivingopportunitiesto SMMEs for subcontracting. MEC Mabuyakhulu

thanked SPS for choosing the RBIDZ for the heftyinvestment, highlighting that “this marks the beginning of greater things as the bricks and mortar of economic development are being laid.”

Don Coleman, Director of SPS manufacturingsaid, “This is a trouble-free piping system that will allow emerging contractors to compete in the civil contracting market. They are easier to install and have a longer lifespan than existing products.Wewill betraining the emerging contractors how to install the piping,” he said. The project will create about 60 direct and 110 indirect jobs.

MEC Mabuyakhulu also announced theconstructionofaR16millionentrancegatecomplexthat is aimed at fast-tracking a customs control area for the goods manufactured in the industrial zone and destinedforexportfromtheportofRichardsBay.Thecontract has also been awarded to a local construction company, Hlanganisani Construction, which is based inEmpangeni.

The In-Conversation with KZN SeminarsIn the interest of promoting the province of KwaZulu-Natal as an investment destination, Trade &Investment KwaZulu-Natal (TIKZN) in collaborationwith its strategic development partners, RBIDZ, Dube Trade Port, Durban Chamber of Commerce and

Zamo Gwala, TIKZN; Sihle Ngcamu, RBIDZ; Hamish Erskine, DTP; and Siddiq Adam, KZN Growth Fund.



Industry, and KwaZulu-Natal Growth Fund hosted an information-sharing business breakfast in Gauteng and Cape Town.

The In-Conversation concept began when TIKZN hosted an ‘In-Conversation with the CEO’breakfast session in Cape Town to tell the KZN story. Emanating from that meeting, was the realisationthat a collaborative approach was required, hence a larger delegation going to Gauteng to highlight the value chain with the abovementioned entities. Speakingonbehalfof theRBIDZ,MrSihleNgcamu,formerExecutiveManagerforBusinessDevelopmentand Support, said that the RBIDZ was establishedunder the Industrial Development Zone programme to promote direct foreign investments. “The RBIDZ is tasked with acquiring land, zoning it and developing appropriate infrastructure to suit potential investors,” he said. The RBIDZ currently has 216 hectares of land, which has been zoned for medium and heavy industry, withtheviewtoexpandingitto3000hectares,”saidNgcamu.

Cape TownThe second destination for the In-Conversation was held at the Cullinan Hotel in Cape Town. Cape Town is the economic hub of the Western Cape, which is geographically, the fourth largest province in SouthAfrica,occupying129462km²,approximately10%ofthetotalareaofSouthAfrica.Similartothepreviousevent, the main objective of the Cape Town ‘In-Conversation’ was not to persuade investors to uproot from current locations, however to provide growth and expansionopportunitieswithintheKZNprovince.ThecollaboratedeffortsensuredthatKZNisperceivedastheprime investmenthub forSouthAfricaunder thefollowing focus sectors:

• Manufacturing;• Agriculture;• Maritime;• AerotropolisandTourism;and• Chemical.

KZNGrowthFundCEOMrSaddiqAdamshighlightedthat the KZN Gross Domestic Product (GDP) ispredominately greater than that of the national

growth. However, as a country, South Africa hasa low manufacturing bearing or footprint, which is why the national government is providing institutions such as the RBIDZ, TIKZN and KZN Growth Fund to aid investors in becoming less consumer and importer orientated. RBIDZ CEO Mr PhumeleleMotsoahae assured investors that RBIDZ is open for business, highlighting the 50-year Master Plan strategy. Mr Motsoahae also mentioned some of theexciting ventures that theRBIDZ is focusingon,including establishing an Aluminium hub, Techno-park developments, as well as a feasibility study that has been conducted to explore alternative energy suchas renewable energy through biomass, gas to power andsolarenergy.DubeTradePortActingCEOHamishErskine highlighted that indeed exciting times arecoming for the province in reference to the signing of mobileelectronicsgiantsSamsungasthefirsttenantson the Dube Trade Zone, which will attract investors mainly from the electronics and pharmaceutical sectors.

ThenextIn-ConversationisscheduledforDurban.Internationally, the strategy is to target destinations where most stakeholders have vested interests and host this activation campaign promoting KZN and each entity, through the Marketing Connection and the Market Exchange, regional trade blocs like theeast3ROUTEbloc,BRICS,SADC,ECOWAS,G20,andCommonwealth, among others.

Pumi Motsoahae, RBIDZ CEO with Zamo Gwala, TIKZN CEO during the In-Conversation in Cape Town.



36

Zone Development and OperationsZone Development and Operations largely supportsthe following strategic goals:

• Strategic Goal 2: Develop a fully serviced,compliantindustrialestate;and

• Strategic Goal 4: Contribute towards jobcreation and empowerment.

The programme develops and maintains world-class infrastructure for RBIDZ land through an integrated planning, design and management process. It also ensures that the RBIDZ operates responsibly through theimplementationoftheCustomsandExciseActinits Customs Control Area. Also key is the integrated security management.

Phase 1A Development CompleteThe RBIDZ is proud to announce that with the installation of engineering infrastructure in the Zone’s Phase 1A, the 62ha of prime industrial land in this

Phase is now fully serviced and ready for investors.Electrical engineering services to Stage 1 of

Phase 1A that included electrical supply to all erven, information and communication networks, and a street lightingnetworkwascompleted inSeptember2014,whichmade220000m²offullyservicedleasableareaimmediatelyavailabletoinvestors.BulkEarthworkstoStage2ofPhase1A,whichcoveredanareaof46hainextent,wasalsocompletedduringSeptember2014,which marked the completion of the bulk earthworks to Phase 1A. The installation of civil engineering services to Phase 1A Stage 2A, which serviced anadditional 20ha in Phase 1A, was completed in May 2015. The project entailed the installation of an internal water, sewer, storm water and road networks as well as bulk connections to the municipal network.

Thefinalcontractforthecompletionoftheelectricalengineering infrastructure to Phase 1A was awarded in January 2015 and that resulted in the completion of all engineering infrastructure for Phase 1A by the end of July 2015. Hundreds of construction jobs have been created by the RBIDZ with the installation of engineering infrastructuretothedifferentstagesofPhase1A.

At least 32,5% of work benefitted targetedenterprises, which are Black Business Enterprises(BBE),fromthelocalareathroughourindirectenterprisedevelopment initiatives. Another contribution to economic development has been the utilisation of local labour,whichis63,8%,withanaverageof45%beingyouthand6%beingfemales.

Phase 1A Development.

Phase 1A – Civil infrastructure.



Gate Complex ConstructionThe2015/2016financialyearalsosawtheinceptionoftheconstructionof theCustomsControlArea (CCA)GateComplex.TheR16millionprojectwasawardedto a local construction company called Hlanganisani Construction.Thecustomscontrolgatecomplexwillhousesixpersonnel, including theofficeof theCCAofficer, SARS, controller’s room, visitor’s desk anda small conference room housing up to 10 people. It boasts aluminium windows as well as pavement bricks.Italsohasasecurityoffice,frontlandscaping,and ample parking area.

RBIDZ ISO-certifiedSABShasconfirmedandformallyapprovedtheRBIDZasanISO9001certifiedcompany.ISO9001isafamilyof standards related to quality management systems and designed to help organisations to ensure that they meet the needs of customers, shareholders and employees. “The certification of compliance with ISO 9001recognises that the policies, practices and procedures of our company ensure consistent quality in the services and work product that we provide to our consumers,” elaboratedtheRBIDZCEOMrPumiMotsoahae.

ObtainingISO9001statusisnotaquickprocessbut one that the RBIDZ started about two years ago with the creation of a formal quality management system including all procedures, charters and policy documentation. Once the system was in place, the

Stage1auditwascommissionedinDecember2014.Atthisaudit,SABSraisedafewfindings,whichwereallclosedby theRBIDZ inJanuary2015.TheStage2 audit was conducted in February this year with one findingbeing raised.This findingwas rapidly closedbytheRBIDZandevidencewaspresentedtoSABS,leading the company into receiving the clearance of findings letter and ultimately, the certification. Atthe certification handover, Motsoahae emphasisedthat “ISO 9001 certification attests to the RBIDZ’scommitment to continuous improvement, and it also provides investors and other stakeholders with assurance of high quality and customer delight in the servicesthatweoffer”.

Mr Dinesh Naidu, SABS East Coast Region:General Manager, commended the knowledge and understanding displayed by the leadership of the RBIDZ pertaining to quality issues. “Integration of investors and their requirements toSouthAfricanQualityStandardsis very important and I have no doubt that RBIDZ will ensure that going forward,” said Naidu.

ISO9001benefitstoRBIDZare:• Providingseniormanagementwithanefficient

management process, setting out areas of responsibilityacrosstheorganisation;

• Communicatingapositivemessagetostaffand customers, identifying and encouraging moreefficientandtime-savingprocesses;

• Highlightingdeficiencies,thusreducingorganisationalcosts;and

RBIDZ staff celebrating the ISO9001 accreditation.



38

• Providing continuous assessment and improvement opportunities.

ISO 9001 benefits to RBIDZ investors andstakeholders are:

• Improvedqualityofservicedelivery;• Timeousdelivery;• Rightfirsttimeattitude;• Fewerreturnedproductsandcomplaints;• Commitmenttoquality;• ImprovedcustomerconfidenceintheRBIDZ

processes;and• Overallcustomersatisfaction.

WordsofgratitudewereexpressedtotheRBIDZteamfor working tirelessly in ensuring that the organisation attains this accreditation.

Richards Bay IDZ Scores Four Years of Injury-free StatusIt is no mean feat for a building site with multiple contractors to achieve four years of injury-free status.

This remarkable achievement has been notched up by the Richards Bay Industrial Development Zone Company SOC Ltd, which has not had asingle debilitating injury since 2010, when it began construction of Phase 1A. Linda Buthelezi, SafetyHealth &Quality (SHQ)Manager at RBIDZ, said thecompany laid the groundwork over a long time and that the health and safety of everyone involved in the RBIDZ’s development and projects remained the priorityofthecompany.“Safetymustbemanagedandeveryone,withnoexception,mustbe involved in itsdevelopment. We have assigned a very high priority to safety in our operations and the goal is that everyone returns home healthy after a day at work,” he said. Hence,the‘ZeroHarmandInjuryFree’environmentispromoted within the RBIDZ and all its operations and enterprises.

“The RBIDZ works with its locators to put programmes in place related to behavior-based safety,visibleleadership,hazardidentificationandriskassessments, internal audits, management reviews and third party audits. Golden rules, standard procedures and safety training are also key components of the safety drive,” said Buthelezi.

SenioremployeesinallIDZenterprisesareexpectedto ensure compliance with health and safety laws and remain responsible for taking steps considered to be practical to mitigate any potential hazards. Benchmarking is used to measure standards against leading best practice. Relevant information and experienceissharedacrossalllocatorswithinRBIDZ.

Buthelezi said inter-enterprise site visits were encouraged as an integral part of the shared learning process whereby management teams have the opportunity to gain first-hand information on SHQpractices and access to innovative ideas.

He attributed the four-year injury-free status to stringent measures that are in force, among which are that:

• All contractors are issued with a baseline risk assessment for all site risks and hazards for accurateplanningandprojectexecution;

• Detailed site specific risk assessments aremandatory before commencing work on all RBIDZsites;

• DetailedCVsforkeypersonnelarerequiredtocheckforcompetenceandexperiencepriortocommencingworkonallRBIDZsites;

• SHQ audits are conducted monthly by theRBIDZ, Department of Labour, Departmentof Environmental Affairs, project engineers,safety consultants and Department of Water andSanitationtoensurefullcompliancetoallrequirements;

• ManagersresponsibleforSHQissuesconductrandomvisitstoallsitestoensureadherence;

• Inductions for all contractors and investors are conducted to assist in raising awareness and understanding of all risks and hazards on RBIDZ sites for better project planning and execution;and

• Any incident, no matter how minor, is reported, recorded, shared with all, investigated and all preventive and corrective actions implemented so that recurrence of similar incidents is avoided.

Buthelezi said that the concept of ensuring a safe working environment and compliance with health and safety legislation was reinforced in contracts with construction companies and heavy industry tenants.

Caption.



Contractors and locators in the zone were also provided with health and safety specifications. Buthelezi saidthat a good health and safety record gives assurance to RBIDZ investors that the organisation operates in a safe and conducive environment. “Placing high priority on health and safety ensures that contractors, investors and the RBIDZ have less absenteeism due to illness and accidents/incidents. An impressive record also protects the RBIDZ brand and makes sure that litigation, claims against the Company, and court cases are avoided.”

Contractors and investors with very good health and safety performance are given recognition and awards, he said, adding that “a safe workforce is a productive workforce”.

JohnPaine,RichardsBayManagerof LovemoreBros Machinery Logistics, which is located withinPhase 1A, said the company supported the stringent safetymeasures enforcedbyRBIDZ. “Our companyplaces high value on workplace safety and also has stringent safety rules. Any business knows that employee attrition and absenteeism can be major obstacles. When you create a healthy and safe workplace, you reduce those issues in several ways.”

“Workplace safety is about much more than legislation. It’s about creating the kind of productive, efficient,happyandinspiringworkplaceweallwanttobe part of,” he said.

Caption.

AdministrationThe Administration programme of the RBIDZ primarily provides strategic support to the company and maintains good corporate governance systems that guide the implementation of organisational strategy in line with mission espoused in this plan. Administration ismadeupofthefollowingsub-programmes:OfficeoftheCEO(Strategy,MonitoringandEvaluation),Finance&SupplyChainManagementandCorporateServices.The programme supports three of the strategic goals, namely:

• Strategic Goal 3: Secure adequate financialresources to ensure the sustainability of the RBIDZ;

• StrategicGoal5:Establishrobuststakeholderengagement;and

• Strategic Goal 6: Pursue best practice byensuring good governance.

Office of the CEOThe purpose of the sub-programme is to establish corporate governance systems and to monitor the implementation of organisational strategy in line with the overall strategic goal of governance and legislative compliance. It acts as a link between management andtheBoardaswellasexternalstakeholders,andisthe overall guardian of the brand.

The R16 million Gate Complex Construction Project has created over 50 jobs per month over a 13-month period.



