ENGINEERING COUNCILO FS OUTH AFRICA Reports/ECSA_Annual_Report_2… · NC National Certificate NHBRC National Home Builders Registration Council NIP National Infrastructure Plan

Intergrated Annual Report

2016/2017

ENGINEERING COUNCIL OF SOUTH AFRICA

1st Floor, Waterview Corner Building, 2 Ernest Oppenheimer Avenue, Bruma, 2198

Private Bag X691, Bruma, Johannesburg, 2026

+27 (0)11 607 9500 | +27 (0) 11 622 9295

[email protected] | www.ecsa.co.za

@ECSAOfficial Engineering Council of South Africa-ECSA ECSAGroupNews


EN

GIN

EE

RIN

GC

OU

NC

ILO

FS

OU

TH

AF

RIC

AA

NN

UA

LR

EP

OR

T2016/2

017

3

The Engineering Council of South AfricaAnnual report for the year ended 31 March 2017

Contents

IMPORTANTContent is extracted from full Annual Report and indexing may vary.

Part AGeneral Information .......................................................................................................5 ECSA General Information ......................................................................................................................6

ListofAbbreviations/Acronyms ...............................................................................................................7

ForewordbythePresident ......................................................................................................................9

ChiefExecutiveOfficer’sOverview ....................................................................................................... 11

ECSA‘sImpactOverview ......................................................................................................................13

OrganisationalExecutiveStructure .......................................................................................................15

GovernanceStructure ...........................................................................................................................16

CommitteeStructures ............................................................................................................................17

Part BPerformance Information .............................................................................................20

SituationalAnalysis.....................................................................................................................................20

StrategicOutcomeOrientedGoals.............................................................................................................22

PerformanceInformationbyProgramme ...................................................................................................24

Part CGovernance ...................................................................................................................32

RiskManagement.......................................................................................................................................32

Part FFinancial Information ...................................................................................................35

4


Part A

General Information

6 ECSA Annual Report 2017 | General Information


REGISTEREDNAME: EngineeringCouncilofSouthAfrica REGISTRATIONNUMBER(ifapplicable): N/A PHYSICALADDRESS: 1stFloorWaterviewCornerBuilding 2ErnestOppenheimerAvenue Bruma 2198 POSTALADDRESS: PrivateBagX691 Bruma Johannesburg 2026 TELEPHONENUMBER: +27116079500 FAXNUMBER: +27116229295 EMAILADDRESS: [email protected] WEBSITEADDRESS: www.ecsa.co.za EXTERNALAUDITORS: PricewaterhouseCoopersInc. 2EglinRoad Sunninghill 2157 www.pwc.com/za BANKERS: StandardBank East Gate Bedfordview COMPANY/BOARDSECRETARY None,AdministrationDepartmentperforms someofthesecretarialduties

1. ECSA General Information

7General Information | ECSA Annual Report 2017


2. List of Abbreviations/AcronymsAEW AfricaEngineeringWeekAoPI AuditofperformanceinformationARC Audit,RiskandComplianceCommitteeBE BuiltEnvironmentCPUT CapePeninsulaUniversityofTechnologyCBE CouncilfortheBuiltEnvironmentCC Competition CommissionCEO ChiefExecutiveOfficerCERTAC CertificatedEngineerAccreditationCommitteeCESA ConsultingEngineersSouthAfricaCHE CouncilonHigherEducationCIDB ConstructionIndustryDevelopmentBoardCIM Communication,InformationandMarketingCOP CodeofPracticeCPD ContinuingProfessionalDevelopmentCPUT CapePeninsulaUniversityofTechnologyCRC CentralRegistrationCommitteeCUT CentralUniversityofTechnologyDEA DepartmentofEnvironmentalAffairsDHET DepartmentofHigherEducationandTrainingDME DepartmentofMineralsandEnergyDoL DepartmentofLabourDPW DepartmentofPublicWorksDST DepartmentofScienceandTechnologyDUT DurbanUniversityofTechnologyEC EducationCommitteeECN EngineeringCouncilofNamibiaECSA EngineeringCouncilofSouthAfricaECZ EngineeringCouncilZimbabweELOs ExitLevelOutcomesEMF EngineersMobilityForumEP EngineeringProfessionEPA EngineeringProfessionAct,2000(ActNo46of2000)EPAC EngineeringProgrammeAccreditationCommitteeEPQEC EngineeringProgrammeQualificationsandExaminationsCommitteeESA EmployerSurplusAccountESGB EngineeringStandardsGeneratingBodyETMF EngineeringTechnologists’MobilityForumEXCO ExecutiveCommitteeF&S FinanceandStaffCommitteeGGI GillianGamsyInternationalGRAP SouthAfricanStandardsofGenerallyRecognisedAccountingPracticeGSSA GeologicalSocietyofSouthAfricaHEQC HigherEducationQualificationCouncilHEQF HigherEducationQualificationsFrameworkHESA HigherEducationSouthAfricaHR HumanResourcesHIC HighImpactCommitteeIAC InternationalAffairsCommitteeIC InvestigatingCommittee



ICE InstitutionofCivilEngineersIDOEW IdentificationofEngineeringWorkIFEES InternationalFederationofEngineeringEducationSocietiesIFRS InternationalFinancialReportingStandardsIMESA InstituteofMunicipalEngineeringofSouthernAfricaIMSSA InstituteofMineandSurveyorsofSouthAfricaIT InformationTechnologyJIC Joint Implementation CommitteeLMI LiftingMachineryInspectorsregistrationcommitteeMoU MemorandumofUnderstandingMUT MangosuthuUniversityofTechnologyNATED NationalTechnicalEducationNDP NationalDevelopmentPlanNBS NationalBeneficiationStrategyNC NationalCertificateNHBRC NationalHomeBuildersRegistrationCouncilNIP NationalInfrastructurePlanNQF NationalQualificationsFrameworkNRCS NationalRegulatorforCompulsorySpecificationsNRS NewRegistrationSystemsPAC ProfessionalAdvisoryCommitteePDSG PolicyDevelopmentandStandardGenerationPICC PresidentialInfrastructureCoordinatingCommissionPLATO SouthAfricanCouncilforProfessionalandTechnicalSurveyorsQEC QualificationsEvaluationCommitteeSACNASP SouthAfricanCouncilforNaturalScientificProfessionSACPE SouthAfricanCouncilforProfessionalEngineersSAGI SouthAfricanGeomaticsInstituteSAICA SouthAfricanInstituteofCharteredAccountantsSAIMM SouthernAfricanInstituteforMiningandMetallurgySALGA SouthAfricanLocalGovernmentAssociationSAQA SouthAfricanQualificationsAuthoritySASEE SouthAfricanSocietyofEngineeringEducationSAYEP SouthAfricanYouthintoEngineeringProgrammeSCM SupplyChainManagementSEESA SocietyofEngineeringEducatorsSouthAfricaTECHNOSGG TechnologyStandardGeneratingGroupTPAC TechnologyProgrammeAccreditationCommitteeTPQEC TechnologyProgrammeQualificationsandExaminationsCommitteeTUT TshwaneUniversityofTechnologyUCT UniversityofCapeTownUK UnitedKingdomUKZN UniversityofKwaZuluNatalUNESCO UnitedNationsEducationScientificandCulturalOrganisationUP UniversityofPretoriaVA VoluntaryAssociationVC Vice-ChancellorWA WashingtonAccordWFEO WorldFederationofEngineeringOrganisationsWSU WalterSisuluUniversity

2. List of Abbreviations/Acronyms (cont.)



3. Foreword by the PresidentFirstly, let me take this opportunity to expressmy earnestappreciation to the 5th term ECSA Council membersfor entrusting me with the responsibility of leading thisorganisationforasecondterm.Itisalsomyhonourtopresentthe2016/2017annualreportoftheorganisationtoourvaluedmembersandengineeringstakeholders,arecordthatreflectstheultimatedefiningmomentsofECSA.

ThefinancialyearunderreviewhasseenECSAnavigatingthrough various policies in order to tighten operationaltargetsandtoensurethatECSAemergesasamoreresilientorganisation.Wehaverevisedourregistrationstructureandappointednewpeerreviewstructures,improvedgovernance,compliance and stakeholder management functions.Furthermore,weareallocatingtheappropriateresourcestoensurethatourcommunication,ITandbackupplatformsarerobust.Thiswillinturnenhancetheexperiencewedelivertoallregisteredpersons.

ThevoluntarynatureofprofessionalregistrationinSouthAfricahas posed unstable registration patterns.The deterioratingeconomicconditionsmeantthatlessengineeringpractitionerssawtheneedtoregister.

IagreedtoassumetheroleofPresidentfromSeptember2016duringtheinaugurationofthe5thtermECSACouncil.Myprimary taskswerehighlighted in themanifesto that I presentedat theCouncilLekhotlainNovember2016.Themanifestoisaguideofthevisionforthenextterm,lookingspecificallyatthereviewoftheentirelegislationandproposingamendmentsthatwillenableeffectiveandefficientregistrationtrends.

ECSA continued to strengthen stakeholder partnerships that will direct the organisation towards acohesiveandtransformedregulatoryregimewhichplacesthesafetyofourcommunitiesasapriority.TheactivitiesofECSAhowevercontinuedtofocusonprogrammestowardsinfluencingandfacilitatingconsultationswithengineeringpractitioners tomeet thechallengesof rehabilitating,developingandmaintainingregulationinfrastructurethatwillmeettheneedsofourlocalstakeholders,butstillbeabletoconformtointernationalstandards.

Strategicpartnerscontinue tosupportECSAand itsoperationalstructure.Thismeans thatECSA’smandate is supported by industry partners that share the same vision as the organisation. Newpartnershipagreementshavebeenconcludedandsomehavebeenrenewed.Amongstothers,onesuchstrategicpartner is theKwa-ZuluNatalDepartmentofTransportand theTransportEducationandTrainingAuthority. These partnerships begin to articulate the skills development challenge ofyounggraduateswhoarenotabletoregisterprofessionallyduetoalackofexperiential learning.Itisan initiative thatwill fosterstructuredmentorship that isquantifiable.Strideshavebeenmade topartnerwithorganisationssuchastheDepartmentofScienceandTechnologyinordertoadvancetheprogrammesofregulationandadvocacy,notonlywithinthecountrybutalsoatSADCregion.

Cyril Vuyani GamedeECSA President



Iwould like to acknowledge thework of the fourth termCouncilwho seamlessly handed over thereignstothenewCouncilinthelatterpartof2016.AlegacyreportthatdetailstheachievementsofthepreviousCouncilisavailable.WeinviteandencouragenewcontributionstoourvariousHighImpactCommittees inorder to improveeffectivenessandefficiency.Wealsocongratulate thosewhohavecontributedbeforeandencouragethemtocontinuewiththisselflessaction.

Lastly,Iwouldliketoapplaudtheentireoperationalteamforyourselflesscontributionstoourcountry’svisionandcreateabetterlifeforall.Thejourneyisstill longaswecontinuetocultivateacultureofengineeringexcellence.Weshallcontinuetostrengthenpartnershipswithregional,national,provincialandlocalgovernmentdepartmentsandagencieswhosecollectivecapacitymustbecoordinatedandmonitoredtoensureeffectiveinterventionsintheengineeringsectorwithinSouthernAfrica.

Yourstruly,

_____________________________Mr.CyrilVuyaniGamede,PrEngECSAPresident



4. Chief Executive Officer’s OverviewIt is once again an honour to present the2016/2017AnnualReport to all stakeholdersthat behold the statutory vision of theEngineering Council of South Africa. Thereport isanaccountofhowECSAcontinuesto deliver the enormous regulatory mandatethat still remains non-compulsory in termsofits legislative command.Also, the regulationof theengineering fraternitycontinues to risedespite the economy that is facing a globalslowdown,defyingthetidetodownscalesomeinfrastructure projects and amid the face ofrising unemployment for many engineeringgraduates. This is the story of a developingstatutory institution that continues to createprofessional knowledge and raise the barofcompetencystandards for theengineering fraternity toprosperwithinanunfavourableeconomicenvironment.

Havingservedat theEngineeringCouncilofSouthAfrica foralmost3yearsnow, it isnotable thatthefinancialyearunderreviewremainsasatruecatalystofchange;ayearinwhichwehavenotednumeroussuccessesthatwerefundamentalforthetransformationoftheCouncil.Theyearwillalsogointothehistoryofthisorganisationasonethatwascharacterizedbychallengeswhichhoweverdidnotsupersedetheseveraltriumphsthatensued.

In true resonance of an eventful and successful year, allow me to summarise the milestones of2016/2017thatweachievedasacollective:

There is a steady increase in registration figures, something encouraging despite the economicchallenges.Also,anotabledeclineintermsofregistrationcancellationshasbeenobserved.ThetaskoftheStrategicServicesunithasbeentodevisesolutionsthatwillretaintheseregisteredpersonsbywayofaddingvaluetotheirregistrationstatus.

TherestructuringofECSAcommitteeshasreducedthenumberfromatotalof44to8HighImpactCommittees (HICs) whose mandate is overseen by Council. The restructure has ensured that allfunctions are streamlined to the obligations of the organisation.Also, the cost saving benefit wasidentifiedandstillremainsaprimaryfactorforthisexercise.

InJuly2016,atotalof12nationalpublicconsultationroadshowstorepositionthefootprintofECSAweresuccessfullyhosted.Thekeyobjective for theroadshowswas thereviewprocessofECSA’sVoluntaryAssociationRecognition framework and theContinuingProfessionalDevelopment (CPD)frameworkwhichhavebeenapprovedbyCouncilforadoption.

The recentappointmentof thefifth-termECSACouncilby the formerMinisterofPublicWorks;Mr.Thulas Nxesi remains an eventful milestone to characterise this calendar’s appraisal. The newlyelectedCouncilstructure reflectsadiverseand improvedrepresentationofyoungandexperiencedengineeringprofessionals,balancedingenderandrace,personswhohaveservedthiscountrybothatprivateandpublicsectors.

Sipho MadonselaECSA CEO



TheprocesstorebuildECSA’soperational infrastructurehasseenthesetupofanintegratedonlineIT system, termed theCustomerRelationsManagement (CRM) system taking great shape duringthe latterpartof2016.Thisportalwillensurethe integrationandoptimumusageofouroperationalresourceswithindifferentdivisions.Itisthenatureofthissystemthatalltransactionswillberecordedforeachclientwhomakescontactwiththeoffice.Thesystemwillthereforeimprovetheefficiencyofclientserviceandenforcethecultureofaccountabilityforallstaffmemberswhodealwithclientsonadailybasis.

Therevampoftheofficespacetooptimisetheminimalworkingstationsisstillongoingandisalmostcomplete.Thiswillensureefficiencywhenservingclientsandwhenconductingdailyresponsibilities.There isa steady increase in termsofECSA’s staffcomplement to fill thekeypositionswithin thedifferentunitswhichhasadirectimpactonthedeliveryoftheoverallbusinessstrategy.

Ifwearetoauthenticallymeasureoursuccesses,Iwouldimaginethatitisprudenttoalsomentionthattherewereafewstrategiclet-downsthattookplaceduringthisfinancialyear.

ECSA’sexemptionapplicationtotheCompetitionCommissionfortheGuidelineProfessionalFeesandIdentificationofEngineeringWork(IDoEW)wasdeclinedbasedonsubstantiatedreasonsofperceivedanti-competition.ThislimitsECSA’sregulatorymarginsinthemainstreameconomy.However,aprocessiscurrentlyunderwaythroughtheCouncilfortheBuiltEnvironment(CBE)toappealtheprocess.

AnotherglaringgapexistsasECSAisperceivedtobenon-visibleintheeyesofthecommunitythatweserve.Thishasnecessitatedthecompilationofavibrantbrandingstrategythatwillensurethatthedesired imageisprojectedandmaintainedpositivelyto increaseECSA’sbrandvisibility,awarenessandimprovecustomerloyaltyandpositionECSA’sleadershipasbrandambassadors.

Ifanalysedattheirownperil,Icountthesechallengeswiththeviewthatasaprogressiveorganisationwemustposethemasopportunitiesforgrowthandchange.AsIreflectonmyservicecharterthusfar,Iamcertainofonething:theeraofchangehasbegun.Thisisanexcitingeraindeed;onethatwilltransformECSAtoberesponsiveandrelevanttotheregulatoryneedsoftheSouthAfricancommunitythatitserves.ECSAshouldbegintobedefinitiveandexemplaryofengineeringexcellenceinallforms.

ECSA’slegislativemandateisderivedfromthenationalDepartmentofPublicWorks,deliveredthroughthecommandoftheCouncilfortheBuiltEnvironment(CBE).Iwishtothankallthesecolleaguesfortheirinvaluablesupport.ItisthroughthemthatthestatureofECSAhasbeenelevatedtoalevelwhereithasbecomeanationalsupportstructureforprofessionalsubstance.

TotheCouncilmembers,theExecutivemanagementoftheorganisationandECSAemployeesatlarge;letmeexpressmysinceresenseofgratitudeforyourhardworkandcommitment.LetuscontinuetheeffortstomakeECSAadriven,efficientandproductiveorganisation.

