ANNUAL REPORT 2012/2013 - SANEDI · the year’s objectives. This Annual Report will highlight the...

ANNUAL REPORT 2012/2013

It’s our commitment

to green energy in South Africa

MISSIONAdvance innovation of clean energy solutions and rational energy use that effectively supports South Africa’s national energy objectives and the transition towards a sustainable, low carbon energy future.

VISIONTo serve as a catalyst for sustainable energy innovation, transformation and technology diffusion in support of South Africa’s sustainable development that benefits our nation.

VALUESInnovationAccountabilityTransparencyIntegrityProfessionalismNational InterestBatho Pele

Science inspired by nature for a greener future

ABOUT SANEDIChapter 4 of the National Energy Act, 2008 (No. 34 of 2008) provides for the establishment of the South African National Energy Development Institute (SANEDI).

SANEDI is established as a juristic person and is listed as a Schedule 3A public entity under the Public Finance Management Act No. 1 of 1999 as amended. SANEDI was operationalised by the State President on 18 March 2011 – effective as of 1 April 2011.

The main function of SANEDI is to direct, monitor and conduct applied energy research and development, demonstration and deployment as well as to undertake specific measures to promote energy efficiency throughout the country.

NTE

NTS

C

Since energy is one of the greatest challenges facing the world, with

much of the research aimed at designing systems that would work in

greater harmony with the planet, it is not surprising that science would

look to nature for answers. Biomimicry simply means using designs

inspired by nature to solve human problems. The idea is that over 3.8

billion years of evolution, nature itself has solved many of the problems

that humanity finds itself grappling with today.

Key to Abbreviations2

Board of Directors4

Chairperson’s Report6

CEO’s Report8

Advanced Fossil Fuel Use14

Clean Energy Solutions18

Working for Energy24

Data and Knowledge Management32

SANEDI Communications36

Human Resource Management38

Corporate Social Responsibility42

Acknowledgements109

Annual Financial Statements44Accounting Authority’s Responsibilities and Approval 46Board Audit and Risk Committee Report 47 – 48Report of the Auditor-General 49 – 53Statement on Corporate Governance 54 – 56Performance Against Objectives 57 – 66Accounting Authority’s Report 67 – 71Materiality and Significance Framework 72Statement of Financial Position 73Statement of Financial Performance 74Statement of Changes in Net Assets 75Cash Flow Statement 76Accounting Policies 77 – 93Notes to the Annual Financial Statements 64 – 108

Energy Efficiency Programme28

Smartgrids35

1 SANEDI Annual Report 2012/2013

AAAMSA Association of Architectural Aluminium Manufacturers of South Africa AFD French Development AgencyAGSA Auditor-General of South AfricaASSAf Academy of Science South AfricaBEE Black Economic EmpowermentCCS Carbon Capture and StorageCCT Clean Coal Technologies CEF CEF Group of Companies formerly known as Central Energy FundCEM Clean Energy MinisterialCES Clean Energy SolutionsCEO Chief Executive OfficerCER Centre of Energy ResearchCESAR The Centre for Energy Systems Analysis and ResearchCFT Carbon Fuel Tablet CNES Centre of New Energy SystemsCO2 Carbon DioxideCOCATE Large-scale CCS Transportation Infrastructure in EuropeCoRD Centres of Research and DevelopmentCPI Consumer Price IndexCPV Concentrator PhotovoltaicsCSAG Climate Systems Analysis GroupCSC Community Steering CommitteeCSP Concentration Solar PowerCSIR Council for Scientific and Industrial ResearchCSIR CSP CSIR Concentrated Solar PowerCSTDI Centre for Solar Technology, Development and InnovationDEA Department of Environmental AffairsDID Gauteng Department of Infrastructure DevelopmentDKK Danish KroneDoT Department of TransportDoE Department of EnergyDSM Demand Side Management

DST Department of Science and TechnologyDTU Technical University of Denmark DBREV Douglas Banks Renewable Energy Visiondti Department of Trade and Industry Dx Distribution GridEDI Electricity Distribution IndustryEE Energy Efficiency EMWG Energy Management Working GroupeNATIS National Traffic Information SystemEPD Energy Performance DatabaseEPWP Expanded Public Works Programme ERC Energy Research CentreESI Electricity Supply IndustryETDE Energy Technology Data ExchangeETDEWEB Energy Technology Data Exchange World Energy BaseFMPPI Framework for Managing Programme Performance InformationGAAP Generally Accepted Accounting PracticeGEF Global Environment FacilityGHG Green House GasGIZ German agency for international cooperationGPDRT Gauteng Province Department of Roads TransportGRAP Generally Recognised Accounting PracticeGSEP Global Superior Energy Performance IAS International Accounting StandardsIDC Industrial Development CorporationIEA International Energy AgencyIEP Integrated Energy PlanIFPEN IFP Energies nouvelles IIA Institute of Internal AuditorsiPV Institute PhotovoltaicISGAN International Smart Grid Action NetworkIT Information Technology

KEY TOABBREVIATIONS

SANEDI Annual Report 2012/20132

kW KiloWattsMEASA Marine Energy Association of South AfricaMoU Memoranda of UnderstandingMTEC Medium Term Expenditure CommitteeMW Mega WattNAAMSA National Association of Automobile Manufacturers of South AfricaNBI National Business InitiativeNDA National Development AgencyNEEA National Energy Efficiency AgencyNIER Newcastle Institute of Energy ResearchNRF National Research FoundationNWA Numerical Wind AtlasOWA Observational Wind AtlasPAA Public Audit ActPCSP Pilot CO2 storage project PDI Previously Disadvantaged IndividualPFMA Public Finance Management ActPPA Power Purchase Agreement PPC Parliament Portfolio CommitteePSA Plataforma Solar de AlmeriaPV PhotovoltaicsRE Renewable EnergyRECORD Renewable Energy Centre for Research and DevelopmentREEEP Renewable Energy and Energy Efficiency PartnershipsR&D Research and DevelopmentSABS South African Bureau of StandardsSACCCS South African Centre for Carbon Capture and StorageSACRM South African Coal RoadmapSADC South African Development CommunitySAfECCS South Africa – EU Cooperation on Carbon capture and StorageSAGEN South Africa – German Energy Programme SANAS South African National Accreditation SystemSANEDI South African National Energy Development InstituteSANERI South African National Energy Research InstituteSAPIA South African Petroleum Industry AssociationSAPVIA South African Photovoltaic Industry Association SARS South African Revenue ServicesSARETEC South African Renewable Energy Technology Centre SASGI South African Smart Grids InitiativeSASTELA Southern Africa Solar Thermal and Electricity Association

SATTIC South African Travel and Tourism Industry ConferenceSAWEA South African Wind Energy AssociationSAWEP South African Wind Energy ProgrammeSAWS South African Weather ServiceSAYAS South African Young Academy of Science SEA Strategic Environmental Impact AssessmentSETRM Solar Energy Technology RoadmapSLA Service level agreementSMME Small Micro Medium EnterprisesSMART Specific, Measurable, Achievable, Realistic and Time boundSOLTRAIN Southern African Solar Thermal Training and Demonstration InitiativeTAF Technical Assistance FacilityTIA Technology Innovation AgencyTx Transmission GridUCT University of Cape TownUCT CSAG University of Cape Town Climate Systems Analysis GroupUNDP United Nations Development ProgrammeURL Uniform Resource LocatorVNWA Verified Numerical Wind AtlasWASA Wind Atlas of South AfricaWAsP Wind Atlas Analysis and Application ProgrammeWITS University of the WitwatersrandWfE Working for Energy ProgrammeWWF World Wildlife FundWRI World Resource InstituteWSU Walter Sisulu University


HO

OH O

OH

DIRECTORSBOARD OF

Justice N Mlonzi (Chairperson)BProc. LLB

Mr J Marriott (Deputy Chairperson)BSc Chem Eng

Ms M ModiseBSc (Hon), HED, MSc (Eng)

Mr M VilanaBS Accounting

Dr D Hildebrandt BSc Chem Eng, MSc Chem Eng, PhD Chem Eng

Prof E MeyerBSc, BSc (Hon), MSc, PhD

Ms D RamalopeBSc (Hon), MSc, MBL

Dr V MunsamiBSc (Hon), MSc, PhD

Mr G FourieDiploma Mech Eng, BCom Economics, MBA

Mr M Gordon (alternate director to Ms D Ramalope)BSc, MBA

Dr R Maserumule (alternate director to Ms M Modise)BSc, MBA


DIRECTORSBOARD OF

Honeycomb-patterned acrylic imbedded with tiny solar panels could serve as energy-

generating windows. Israeli solar power startup SolarOr designed the BeeHive PV with

honeycomb-shaped prisms that focus sunlight to gather up as much of it as possible.

The design could amplify solar energy 2.5 times its normal strength.

Justice N Mlonzi

Dr V Munsami

Mr M Gordon

Dr D Hildebrandt

Dr G Fourie

Mr M Vilana

Mr J Marriott

Prof E Meyer

Ms M Modise

Ms D Ramalope

Dr R Maserumule


Justice N MlonziCHAIRPERSON

REPORT

Efficient and low-carbon energy is the focus of

the South African National Energy Development

Institute’s (SANEDI’s) work as it strives to fulfil its part

in a sustainable future. Such activities take place

within a dynamic environment as SANEDI continues

its transition from a Schedule 2 to a Schedule 3A

state owned entity.

CHAIRPERSON’s


SANEDI was officially launched in Johannesburg on 19 July 2012 at a lively function presided over by Ms Dipuo Peters, the Minister of Energy, and attended by a number of international persons. The new logo was promoted and the function demonstrated the strong support for the work of SANEDI.

SANEDI continues its participation with strategic international partners, thereby strengthening the quality of work undertaken and promoting SANEDI and South Africa’s position as a global player in the energy research and development field. In this regard, it was my privilege to visit the Newcastle Institute of Energy Research (NIER) at the University of Newcastle in Australia during October,2012. There, with Professor Caroline McMillen, the Vice Chancellor of the University, we signed a Memorandum of Understanding that paves the way for cooperation between SANEDI and NIER.

This is the latest international cooperative programme to be undertaken by SANEDI and has already shown signs of mutually beneficial collaboration. In the meantime we continue cooperation with other international organisations such as the International Energy Agency as charged by the Minister of Energy.

Much of SANEDI’s work has been supported by industry and international organisations and governments. Such financial support is essential to sustain the programmes within SANEDI and is acknowledged with gratitude. Moreover, such support is indicative of the local and international esteem in which SANEDI is held.

SANEDI ends its 2012/13 year with a high attainment of the year’s objectives. This Annual Report will highlight the main achievements of SANEDI during 2012/13 that bear witness to the dedicated work of the SANEDI staff. The Strategic Five-Year Plan and the Annual Performance Plan for 2013/14 have been approved by the Minister of Energy, thus forming the basis for excellence and continued work for the coming year.

Justice N MlonziChairperson

Many plants are heliotropic, gradually tilting towards

the sun to optimise solar energy capture. From an

expressive standpoint, a solar panel that tilts towards

the sun (like a sunflower) can help the public see a

connection between the natural and the high tech.