40

STAKEHOLDER ENGAGEMENTStakeholder Group Major Objectives of the Stakeholder Group Relevance to RBIDZ in Terms of Strategy

and Operations

KZN Department of Economic Development, Tourism and, Environmental Affairs

• Investment promotions and marketing with the aim of industrialisation, job creation and skills development

• Provincial economic development policies and strategies

• Obligationintermsofthefive-yearStrategicPlan and Annual Performance Plan

• ObligationsintermsoftheShareholderCompact

• Achievement of KPIs, as per the shareholder compact

• Operatingonafinanciallysustainablebasisand impact on society

Department of Trade and Industry (dti)

• SEZPolicyandIncentives• Funding for Capital Projects

• Obligationintermsofthefive-yearStrategicPlan and Annual Performance Plan

• Investment promotion program focusing on exportsofgoodsandservicesfromtheIDZ

KZN Provincial Treasury • FundingallocationfortheIDZ/SEZprogramme • Obligationintermsofthefive-yearStrategicPlan and Annual Performance Plan

• ObligationintermsoftheFundingAgreement

Department of Environmental Affairs

• Policy issues regarding environmental management and legislative changes

• EnvironmentalImpactapprovalsandotherlicence approvals

• SustainabilityofIDZprogrammewhichis in full compliance with applicable environmental regulations

Department of Water and Sanitation

• Water resource management, wetland management and comments during EnvironmentalImpactAssessments

• WaterUseLicenceapplicationsandapprovals for development undertaken by the RBIDZ

Department of Forestry and Fisheries

• Forestryandfisheriesresourcemanagement,protectionofendangeredforestandfisheriesspeciesandcommentsduringEIAprocesses

• Critical in the sustainable development of RBIDZ and protection of endangered species

Department of Labour • Construction works and safety inspections and compliance audits

• Annual audits to strengthen RBIDZ’s compliance to the applicable labour requirements

Public Entities such as Transnet and Eskom

• Accesstolandandenergyfortheexpansionof the RBIDZ footprint

• Provision of basic services such as energy and water for the investors/locators

Trade and Investment KwaZulu-Natal (TIKZN)

• Collaboration on investment promotions and marketing of the IDZ internationally

• Alignment with the overall KZN Investment strategic approach

• Sectorspecificprogramswhichareaimedat attracting and channelling investments to Richards Bay

Other state agencies such as the CSIR and the Agricultural Development Agency

• Partnership in developing bankable feasibility for targeted sectors and promotion of research and development

• RBIDZ engages research institutions to tap intothecuttingedgeresearchindifferentsectors

Regulators such as SARS • CustomsControlledArea(CCA)requirements• Guidance and setting minimum regulatory

requirements for RBIDZ operation• Ensuringfaircompetitioninthemarketthrough

the Competition Commission

• Compliance with the requirements of Customs Controlled Area to ensure compliance with the set parameters



STAKEHOLDER ENGAGEMENTStakeholder Group Major Objectives of the Stakeholder Group Relevance to RBIDZ in Terms of Strategy

and Operations

Communities and Private Land Owners

• Landacquisition• Community development

• RBIDZ participates in various community development projects including skills development,jobcreationandSMMEdevelopment

• RBIDZ continues to engage various landowners for more suitable land to be prioritised for industrialisation

• 50-year Master Plan• Investment attraction programme

KZN Growth Coalition • Cooperation in the economic development of the region and the Province

• Balanced representation from local business

• Regional structures driving economic development initiatives to create jobs

Unions • Ensuringtransparentandfairlabourpracticesand a sustainable organisation

• Collective agreements• Internal communication programme,

succession planning, wellness programmes, transformation forum, fair labour practices

Employees • Ensuringfairlabourpracticesandasustainable company

• Internal communication programme, succession planning, wellness programmes, transformation forum, fair labour practices

Investors • Investments and job creation• Industrialisation and sector development• New product development and markets

• 50-year Master Plan• Investment attraction programme

Media • News, advertisements and branding and sustainability of RBIDZ

• Public relations, stakeholder engagements and reputation management

• Brand enhancement• Effectivecommunicationstrategy

Medway Road Construction.



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Corporate Social Investment: The Human Face of Business

Thumbs up for new school shoes.

In the interest of investing in local communities, the RBIDZextended its supportby fundingAriseandShineProjectswith41brandnewpairsof schoolshoes.AspartofaRBIDZCSIinitiative,MrKhanyiDlamini,SpecialistPlannerManager, handedoverthe school shoes onMonday 7 September to 41very eager and appreciative children. Arise and Shine is a legitimate Non-Profit OrganisationoperatingundertheuThunguluDistrict,Ward24inOdondoloReserve,whichislocatedontheoutskirtsof Empangeni. The project runs a daily feedingscheme that helps to eradicate poverty within the Matshana and surrounding communities by catering to orphans and children from underprivileged

RBIDZ Donates School Shoes to Matshane Orphanage Project

homes. Moreover, the project sustains a four-hectare vegetable garden in which the produce is used for the feeding scheme and food parcels to assist impoverished families, as well as for selling to local supermarkets in order to generate an income.

Although it is the third quarter of the school term, the schools shoes were well received. Most of the children were barefoot while others were wearing shoes that were worn. Miss Phindile Majola, a caregiver at the orphanage, expressedsincere gratitude to the RBIDZ for assisting with the generousdonation.“Someofthesechildrenwalktoa great distance to school barefoot, these shoes will help them a lot” she reported.

The commitment towards the social upliftment of the surrounding communities continues to be an integral programme for RBIDZ, and this is evident through the community-based CSI projectswhere the organisation donated and sponsored various projects that are aimed at improving the socioeconomic landscape of the region.

CorporateSocialInvestment(CSI)placesemphasison initiatives that promote the empowerment of youth and women, particularly focusing on the SMMEs,disabled people, arts and cultures, skills development (whichpromotetechnologyandinnovationandICT),integrated health and environmental awareness programmes, including HIV/Aids, recycling andsustainable development.

With limited funding, theCSIhas reachedand

touched the lives of many people around and beyond UThungulu by providing much needed donationto initiatives such as buying sanitary pads for the Caring for Girls campaign, contributing towards the building of the classes for the crèche in Mandlanzini on Mandela Day, donating sewing machines to NaweZifunzeDisabledSociety inMzinganzi, andvarious donations of school uniforms for needy schoolchildren,disabledandpeopleaffectedwithHIVandAids.

GuidedbytheCSIPolicy,RBIDZthereforealignsits core strategies and priorities to benefit peoplewithin the localdistrictofuThungulu.Over thepastfiveyears,thedemandfortheCSI-fundedinitiativeshas risen sharply, owing to the role played by RBIDZ as a community builder in the region.



Nawe Zifunze Disability AssociationThereisnodoubtthatCorporateSocialInvestment(CSI)remainsadynamicphaseintheempowermentof Small, Micro, Medium Enterprises (SMMEs)and thecommunity at large.SouthAfrica facesamassive triple challenge of poverty, unemployment and inequality, hence organisations have stepped in throughCSIinitiativestoassistincontendingwithsuch issues. The RBIDZ has always aligned its core strategieswiththebeneficiationofpeople’sneedswithin the local communities.

Nawe Zifunze Disability Association (NAZIDI)is a non-profit organisation based in MzingaziVillage on the outskirts of Richards Bay. Thedirect interpretation of the organisation’s name means “youarecapableof feedingyourself”; thisisamotto that theNGOattests to. Itencouragespeople with disabilities not to seek hand-outs, but instead to empower themselves through skills that will enable them to generate and sustain an income forthemselvesandtheirfamilies.“Giveamanafishandyou feedhimaday; teachaman tofishandyou feed him for a lifetime” are profound words by

RBIDZ Special Projects Manager Mr Khanyi Dlamini handing over sewing machines to Nawe Zifunze Administrator Ms Nomfundo Zulu and Office Manager Mr Paradise Jali.

philosopher Moses Maimonides that are mirrored by this organisation. NAZIDI equips its members with various skills training in disciplines such as sewing, wheelchair repairs, gardening and baking. The RBIDZ was very keen to support this association as this is an investment that impacts positively on the lives of people with disabilities.

It demonstrates RBIDZ’s commitment as an active participant in nation-building by contributing to programmes that promote upskilling the less fortunate. RBIDZ recently donated sewing equipment to NAZIDI to the value of R22 550. The donated items include the following: Three SaitoStraightStitchSewingMachineandtwoSaitoHighSpeedOverlockers.

RBIDZ contributing to skills development and empowerment of the disabled by donating industrial sewing machines.



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Computers for Tholokuhle High SchoolTholokuhle High school, which is in EnseleniTownship within the uThungulu District Municipality, submitteda request to theRBIDZ forsixdesktopcomputer’s for its computer centre. As we live in a fast-paced technologically dominated environment wherein access to the Internet is no longer a privilege but a necessity, RBIDZ was in full support of the initiative.

The Principal of the school Mr Hlatswayo expressedgreatgratitudeforthedonation;healsoshared his vision of seeing the school’s computer centre active once again. This is due to the fact that the computer centre currently houses only one functioning computer and a printer to accommodate allstudentsfromGrade8uptomatric.Heexplainedthat the school had a donation of 20 desktop computers back in 1998, however, the equipment is no longer in working order. He further added that

Mr Khanyi Dlamini, CSI Chairperson, and Mrs Zodwa Zikalala hand over the computer license and six desktop computers to Qophelo Hlatshwayo, Tholokuhle’s Head Girl (middle).

the aim of the school is to ensure that matriculants are computer savvy before they enter university. “The school is aiming to implement a programme where Grade 12 learners submit all assignments electronically from the beginning of the third term,” he indicated. For safety and security reasons, the schoolhas installedasecurity systemwithCCTVcameras in the new computer centre in order to curb the manhandling and theft of computers.

By having a well-developed infrastructure and secure computer centre, Tholokuhle High Schoolaims to ensure that the investment will be well protected in a secure area for upcoming learners to benefitfrominthefuture.TholokuhleHighSchoolhas also committed to empower its surrounding communitiesbyextendingan invite tocommunitymembers who require internet accessibility and other computer related services.



RBIDZ donated tiles for four classrooms in a local crèche and staff spent their 67 minutes cleaning the crèche to honour Mandela Day.

Hard at work cleaning the yard are Bheki Ntshangase, Virna McMaster and Chumile Mbambo.

RBIDZ’s Khanyi Dlamini and Zodwa Zikalala among the group that worked tirelessly to build the house for Mangalelwa family.

Making a Difference on Mandela DayAs theworld reflectsonNelsonMandela’s legacyeach year on 18 July, we give thanks for his life, his leadership, his devotion to humanity and humanitariancauses.On18July2015,theRBIDZstaff visited Khanyakude Crèche in Madlanzini to celebrate 67 minutes where they got their hands dirty cleaning, landscaping, painting as well as layingtilesonthreeoftheclassroomfloors.RBIDZ,in collaboration with Prostar Paints (a signedinvestor at RBIDZ Phase1 A), further donatedseveral buckets of paints in order to give the crèche a fresh coat, making it appealing for the students once again.

Mrs Nonhlanhla Ngonyama, the principal and founder of Khanyakude Crèche, expressesdgreat

delight, stating the following: “We are very grateful for the support and the donation from RBIDZ and Prostar Paints as this will enable us to keep the crèche inagoodworkingstate tobenefita lotofchildren within the community.”

In a separate initiative, RBIDZ donated bags of cement and worked tirelessly alongside other prominent Richards Bay industries to build a home for the Mangalelwa family outside Ngwelezane. The family of nine faced a traumatic ordeal as their house caught fire and all their belongings wereburnt. The family was then forced to live in a one-room shack, however, on Mandela Day, Zululanders came out in their numbers to help with laying the foundations as well as erecting a three-bedroom house for the family.



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Bringing Warmth to the Children of Amangwe VillageWith the impending winter season, the demand for warm clothes and blankets increases, hence, RBIDZ has generously donated clothing, blankets and toys to assist Amangwe Village with the 439 patientswhoarecurrentlybeingcaredfor.AmangweVillageis a Non-Profit Organisation nestled in the quiettown of kwaMbonambi, outside Richards Bay.

The organisation provides a holistic social service to people infected and affected by HIV/Aids through services such as early childhood development, home-based care, organic food garden training, women empowerment and services toorphansandvulnerablechildren(fostercare).

The organisation renders developmental services mainly to communities within uMfolozi municipal boundaries but also extends servicedelivery in terms of home-based care, women empowermentandtheToyLibrarytocommunitiesin Hlabisa, Mtubatuba, Ntambanana, Esikhawini

andRichardsBay.ErnaSteynburg, theAmangweVillage Centre Manager, highlighted that onesuch project of women empowerment is the R2 project. A group of 20 women meet once a week to contribute R2 each. They then loan out the money at a 10% interest fee per month. “Since beingformed in 2009, we now have over 175 groups that have yielded loans to the value of R1.5 million,” Ernaexplained.Shealsoaddedthatmembershavebenefitedtotheextentthattheyhavebeenabletobuild their own houses from the ground up because of this initiative.

Erna thanked the RBIDZ for the support andhighlighted much support and work still needs to bedoneas theyhaveover400home-basedcarepatients and only 28 stationed home-based care workers.RBIDZwishestothankallstaffmemberswho contributed and donated to this worthy cause.

RBIDZ contributing to the Winter Warmth campaign by giving donations of blankets and clothing for the elderly and toys for the children’s library.



Walk for Water CampaignThe water crisis in KwaZulu-Natal is said to be the worst since the 1960s, with dams levels at their lowest and a drought of this magnitude last witnessed 23 years ago. The drought hit various regions hard within the Province with devastating consequences to agriculture and the economy. Water Affairs Minister Nomvula Mokonyanerevealed that the drought currently affects 173 ofthe 1 628 water supply schemes nationally, serving approximately 2.7 million households as well asan estimated 6 500 stand-alone rural communities mostly situated in KwaZulu-Natal, Mpumalanga, LimpopoandNorthWestprovinces.

In an initiative to raise awareness about the severity of the drought and to educate KZN communities on water saving measures, several prominent Richards Bay industries such as uMhlathuzeWater, RBIDZ, South 32, Foskor,Cityof uMhlathuze and Richards Bay Coal Terminal (RBCT) joined hands to roll out the ‘Walk forWater’ campaign. In addition to raising awareness, the campaign was also aimed at assisting disadvantaged communities and rural schools

by distributing all the water collected from the campaigntothosewhoareseverelyaffected.

More than400Zululanders joined themarch,led by City Mayor Hon. Mduduzi Mhlongo, to raise awareness of the region’s critical water scarcity. The event collected over three thousands litres of water which were distributed to various community members of Nhlangenyuke and Mkhwanazi which is North of Ongoye village. Five local schoolswho entered the Walk for Water best water saving initiative competition each won a 5 000-litre size JoJo water tank. The winning schools were:

• MjabulisweniSecondary• StangerTrainingCentre• LizwiHighSchool• ArboretumPrimarySchool• EnhlanziniPrimarySchool

RBIDZ sponsored two of the water tanks that were presented to Stanger Training Centre as well asLizwiHighschool.Overandabovethewatertanks,participants of the walk received water buckets as well as garden watering cans in order to continue using water wisely and educate their communities.

Distributing water that was collected during the campaign to the most stricken community in Nhlangenyuke.

Zululanders came out in their numbers to support the Walk for Water campaign.

A group of matriculants from Mthwazi Combined School appreciated the knowledge gained from their visit.

Mthwazi Combined School visits our officesMthwazi Combined School, from Mkhuzein Mkhanyakude District visited the RBIDZ offices inSeptember2015where32Grade12s learnedabout the IDZ/SEZprogrammewhich forms part of their Business Studiessyllabus.



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FinanceThis sub-programme establishes and maintains appropriatefinancialandsupplychainmanagementsystems and procedures, ensuring compliance to applicable legislation, guidelines and reporting dates.Italsomanagesthefinancialresourcesofthecompanyefficiently,effectivelyandeconomically.

SMME DevelopmentSmall businesses play an important role in theeconomic and social development of people, especially those living in rural communities as small and micro businesses are an important force, generating employment, income distribution, healthy competition, niche markets and enhancing and supporting productivity. Despite the importance of this sector, there are still a number of barriers that prevent entrepreneurs from starting and running successful enterprises. The RBIDZ has, in the recent past, contributed its fair share towards the support of small businesses in the region as demonstrated in the following snippets.

Emerging Contractor SupportIn support of emerging contractors, the RBIDZ awardedcompetencecertificates tonineemergingcontractors that had completed a three-week training course sponsored by the RBIDZ. The training was provided by accredited provider Zama Training and Development. It focused on quality principles in construction management, estimation and tendering, general project and contract management and the new construction regulations in terms of OccupationalHealthandSafetyAct.

To enhance the productivity and quality of its emerging contractors, the RBIDZ among other supplier and enterprise development initiatives, committed to provide relevant accredited training and workshops to emerging contractors that would help them to align their health and safety plans with the new construction regulations. The excited recipients appreciated theopportunity. “It was such an informative and eye-opening training and the knowledge gained will really assistusmovingforward,”saidMsRosemarySmith,who spoke on behalf of the recipients.

Oninteractingwithcontractors,theRBIDZrealisedthat there were a number of challenges that they faced including a lack of awareness of certain legal compliance requirements and capacity in certain aspects of delivering on contract. The emerging contractors find themselves disadvantaged interms of project estimation and management, not understanding contractual terms and conditions, not complying and aligning to the new construction regulations and displaying a conspicuous lack of quality management systems. Therefore, support in the form of training and development is one of the initiatives that the RBIDZ seeks to entrench in the development of local emerging contractors.

Most of the contractors who received training have either done some work or are currently doing work for the RBIDZ. The majority of the recipients were women and youth contractors. Most of them areExemptedMicroEnterprises(EMEs)andafewareQualifyingSmallEnterprises (QSE) in termsofthe Broad-Based Black Economic Empowerment(BBBEE) and the range of grade designation interms of CIDB is one to four. Through Contract Participation Goals (CPG) requirements, at least20% of the capital spend on infrastructure hasbenefitted targeted enterprises that are blackbusinessenterprises,blackwomenowned (BWO)andblackyouth-ownedenterprises(BYOE).