YoursSincerely,

SiphoEMadonsela,PrEngChiefExecutiveOfficer,ECSA



5. ECSA‘s Impact Overview2016/17financialyearwasundoubtedlyfilledwithexcitingactivitieswithinECSA.Throughitsdaytodayoperations,theorganisationhadapositiveimpactonvariousspheresoftheengineeringindustry.Of fundamental importance is to note the valuewhich theorganisationadded in thefollowingareas:

• Organisational Performance: ECSAdisplayedaremarkable improvement insofarastheachievementof itsdeliverables

as set in the 2016/17 financial yearAnnual Performance Plan is concerned. This sterlingperformanceisreflectedonallthefourprogrammesofthe2015-2020organisationalstrategy.

• Road to registration programme: Throughitsroadtoregistrationprogramme,ECSAmanagedtoreachjustover1288potential

memberswhoshowedaninteresttoregisterwithECSA.Theroadtoregistrationpresentationswere conducted in organisations such as, Eskom, Africa Rail, Sasol, CESA, Grinaker,DepartmentofWaterandSanitation,TshwaneUniversityofTechnology,AfricaRailandmanyotherorganisations.Moreworkstillneedstobedoneinthisareasoastoprovidethepublicwith informationontheprocess tofollowintermsofECSAregistration.Amoreaggressivestrategywillbedevisedinthenewfinancialyeartoreachmoremembersofthepublic.TheincreaseofregisteredengineerswithECSAisinthebestinterestofPublicSafety.

• Engenius Programme: Through its Engenius programme, ECSA reached 16 551 learners throughout the country.

This programme (Engenius), focusses on the promotion of engineering profession in bothprimaryandsecondaryschoolsacrossSouthAfrica.Thisprogrammealsopromotesnationalcollaboration,coordinationandalsoprovidessupportamongstpartnerorganisationsinvolvedinadvancingtheengineeringprofession.

• New registration system: The5thtermCouncilintroducedanewregistrationmodelwhichhassubsequentlyimproved

ECSA‘sturnaroundtimeissofarastheregistrationprocessinconcerned.Thismonumentalachievement will positively contribute to the improvement of service delivery, and mostfundamentally ensureanaccessible, fair, transparent, efficient and credible registration. Intheyearunderreview,ECSAhasalsoaccreditedabout216engineeringprogrammesin28differentinstitutions



• International Accords and Agreements: ECSAhascontinuedtoberecognisedasamemberof theWashington,DublinandSydney

Accords which sets and benchmarks international engineering programmes for Engineers,Technicians and Technologists, respectively. The organisation was also party to theCompetenceAgreementsuchastheInternationalProfessionalEngineersAgreement(IPEA),InternationalEngineeringTechnologistAgreement(IETA)wheretheInternationalEngineeringAlliance(IEA)servesasapresidingbody.

ECSAwill continue to execute itsmandate as provided for in theEngineeringProfessionsAct46of2000.OurprofoundgratitudegoestotheCouncilforBuiltEnvironment(CBE),ourrecognisedVoluntaryAssociations(VAs)andallotherstakeholderswhotirelesslycontributetowardsthelivelihoodofECSA.



8. Organisational Executive Structure

Sipho MadonselaCEO

Mr John CatoExecutive:PolicyDevelopment

and Standards Generation

Ms Zola Khoza: ExecutiveintheOfficeofthe

CEO

Mr Christopher TsatsawaneExecutive:StrategicServices

Mr Zingisile Ntsaluba Executive:FinancialServices

Mr Edmund NxumaloExecutive:RegulatoryFunction

Thoko Machimane ActingExecutive:StrategicServicesuntilFebruary2017.



13. Governance Structure4th Term Council Structure:

TheEPestablishedtheCouncilasthegoverningbodyofECSA.Section3oftheEPAprovidesforthecompositionoftheCouncil.Itconsistsof50membersappointedbytheMinisterofPublicWorksastheExecutiveauthorityoftheCouncil.

TheCouncilhad44committeeswithdelegatedfunctionstoenabletheexecutionofECSAmandate,sperthestructurebelow.

13.1 ECSACommitteeStructure–4thTermofCouncil(April2016–September2016)



14. Committee Structures5th Term Council Structure:

14.1 ECSACommitteeStructure–5thTermofCouncil(September2016–March2017) InlinewithCouncil’sstrategytostreamlineandenhanceorganisationefficiencyandeffective-

ness,the5thCouncilatitsmeetingof25November2016approvedthenewCouncilstructureasdepictedbelow.

ECSA Committee Structure – 25 November 2016

COUNCIL

Presidents Forum

Deans Forum

EXCO

PDSG CRC EC IC F & S ARC STC SRC

PDSG - Policy Development & Standards Generation Committee CRC - Central Registration Committee EC - Education Committee IC - Investigating Committee F & S - Finance & Staff Committee ARC - Audit, Risk & Compliance Committtee STC - Strategic Transformation Committee SRC - Stakeholder Relations Committee





Part B

Performance Information

20


ECSA Annual Report 2017 | Performance Information

9. Performance Information9.1 Situational Analysis

9.1.1 ServiceDeliveryEnvironment

Most of the targets as expressed in theAPP for the year under reviewwere not achievedmainlybecauseeffortswerefocusedonrestructuringandrealignmentofthebusinessprocesses,reviewoftheorganogram,developingofreportingandmonitoringinstruments,orientationofthestaffonthenewprocessesandtherecruitmentofkeypersonnelsuchastheQualityManagerinordertooperationalisethenewstrategy.Councilconsidered the targetsandapproved for the roll-overof theperformancetargetstothe2016/17financialyear.

9.1.2 OrganisationalEnvironment

TheCouncilapprovedthe2015-2020StrategicPlanonthe19March2015.Atthebeginningoftheyearunderreview,administrationembarkedondevelopingtheAnnualPerformancePlan(APP).TheAPPwasapprovedonthe27August2015,whichwasfollowedbythereviewoftheorganogramthatwasapprovedonthe24March2016inordertosupportthenewlyapprovedstrategy.Itwasahistoricmoment for ECSAas the very first ECSAAPP (2015/16) and theStrategic Plan (2015-2020)wasunveiledinCapeTownandtheeventwasgracedbytheHonourableMinisterofPublicWorks,MinisterThulasNxesi.

Onrigorousappraisalofthebusinessinlinewiththe2015-2020StrategicPlan,itbecameevidentthatthecurrentbusinessconfigurationpresentswithstructuralproblemsthatneedsremodelling.CentraltothechallengesisthatECSAcarriesoutitsmandateprimarilythroughthe3outputarmsbeing:

• Administration,ledbytheCEO;• Committeescomprisingofpeers;and• VoluntaryAssociationsrecognisedintermsofsection25oftheEPA. AccountabilityforperformanceisnotequitablysharedamongstthethreearmsofdeliveryoftheECSAmandate.Plansareunderwaytoensurethatallthethreearmsofdeliverywillshareresponsibilityandaccountabilityequitablytowardsthedeliveryofthemandate.Theidentifiedkeystructuralproblemhasacausaleffectonthefollowing:

• blurredhierarchicalreportinglinesbetweenthethreearmsofdelivery;• unclearareasofresponsibilityandaccountability;• adversarialrelationships;• AnewdevelopingtrendofdeviatingfromthecultureofvolunteerisminperformingECSA’swork,

andthatisreplacedbyexpectationofmonetarycompensation”

Thefocusinthecomingfinancialyearwillbeonaddressingtheidentifiedproblematicareasinordertocreateaconducivebusinessenvironment.

21


Performance Information | ECSA Annual Report 2017

9.1.3 KeyPolicyDevelopmentandLegislativeChanges

9.1.3.1 PublicationGuidelineofProfessionalFeesandIdentificationofEngineeringWork

IntermsofSection34oftheEngineeringProfessionAct46of2000(theAct),theEngineeringCouncilof SouthAfrica (ECSA), in consultation with the voluntary associations, representatives of serviceprovidersandclientsinthepublicandprivatesector,isrequiredtopublishGuidelineofProfessionalFees.

Section34(2)oftheActmandatesECSAtoannuallyreviewtheGuidelineofProfessionalFeesandtopublishthemintheGovernmentGazette.TheGuidelineofProfessionalFees(GPF)isapplicablefromthefirstofJanuarytothe31stDecemberperyear.

Section26oftheActmandatesECSAtomakerecommendationstotheCouncilfortheBuiltEnvironment(CBE),regardingthetypeofengineeringworkwhichmaybeperformedbypersonsregisteredinanyofthecategoriesreferredtoinsection18,includingworkwhichmayfallwithinthescopeofanyotherprofessionregulatedbytheprofessions’ActsreferredtointheCouncilfortheBuiltEnvironmentAct43of2000(CBEAct).

Intermsofsection20oftheCBEAct,theCBEisrequiredtoconsultwiththeCompetitionCommission(CC)beforefinalizationoftheidentificationofwork(IDOEW).

InMarch2014, theCBEapplied to theCC, forexemptionof the IDOWandGPFofall the6BuiltEnvironmentProfessionalCouncils(BEPCs);Architecture,Engineering,LandscapeArchitects,ProjectandConstructionManagement,PropertyValuation,andQuantitySurveying.

On20January2016,theCompetitionCommission(CC)rejectedtheexemptionapplicationinrespectof the IDOWandsubsequently rejected theexemptionapplication in respectof theGPFofall theBEPCson20February2016.

At the firstCouncilmeetingof the year, 24March2016,Council resolved to followa two-prongedapproachbyengagingtheCCinordertodiscussitsreasonsfordecliningtheexemptionapplicationandsimultaneouslylodginganappealthroughtheCBE.

TheCBEhasbeenattemptingtoconfirmameetingwiththeCCsinceFebruary2016.TheintentionoftheCBEwastohaveahighlevelmeetingbetweentheCommissionerandDeputyCommissioneroftheCCandtheMinisterofPublicWorksaswellasCEOsandRegistrarsofthe6BEPCs.

TheCBErequestedtheCCforanextensiontoappealtill30April2016,whichwasgranted.TheCCandCBEthenagreedtoputthelodgmentoftheappealinabeyanceuntilthesaidhighlevelmeetingtakesplacewiththeintentiontoreachasettlement,failurewhichtheCBEwillapplyforcondonationthenlodgetheappeal.

22



9.2 Strategic Outcome Oriented Goals

Strategic Goal 1:

Professional Thrust - Engineering practitioners enjoy the benefit of world class education and registration

Strategicobjective1.1 Engineeringpractitionersarerecognisedthroughexcellent,relevantandgloballyacceptededucationstandards

Strategicobjective1.2 Engineeringpractitionersareregisteredthroughaccessible,fair,transparent,efficientandcrediblesystem

Strategicobjective1.3 Growthandretentionofregisteredengineeringpractitioners

Strategicobjective1.4 TheEngineeringprofessionisgrownbyincreasingthenumberofengineeringpractitionerstomeetexistingandfuturedemands

Strategicobjective1.5 Practitionerssuccessfullyrenewtheirregistrationthroughfair,credible,transparentandaccessibleprocesses

Strategic Goal 2

Public awareness of the profession and its standards and regulation to ensure the implementation of those standards in the public interest

Strategicobjective2.1 Publicawarenessoftheengineeringprofessionanditsstandardsthroughpubliceducation,informationandawarenessprogrammes

Strategicobjective2.2 Protectionofthehealth,safetyandinterestofthepublicthrougheffectiveregulationoftheprofession

Strategicobjective2.3 Regulatetheprofessioninaccordancewithlegislativerequirements

23



Strategic Goal 3

Engineering practitioners proactively responsive to local and national socio-economic requirements

Strategicobjective3.1 ResearchundertakenintostrategiccontributionstheprofessioncouldbemakingtosupportnationalprogrammesincludingbutnotlimitedtoNDP,NIPandNationalBeneficiationStrategy

Strategicobjective3.2 ECSAisresponsivetothedecisionmakersthroughexcellentstakeholderrelationships.ECSAisrepresentedinorstructurallylinkedtokeyGovernmentdecisionmakingbodiesandSOEssuchasPICC,NDP,ESKOM,Transnet,Sasol,etc

Strategicobjective3.3 ProposalsaredevelopedandimplementedforspecificprojectsandfundingsoughtfromGovernmentandotherstakeholders

Strategic Goal 4

A sustainable, transformed and coherent organisation that is capable of delivering the impact desired by its stakeholders and society within the provisions of the EPA

Strategicobjective4.1 ArelevantorganisationthatsignificantlymeetstheneedsofbothinternalandexternalstakeholderswithintheECSAmandate.

24



9.3 Performance Information by Programme

Programme1

EducationandRegistration

StrategicGoal Engineeringpractitionersenjoythebenefitofworldclasseducationandregistration

StrategicObjectives Anefficient,inclusive,transparentregistrationandeducationpracticesthatpromotedemand,employability,marketability,mobilityandprotectionofworkenvironment.

Table 1:

StrategicObjective(SO)

Actualachieve-ment2015/2016

Plannedtarget2016/2017

ActualAchievement2016/2017

Deviationfromtheplanned tar-gettoactualachievementfor2016/2017

Comment on deviation

S.O1.1 Engineeringpractitionersarerecognisedthroughexcellent,relevantandgloballyac-ceptededucationstandards

7accreditation visitsconducted

Accreditationofengineering programmes in6institutionsof higherlearning

Achieved An additional 1 interim visitwasconductedatUniversityofKwazuluNatal(UKZN)

Bythetimeschedulingwasfinalised,thedecisionhadnotbeenmadebyEngineeringProgrammeAccreditationCommittee (EPAC)onwhetheranaccreditationforUKZNwillbenecessaryfor2016/17finan-cialyearaswehadainterimvisittowardstheendof2015/16financialyear.

100% compliance withthe requirements fortheinternational accords and standards

100%compliancewiththerequirementsfortheinternationalaccordsandstandardstomaintainECSA’sstandingwiththeinter-nationalengineeringorganisations

Achieved N/A N/A

25









S.O1.2 Engineering practitionersare registeredthrough accessible,fair, transparent,efficient andcrediblesystem

NotAchieved Launchonlineregistrationaccordingto plan

NotAchieved Thedevel-opment of phase1oftheprojectisabout80%complete.Thelaunchofphase1isanticipatedtotakeplaceinQ22017/18financialyear

Aprojectplanhasbeendevelopedwiththeserviceprovider,anditreflectsthattheprojectwillbecompletedinthesecondquarterof2017/18financialyear.ECSAiscloselymonitoringtheprogress

81volunteers were trained.

Trainingof111Assessors

Achieved 366 Asses-sors,Re-viewersandModerators were trained. Targetex-ceededby256

Overachievementwasduetothefactthatpreviouslywetrained as and whentherewas a need. Intheyearunderreviewtheregistrationsystemsandprocesseschangedandthatnecessitatedanaggressivetrainingnationwide.

11policieswerereviewed

Documentsdevelop-mentandreview

Achieved Two poli-ciesweredeveloped,reviewedandapproved. -R-03-SC -E-14-PN/A

N/A

S.O1.3 Growthandretention ofregistered engineering practitioners

Achieved HostAfricaEngineering Weekaccordingto planandsupportthe internationalevent

Achieved N/A N/A

Achieved ArevisedVoluntary Associationrecognition framework.

Achieved N/A N/A

Partiallyachieved

Areviseddraftreten-tionstrategy

Achieved N/A N/A

Achieved6334

Numberofregisteredpractitioners5500

Achieved

6190

Exceeded N/A

26









S.O1.4 Growthoftheprofession to meet existingandfutureneeds

NotAchieved Completefeasibilitystudyonthepossiblecategoriesofregistration

Achieved N/A N/A

NotAchieved Openregistrationfortwospecifiedcategories

Achieved

N/A N/A

N/A Expandtheengineeringstudentprogrammetoonemoretertiaryinstitution

NotAchieved Wehaveinitiated expansiontootherinstututionsand will still prioritisetheMangosuthuUniversityofTechnology(MUT)

ECSA will pursuethemeetingwithMUTinthenewfinancialyear.

S.O1.5 Practitionerssuccessfully renew theirregistration throughfair,credible, transparent andaccessible processes

N/A MonitoringofnewonlineSystem

Notachieved Theindicatoris dependant onthefinalisationoftheCRM.

TheCRMwillbefinalisedandlaunchedduringthesecondquarterof2017/18FinancialYear.

NotAchieved NewimprovementstothenewonlineCPDsystem

NotAchieved onlineCPDsystemisdependent onthenewonlinesystemwhichis80%complete

Aprojectplanhasbeendevelopedwiththeserviceprovider,anditreflectsthattheprojectwillbecompletedinthesecondquarterof2017/18financialyear.ECSAiscloselymonitoringtheprogress

Programme2

Publicawarenessoftheengineeringprofession

Strategicgoal Publicawarenessoftheprofessionanditsstandardsandregulationtoenduretheimplementationofthosestandardsinthepublicinterest

StrategicobjectivesAninformedpublicthatcanholdtheprofessionaccountabletotheregulationstandards

27









S.O.2.1 Publicawareness oftheengineering profession and its standardsthrough publiceducation ,informationand awareness pro-gramme

Achieved LaunchcompendiuminSA

NotAchieved TheCECBcompendiumwebsitewasdevelopedbutitcouldnotbelaunchedduetomisalignmentontheITsidebetweenUNESCOandECSA

Aprojectplanhasbeenputtogethertoensurethatthistargetismetinthenewfinancialyear.