Solar cells that track the angle of the sun can be

38 percent more efficient at generating power than

those that are mounted in a fixed position.


CEO’s

Mr Kadri (Kevin) NassiepCEO: SANEDI

REPORT


The year 2012/13 heralded a new era in SANEDI’s history. Besides taking up offices in the newly constructed 5-Star Council-rated Green Building in Upper Grayston Office Park, SANEDI also

moved a significant step forward in ensuring its independence from CEF. The year has also seen the new Board of Directors taking shape and positioning SANEDI at the “clean”

coal face of development or deployment of clean energy technologies. A number of significant developments at a national and multinational level have contributed

to placing SANEDI at the forefront of major low carbon technology development. Some of these are shared in this report.

The Department of Energy continues to provide guidance to the Board and management of SANEDI and fulfils the role of governance

oversight at a national government level. The Compliance team at the Department has worked closely with SANEDI in the

past year, to find ways of bolstering the resources of the new entity and also ensuring compliance with the prescripts of law that frame SANEDI’s operations.

The Department of Science and Technology (DST), as the custodian of R&D in South Africa has recognised the role that SANEDI plays in the innovation value chain. Together with the Technology Innovation Agency (TIA), the entity is well placed to support the development of local innovation that promotes job creation and stimulates local industry development. The DST has also played a significant role in supporting key programmes housed within SANEDI. These include Carbon Capture and Storage, the Energy Efficiency Hub at the University of Pretoria and lastly, the Centre for Energy Systems Analysis and Research (CESAR).

CESAR is a virtual centre involving cooperation between the Data and Knowledge Management

Component of SANEDI and the Universities of Cape Town (through the Energy Research Centre) and Pretoria

(through its Institute for Technological Innovation). The manner in which these various institutions interact will be

detailed later in this report.

SANEDI has produced exceptional results in terms of deliverables, despite a limitation in funding. A surplus of

R16 556 000.00 for the year was realised and this surplus has been provided for in terms of accruals for the 2012/13 financial year. SANEDI

has been able to continue with its primary objectives of building human capital and developing innovative, value-added solutions that promote a

transition to a low carbon future. In fact, SANEDI’s mission and vision speak to the objective of using innovation as a catalyst for a sustainable transition to a low

carbon future.

CEO’sREPORT

Reflections on the year that was


CONTINUED | CEO’s REPORT

SANEDI produces a clean audit report for the 2012/13 year

In keeping with the proud tradition maintained by SANEDI’s predecessor, the South African Energy Development Institute (SANERI), in producing unqualified audit reports, the Auditor-General has produced an unqualified report on the annual financial statements and performance against objectives for the 2012/13 year. Despite the challenges presented by a transition from a Schedule 2 entity under the Public Finance Management Act (PFMA) to a Schedule 3A entity, SANEDI has been able to cope with the new requirements in terms of governance and compliance that National Treasury have prescribed. Despite the positive report produced by the Auditor-General, there are matters pertaining to supply chain management, in particular, that require addressing. These have, to a large degree, been taken into account in the development of SANEDI’s own Supply Chain Management process.

A significant step forward towards full independence

While the relationship with CEF (SOC) Ltd remains strong, there remains an urgent need to establish and maintain separate support services to some of those currently provided for by CEF (SOC) Ltd. In particular, the financial management system and supply chain management services require different approaches from those employed by CEF (SOC) Ltd. As a Schedule 3A entity under the PFMA, SANEDI is required to report on its financial position using the Generally Recognised Accounting Practice (GRAP) reporting procedures, as opposed to Generally Accepted Accounting Principles (GAAP), as used by CEF (SOC) Ltd. which is a Schedule 2 entity. SANEDI also requires a strong project accounting system, to manage the myriad of projects under its control. CEF (SOC) Ltd. has placed more emphasis on conventional management accounting protocols which limits SANEDI’s capability in terms of reporting on ring-fenced projects supported by external funders. In addition, SANEDI has assessed

the requirements of National Treasury’s Practice Notes with respect to Supply Chain Management and has introduced it’s own policy and committee to ensure full compliance with the regulatory and guiding framework that governs supply chain management in South Africa.

The newly constructed Block E in Upper Grayston Office Park now houses the headquarters of SANEDI. Besides its strategic location next to CEF (SOC) Ltd., the building is one of three in the country that boasts a 5-star rating from the Green Building Council. This rating allows SANEDI to practice its mantra of leading by example and reducing its own carbon footprint. Other areas in which SANEDI is reducing its carbon footprint is through the use of recycled materials in the production of this annual report and in sourcing corporate branded clothing produced from recycled plastic. It also supports corporate social responsibility projects and this year, has supported the Children of Fire Home, which houses and educates children and youth affected physically and psychologically by fire.

The drive towards independence from CEF (Pty) Ltd. has been accelerated through the appointment of a financial management team, led by Raquel Abrahamse, the acting CFO. The appointment of the IT manager, Jay Nankoo, has also expedited the transition to an independent network backbone. Together with Dr Minnesh Bipath, the acting CIO, the IT Department has screened the various hardware and software options that constitute best practice globally. The team eventually settled on the Dell VM Start hardware and the Microsoft Dynamics ERP solution. Implementation of the ERP solution will commence in the new financial year and will include the modules necessary to run SANEDI’s own financial management system.

The appointment of a company secretary and HR manager are scheduled for the New Year but remain critical appointments. In particular, the company secretary will focus on ensuring that the transition from a Schedule 2 entity to a Schedule 3A entity is undertaken in compliance with all requisite guidelines, legislation and related regulations.


Another area that continues to produce phenomenal results in terms of human capital development is the Energy Efficiency and DSM Hub at the University of Pretoria. Over 150 students have now received financial assistance from the programme, headed by the nationally and internationally acclaimed head of the CNES department, Prof. Xia, who is an NRF A-rated Professor. The Centre of New Energy Systems (CNES) department has also been awarded the BP Chair for Energy Efficiency, further recognition of the superlative efforts of the Hub. The Hub is to be transformed into a Centre in the near future to bring it into line with the other Centres of Research and Development (CORD) established thus far. The research and testing programme at the Hub will be readily absorbed into the new Centre.

SANEDI as the implementing agent for low carbon technology deployment

The South African Smart Grids Initiative (SASGI) has gained traction during the year and the Smart Grid Vision for South Africa is now well under development. It is largely due to this initiative that the Department of Energy and National Treasury have seen fit to appoint SANEDI as the implementing agent for the piloting of smart meters in South African cities. The proposed pilot involves the installation of between 10,000 to 15,000 smart meters in either one or two metropolitan areas. This project has been made possible by a grant from the European Union, totalling some R180 million over three years. The first allocation, of R71 million has already been received by SANEDI. The pilot sites will be identified during the first half of the next financial year.

This year, following the launch of the 1st Verified Numerical Wind Atlas (VNMA) by the Deputy Minister of Energy, the Hon. Barbara Thompson, the Wind Atlas of South Africa (WASA) which is programme managed by SANEDI, focused on the continuation of the wind measurements, the development of a high resolution wind resource map making use of the VNWA, topography and land cover data with user guides. The wind resource map identifies wind ‘hot spot’ key areas in the country where wind regimes are promising and require further analysis. This resource wind and data are

People – our biggest asset

SANEDI relies on two important features of its business for its success to-date. Highly skilled and specialised people as well as access to the right data and the management of that data are the hallmarks of a knowledge-based economy. SANEDI sees its staff as its biggest asset and in turn, SANEDI is positioned to be an important contributor, particularly within the energy sector, to the transition to a knowledge-based economy. SANEDI’s staff complement has grown over the year, notably in the areas of carbon capture and storage, as well as renewable energy. The staff complement now features 41 staff members made up of permanent staff members, contract staff, interns and secondments. An internship policy has been put in place in SANEDI and is already yielding pleasing results. What is of concern, however, is the large number of graduates that are unemployed in South Africa at the moment. In response to an advertisement for 10 interns in Gauteng, SANEDI received applications from just over 3,000 aspirant graduates! The task of selecting only a handful of these graduates has been made difficult by the high calibre of the applicants. To-date, interns in the area of IT, Smart Grids, Administration and Finance have been placed on a one year contract. As a result of the experiential training offered it is hoped that these interns will find gainful employment in the formal job market.

The South African Centre for Carbon Capture and Storage (SACCCS) moves into a critical phase with the focus on the Pilot CO2 Storage Project (PCSP). In this phase tens of thousands of tons of CO2 will be injected into a storage site located onshore. The injection is planned for the 2017/18 year, depending on the outcome of several studies. The section on CCS later in the Annual Report covers this process in more detail.

What is of importance from a human resource perspective is the need to appoint staff that will assist in gauging the public’s position on the matter of CO2 storage. A stakeholder engagement team has now been constituted under the auspices of the SACCCS and will be undertaking extensive public consultation sessions during the next two years.


Together with gas sourced from potentially iGas or Sasol, there could well be a major contribution from gas to powering public transportation in Gauteng.

Working for Energy as part of the Expanded Public Works Programme

The Working for Energy Programme has not received any additional funding for the 2012/13 year. This is largely due to the funds that are retained by SANEDI for project implementation not being disbursed as yet. Notwithstanding the challenges faced in getting projects off the ground, SANEDI continues to work with several communities in installing biogas projects and creating jobs in the process.

A big focus for SANEDI this year has been on establishing a Waste to Energy facility in the country. The facility will be a hub that acts as a transfer point for waste and various waste-to-energy conversion processes will be introduced that will be able to produce electricity, liquid fuels or gas from waste. Capacity building in the area where the plant will be located will also result in skills development in areas of high unemployment.

being used by the Department of Environmental Affairs in its Strategic Environmental Impact Assessment program for the identification of potential wind energy development zones. The Danish government confirmed further support for the expansion of WASA and gain SANEDI has been chosen to manage the project, WASA II. All the information contained in all the WASA projects is invaluable to project developers, financiers, government and the utility. The WASA project is funded by the Danish Government and the Global Environment Facility (GEF) through the United Nations Development Programme (UNDP) and is implemented by a consortium of local and international institutions.

Greening our highways

SANEDI’s Green Transport Programme is in the process of being remodelled in line with the needs of stakeholders such as Government and industry. The Green Transport Centre facility has been moved from its existing location in Midrand to the CSIR. This is a temporary measure as a long-term decision needs to be taken on a permanent home for the Centre.

In the interim, efforts have continued to focus on supporting Gauteng Provincial Government in the sourcing of gas from landfills to power municipal fleets.

CONTINUED | CEO’s REPORT


SANEDI continues to play a critical role in supporting the tax incentive for energy efficiency improvements made in industry and the commercial sector. The Section 12L incentive, which is coordinated by the Department of Trade and Industry (dti), in conjunction with National Treasury and SARS, focuses on providing an incentive to industry intent on establishing energy efficient facilities. The new regulations pertaining to Section 12L are pending, and are expected to be published by the Minister of Finance in the first half of 2013/14.