The training is aimed at turning around challenges that continue to limit the capacity of contractors either when completing their bid documents or when they are actually executing projects for theRBIDZ.Thenextgroupisalsocurrentlyundergoingthesametraining,andwillbecertifiedsoon.

Nine emerging contractors who received training that was sponsored by the RBIDZ.



Mr Ndiphiwe Ntuli from Elegant Afro Line, one of the investors, addressing the SMMEs on the requirements of Elegant’s plant.

Engagement between RBIDZ Locators and Local SMMEs

In February 2016, the RBIDZ hosted the second AnnualEngagementSessionwithRBIDZlocatorsandSMMEs (Small,Medium&Micro Enterprises). Themain aim of the event was to provide a platform for dialoguebetweentheSMMEsandRBIDZinvestors.The event was to ensure that business owners aligned their services to the supply needs of the investors.

TwooftheSMMEswhohadpreviouslybenefittedfrom the previous event shared their inspiring testimonials on how the RBIDZ programmes had positively influenced their organisations. TheRBIDZ’s signed investors presented their future requirements toSMMEs in attendance.SizabantuPiping Systems’ (SPS) CEO Mr Don Colemanprepared a full presentation on how SMMEscan benefit from the organisation. “We will needservices in recruitment, engineering, electrical, security, cleaning and gardening, catering and accommodation for foreign stakeholders, transport and logistics, IT work, painting and certification,”said Coleman. “People who are experts in ourunique PVC piping solutions will also be comingtoRichardsBayfromSpaintoofferfreetrainingtoemerging construction contractors over the nexttwo years,” Coleman emphasised.

“Because our product is much simpler to install than steel and concrete pipes, but designed to handle bulk water networks from dams and rivers, it would not require large construction companies to do the work. The training will afford smallercontractors to do work for government projects.”

AmongotherswhopresentedwereNyanzaLight

MetalsandElegantAfro-lineChemicals.NyanzaisexpectedtoinvestaroundR4.5billioninitsfactoryand aims to start construction in 2018/2019 at the RBIDZPhase1F industrialpark inAlton. ElegantAfro Chemicals indicated that it will produce chlorine, caustic soda and their derivatives will call for services including warehousing, transportation, packaging and waste management. This will be a capital-intensive project that will greatly assist with job creation, regional economic growth, skills development and training in Zululand.

RBIDZ’s Ground-breaking Tender Debriefing SessionsIt is unfortunate that many tenderers often get little feedback on why their tenders were unsuccessful. They may never get to know that their tender was rejected because they omitted a tax clearance certificate orwere scored down because they failed to submit a curriculumvitaeofoneoftheexpertsintheirteam.

This may lead to them making the same mistake in multiple tenders and submitting tenders in vain, costing them both time and effort, all because they did notrealise that they were doing something wrong. To avoid this situation and to empower its suppliers, the RBIDZ holds debriefings after each of its public tenders.Unsuccessfultenderersareinvitedtoameetingwherethe tender is discussed, common problems pointed out, the specific items, that disqualified a tender orcaused it to score badly, are pointed out and the scoringsystemexplained.

This system not only empowers suppliers but benefitstheRBIDZasfewertendersaredisqualifiedor fail to reach the threshold for functionality. It also serves to demonstrate that the RBIDZ has fair, equitable, transparent and competitive processes where tenderers can be assured that their tenders will be dealt with fairly, avoiding any perception that some tenderers will be favoured.

According to section 217 of the Constitution, procurement by Government and public sector entities must be done in a manner that is fair, equitable,transparent,competitiveandcost-effective.The fundamental and broadly accepted principle underlying a modern procurement system is open competition, which ensures unrestricted, universal



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access to the procurement market. The tenderer who best meets the demand, at the best price, wins.

In South Africa, this has been enhanced toempower black tenderers by allowing them to compete and be successful in their tenders even if they do not have the lowest price, provided that their prices are within the threshold of the lowest priced tenderer.

This threshold depends on the size of the tender and the BEE levels of the competing tenderers,but does not exceed 11% for tenders above R1million and 25% for tenders below R1million.Tenders are thus used to empower small emerging businesses while limiting the premium paid for such empowerment to reasonable levels. In terms of the UnitedNationsDevelopmentProgrammeguidelinesfor public-private partnerships for the urban environment, a transparent procurement system ensuresthatallqualifiedsuppliershaveequalaccessto all elements of the system, including methods of procurement; legislation; evaluation criteria andtechnicalspecifications;anddueprocess.

Publicprocurementshould,tothegreatestextentpracticable, be transparent in its practices, processes, policies and relationships with all stakeholders, while ensuring protection of confidential information.ResearchhasshownthatpublictendersinSouthAfricaequatetoatleast20%ofgrossdomesticproduct.

The tender system, however, requires proper controls to be put in place as it creates a risk of fraud and corruption. Tenders can be awarded to entities with no track record, scores can be manipulated, tenders can be disqualified on petty or bogusgrounds or the tender can simply be awarded to an entity that did not score the highest. In his 2016 Budget Speech, the Minister of Finance PravinGordhan announced that he, President Zuma and other ministers had engaged business leaders to understand their concerns and views, which included the issue of tenders. Working groups have since been established with several practical proposals for joint action, including a collaborative initiative to combat corruption and abuse of tender procedures.

In addition to spending by investors, the RBIDZ is spending hundreds of millions of rand developing the zone and this year alone will commence construction

projects worth over R200 million for developing Phase 1F of the zone and upgrading infrastructure municipal roads near Phases 1A and 1F. Given the magnitude of its tenders, the RBIDZ wishes to ensure that it meets the requirements of the Constitution in ensuring that its processes are fair, equitable, competitive,transparentandcost-effective.

RBIDZ has further adopted best practices like settingup threebidcommittees;having theChiefFinancialOfficerchairtheBidEvaluationCommitteeandtheCEOtheBidAdjudicationCommittee,withthe other members of the committees revolving. This encourages members of bid committees to raise any concerns, which leads to recording all bid committeemeetings;allpresentatbidcommitteemeetings are required to declare if they have any interests in any matters under discussion before the committee. It also provides for appeals against decisions of the Committee to the Audit and Risk Committee of the Board.

Initially created to give feedback to tenderers and to try and ensure that for future tenders tenderers avoid basic mistakes that could see their tenders disqualified or marked down, theintroductionoftenderdebriefingbytheRBIDZalsoassists in preventing corruption related to tenders andtogarnerconfidenceintheRBIDZasapotentialcustomer for tenderers. Thus, debriefing providestenderers with an opportunity to obtain feedback that can be used to improve future submissions, increase their competitiveness and the likelihood of successfully bidding for future projects. The processalsobenefitstheRBIDZastenderershavethe opportunity to avoid mistakes and thus prevent pricecompetitivetendersfrombeingdisqualifiedormarked down at the earlier stages of the process.

A fair process also encourages tenderers to tender because they know their tenders will be treated fairly rather than not bidding because they perceive that the result will be a forgone conclusion. This results in very competitive pricing. Since introducing thetender debriefing sessions, the RBIDZ has beencommended by tenderers who have indicated that theyhadbenefitedgreatlyfromtheexercise.

Tenderers spend a lot of time and money preparing proposals. The debriefing ensures that



a respondent also understands the activities of the RBIDZ in evaluating tenders. It explains the RFPevaluation process as well as the amount of time andeffortexpendedbytheEvaluationCommittee.Mostimportantly,debriefingsaregoodforeveryoneconcerned. Tenderers cannot improve if they do not understand their failings.

Debriefings will encourage and help themsubmit better proposals in the future while the RBIDZbenefitsfromgettingmoretendersthroughto the price and preference evaluation stage and from having stronger suppliers.

Corporate ServicesCorporate services ensures that the RBIDZ operates responsibly and commits to long-term sustainability through implementation of international best practices with regard to quality management, health and safety, environmental management and Customs Control Area management. Its other role is to ensure that the RBIDZ contractors, investors and stakeholders uphold environmental, health and safetybestpractices.Otherkeydeliverablesinclude: • Provisionandmanagementofhuman;

capitalandrelatedcorporatematters;• Human Resource Development and

Retention;• Provision and maintenance of integrated

ICTsystems;and• Ensuring100%governanceandlegislative

compliance.

Employee DevelopmentBachelor’s Degree for NokuthulaFamily, work and studies are rarely a desired combination for any person. However, sometimes circumstances cause many people to findthemselves with no choice but to follow this route for self-development purposes.

OnesuchindividualisNokuthulaMafuleka,whomuntil recently, was employed as an office assistantat the RBIDZ from 2010. Nokuthula initially joined the organisation as a contract worker and a year later, she was permanently appointed. Her duties included but not limited to cleaning, preparing for meetings, serving refreshments, maintaining stock and assisting at reception when a need arose. When she joined the RBIDZ, she was a young woman with

justamatriccertificate.In2013,theRBIDZpresentedherwithanexcitingopportunitytofurtherherstudiesand she enrolled for a Bachelor’s degree in Public AdministrationattheManagementCollegeofSouthAfrica(Mancosa).On21May2016,theRBIDZjoinedhands to congratulate Ms Mafuleka as she was welcomedtotheMancosaalumnaafterfinishingherdegree in record time at the end of 2015.

Over and above her qualification, Nokuthula hasproven to be a hard worker, who is able to adjust in any given situation. “My journey to graduating has been a long and challenging one,” she explained “Mymainchallengewasbalancingassignments,examsandstillattending to my daily duties at work, however, I am truly grateful to the RBIDZ for funding me and the support I havereceivedhasbeenoverwhelming.”Shehighlightedthat being the first in her family to graduatewas anexcitingtimefortherestofherfamily.“Ibelievethatmyachievements not only will inspire my family members, but will also enrich my community. My personal motto: ‘Nothingisimpossible’hashelpedmetobevictoriousandgavemecouragetoaimevenhigher”.Questionedonherfutureaspirations,sheexplainedthatshewillbecontinuing with her studies, as she plans to enrol for anhonoursdegreein2017.ShehasbeenundergoingtrainingattheZDOunitasaunitadministrator,whichhasgivenherhands-onexperiencewithinhercareerfieldaswellasassistedinharnessingherskillsset.

Following the availability of several vacancies at theRBIDZ,NokuthularecentlycontestedforaUnitadministrator’s position and was the successful candidate. She has officially resumed her dutieswithin her new portfolio as of July 2016. Her story is an inspiration to everyone within the organisation and it is hoped that it will motivate even more employees to study further regardless of their level within the organisation.

Celebrating with Nokuthula Mafuleka is CEO Pumi Motsoahae.



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Project Management Training for Staff

It is a fact that the importance of project management training goes beyond the deliverables of meeting deadlines. Project management is all about the effective management of change and has nowbecomeafieldinhighdemandasmoreorganisationsstrive to deliver successful fast-paced projects in increasinglycomplexenvironments.

Professional project management training can ensure that organisations of all sizes reap the benefits of a well-controlled, project-basedapproach to business. The RBIDZ is a project-driven organisation dealing with large-scale projects.

According to research, large projects are twice as likely to be late, over budget and missing critical features as opposed to small projects. The RBIDZ recently hosted a two-part, three-day training for all its employees to equip them with the fundamentals of managing a project.

SQData&Consulting(Pty)Ltdtrading,knownasSQDCBusinessSchoolwasselectedastheserviceprovider to facilitate the training. The Durban-based ISO 9001-2008 certified organisation has branchofficesinJohannesburgandinCapeTown.Inorderforthetrainingsessionstobebeneficialtoall,employeeswere divided into two groups to manage the training room size and be able to give adequate attention to each student. The project management facilitators were very insightful and knowledgeable. It is assuring to note that over 61% of project managementpractitioners say their organisation offers ongoingprojectmanagementtrainingforstaff.

The RBIDZ, therefore, availed the opportunity to further train willing candidates from novice to practitioner level. The RBIDZ applauds the following four employees who have seized the opportunity to continue namely; Brenda Mabaso, NomceboCebekhulu,SiphamandlaNeneandSlindeloMbuli.

Driver’s License for NomceboItwasallsmileson4January2016,astheRBIDZbrand management and marketing intern Ms Nomcebo Cebekhulu obtained her valid Code B (Light Motor Vehicle) driver’s permit at theEmpangeniRTI.Nomcebo is thesecond recipienttobenefit fromtheRBIDZemployeedevelopmentinitiative that aims to equip interns with skill sets outside their applied fields. The driver’s licenceinitiative was implemented in 2015 to assist staffin acquiring valid driving permits since a driver’s license is now essential. The programme has thus far produced exceptional resultswith formercorporateservicesintern,MrSibusisoMyenibeingthe first to successfully utilise the opportunityand acquire a licensewithin the specifiedperiod.Nomceboexpressedgreatgratitude to theRBIDZ

Nomcebo Cebekhulu benefitted from the Employee Development Programme by earning her driver’s licence.

programmeasherfieldrequiresintensivetravellinginordertobeeffective.

The SQDC facilitators with the RBIDZ staff members who participated in the training.



Growing Corporate Citizens Through Our Internship ProgrammeInOctober,theRBIDZ’splanninginternMsChumaMbambo attended the annual Conference for PlanningStudents andYoungGraduates (CPSYG2015)hostedbytheUniversityofJohannesburginassociation with all African Planning schools.

The first two days of the programme werereserved for presentations from both industry professionals and students in the World Built Environment field in Africa. She was also part ofthe honoured delegates who shared their vast knowledge when she presented her paper based on‘GreenInfrastructure’.

ThelastdayoftheconferencewasanexcursionaroundJohannesburg toexplore theoldandnewTown Planning techniques that were utilised to grow the City, and techniques that are being used at present. For example, the hostel and housingsystemsthatwereusedintheAlexandraTownshipduring apartheid times and what is being done now to deal with the issues faced by the planners in the municipalities in the area.

Furthermore,theytookacloserlookatSandtonCity and its new ‘Eco-mobility’ project, whichencourages people to walk or cycle more instead of using public transport. “I was shocked at the proximityofAlextoSandtonthoughandtheextremedifference in the living conditions of these twoplaces,” she explained. Finally,we visitedCosmoCity, which is a new and beautiful developing area that was built with the purpose of providing housing forpeopleofdifferentincomeclassesinoneareaandwe had a look at how planners are working to make a success out of the area by allocating social facilities in Cosmo City for better access for the residents.

ICT GovernanceIn the 2015/2016 financial year, the RBIDZ’sfocus within the ICT department was to develop a coherent governance framework, strategy and policies. This included:

Development of the ICT StrategyTheICTStrategywasdevelopedandapprovedbythe Board. The primary objective of this plan is to definehow ICTwill be applied in thebusiness tosupport the achievement of business goals and objectives. In particular, it defines how ICT willcontribute to:• Improvedoperationalintegrity–ICTenables

business operation while enhancing confidentiality,integrityandavailabilityofinformation(righttime,place,formatandcontext);

• Improvedservicedelivery–ICTcontributesto the continuous improvement of service deliveryintermsofeconomy,efficiency,effectiveness,equityandbusinessandenvironmentalsustainability;

• Improvedsecurity–ICTensuresthatunlawfulaccess to information and systems is prevented,detectedandrespondedto;and

• Improvedreporting–enablesthebusinesstomeasure the achievement of its objectives.

Development of the Disaster Recovery Plan (DRP)The IT DRP was developed and approved. The Plan stipulates the responsibilities of the Disaster Recovery Team, whose mission is to establish level procedures to ensure the continuity of business functions in an event that the organisation experiencesadisaster.

Audit FindingsTo address the previous audit findingsrecommended, IT policies were developed and approved.



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1. intRoductionThe RBIDZ is a company and a provincial government business entity and is therefore governed by both the PFMA and the Companies Act. In addition to this, the RBIDZ has established a solid corporate governance framework through a shareholder compact/funding agreement with the ExecutiveAuthority,aBoardCharterandchartersfor each Board Committee. The charters all take into account the guidance of the King III Report on Corporate Governance published by the Institute of Directors. Management’s Executive Committee isalso governed by a Charter. The reporting protocols are well structured throughout the organisation.