NotAchieved Facilitatefortheestablishmentofforumsforyoungandwomenengineers

NotAchieved ForumsforYoungandWomenengineerswerenotestablishedduetocapacitychallenges

ECSA will liaise withtherec-ognisedVoluntaryAssociationstoforgerelationswiththeexistingforumsinsteadofreinventingthewheel.

N/A ConductneedsandnumbersResearchforSADCregion

Notachieved TheneedsandNumbersResearchsponsoredbytheDepartmentofScienceandTechnology(DST)anddidnot materialise duetoPFMAprocurementchallenges.

SubsequenttofailuretosecurefundswithDST,ECSAraisedfundsfrom an interna-tional donor to conductasimilarstudy.DSTandECSAarecurrentlyjointlyconductingResearchonNeedsandNum-berswhichwillbecompletedinthe2017/18financialyear.

N/A Providesecretariatser-vicestoSAFEO

Achieved N/A N/A

N/A SupportAfricacapacitybuildinginitiativesthroughtheFederationofAfricanEngineeringOrganizations(FAEO)

Achieved N/A N/A

N/A Publishten(10)engineeringarticles

NotAchieved Engineeringarticleswerenotpublishedduetocapacityconstraintsintheyearunderreview,staffhasbeenappointedtofulfillthistask.

Aremedialactionwillbeputinplacetomeetthistargetinthe2017/18Financialyear.

Achieved 20 000 learners reachedthrough Engeniusinformation session

NotAchieved 16 551 learners werereached

Therewasnoclearindicationonhowandwhichlearnerswillbetargetedforthe20000tobereached,hencethetargetwasnotreached.

NotAchieved Train 10 role models NotAchieved Role models were not trained astherewasaneedtoreviewtheGovernancepoliciesinordertomanagetheassociatedrisk.

ECSAisintheprocessofreview-ingtheEngeniusprogramme,rolemodels will no longerbetrained.

Achieved Implement ECSA brandstrategyaccording to plan

NotAchieved Brandstrategywas not implemented,thestrategywasapprovedinMarch2017duetocapacitychallenges.

TheBrandStrategyandPlanwasapprovedin April 2017. Progressontheimplementation is movingslowduetotheresignationoftheresourceresponsibleforthefunction.

Table 2:

28









S.O2.2 Protectionofhealth,safetyand interestofpublic througheffective regulationofthe profession

NotAchieved Finalise 80% of disciplinarybacklogcases

Achieved 94% of disciplinarybacklogcaseswerefinal-ised. Exceededthetargetby14%

Availabilityofhumanresourcecapacity,plansareunderwaytoappointstaff.

NotAchieved finalise90%ofnewdisciplinarycases

NotAchieved 86% of currentcaseswerefinal-ised.Belowtargetby4%

Targetwasnotmetduetotheunavailabilityofrespondent/LegalRep-resentatives.Thenumberofinvestigatorswereincreasedin order to managethebacklog.

NotAchieved Developmentofa legal/casemanagement system(dependantonS.O.1.2)

NotAchieved Case ManagementSystemwas not implemented as it is dependant on theCRM

Case ManagementSystemispartoftheCRMdevelopment,itisscheduledtobecompletedinthefourthquarterofthe2017/18financialyear.

29









S.O2.3 Regulatethe profession in accordancewith legislativerequirements

NotAchieved Reportontheneed toreviewtheEngineeringProfessionsActand adviseCBE

NotAchieved ALegalconsultantfirmhasbeenappointed to investigatetheneedtoreviewtheAct

Thereweredelaysincommencingwiththeinvestigation.ThereportisdueinJune2017 and will beconsideredbyCouncilinAugust2017.

NotAchieved •Anapprovedoverarchingframework •Developmentandimplementation of a comprehensiveframework for : 1.Promotionof preferential procurementand utilisationbyindustryofengineeringservices (employersandcorporationsprocuringand employingengineers)locallyandcrossborder 2.PromotionoffulladherencetotheECSAcodeof conductforECSAregisteredprofessionals 3.Theformalisationofarelationshipbetweenpublic

Achieved

N/A N/A

N/A 1.Anapprovedframework for collaborationtoinvestigatepoorqualityengineeringwork.2.EnterintoanMoUwithtwoGovernmentDepartment

NotAchieved Thisisademand drivenindicator.ECSA drafted an addendumforconsiderationbybothDoLandNHBRConthedraftMoUsfromthepreviousfinancialYear.

ECSA awaits inputsfromDoLandNHBRCin order to concludetheMoUs.

30









S.O3.1 Researchundertaken intostrategic contributionsthe professioncouldbemakingtosupport national programmes including butnotlimitedto NDP,NIPandNational Beneficiation

NotAchieved Finalise1Researchreporttocontributetosocio-economicprioritiesofthecountry

NotAchieved Researchwasnotconductedduetocapaci-tyconstraints.

TheResearchportfolioisun-derreview.

S.O3.2ECSA is responsivetodecisionmakersthroughexcellentstakeholderrelationships.ECSA is represented in or structurallylinkedtokeyGovernmentdecisionmakingbodiesandSOE’se.g.PICC,NDP,Eskom,Transnet,Sasol,etc.

NotAchieved 1xMoUsignedwithanyGovernmentDepartmentofSOEs

NotAchieved Draft proposal withtheDepartment ofPublicWorks(DPW)finalisedandsubmittedtotheDepartment

ECSA awaits DPWtoconsidertheproposal.

Programme3Table 3:

31









S.O.3.3 Proposalsare developedand implemented for specificprojects andfundingsought fromGovernment andotherstake-holders

NotAchieved RaiseR3mforstrategicprojectsincashorinkind.

NotAchieved Draftfundingproposal was submittedtoDPW.

ECSA awaits feedbackfromDPW.

S.O4.1ArelevantorganisationthatsignificantlymeettheneedsofbothinternalandexternalstakeholderswithintheECSAmandate

Achieved Revisedcouncilcommitteesandoperatingstandards

Achieved N/A N/A

N/A Centralcouncildocu-mentrepository

Achieved N/A N/A

N/A Documentedand/orrevisedprocesses

NotAchieved QMSprocesseswere not developedduetoresourceunavailability

Thetargetisincludedintheaccelerationplan. TheQMManagerwasappointed to developandimplementtheQMS.

Achieved Unqualifiedauditopinion

Achieved N/A N/A

NotAchieved Implementation of therecommendedITInfrastructure

NotAchieved TheITplanwas reconfiguredto developanintegrated platform fortheentire business.

Theprocesstoprocureserverequipmentforstaffisunderway.Theprocurementwillbeinstalledandcommissionedby30June2017

Achieved Increasedrevenuecollectionby8%annually

Achieved N/A N/A

Programme4

Asustainable,transformedandcoherentorganisation

StrategicGoal Asustainable,transformedandcoherentorganisationthatiscapableofdeliveringtheimpactdesiredbyitsstakeholdersandsocietywithintheprovisionsoftheEPA(EngineeringProfessionAct)

StrategicObjectivesAcoherentandwellrunorganisation

Table 4:

32


ECSA Annual Report 2017 | Governance

20. RISk REPORtECSARISKREGISTER2016/17Item No. Risk RiskCategory RiskDescriptor Impact Likelihood Residual

RiskRisk Rating

Mitigation Status Status

1 Inadequatestakeholdersupportandcooperation

Human LackofcooperationfromsomeVA’sduetounhappinesswiththetransformationnarrativeembarkeduponbyECSA,whichmaynegativelyimpactECSA’sprocessesthatrelyonVAsupport.

4 4 16 High VAengagementonanon-goingbasistocreateacommongroundofunderstanding

VAstakeholderengagement

VAstakeholderengagementisbeingdevelopedandwillbeimplementedduring2017/18financialyear

2 Inadequatehumancapacity

Human Inadequatehumancapacityforexpecteddeliveryduetotraditionalrecruitmentprocessesthatwereusedresultingindelayedappointments.

3 4 12 Medium Multiplerecruitmentplatformswereinvestigatedandsubsequentlyimplemented

Closed Closed

3 ProjectDelays System Themigrationofdatamaybedelayedduetodatacleansingwhichmayimpacttheonlinesystemslaunchdate.

2 3 6 Medium Haveappointedaconsultant(JMR)tomanagetheprojectplan and keep ECSA informed of potentialdelays.

InProgress InProgress

4 LackoftechnologyacceptancebyStakeholders

System Thenewonlinesystemmaynotbeacceptedbyrelevantstakeholdersduetolackofunderstandingofthenewsystemandadaptingtonewtechnology,whichmayresultindelayedimplementation.

3 2 6 Medium Stakeholderengagementwereundertakentoinformthemoftheonlineregistrationsystembenefits.


5 PooronlineSystemPerformance

System TheonlinesystemperformancemaybeslowduetotheCloudsolutionimplementationwhichmayresultindissatisfiedclients/customers.w

4 1 4 Low Thereisanoptionforachangeoverbacktoon-premiseifsystemperformanceisnotacceptable.ECSAiscloselymonitoringthesituation.


6 Inefficientregistrationprocesses

Operational Inefficientregistrationprocessesduetointermittentregistrationcommitteemeetingsresultingindelayedregistrations.

2 2 4 Low Theregistrationprocesswasreviewed.AnewimprovedregistrationmodelwasconsideredandapprovedbyCouncilonthe16thMarch2017anditisbeingimplemented.

InProgress Inprogress

7 Inadequateprocessesandprocedures

Operational Theriskoflossresultingfrominadequateorfailedinternalprocessesandnon-adherencetoprocedures.

3.50 3.00 10.50 Medium ECSAisdevelopingandimplementingtheQMSinlinewiththerequirementsofISO9001:2015.

Inprogress InProgress

8 Outdatedenablinglegislation

Governance Inefficientlegislationwhichdoesnotaddresscurrentneedsanddoesnotfullyservethepurposeforwhichitwasenacted.

3.50 3.80 13.3 High LegalfirmhasbeenappointedtoinvestigatetheneedforEPAreview.


9 Lackofsuccessionplanning

Operational InsufficientsuccessionplanningandknowledgesharinginkeypositionsduetoinadequateHRprocesseswhichmayimpactECSA’ssustainabilityandbusinesscontinuity.

3.80 3.70 14.06 High HRstrategyisbeingreviewedtoaddressamongothersthesuccessionplanning.



Governance InsufficientsuccessionplanningandknowledgesharinginkeypositionsposesarisktoECSA’ssustainabilityandbusinesscontinuity

3.80 3.70 14.06 High HRstrategyisbeingreviewedtoaddressamongothersthesuccessionplanning


33


Governance | ECSA Annual Report 2017

ECSARISKREGISTER2016/17Item No. Risk RiskCategory RiskDescriptor Impact Likelihood Residual

RiskRisk Rating

Mitigation Status Status

1 Inadequatestakeholdersupportandcooperation

Human LackofcooperationfromsomeVA’sduetounhappinesswiththetransformationnarrativeembarkeduponbyECSA,whichmaynegativelyimpactECSA’sprocessesthatrelyonVAsupport.

4 4 16 High VAengagementonanon-goingbasistocreateacommongroundofunderstanding

VAstakeholderengagement

VAstakeholderengagementisbeingdevelopedandwillbeimplementedduring2017/18financialyear

2 Inadequatehumancapacity

Human Inadequatehumancapacityforexpecteddeliveryduetotraditionalrecruitmentprocessesthatwereusedresultingindelayedappointments.

3 4 12 Medium Multiplerecruitmentplatformswereinvestigatedandsubsequentlyimplemented

Closed Closed

3 ProjectDelays System Themigrationofdatamaybedelayedduetodatacleansingwhichmayimpacttheonlinesystemslaunchdate.

2 3 6 Medium Haveappointedaconsultant(JMR)tomanagetheprojectplan and keep ECSA informed of potentialdelays.


4 LackoftechnologyacceptancebyStakeholders

System Thenewonlinesystemmaynotbeacceptedbyrelevantstakeholdersduetolackofunderstandingofthenewsystemandadaptingtonewtechnology,whichmayresultindelayedimplementation.

3 2 6 Medium Stakeholderengagementwereundertakentoinformthemoftheonlineregistrationsystembenefits.


5 PooronlineSystemPerformance

System TheonlinesystemperformancemaybeslowduetotheCloudsolutionimplementationwhichmayresultindissatisfiedclients/customers.w

4 1 4 Low Thereisanoptionforachangeoverbacktoon-premiseifsystemperformanceisnotacceptable.ECSAiscloselymonitoringthesituation.


6 Inefficientregistrationprocesses

Operational Inefficientregistrationprocessesduetointermittentregistrationcommitteemeetingsresultingindelayedregistrations.

2 2 4 Low Theregistrationprocesswasreviewed.AnewimprovedregistrationmodelwasconsideredandapprovedbyCouncilonthe16thMarch2017anditisbeingimplemented.


7 Inadequateprocessesandprocedures

Operational Theriskoflossresultingfrominadequateorfailedinternalprocessesandnon-adherencetoprocedures.

3.50 3.00 10.50 Medium ECSAisdevelopingandimplementingtheQMSinlinewiththerequirementsofISO9001:2015.

Inprogress InProgress

8 Outdatedenablinglegislation

Governance Inefficientlegislationwhichdoesnotaddresscurrentneedsanddoesnotfullyservethepurposeforwhichitwasenacted.

3.50 3.80 13.3 High LegalfirmhasbeenappointedtoinvestigatetheneedforEPAreview.



Operational InsufficientsuccessionplanningandknowledgesharinginkeypositionsduetoinadequateHRprocesseswhichmayimpactECSA’ssustainabilityandbusinesscontinuity.

3.80 3.70 14.06 High HRstrategyisbeingreviewedtoaddressamongothersthesuccessionplanning.



Governance InsufficientsuccessionplanningandknowledgesharinginkeypositionsposesarisktoECSA’ssustainabilityandbusinesscontinuity

3.80 3.70 14.06 High HRstrategyisbeingreviewedtoaddressamongothersthesuccessionplanning


34 ECSA Annual Report 2017 | Regulatory Functions

The Engineering Council of South AfricaAnnualreportfortheyearended31March2017

35


Human Resource Management | ECSA Annual Report 2017

Part F

Financial Information

Annual financial statements

for the year ended 31 March 2017

25Published August 2017

ECSA Annual Report 2017 | Financial Information36

The Engineering Council of South AfricaAnnualfinancialstatementsfortheyearended31March2017

Index Page

Council’sResponsibilitiesandApproval ..............................................................................................................125(33)

Council’sReport ......................................................................................................................................126-128(34-36)

IndependentAuditor’sReport ..............................................................................................................................129(37)

StatementofFinancialPosition ...........................................................................................................................132(40)

StatementofFinancialPerformance ...................................................................................................................133(41)

StatementofChangesinNetAssets ...................................................................................................................134(42)

StatementofCashFlows ....................................................................................................................................135(43)

StatementofComparisonofBudgetandActualAmounts...................................................................................136(44)

Notestothefinancialstatements ........................................................................................................................137(45)

The following supplementary information does not form part of the annual financial statements and is unaudited:DetailedIncomestatement .................................................................................................................................. 166(74)

AnnualFinancialStatementsfortheyearended31March2017

Financial Information | ECSA Annual Report 2017 37


Council’s Responsibilities and Approval

Council’s Responsibilities and Approval

TheCouncil,althoughnotrecognisedbyNationalTreasuryasaPublicEntity,choosestofollowtherequirementsofthePublicFinanceManagementAct(Act1of1999)inmaintainingadequateaccountingrecordsandareresponsibleforthecontentandintegrityoftheannualfinancialstatementsandrelatedfinancialinformationincludedinthisreport.ItistheresponsibilityoftheCounciltoensurethattheannualfinancialstatementsfairlypresentthestateofaffairsoftheCouncilasattheendofthefinancialyearandtheresultsofitsoperationsandcashflowsfortheperiodthenended.Theexternalauditorsareengagedtoexpressanindependentopinionontheannualfinancialstatementsandweregivenunrestrictedaccesstoallfinancialrecordsandrelateddata.

The annual financial statements have been prepared in accordance with South African Standards of GenerallyRecognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by theAccountingStandardsBoard.

Theannualfinancialstatementsarebaseduponappropriateaccountingpoliciesconsistentlyappliedandsupportedbyreasonableandprudentjudgementsandestimates.