More broadly, SANEDI continued to work with the French Development Agency (AFD). Under the current agreement, AFD is supporting the establishment of a technical advisory facility in SANEDI. This facility will provide technical assistance to commercial and developmental financing institutions in South Africa when these institutions review applications for funding of energy efficiency projects. This is in line with a separate agreement between AFD and specific funding institutions, whereby these institutions will be awarded a credit line to support energy efficiency projects in South Africa. Efforts in 2012/13 focused on the appointment of a resident technical advisor who will be stationed in SANEDI.

The German Agency for International Cooperation (GIZ) has continued to support energy efficiency in South Africa and the South Africa – German Energy Programme (SAGEN) was put in place during the year. Already, technical consultants in energy efficiency and renewable energy have been appointed by GIZ and are stationed at either the Department of Energy

(DoE) or SANEDI. These international experts have been invaluable in supporting initiatives such as policy mapping for the DoE, database establishment for the 12L tax incentive and drafting the parameters governing the introduction of Section 12L and the establishment of the Renewable Energy Centre or Research and Development (RECORD).

Mr K NassiepChief Executive OfficerSANEDI

Energy Efficiency as part of our industry’s focus


ADVANCEDFOSSIL

FUELElectricity generation, liquid fuels production and chemical production use coal to underpin economic activity in South Africa and provide commerce, industry and households with required energy and chemicals. Moreover, the export of coal forms an important foreign exchange earner. Notwithstanding national efforts to increase the use of renewable energies and energy efficiency measures, coal will continue to be the mainstay of South Africa’s development for decades to come. Therefore it is essential that the continued use of coal be undertaken in a clean approach while taking necessary steps to minimise greenhouse gas emissions. It is to these ends that the activities of the Advanced Fossil Fuels division of SANEDI are directed.


Clean Coal Projects

The 2012/13 year has seen the completion of four multi-year clean coal technology projects, namely:• Direct extraction of liquid fuels from coal;• The adsorption of carbon dioxide onto coal as a

carbon sequestration mechanism;• The speciation of heavy metals in coal; and• The finalisation of the high pressure spray injector

project that tests the characteristics of new liquid fuels.

These projects were undertaken at the University of Witswatersrand and the North-West University and not only delivered technical outputs that add to our understanding of coal and its usage but also facilitated the capacity building of a number of students.

Coal Road Map

SANEDI also participated in the development of a South African Coal Road Map. This is a multi-year project initiated by the Fossil Fuel Foundation and involves Government and industry. With Phase I completed earlier, the final Phase II is scheduled to be released during 2013. SANEDIs interest in the Coal Road Map is to ascertain research and development gaps for coal.

Oil and Gas Road Maps Framework

Complementary to the Coal Road Map, SANEDI has been developing the following frameworks:• Oil R&D Road Map Framework and a• Gas R&D Road Map Framework.

The primary purpose of these two reports is to ascertain research and development gaps for oil and gas. These two Frameworks were delivered to the Department of Energy for consideration.


Apparatus for the high pressure adsorption of carbon dioxide onto coal – University Witwatersrand

Carbon Capture and Storage

The principle effort of the Advanced Fossil Fuels Division work was carbon capture and storage (CCS) through the South African Centre for Carbon Capture and Storage (SACCCS). The principle of CCS is the capture of carbon dioxide (CO2) from large point sources of CO2, such as coal-fired electricity generation or synthetic fuel generation, and safely storing it in a deep geological formation.

The work of SACCCS involves the development of the Pilot CO2 Storage Project (PCSP) as well as other support activities for CCS in South Africa.

Marker for an old borehole, the results of which have been used in the preliminary study

CONTINUED | ADVANCED FOSSIL FUELS

The Pilot CO2 Storage Project: The year 2012/13 saw significant work done for the pre-feasibility stage of the PCSP and some initial planning for the feasibly stage which will include the acquisition of new geological data.

2012/13 saw the PCSP receiving R207 million from the Department of Energy, the completion of the preliminary analysis of the two prospective storage areas – the Zululand and the Algoa Basins, and the completion of the Local and National CCS Stakeholder Engagement plans. 2012/13 also saw SACCCS commence engagement with potential regulators and other stakeholders related to the PCSP.


New data acquisition, in the feasibility stage of the PCSP will build on the outputs of the previously published Atlas on Geological Storage of Carbon Dioxide in South Africa and follow-up studies using existing geological information, and involve basin exploration and site characterisation for the selection of a site for the PCSP.

A key study contributing to the work of the PCSP was the South Africa – EU Cooperation on Carbon capture and Storage (SAfECCS) project which was partially funded by the European Union (70%) and by SACCCS (30%) and had four main sub-programmes, namely:• Investigation of potential geological sites for

storage of carbon dioxide in the Algoa Basin;• Capacity building of modelling of geological

storage sites;• Permitting and authorisation requirements for the• Pilot Carbon Dioxide Storage Project; and• Funding for carbon dioxide projects in South Africa.

The technical components of the projects were completed during the last quarter of 2012/13 and the outputs incorporated into future work plans.

In addition to the work of the PCSP, SACCCS also continued the work to support CCS more broadly in South Africa.

One of the support activities completed in 2012/13 was a study into the options for the meaning of “carbon capture readiness”. The latter study was sent, inter alia, to the Department of Environmental Affairs who have stated that the Kusile Power Station must be carbon capture ready. Also, the SACCCS has been involved in the Department of Energy/World Bank studies of:• Regulatory framework for carbon capture and

storage in South Africa;• Techno-economic assessment of carbon capture

and storage; and• Stakeholder engagement.

Another support activity undertaken in 2012/13 was the Large-scale CCS Transportation Infrastructure in Europe (COCATE) project which was a multinational consortium of ten research institutions that investigated the combination of CO2 from a number of small sources

of CO2 for capture and transport to a storage site. The project was led by IFP Energies nouvelles (IFPEN) and funded by the European Union FP7 Programme. The project culminated with a knowledge dissemination workshop held in Johannesburg during November, 2012.

As carbon capture and storage is a global matter, SACCCS continued collaboration with a number of international CCS organisations including:• International Energy Agency Greenhouse Gas and• Carbon Sequestration Leadership Forum.

A significant number of the projects undertaken during2012/13 were of an international collaborative nature.

Two other significant CCS developments for 2012/13 that support the work of SACCCS and the deployment of CCS in South African more broadly, were the South African Cabinet endorsement of the South African CCS Road Map and the Department of Energy’s establishment of an Interdepartmental Task Team to address the policy and regulatory matters pertaining to CCS.


CLEANENERGYSOLUTIONS

RECORD was first envisioned in 2010 but was only formally launched in November 2012. In February 2012, the newly appointed centre manager, Dr Karen Surridge-Talbot and a GIZ senior advisor, Ms Marlett Balmer, gave description to the focal work packages of RECORD.

It was felt that with South Africa demonstrating its commitment to a more sustainable future growth path by supporting RE and EE measures, together with skills development and job creation through fostering a green economy, prospects for renewable energy generation in the country are increasingly positive given a supportive policy and legislative framework coupled with excellent resources, especially wind and solar. South Africa has abundant natural resources that can be harnessed for energy production:• A reasonable wind energy resource, geographically;• Dispersed allowing for security of supply;• A world-class wave energy resource,

predominantly along the south and west coasts and an untapped potential ocean current resource on the east coast;

• One of the best solar regimes in the world having an irradiation of up to 2900kWh/m2 (DNI); and

• Biomass displaying regional potential and energy from waste offering increasing opportunities for exploitation.

Renewable Energy Centre of Research and Development (RECORD)

Solar Energy Study Tour in July 2012 (taken at the GemaSolar circular CSP plant in Spain)


SOLUTIONS

RECORD within SANEDI

SANEDI’s mandate is to serve as a catalyst for sustainable energy innovation, transformation and technology diffusion in support of South Africa’s sustainable development. RECORD supports the mandate of SANEDI within the Clean Energy Solutions (CES) portfolio, with specific focus on supporting and coordinating renewable energy research and development throughout the country.

RECORD PartnershipAgainst the background of renewable energy development in South Africa, the Governments of South Africa and the Federal Republic of Germany agreed in 2010 to implement an energy and climate programme via GIZ. The South African-German Energy programme (SAGEN) aims to promote investment in renewable energy and energy efficiency and thus supports the development of a sustainable energy sector in South Africa. Under the auspices of SAGEN, GIZ is cooperating with SANEDI and RECORD to achieve mutually agreed goals.

RECORD Core ActivitiesCoordinate renewable energy research in South AfricaIn line with the legislative mandate of SANEDI, RECORD provides limited funding for applied renewable energy research conducted at tertiary institutions in South Africa. To ensure efficient use of limited research funds, RECORD coordinates renewable energy research according to national priorities and stakeholder objectives. This is thus far being achieved through:• Regular discussion sessions with government

departments and entities to agree on RE research priorities;

• Clarification of academic RE research mandates, roles and responsibilities in South Africa;

• Facilitation of information exchange events on RE research topics (Algal bio-energy platform formation, Wind and Radar workshop, solar measurement programme coordination, Ocean Energy event);

• Organising information exchange events in cooperation with industry (SAWEA, SAPVIA, SASTELLA, SOLTRAIN); and

• Human capital development through facilitated attendance of training both locally and internationally.

Facilitate renewable energy research collaborationRECORD aims to foster collaboration between renewable energy research and development stakeholders which have common goals. This is achieved through collaborative funding and sharing of resources to ensure that applied research is not duplicated within the same field. RECORD strongly supports the formation of theme-focused research clusters where trans-institutional cooperation, sustaining broad focus areas in renewable energy topics, is addressed. Some of the projects include:• Solar radiation measurement project in conjunction

Dept. of Science and Technology (DST) and the South African Weather Service (SAWS);

• Solar Energy Technology Roadmap (SETRM) ), a national project spearheaded by the DOE and DST


assisted by the International Energy Agency (IEA);• Support to strengthening the PV research centre

of excellence at Nelson Mandela Metropolitan University (Centre of Energy Research);

• CPV (Sasol, Siemens, Vodacom) feasibility study;• CSIR CSP heat storage and high temperature

applications;• Wind and Radar research in conjunction with the

South African National Defence Force (SANDF);• RE research managed for paying clients;• Funding and distribution of subject specific studies

for RE sector resources viz. previously funded SANERI Renewable Energy research report summary, Algal Bio Energy Review, Ocean Energy Resource Review, State of Energy Research in SA review (in process);

• The establishment of Marine Energy Association of South Africa (MEASA) (in process);

• Hosted the International Energy Agency (IEA) BioEnergy ExCo in May 2013; and

• Dissemination of information regarding renewable energy in all aspects, namely studies, reports, presentations, funding opportunities, international and national collaborations, via the RECORD website (www.record.org.za).

Contribute to renewable energy skills development RECORD recognises the importance of skills development to service the growing renewable energy (RE) sector in South Africa and cooperates with a variety of actors who provide training at different levels.• Strong influence in the South African Renewable

Energy Technology Centre (SARETEC), the Centre Manager is employed by SANEDI and SANEDI/ RECORD serves on the advisory board;

• Strong influence in the Centre for Solar Technology, Development and Innovation (CSTDI), driving alignment between points of solar expertise training future experts in solar energy; and

• Providing the Douglas Banks Renewable Energy Vision (DBREV) bursary for one student.