2. executive AuthoRityThe entity reports against the set targets in the Annual Performance Plan on a quarterly basis to EDTEA.Writtenreportsaresubmitted15daysafterthe end of the quarter after which a meeting to discussthereportsisorganisedbyEDTEA.Duringthe financial year under review, all four reportsweresubmitted timeously toEDTEAandtheCEOattended all four meetings to discuss progress against set targets.

3. the Accounting AuthoRity/boARd

The Board has an independent role with accountability to the shareholders and the Company and is responsible as the primary oversight body of the Company. The Board appreciates that strategy, risk, performance and sustainability are inseparable and gives effect to this by contributing to andapproving the strategy and satisfying itself that the strategy and business plans do not give rise to risks that have not been thoroughly assessed by management, identifying key performance and risk areas, ensuring that the strategy will result in sustainable outcomes.

The Role of the Board TheBoardmembershavethespecificresponsibilitiesset out in the PFMA, the Companies Act and the

King III Report on Corporate Governance, including the duty of utmost care to:• EnsurereasonableprotectionoftheassetsandrecordsoftheCompany;toactwithfidelity,honesty,integrityandinthebestinterests of the Company in managing the financialaffairsoftheCompany;

• Disclosetotheexecutiveauthorityresponsible for the Company or the Provincial Legislatureonrequestallmaterialfacts,including those reasonably discoverable, whichinanywaymayinfluencethedecisionsoractionsoftheexecutiveauthorityorlegislature;

• Act as the focal point for, and custodian of, corporate governance by managing its relationship with management, the shareholders and other stakeholders of the Company along sound corporate governance principles;

• EnsurethattheCompanyisandisseentobe a responsible corporate citizen by having regardfornotonlythefinancialaspectsofthe business of the Company but also the impact that business operations have on the environment and the society within which it operates;

• Beresponsibleforthegovernanceofrisk;• Beresponsibleforinformationtechnology(IT)governance;

• EnsurethattheCompanycomplieswithapplicable laws and considers adherence to non-bindingrulesandstandards;toensurethe integrity of the Company’s Annual report and to appoint and evaluate the performance oftheChiefExecutiveOfficer.

The Board acts collectively and does not assume the functions of management, which remain the responsibility of the executive directors, officersand other members of senior management.

Board CharterThe Board has adopted a Board Charter, setting out its roles and responsibilities. The Charter was reviewed during the year under review.



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Composition of the Board Name Designation Area of Expertise Other Committees

(E.g. Audit Committee)No. of Meetings Attended (Days)

Ms P.B. KuneneA Chairperson Management, banking, public sector

3

Mr M.C. ClarkB Deputy Chairperson/Chairperson

Management, public sector, governance

Chairperson of Human Resources and RemunerationCommittee(until18/1/2016)AuditandRiskCommittee(until18/1/16)Human Resources and Remuneration Committee(from18/1/16)

6

MsT.N.EbokaC Member Management, engineering Chairperson of Infrastructure and InvestmentCommittee;AuditandRiskCommittee(from18/1/16)

2

MrZ.L.FihlaniC Member Management, auditing, finance

Chairperson of the Audit and Risk Committee

2

Mr A.A. MahlalutyeC Member Management, economic zones

SocialandEthicsCommittee 6

MrA.S.Makhanya Member Management, engineering, water and effluentservices

SocialandEthicsCommitteeInfrastructure and Investment Committee (from18/1/16)

4

MrE.F.Mbatha Member Management, local government

ChairpersonofSocialandEthicsCommittee

6

Mr K. Naidoo Member Finance, management HR and Remuneration Committee 1Ms M.J. Ndlovu Member Management Audit and Risk Committee

HR and Remuneration Committee6

Mrs M.T.B. NdlovuC Member Management, law, local government

HR and Remuneration CommitteeActing Chairperson of the Audit and Risk Committee(from18/1/16)

6

MsN.G.Sithole Member Management, logistics Infrastructure Committee 1Mr P. MotsoahaeD CEO Management, strategy,

governance, logistics6

Mr M.C. KhuzwayoE CFO Management,finance 5A:Resigned24/11/2015B: Appointed as Chairperson 18/1/2016C: Re-appointed 18/1/2016D: Appointed 01/12 2013E:Appointed01/7/2015ForqualificationsandotherBoarddirectorships,refertopages4-6.

Board CommitteesBOD Committee Meetings

Audit and Risk Social and Ethics Infrastructure and Investment

HR and Remuneration

Held Attended Held Attended Held Attended Held Attended

Ms P.B. KuneneMr M.C. Clark 3B 3 10A,E 10MsT.N.Eboka 1C 1 3A 3MrZ.L.Fihlani 4A 4Mr A.A. Mahlalutye 2 2MrA.S.Makhanya 2 2 1C 1MrE.F.Mbatha 2A 2Mr K. NaidooMs M.J. Ndlovu 4 3 9D 9Mrs M.T.B. Ndlovu 10E 10MsN.G.Sithole 3 3MrS.MkhizeG 3 2

A: Committee ChairpersonB: Member of Committee until 18/1/2016C: Appointed to Committee 18/1/2016D: Appointed to Committee 27/05/2015E:MrsNdlovuactedasChairofCommitteefrom18/1/16F:AttendedmeetingswithoutbeingamemberoftheCommitteeorforaspecialpurpose(e.g.recruitment)G. Non-director



Remuneration of Board MembersThe remuneration of directors is determined by the shareholder. The Company reimburses/does travel bookings for directors other than those in the employ of Government departments. During the course of the year, the method of remuneration for Board meetings was amended to include a retainer that is only paid if the scheduled meeting is attended.

Fees for Services as Directors

Managerial Services 2016 2015

SalaryCTC

Retirement Fund and

Medical Aid Contributions

TotalR

TotalR

Executive Directors of RBIDZ

P. Motsoahae Chief Executive Officer 0 2471919 N/A 2471919 2 731 630

M KhuzwayoA,C Chief Financial Officer 0 954000 N/A 954000 N/A

Non-executive Directors of RBIDZ

M. ClarkC Chairperson of the Board (from 18 January 2016)

396564 - - 396564 396 236

B. KuneneB,A Chairperson of the Board (until 24 November 2015)

207 383 - - 207 383 528024

T.Eboka Member of the Board of Directors 91 805 - - 91 805 138 938

Z. Fihlani Member of the Board of Directors 122 973 - - 122 973 235 317

A. Mahlalutye Member of the Board of Directors 131 537 - - 131 537 58 971

S.MakhanyaMember of the Board of Directors 103234 - - 103234 133 606

E.Mbatha Member of the Board of Directors 137 793 - - 137 793 174887

K. NaidooD Member of the Board of Directors 0 - - 0 0

M.J. Ndlovu Member of the Board of Directors 216 872 - - 216 872 191048

M.B.T. Ndlovu Member of the Board of Directors 195 561 - - 195 561 147125

N.SitholeE Member of the Board of Directors 42487 - - 42487 110 899

Notes:A: Remuneration for part of the yearB:ResignedduringyearandremunerationpaidtoStandardBankLimiteduntilJuly2015C:Appointedduring2015/16financialyearD:NoremunerationpayableasofficialrepresentsaGovernmentdepartmentE:RemunerationpaidtoTransnetFoundation



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4. RisK mAnAgement In accordance with the PFMA and King III, the Company is keenly aware of the need to manage its risks effectively. To this end, the Companyconducts an annual risk assessment as part of the strategic planning process where both high level strategic risks and operational risks affecting thedifferent business units are identified. These arethenincludedintheCompany’sStrategicPlanandAnnual PerformancePlan. The risks identified areincluded in the monthly dashboard reports where the different business units report to executivemanagement on the steps taken to address the identified risks. Emerging risks are also identifiedand reportedon atmonthlyExecutiveCommitteemeetings as the Executive Committee serves asthe internal risk committee of management, thus ensuring buy-in at an executive level. While theLegalManager/CompanySecretaryistheChiefRiskOfficeroftheCompany,allexecutivemanagersarerisk champions for the operational risks emanating from their business units.

Management reports to the Audit and Risk Committee four times per year on both the steps beingtakentoaddressidentifiedrisksaswellasonanyemergingrisksthathavebeenidentified.

5. inteRnAl Audit And Audit committees

The Company has adopted both an Internal Audit Charter and a Audit and Risk Committee Charter to ensure that the internal audit function is able to operate as an independent appraisal function to examine and evaluate the company’s processesin the effective discharge of its responsibilities.Its objectives include promoting effective riskmanagement and operational efficiency atreasonable cost, in accordance with the standards for the Professional Practice of Internal Audit establishedbytheInstituteofInternalAuditors(IIA).

The internal audit function evaluates governance processes; assesses the effectiveness of riskmanagement; analyses and evaluates businessprocesses and controls; andprovides informationon fraud, corruption, unethical behaviour and irregularities;andperformsotherrelatedactivities.

The function, which is outsourced to the KwaZulu-NatalTreasury’s InternalAuditUnit, reports to theAudit and Risk Committee.

During the year, audits and/or follow-up audits wereconductedonhumanresourcemanagement;public entity funding; asset management;performance information; the employeeperformance management system and a conflictof interest review. Fieldwork was completed on an IT general controls review while a report on supply chain management reached the draft report stage.

The functions of the Audit and Risk Committee are set out in a Committee Charter, which is based on the recommendations of the King III Report on Corporate Governance issued by the Institute of Directors and which was reviewed and updated during the year. The key functions of the Committee are to assist the Board in fulfilling its oversightfunctions in terms of the PFMA, including to:• AssisttheChiefExecutiveandExecutive

Management in carrying out their functions asprescribedinsections38(1),76(4)(d)and 77 of the PFMA Regulation 3.1.8 of the Treasury Regulations, the Company’s Act and principlesofsoundcorporategovernance;

• Evaluatetheadequacyandefficiencyoftheinternal control systems, accounting practices, informationsystemsandauditingprocesses;

• Give an opinion and introduce measures that may serve to enhance the credibility and objectivityoffinancialstatementsandreportspreparedwithreferencetotheaffairsoftheCompany;

• Facilitate,promoteandmaintaineffectivecommunication and work relations with the Board of directors, Management and the internalandexternalauditors;

• Monitor compliance with laws, code of businessconductandregulations;

• Publicly issue a statement to the shareholders confirmingtheeffectivenessoftheinternalfinancialcontrolsandprovideawrittenassessment of Company’s system of internal control;

• Review an integrated annual report with special emphasis on the impact of the Company in the economic, environmental and



The table below discloses relevant information on the members of the Audit and Risk Committee:

Name Qualifications Internal or External

If Internal, Position in the Public Entity

Date First Appointed

End of Appointment

Mr Z. Fihlani BCom,BCompt(Hons),CTA,HDipTax(Int.Law),MCom(Tax)andCA(SA)

External Non-executivedirector

5/10/2012 and re-appointed 18/01/2016

2016 AGM

Mr M.C. Clark BSoc.Sc,PgDipIR External Non-executivedirector

5/10/2012 18/01/2016

Ms M.J. Ndlovu MBA graduate with degrees and diplomas in Human Resources Management and Transportation


5/10/2012 and re-appointed 18/01/2016

2016 AGM

MrsT.Eboka BSc(ApplMathematics),BSc(TextileEngineering),MBA,SeniorExecutiveProgramme(Harvard),CertificateinChangeManagement(Cornell)


18/01/2016 2016 AGM

The members of the Committee are appointed/re-appointed at each Annual General Meeting, as contemplated in the Companies Act, 2008.

6. compliAnce With lAWs And RegulAtions

The Legal Manager/Company Secretary isresponsible for the compliance function. The Company has adopted a comprehensive Compliance Policy. Research is conducted on applicable laws and various open source databases are used to determine upcoming legislation as well as relevant judgments.

Checklists are compiled on key legislation, which is prioritised based on a risk-based approach.

Compliance issues are reported to the Board through the Audit and Risk Committee on a quarterly basis.

7. FRAud And coRRuption The Company has adopted a comprehensive Fraud Prevention Policy and compiles a Fraud Prevention Plan on an annual basis. This includes a response plan to allegations of fraud and corruption;probity investigations of prospective staff andeven suppliers, thereby creating an open and

transparent culture; protectionofwhistle blowers;annual declarations of financial interests as wellas declarations at certain meetings; mandatoryreporting of gifts and gratuities received by staffand encouragement of staff to report suspectedfraud and corruption. The Company has a whistle-blowing hotline and the Fraud Prevention Policy provides for the persons to whom fraud is to be reported.

The Company is particularly proud of the conflictofinterestreviewwheretheCompanywasthe first to request such a review. Here, variousdatabases are interrogated to ensure that directors and employees of the Company do not have any undisclosed conflicts of interest. It is understoodthat this is being rolled out to other public entities in KwaZulu-Natal.

Another innovative way that the Company addresses the risk of fraud and corruption is in the fieldofprocurement.TheCompanyhasadoptedatransparent process where all losing tenderers for public tenders are invited to a debriefing sessionwhere the reasons for awarding the tender and reasons each tendererwas disqualified or scoredlow are given. This reduces the possibility of tender awards being manipulated by corrupt persons.

socialspheres;toensurethattheCompanyhasimplementedaneffectivepolicyandplan for risk management that will enhance the Company’s ability to achieve its strategic

objectives;andtoensurethatthedisclosureregarding risk is comprehensive, timely, and relevant.



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Where fraud is reported, the policy provides for the investigation of the matter by a person independent of the division in which the fraud is suspected.

8. minimising conFlict oF inteRest

In addition to the aforementioned Fraud Prevention Policy, the Company has adopted a Code of Conduct, which also addresses the issue of conflicts of interest. These are further supportedby a Supply Chain Management Policy that alsoseeks to avoid undisclosed conflicts of interestand persons in a position to make decisions where they have a conflict of interest. While the FraudPrevention Policy relies on gifts and conflicts ofinterestbeingdeclared,conflictofinterestreviewsare also conducted to ensure that all conflicts ofinterest are disclosed.

Withregardtoexternalparties,theCompany’sprocurement processes require that potential service providers complete and sign a form indicatinganyconflictsofinterestintheprocessesoranylinkagestheymayhavewithdirectorsorstaffmembers of the Company.

9. code oF conduct The Company has adopted a Code of Conduct that is applicable to all directors and staff and isintended to guide the behaviour that the Company expects in its interaction with all internal andexternalstakeholders,withspecialemphasisontheinteractions of internal stakeholders with each other and with the communities within which the Company operates. The Code of Conduct seeks to ensure that behaviour is guided by socially established principles of honesty, fairness, accountability, non-discrimination and respect for human dignity.

The Policy requires staff members toreport dishonest activities and provides for the investigation of all infringements of the Code, followed by the taking of appropriate remedial action, which may include disciplinary action, termination of relationships with a supplier, or taking steps to prevent a reoccurrence.

10. heAlth, sAFety And enviRonmentAl issues

A key driver in ensuring a high level of safety, health and environmental compliance is the application of the company’s Incident Management System.During the reporting period, the majority of all SHEQ-related non-conformances were recorded,investigatedandclosedoutwithin30days.Lessonslearnt were shared with service providers in order to improve on performance and compliance. Apart from one minor soil contamination incident, which resulted from the spillage of fuel during refuelling, all incidents were related to poor housekeeping (mainlylitterandoff-cutsofconstructionmaterials)with no immediate impact on the environment.

During the period year, the following projects were undertaken RBIDZ and its tenants:

• Construction of the SPS Manufacturingfactory;

• Construction of the Entrance GateComplex;and

• Finalisation of civil engineering and electricalprojectsforPhase1A(Stage2B).

In line with the RBIDZ’s good governance and the applicationofSHEQ’sspecificationdocuments,allcontractorswererequiredtoexercisefullcontroloftheir activities and processes. These include risk identificationandmitigation,adherencetoallSHElegislation and policies. Adherence to these was measuredthroughinternalandexternalSHEaudits.