TheCouncilacknowledgesthattheyareultimatelyresponsibleforthesystemofinternalfinancialcontrolestablishedbytheCouncil,andplaceconsiderableimportanceonmaintainingastrongcontrolenvironment.ToenabletheCounciltomeettheseresponsibilities,theCouncilsetsstandardsforinternalcontrolaimedatreducingtheriskoferrorordeficitinacosteffectivemanner.Thestandards include theproperdelegationof responsibilitieswithinaclearly definedframework,effectiveaccountingproceduresandadequatesegregationofdutiestoensureanacceptablelevelofrisk.ThesecontrolsaremonitoredthroughouttheCouncilandallemployeesarerequiredtomaintainthehighestethicalstandardsinensuringtheCouncil’sbusinessisconductedinamannerthatinallreasonablecircumstancesisabovereproach.ThefocusofriskmanagementintheCouncilisonidentifying,assessing,managingandmonitoringallknownformsofriskacrosstheCouncil.Whileoperatingriskcannotbefullyeliminated,theCouncilendeavourstominimiseitbyensuringthatappropriateinfrastructure,controls,systemsandethicalbehaviourareappliedandmanagedwithinpredeterminedproceduresandconstraints.

TheCouncil isoftheopinion,basedontheinformationandexplanationsgivenbymanagement,thatthesystemofinternalcontrolprovidesreasonableassurancethatthefinancialrecordsmaybereliedonforthepreparationoftheannualfinancialstatements.However,anysystemofinternalfinancialcontrolcanprovideonlyreasonable,andnotabsolute,assuranceagainstmaterialmisstatementordeficit.

TheCouncilhasreviewedECSA’scashflowforecastfortheyearto31March2018and,inthelightofthisreviewandthecurrentfinancialposition, theyaresatisfiedthatECSAhasorhasaccesstoadequateresourcestocontinue inoperationalexistencefortheforeseeablefuture.

TheexternalauditorsareresponsibleforindependentlyauditingandreportingonECSA’sannualfinancialstatements.TheannualfinancialstatementshavebeenexaminedbyECSA’sexternalauditorsandtheirreport ispresentedonpages129,130and131.

Theannualfinancialstatementssetoutonpages132-166whichhavebeenpreparedonthegoingconcernbasis,wereapprovedbyCouncilon25August2017andsignedonitsbehalfby:

Mr CV Gamede Mr SE MadonselaPresident Chief Executive Officer



Council’s Report

Council’s Report

TheCouncilsubmitstheirreporttheyearended31March2017.

1. Review of activities

Main business and operations

TheEngineeringCouncilofSouthAfrica(ECSA)isestablishedintermsoftheEngineeringProfessionAct(No.46of2000).TheActempowersECSAtoperformthefollowingfunctions,inordertoprotectthehealthandsafetyofcitizensandtheenvironmentfromtherisksassociatedwithengineeringwork:

• Setstandardsforengineeringeducationandprofessionalcompetency;• Accrediting engineering education programmes, offered by public and private providers, that meet with the

educationalrequirementsforregistrationinthevariouscategories;• Registerpersonsinprofessionalcategorieswhodemonstratescompetencyagainstthestandardsforthe

categories;• Evaluateeducationalqualificationsthatarenotalreadyaccreditedorrecognised;• Registerpersonswhomeeteducationalrequirementsincandidatecategories;• Establish specified categories of registration to meet specific health and safety licensing requirements and

registeredpersonsinthesecategories;• RequireregisteredpersonstorenewregistrationatintervalsandunderconditionsthattheCouncilprescribes;• Enterinternationalagreementsfortherecognitionofeducationalprogrammesandregistration;• Developandmaintainacodeofconduct,supportedwherenecessarybycodesofpractice;• Investigatecomplaintsofimproperconductagainstregisteredpersonsandconductenquiriesandimpose

sanctionsaseachcaserequires;• RecogniseVoluntaryassociations;• RecommendtotheCouncilfortheBuiltEnvironment(CBE),ECSA’sidentificationofthetypeoftheengineering

workwhichmaybeperformedbypersonsregisteredinanycategory.

Address1stFloorWaterviewCornerBuilding2ErnestOppenheimerAvenueBrumaLakeOfficeParkJohannesburg2198

2. Going concern

Wedrawattentiontothefactthatat31March2017,thecouncilhadaccumulatedsurplusesofR43,032,615(2016:R36,867,863)andthattheCouncil’stotalassetsexceeditsliabilitiesbyR43,032,615(2016:R36,867,863).

Theannualfinancialstatementshavebeenpreparedonthebasisofaccountingpoliciesapplicabletoagoingconcern.Thisbasispresumesthat fundswillbeavailable tofinancefutureoperationsandthat therealisationofassetsandsettlementofliabilities,contingentobligationsandcommitmentswilloccurintheordinarycourseofbusiness.

3. Subsequent events

TheCouncilisnotawareofanymatterorcircumstancearisingsincetheendofthefinancialyearthatcouldhaveamaterialeffectonthefinancialstatements.




Council’s Report

Council’s Report

4. Council members

TheoutgoingCouncilmembersoftheorganisationon27September2016wereasfollows:

MrCVGamede(President) MrDNMattheeMrAPeters MrKCMistryMrRABotha MrMMGMofokengMrYBrijmohan MrRJMoloisaneMrWSBBurger DrBLMwakaMrLTDhlamini MrNMMyatazaMrPMErasmus MrMANgcoboMrKGreenwood MrNNqandelaMrMGxamza MsTNkambuleDrKIJacobs MrKNyangoniMrSSJacobs MsMPadayachee-SamanMrMEJele MrRPatelMrREJennings MrBPPetlaneProf.BMLacquet MsTPhiriDrALawless MrMThunziMrOLLeburu MsAMSassenbergMsNVBMagubane MrAJSinghMrSMakhetha MrCMSogaMsPMangakane MrCPStuurmanMsTPMaphumulo DrNTutuProf.TMarwala MrNPvanDenBergHonLBMashile MrDJvanNiekerkProf.MLMasu Prof.BJvanWykMrTMaswanganyi MsTMZumaDrZTMathe MrMIZitha

TheincomingCouncilmemberson27September2016areasfollows:

MrCVGamede(President)DrKIJacobs MsHAMtshaliMsSPMorejwane MrNMMyatazaMsSRMButhelezi MsLNjomaneMrKChetty MsTNkambuleMsTLChili MrNNqandelaMrJHEDaniels DrKNyembweMrDRDaries MrKRO’JageerMrMGwazube MsTRamagofuMrMGxamza MrMRamahuluMrBCHlabisa MsNSampsonMrMEJele MrAMSentshoMrREJennings MrCMSofaMrEKerst MrAHSommerMrSKeswa MrCPStuurmanMrMLebea MrMThunziMsRPMadiba MsSATireDrJMahachi MrMRTlala


4. Council members (Continued)

MrLMahlangeni AdvBTlhakungMsTPMaphumulo DrNTutuMrMPMaiselaKaMdluli DrCAAvanZylMrTDMemela RAdm(JG)KJWatsonMsRHMotsotsoane MrTKLXakaxaMsOMthethwa MrNSZimu

5. Secretary

ThedutiesofaCouncilsecretaryoftheECSAarefullyfulfilledbytheadministrativestaff.TheEngineeringProfessionActdoesnotrequiretheECSAtoappointadedicatedcompanysecretary.

6. Auditors

PricewaterhouseCoopersInc.willcontinueinofficeinaccordancewiththeprocurementpolicy.

7. Legal form

Council.

8. PFMA compliance

InlinewiththeMinister’sdirectiveECSAstrivestobePFMAcompliant.Followingthedivergentviewsonthismatter,theCouncilsoughtlegaladviceonwhetherECSAfallswithintheambitofPFMAornot.AlegalopinionfromtheOfficeoftheChiefStateLawAdviserwasreceivedon28June2017confirmingthatindeedECSAfallswithintheambitofPFMA.AformalapplicationtoNationalTreasury inwritinghasbeenmadeadvisingthatECSAremainsanunlistedentityintermsof47(2)ofthePFMA.


Council’s ReportThe Engineering Council of South AfricaAnnualfinancialstatementsfortheyearended31March2017


The Engineering Council of South AfricaAnnual financial statements for the year ended 31 March 2017

Notes to the financial statements

Independent Auditor’s Report

To the Engineering Council of South Africa

Our opinion

Inouropinion,thefinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheEngineeringCouncilofSouthAfrica(ECSA)asat31March2017,anditsfinancialperformanceandcashflowsfortheyearthenendedinaccordancewithSouthAfricanStandardsofGenerallyRecognisedAccountingPractice.

What we have audited

TheEngineeringCouncilofSouthAfrica’sfinancialstatementssetoutonpages132to165comprise:• thestatementoffinancialpositionasat31March2017;• thestatementofcomprehensiveincomefortheyearthenended;• thestatementofchangesinequityfortheyearthenended;• thestatementofcashflowsfortheyearthenended;and• thenotestothefinancialstatements,whichincludeasummaryofsignificantaccountingpolicies.

Basis for opinion

WeconductedourauditinaccordancewithInternationalStandardsonAuditing(ISAs).OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditor’sresponsibilitiesfortheauditofthefinancialstatementssectionofourreport.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

Independence

WeareindependentoftheECSAinaccordancewiththeIndependentRegulatoryBoardforAuditorsCodeofProfessionalConductforRegisteredAuditors(IRBACode)andotherindependencerequirementsapplicabletoperformingauditsoffinancialstatementsinSouthAfrica.WehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeIRBACodeandinaccordancewithotherethicalrequirementsapplicabletoperformingauditsinSouthAfrica.TheIRBACodeisconsistentwiththeInternationalEthicsStandardsBoardforAccountantsCodeofEthicsforProfessionalAccountants(PartsAandB).

Other information

TheCouncilisresponsiblefortheotherinformation.TheotherinformationcomprisesPartA–GeneralInformation,PartB–PerformanceInformation,PartC–Governance,PartD–OverviewofHumanResources,PartE–RegulatoryFunctionsoftheAnnualReport,theCouncil’sReportandDetailedIncomeStatement.Otherinformationdoesnotincludethefinancialstatementsandourauditor’sreportthereon.

Ouropiniononthefinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanauditopinionoranyformofassuranceconclusionthereon.

Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationidentifiedaboveand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsorourknowledgeobtainedintheaudit,orotherwiseappearstobemateriallymisstated.


If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.

Responsibilities of the Council for the financial statements

TheCouncilisresponsibleforthepreparationandfairpresentationofthefinancialstatementsinaccordancewithSouthAfricanStandardsofGenerallyRecognisedAccountingPractice,andforsuchinternalcontrolastheCouncildetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Inpreparingthefinancialstatements,theCouncilisresponsibleforassessingECSA’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlesstheCouncileitherintendstoliquidateECSAortoceaseoperations,orhavenorealisticalternativebuttodoso.

Auditor’s responsibilities for the audit of the financial statements

Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithISAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

AspartofanauditinaccordancewithISAs,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:

• Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareap-propriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessofECSA’sinternalcontrol.

• EvaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebytheCouncil.

• ConcludeontheappropriatenessoftheCouncil’suseofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtonECSA’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyex-ists,wearerequiredtodrawattentioninourauditor’sreporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycauseECSAtoceasetocontinueasagoingconcern.


Independent auditor’s report



Independent auditor’s report

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,includingthedisclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfair presentation.

WecommunicatewiththeCouncilregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.

PricewaterhouseCoopers Inc. Director:RoshanRamdhanyRegisteredAuditorJohannesburg

Date:29August2017

Other matterThe supplementary information set out on page 38 does not form part of the annual financialstatements and is presented as additional information. We have not audited these schedules andaccordingly we do not express an opinion thereon.

PricewaterhouseCoopers Inc.Director: Roshan RamdhanyRegistered AuditorSunninghill29 August 2016


The Engineering Council of South AfricaAnnualfinancialstatementsfortheyearended31March2017Annualfinancialstatementsfortheyearended31March2016

Statement of Financial Position as at 31 March 2017

Statement of Financial Position as at 31 March 2017 2017 2016 Note(s) R R

Assets Non-CurrentAssets Property,plantandequipment 4 10,230,396 8,337,937Intangibleassets 5 2,666,439 2,430,275Investments 6 12,889,561 12,347,620Employeebenefitasset 7 9,330,000 8,949,000 35,116,396 32,064,832

CurrentAssets Tradeandotherreceivables 8 6,684,871 6,930,682Prepayments 31 611,088 207,867Cashandcashequivalents 9 14,926,776 12,170,755 22,222,735 19,309,304Total Assets 57,339,131 51,374,136

Liabilities Current Liabilities Borrowings 10 - 587,704Tradeandotherpayables 11 12,331,199 12,371,401Provisions 12 1,975,317 1,547,168 14,306,516 14,506,273Total Liabilities 14,306,516 14,506,273Net Assets 43,032,615 36,867,863Accumulatedsurplus 43,032,615 36,867,863Total Liabilities And Net Assets 57,339,131 51,374,136



Statement of Financial Performance

Statement of Financial Performance 2017 2016 Note(s) R R

Operatingrevenue 14 90,970,004 79,734,715Otherincome 15 3,649,587 1,815,066Total revenue 94,619,591 81,549,781Generalexpenses 16 (43,339,984) (34,300,373)Personnelexpenses 17 (39,484,217) (34,737,844)Otherexpenses 18 (8,501,214) (13,163,116)

Operating (deficit)/surplus 3,294,176 (651,552)Investmentrevenue 19 5,356,558 6,108,589Fairvalueadjustments 27 287,120 108,475Actuarialgains/(losses) 7 (506,000) (5,730,000)Effectsofpensionfundassetlimitation 7 - 10,417,000Financecosts 20 (2,267,102) (2,079,989)

Surplus for the year 6,164,752 8,172,523



Statement of Changes in Net Assets

Statement of Changes in Net Assets Accumulated Total net surplus assets R R

Balance at 01 April 2015 28,695,340 28,695,340ChangesinnetassetsSurplusfortheyear 8,172,523 8,172,523Totalchanges 8,172,523 8,172,523

Balance at 01 April 2016 36,867,863 36,867,863ChangesinnetassetsSurplusfortheyear 6,164,752 6,164,752

Totalchanges 6,164,752 6,164,752

Balance at 31 March 2017 43,032,615 43,032,615




Statement of Cash Flows

Statement of Cash Flows 2017 2016 Note(s) R R

Cash flows from operating activities

Receipts Cashreceiptsfromcustomers 99,333,872 80,510,579Investmentrevenue 5,356,558 6,108,589

Payments Cashpaymentstosuppliers (98,025,835) (81,455,324)Financecosts (17,102) (2,079,989)Net cash flows from operating activities 23 6,617,642 3,083,855

Cashflowsfrominvestingactivities

Purchaseofproperty,plantandequipment 4 (2,690,735) (866,209)Proceedsfromsaleofproperty,plantandequipment 4 95,815Purchaseofotherintangibleassets 5 (358,212) (184,652)Netmovementinfinancialassets 6 (254,821) (306,889)Net cash flows from investing activities (3,273,917) (1,261,935)

Cashflowsfromfinancingactivities

Repaymentofborrowings 10 (587,704) (845,569)Netcashflowsfromfinancingactivities (587,704) (845,569)

Netincrease/(decrease)incashandcashequivalents 2,756,021 976,351Cashandcashequivalentsatthebeginningoftheyear 12,170,755 11,194,404Cash and cash equivalents at the end of the year 9 14,926,776 12,170,755



Statement of Comparison of Budget and Actual Amounts

Statement of Comparison of Budget and Actual AmountsBudget on Cash Basis Approved Adjustments Final Budget Actual Difference budget amounts on between final comparable budget and basis actual R R R R RStatement of Financial Performance Revenue Revenuefromexchangetransactions

Accreditationvisits 2,210,712 - 2,210,712 1,773,642 (437,070)Thirdpartycontributions 400,000 - 400,000 297,698 (102,302)Disciplinaryfines 25,000 - 25,000 60,000 35,000Otherincome 35,000 - 35,000 96,978 61,978Profitonsaleoffixedassets 2,500 - 2,500 - (2,500)Total revenue from exchange transactions 2,673,212 - 2,673,212 2,228,318 (444,894)

Revenue from non-exchange transactions Annualfees 72,332,865 - 72,332,865 77,800,376 5,467,511Applicationfees 12,378,309 - 12,378,309 11,395,986 (982,323)Baddebtsrecovered 250,000 - 250,000 3,194,911 2,944,911Total revenue from non-exchange transactions 84,961,174 - 84,961,174 92,391,273 7,430,099

Total revenue 87,634,386 - 87,634,386 94,619,591 6,985,205

ExpenditurePersonnel (44,985,490) 4,000,000 (40,985,490) (39,484,217) 1,501,273Depreciationandamortisation - - - (890,481) (890,481)Impairmentloss/Reversalofimpairments (4,359,557) - (4,359,557) (7,139,230) (2,779,673)Financecosts (55,859) - (55,859) (2,267,102) (2,211,243)Leaserentalsonoperatinglease (463,525) - (463,525) (471,503) (7,978)Repairsandmaintenance (6,052,558) - (6,052,558) (3,493,218) 2,559,340GeneralExpenses (33,232,775) (4,000,000) (37,232,775) (39,846,766) (2,613,991)Totalexpenditure (89,149,764) - (89,149,764) (93,592,517) (4,442,753)Operatingsurplus/(deficit) (1,515,378) - (1,515,378) 1,027,074 2,542,452Investmentrevenue 1,575,191 - 1,575,191 5,356,558 3,781,367Fairvalueadjustments - - - 287,120 287,120Actuarialgains/(losses) - - - (506,000) (506,000) 59,813 - 59,813 6,164,752 6,104,939

Pleaserefertonote28forexplanationsonmaterialdifferences.