Support renewable energy business developmentRECORD facilitates mutually beneficial interaction and information exchange between stakeholders in the renewable energy sector in South Africa, as well as at an international level. Through its website, RECORD endeavours to share studies, research results and other important documents in the public domain in order to support business development in the sector, viz.:

• Concentration Solar Power (CSP) localisation study for SASTELA concluded.

The availability of appropriate and applicable standards for renewable energy technologies is important for the development of a thriving industry and RECORD supports the process of standards development and testing, where appropriate. RECORD is interacting with the South African National Accreditation System (SANAS) regarding training of accreditors.

Renewable energy awareness creationRECORD strives through various means to create both local and international awareness regarding renewable energy and South Africa’s policies pertaining to this. Information is readily available on the RECORD website concerning many areas of renewable energy research and development. Additionally, should RECORD feel that stakeholders require specific information on a renewable energy topic, it is able to commission studies in these target areas. This is achieved through:• A formally drafted public relations plan in order to

create RE awareness through RECORD;• Promotion of RE in South Africa via the RECORD

website (www.record.org.za);• Implementation of a community awareness

programme, in the first areas for RE roll out, at primary school level, a children’s art competition was conducted to teach about wind and solar energy; and

• Support to the Science Spaza project through the South African Young Academy of Science (SAYAS) is in process.

The RECORD Renewable energy Research Excellence award for Lifetime Researcher given at the RECORD launch on 11 November 2013 (Dr Dieter Holm, Dr Thembakazi Mali, Mr Kevin Nassiep, Dr Karen Surridge-Talbot)

CONTINUED | CLEAN ENERGY SOLUTIONS


Solar Energy Study Tour in July 2012 (taken at the Plataforma Solar de Almeria (PSA), Almeria, Spain.

Solar Energy Study Tour in July 2012 (taken at the Institute Photovoltaic (iPV) in Stuttgart, Germany)

Networking at the RECORD launch

Southern African Secretariat of Renewable Energy and Energy Efficiency Partnership (REEEP)

Since 2009, SANEDI has been hosting the Southern African Secretariat of REEEP, a multilateral partnership. Formed in 2002 at the World Summit on Sustainable Development in Johannesburg, REEEP was established to promote the uptake of renewable energy and energy efficiency, particularly in developing countries and economies in transition. The partnership currently consists of close to 400 partners, 40 of which are governments, and has successfully supported over 80 policy, regulatory, business and finance initiatives in developing countries.

To-date REEEP Southern Africa has assisted in the development of renewable energy and energy efficient projects in Zambia, Lesotho, Mozambique, Angola, Namibia and South Africa. REEEP facilitates market conditions in developing countries in order to accelerate

the deployment of renewable energy and energy efficiency through the introduction of suitable policies and measures as well as business models and finance facilities. Regional priorities are developed each year as part of a financial framework supported by the REEEP partnership whereby a funding call takes place every 18 months. Regional priorities for 2013 include the thematic areas around scaling up successful business models, supporting off-grid generation, harnessing the benefits of clean energy in both food production and in reliable water supply and opening up energy data in emerging markets.

The ninth funding call took place in 2012 and an announcement was made that of 98 final proposals, 28 projects were chosen and approved by REEEP’s International Secretariat in Vienna and its Governing Body. The awarded projects span over 19 countries in Africa and Asia, two of which are in South Africa. The Government of Norway, which has been a strong supporter of REEEP since 2006, is supporting or co-funding 15 of these projects. €3.95 billion in funds have been awarded with projects ranging from the promotion of electric two-wheelers and solar energy in Vietnamese cities to powering water supply in South Africa by using small hydro opportunities on existing infrastructure. The other project awarded from South Africa was the application by Sustainable Energy Africa, which was awarded funding for a project entitled “Sustainable Electricity Provision at the Municipal Level”.

REEEP’s objectives are to grow the share of renewable energy and energy in the energy mix and ensure that economic energy intensity improves. In order to grow the market projects which are often considered “niche intervention” need to be replicable and be able to be up-scaled, especially projects in municipalities and projects that are part of national and regional government support.

REEEP is interested in developing a more open form of proposal submission and is willing to engage with institutions on ideas and particularly with those whose ideas are similar to REEEP’s focus areas and general goals. REEEP continues to engage with Government and regional entities such as sustainable energy regulators, international cooperating partners, NGOs and other bodies in an effort to continuously working towards addressing the most prevalent issues in achieving the ultimate goal of sustainable energy access.


The scope of work is comprised of six work packages addressing the modelling, verification, application with guidelines and dissemination of results e.g. http://www.wasa.csir.co.za; http://www.wasaproject.info/; http://veaonline.risoe.dk/wasaFollowing the successful launch of the Verified Numerical Wind Atlas (VNWA) in March 2012, the following activities took place:

The second year of wind measurements were completed with data recovery rate above 90% as indicated in Table 1.

Table 1: Wind Measurements

The Verified Numerical Wind Atlas (NWA), based on one years measured data Observational Wind Atlas (OWA one year) was confirmed over 2 years measured data (OWA 2 years) as indicated in Table 2.

The Wind Atlas for South Africa Project (2009 – 2014) is an initiative of the DoE with the principal funders being the South African Wind Energy Programme (SAWEP) funded by the Global Environment Facility (GEF) (R8 million) and the Royal Danish Embassy (DKK9,998,441.20) with the South African National Energy Development Institute (SANEDI) as the Executing partner. The implementation partners include the South African Council for Scientific and Industrial Research (CSIR), University of Cape Town (Climate Systems Analysis Group) (UCT CSAG), South African Weather Services (SAWS) and the Department of Wind Energy from the Technical University of Denmark (DTU)Wind Energy.

The main objective of the WASA through capacity development and research cooperation is to develop and employ numerical (modelled) wind atlas methods and to develop capacity to enable long term planning of large-scale exploitation of wind power in South Africa, including dedicated wind resource assessment and siting tools for planning purposes, i.e. a Verified with physical wind measurements Numerical (modelled) Wind Atlas and database for South Africa.

Wind Atlas for South Africa (WASA) Project

WASA

Umean @ 61.5m

-1 YEAR

Umean @ 61.5m

-2

YEARS*

ΔU Data recovery

Data recovery

WM01 5.86 6.02 2.7 100

WM02 6.21 6.10 -1.8 100

WM03 7.09 7.09 0.0 100

WM04 6.59 6.65 0.9 100

WM05 8.64 8.57 -0.8 97.9

WM06 7.02 7.13 1.6 100

WM07 6.85 6.87 0.3 100

WM08 7.36 7.38 0.3 100

WM09* 7.58 7.81 3.0 98.1

WM10* 6.55 6.55 0.0 92.4

* Not a 2-years period for WM09 and WM10WM09: 2010-09-01 to 2011-07-31 plus August 2012, WM10: 2010-10-01 to 2011-09-30.

Umean: mean wind speed

CONTINUED | CLEAN ENERGY SOLUTIONS

WM01 Alexander Bay

WM02 Calvinia

WM03 Vredendal

WM06 Sutherland

WM04 Vredenburg

WM05 Napier

WM07 Beaufort West

WM08 Humansdorp

WM09 Noupoort

WM10 Butterworth


NWA 1 YEAROWA

1 YEAR Error

NWA-OWA1Y OWA

2 YEARS Error

NWA-OWA2Y

WM01 5.33 6.16 -13.47% 6.34 -15.93

WM02 7.01 6.62 5.89% 6.50 7.85

WM03 6.63 7.19 -7.79% 7.19 -7.79

WM04 7.19 7.33 -1.91 7.39 -2.71

WM05 8.35 8.99 -7.12 9.00 -7.22

WM06 7.24 7.44 -2.69 7.55 -4.11

WM07 6.61 7.45 -11.28 7.48 -11.63

WM08 7.66 7.71 -0.65 7.72 -0.78

WM09 7.58 7.5 1.07 7.72 -1.81

WM10 6.09 6.32 -3.64 6.32 -3.64

mean error -4.16 mean error -4.78

Table 2: Verification of the Numerical Wind Atlas

A Beginners Guide to Microscale Modelling using WAsP_v5(http://stel-apps.csir.co.za/wasa-img/Beginners%20Guide%20to%20Microsacle%20Modelling%20using%20WAsP_v5.pdf) was introduced during the 2012 Windaba Conference. The Guide provides step-by-step guidance for anyone with a basic working knowledge of commercially available wind flow models (e.g. WAsP). It will enable them to perform microscale modelling of the local wind resource and potential by making use of the publicly available Verified Numerical Wind Atlas database, topography and land cover maps as input data.

SANEDI hosted a DoE WASA information workshop in December 2012. Several Provincial and National Government departments, including National Treasury and Environmental Affairs participated in this workshop. The workshop participants confirmed the importance of WASA with DEA making use of WASA for its Strategic Environmental Impact Assessment (SEA) study. The DEA SEA study objective is to identify development corridors suitable for the efficient and effective roll out of wind energy in South Africa.

SANEDI represented WASA at the 3rd IRENA Assembly meeting (January 2013) Global Atlas side event which launched the Global Solar and Wind Atlas. WASA is a partner (http://www.irena.org/globalatlas/partnership.html) and the Verified Numerical Wind Atlas is displayed

on the Global Wind Atlas Map Interface and Catalogue (http://www.irena.org/globalatlas/)

The Government of Denmark and South Africa signed an agreement in March 2013. Through this agreement the Government of Denmark is providing a grant contribution of total DKK 40 million of which DKK 12 million is earmarked for WASA Phase 2. WASA Phase 2 is an expansion of WASA that will cover the Eastern Cape, KwaZulu-Natal and parts of the Free State Provinces.

The final year (March 2013 – March 2014) of WASA Phase 1 will focus on:• Updating the Numerical Wind Atlas (WRF

mesoscale modelling), seasonal variation of the wind resource, production of the Extreme Wind Atlas, research and updating topography data, as well as generation of microscale wind resource maps with GIS integration;

• Ongoing engagement with Government, utilities, public and private sector regarding the application of WASA in terms of the policy, legal and regulatory framework for wind development areas, wind resource assessment and wind farm planning; and

• Implementation of WASA Phase 2.


ENERGYWORKING FOR

The Working for Energy Programme (WfE) is a multi-year Renewable Energy Programme aimed at delivering energy solutions to rural communities. The Programme is in its fourth year and has gained some ground with the roll-out of its project pipeline in KwaZulu-Natal, the Eastern Cape and the Western Cape.

Applied Research in Rural Energy Provision

Due to the novelty of the Programme, constituent projects are still at proof of concept stage in terms of renewable energy options, with special emphasis on social acceptability, and assessing the socio-economic impacts on targeted beneficiaries and communities. It is envisaged that the full roll-out will ensue only after the offering has been refined and the cost-benefits are fully understood. This stage will be followed by sustainable fiscus funding of the Programme as part of the Government’s service delivery interventions.

WfE and the Expanded Public Works Programme (EPWP)

One of the biggest challenges for the Programme was its alignment with the requirements of the Expanded Public Works Programme. The process of alignment of


WORKING FORthe Programme has been completed, and all new and current projects are subjected to the EPWP protocols, in terms of job creation, skills development and energy services delivery.