The aforementioned projects achieved more than 500 000 man-hours without an injury. This milestone was reached because of:

• Jobtaskobservations;• Detailedriskassessments;• Periodicinspections;• Internalandexternalauditing;• Toolboxtalks;• Training of contractors on key legislative

changes/requirements;and• Sharingofinteractivehazards.

The highlights for the financial year include thefollowing:



• Obtaining the environmental authorisationforthePhase1FRailwayLine;

• ObtainingWaterUseLicencesforMedwayRoad, Phase 1F Internal EngineeringInfrastructure andPhase 1FRailway Line;and

• Securing approval for the company’sEnvironmental Management SpecificationRevision No. 2.

The company remains committed to a safe working environmentandtheapplicationofSHElegislationand quality standards, while striving for a prompt turnaround on environmental approvals.

11. bbbee Act And the codes oF good pRActice

As stated in the BBBEE Act and its associatedCodes of Good Practice, the RBIDZ continues to implement its mandate in a manner that is cognisant and inclusive of wide socioeconomic participation, especially among historically disadvantaged groups. Significant contributions have beenmade through corporate social investment (CSI),preferential procurement, and supplier and enterprise development. This has culminated in the RBIDZ earning the BEE recognition statusof a Level 2 BBBEE Contributor during its lastassessment. Among the targeted groups that continuetobenefitfromtheBBBEEimperativesinitsday-to-daybusinessareSMMEsthatareBlackBusinessEnterprises(BBEs),BlackWomenOwned(BWO)andBlackYouthOwned(BYO)enterprises,CooperativesandCommunity-basedOrganisations(CBOs). Empowerment is also driven throughcapacity building initiatives directed towards emergingcontractors,exchangeofinformationthatpositionSMMEsforbusinessopportunities,aswellas participation in the local and regional economic and business forums.

12. compAny secRetARy The Company’s Legal Manager functions as itsCompanySecretary,withfunctionswhichinclude:

• Being the central source of guidance and advice to the Board and within Company on matters of good governance and changes inlegislation;

• Being responsible for Board and Committee Charters; preparation of the annual workplanandmeetingschedule;

• Circulating Board andCommittee papers;induction, orientation and ongoing training ofdirectors;

• Ensuring returns are provided to theCompanies and Intellectual Property Commission;and

• Assisting with Board evaluations.

The Board has also appointed a Board secretariat. This function has been outsourced to a service provider is who responsible for the recording, approval and circulation of minutes. By outsourcing the function, the situation is avoided where the Board Secretary has to report on anequal basis to both management and the Board or is, as amember ofmanagement, in a conflictsituation where issues concerning management are considered by the Board.

Certification by Company SecretaryI, the undersigned, KN Harvey, in my capacity as CompanySecretary,certifythattheCompanyhaslodged with the Companies and Intellectual Property Commission all such returns as are required of a State-ownedcompany intermsoftheCompaniesAct, and that all such returns are, to the best of my knowledge and belief, true, correct and up-to-date.

Adv. KN HarveyCompanySecretaryDate: 29 July 2016



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13. Audit committee RepoRt

Wearepleasedtopresentourreportforthefinancialyear ended 31 March 2016.

Audit and Risk Committee ResponsibilityThe Audit and Risk Committee reports that it has complied with its responsibilities arising from Section 51(1)(a)(ii) of the Public FinanceManagement Act and Treasury Regulation 3.1.13. The Committee has adopted appropriate formal terms of reference contained in its Audit and Risk Committee Charter, which was reviewed during the reporting period. The Committee has regulated its affairs incompliancewith thischarter andhasdischarged all its responsibilities as contained therein.

The Effectiveness of Internal ControlOur review of the findings of the Internal Auditwork, which was based on the risk assessments conducted in the public entity, revealed certain weaknesses, which were then raised with the public entity.

The following internal audit work was completed during the year under review:

• Human resource management including follow-up;

• Publicentityfunding;• Assetmanagementincludingfollow-up;• Performanceinformation;• Employeeperformancemanagement

system;and• Conflictofinterestreview.

Fieldwork completed on an IT General Controls ReviewwhileareportonSupplyChainManagement,including follow-up, reached the draft report stage.

In-Year Management and Monthly/Quarterly ReportThe Company has reported monthly and quarterly to the Treasury, as required by the PFMA.

Evaluation of Financial StatementsWehavereviewedtheannualfinancialstatementsprepared by the Company.

Auditor’s ReportWe have reviewed the Company’s implementation plan for audit issues raised in the prior year and we aresatisfiedthatthemattershavebeenadequatelyresolved.

The Audit and Risk Committee concurs and acceptstheconclusionsoftheExternalAuditorontheannualfinancialstatementsandisoftheopinionthat the audited annual financial statements beaccepted and read together with the report of the ExternalAuditor.

Mr Zola FihlaniChairperson of the Audit CommitteeDate: 29 July 2016



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1. intRoduction TheCorporateServicesBusinessUnit isresponsiblefortheempowermentofinternalpeoplebyeffectivehumanresource management and development. New structure was approved by the Board prior to April 2015 which was tocomeintooperationon1April2015.Fourteenpositionswereplannedtobefilledduring2015/2016financialyear.

2. humAn ResouRce oveRsight stAtistics Personnel Cost by Business Units Business Units Total Budget for the

Business Unit (Excl. VAT) (R’000)

Personnel Expenditure (R’000)

Personnel as a % of Total Budget

No. of Employees

CEO’sOffice 7405 2 913 39% 2

Strategy,M&E 7794 2 855 36% 4

ZDO 6 515 2548 39% 2

BDS 8 886 3441 39% 2

Finance 18 806 4282 23% 7

CorporateServices 18944 5 956 31% 11

Total 68 351 21 995 32% 28

Personnel Cost by Salary BandSalary Bands Personnel Expenditure

(R’000)% of Personnel Exp. to Total Personnel Cost

No. of Employees Average Personnel Cost Per Employee

(R’000)

Top Management [BandsD5-E4] 7324 33% 6 1 221

SeniorManagement [BandsD1-D4] 11 019 50% 12 918

Skilled [BandsC1-C5] 2 551 12% 5 510

Semi-Skilled [BandsA1-B5] 1 101 5% 5 220

Total 21 995 100% 28 785

Performance RewardsProgramme/Activity/Objective

Performance Rewards (R’000)

Personnel Expenditure (R’000)

% of Performance Rewards to Total Personnel Cost

Top Management [BandsD5-E4] 759 7324 10%

SeniorManagement [BandsD1-D4] 564 11 019 5%

Skilled [BandsC1-C5] 214 2 550 8%

Semi-Skilled [BandsA1-B5] 81 1 100 7%

Total 1 618 21 993 7%



Training Costs Programme/Activity/Objective

Personnel Expenditure

(R’000)

Training Expenditure

(R’000)

Training Expenditure as a % of Personnel

Cost.

No. of Employees

Trained

Avg. Training Cost Per Employee

(R’000)

CEO’sOffice 5 768 36 0.62% 5 7.2

ZDO 2548 1 0.04% 2 0.5

BDS 3441 7 0.20% 1 7.0

Finance 4282 111 2.59% 8 13.9

CorporateServices 5 956 52 0.87% 8 6.5

Total 21 995 207 0.94% 24 8.6

Employment and Vacancies by Business UnitsBusiness Units 2014/2015

No. of Employees2015/2016

Approved Posts2015/2016

No. of Employees2015/2016 Vacancies

% of Vacancies

CEO’sOffice 6 8 5 3 38%

ZDO 2 7 2 5 71%

BDS 4 7 3 4 57%

Finance 8 10 7 3 30%

Corporate Services 9 15 11 4 27%

Total 29 47 28 19 40%

Employment and Vacancies per Salary BandsSalary Band 2014/2015

No. of Employees2015/2016

Approved Posts2015/2016

No. of Employees2015/2016 Vacancies

% of Vacancies

Top Management [BandsD5-E4] 6 5 4 1 20%

SeniorManagement [BandsD1-D4] 11 20 13 7 35%

Skilled [BandsC1-C5] 7 14 6 8 57%

Semi-Skilled [BandsA1-B5] 5 8 5 3 38%

Total 29 47 28 19 40%

Thenewstructureaddinganadditional14newpositionswasapproved.Consentwasalsoobtainedtofill thepositionsofExecutiveManager:CorporateServices,CCAOfficerandProjectManager:Civils.Allthesepositionsarestilltobefilled.



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Employment ChangesSalary Band Employment at

Beginning of PeriodAppointments Terminations Employment at End

of the Period

Top management [BandsD5-E4] 6 1 3 4

Seniormanagement [BandsD1-D4] 11 2 0 13

Skilled [BandsC1-C5] 7 1 2 6

Semi-skilled [BandsA1-B5] 5 0 0 5

Total 29 3 4 28

Reasons for Staff Leaving Reason Number % of Total No. of Staff Leaving

Death 0 0%

Resignation 3 75%

Dismissal 0 0%

Retirement 0 0%

Ill health 0 0%

Expiryofcontract 1 25%

Other 0 0%

Total 4 100%

Explanations:Provideexplanationsforstaffleavingandwhatattemptsaremadetoreplacethesestaff.

Labour Relations: Misconduct and Disciplinary ActionNature of Disciplinary Action Number

Verbalwarning 0

Written warning 0

Final written warning 0

Dismissal 0

Equity Target and Employment Equity Status Levels Male

African Coloured Indian White

Current Target Current Target Current Target Current Target

E–Topmanagement 1 1 0 0 0 0 0 0

D5–Seniormanagement 1 2 0 0 0 0 1 0

D–Professionalqualified 7 7 0 0 0 1 2 0

C–Skilled 1 6 0 0 0 1 0 0

B&A–Semi-skilledandunskilled 0 2 0 0 0 0 0 0

Total 10 18 0 0 0 2 3 0



Levels Female

African Coloured Indian White

Current Target Current Target Current Target Current Target

E–Topmanagement 0 0 0 0 0 0 0 0

D5–Seniormanagement 1 2 0 0 0 0 0 0

D–Professionalqualified 3 7 0 0 1 1 0 0

C–Skilled 4 5 0 0 0 1 1 1

B&A–Semi-skilledandunskilled 3 2 1 1 0 0 1 0

Total 11 16 1 1 1 2 2 1

Levels Disabled Staff

Male Female

Current Target Current Target

E–Topmanagement 0 0 0

D5–Seniormanagement 0 0 0 0

D–Professionalqualified 0 1 0 0

C–Skilled 0 0 0 0

B&A–Semi-skilledand unskilled 0 0 0 0

Total 0 1 0 0



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contents

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE COMPANY SOC LIMITEDRegistration number : 2002/009856/07AnnuAl FinAnciAl stAtementsAs at 31 March 2016

StatementofResponsibilityoftheDirectors 70Report of the Independent Auditors 71ReportoftheDirectors 74StatementofFinancialPosition 76StatementofComprehensiveIncome 77StatementofChangesInEquity 78StatementofCashFlows 79NotestotheAnnualFinancialStatements 80 SUPPLEMENTARY SCHEDULE DetailedStatementofComprehensiveIncome 97

Theannualfinancialstatementssetoutonpages 76-96 and the statement of responsibility by the directors on page 70 were approved by the Board of Directors and signed on its behalf by:

Mr Mel Clark Mr Phumelele MotsoahaeBoardChairperson ChiefExecutiveOfficerDate: 29 July 2016 Date: 29 July 2016



stAtement oF Responsibility by the diRectoRsAs AT 31 MARCh 2016

FINANCIAL STATEMENTSTheannualfinancialstatementshavebeenpreparedbymanagementinaccordancewithInternationalFinancialReporting Standards and in the manner required by the South African Companies Act. They are based onappropriate accounting policies, which have been consistently applied and which are supported by reasonable and prudent judgements and estimates.

Thedirectorsareresponsibleforthepreparationofannualfinancialstatementsthatfairlypresentthestateofaffairsandtheresultsofthecompany.Theexternalauditorsareresponsibleforindependentlyauditingandreportingontheseannualfinancialstatements,inconformitywithInternationalAuditStandards.

INTERNAL CONTROLS

The Board of directors is responsible for the company’s systems of internal control. These systems are designed to providereasonable,butnotabsoluteassuranceastotheintegrityandreliabilityofthefinancialstatementsandtosafeguardandmaintainaccountabilityofitsassetsandtodetectandminimisesignificantfraud,potentialliability,loss and material misstatement while complying with applicable laws and regulations.

Thecontrolsconcentrateoncritical riskareas.Theseareasare identifiedbyoperationalmanagementandaremonitored by the directors. All controls relating to the critical risk areas are closely monitored and subject to internal audit. Nothing has come to the attention of the directors to indicate that a material breakdown in the controls within the Company has occurred during the year.

PERFORMANCE MANAGEMENT

The Company reports on its own performance against pre-determined objectives as contained in the Annual PerformancePlanfor2015/2016financialyearandinaccordancewiththePublicFinanceManagementAct1of1999asamended.Theperformancereportistabledonquarterlybasistothefollowingstructures:Audit&RiskManagement, the Accounting Authority (RBIDZBoard) and the Executive Authority (Department of EconomicDevelopment,TourismandEnvironmentalAffairs).

BOARD REMUNERATION

Theremunerationofdirectorsandseniormanagersissetoutinnote18totheannualfinancialstatements.

Thefinancialstatementssetoutonpages76-97,whichhavebeenpreparedonthegoingconcernbasis,wereapproved by the Board of directors and signed on its behalf by:

Mr Mel Clark Board Chairperson Date: 29 July 2016



AuditoR’s RepoRt FOR THE YEAR ENDED 31 MARCH 2016The RIChARDs BAy InDusTRIAl DevelopMenT Zone CoMpAny soC lTD

REPORT ON THE FINANCIAL STATEMENTSIntroduction1. Ihaveauditedtheseparatefinancialstatements

of the Richards Bay Industrial Development ZoneCompanySOCltdsetoutonpages76to96,whichcomprisetheStatementofFinancialPosition as at 31March 2016, the Statementof Profit or Loss and Other ComprehensiveIncome,Statement ofChanges inEquity, andStatementofCashFlowsandNotescomprisinga summary of significant accounting policiesandotherexplanatoryinformation.

Accounting Authority’s Responsibility for the Financial Statements2. The board of directors, which constitutes the

accounting authority, is responsible for the preparation and fair presentation of these financial statements in accordance with theInternational Financial Reporting Standards(IFRS) and the requirements of the PublicFinanceManagementActofSouthAfrica,1999(ActNo.1of1999)(PFMA)andtheCompaniesActofSouthAfrica,2008(ActNo.71of2008)(CompaniesAct) and for such internal controlas the accounting authority determines is necessary to enable the preparation of financialstatementsthatarefreefrommaterialmisstatement, whether due to fraud or error.

Auditor-General’s Responsibility 3. Myresponsibilityistoexpressanopiniononthese

financialstatementsbasedonmyaudit.Iconductedmy audit in accordance with the International Standards on Auditing. Those standards requirethat I comply with ethical requirements, and plan and perform the audit to obtain reasonable assuranceaboutwhetherthefinancialstatementsare free from material misstatement.

4. An audit involves performing procedures toobtain audit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on the auditor’s judgement, including the assessment of the risks ofmaterialmisstatement of the financialstatements, 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 financialstatementstodesignauditproceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of the entity’s internalcontrol. 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 financialstatements.

5. I believe that the audit evidence I have obtained issufficientandappropriatetoprovideabasisfor my audit opinion.

Opinion6. Inmyopinion,thefinancialstatementspresent

fairly, in all material respects, the financialposition of the Richards Bay Industrial Development Zone Company SOC Ltd(RBIDZ)asat31March2016and itsfinancialperformanceandcashflows for theyear thenended, in accordance with IFRS, and therequirements of the PFMA and the Companies Act.

Additional Matters7. I draw attention to the matters below. My opinion

isnotmodifiedinrespectofthesematters.

Report of the Auditor-General to the KwaZulu-Natal Provincial Legislature on the Richards Bay Industrial Development Zone Company SOC Ltd



Previous Year Audited by a Predecessor Auditor8. The financial statements of the previous year

were audited by a predecessor auditor in terms ofsection4(3)ofthePublicAuditActon30July2015.