1. Presentation of Annual Financial Statements

Theannualfinancialstatementshavebeenprepared inaccordancewith theSouthAfricanStandardsofGenerallyRecognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by theAccountingStandardsBoardinaccordancewithSection91(1)ofthePublicFinanceManagementAct(Act1of1999).

Theseannual financial statements havebeenpreparedonanaccrual basis of accounting andare in accordancewithhistoricalcostconventionasthebasisofmeasurement,unlessspecifiedotherwise.TheyarepresentedinSouthAfricanRands.

1.1 Significant judgements and sources of estimation uncertainty

Inpreparingtheannualfinancialstatements,managementisrequiredtomakeestimatesandassumptionsthataffecttheamountsrepresentedintheannualfinancialstatementsandrelateddisclosures.Useofavailableinformationandtheapplicationofjudgementisinherentintheformationofestimates.Actualresultsinthefuturecoulddifferfromtheseestimateswhichmaybematerialtotheannualfinancialstatements.Significantjudgementsinclude:Trade receivables, loans and other receivables

The council assesses its trade receivables, loans and other receivables for impairment where there are possibleindicators for impairment. In determiningwhether an impairment loss should be recorded in surplusor deficit, theCouncilmakesjudgementsastowhetherthereisobservabledataindicatingameasurabledecreaseintheestimatedfuturecashflowsfromafinancialasset.

Theimpairmentfortradereceivablesandotherreceivablesiscalculatedonaportfoliobasis,basedonhistoricallossratios,adjustedfornationalandindustry-specificeconomicconditionsandotherindicatorspresentatthereportingdatethatcorrelatewithdefaultsontheportfolio.

Post retirement benefits

Thepresentvalueofthepostretirementobligationdependsonanumberoffactorsthataredeterminedonanactuarialbasisusinganumberofassumptions.Theassumptionsusedindeterminingthenetcost(income)includethediscountrate.Anychangesintheseassumptionswillimpactonthecarryingamountofpostretirementobligations.

TheCouncildeterminestheappropriatediscountrateattheendofeachyear.Thisistheinterestratethatshouldbeusedtodeterminethepresentvalueofestimatedfuturecashoutflowsexpectedtoberequiredtosettlethepensionobligations. In determining the appropriate discount rate, the council considers the interest rates of high-qualitycorporatebondsthataredenominatedinthecurrencyinwhichthebenefitswillbepaid,andthathavetermstomaturityapproximatingthetermsoftherelatedpensionliability.

Otherkeyassumptionsforpensionobligationsarebasedoncurrentmarketconditions.Theassumptionsusedareconsistentwithassumptionsusedinthestatutoryvaluation.However,GRAP25requiresthevaluationtobecarriedoutonaprescribedmarketvaluebasisandanumberoftheassumptionsthereforedifferfromthoseusedinthestatutoryvaluation.Valuationrateofinterest–GRAP25requiresratestobedeterminedbyreferencetothecurrentmarketyieldofgovernmentbonds.Thebulkoftheliabilitieshaveashortterm,whilstoneremainingpensionerhasapotentiallyverylongremainingoutstandingterm.




Allowance for doubtful debts

An impairment loss is recognised in surplus and deficit when there is objective evidence that it is impaired. Theimpairmentiscalculatedasapercentageofnettradereceivables.Thepercentageisbasedonhistoricaldata.Currentlycouncilfeelsthat55%ofnetreceivableswillsufficefortheallowancecalculation.

1.2 Property, plant and equipment

Property,plantandequipmentaretangiblenon-currentassetsthatareheldforuseintheproductionorsupplyofgoodsorservices,rentaltoothers,orforadministrativepurposes,andareexpectedtobeusedduringmorethanoneperiodThecostofanitemofproperty,plantandequipmentisrecognisedasanassetwhen:

• itisprobablethatfutureeconomicbenefitsorservicepotentialassociatedwiththeitemwillflowtothecouncil;and• thecostoftheitemcanbemeasuredreliably.Property,plantandequipmentisinitiallymeasuredatcost.

Costsincludecostsincurredinitiallytoacquireorconstructanitemofproperty,plantandequipmentandcostsincurredsubsequently toaddto, replacepartof,orservice it. Ifareplacementcost is recognised in thecarryingamountofanitemofproperty,plantandequipment,thecarryingamountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtothestatementoffinancialperformanceduringthefinancialperiodinwhichtheyareincurred.

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to theirestimatedresidualvalue.

Property,plantandequipmentiscarriedatcostlessaccumulateddepreciationandanyimpairmentlosses.Property,plantandequipmentistestedforimpairmentonanannualbasis.

Theusefullivesofitemsofproperty,plantandequipmenthavebeenassessedasfollows:

Theusefullivesofitemsofproperty,plantandequipmenthavebeenassessedasfollows:

Item Depreciation method Average useful lifeBuildings Straightline 50yearsFurnitureandfixtures Straightline 10yearsMotorvehicles Straightline 5yearsOfficeequipment Straightline 5yearsComputerequipment Straightline 3yearsImprovementstoproperty Straightline 10years

Thedepreciableamountofanassetisallocatedonasystematicbasisoveritsusefullife.

Eachpartofanitemofproperty,plantandequipmentwithacostthatissignificantinrelationtothetotalcostoftheitemisdepreciatedseparately.

Thedepreciationmethodusedreflectsthepatterninwhichtheasset’sfutureeconomicbenefitsorservicepotentialareexpectedtobeconsumedbythecouncil.Thedepreciationmethodappliedtoanassetisreviewedatleastateachreportingdateand,iftherehasbeenasignificantchangeintheexpectedpatternofconsumptionofthefutureeconomicbenefitsorservicepotentialembodied in theasset, themethod ischanged to reflect thechangedpattern.Suchachangeisaccountedforasachangeinanaccountingestimate.




Thecouncilassessesateachreportingdatewhetherthereisanyindicationthatthecouncilexpectationsabouttheresidualvalueandtheusefullifeofanassethavechangedsincetheprecedingreportingdate.Ifanysuchindicationexists,thecouncilrevisestheexpectedusefullifeand/orresidualvalueaccordingly.Thechangeisaccountedforasachangeinanaccountingestimate.

Thedepreciationchargeforeachperiodisrecognisedinsurplusordeficitunlessitisincludedinthecarryingamountofanotherasset.

Itemsofproperty,plantandequipmentarederecognisedwhentheassetisdisposedoforwhentherearenofurthereconomicbenefitsorservicepotentialexpectedfromtheuseoftheasset.

Thegainorlossarisingfromthederecognitionofanitemofproperty,plantandequipmentisincludedinsurplusordeficitwhentheitemisderecognised.Thegainorlossarisingfromthederecognitionofanitemofproperty,plantandequipmentisdeterminedasthedifferencebetweenthenetdisposalproceeds,ifany,andthecarryingamountoftheitem.

Assetswhichthecouncilholdsforrentalstoothersandsubsequentlyroutinelysellaspartoftheordinarycourseofactivities,aretransferredtoinventorieswhentherentalsendandtheassetsareavailable-for-sale.Proceedsfromsalesoftheseassetsarerecognisedasrevenue.Allcashflowsontheseassetsareincludedincashflowsfromoperatingactivitiesinthecashflowstatement.

1.3 Intangible assets

Anassetisidentifiedasanintangibleassetwhenit:

• iscapableofbeingseparatedordivided fromanentityandsold, transferred, licensed, rentedorexchanged,eitherindividuallyortogetherwitharelatedcontract,assetsorliability;or

• arisesfromcontractualrightsorotherlegalrights,regardlesswhetherthoserightsaretransferableorseparatefromtheentityorfromotherrightsandobligations.

Intangibleassetsareinitiallyrecognisedatcost.

Whereanintangibleassetisacquiredthroughanon-exchangetransaction,itsinitialcostatthedateofacquisitionismeasuredatitsfairvalueasatthatdate.

Expenditureon research (oron the researchphaseofan internalproject) is recognisedasanexpensewhen it isincurred.

An intangibleassetarising fromdevelopment (or fromthedevelopmentphaseofan internalproject) is recognisedwhen:

• itistechnicallyfeasibletocompletetheassetsothatitwillbeavailableforuseorsale;• thereisanintentiontocompleteanduseorsellit;• thereisanabilitytouseorsellit;• itwillgenerateprobablefutureeconomicbenefitsorservicepotential;• thereareavailabletechnical,financialandotherresourcestocompletethedevelopmentandtouseorsellthe

asset;and• theexpenditureattributabletotheassetduringitsdevelopmentcanbemeasuredreliably.

Intangibleassetsarecarriedatcostlessanyaccumulatedamortisationandanyimpairmentlosses.




An intangibleasset is regardedashavingan indefiniteuseful lifewhen,basedonall relevant factors, there isnoforeseeable limit to theperiodoverwhich theasset is expected togeneratenet cash inflowsor servicepotential.Amortisationisnotprovidedfortheseintangibleassets,buttheyaretestedforimpairmentannuallyandwheneverthereisanindicationthattheassetmaybeimpaired.Forallotherintangibleassetsamortisationisprovidedonastraightlinebasisovertheirusefullife.

Theamortisationperiodandtheamortisationmethodforintangibleassetsarereviewedateachreportingdate.

Reassessingtheusefullifeofanintangibleassetwithafiniteusefullifeafteritwasclassifiedasindefiniteisanindicatorthattheassetmaybeimpaired.Asaresulttheassetistestedforimpairmentandtheremainingcarryingamountisamortisedoveritsusefullife.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are notrecognisedasintangibleassets.

Amortisationisprovidedtowritedowntheintangibleassets,onastraightlinebasis,totheirresidualvaluesasfollows:

Item UsefullifeRegistrationsystem 5yearsAccountingsystem 5years

Intangibleassetsarederecognised:• ondisposal;or• whennofutureeconomicbenefitsorservicepotentialareexpectedfromitsuseordisposal.

Thegainorlossisthedifferencebetweenthenetdisposalproceeds,ifany,andthecarryingamount,andisrecognisedinsurplusordeficitwhentheassetisderecognised.

1.4 Financial instruments

Afinancialinstrumentisanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityoraresidualinterestofanotherentity.

The amortised cost of a financial asset or financial liability is the amount atwhich the financial asset or financialliabilityismeasuredatinitialrecognitionminusprincipalrepayments,plusorminusthecumulativeamortisationusingtheeffectiveinterestmethodofanydifferencebetweenthat initialamountandthematurityamount,andminusanyreduction(directlyorthroughtheuseofanallowanceaccount)forimpairmentoruncollectibility.

Creditriskistheriskthatonepartytoafinancialinstrumentwillcauseafinanciallossfortheotherpartybyfailingtodischargeanobligation.

Derecognitionistheremovalofapreviouslyrecognisedfinancialassetorfinancialliabilityfromanentity’sstatementoffinancialposition.

Theeffectiveinterestmethodisamethodofcalculatingtheamortisedcostofafinancialassetorafinancialliability(orgroupoffinancialassetsorfinancialliabilities)andofallocatingtheinterestincomeorinterestexpenseovertherelevantperiod.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashpaymentsorreceiptsthroughtheexpectedlifeofthefinancialinstrumentor,whenappropriate,ashorterperiodtothenetcarryingamountofthefinancialassetorfinancialliability.Whencalculatingtheeffectiveinterestrate,anentityshallestimatecashflowsconsideringallcontractual termsof thefinancial instrument (forexample,prepayment,callandsimilaroptions)butshallnotconsiderfuturecreditlosses.Thecalculationincludesallfeesandpointspaidorreceivedbetweenpartiesto thecontract thatarean integralpartof theeffective interest rate (see theStandardofGRAPonRevenue from




ExchangeTransactions),transactioncosts,andallotherpremiumsordiscounts.Thereisapresumptionthatthecashflowsandtheexpectedlifeofagroupofsimilarfinancialinstrumentscanbeestimatedreliably.However,inthoserarecaseswhenitisnotpossibletoreliablyestimatethecashflowsortheexpectedlifeofafinancialinstrument(orgroupoffinancialinstruments),theentityshallusethecontractualcashflowsoverthefullcontractualtermofthefinancialinstrument(orgroupoffinancialinstruments).

Fairvalueistheamountforwhichanassetcouldbeexchanged,oraliabilitysettled,betweenknowledgeablewillingpartiesinanarm’slengthtransaction.

Afinancialassetis:

• cash;• aresidualinterestofanotherentity;or• acontractualrightto: - receivecashoranotherfinancialassetfromanotherentity;or - exchangefinancialassetsorfinancialliabilitieswithanotherentityunderconditionsthatarefavourabletothe

entity.

Afinancialliabilityisanyliabilitythatisacontractualobligationto:

• delivercashoranotherfinancialassettoanotherentity;or• exchangefinancialassetsorfinancialliabilitiesunderconditionsthatarepotentiallyunfavourabletotheentity.

Interestrateriskistheriskthatthefairvalueorfuturecashflowsofafinancial instrumentwillfluctuatebecauseofchangesinmarketinterestrates.

Liquidityriskistheriskencounteredbyanentityintheeventofdifficultyinmeetingobligationsassociatedwithfinancialliabilitiesthataresettledbydeliveringcashoranotherfinancialasset.

Loanspayablearefinancialliabilities,otherthanshort-termpayablesonnormalcreditterms.

Marketriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarketprices.Marketriskcomprisesthreetypesofrisk:currencyrisk,interestrateriskandotherpricerisk.

Classification

Theentityhasthefollowingtypesoffinancialassets(classesandcategory)asreflectedonthefaceofthestatementoffinancialpositionorinthenotesthereto:

Class CategoryCashandCashequivalents FinancialassetmeasuredatamortisedcostTradeandotherreceivables FinancialassetmeasuredatamortisedcostInvestments Financialassetmeasuredatfairvalue

Theentityhasthefollowingtypesoffinancialliabilities(classesandcategory)asreflectedonthefaceofthestatementoffinancialpositionorinthenotesthereto:

Class CategoryTradeandotherpayables FinancialliabilitymeasuredatamortisedcostBorrowings Financialliabilitymeasuredatamortisedcost




Initial recognition

The entity recognises a financial asset or a financial liability in its statement of financial position when the entitybecomesapartytothecontractualprovisionsoftheinstrument.Initial measurement of financial assets and financial liabilities

Theentitymeasuresafinancialassetandfinancialliabilityinitiallyatitsfairvalueplustransactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialassetorfinancialliability.

Subsequent measurement of financial assets and financial liabilities

Theentitymeasuresallfinancialassetsandfinancialliabilitiesafterinitialrecognitionusingthefollowingcategories:

• Financialinstrumentsatfairvalue.• Financialinstrumentsatamortisedcost.

Allfinancialassetsmeasuredatamortisedcost,orcost,aresubjecttoanimpairmentreview.

Fair value measurement considerations

Thebestevidenceof fairvalue isquotedprices inanactivemarket. If themarket forafinancial instrument isnotactive,theentityestablishesfairvaluebyusingavaluationtechnique.Theobjectiveofusingavaluationtechniqueistoestablishwhatthetransactionpricewouldhavebeenonthemeasurementdateinanarm’slengthexchangemotivatedbynormaloperatingconsiderations.Valuationtechniquesincludeusingrecentarm’slengthmarkettransactionsbetweenknowledgeable,willingparties,ifavailable,referencetothecurrentfairvalueofanotherinstrumentthatissubstantiallythesame,discountedcashflowanalysisandoptionpricingmodels.Ifthereisavaluationtechniquecommonlyusedbymarketparticipantstopricetheinstrumentandthattechniquehasbeendemonstratedtoprovidereliableestimatesofpricesobtainedinactualmarkettransactions,theentityusesthattechnique.Thechosenvaluationtechniquemakesmaximumuseofmarketinputsandreliesaslittleaspossibleonentity-specificinputs.Itincorporatesallfactorsthatmarketparticipantswouldconsiderinsettingapriceandisconsistentwithacceptedeconomicmethodologiesforpricingfinancialinstruments.Periodically,anentitycalibratesthevaluationtechniqueandtestsitforvalidityusingpricesfromanyobservablecurrentmarkettransactionsinthesameinstrument(i.e.withoutmodificationorrepackaging)orbasedonanyavailableobservablemarketdata.

Reclassification

Theentitydoesnotreclassifyafinancialinstrumentwhileitisissuedorheldunlessitis:

• combinedinstrumentthatisrequiredtobemeasuredatfairvalue;or• aninvestmentinaresidualinterestthatmeetstherequirementsforreclassification.

Iffairvaluecannolongerbemeasuredreliablyforaninvestmentinaresidualinterestmeasuredatfairvalue,theentityreclassifiestheinvestmentfromfairvaluetocost.Thecarryingamountatthedatethatfairvalueisnolongeravailablebecomesthecost.

Ifareliablemeasurebecomesavailableforaninvestmentinaresidualinterestforwhichameasurewaspreviouslynotavailable,andtheinstrumentwouldhavebeenrequiredtobemeasuredatfairvalue,theentityreclassifiestheinstrumentfromcosttofairvalue.