Energy islandsThe intended project was to retrofit Robben Island with renewable energy generating capacity and energy efficient equipment. The objective was to illustrate the potential of the ‘Energy Island’ concept in the energy

mix of South Africa. The proposal was to undertake a feasibility study, to be followed by a pilot project to demonstrate the applicability and sustainability of hybrid renewable energy.

Due to insufficient progress in getting stakeholder consensus on the project, the Minister has taken a decision to divert the funding for the feasibility study of the project to other WfE initiatives, such as the greening of schools and clinics.

Expanding the Energy Island concept further on shore, SANEDI is working with the Water Research Council, the Department of Water Affairs and other stakeholders to explore the potential for the Green Village concept which concept seeks to pilot joint projects focusing on the Energy-Food-Water nexus in selected priority rural areas.

Alternative Cooking FuelThe Carbon Fuel Tablet (CFT) Project is aimed at demonstrating the utilisation of coal waste for the provision of alternative energy sources for rural and low-income households. The fuel tablets are to be produced from waste coal sourced from coal mine dumps and coal export terminals.

The parties comprising of SANEDI, the DoE and SE-AFRICA have concluded agreements on the approach as well as the details of the project deliverables and non-disclosure agreement to protect the interest of the intellectual property owners.


Implementation is envisaged to commence in the next financial year. It is projected that the project will reach feasibility phase before the end of the financial year ending March 2014. The role of SANEDI is limited to partial funding of the feasibility study.

Agricultural waste to energyWorking for Energy Bela-Bela Biogas project The Bela-Bela project was designed in two phases. The first phase demonstrates our local capacity to generate electricity from biogas produced from agricultural waste using locally designed gas generators. The second phase aims at demonstrating the possibility of reticulating biogas produced from agricultural waste for daily use by surrounding communities. Phase 1 of this project is complete.

The success of the projects was premised on the ability of the electricity generator which is fuelled by the biogas, being able to sell electricity to the national grid. As at the end of the financial year, no Power Purchase Agreement (PPA) or wheeling agreement was be concluded with Eskom.

In this regard, the second phase of the project has been compromised by the inability of the electricity generation component to generate revenues necessary to sustain and expand the project as envisaged. Further developments on the projects will depend on the resolution of the electricity supply to Eskom or a green electricity off-taker.

The Bio-Energy Cluster ProjectsThe utilisation of biogas derived from anaerobic digesters continues to be a relatively new concept for many in the South African rural communities. The Bio-Energy Cluster Project was intended to demonstrate the utilisation of biogas technology in energy starved communities and to become a yardstick of potential challenges to be anticipated during the future possible mass roll-out.

Based on the lessons learned from the earlier Bio-energy Cluster Project, the Working for Energy Programme is also reviewing the skills development, design, building and operation parameters required relating to future bulk size digesters which will be installed in communities.

As at the end of the financial year, SANEDI had concluded new contracts for new up-scaled demonstration projects that will be implemented in the next financial year. These include the Mpfuneko, Illembe and Fort Cox bio-energy projects.

Special initiativesLucingweni Renewable Energy Legacy ProjectFollowing the directive of the Parliament Portfolio Committee (PPC) on Energy with stakeholders and the community of Lucingweni in January 2012, a decision was reached to transfer all assets previously earmarked for the project to the Walter Sisulu University (WSU) for the establishment of the rural energy research programme in conjunction with the SANEDI Renewable Energy Centre of Research and Development (RECORDs).

CONTINUED | WORKING FOR ENERGY


The WSU has been under administration, and no progress has been made in this regard. A decision has been reached to support the RECORDs based at the Nelson Mandela Metropolitan University and the Cape Peninsula University of Technology due to their advanced state of readiness. Some assets will be retained to establish a RECORD at WSU, once the university is fully functional again.

In addition, a number of new projects have been framed, namely the negotiation of the Lucingweni Community development of the Early Childhood Development Centre.

Future project pipelineA multi-disciplinary approach to leverage resources from other relevant stakeholders has been taken in framing new project going into the future. During this financial year, SANEDI has signed cooperative agreements with the National Development Agency (NDA) and the Gauteng Department of Infrastructure Development to jointly implement greening projects in low income schools and community projects. These initiatives will be implemented in the next financial year.


Table 1. EE DSM Hub Performance results – March 2013

PERFORMANCE INDICATORTARGETS(APRIL 2012 TO MARCH 2013)

ACTUAL(APRIL 2012 TO MARCH 2013)

Journal Publications 13 23

Conference Publications 20 43

Registered Students 90 130

Graduates 21 16

Short Courses 45 45

Proportion of Female Students 18% 19%

Proportion of PDI’s 40% 60%

SANEDI continues to play a catalytical role in the Energy Efficiency field, through continued dialogue with both the public and private sector to find new, innovative and cost-effective solutions for the accelerated uptake of energy efficiency in the country.

Two examples which also support the notion of co-operative governance include the work SANEDI is doing to support the Department of Trade and Industry, National Treasury and SARS with the evaluation and verification of the energy efficiency component of the 12-L Industrial Tax Incentives. The second example relates to the remarkable achievements of the SANEDI Energy Efficiency and Demand Side Management Hub at the University of Pretoria.

The activities of the Hub are jointly funded by the DST and SANEDI and they have produced over 100 Master and Doctoral students who have specialised and graduated in Energy Management and who are now playing a pivotal role in filling the skills gap for this sought-after expertise in the country.

Going forward, SANEDI will play an even more important role in the co-ordination, integration and reporting on the consolidated performance of the various fragmented energy efficiency initiatives in the country.

EFFICIENCYPROGRAMME

ENERGY


CONFERENCE DATE PRESENTER / ATTENDEE

IEA GSEP KemCO (conference on Energy Management and M&V)

21 - 23 March 2013 Barry Bredenkamp

Utility Week 21 - 24 May 2012 Barry Bredenkamp

Partnership Forum of the Africa-EU Energy Partnership 8 - 10 May 2012 Barry Bredenkamp

Sustainability Week 25 - 29 July 2012 Barry Bredenkamp

SATTIC2 - 4 September 2012

N/A

REN21 13 September 2012 Barry Bredenkamp

Young Scientist Conference16 - 18 October 2012

Barry Bredenkamp

AAAMSA 25 October 2012 Barry Bredenkamp

SABS Convention 11 October 2012 Barry Bredenkamp

SAEEC14 - 15 November 2012

Barry Bredenkamp

dti Manufacturing Conference27 - 28 November 2012

Barry Bredenkamp

Smart Energy Executive Forum 6 November 2012 Barry Bredenkamp

WWF Climate Change Response Policy21 - 22 November 2012

Lauren Smith

KZN Green Growth Conference 5 - 6 February 2013 N/A

SAEEC Eastern Cape Event 6 February 2012 Barry Bredenkamp

Industrial Resource Efficiency Conference 11 - 12 March 2013 Barry Bredenkamp

USA DoE Workshop 19 - 20 March 2013 Barry Bredenkamp

WWF Energy Planning Workshop 20 March 2012 Lauren Smith

Table 2. Conferences attended representing SANEDI Energy Efficiency Programme:


Big EE

A successful relationship with the Wuppertal Institute has opened doors to research institutions of China (CSUS-IBR Eco Technology Co., Ltd.), India (teri) and CSCP.

The creation and sustainability of further local relationships with institutions including SAINT GOBAIN, CSIR and NBI has become an important focal area of the project.

It is through these stakeholders, that the Big EE has managed to collect and collate data. A challenge, however, has been the confidentiality of information, and the fact that the process is new to the South African context.

EE Schools CompetitionThe EE schools competition introduces Energy Efficiency at school level, with the goal of in turn reaching parents. It opens a door for a future career path for the learners.

Energy Efficiency Use and Planning (EEU&P)The specific objectives of the program were to provide the participants with:• Increased knowledge of energy efficiency and its

benefits for sustainable development and poverty reduction;

• Increased knowledge of methods and tools for energy efficiency;

• Increased knowledge of methods and tools for organisational change; and

• Expanded international and national networks for exchange of knowledge and experience within the energy sector.

The programme was scheduled to provide knowledge about energy efficiency as well as concrete methods and tools for initiating and leading change and advocacy. National and local energy planning and work towards increased cooperation between various actors within the sector. In this way, participants are expected to act as change agents.

The Global Superior Energy Performance (GSEP) Energy Management Working Group (EMWG)

The recently formed Energy Management Working Group Steering Committee will provide country level input and guide decision making during the strategy development process. The EMWG Steering Committee, made up of senior policy or programme staff from GSEP member countries, will guide decision making during the strategy development process. Committee members will refine the approaches, goals, objectives, structure, outreach and communications, and partnerships that will define the EMWG going forward.

SANEDI Energy Efficiency Programme has provided input to ensure that activities through the task forces are designed to be high-impact and will help achieve the goals and objectives of the GSEP energy management activities and have helped to identify and secure resources needed to execute EMWG activities. The Working Group is in the process of developing a strategy to engage industry and related energy efficiency initiatives to ensure that opportunities for collaboration and coordination of activities are maximized, and the continued relevance of EMWG’s approach and activities. SANEDI also works closely with the GSEP Secretariat to ensure EMWG activities are aligned with overall GSEP goals and are coordinated with other GSEP working group activities. The United States of America (USA) will synthesize the input for the strategy paper and will manage the feedback process. The first webinar was held on February 21, 2013, and the committee will meet 2-3 more times prior to the EMWG Workshop in South Africa, where this collaboration will result in a refined draft document which was the basis for discussions at the workshop in Cape Town, South Africa (April 29 – May 1, 2013).

CONTINUED | ENERGY EFFICIENCY PROGRAMME


GSEP Energy Management Task Force:

The Task Force focuses on the following activities:• Discussions on Commercial Buildings – which

includes multi-lateral discussions on Energy Management Software implementation in commercial buildings.

• GSEP Energy Management Case Studies: A design template is under development and SANEDI had been instrumental in the refinement of this document.

• Qualified Energy Manager Programmes – Content and experience from other countries who have implemented such programmes.

• GSEP Energy Performance Database (EPD): Refinements to the EPD framework are in progress and based on comments received from the members. The database will be populated with data from participating countries.

Technical Assistance Facility for soft-credit line for commercial banks on renewable initiatives

The AFD (Agence Française de Developpement), a French public entity, is a bi-lateral development finance institution, acting on behalf of the French government. Its mission is to finance development according to France’s Official Development Assistance policies. Key strategic objectives of the AFD include poverty reduction, economic growth and combating climate change.

The AFD is proposing a soft-credit facility to finance sustainable energy initiatives in South Africa, with the purpose of alleviating the current energy situation and addressing future supply concerns. The AFD credit line will finance small and medium-sized investments in the field of energy efficiency and renewable energy made by private South African companies in the industrial and commercial sectors, through 3 participating banks (namely ABSA Bank Ltd, IDC Ltd and Nedbank Ltd).