Unaudited Supplementary Schedules9. The supplementary information set out on

pages 97 does not form part of the financialstatements and is presented as additional information. I have not audited these schedules and, accordingly, I do not express anopinionthereon.

Other Reports Required by the Companies Act10.Aspartofmyauditofthefinancialstatements

for the year ended 31 March 2016, I read the Directors’ Report, the Audit Committee’s Reportandthecompanysecretary’scertificateto determine whether there were material inconsistencies between these reports and the auditedfinancialstatements.Thesereportsarethe responsibility of the respective preparers. Based on these reports, I have not identifiedmaterial inconsistencies between the reports andtheauditedfinancialstatement.Ihavenotaudited the reports and, accordingly, do not expressanopiniononthem.

Report on Other Legal and Regulatory Requirements 11. InaccordancewiththePublicAuditActofSouth

Africa,2004(ActNo.25of2004)(PAA)andthegeneral notice issued in terms thereof, I have a responsibilitytoreportfindingsonthereportedperformance information against predetermined objectives for selected objectives presented in the annual performance report, compliance with legislation and internal control. The objective ofmytestswasto identify reportablefindingsas described under each subheading but not to gather evidence to express assurance onthesematters.Accordingly,Idonotexpressanopinion or conclusion on these matters.

Predetermined Objectives12. I performed procedures to obtain evidence

about the usefulness and reliability of the reported performance information for the

following selected objectives presented in the annual performance report of the entity for the year ended 31 March 2016.

13. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance was consistent with the planned objectives. I further performed tests to determine whether indicators and targets were well-defined,verifiable, specific, measurable, time boundand relevant, as required by the National Treasury’s Framework for Managing Programme PerformanceInformation(FMPPI).

14. I assessed the reliability of the reportedperformance information to determine whether it was valid, accurate and complete. .

15. I did not raise any material findings on theusefulness and reliability of the reported performance information for the selected objectives.

Additional Matters16. Although I identified no material findings on

the usefulness and reliability of the reported performance information for the selected objectives, I draw attention to the following matters.

Achievement of Planned Targets17.Theannualperformancereportonpages24to

31 for information on the achievement of the planned targets for the year.

Adjustment of Material Misstatements

18. Iidentifiedmaterialmisstatementsintheannualperformance report submitted for auditing. These material misstatements were on the reported performance information for objectives to promote, attract and facilitate investments;provide structure and packaged information of potential; create both construction andpermanent jobs business initiatives; allnecessary development and design approvals forRBIDZ landparcels;developandmaintainengineering infrastructure for all RBIDZ



land parcels: Phase 1A internal engineering infrastructure implemented with approved budget; develop and maintain engineeringinfrastructure for all RBIDZ land parcels: Phase 1A internal engineering infrastructure implemented with approved budget, ensure adherence to legislation, ethical standards, bestpracticesandinternalpolicies;andensureadherence to legislation, ethical standards, best practices and internal policies. As management subsequently corrected the misstatements, I did not identify any material findings onthe usefulness and reliability of the reported performance information.

Compliance with Legislation 19. I performed procedures to obtain evidence

that the entity had complied with applicable legislationregardingfinancialmatters,financialmanagement and other related matters. I did not identify any instances ofmaterial findingson compliance with specific matters in keylegislation, as set out in the general notice issued in terms of the PAA.

Internal Control20. I considered internal control relevant to my audit

ofthefinancialstatements,AnnualPerformanceReport and compliance with legislation. I did not identify any significant deficiencies in internalcontrol.

Pietermaritzburg

29 July 2016



RepoRt oF the diRectoRs31 March 2016

The directors have pleasure in presenting their report on the activities of the company for the year ended 31 March 2016.

NATURE OF BUSINESS AND OPERATIONS Richards Bay Industrial Development Zone Company SOC Limited (RBIDZ) was formed to undertake thedevelopment of industrial land in the Richards Bay area.

FINANCIAL RESULTSTheresultsfortheyeararereflectedinthestatementofcomprehensiveincomesetoutonpage77.Insummary,theCompanyhadnooperatingsurplusordeficitforthefinancialyear.AnaftertaxsurplusofR660806hasbeenreported.

SHARE CAPITALRBIDZ has 1 000 authorised and issued share capital. The share capital is as follows:

1000shares ProvinceofKwaZulu-NatalrepresentedbyitsDepartmentofEconomicDevelopment, TourismandEnvironmentalAffairs.

DIRECTORATEDATE APPOINTED

Ms B. Kunene Resigned 23 November 2015 1 July 2012

Mr M. ClarkAppointed as a Chairperson on 18 January 2016 1 July 2012

MsT.Eboka(re-appointed 18 January 2016)

1 July 2012

Mr Z. Fihlani(re-appointed 18 January 2016)

1 July 2012

Mr A. Mahlalutye(re-appointed 18 January 2016)

1 July 2012

MrS.Makhanya 1 July 2012MrE.Mbatha 1 July 2012Mr K. Naidoo 1 July 2012Ms J. Ndlovu 1 July 2012Ms M. Ndlovu 1 July 2012MsN.Sithole 1 July 2012Mr P. Motsoahae 1 December 2013Mr M.C. Khuzwayo 2 July 2015

EXTERNAL AUDITORSOfficeoftheAuditor-General

INTERNAL AUDITORSKZNProvincialTreasury:InternalAuditServices



RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE COMPANY SOC LIMITEDRepoRt oF the diRectoRsAs AT 31 MARCh 2016

SECRETARY ThecompanysecretaryandtimetronsareperformedbyEOH.

Business address: Postal address: Captains Walk Building Private Bag X1005 Pioneer Road Richards Bay Tuzi Gazi Waterfront 3900 Richards Bay 3900

GOING CONCERN Onthebasisoftheannualfinancialstatementsforthe2015/2016financialperiodandinformationregardingtheforthcomingfinancialyear,thedirectorshaveeveryreasontobelievethattheCompanyremainsagoingconcern.

SUBSEQUENT EVENTS There are no subsequent events.

INFORMATION DISCLOSED IN TERMS OF SECTION 55(2)(b) OF THE PFMAParticularsof irregularexpenditure incurredbytheCompany inrespectoftheyearended31March2016aredisclosedinNote20oftheannualfinancialstatements.



RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE COMPANY SOC LIMITED

stAtement oF FinAnciAl position As AT 31 MARCh 2016

Notes 2016 2015

R R

ASSETS

Non-current assets

Property, plant and equipment 2 4680 6 270

Intangible asset 3 - -

Deposits 4 66347281 201 116

Current assets 541403938 427225363

Accounts receivable 5 2 936 205 59 738 525

VATreceivable 12 - 13948182

Cash and cash equivalents 6 538 080 059 353 538 656

Deferredtaxation 7 387674 -

Total assets 607 755 899 427 432 749

EQUITY AND LIABILITIES

Capital and reserves 151478107 150 817 303

Sharecapital 8 1 000 1 000

Sharepremium 9 151 200 000 151 200 000

Accumulatedsurplus/(deficit) 277 108 (383697)

Non-current liabilities

Deposits payable 11.1 34240 5 000

Current liabilities 456243552 276610446

Deferred income 10 442957996 255873524

Deferredtaxation 7 - 273 132

Accounts payable 11 12580842 20463790

VATpayable 12 704714 -

Total equity and liabilities 607 755 899 427 432 749

Thesefinancialstatementsfor2015/2016werepreparedon25May2016andhavebeenindependentlyauditedbytheAuditor-GeneralofSouthAfricainaccordancewiththeprovisionsofthePublicAuditAct2006aswellasany applicable provisions of the Companies Act 2008. The statements were prepared by Mr Mzamo Khuzwayo, the ChiefFinancialOfficeroftheCompany.




stAtement oF compRehensive income FoR The yeAR enDeD 31 MARCh 2016

Notes 2016 2015

R R

Gross Revenue 13 37 641 702 40 505 747

Grant applied 36 298 115 40119808

Otherincome 1343587 385 939

Operatingexpenses (53017434) (50745445)

Loss from operations before finance expense 14 (15 375 731) (10 239 698)

Financeexpense (180109) -

Loss from operations before finance income (15 555 840)

Finance income 17 15555840 10 239 698

Surplus before taxation - -

Taxation 15 660 806 (388069)

Surplus/(deficit) for the year 660 806 (388 069)




stAtement oF chAnges in eQuity FoR The yeAR enDeD 31 MARCh 2016

Note Share Capital Share Premium

Accumulated Surplus/

(Loss)

Total

R R R R

Opening as at 1 April 2013 1 000 151 200 000 764540 151965540

Deficitfortheyear 14 - - (760168) (760168)

Opening as at 31 March 2014 1 000 151 200 000 4372 151 205 372

Deficitfortheyear 14 - - (388069) (388069)

Closing as at 31 March 2015 1 000 151 200 000 (383697) 150 817 303

Surplusfortheyear 660 806 660 806

Balance as at 31 March 2016 1 000 151 200 000 277 108 151 478 108




stAtement oF cAsh FloWsAs AT 31 MARCh 2016

Notes 2016 2015

R R

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from customers 101035450 24561775

Cash paid to suppliers and employees (53017434) (50745445)

Cashgenerated/(utilised)inoperations 16.1 48018017 (26183670)

Finance income 15 555 839 10 239 698

Netcashflowsfromoperatingactivities 63 573 856 (15943972)

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment (102021286) (176257105)

CASH FLOWS FROM FINANCING ACTIVITIES 222 988 833 84563254

Deposits payable 29240 5 000

Deposits receivable (66146164) -

Grant received 331144815 124678062

Grant applied (42039057) (40119808)

Net increase/(decrease) in cash and cash equivalents 184541404 (107637824)

Cash and cash equivalents at beginning of year 353 538 656 461176479

Cash and cash equivalents at end of year 538 080 059 353 538 656




notes to the AnnuAl FinAnciAl stAtementsFoR The yeAR enDeD 31 MARCh 2016

1. ACCOUNTING POLICIES 1.1 BASIS OF PREPARATIONStatement of Compliance TheannualfinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards. Basis of Measurement Thefinancialstatementshavebeenpreparedonagoingconcernbasisutilisingthehistoricalcostconceptexceptforfinancialinstrumentsatfairvaluethroughprofitorloss,whicharemeasuredatfairvalue.

Historicalcostisgenerallybasedonthefairvalue(FV)oftheconsiderationgiveninexchangeforgoodsandservices.Fairvalue(FV)isthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipants at the measurement date, regardless of whether the price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the RIBDZ takes into account the characteristics of the assets or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. USE OF ESTIMATES AND JUDGEMENTS Thepreparationoffinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptionsthataffecttheapplicationofaccountingpoliciesandreportedamountsofasset,liabilities,incomeandexpenses.Thesealsoconcernthefutureandwillthusaffectthereportedamountsofassetsandliabilitieswithinthenextfinancialyear.Theresultingaccountingestimateswill,bydefinition,seldomequaltherelatedactualresults.

Theestimatesandassociatedassumptionsarebasedonhistoricalexperienceandvariousotherfactorsthatarebelievedtobe reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised intheperiodinwhichtheestimateisrevisedandfutureperiods’revisionsaffectbothcurrentandfutureperiods. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountofassetsandliabilitieswithinthenextfinancialyearrelatetocreditimpairmentlossesonloansandreceivables,aswellasimpairmentlosses on investment property. During the period under review, there were no other areas involving a higher degree of judgment orcomplexity,orareaswhereassumptionsandestimatesaresignificanttothefinancialstatements. COMPARATIVE FIGURES Wherenecessary,comparativefigureshavebeenadjustedtoconformwithchangesinpresentationinthecurrentyear.

SIGNIFICANT ACCOUNTING POLICIES Exceptasdescribedotherwise,theaccountingpoliciessetoutbelowhavebeenappliedconsistentlytoallperiodspresentedinthesefinancialstatements.



RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE COMPANY SOC LIMITEDnotes to the AnnuAl FinAnciAl stAtements (cont.)FoR The yeAR enDeD 31 MARCh 2016

1. ACCOUNTING POLICIES (cont.)1.2 INTANGIBLE ASSETS Intangibleassetsotherthangoodwill(refertobasisofconsolidationpolicyabove),arerecognisedifit isprobablethatfutureeconomic benefits will flow to the entity from the intangible assets and the costs of the intangible assets can be reliablymeasured. Intangible assets comprise separately identifiable intangible items arising from business combinations, computer softwarelicenses and other intangible assets. Intangible assets are recognised at cost. The cost of an intangible asset acquired in a businesscombinationisitsfairvalueatthedateofacquisition.Intangibleassetswithadefiniteusefullifeareamortisedusingthestraight-linemethodovertheirusefuleconomiclife,generallynotexceeding20years.Intangibleassetswithanindefinitelifearenotamortised.Ateachdateoftheconsolidatedstatementoffinancialposition,intangibleassetsarereviewedforindicationsofimpairmentorchangesinestimatedfutureeconomicbenefits.Ifsuchindicationsexist,theintangibleassetsareanalysedtoassesswhethertheircarryingamountisfullyrecoverable.Animpairmentlossisrecognisedifthecarryingamountexceedstherecoverable amount.

Intangibleassetswithanindefiniteuseful lifearetestedannuallyforimpairmentandwheneverthereisanindicationthattheasset may be impaired.

Anintangibleassetisderecognisedondisposal,orwhennofutureeconomicbenefitsareexpectedfromtheuseordisposal.Gainsorlossesarisingfromde-recognitionofanintangibleasset,measuredasthedifferencebetweenthenetdisposalproceedsandthecarryingamountoftheasset,arerecognisedinP/Lwhentheassetisderecognised.

Computer Software Acquired computer software are capitalised as assets on the basis of the costs incurred to acquire and bring the specificsoftware into use. These assets are amortised on a straight-line basis over their estimated economic life. Capitalised computer software is carried at cost less accumulated amortisation and impairment losses. Computer software is tested annually for impairmentorchangesinestimatedfuturebenefits.

System Development Costs Costsassociatedwithmaintainingcomputersoftwareprogrammesarerecognisedasanexpenseandwhenincurred.

Directsoftwaredevelopmentcoststhatenhancethebenefitsofcomputersoftwareprogrammesandareclearlyassociatedwithanidentifiableanduniquesoftwaresystem,whichwillbecontrolledbytheGroupandhasaprobablebenefitexceedingoneyear, are recognised as intangible assets. These costs are initially capitalised as work-in-progress up to the date of completion of the project, after which the asset is transferred to computer software and accounted for as per the computer software and licenses policy.

Management reviews the carrying value of capitalised work-in-progress on an annual basis, irrespective of whether there is an indication of impairment.

Development costs are recognised as intangible assets when the following criteria are met:• Itistechnicallyfeasibletocompletethesoftwareproductsothatitwillbeavailableforuse;• Managementintendstocompletethesoftwareproductanduseorsellit;• Thereisanabilitytouseorsellthesoftwareproduct;• Itcanbedemonstratedhowthesoftwareproductwillgenerateprobablefutureeconomicbenefits;• Adequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorsellthesoftwareproductare

available;and• Theexpenditureattributabletothesoftwareproductduringitsdevelopmentcanbereliablymeasured.

Useful Life Computer software 3 years




1. ACCOUNTING POLICIES (cont.)1.3 PROPERTY, PLANT AND EQUIPMENT All property, plant and equipment and capital work-in-progress is included at cost. Cost includes all costs directly attributable to bringing the assets to working condition for their intended use. Borrowing costs are capitalised in relation to plant requiring a substantial period of time for preparation for intended use. Buildings, infrastructure, plant, equipment and vehicles are depreciated on a straight line basis at rates that will reduce the historical costs to estimated residual values over the anticipated usefullivesoftheassets.Wherebuildingsareerectedonleaseholdlandorlandheldunderapermissiontooccupycertificatewithafinitelife,thebuildingsaredepreciatedoverthedurationoftheleaseorpermissiontooccupycertificate.