Gains and losses

Againorlossarisingfromachangeinthefairvalueofafinancialassetorfinancialliabilitymeasuredatfairvalueisrecognisedinsurplusordeficit.

Forfinancialassetsandfinancialliabilitiesmeasuredatamortisedcostorcost,againorlossisrecognisedinsurplusordeficitwhenthefinancialassetorfinancialliabilityisderecognisedorimpaired,orthroughtheamortisationprocess.

Impairment and uncollectibility of financial assets

Theentityassessattheendofeachreportingperiodwhetherthereisanyobjectiveevidencethatafinancialassetorgroupoffinancialassetsisimpaired.

Financialassetsmeasuredatamortisedcost:

Ifthereisobjectiveevidencethatanimpairmentlossonfinancialassetsmeasuredatamortisedcosthasbeenincurred,theamountofthelossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimated futurecashflows(excluding futurecredit losses thathavenotbeen incurred)discountedat thefinancialasset’soriginaleffectiveinterestrate.Thecarryingamountoftheassetisreduceddirectlyorthroughtheuseofanallowanceaccount.Theamountofthelossisrecognisedinsurplusordeficit.

If,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreverseddirectlyorbyadjustinganallowanceaccount.Thereversaldoesnot result inacarryingamountof thefinancialasset thatexceedswhattheamortisedcostwouldhavebeenhadtheimpairmentnotbeenrecognisedatthedatetheimpairmentisreversed.Theamountofthereversalisrecognisedinsurplusordeficit.

Derecognition

Financial assets

Theentityderecognisesfinancialassetsusingtradedateaccounting.

Theentityderecognisesafinancialassetonlywhen:

• thecontractualrightstothecashflowsfromthefinancialassetexpire,aresettledorwaived;• theentitytransferstoanotherpartysubstantiallyalloftherisksandrewardsofownershipofthefinancialasset;

or• theentity,despitehavingretainedsomesignificantrisksandrewardsofownershipof thefinancialasset,has

transferredcontroloftheassettoanotherpartyandtheotherpartyhasthepracticalabilitytoselltheassetinitsentiretytoanunrelatedthirdparty,andisabletoexercisethatabilityunilaterallyandwithoutneedingtoimposeadditionalrestrictionsonthetransfer.Inthiscase,theentity:

- derecognisestheasset;and - recognisesseparatelyanyrightsandobligationscreatedorretainedinthetransfer.

The carrying amounts of the transferred asset are allocated between the rights or obligations retained and thosetransferred on the basis of their relative fair values at the transfer date.Newly created rights and obligations aremeasured at their fair values at that date. Any difference between the consideration received and the amountsrecognisedandderecognisedisrecognisedinsurplusordeficitintheperiodofthetransfer.




Onderecognitionofafinancialasset in itsentirety,thedifferencebetweenthecarryingamountandthesumoftheconsiderationreceivedisrecognisedinsurplusordeficit.

Ifthetransferredassetispartofalargerfinancialassetandtheparttransferredqualifiesforderecognitioninitsentirety,thepreviouscarryingamountofthelargerfinancialassetisallocatedbetweenthepartthatcontinuestoberecognisedandthepartthatisderecognised,basedontherelativefairvaluesofthoseparts,onthedateofthetransfer.Forthispurpose,aretainedservicingassetistreatedasapartthatcontinuestoberecognised.Thedifferencebetweenthecarryingamountallocatedtothepartderecognisedandthesumoftheconsiderationreceivedforthepartderecognisedisrecognisedinsurplusordeficit.

Ifatransferdoesnotresultinderecognitionbecausetheentityhasretainedsubstantiallyalltherisksandrewardsofownershipofthetransferredasset,theentitycontinuetorecognisethetransferredassetinitsentiretyandrecogniseafinancial liability for theconsideration received. Insubsequentperiods, theentity recognisesany revenueon thetransferredassetandanyexpenseincurredonthefinancialliability.Neithertheasset,andtheassociatedliabilitynortherevenue,andtheassociatedexpensesareoffset.

1.5 Leases

Aleaseisclassifiedasafinanceleaseif it transferssubstantiallyall therisksandrewardsincidental toownership.Aleaseisclassifiedasanoperatingleaseif itdoesnottransfersubstantiallyall therisksandrewardsincidentaltoownership.

Operating leases - lessor

Operatingleaserevenueisrecognisedasrevenueonastraight-linebasisovertheleaseterm.Thedifferencebetweentheamountsrecognisedasanincomeandthecontractualreceiptsarerecognisedasanoperatingleaseliability.Thisliabilityisnotdiscounted.

Initialdirectcostsincurredinnegotiatingandarrangingoperatingleasesareaddedtothecarryingamountoftheleasedassetandrecognisedasanexpenseovertheleasetermonthesamebasisastheleaserevenue.

IncomeforleasesisdisclosedunderOtherIncomeintheStatementofFinancialPerformance.

Operating leases - lessee

Operatingleasepaymentsarerecognisedasanexpenseonastraight-linebasisovertheleaseterm.Thedifferencebetweentheamountsrecognisedasanexpenseandthecontractualpaymentsarerecognisedasanoperatingleaseassetorliability.

Anycontingentrentsareexpensedintheperiodtheyareincurred.

1.6 Employee benefits

Employeebenefitsareallformsofconsiderationgivenbyanentityinexchangeforservicerenderedbyemployees.

Other long-term employee benefits are employee benefits (other than post-employment benefits and terminationbenefits)thatarenotduetobesettledwithintwelvemonthsaftertheendoftheperiodinwhichtheemployeesrendertherelatedservice.




Short-term employee benefits

Short-termemployeebenefitsareemployeebenefits(otherthanterminationbenefits)thatareduetobesettledwithintwelvemonthsaftertheendoftheperiodinwhichtheemployeesrendertherelatedservice.

Short-termemployeebenefitsincludeitemssuchas:

• wages,salariesandsocialsecuritycontributions;• short-termcompensatedabsences (suchaspaidannual leaveandpaidsick leave)where thecompensation

for theabsences isdue tobesettledwithin twelvemonthsafter theendof the reportingperiod inwhich theemployeesrendertherelatedemployeeservice;

• bonus,incentiveandperformancerelatedpaymentspayablewithintwelvemonthsaftertheendofthereportingperiodinwhichtheemployeesrendertherelatedservice;and

• non-monetarybenefits(forexample,medicalcare,andfreeorsubsidisedgoodsorservicessuchashousing,carsandcellphones)forcurrentemployees.

Whenanemployeehasrenderedservicetotheentityduringareportingperiod,theentityrecognisetheundiscountedamountofshort-termemployeebenefitsexpectedtobepaidinexchangeforthatservice:

• asaliability(accruedexpense),afterdeductinganyamountalreadypaid.Iftheamountalreadypaidexceedstheundiscountedamountofthebenefits,theentityrecognisethatexcessasanasset(prepaidexpense)totheextentthattheprepaymentwillleadto,forexample,areductioninfuturepaymentsoracashrefund;and

• asanexpense,unlessanotherStandardrequiresorpermitstheinclusionofthebenefitsinthecostofanasset.

Theentityrecognisestheexpectedcostofbonus,incentiveandperformancerelatedpaymentswhentheentityhasapresentlegalorconstructiveobligationtomakesuchpaymentsasaresultofpasteventsandareliableestimateoftheobligationcanbemade.Apresentobligationexistswhentheentityhasnorealisticalternativebuttomakethepayments.

Post-employment benefits: Defined benefit plans

Post-employment benefits are employee benefits (other than termination benefits) which are payable after thecompletionofemployment.

Post-employmentbenefitplansareformalorinformalarrangementsunderwhichanentityprovidespost-employmentbenefitsforoneormoreemployees.

Definedbenefitplansarepost-employmentbenefitplansotherthandefinedcontributionplans.

Actuarialgainsandlossescompriseexperienceadjustments(theeffectsofdifferencesbetweenthepreviousactuarialassumptionsandwhathasactuallyoccurred)andtheeffectsofchangesinactuarialassumptions.Inmeasuringitsdefinedbenefit liability theentityrecogniseactuarialgainsand losses insurplusordeficit in thereportingperiod inwhichtheyoccur.




Assetsheldbyalong-termemployeebenefitfundareassets(otherthannon-transferablefinancialinstrumentsissuedbythereportingentity)thatareheldbyanentity(afund)thatislegallyseparatefromthereportingentityandexistssolelytopayorfundemployeebenefitsandareavailabletobeusedonlytopayorfundemployeebenefits,arenotavailable to thereportingentity’sowncreditors(even in liquidation),andcannotbereturnedto thereportingentity,unlesseither:

• theremainingassetsofthefundaresufficienttomeetalltherelatedemployeebenefitobligationsoftheplanorthereportingentity;or

• theassetsarereturnedtothereportingentitytoreimburseitforemployeebenefitsalreadypaid.Current servicecost is the increase in thepresent valueof thedefinedbenefitobligation resulting fromemployeeserviceinthecurrentperiod.

Interestcostistheincreaseduringaperiodinthepresentvalueofadefinedbenefitobligationwhicharisesbecausethebenefitsareoneperiodclosertosettlement.

Pastservicecost is thechange in thepresentvalueof thedefinedbenefitobligation foremployeeservice inpriorperiods,resultinginthecurrentperiodfromtheintroductionof,orchangesto,post-employmentbenefitsorotherlong-termemployeebenefits.Pastservicecostmaybeeitherpositive(whenbenefitsareintroducedorchangedsothatthepresentvalueofthedefinedbenefitobligationincreases)ornegative(whenexistingbenefitsarechangedsothatthepresentvalueofthedefinedbenefitobligationdecreases).Inmeasuringitsdefinedbenefitliabilitytheentityrecognisespastservicecostasanexpenseinthereportingperiodinwhichtheplanisamended.

Planassetscompriseassetsheldbyalong-termemployeebenefitfundandqualifyinginsurancepolicies.

Thepresentvalueofadefinedbenefitobligationisthepresentvalue,withoutdeductinganyplanassets,ofexpectedfuturepaymentsrequiredtosettletheobligationresultingfromemployeeserviceinthecurrentandpriorperiods.

Thereturnonplanassetsisinterest,dividendsorsimilardistributionsandotherrevenuederivedfromtheplanassets,togetherwithrealisedandunrealisedgainsorlossesontheplanassets,lessanycostsofadministeringtheplan(otherthan those included in theactuarialassumptionsused tomeasure thedefinedbenefitobligation)and lessany taxpayablebytheplanitself.

Theamountrecognisedasadefinedbenefitliabilityisthenettotalofthefollowingamounts:

• thepresentvalueofthedefinedbenefitobligationatthereportingdate;• minusthefairvalueat thereportingdateofplanassets(ifany)outofwhichtheobligationsaretobesettled

directly;• plusanyliabilitythatmayariseasaresultofaminimumfundingrequirement

Theamountdeterminedasadefinedbenefitliabilitymaybenegative(anasset).Theentitymeasuretheresultingassetatthelowerof:

• theamountdeterminedabove;and• thepresentvalueofanyeconomicbenefitsavailableintheformofrefundsfromtheplanorreductionsinfuture

contributionstotheplan.Thepresentvalueoftheseeconomicbenefitsisdeterminedusingadiscountratewhichreflectsthetimevalueofmoney.

Anyadjustmentsarisingfromthelimitaboveisrecognisedinsurplusordeficit.

Theentitydeterminesthepresentvalueofdefinedbenefitobligationsandthefairvalueofanyplanassetswithsufficientregularitysuchthattheamountsrecognisedintheannualfinancialstatementsdonotdiffermateriallyfromtheamountsthatwouldbedeterminedatthereportingdate.




Theentity recognises thenet totalof the followingamounts insurplusordeficit,except to theextent thatanotherStandardrequiresorpermitstheirinclusioninthecostofanasset:

• currentservicecost;• interestcost;• theexpectedreturnonanyplanassetsandonanyreimbursementrights;• actuarialgainsandlosses;• pastservicecost;• theeffectofanycurtailmentsorsettlements;and• theeffectofapplyingthelimitonadefinedbenefitasset(negativedefinedbenefitliability).

TheentityusestheProjectedUnitCreditMethodtodeterminethepresentvalueofitsdefinedbenefitobligationsandtherelatedcurrentservicecostand,whereapplicable,pastservicecost.TheProjectedUnitCreditMethod(sometimesknownastheaccruedbenefitmethodpro-ratedonserviceorasthebenefit/yearsofservicemethod)seeseachperiodofserviceasgivingrisetoanadditionalunitofbenefitentitlementandmeasureseachunitseparatelytobuildupthefinalobligation.

Indetermining thepresent valueof itsdefinedbenefitobligationsand the related current service costand,whereapplicable,pastservicecost,anentityshallattributebenefit toperiodsofserviceunder theplan’sbenefit formula.However,ifanemployee’sserviceinlateryearswillleadtoamateriallyhigherlevelofbenefitthaninearlieryears,anentityshallattributebenefitonastraight-linebasisfrom:

• thedatewhenservicebytheemployeefirst leadstobenefitsunder theplan(whetherornot thebenefitsareconditionalonfurtherservice);until

• thedatewhenfurtherservicebytheemployeewillleadtonomaterialamountoffurtherbenefitsundertheplan,otherthanfromfurthersalaryincreases.

Actuarialvaluationsareconductedonanannualbasisbyindependentactuariesseparatelyforeachplan.Theresultsof the valuationareupdated for anymaterial transactionsandothermaterial changes in circumstances (includingchangesinmarketpricesandinterestrates)uptothereportingdate.

Actuarial assumptions

Actuarialassumptionsareunbiasedandmutuallycompatible.

Financialassumptionsarebasedonmarketexpectations,atthereportingdate,fortheperiodoverwhichtheobligationsaretobesettled.

Therateusedtodiscountpost-employmentbenefitobligations(bothfundedandunfunded)reflectthetimevalueofmoney.Thecurrencyandtermofthefinancialinstrumentselectedtoreflectthetimevalueofmoneyisconsistentwiththecurrencyandestimatedtermofthepost-employmentbenefitobligations.

Post-employmentbenefitobligationsaremeasuredonabasisthatreflects:

• estimatedfuturesalaryincreases;• thebenefitssetoutinthetermsoftheplan(orresultingfromanyconstructiveobligationthatgoesbeyondthose

terms)atthereportingdate;and• estimatedfuturechangesinthelevelofanystatebenefitsthataffectthebenefitspayableunderadefinedbenefit

plan,if,andonlyif,either:• thosechangeswereenactedbeforethereportingdate;or• pasthistory,orotherreliableevidence,indicatesthatthosestatebenefitswillchangeinsomepredictablemanner,

forexample,inlinewithfuturechangesingeneralpricelevelsorgeneralsalarylevels.




1.7 Provisions and contingencies

Provisionsarerecognisedwhen:

• theentityhasapresentobligationasaresultofapastevent;• itisprobablethatanoutflowofresourcesembodyingeconomicbenefitsorservicepotentialwillberequiredto

settletheobligation;and• areliableestimatecanbemadeoftheobligation.

Theamountofaprovisionisthebestestimateoftheexpenditureexpectedtoberequiredtosettlethepresentobligationatthereportingdate.

Wheresomeorallof theexpenditurerequired tosettleaprovision isexpectedtobereimbursedbyanotherparty,the reimbursement is recognisedwhen,andonlywhen, it isvirtuallycertain that reimbursementwillbe received ifthecouncilsettlestheobligation.Thereimbursementistreatedasaseparateasset.Theamountrecognisedforthereimbursementdoesnotexceedtheamountoftheprovision.

Provisionsarenotrecognisedforfutureoperatingsurpluses.

Ifanentityhasacontractthatisonerous,thepresentobligation(netofrecoveries)underthecontractisrecognisedandmeasuredasaprovision.

1.8 Revenue

Revenueisthegrossinflowofeconomicbenefitsorservicepotentialduringthereportingperiodwhenthoseinflowsresultinanincreaseinnetassets,otherthanincreasesrelatingtocontributionsfromowners.

Conditionson transferredassetsarestipulations thatspecify that the futureeconomicbenefitsorservicepotentialembodiedintheassetisrequiredtobeconsumedbytherecipientasspecifiedorfutureeconomicbenefitsorservicepotentialmustbereturnedtothetransferor.

Controlofanassetarisewhentheentitycanuseorotherwisebenefitfromtheassetinpursuitofitsobjectivesandcanexcludeorotherwiseregulatetheaccessofotherstothatbenefit.

Feeincomeconsistsofannualfees,applicationsfeesandaccreditationsofuniversities.ProfessionalfeesarepayablebymemberswhoareintheProfessionalorRegisteredcategories.Feeincomeisrecordedinthefinancialstatementsintheperiodtowhichitrelates.

CandidatefeesarepayablebymemberswhoarenotyetqualifiedProfessionalorRegisteredpersons.

Applicationfeesareonce-offfeespayableonsubmissionofanapplicationform.Thesefeesaretocompensateforthecostsincurredduringtheevaluationprocessandarerecognisedwhenreceived.

1.9 Revenue from exchange transactions

Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable,netoftradediscountsandvolumerebates.