Projects would be awarded funding, provided they addressed specifically outlined factors. These include retrofitting of existing installations, including on-site cogeneration, rehabilitation of boilers, regenerative burners and rehabilitation of power distribution or energy efficiency management systems.

Those projects that aim to undertake commercial energy efficient building construction and design, such as energy efficient heating and ventilation systems, construction materials, as well as combined heat and power generation, would also be considered. Further, renewable energy investments, including power generation for own consumption or for sale to the national grid also forms part of the criteria.

The implementation of this financing requires a Technical Assistance Facility to support the emergence of targeted investments and the evaluation of their technical eligibility for the credit line. The recipient, the South African National Energy Development Institute (SANEDI), intends to provide the required technical assistance in support of the AFD sustainable energy credit line in South Africa.


Centre for Energy Systems and Research (CESAR)

Modelling of Regional Liquid Fuel in the Transport Sector

CESAR is funded by the Department of Science and Technology (DST). The aim of this project was to perform a comprehensive analysis of regional transport demand in South Africa in the medium to long term under different scenario assumptions, what the resulting demand for liquid fuels would be and the associated projected CO2 emissions. The project focused on the development of a number of models which, when combined, can be used to develop scenarios around the likely future energy and infrastructure requirements of the transport sector and its major influences in terms of both energy and emissions. The future energy demand of the transport sector was calculated in terms of services performed (‘useful’ energy) as well as the amount of energy supplied (‘final’ energy).

This allows analysis of the substitution between alternative energy forms and modes as well as an appraisal of the evolution of the technological improvements in vehicles.

A number of modelling techniques were combined to provide a novel and rigorous methodology for estimating the current and future vehicle parc as well as the associated energy demand. In the end; five models were employed in the study: • A vehicle parc model; • A time budget model;• A computable general equilibrium model;• A freight demand model; and • A fuel demand model.

DATA andKNOWLEDGE

MANAGEMENT


When leaves are damaged by intense ultraviolet light, they’re able to repair themselves,

constantly producing new cells to replace the damaged ones. If only solar cells could

do the same thing, they’d last a lifetime. Luckily, scientists have found a way to replicate

that natural process using proteins, bacteria and water. These solar cells can’t compete

with silicon cells just yet – it will take decades of research to improve them – but it’s an

impressive start that could improve ‘artificial leaf’-type solar cells even further.

Data with which to populate transport sector models is sparse in South Africa, and a broad range of input assumptions are made that are discussed in detail in the report.

The vehicle parc model developed is calibrated over seven years from 2003 – 2009, and was largely developed to fill knowledge gaps around vehicle usage patterns in South Africa. The model provides a comprehensive picture of the baseline vehicle pare and its activity, disaggregated by vehicle class and technology. Due to the nature and spatial distribution of the demand for fuels by the transport sector, the vehicle parc model was developed and calibrated at a provincial scale.

The vehicle parc model draws on estimates of scrapping curves, vehicle sales, annual vehicle mileage for each vehicle class and decay of mileage as vehicles age. In order to calibrate the vehicle parc model against known fuel usage, the evolution of vehicle fuel efficiency over the lifetime of the vehicle is included in the model. Primary sources of data for the vehicle parc model are eNATIS, NAAMSA, the Department of Transport and the South African Petroleum Industry Association (SAPIA), in addition to several smaller local studies and international studies which were used as benchmarks. Base year technology penetration, fuel economy and vehicle mileage were validated outputs of the vehicle parc model.

Energy demand in the transport sector is driven by the distance travelled and the energy required for each passenger or ton kilometre travelled. Average fuel economy is influenced by several variables: for instance, the fuel economy of vehicles decreases as they age but new cars are becoming more efficient, and new cars tend to cover higher annual mileages than older vehicles. Efficiency improvements occur due to technology becoming more efficient but also from reductions in vehicle mass and engine capacity.

The project was finalised in July 2012 with the following deliverables:• A report consisting of an executive summary,

two ‘papers’ and a report on two stakeholder workshops that were held during the course of the project. The ‘papers’ are stand-alone data rich documents currently part of the ERC ‘working paper series’ with the intention of being submitted to peer reviewed journals. The first paper focuses on the characterisation of the current vehicle parc of South Africa by province. The second paper focuses on the projection of the future demand under different scenario assumptions.

• The complete data set required to replicate the results of the model provided in spreadsheet format. Some of the data is to be used by the DoE in the latest IEP process.

The models were designed and structured based on input received at two stakeholder workshops that took place in the course of the project. The models were developed primarily by researchers at the Energy Research Centre, namely Bruno Merven, Adrian Stone and Alison Hughes. The model framework and basic data was used in the long assignment of the modelling course, which is part of the ERC MSc programme in 2012. Further enhancements to the model and the scenario analysis have been proposed for future funding to SANEDI.

KNOWLEDGEMANAGEMENT


Energy Technology Data Exchange

The Energy Technology Data Exchange (ETDE), is a multi-lateral energy exchange created in 1987 within the International Energy Agency (IEA) “Implementing Agreements” international collaborative framework. The mission of the ETDE is to provide governments, industry and the research community in the member countries with access to the widest range of information on energy research, science and technology and to increase the dissemination of this information to the developing countries.

The Energy Technology Data Exchange World Energy Base (ETDEWEB) makes it possible for users to search and explore over 4.3 million worldwide energy literature references.

The benefits for South Africa participating in the ETDE Implementing Agreement are:• it gives the country the opportunity to stay abreast

of recent developments in various research areas;• Avoids duplication of research efforts and learning

from expected and unexpected results;• jump-starts research at a point further along than

anticipated;• identifies which countries and people are involved

in particular research areas;• Promotes international cooperation in energy R&D;• Promotes understanding of how countries deal

with energy related environmental and climate change;

• Finds approaches to energy use including policy and economic factors, alternative and renewable energy sources and conversion aspects; and

• Finds historical perspective on historical issues.

The 34th ETDE EXCO was held in Utrecht, Netherlands in May 2012. Government, industry, the research community and tertiary institutions are encouraged to access the ETDEWEB. SANEDI has a URL on their website to the ETDEWEB and government, industry, the research community and tertiary institutions are encouraged to do the same seeing that South Africa is a member country to the ETDE and implementing the Agreement.

CONTINUED | DATA KNOWLEDGE MANAGEMENT

Butterfly wings are not just beautiful.

They are also sophisticated collectors of solar

energy that help butterflies stay warm, and

researchers say that their shingle-like structure

could provide valuable clues into developing

better solar technology. The scientists used an

electron microscope to study the wing structure

of two species of black butterflies. They found

that the wings are composed of elongated

rectangular scales, arranged a bit like overlapping

shingles on a roof. The scales on each type of

butterfly also had steep ridges, with small holes

on either side leading to a second layer.


The effective deployment of technology in the electricity supply industry (ESI) is worldwide recognised as a key business enabler. The deployment of appropriate technology contributes amongst others to improved customer service, improved business efficiency and improved business sustainability. While South Africa is lagging in the deployment of technology in the ESI to leverage the potential benefits, the progress during the past year deserves acknowledgement.

The transmission (Tx) grid in South Africa can be regarded as rather intelligent. This sector within the ESI is leading in the deployment of appropriate technology. Within the distribution (Dx) grid a level of progress is made up to the medium voltage level. The challenge for the Dx sector is however to deploy technology at the

lower voltage levels which will provide real customer benefits. South Africa finds itself at a stage where it is essential to improve the effective utilisation of energy and to enhance the reliability and availability of the distribution grid. These objectives cannot be achieved without a level of grid intelligence and customer enablement.

Industry and stakeholder cooperation is regarded as holding the key to the effective deployment of technology. To this end the South African Smart Grid Initiative (SASGI) was established during the year under review. SASGI is an industry forum established under the guidance of SANEDI and chaired by the Department of Energy. The main objectives of SASGI are to facilitate cooperation, to contribute to policy formulation, to provide guidance in the establishment of standards, identify technology functionality and to provide leadership in the deployment of appropriate technology. This forum is active and substantial progress was made during the year in overview towards the realisation of the forum objectives. South Africa, represented by SANEDI, was accepted during the past year as a full member of the International Smart Grid Action Network (ISGAN). As a member of ISGAN the aim is to promote the requirements of South Africa and to leverage the international experience to the benefit of the local ESI.

Through the SANEDI interventions and SASGI guidance the ESI and in particular the distribution sector was able to embark amongst others on a technology investment optimisation approach. While it is acknowledged that there is still a lot to be done, the progress and goodwill is encouraging. A number of the metropolitan municipalities and Eskom Distribution embraced the journey towards a smarter grid. While the priorities in the various entities define their point of departure in their journey towards a smarter grid, for most of these entities their ultimate technology deployment goal is clear. The deliverables for the year in overview were aimed at laying the foundation to facilitate the journey towards a smarter grid.

The effective deployment of technology will position South Africa to provide the required electricity supply infrastructure to support the customer requirements of the 21st century.

GRIDSSMART


COMMUNICATIONSSANEDI

Launch of SANEDI

The South African National Energy Research Institute (SANERI) was established following a Cabinet resolution in 2002, when South Africa was faced with an eroding Energy Research and Development capacity in existing institutions outside of universities. The Institute’s primary mandate was to support and direct renewable energy research in both the private sector and at a tertiary level. Since then, and due to a number of developments in the South African energy industry SANERI began an amalgamation process with NEEA (National Energy Efficiency Agency), to form a new entity entitled SANEDI. This entity would serve to introduce and promote products and services of the two former entities, and to accelerate the awareness and uptake of green energy in South Africa.

With this new entity came the need to develop a new, distinctive corporate identity, including a new company logo that would effectively capture and communicate the following core concepts:• Energy within the global issue of climate change;• An African identity;• Research, development and innovation; and• Energy efficiency.

A logo design competition was launched in January 2012 calling for entrants to submit their ideas for a monolithic logo, encompassing the themes of “Green Economy” and a “Low Carbon Future”. Submissions had to be accompanied by a detailed explanation of the design, as well as examples of letterheads and business cards bearing the new design, with the designer of the winning logo standing to receive R50,000,00 in prize money.

A judging panel within SANEDI made the final selection, eventually deciding on a logo design submitted by Mr Andrew Footit, a self-taught graphic designer from Johannesburg who learnt about the competition via an advertisement in the Sunday Times newspaper. His design is based on the combination of the internationally recognised “recycle” symbol with wind energy propeller blades and an abstract-styled leaf, to depict the

concepts of green energy and a low carbon future. The orange colour included in the design represents energy while the green colour symbolizes transition to a low carbon future.


SANEDI Launch

SANEDI was officially launched at a prestigious event held in Johannesburg on 19 July 2012 where the honourable Minister of Energy, Ms Dipuo Peters unveiled the new SANEDI logo. Amongst the delegates in attendance were representatives from different embassies including America, Japan, Netherlands and other countries, academics from Gauteng universities, industry partners and the Energy community at large.

SANEDI logo unveiled by the Minister of Energy Ms Dipuo Peters and the chairperson of the SANEDI board Justice Nothemba Mlonzi.