Property,plantandequipmentacquiredunderfinanceleasearrangementsarecapitalised.Suchassetsaredepreciatedonastraight line basis at rates considered appropriate to reduce capitalised cost to estimated residual value over the anticipated usefullivesoftheassets.Leasefinancechargesareamortisedoverthedurationofthefinanceleasesusingtheeffectiveinterestratemethod.Propertiessubjecttosaleandlease-backtransactions,wheretheleaseisclassifiedasafinanceleaseandthevalueof the property implicit in the lease is higher than the carrying value, the carrying value is not adjusted and no gain is recognised. The residual value of assets is the estimated amount that the entity would currently obtain from disposal of the asset, after deductingtheestimatedcostsofdisposal,iftheassetwerealreadyattheageandintheconditionexpectedattheendofitsuseful life. A review of residual value is performed at balance sheet date each year, as well as an adjustment, if appropriate. The assets useful lives are reviewed and adjusted if appropriate, at each balance sheet date. The anticipated useful lives of the assets are as follows:

Item Useful life Furnitureandfittings 10 years Officeequipment 5 yearsComputer equipment 3 yearsMachines 5 yearsLand Indefinite

1.4 INVENTORIES AND CONTRACTS IN PROGRESS Inventories are measured at the lower of cost or net realisable value. The cost of inventories is based on weighted average principle,andincludesexpenditureincurredinacquiring,convertingtheinventoriesandbringingthemtotheirpresentlocationand condition. In the case of manufactured or constructed inventories and work-in-progress, costs include an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary causeofbusiness,lesstheestimatedcompletioncostsandsellingexpenses.

1.5 GOVERNMENT GRANTS Government grants are recognised when there is reasonable assurance that the entity has complied with the conditions attached to the grant and that the grant has been received.

Government grants whose primary condition is that the entity should purchase, construct or acquire non-current assets are deducted in arriving at the carrying amount of the assets.

Othergovernmentgrantsarerecognisedasincomeovertheperiodsnecessarytomatchthemwiththecostsforwhichtheyareintendedtocompensate,onasystematicbasis.Governmentgrantsthatarereceivableascompensationforexpensesorlossesalreadyincurredorforthepurposesofgivingimmediatefinancialsupporttotheentitywithnofuturerelatedcostarerecognisedinprofitorlossintheperiodinwhichtheyarereceived.

Governmentgrantsreceivedforspecificloansandadvancesprogrammesarerecognisedasincomewhenalltheconditionsofthegranthavebeenfulfilledandthereisreasonableassurancethatthegrantwillbereceived.




1. ACCOUNTING POLICIES (cont.)1.6 OPERATING LEASE Assets leasedbytheCompanyunderwhichall therisksandbenefitsofownershipareeffectivelyretainedbythe lessorareclassifiedasoperatingleases.Rentalspayableundertheoperatingleasesarechargedtoprofitorlossonastraightlinebasisover the term of the lease.

1.7 DEFERRED TAX AND CURRENT TAX Deferredtaxisprovided,usingtheliabilitymethod,foralltemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.Deferredtaxassetsandliabilitiesshallbemeasuredatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.Deferredtaxassetsarerecognisedtotheextentthatitisprobablethattaxablebenefitswillbeavailableagainstwhichdeductibletemporarydifferencescanbeutilised.

Currenttaxforcurrentandpriorperiodsis,totheextentunpaid,recognisedasaliability.Iftheamountalreadypaidinrespectofcurrentandpriorperiodsexceedstheamountdueforthoseperiods,theexcessisrecognisedasanasset.Currenttaxliabilities/(assets)forthecurrentandpriorperiodsaremeasuredattheamountexpectedtobepaidto/(recoveredfrom)thetaxauthorities,usingthetaxrates(andtaxlaws)thathavebeenenacted,orsubstantivelyenacted,bytheendofthereportingperiod.

1.8 PROVISIONS AND CONTINGENT LIABILITIES A provision is recognised if, as a result of a past event, the entity has a present legal or constructive obligation that can be estimatedreliablyanditisprobablethatanoutflowofeconomicbenefitswillberequiredtosettletheobligation.

Aprovision foranonerouscontract is recognisedbytheentitywhentheexpectedbenefits tobederivedbytheentity fromacontract are lower than the unavoidable cost of meeting its obligation under the contract. An onerous contract is a contract in which theunavoidablecostsofmeetingtheobligationsunderthecontractexceedtheeconomicbenefitsexpectedtobereceivedunderit.

Contingentliabilities,whichincludecertainguaranteesotherthanfinancialguarantees,arepossibleobligationsthatarisefrompasteventswhoseexistencewillbeconfirmedonlybytheoccurrence,ornon-occurrence,ofoneormoreuncertainfutureevents;notwhollywithintheentity’scontrol.Contingentliabilitiesarenotrecognisedinthefinancialstatementsbutaredisclosedinthenotestothefinancialstatementsunlesstheyareremote.

1.9 REVENUENet Interest Income Interestincomeandexpensesarerecognisedinprofitorlossonanaccrualbasis,withreferencetotheprincipaloutstandingusingtheeffectiveinterestratemethod.

Theeffectiveinterestratemethodisamethodofcalculatingtheamortisedcostofafinancialassetorfinancialliabilityandofallocatingthe interest incomeor interestexpenseover therelevantperiod.Theeffective interest rate is therate thatexactlydiscountstheestimatedfuturecashreceiptsthroughtheexpectedlifeofthefinancialinstrument.

In termsof IAS39, interest isaccrued in respectof impairedadvancesbasedon theoriginaleffective interest rateused todetermine the recoverable amount.

1.10 FINANCIAL INSTRUMENTSNon derivative financial instrumentNon-derivativefinancialinstrumentscompriseinvestmentsinequityanddebtsecurities,tradeandotherreceivables,cashandcash equivalents, loans and advances, borrowings and deposits.

Non-derivativefinancialinstrumentsarerecognisedinitiallyatfairvalueplusforinstrumentsnotatfairvalue,throughprofitandloss,anydirectlyattributable transactioncosts,exceptasdescribedbelow.Subsequent to initial recognition,non-derivativefinancialinstrumentsaremeasuredasdescribedbelow.

Afinancialinstrumentisrecognisediftheentitybecomespartytothecontractualprovisionsoftheinstrument.Financialassetsarederecognisediftheentity’scontractualrighttothecashflowsfromthefinancialassetsexpiresoriftheentitytransfersthefinancialassettoanotherpartywithoutretainingcontrolorsubstantiallyallrisksandrewardsoftheasset.Financialliabilitiesarederecognisediftheentity’sobligationsspecifiedinthecontractexpireoraredischargedorcancelled.




1. ACCOUNTING POLICIES (cont.)1.10 FINANCIAL INSTRUMENTS (cont.)Financial Asset Financial Assets at Fair Value Through Profit or Loss An instrument is recognisedat fairvalue throughprofitand loss if it isheld for tradingor isdesignatedassuchupon initialrecognition.Financialinstrumentsaredesignatedatfairvaluethroughprofitandlossiftheentitymanagessuchinvestmentsandmakespurchasesandsaledecisionsbasedontheirfairvalues.Financialinstrumentsatfairvaluethroughprofitorlossaremeasuredatfairvalue,andchangesinvaluearerecognisedinprofitor loss.Thefairvalueofpubliclytradedinvestmentsisbased on quoted bid prices.

Loans and Receivables Loansandadvancesarenon-derivativefinancialassetswithfixedordeterminablepayments,areinitiallymeasuredatfairvalueplusoriginationtransactioncostsandsubsequentlyaccountedforatamortisedcostusingtheeffectiveinterestratemethod,less any impairment losses.

Tradeandotherreceivablesthathavefixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasloansandreceivables.Loansandotherreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod,lessanyimpairment charges.

Cash and Cash Equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, net of bank overdrafts.

Other Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less anyimpairment losses.

Impairment of Financial Asset Loansandadvancesarestatedafterthedeductionofprovisionsforcreditimpairment.Loansandadvancesarereviewedateachbalancesheetdatetodeterminewhetherthereisobjectiveevidenceofimpairment.Loansandadvancesareimpairedandimpairment losses are incurred if there is objective evidence of impairment, resulting from one or more loss events that occurred after initial recognition, that indicates it is probable the entity will be unable to realise all amounts due. The carrying amount of afinancialassetidentifiedasimpairedisreducedtoitsestimatedrecoverableamount.Theestimatedrecoverableamountoftheadvanceiscalculatedasthepresentvalueofexpectedfuturecashflowsdiscountedattheoriginaleffectiveinterestrateatinception of the advance.

Inestimatingtheexpectedfuturecashflowsfromtherealisationof‘permissiontooccupy’securities,pastexperienceinrealisingthistypeofsecurityhasbeentakenintoaccount.Subsequenttoimpairment,theeffectsofdiscountingunwindovertime,basedontheoriginaleffectiveinterestrate.

The impairment of non-performing loans and advances is based on periodic evaluations of loans and advances and take account ofpastlossexperienceandtheeconomicclimateinwhichtheborrowersoperate.Impairmentofperformingloansandadvancesisaccountedforifthereisobservableevidencethatalosseventhasoccurredaftertheinitialrecognitionofthefinancialasset.Inordertoprovideforlatentlossesinaportfolioofloansandadvancesthathavenotyetbeenindividuallyidentifiedasimpaired,a credit impairment for incurred but not reported losses is created based on historic loss patterns and estimated emergence periods.Thisimpairmentisreferredtoasunidentifiedimpairment.

Onceallreasonableattemptshavebeenmadeatcollectionandthereisnorealisticprospectofrecoveringoutstandingamounts,anadvanceiswrittenoffagainsttherelatedimpairment.Loansandadvancesimpairmentsandanysubsequentreversalsthereoforrecoveriesofamountspreviouslywrittenoffareeitherchargedorcreditedtotheincomestatement.

Non-current Assets Held for Sale Non-current assets (or properties in possession) are classified as assets held for salewhen their carrying amount is to berecovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.




1. ACCOUNTING POLICIES (cont.)1.10 FINANCIAL INSTRUMENTS (cont.)Derecognition of Financial Assets Theentityderecognisesafinancialassetonlywhenthecontractualrightstothecashflowsfromtheassetexpire;orittransfersthefinancialassetandsubstantiallyalltherisksandrewardsofownershipoftheassettoanotherentity.IftheCompanyneithertransfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the company retainssubstantiallyalltherisksandrewardsofownershipofatransferredfinancialasset,theCompanycontinuestorecognisethefinancialassetandalsorecognisesacollateralisedborrowingfortheproceedsreceived.

1.11 Irregular, Fruitless and Wasteful ExpenditureIrregular, fruitless and wasteful expenditure means expenditure incurred in contravention of or not in accordance with arequirement of any applicable legislation, including PFMA and any provincial legislation providing for procurement procedures in that Provincial Government.

This is expenditure thatwould have been avoided had reasonable care been exercised. All irregular, fruitless andwastefulexpenditureischargedagainstincomeintheperiodinwhichitisincurredandwhererecovered,itissubsequentlyaccountedforasrevenueinthestatementoffinancialperformance.

1.12 Subsequent EventsTheentityaccountsforsubsequenteventsintermsofIAS10.Thekeyissuesrecognisedanddisclosedinclude:Eventsafterreporting period: Noting events favourable or unfavourable that occur between the end of the reporting period and the date that thefinancialstatementsareauthorisedforissue.

Adjusting Event Eventsafterthereportingperiodthatprovidefurtherevidenceofconditionsthatexistedattheendofthereportingperiodwhichcanimpactonthegoingconcernoftheentity.TheseeventswillrequireanadjustmenttotheAnnualFinancialStatements.

Non-adjusting Events Eventsafterthereportingperiodthatareindicativeofaconditionthataroseaftertheendofthereportingperiodbutforwhichno adjustment is necessary.

1.13 NEW STANDARDS AND INTERPRETATION ADOPTED

Standard/Interpretation Date issued by IASB

Effective Date

Periods Beginning On or After

IAS19 DefinedBenefitPlans:Employeecontributions Nov 2013 1Jul2014

Amendments to 6 standards

ImprovementstoIFRSs2010-2012Cycle Dec 2013 1Jul2014

Amendmentsto4standards

ImprovementstoIFRSs2011-2013Cycle Dec 2013 1Jul2014

IFRS9(2009) Financial instruments Nov 2009 To be decided

IFRS9(2010) Financial instruments Oct2010 To be decided




2. PROPERTY, PLANT AND EQUIPMENTTotal Motor

VehiclesFurniture &

FittingsOffice

Equipment Machines Land Computer

EquipmentWork-in

-ProgressR R R R R R R R

2016Carrying amount at beginning of year 6 270 - 6 270 - - - - -

Cost 410209988 - 2 112 018 347971 - - 2 366 166 405383833Grant applied (410197650) (2099680) (347971) (2366166) (405383833)Accumulated depreciation (6068) - (6068) - - - - -

Current year additions 101911634 549538 12 000 66 938 145000 59240000 525 977 41372181Grants applied (101911635) (549538) (12000) (66938) (145000) (59240000) (525977) (41372181)Depreciation for the year (1590) - (1590) - - - - -

- - -

Cost 512 121 623 549538 2124018 414909 145000 59240000 2892143 446756014Grant applied (512109285) (549538) (2111680) (414909) (145000) (59240000) (2892143) (446756014)Accumulated depreciation (7658) - (7658) - - - - -

Carrying amount at end of year 2016 4 680 - 4 680 - - - - -

2015Carrying amount at beginning of year 233948406 - 7 860 - - - - -

Cost 233952884 - 1345254 323486 - - 1985504 230298640(1332916) (323486) (1985504) (230298640)

Accumulated depreciation (4478) - (4478) - - - - -

Current year additions 176 257 105 - 766 765 24485 - - 380 662 175 085 193 Grants applied (176257105) - (766765) (24485) - - (380662) (175085193)Depreciation for the year (1590) - (1590) - -

Cost 410209988 - 2 112 018 347971 - - 2 366 166 405383833Grant applied (410197650) (2099680) (347971) (2366166) (405383833)Accumulated depreciation (6068) - (6068) - - - - -

Carrying amount at end of year 2015 6 270 - 6 270 - - - - -




2016 2015

R R

3. INTANGIBLE ASSETS (SOFTWARE)Openingcarryingamount -

Cost - -

Grant applied

Accumulated depreciation - -

Additions 109 651

Grant applied (109651)

Cost 109 651 -

Grant applied (109651)

Accumulated depreciation - -

Closing carrying amount - -

NB: Software purchased in 2014/2015 were reported as part of Property, Plant and Equipment in Note 2.

4. DEPOSITSLandtransferdeposit 66146164 -

TuziGaziproperties–Occupationofofficebuildings 175 816 175 816

CityofUmhlatuze–Electricity 25 300 25 300

66 347 281 201 116

5. ACCOUNTS RECEIVABLEEmployeedebtors 168946 40400

Otherreceivables 2 767 259 59 698 125

2 936 205 59 738 525

Ageing of past due but not impaired

30 to 60 days 2 639 296 316 586

60 to 90 days - -

90 to 120 days - -

>120 days 296 909 59421939

2 936 205 59 738 525




2016 2015 R R

6. CASH AND CASH EQUIVALENTSCash and cash equivalents consists of:Absa current account 3707724 1 161 618 Absa call account 95 296 21417307Absa liquidity plus 27701646Petty cash 948 2040DTI grant account 145034718 48482856Landpurchaseaccount 83 283 688 18 871 876 First National Bank call accounts 135 769 686 81389534Investec call accounts 130141088 96882046Nedbank call account - 76 781 380 Absa DTI-Nyanza call account 12345264 8 550 000

538 080 059 353 538 656

7. DEFERRED TAXATIONDeferredtaxationliability/(asset)comprises:

- Depreciation (535273) (318993)- Accumulated loss (110567) (110567)- Provision for bonuses 146780 629 228 - Provision for leave pay 78 963 78 963 - Rental smoothing 32422 (5500)

(387 674) 273 132 Deferredtaxationreconciliation:Balance at beginning of the year 273 132 (114937)

Movements during the yearAdjustment - Depreciation (216280) (234700)- Provision for bonuses (482448) 629 228 - Rental smoothing 37 922 (6459)- Balance at end of the year (387 674) 273 132

8. SHARE CAPITALAuthorised share capital1 000 ordinary shares of R1 each 1 000 1 000

Issued share capital1 000 ordinary shares issued @ R1 par value1000ProvinceofKwaZulu-NatalrepresentedbyitsDepartmentofEconomicDevelopment,TourismandEnvironmentalAffairs.