Anexchange transaction isone inwhich theentity receivesassetsorservices,orhas liabilitiesextinguished,anddirectlygivesapproximatelyequalvalue(primarilyintheformofgoods,servicesoruseofassets)totheotherpartyinexchange.




Fairvalueistheamountforwhichanassetcouldbeexchanged,oraliabilitysettled,betweenknowledgeable,willingpartiesinanarm’slengthtransaction.

Accreditationvisitrevenueisrecognisedasrevenuefromexchangetransactions.

Interest

Revenuearisingfromtheusebyothersofentityassetsyieldinginterest,royaltiesanddividendsorsimilardistributionsisrecognisedwhen:

• Itisprobablethattheeconomicbenefitsorservicepotentialassociatedwiththetransactionwillflowtotheentityand

• Theamountoftherevenuecanbemeasuredreliably.

Interestisrecognised,insurplusordeficit,usingtheeffectiveinterestratemethod.

1.10 Revenue from non-exchange transactions

Non-exchangetransactionsaretransactionsthatarenotexchangetransactions.Inanon-exchangetransaction,ancouncileitherreceivesvaluefromanotherentitywithoutdirectlygivingapproximatelyequalvalueinexchange,orgivesvaluetoanothercouncilwithoutdirectlyreceivingapproximatelyequalvalueinexchange.

Transfersareinflowsoffutureeconomicbenefitsorservicepotentialfromnon-exchangetransactions,otherthantaxes.

Applicationandannualfeesarerecognisedasrevenuefromnon-exchangetransactions.

Recognition

Aninflowofresourcesfromanon-exchangetransactionrecognisedasanassetisrecognisedasrevenue,excepttotheextentthataliabilityisalsorecognisedinrespectofthesameinflow.

Asthecouncilsatisfiesapresentobligationrecognisedasaliabilityinrespectofaninflowofresourcesfromanon-exchangetransactionrecognisedasanasset,itreducesthecarryingamountoftheliabilityrecognisedandrecognisesanamountofrevenueequaltothatreduction.

Measurement

Revenuefromanon-exchangetransactionismeasuredattheamountoftheincreaseinnetassetsrecognisedbythecouncil.

When,asaresultofanon-exchangetransaction,thecouncilrecognisesanasset,italsorecognisesrevenueequivalenttotheamountoftheassetmeasuredatitsfairvalueasatthedateofacquisition,unlessitisalsorequiredtorecognisealiability.Wherealiabilityisrequiredtoberecogniseditwillbemeasuredasthebestestimateoftheamountrequiredtosettletheobligationatthereportingdate,andtheamountoftheincreaseinnetassets,ifany,recognisedasrevenue.Whenaliabilityissubsequentlyreduced,becausethetaxableeventoccursoraconditionissatisfied,theamountofthereductionintheliabilityisrecognisedasrevenue.


1.11 Borrowing costs

Borrowingcostsareinterestandotherexpensesincurredbyanentityinconnectionwiththeborrowingoffunds.

Borrowingcostsarerecognisedasanexpenseintheperiodinwhichtheyareincurred.

1.12 Budget information

Council istypicallysubjecttobudgetarylimitsintheformofappropriationsorbudgetauthorisations(orequivalent),whichitsetsforitself,asdefinedinitsDelegationofAuthorityFramework.

Generalpurposefinancialreportingbycouncilshallprovideinformationonwhetherresourceswereobtainedandusedinaccordancewiththelegallyadoptedbudget.

Theapprovedbudgetcoversthefiscalperiodfrom01/04/2016to31/03/2017.

TheannualfinancialstatementsandthebudgetareonthesamebasisofaccountingthereforeacomparisonwiththebudgetedamountsforthereportingperiodhavebeenincludedintheStatementofComparisonofBudgetandActualamounts.

2. New standards and interpretations

2.1 Standards and interpretations effective and adopted in the current year

Inthecurrentyear,theCouncilhasadoptedthefollowingstandardsandinterpretationsthatareeffectiveforthecurrentfinancialyearandthatarerelevanttoitsoperations:

GRAP17(asamended2015):Property,PlantandEquipment

• Basedon the feedback receivedaspartof thepost-implementation review, theAccountingStandardsBoardagreedtoreconsidercertainprinciplesinGRAP16andGRAP17.Inparticular,theBoardagreedto:

• Reviewtheprinciplesandexplanationsrelatedtothedistinctionbetweeninvestmentpropertyandproperty,plantandequipment.

• Considerwhetheranindicator-basedassessmentofusefullivesofassetscouldbeintroduced.• Clarifythewordingrelatedtotheuseofexternalvaluers.• Introducemorespecificpresentationanddisclosurerequirementsforcapitalwork-in-progress.• Reviewtheencourageddisclosuresandassesswhetheranyshouldbemademandatoryordeleted.• Requireseparatepresentationofexpenditureincurredonrepairsandmaintenanceinthefinancialstatements.

Amendmentsidentifiedaspartofthepost-implementationreview,affectedthefollowingareas:• Indicator-basedassessmentoftheusefullivesofassets• Useofexternalvaluers• Encourageddisclosures• Capitalwork-in-progress• Expenditureincurredonrepairsandmaintenance

Theeffectivedateofthestandardisforyearsbeginningonorafter01April2016.

Thecouncilhasadopted thestandard for thefirst time in the2017annualfinancialstatements.The impactof thestandard is not material.






3. Risk management

Capital risk management

TheCouncil’sobjectiveswhenmanagingcapitalaretosafeguardtheCouncil’sabilitytocontinueasagoingconcerninordertoprovideservicesasenactedbytheEngineeringProfessionAct2000,(Actno46of2000)andtomaintainanoptimalcapitalstructuretoreducethecostofcapital.

ThecapitalstructureoftheCouncilconsistsofdebt,whichincludestheborrowingsdisclosedinnotes10,cashandcashequivalentsdisclosedinnote9,andequityasdisclosedintheStatementofFinancialPosition.Allborrowingshavebeenpaidup.

Therearenoexternallyimposedcapitalrequirements.

Therehavebeennochangestowhattheentitymanagesascapital,thestrategyforcapitalmaintenanceorexternallyimposedcapitalrequirementsfromthepreviousyear.

Financial risk management

TheCouncil’sactivitiesexposeittoavarietyoffinancialrisks:marketrisk(includingfairvalueandinterestraterisk),creditriskandliquidityrisk.TheCouncil’soverallriskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotentialadverseeffectsontheCouncil’sfinancialperformance.RiskmanagementiscarriedoutbyanauditandriskcommitteeunderpoliciesapprovedbytheCouncil.TheCouncilprovideswrittenprinciplesforoverallriskmanagement,aswellaswrittenpoliciescoveringspecificareas,suchasinterestrateriskandcreditriskandinvestmentofexcessliquidity.

Liquidity risk

Cashflow forecasting isperformedby theCouncil.TheCouncil’s financedivisionmonitors rolling forecastsof theCouncil’sliquidityrequirementstoensureithassufficientcashtomeetoperationalneedswhilemaintainingsufficientheadroomonitsundrawncommittedborrowingfacilitiesatalltimessothatthecompanydoesnotbreachborrowinglimitsorcovenants(whereapplicable)onanyofitsborrowingfacilities.TheCouncil investssurpluscashininterestbearing current accounts, time deposits,moneymarket deposits andmarketable securities, choosing instrumentswithappropriatematuritiesorsufficientliquiditytoprovidesufficienthead-roomasdeterminedbytheabovementionedforecasts.

Interest rate risk

AstheCouncilhasnosignificantinterest-bearingassets,theCouncil’sincomeandoperatingcashflowsaresubstantiallyindependentofchangesinmarketinterestrates.

TheCouncilanalysesitsinterestrateexposureonaregularbasis.InterestratefluctuationsthatcouldimpactonitssurplusordeficitaretheratesearnedonCouncil’sshort-terminvestments.Itisnotforeseenthattheactualrevenueearnedcompared to thebudgeted revenuewilldeviatebymore thanR200,000perannum.This translates into apossiblefluctuationof0.1%to0.2%intotalrevenue.




Credit risk

Creditriskconsistsmainlyofcashdeposits,cashequivalentsandtradedebtors.Thecouncilonlydepositscashwithmajorbankswithhighqualitycreditstandingandlimitsexposuretoanyonecounter-party.Refertotablebelowforcreditratings

Standard BankNationallong-termcreditratingAA(ZAF)Nationalshort-termcreditratingF1+(ZAF)InvestecNationallong-termcreditratingAA(ZAF)Nationalshort-termcreditratingA1+(ZAF)

Tradereceivablescompriseawidespreadcustomerbase,mainlybeingregisteredpersons.Managementevaluatescreditriskrelatingtoregisteredpersonsonanongoingbasis.TheCouncilhastocomplywithstatutoryobligationsandnochoiceisexercisedontheregisteredperson’sabilitytopaymembershipfees.

4. Property, plant and equipment

2017 2016 Cost/ Accumulated Carrying Cost/ Accumulated Carrying Valuation depreciation value Valuation depreciation value and and accumulated accumulated impairment impairmentBuildings 7,691,993 (1,614,002) 6,077,991 7,691,993 (1,460,162) 6,231,831Furnitureandfixtures 2,209,541 (1,396,377) 813,164 1,841,517 (1,311,291) 530,226Motorvehicles 198,064 (178,258) 19,806 198,064 (178,258) 19,806Officeequipment 827,084 (545,026) 282,058 601,028 (497,703) 103,325Computerequipment 4,085,028 (2,160,899) 1,924,129 2,214,618 (1,934,282) 280,336Improvementstoproperty 2,409,222 (1,295,974) 1,113,248 2,255,280 (1,082,867) 1,172,413Total 17,420,932 (7,190,536) 10,230,396 14,802,500 (6,464,563) 8,337,937

Reconciliation of property, plant and equipment - 2017

Opening Additions Depreciation Impairment Total balance lossBuildings 6,231,831 - (153,840) - 6,077,991Furnitureandfixtures 530,226 368,025 (85,087) - 813,164Motorvehicles 19,806 - - - 19,806Officeequipment 103,325 234,891 (47,323) (8,835) 282,058Computerequipment 280,336 1,933,877 (269,074) (21,010) 1,924,129Improvementstoproperty 1,172,413 153,942 (213,107) - 1,113,248 8,337,937 2,690,735 (768,431) (29,845) 10,230,396




Reconciliation of property, plant and equipment - 2016

Opening Additions Depreciation Impairment Total balance lossBuildings 6,385,670 - (153,839) - 6,231,831Furnitureandfixtures 138,353 521,089 (122,942) (6,274) 530,226Motorvehicles - - 19,806 - 19,806Officeequipment 94,722 57,115 (48,512) - 103,325Computerequipment 553,203 118,297 (385,925) (5,239) 280,336Improvementstoproperty 1,211,780 169,708 (209,075) - 1,172,413 8,383,728 866,209 (900,487) (11,513) 8,337,937

Buildings - Section title deeds held Anundividedshareofthecommonproperty(Section5-8,9-10and16)intheschemeapportionedtothesaidsectioninaccordancewiththeparticipationquotaasendorsedonthesaidsectionalplan

ThebondoverthePropertyisfullypaidup,asdisclosedinnote10. Square 2017 2016 Metres R RSection5(FirstFloor) 631 - -Section6(Firstfloor) 383 - -Section7(Firstfloor) 237 - -Section8(Firstfloor) 456 - -T013126/2009Purchased29Apr2009 - 6,275,750 6,275,750

Section9(Secondfloor) 212 - -Section10(Secondfloor) 329 - -T57554/1999

Purchased30Sep1999 - 1,411,243 1,411,243Section16(Basement)T044549/2005 5 - -Purchased10Aug2005 - 5,000 5,000 2,253 7,691,993 7,691,993

5. Intangible assets 2017 2016 Cost/ Accumulated Carrying Cost / Accumulated Carrying Valuation amortisation value Valuation amortisation value and and accumulated accumulated impairment impairmentRegistrationsystem 2,252,090 - 2,252,090 1,834,378 59,500 1,893,878Accountingsystem 716,975 (302,626) 414,349 493,186 43,211 536,397Total 2,969,065 (302,626) 2,666,439 2,327,564 102,711 2,430,275




Reconciliation of intangible assets - 2017

Opening Additions Amortisation Total balanceRegistrationsystem 1,834,378 358,212 - 2,252,090Accountingsystem 536,398 - (122,049) 414,349 2,430,276 358,212 (122,049) 2,666,439Reconciliationofintangibleassets-2016 Opening Additions Amortisation Total balanceRegistrationsystem 1,834,378 59,500 - 1,893,878Accountingsystem 493,186 125,152 (81,940) 536,398 2,327,564 184,652 (81,940) 2,430,276

6 Investments Designated at fair value

SISInflationplus1-3Investments 12,889,561 12,347,620

Theseinstrumentsconsistofinvestmentsheldatfinancialinstitutionsandtheirmarket valuesquotedinthemarketplace.

Non-currentassets Theentityhasnotreclassifiedanyfinancialassetsfromcostoramortisedcosttofairvalue,orfromfairvaluetocostoramortisedcostduringthecurrentorprioryear.

SISInflation–openingbalance 12,347,620 11,932,256Fairvalueadjustment–currentyearrecognisedinsurplusor 287,120 108,474deficitEarningsrecognisedinsurplusanddeficitfortheperiodnet 254,821 306,890ofearningsandadminfees Fair value at year-end 12,889,561 12,347,620

7. Retirement benefit asset

Definedbenefitplan

Retirementbenefit

BalancesheetobligationsforPensionbenefits-non-currentliabilities (21,531,000) (21,030,000)

IncomestatementchargeforEmployeebenefitexpense-wagesandsalaries 39,484,218 34,737,844-pensioncost-definedbenefitplan (381,000) (6,946,000) 39,103,218 27,791,844

Actuariallosses/(gains)recognisedinthestatementoffinancialperformance 644,000 5,730,000Cumulativeactuariallosses/(gains)recognisedinstatementoffinancialperformance (4,392,000) (10,122,000) (3,748,000) (4,392,000)




Pensionbenefits PlanassetsareheldinaSanlamMatrix50portfolioandthereturnisbasedontheperformanceof theportfolio.Theassetsunderlying theEmployerSurplusAccountand the SolvencyReserve have been included in the asset value. The funds areadministeredbyaseparatelegalentityandasaresult,theassetsbelongingtotheFundarecreditremote.

The amounts recognised in the statement of financial position are as follows:

Carrying value Presentvalueofthedefinedbenefitobligation-whollyunfunded (21,531,000) (21,030,000)Fairvalueofplanassets 30,861,000 29,979,000 9,330,000 8,949,000

Netassetamountrecognitionwasdeterminedonthefollowingbasis:

ThedefinitionsoftheFundprovidefortheestablishmentofanEmployerSurplusAccount(”ESA”).Rule13.3.3statesthatfuturesurplusbeallocatedbetweentheESAandMemberSurplusAccountinproportionsasdeterminedbythetrustees.

Inthesecircumstances,AC504statesthatthepresentvalueoftheeconomicbenefitsavailabletotheemployer(par.68(b)ofGRAP25)isthevalueoftheESAplustheaccountingsurplusavailableasareductioninfuturecontributions.As confirmed byAbsa Consultants andActuaries, the value of the ESA was R9,330,000 as at 31 March 2017.Furthermore,sincetherearenoactiveDefinedBenefitmembersintheFund(asperthevaluationreport),accountingsurplusavailableasareductioninfuturecontributionsiszero.ThepresentvalueoftheeconomicbenefitsavailabletotheemployeristhereforeR9,330,000.

Thevalueoftheassetreflectedonthebalancesheetshouldbedeterminedintermsofpar.68ofGRAP25.Thisstatesthatthenetassetrecognisedshouldbethelowerofthevaluedeterminedunderpar.64andthepresentvalueoftheeconomicbenefitsavailabletotheemployer(par.68(b)).Thevaluesforthepastthreeyearsareasfollows(theactuaryprovidedtheESAbalanceasateachdate):

Thevaluedeterminedunderpar.64wasR9,330,000asat31March2017andthevalueofpar.68(b)wasR9,330,000.Therefore,thenetassetasat31March2017shouldbelimitedtoR9,330,000.






2017 2016 R RThefairvalueofplanassetsincludes:SanlamMatrix50portfolio TheassetsunderlyingtheEmployerSurplusAccountandtheSolvencyReservehavebeenincludedintheassetvalue.Assetsnotrecognised(GRAP25,paragraph68(b)). Movement in the defined benefit obligation are as follows

Openingbalance 21,030,000 24,281,000Interestcost 2,250,000 1,995,000Actuarial(gains)/losses ( 9,000) (3,523,000)Benefitspaid (1,680,000) (1,723,000) 21,531,000 21,030,000

Net gain / (expense) recognised in the statement of financial performance

Interestcost (2,250,000) (1,995,000)Actuarialgains/(losses) (506,000) (5,730,000)EffectoflimitinGRAP25,par.68(b) - 10,417,000Expectedreturnonplanassets 3,137,000 4,254,000 381,000 6,946,000




2017 2016 R RRetirement benefit asset (continued)

Themovementinthefairvalueofplanassetsareasfollows

Openingbalance 29,979,000 36,701,000Expectedreturn 3,137,000 4,254,000Actuarialgains(losses) (575,000) (9,253,000)Benefitspaid (1,680,000) (1,723,000) 30,861,000 29,979,000

Keyassumptionsused

Theprincipalactuarialassumptionsusedwereasfollows:

Discountratesused 7.34% 7.87%Expectedrateofreturnonassets 9.80% 9.91%Expectedrateofreturnonreimbursementrights 11.34% 11.87%

Theassumptionsusedareconsistentwithassumptionsusedinthestatutoryvaluation.However,GRAP25requiresthevaluationtobecarriedoutonaprescribedmarketvaluebasisandanumberoftheassumptionsthereforedifferfromthoseusedinthestatutoryvaluation.