Communications Strategy

As a newly established entity SANEDI has had to develop a communications strategy that will guide all communication activities. SANEDI is a state owned entity entrusted with the mandate to support policy development, planning and implementation of sustainable development policy objectives in the energy sector. It is paramount that SANEDI encourages information sharing and technology diffusion to various stakeholders. The main objective of developing a SANEDI communications strategy is to ensure that these stakeholders are kept up-to-date with SANEDI activities at project, programme and corporate level. The strategy is a live document from which all work plans and activities stem.

Pictured after the unveiling of the logo are; from left Justice Nothemba Mlonzi, Chairperson of the SANEDI board, Honourable Ms Dipuo Peters Minister of Energy and Mr Kadri Nassiep, CEO of SANEDI.

Honourable Minister of Energy, Ms Dipuo Peters


MANAGEMENTSANEDI contracts its human resources services to the CEF Group of Companies (SOC) Ltd which is managed through the signing of a service level agreement on an annual basis. Through the service level agreement with the CEF Group of Companies (SOC) Ltd, SANEDIs organisational capabilities are developed so as to enable the organisation to deliver on its strategic objectives.

HUMANRESOURCE

Staff: PDI Status

75%PDIs

25%


MANAGEMENTStaff ComplementSANEDIs staff complement increased to 41 by the end of the financial year as opposed to 27 staff members at the end of the previous financial year. The organisation also employed two interns as a means of contributing to youth empowerment by providing experiential training and to address challenges regarding capacity building in the public service. Although it was envisaged to appoint 10 interns in the organisation by the end of the financial year, there were serious challenges as the stipend is considered too low in comparison to private companies.

Employment Equity and TransformationAs at the end of the period under review, there was a 75 percent previously disadvantaged representation and a 53 percent female representation.

RESOURCE 53%Female

Staff: Gender

47%Male


K NassiepCEO

Dr M BipathSenior ManagerSmartgrids

Dr T MaliSenior ManagerClean Energy Solutions

Dr T SurridgeSenior ManagerAdvanced Fossil Fuel Use

D Govender ManagerCorporate Support/Office of the CEO

D BatteActing Senior ManagerGreen Transport

B BredenkampSenior ManagerEnergy Efficiency and Communications

D MahumaSenior ManagerWfE

Dr K Surridge-TalbotCentre ManagerRECORD

E NkilePersonal AssistantWfE

C BorchardGIZ International EE Advisor

L RadebeSystem Administrator

N AlgioREEEP Manager

R AbrahamseActing CFO

S OkuboyejoProject OfficerWfE

R MunyaiConsultantSACCCS

Dr S HietkampConsultantAdvanced Fossil Fuel Usage

Dr W de BeerConsultantSmart Grids K Modingoana

Data Support and Communication Officer

J NankooIT Manager

T SociAccountant


N GaranePublic Awareness Officer

D LundallActing Communications Officer

M SumaniProject ManagerGreen Transport Programme

N CassimAdministration OfficerWfE

J SchäfflerREEEP Regional Technical Coordinator

L SmithActing Project OfficerEnergy Efficiency

T SnyerProject ManagerWfE

A OttoRenewable Energy Technical Advisor

E NyandoroProject CoordinatorAdvanced Fossil Fuel Use

D MahlanguReceptionist

M MoneweActing PA to the CEO

S MsweliIntern

B KamakiAccountant

S SekoaRefreshment Officer

P ModikoPublic Engagement Lead for SACCCS

S JumbaOffice AdminstratorSACCCS

T YusufIntern

N GumedeStorage Lead SACCCS

W NgcoboPublic Engagement Analyst SACCCS

T BenukaRefreshment Officer

B BeckCentre ManagerSACCCS


RESPONSIBILITY

SANEDI sponsors The Children of Fire

CORPORATE SOCIAL

SANEDI staff and the CEO, Mr Kadri Nassiep, presented shoes to The Children of Fire


In the spirit of Batho Pele, a value espoused by SANEDI, the staff decided to commit to a social development project as a collective. ‘The Children of Fire’, an institution

situated in Melville, Johannesburg that cares for under-privileged child-burn-victims awaiting, undergoing and recovering from medical procedures, was

selected because the institution’s existence is essentially the result of mismanaged energy and unsafe energy usage practices that SANEDI

is committed to educating the nation to avoid.

In lieu of the usual Christmas party, the staff contributed to the purchase of much needed Green Cross shoes for each of the

children attending the school. This need was identified by the staff as being the most pressing at the time.

A small contingent of SANEDI staff accompanied the CEO (Mr Kadri Nassiep) to deliver the shoes and meet the children. Visitor numbers are kept to a minimum to avoid infecting or stressing the children who were generally in delicate health. This occasion marked the establishment of the now on-going association between SANEDI and the Children of Fire.

CORPORATE SOCIAL


ANNUAL FINANCIAL STATEMENTS

Country of incorporation and domicile South AfricaNature of business and principal activities Energy research and developmentRegistered office Block C, Upper Grayston Office Park 152 Ann Crescent Strathavon Sandton 2199Business address Block E, Upper Grayston Office Park 150 Linden Street Strathavon Sandton 2199Postal address PO Box 9935 Sandton 2146Bankers AbsaAuditors Auditor-General of South AfricaSecretary CEF (SOC) Limited incorporated in South Africa

GENERAL INFORMATION


ANNUAL FINANCIAL STATEMENTSfor the year ended 31 March 2013

INDEXThe reports and statements set out below comprise the annual report presented to the Department of Energy:

Index Page

Accounting Authority’s Responsibilities and Approval 46Board Audit and Risk Committee Report 47 – 48Report of the Auditor-General 49 – 53Statement on Corporate Governance 54 – 56Performance Against Objectives 57 – 66Accounting Authority’s Report 67 – 71Materiality and Significance Framework 72Statement of Financial Position 73Statement of Financial Performance 74Statement of Changes in Net Assets 75Cash Flow Statement 76Accounting Policies 77 – 93Notes to the Annual Financial Statements 94 – 108


ACCOUNTING AUTHORITY’S RESPONSIBILITIES AND APPROVAL

The board is required by the Public Finance Management Act (Act No. 1 of 1999), to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is the responsibility of the board to ensure that the annual financial statements fairly present the state of affairs of the company as at the end of the financial year and the results of its operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on the annual financial statements and were given unrestricted access to all financial records and related data.

The annual financial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.

The annual financial statements are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The board acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place considerable importance on maintaining a strong control environment. To enable the board to meet these responsibilities, the accounting authority sets standards for internal control aimed at reducing the risk of error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The board is of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records can be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or deficit.

The accounting authority is primarily responsible for the financial affairs of the company.

The external auditors are responsible for independently reviewing and reporting on the company’s annual financial statements. The annual financial statements have been examined by the company’s external auditors and their report is presented on pages 49 to 53.

The annual financial statements set out on pages 67 to 108 which have been prepared on the going concern basis, were approved by the accounting authority on 31 July 2013 and were signed on its behalf by:

Mr J Marriott Deputy ChairpersonSANEDI Board

for the year ended 31 March 2013


BOARD AUDIT AND RISK COMMITTEE REPORT

We are pleased to present our report for the financial year ended 31 March 2013.

Charter

The audit committee and risk committee (the Committee) are guided by a detailed charter that is reviewed and approved by the board on an annual basis. The Committee has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein. The members of the two committees are the same members and the committee meetings occurred on the same dates.

Membership

The Committee members were appointed by the board of directors and comprises of three non-executive members. The audit committee and risk committee consist of the same members as listed hereunder and should meet on a minimum of four occasions per annum as per its approved Charter. During the financial year 4 meetings were held.

Name of member Number of meetings attended Mr V Magan (Chairperson) 4 Ms M Thomani 3 Ms M Nyathi 4 Ms M Thomani resigned on 07 March 2013. Internal audit

The Committee considered and recommended the internal audit charter for approval to the board and approved the annual work plan for the internal audit function. The internal audit function is responsible for reviewing and providing assurance on the adequacy and effectiveness of the internal control environment across operations. The Chief Audit Executive is responsible for reporting the findings of the internal audit work against the agreed audit plan to the committee on a quarterly basis.

The Chief Audit Executive has direct access to the committees, primarily through its chairperson. The audit committee is also responsible for the assessment of the performance of the internal audit function. An external quality assurance review was performed in March 2013 by the Institute of Internal Auditors (IIA). In April 2013 they reported positive results and rated the internal audit function as “general conformance” with the IIA Standards.

The internal audit function is independent and had the necessary resources, budget, standing and authority within the company to enable it to discharge its functions. The Chief Audit Executive, through the service level agreements, reports functionally to the chairperson of the Audit Committee and administratively to CEF (SOC) Limited.

We are satisfied that the internal audit function is operating effectively and that it has addressed the risks pertinent to the company in its audits. We believe that Internal Audit contributes to the improvement of internal controls within the company.

Internal control effectiveness

The audit committee has noted that the system of internal controls that is in place needs to be reviewed and improved to ensure the system of internal controls is appropriate in all material respects to: • Reduce risks to an acceptable level;• Meet the business objectives;• Ensure all assets are adequately safeguarded; and• Ensure that transactions undertaken are recorded in the accounting records.



Internal and external audit provides the audit committee with reasonable assurance that the majority of internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. From the various reports of the internal and external auditors, we noted that matters which indicated any deficiencies in the system of internal control have been brought under management’s attention and corrective measures are being implemented.

Corporate Governance

We acknowledge that the company continues to strive towards complying sound principles of corporate governance. As per our discussions with management, management confirms that the content and quality of monthly and quarterly reports prepared and issued by the Chief Executive Officer during the year under review were properly formulated and have complied with the Public Finance Management Act (PFMA) in this regard.

Risk Management

The Board assigned the oversight of the risk management function to the risk committee. The company implemented a risk management strategy which includes the fraud prevention plan. A formal risk assessment was undertaken for the year ended 31 March 2013 with quarterly reviews, updates and reports. Consequently, internal audit used this data to prepare the 3 year rolling strategic plan and the annual operating audit plan. The risk committee monitored the significant risks faced by the company through reviewing risk reporting and participation in the risk assessment workshop. We are satisfied that significant risks were managed to an acceptable level.

Annual Financial Statements

We have: • Reviewed and discussed the audited annual financial statements to be included in the annual report, with the

Auditor-General of South Africa and the Accounting Officer;• Reviewed the entity’s compliance with legal and regulatory provisions;• Reviewed the Auditor-General of South Africa’s management report and management’s responses thereto; • Reviewed changes in accounting policies and practices; and • Reviewed significant adjustments resulting from the audit.

The Committee concurs and accepts the Auditor-General of South Africa’s (AGSA) report on the annual financial statements, and is of the opinion that the audited financial statements be accepted and read together with the report of the AGSA.

Conclusion

We therefore recommend that the Board approve the audited Annual Financial Statements.

Appreciation

The Committees’ members express their sincere appreciation to the Board, Chief Executive Officer, Management, Internal Audit and the Auditor-General of South Africa.