9. SHARE PREMIUM 151 200 000 151 200 000

Funds held to acquire assets in respect of shareholding 151 200 000 151 200 000




2016 2015

R R

10. DEFERRED INCOME*Openingbalance 255873524 347572376

Government grants received during the year 312 058 720 111 377 193

Governmentgrantsreceivedduringtheyear–NyanzaLightMetals 8 550 000 -

Interest received on DTIgrant(Capitalgrant) 9234852 13 300 869

Interest received on DTIgrant(NyanzaLightmetals) 444706 -

Grantsappliedagainstoperatingexpenditure (36298115) (40119808)

Grantsappliedagainstoperatingexpenditure(NyanzaLightMetals) (5740942) -

Grantsappliedagainstfixedassetsotherthanwork-in-progress (60539453) (1171912)

Grant applied intangible assets (109651)

Grants applied against work-in-progress (41372181) (175085193)

Adjustments from prior year 856 537 -

442 957 996 255 873 524

*TheCompanyreceivesconditionalgrantsfromEDTEAandthedti.

11. ACCOUNTS PAYABLECreditors rent straight line 12 372 147808

Provisions 9 562 580 10 570 569

Accounts payable 3 005 890 9745414

12 580 842 20 463 790

11.1 DEPOSITS PAYABLE 34240 5 000

12. VAT (PAYABLE)/RECEIVABLESouthAfricanRevenueServices (704 714) 13 948 182

13. GROSS REVENUE 37 641 702 40 505 747

Gross revenue comprises GovernmentgrantsrecognisedasincomeaftertakingVATintoaccount,tenderfeeincome,refundfromSETAandleaseincome

14. LOSS FROM OPERATIONSLossfromoperationsisstatedaftertakingthefollowingintoaccount:

Auditors’ remuneration 193 386 174967

-forservicesasauditors(bothinternalandexternal)

Depreciation–Furnitureandfittings 1 590 1 590

Directors fees 1 608 666 1 972 111

Staffcosts 22945431 24170245

Legalfees 77 219 418785

Leasepayment 7 120 75 312




2016 2015

R R

15. TAXATIONSANormaltaxcomprises:

- Taxationfortheyear

- Currenttax - -

- Deferredtax (660806) 388 069

(660 806) 388 069

Reconciled as follows:

Standardtaxrate 28% 28%

Taxationonprofitfortheyearatthestandardrate

Taxeffectonpermanentdifferences (660806) 388 069

(660 806) 388 069

Effectivetaxrate 28% 28%

Noprovisionforcurrenttaxationhasbeenmadeasthecompanyhasanestimated taxlossavailableforreductionoffuturetaxableincomeof:

- -

16. NOTES TO THE STATEMENT OF CASH FLOWS16.1 Cash Generated from OperationsSurplus/(Deficit)beforetaxation - -

Adjustment for:

Depreciation 1 590 1 590

Finance income (15555840) (10239698)

Operatingincomebeforeworkingcapitalchanges (15554250) (10238108)

Working capital changes 63 572 266 (15945562)

Decrease/(increase)inaccountsreceivable 56 802 320 (847994)

Increase/(decrease)inVATpayable 704714 (9490523)

Decrease/(increase)inVATreceivable 13948182 (13948182)

(Decrease)/increaseinaccountspayable (7882950) 8341137

Cashgenerated/(utilised)inoperations: 48018017 (26183670)

17. FINANCE INCOMEFinance income comprises interest received on short-term funds deposits with various banks as per Company’s investment policy.

Interest earned 15 555 840 10 239 698




18. RELATED PARTIESThe Company in the normal course of business entered into various related party transactions with its stakeholders. These transactions occurred under terms and conditions that are no more favourable to those entered into with third parties in arm’s length transactions.

2016 2015

Thefollowingaredefinedasrelatedpartytransactions: R R

Balance sheet items:

-Transfers(KZNDepartmentofEconomicDevelopment,TourismandEnvironmentalAffairs)

185 321 930 59798246

-Transfers(DepartmentofTradeandIndustry) 126 736 790 51578947

Income statement items:

- Directors’ fees 1 608 666 1 972 111

- -

KEY PERSONNEL REMUNERATION – EXECUTIVE MANAGEMENTExecutive Management as at 31 March 2016

Salary Performance Bonuses

Allowance Leave Other* Total

Mr P Motsoahae (ChiefExecutiveOfficer)

2483580 364608 - - 116 110 2964298

Mr M Khuzwayo (joined 1 July 2015)

954000 156 350 21084 - 38 910 1170344

MrSNgcamu (resigned 29 February 2016)

1 150 678 166 858 24200 142396 67 781 1 551 913

Mrs G Zwane (joined 1 November 2015)

514200 60 676 6 000 - 4348 585224

Mr J Muller 1244361 183847 14400 - 21462 1464070

Mr K Harvey #1164227 133412 - - - 1 297 639

Ms Zeka (resigned 31 July 2015)

388 076 - 4800 94019 10477 497372

7 899 121 1 065 751 70 484 236 415 259 088 9 530 859

*Otherincludesreimbursementcostsforexpensesincurredwhileonbusinesstripinordertoexecuteassignedduties.#IncludesanactingallowanceofR319170foractingastheExecutiveManager:CorporateServices.




18. RELATED PARTIES (cont.)KEY PERSONNEL REMUNERATION – EXECUTIVE MANAGEMENT (cont.)Executive Management as at 31 March 2015

Salary Performance Bonuses

Allowance Leave Other* Total

Mr P Motsoahae (ChiefExecutiveOfficer)

2350547 295 393 - 85 689 2 731 630

Mr M Nkopane (resigned 28 February 2015)

1 200 360 151349 12 000 - 37 180 1400890

MrSNgcamu 1 328 509 151349 14400 - 48436 1542694

Mrs N Zulu (contract ended 31 March 2015)

1341344 151349 14400 123 368 12 207 1642668

Mr J Muller 1341426 151349 14400 - 28254 1535430

Ms Zeka 1274450 151349 14400 - 17 291 1457490

8 836 638 1 052 141 69 600 123 368 229 057 10 310 803

*Otherincludesreimbursementcostsforexpensesincurredwhileonbusinesstripinordertoexecuteassignedduties.

KEY PERSONNEL REMUNERATION – DIRECTORS2016 2015

R R

MsBKunene(resigned23November2015) 118 683 415675

MrMClark(Chairperson) 438430 396 235

MsTEboka 91 805 138 938

Mr Z Fihlani 124505 235 307

Mr A Mahlalutye 131 537 58 971

MrSMakhanya 103234 133 606

MrEMbatha 137 793 174878

Mr K Naidoo** - -

Ms J Ndlovu 216 989 191048

Ms M Ndlovu 237248 147902

MsNSithole* 8442 79 553

1 608 665 1 972 111

* Board fees are paid to the third party.

**NoremunerationpaidastheyareseniorgovernmentofficialsrepresentingtheDepartmentofEconomicDevelopment,TourismandEnvironmentalAffairsandthedti.




2016 2015

R R

19. COMMITMENTSOperational commitments*

Current - 1 890 087

Next12months 163413 5 567 323

From 2-5 years - 200514

Laterthan5years - -

Totalfuturecashflows 163413 5 767 837

Capital commitments **

Current - 175 085 193

Next12months 159476747 60417110

From 2-5 years - 7 199 368

Laterthan5years - -

Total commitments 159 640 159 250 359 595

* Officebuildinghelpunderoperatingleasefor3-yearwitheffectfrom1May2013

** Capital commitments relates to capital infrastructure projects already awarded as at 31 March 2016

20. IRREGULAR EXPENDITURE, WASTEFUL AND UNAUTHORISED EXPENDITURE20.1. Irregular ExpenditureOpeningbalance - -

Add:Irregularexpenditure–currentyear - -

Less:amountcondoned - -

- -

Lessamountsrecoverable(notcondoned) - -

Lessamountsnotrecoverable(notcondoned) - -

Irregular expenditure awaiting for condonation - -

Details of irregular Expenditure – Current year

Incident

Non-compliance with supply chain management policy (Condoned by condoning authority – Accounting Authority)

- -

- -

Non-compliance with subsistence and travel policy (Condoned by condoning authority – Accounting Authority)

- -

Total - -




2016 2015

R R

20. IRREGULAR EXPENDITURE, WASTEFUL AND UNAUTHORISED EXPENDITURE (cont.)

20.2. Wasteful ExpenditureOpeningbalance - -

Add:Wastefulexpenditure–currentyear 180 109 -

Less:amountcondoned (180109) -

- -



Wasteful expenditure awaiting for condonation - -

Details of Wasteful Expenditure – current year

Incident

None - -

Non compliance with supply chain management policy (Condoned by condoning authority – Accounting Authority)

- -

- -

Non compliance with payment terms (Condoned by condoning authority – Accounting Authority)

180 109 -

Total 180 109 -

20.3. Unauthorised ExpenditureOpeningbalance - -

Add:Unauthorisedexpenditure–currentyear - -

Less:amountcondoned - -

- -



Unauthorised expenditure awaiting for condonation - -

Details of unauthorised expenditure – Current year

Incident

None - -

- -

- -

- -

Total - -




2016 2015

R R

21. FINANCIAL INSTRUMENTSTheCompany’sexposureto interestrateriskonfinancial instrumentatthebalancesheet date are as follows:

Total financial assets

Trade and other receivable 2 936 205 59 738 525

Cash and cash equivalents 538 080 059 353 538 656

541 016 265 413 277 181

Total financial liabilities

Trade and other payables 12 580 842 20 463 790

Credit RiskTheCompanydoesnothaveahugedebtorsbook,asa result, itsexposure tocredit risk isminimal.ThecashandcashequivalentsaredepositsthatareplacedwithA1ratingfinancialinstitutions.TheCompanylimitsitsexposurebydealingwithwell-establishedfinancialinstitutions.TheCompanydoesnothavesignificantexposuretoanindividualdebtororcounter-party.

Liquidity RiskTheCompanyexposuretoliquidityriskisveryminimalasitis100%fundedbytheDEDTEAaswellastheDTI.Theannualbudgetsareapprovedatthebeginningofeachfiscalyearandfundingagreementsconcludedbetweentheparties.Cashflowsaremonitoredmonthlyagainstbudgetsandadjustmentsaremadewherenecessary.Riskmanagementassessmentsareconductedtoassistwith identifyinganypossiblecashflow, liquidityorotherrisks. Inaddition,theentity isexploringopportunities for raising income to ensure the sustainability of the organisation in case the grant is reduced or cut back.

Interest Rate RiskAlthoughtheCompany’sfundsaresubjecttointerestraterisk,thesefundsareplacedwithreputablefinancialinstitutions.Theentitydoesnothedgeanyof its fundsbutmonitors thefluctuations in interest ratesandobtainsadvice frombankofficialsonaregularbasis.

22. PROVISIONS22.1 Leave Pay AccruedOpeningbalance 1117644 711 107

Movement during the year (187133) 406536

Closing balance 930 510 1 117 644

Leavepayisdeterminedusinghistoricaldatabasedonthepastservicesofferedbytheemployees.LeavepayisaccruedasrequiredbyIAS19.

22.2 Provision for BonusesOpeningbalance 3 738 850 1491607

Performance bonuses paid (1723028) (1546521)

Performance bonuses 947716 3 793 765

2 963 538 3 738 850

The Company remunerates employees on performance as per Company policy.




2016 2015

R R

22. PROVISIONS22.3 Other Provisions

-Litigationclaims 5 486 757 5 486 757

23. CONTINGENT LIABILITIES23.1.AformeremployeefiledareviewapplicationwiththeLabourCourtcontestinghisdismissal.ThematterisstilltobeconsideredbytheCourt.GiventhesuccessintheCCMA,theCompanyisoptimisticofsuccessintheLabourCourt.

23.2.AnuncertainamountshallbepayabletoShepstone&Wylieinthefuture,beingtheconvayencersfeesforthetransferofPhase1F(landpurchasedfromtheCityofuMhlatuze).

23.3.ThePlaintiffclaimedthataformeremployeeoftheCompany,orallyagreed,onbehalfoftheCompany,topurchaseits portion of land for use as part of the RBIDZ and are claiming damages for loss of selling price and lost commission, the amountinquestionisR727000000.ThematterwassuccessfullydefendedonMay2014.




detAiled stAtement oF compRehensive incomeFoR The yeAR enDeD 31 MARCh 2016

2016 2015R R

Grant applied 36 298 115 40 119 808

Otherincome 1 343 587 385 939

Leaseincome 711 073 222425Management fee 199 068 - Tender fees 255254 152 018 Bursary recovery 125 998 - Otherincome 52194 11496

Expenditure 53 017 434 50 745 445 Advertising and promotion 2 559 126 1 837 131 Agents commission 72254 18497Audit fees 193 386 174967Assetwrittenoff - - Bank charges 39 566 24481Bursaries 92 255 138 622 Cleaning services 46523 29947Corporate social investment 86 780 87403Depreciation 1 590 1 590 Directors’ fees 1 608 666 1 972 111 Electricityandwater 4676237 2003254Employeewell-being 10 906 - Insurance 201 771 185 331 IT accessories 58484 3 651 Leasecharges 7 120 75 312 Legalfees 77 219 418785Maintenance 1 119 170 621742Marketing materials 205 113 25460Postage, printing and stationery 462714 279 962 Professional services 6 727 229 6 722 769 Propertyratesandtaxes 3 810 531 5 335 815 Refreshments 179 062 376 361 Recruitment and transfers 652 088 399 225 Rentalexpenses 2 198 675 1814776Employeecost 22945431 24170245Securityservices 882 091 664792SMMEdevelopment 88 123 36 570 Subscriptionsandlicensing 648571 526644Telephoneandfax 349026 382 517 Training 363 266 518 866 Venuehireandexhibitions 206449 15 570 Travel and accommodation 2448014 1883048

(Loss) before finance expense (15375731) (10239698)

Finance expense 180 109 -

(Loss) before finance income (15555840) (10239698)

Finance income 15555840 10 239 698

Surplus/(deficit) for the year - -



98

list oF AbbReviAtions/AcRonyms

AGSA AuditorGeneralofSouthAfrica

BBBEE BroadBasedBlackEconomicEmpowerment

BRICS Brazil,Russia,India,ChinaandSouthAfrica

BWO Black Women-owned

BYOE BlackYouth-ownedEnterprises

CEO ChiefExecutiveOfficer

CFO ChiefFinancialOfficer

CPG Contract Participation Goals

DRP Disaster Recovery Plan

DTI Department of Trade and Industry

ECOWAS EconomicCommunityofWestAfricaStates

EME ExemptedMicroEnterprises

FV FairValue

ICT Information and Communication Technology

KZNEDTEAKZNDepartmentofEconomicDevelopment,TourismandEnvironmentalAffairs

MEC MemberofExecutiveCouncil

MTEF MediumTermExpenditureFramework

MUT MangosuthuUniversityofTechnology

NAZIDI NaweZifunzeDisabilityOrganisation

PFMA Public Finance Management Act

QSE QualifyingSmallEnterprises

RFP Request for Proposal

SABS SouthAfricanBureauofStandards

SADC SouthernAfricanDevelopmentCommunity

SCM SupplyChainManagement

SMME SmallMediumandMicroEnterprises

TIKZN Trade and Investment KwaZulu-Natal

TR Treasury Regulations


PR252/2016 ISBN:978-0-621-44785-9

Richards Bay Industrial Development Zone Company SOC Ltd Captains Walk Building, Tuzi Gazi Waterfront

Pioneer Road, Richards BayPrivate Bag X 1005Richards Bay, 3900

Tel: +27 35 788 0571Fax:+27357880578Email:[email protected]

www.rbidz.co.za

Documents

AnnuAl RepoRt - Provincial Government of South Africa RepoRt 2015-2016 II RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE ANNA RPRT 2015-2016 GATEWAY TO WORLD MARKETS About the RichARds bAy