Valuation rate of interest –GRAP 25 requires rates to be determined by reference to the currentmarket yield ofgovernmentbonds.TheyieldoftheR209governmentbondwas9.80%andthelong-termliabilityontheyieldoftheR202governmentbond2.29%at31March2017.The implied long-terminflationassumption in7.34%perannum,whichwasderivedfromtheR209andR202.Ratesgivenaretheweightedaveragerates.

Theexpectedreturnonassetsarebasedonanaveragebalancesportfolio.Theexpectedlongtermrealreturnis4%,calculatedasfollows: Portfolio Realreturn Weighted returnEquity 70 % 4.50 % 3.15 %Bonds 30% 3.00% 0.90% 100.00 % 7.50 % 4.05 %

InaccordancewiththePensionIncreasePolicy,increasesshouldbegrantedequaltotheincreaseintheConsumerPriceIndex,subjecttoaffordability.

Inrespectoftheperiodafterretirement,thepublisheda(55)tablesformalesandfemaleshavebeenused.Thenumberofpensionersasat31March2017,theirannualpensionandweightedaverageage,comparedtothatasat31March2016 were as follows:

Numberofpensioners 9 9Annualpension 1,680,000 1,604,000Pensionweightedaverageage 49.5 49




2017 2016 R R8. Trade and other receivables

Tradedebtorsandotherdebtors 14,919,633 23,784,198Employeecostsinadvance (29,864) (16,364)Deposits 2,000 2,000Impairmentforbaddebts (8,206,898) (16,839,152) 6,684,871 6,930,682

Fair value of trade and other receivables

Tradeandotherreceivables 10,289,342 6,930,682

Trade and other receivables impaired Theamountoftheprovisionwas(R8,208,898)asof31March2017(2016:16,839,152). Reconciliation of provision for impairment of trade and other receivables

Openingbalance 16,839,152 5,083,425Provisionforimpairment 3,267,964 11,755,727Amountswrittenoffasuncollectible (11,900,218) -Closingbalance 8,206,898 16,839,152

Usually,onceayear,ECSAcancelstheregistrationofregisteredpersonswhoareindefaultfornonpaymentoftheirannualfeesofthepreviousyear.In2015/2016nocancellationstookplace,althoughthepotentialdefaultershadbeenidentified(2,968defaultersowingR9,078,215).ThecancellationsonlyoccurredinJuly2016.Thelargeprovisionforimpairmentamount(R16,839,152)atyear-end31March2016consistsoutoftwoamounts,beingthebeforementionedR9,078,215aswellasR7,760,937whichrepresenteda55%impairmentprovisionontheaccountsreceivableamounton31March2016afterexcludingtheplannedR9,078,215cancellationamount.

DuringJuly2016Councilapprovedforwrite-offR8,570,052asuncollectable.R1,004,110wasprocessedasaVATliabilityreversalandR7,565,942wasallocatedtotheimpairmentprovision.ThedifferencetotheoriginalprovisionofR9,078,215isduetolatepaymentshavingbeenreceivedbetweenAprilandJuly2016.

On29March2017Councilapprovedforwrite-offR9,292,554asuncollectable.TheoriginalrequestforwriteoffhadbeenR9,411,058.The difference between actual and requestedwas as a result of a few payments having beenreceivedinthedaysbetweendraftingtherequestandreceivingtheauthorisation.R1,087,012wasprocessedasaVATliabilityreversal,R4,334,276wasallocatedtotheimpairmentprovision(debtfromthepreviousyearpartlyoffsettingagainsttheR7,760,937provision)andR3,871,266wasallocatedtotheexpenseaccountbaddebtswrittenoff(currentyearinvoicesthatwereunpaidbytheindividualbeingcancelledfornothavingpaidthepreviousyear’sdebt).

Thetwoamountsallocatedtotheimpairmentprovision,R7,565,942(July)andR4,334,276(March),totalR11,900,218.

Theprovisionfor impairmentamountofR8,206,898on31March2017represents55%of thenet tradereceivablebalanceonthatdate.




2017 2016 R R

9. Cash and cash equivalents

Cashandcashequivalentsconsistof:Cashonhand4,9997,201Bankbalances14,921,77712,163,554 14,926,776 12,170,755

10. BorrowingsAt amortised costMortgagebond - 587,704BondonSection5-8fromABSABank.Interestatarateof9.75%paandrepaidwithin10years.Theloanwasfullyrepaidduring2016.

Current liabilitiesAtamortisedcost - 587,704

11. Trade and other payables

Tradepayables 6,510,120 5,953,611SouthAfricanRevenueServices-VAT 803,812 2,446,664Otheraccruedexpenses 3,194,763 2,815,520DonationfromtheRoyalAcademyofEngineersforSAFEOprojects 581,134 -Otherpayables 1,241,370 1,155,606

12,331,199 12,371,401

The donation from the Royal Academy of Engineers is temporarily kept whilst aSAFEObankaccountisopened.ThemoneywastransferredtotheSAFEObankingaccountduringMay2017.

12. ProvisionsReconciliation of provisions - 2017 Opening Movement Total BalanceLeavepayprovision 1,547,168 32,149 1,579,317ProvisionforpenaltiesonlatesubmissionstoFSB - 396,000 396,000

1,547,168 428,149 1,975,317

Reconciliation of provisions - 2016 Opening Movement Total Balance

Leavepayprovision 1,645,171 (98,003) 1,547,168




2017 2016 R R13. Financial instruments

Categories of financial instruments

2017Financial assets

At fair value At amortised Total cost

Investments 12,840,934 - 12,840,934Tradeandotherreceivables - 10,289,342 10,289,342Cashandcashequivalents - 14,926,777 14,926,777

12,840,934 25,216,119 38,057,053

Financial liabilities

At amortised Total costTradepayables 11,215,793 11,215,793Otherpayables 1,155,606 1,155,606 12,371,399 12,371,399

Financial assets

At fair value At amortised Total cost

Investments 12,347,620 - 12,347,620Tradeandotherreceivables - 6,930,682 6,930,682Cashandcashequivalents - 12,170,755 12,170,755 12,347,620 19,101,437 31,449,057

Financial liabilities At amortised Total costBorrowings 587,704 587,704Tradeandotherpayables 10,370,275 10,370,275 10,957,979 10,957,979




2017 2016 R R

14. Operating revenue

Annualfees 77,800,376 68,089,274Applicationfees 11,395,986 10,128,873Accreditationvisits 1,773,642 1,516,568 90,970,004 79,734,715

The amount included in revenue arising from exchanges of goods or services are as follows:

Accreditationvisits 1,773,642 1,516,568

The amount included in revenue arising from non-exchange transactions is as follows:Annualfees 77,800,376 68,089,274Applicationfees 11,395,986 10,128,873 89,196,362 78,218,147

15. Other income

IncomefromSETAsandotherpublicentities 297,698 1,220,245Baddebtsrecovered 3,194,911 301,815Disciplinaryfines 60,000 130,000Appeals - 8,798Otherincome 96,978 156,261Profitonsaleoffixedassets - (2,053) 3,649,587 1,815,066




2017 2016 R R16. General expenses Acquisitionofsmallfixedassets 26,578 39,690Auditorsremuneration-External 476,873 428,255Auditorsremuneration-Internal 331,360 127,762Accountingservices 13,649 -Bankcharges 411,269 303,115Casuallabour 82,321 123,556Committeeroomexpenses 50,525 163,842Consultingandprofessionalfees 3,509,837 3,142,933Councilandcommitteemeetings 18,222,966 14,240,965Disciplinarymattersandfines - 423,029Electricityandwater 1,444,714 1,370,256ITexpenses 1,417,958 1,324,185Insurance 223,265 222,854Investmentfees 149,406 138,630Legalexpenses 3,734,023 917,833MarketingandBranding 1,573,524 1,724,006Membershipfees 274,446 222,537Motorvehicleexpenses 24,152 28,837Officeexpenditure 349,646 707,197Personnelrecruitment 249,242 284,904Printingandstationery 2,417,223 740,546Projectcost 548,462 1,737,437Rentalexpense 336,240 330,805Repairsandmaintenance 3,493,218 2,070,997Security 267,978 47,965Staffstudyassistance 195,555 139,567Staffwelfare 1,077,364 1,573,759Telephoneandfax 770,839 680,563Training 364,229 126,698Travel-staff 1,303,122 917,650 43,339,984 34,300,373

17. Personnel

Basicsalary 34,160,085 29,725,190Medicalaid-companycontributions 1,642,441 1,616,697UIF 133,351 129,530SDL 331,026 300,994Othershorttermcosts 118,584 141,335Definedcontributionplans 3,098,730 2,824,098 39,484,217 34,737,844

18. Other expenses

Provisionforimpairmentoftradeandotherreceivables 7,139,230 11,755,106Operatingleasecharges(Contractualamounts) 471,503 425,583Amortisationonintangibleassets 122,049 81,940Depreciationonproperty,plantandequipment 768,432 900,487 8,501,214 13,163,116




2017 2016 R R

19. Investment revenue

Interest revenueInterestfromshortterminvestments 1,815,331 1,409,070Interestlongterminvestments 404,227 445,519ExpectedreturnonDefinedBenefitassets 3,137,000 4,254,000 5,356,558 6,108,589

20. Finance costs

Non-currentborrowings 17,102 84,989Otherinterest:Pensionbenefit 2,250,000 1,995,000 2,267,102 2,079,989

21. Taxation TheCouncilisexemptedfromIncomeTaxintermsofSection10(1)(cA)oftheIncomeTaxAct. 22. Auditors’ remuneration

Fees-ExternalAuditors 476,873 428,255Fees-InternalAuditors 331,360 127,762 808,233 556,017

23. Cash generated from operations

Surplus 6,164,752 8,172,523Adjustments for:Depreciation 768,432 900,487Amortisationofintangibleassets 122,049 81,940Lossonsaleofassetsandliabilities - (84,301)Actuarialgains/(losses) 506,000 5,730,000Effectofpensionfundassetlimitation - (10,417,000)Fairvalueadjustments (287,120) (108,475)Movementsinretirementbenefitassetsandliabilities (887,000) (2,259,000)Movementsinprovisions 428,149 (98,003)Changesinworkingcapital:Tradeandotherreceivables 245,811 (1,039,202)Prepayments (403,229) (207,867)Tradeandotherpayables (40,202) 2,412,753 6,617,642 3,083,855



Detailed Income statement

2017 2016 R R24. Commitments Operating leases - as lessee (expense)

Minimum lease payments due-withinoneyear 37,507 204,510-insecondtofourthyearinclusive - 111,656 37,507 316,166

OperatingleasepaymentsrepresentrentalspayablebytheCouncilforofficeequipment.Leasesarenegotiatedforanaveragetermoffiveyearsandrentalsnormallyhaveafixedinterestrate.Nocontingentrentispayable. 2017 2016 R R25. Going concern

Theannualfinancialstatementshavebeenpreparedonthebasisofaccountingpoliciesapplicabletoagoingconcern.Thisbasispresumesthat fundswillbeavailable tofinancefutureoperationsandthat therealisationofassetsandsettlementofliabilities,contingentobligationsandcommitmentswilloccurintheordinarycourseofbusiness.

26. Events after the reporting date

AlegalopinionfromtheOfficeoftheChiefStateLawAdviserwasreceivedon28June2017confirmingthatECSAfallswithintheambitofPFMA.GoingforwardECSAwillensurecompliance.

27. Fair value adjustments

Investments

• Investments(DesignatedasatFVthroughP&L) 287,120 108,475

28. Budget differences

Material differences between budget and actual amounts

Baddebtsrecoveredmainlyrepresentsunrecoverableamountsfrompreviousyearsrepaidbypersonswishingtore-registerwithECSA.Thebudgetedamountwas very conservativedue touncertainty over theamount that couldbecollected. Council’sbudget isanoperationalbudgetand traditionallydoesnotbudget fornon-cash items thatdonotimpactonactualcashrevenuesandexpenses.Depreciationandamortisationissuchanexample.

Revenue from annual fees exceeds budget by R5,467,511 as the larger actual head count invoiced exceeded theconservativecountonwhichthebudgetwasbased.

Personnelexpenseswerereducedbypostponingtheappointingofnewpositionscreatedandbudgetedfor.Thesavingwasre-allocated tooffsetexpenses relating toprojectsof theCEOaswellas legalexpenses.Councilapproved theadditionalexpensesonconditionthatcompensatingsavingsbemadeonotherbudgetlines. Theincreaseinfinancecost(seenote20)isduetoanitem“otherinterestpaid:pensionbenefit”.Thisoriginatesfromthepensionfundvaluationandisnon-cashofnature.

RepairsandmaintenancereflectsasavingagainstbudgetofR2,559,340.Thebulkofthesavingcomesfromthefactthatlesssoftwaremaintenancetookplacethanbudgetedfor.Aportionofthe“saving”,R358,212,wascapitalisedtotheintangibleassetregistrationsystem.Thebalanceisasaving.

General expenses reflects an over-expenditure of R2,613,991, mainly due scanning costs relating to documentwarehousingandlegalcosts.




2017 2016 R R

29. Key personnel emoluments

Remuneration paid to key personnel

2017

Months Emoluments Contributions Payments for Total employed to retirement loss of office plan

SEMadonsela 12 1,851,125 160,787 - 2,011,912JHCato 12 1,332,636 112,631 - 1,445,267ZKhoza 6 691,185 62,890 - 754,075ELNxumalo 12 1,166,388 110,351 - 1,276,739BJMdlalose 10 954,511 58,687 383,330 1,396,528ZNtsaluba 6 663,647 62,890 - 726,537CNTsatsawane 2 200,306 18,958 - 219,264 60 6,859,798 587,194 383,330 7,830,322

Months Emoluments Contributions Total employed to retirement plan SEMadonsela 12 1,607,207 150,268 1,757,475MESabela 10 1,050,074 94,863 1,144,937MCPhalane 12 1,380,010 123,756 1,503,766RNGaoraelwe 11 1,363,304 46,702 1,410,006TYMachimane 9 1,170,663 - 1,170,663 54 6,571,258 415,589 6,986,847

30. Contingencies

Councilhasanumberofcourtcasesthatarependingbeforecourt.OurattorneysestimatethatthetotalcostcouldbeashighasR2.1million.

31. Prepayments

Prepaidexpensesatyear-end 234,469 -PrepaidVAT-Suspense 376,619 207,867 611,088 207,867




2017 2016 Note(s) R R Revenue Annualfees 77,800,376 68,089,274Applicationfees 11,395,986 10,128,873Accreditationvisits 1,773,642 1,516,568Disciplinaryfines 60,000 130,000Marketingandbranding 297,698 1,220,245Baddebtsrecovered 3,194,911 301,815Sundryincome 96,978 156,261Profitonsaleoffixedasset - (2,053)Appeals - 8,798Total revenue 94,619,591 81,549,781

ExpenditurePersonnel 17 (39,484,217) (34,737,844)Depreciation 4 (768,432) (900,487)Amortisationonintangibles 5 (122,049) (81,940)Financecosts 20 (2,267,102) (2,079,989)GeneralExpenses 16 (43,339,984) (34,300,374)Impairmentloss/Reversalofimpairments (7,139,230) (11,755,105)Leaserentalsonoperatinglease (471,503) (425,583)

Total expenditure (93,592,517) (84,281,322)Operating surplus (deficit) 1,027,074 (2,731,541)Investmentrevenue 5,356,558 6,108,589Fairvalueadjustments 27 287,120 108,475Actuarialsgains/(losses) (506,000) (5,730,000)Effectofpensionfundassetlimitation - 10,417,000 5,137,678 10,904,064Surplus for the year 6,164,752 8,172,523

Thissupplementaryinformationbeingpresenteddoesnotformpartofthefinancialstatementsandisunaudited.


Annual Report

2016/2017


1st Floor, Waterview Corner Building, 2 Ernest Oppenheimer Avenue, Bruma, 2198

Private Bag X691, Bruma, Johannesburg, 2026

+27 (0)11 607 9500 | +27 (0) 11 622 9295

[email protected] | www.ecsa.co.za

@ECSAOfficial Engineering Council of South Africa-ECSA ECSAGroupNews


EN

GIN

EER

ING

CO

UN

CIL

OF S

OU

TH

AFR

ICA

AN

NU

AL R

EPO

RT 2

01

6/2

01

7