Mr V Magan (Chairperson) 31 July 2013

BOARD AUDIT AND RISK COMMITTEE REPORTfor the year ended 31 March 2013


REPORT ON THE FINANCIAL STATEMENTS

Introduction

1. I have audited the financial statements of the South African National Energy Development Institute set out on pages 67 to 108, which comprise the statement of financial position as at 31 March 2013, the statement of financial performance, statement of changes in net assets and the cash flow statement for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Accounting Authority’s responsibility for the financial statements

2. The board of directors which constitutes the accounting authority is responsible for the preparation and fair presentation of these financial statements in accordance with the South African Standards of Generally Recognised Accounting Practise (SA Standards of GRAP) and the requirements of the Public Finance Management Act (Act No. 1 of 1999) (PFMA), and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor-General’s responsibility

3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the General Notice issued in terms thereof and International Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

opinion.

Opinion

6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the South African National Energy Development Institute as at 31 March 2013, and its financial performance and cash flows for the year then ended in accordance with the South African Standards of Generally Recognised Accounting Practise and the requirements of the Public Finance Management Act (Act No. 1 of 1999).


REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE SOUTH AFRICAN NATIONAL ENERGY DEVELOPMENT INSTITUTE


REPORT ON THE FINANCIAL STATEMENTS (CONTINUED)

Emphasis of matter

Restatement of corresponding figures

7. The corresponding figures for 31 March 2012 have been restated as a result of an error discovered during 2013 in the financial statements of the South African National Energy Development Institute at, and for the year ended, 31 March 2013.

Material impairments

8. Material losses to the amount of R6,8 million were incurred as a result of impairments in the accounts receivables.

Additional matter

9. As part of our audit of the financial statements for the year ended 31 March 2013, I have read the Directors’ Report, the Audit Committee’s Report and the Company Secretary’s Certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports I have not identified material inconsistencies between the reports and the audited financial statements in respect of which I have expressed an unmodified. I have not audited the reports and accordingly do not express an opinion on them.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

10. In accordance with the PAA and the General Notice issued in terms thereof, I report the following findings relevant to performance against predetermined objectives, compliance with laws and regulations and internal control, but not for the purpose of expressing an opinion.

Predetermined objectives

11. I performed procedures to obtain evidence about the usefulness and reliability of the information in the Report on South African Energy Development Institute’s Strategic Objectives as set out on pages 57 to 66 of the annual report.

12. The reported performance against predetermined objectives was evaluated against the overall criteria of

usefulness and reliability. The usefulness of information in the annual performance report relates to whether it is presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance is consistent with the planned objectives. The usefulness of information further relates to whether indicators and targets are measurable (i.e. well defined, verifiable, specific, measurable and time bound) and relevant as required by the National Treasury Framework for managing programme performance information.

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

for the year ended 31 March 2013 (continued)



REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS (CONTINUED)

The material findings are as follows:

Usefulness of information

Measurability

Performance measure not well defined 14. The National Treasury Framework for managing programme performance information (FMPPI) requires that

measures should have clear unambiguous data definitions so that data is collected consistently and is easy to understand and use.

15. A total of 47% of the indicators were not well defined, in that clear unambiguous data definitions were not

available to allow for data to be collected consistently.

Reliability of information

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

17. There were no material findings on the performance against objectives report concerning the usefulness and reliability of the information.

Additional matter

18. I draw attention to the following matter below. This matter does not have an impact on the predetermined objectives audit findings reported above.

Achievement of planned targets

19. Of the total number of 67 planned targets, 26 targets were not achieved during the year under review. This represents 39% of total planned targets that were not achieved during the year under review.

Material adjustments to the Performance Against pre-determined objectives

20. Material misstatements in the annual performance report were identified during the audit, all of which were corrected by management.

Compliance with laws and regulations 21. I performed procedures to obtain evidence that the entity has complied with applicable laws and regulations

regarding financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key applicable laws and regulations as set out in the General Notice issued in terms of the PAA are as follows:

Expenditure management

22. The accounting authority did not take reasonable steps to prevent irregular expenditure as required by section 51(1) (b) (ii) of the PFMA.





Financial statements

23. The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 55(1)(b) of the PFMA and section 29(1)(a) of the Companies Act. Material misstatements identified by the AGSA relating to the classification of revenue, recognition of grants and Valuation of creditors, deferred income, and current assets were subsequently corrected.

Procurement and contract management

24. Goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury Regulation 16A6.1.

25. Contracts and quotations were awarded to bidders who did not submit a declaration on whether they are employed by the state or connected to any person employed by the state, which is prescribed in order to comply with Treasury regulation 16A8.3.

26. Contracts and quotations were awarded to bidders based on preference points that were not allocated and calculated in accordance with the requirements of the Preferential Procurement Policy Framework Act and its regulations.

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

28. Contracts were awarded to bidders based on points given for criteria that differed from those stipulated in the original invitation for bidding, in contravention of Treasury Regulations 16A6.3 (a) and the Preferential Procurement Regulations.

29. Contracts and quotations were awarded to suppliers whose tax matters had not been declared by the South African Revenue Services to be in order as required by Treasury Regulations 16A9.1(d) and the Preferential Procurement Regulations.

30. Contracts were awarded to bidders who did not submit a declaration of past supply chain practices such as fraud, abuse of SCM system and non-performance, which is prescribed in order to comply with Treasury regulation 16A9.2.

31. Goods and services of a transaction value above R500 000 were procured without inviting competitive bids, as required by Treasury Regulations 16A6.1. Deviations were approved by the accounting officer even though it was not impractical to invite competitive bids, in contravention of Treasury regulation 16A6.4.

Internal control

32. I considered internal control relevant to my audit of the financial statements, Report of South African Energy Development Institute Strategic Objectives and compliance with laws and regulations. The matters reported below under the fundamentals of internal control are limited to the significant deficiencies that resulted in the findings on the Report of South African Energy Development Institute Strategic Objectives and the findings on compliance with laws and regulations included in this report.

Leadership

33. Non-compliances with laws and regulations could have been avoided had the accounting authority implemented proper controls over monitoring of compliance with laws and regulations.

34. Material adjustments to financial statements could have been avoided had the leadership of the entity implemented adequate policies and procedures over daily processing and review of transactions.





Financial and Performance Management

35. Material adjustments to financial statements could have been avoided had the entity implemented adequate controls over daily processing and review of transactions and adequate controls over preparation of regular, accurate and complete financial and performance reports.

36. Non compliance with laws and regulations could have been avoided if the entity had implemented proper controls over the monitoring of laws and regulations.

Pretoria31 July 2013





STATEMENT ONCORPORATE GOVERNANCE

1. Introduction

The South African National Energy Development Institute ensures that its processes and practices are reviewed on an ongoing basis in order to ensure adherence to good corporate governance practices.

2. Compliance

The board of directors believe that the company endorses the principles as set out in the Protocol on Corporate Governance. The entity strives towards the spirit of the King III Report on Corporate Governance for South Africa and has endeavoured to comply with the principles incorporated in the Code of Corporate Practices and Conduct and the Public Finance Management Act (PFMA).

The entity has a formalised system of corporate governance as set out below.

3. Governing bodies

Board of directors

The South African National Energy Development Institute has a unitary board structure made up of non-executive directors, appointed by the shareholder. The board of directors (the board) meets at least once every quarter, and executive managers attend by invitation. The board charges executive management with regard to the day to day running of business, with the board addressing a range of key issues to ensure that it retains the strategic direction of, and proper control over, the entity. The non-executive directors are appointed on a three year cycle and re appointment is not automatic. The offices of the Chairperson and Chief Executive Officer are separated.

In accordance with the Public Finance Management Act (Act No. 1 of 1999) the board is the accounting authority of the entity. In keeping with the recommendations of the King Report, the board adopted a board charter which sets out the role of the board as follows.

The Board’s primary responsibilities include the appointment of the Chief Executive Officer, determining the entity’s objectives and values and giving strategic direction to the company, taking effective and appropriate steps to ensure that key risk areas and key performance indicators of the company’s business are identified, monitoring the performance of the entity against agreed objectives, advising on significant financial matters and reviewing the performance of executive management against defined objectives and applicable industry standards, as well as:

• Approving key policies, investments, risk management and relevant transactions that exceed managements’ levels of authority;

• Reviewing and approving the entity’s strategy, objectives, and plans;• Considering and approving annual financial statements and submissions to the shareholder;• Ensuring adherence to good corporate governance and ethics; and• Reviewing effectiveness of controls.

Company Secretary

The Company Secretary provides the board of directors with guidance and advice on matters of business ethics and good governance, as well as on the nature and extent of their duties and responsibilities and how such duties and responsibilities should be properly discharged.


Each of the directors has unrestricted access to the advice and services of the Company Secretary, entity information, and is entitled to seek independent professional advice, at the entity’s expense in pursuance of their duties as director.

Board audit committee and risk committee

The roles and responsibilities for the board audit committee and the board risk committee were split to improve and focus attention on risk management activities separately. The members of the two committees are the same and the committee meetings happened on the same dates.

In terms of the Public Finance Management Act (Act No. 1 of 1999 as amended by Act No. 29 of 1999), S77(a) & (b), at least two meetings a year should be held and the board audit committee and board risk committee should consist of at least three members. The board audit committee and board risk committee held four meetings during the year. The board audit committee and board risk committee consist of three independent non-executive members. Each committee has an agreed terms of reference as approved by its board of directors. The report of the South African National Energy Development Institute board audit committee, the board risk committee and the board is included in these annual financial statements. The report sets out the responsibilities covered by these committees.

4. Materiality and significance framework

A materiality and significance framework is in place. Its purpose is to regulate the disclosure of material facts to the Minister of Energy, disclosure in the entity annual financial statements and approval from the Minister of Energy for participation in certain transactions.

5. Directors’ responsibility for the annual financial statements

The directors of the entity are responsible for the entity’s annual financial statements. The Auditor-General of South Africa is responsible for performing an independent audit of the annual financial statements.

The annual financial statements and notes thereto are prepared in accordance with the South African Statements of Generally Recognised Accounting Practice (GRAP). Accounting policies are consistently applied except where otherwise stated, in which case full disclosure of changes is made.

6. Internal audit

The South African National Energy Development Institute uses the services of the CEF Group internal audit function that has the support and cooperation of both the board and management. The internal audit function has written terms of reference for the CEF Group of companies, approved by the CEF board of directors annually. The internal audit function is under the control of the audit committee.

The internal audit function carries out its work in terms of an approved internal work plan based on the risk framework of the company. The audit committee approves the annual work plan. The Acting Chief Audit Executive has full access to the chairperson of the audit committee and the board of directors.






The key responsibilities of internal audit are to the board, its committees, or both, in discharging its responsibilities by:• Evaluating the entity’s governance processes including ethics;• Performing an objective assessment of the effectiveness of the risk management and internal control framework;• Systematically analysing and evaluating business processes and associated controls; and• Providing a source of information, as appropriate, regarding instances of fraud, corruption, unethical behaviour

and irregularities.

The internal audit function adheres to the International Standards for Professional Practice of Internal Auditing and Code of Ethics. The Chief Audit Executive developed and maintained a quality assurance and improvement programme. The internal audit function is subjected to an external quality review at least every five years. In 2013 an external effectiveness function as “generally conformance” with the IIA Standards.

7. Risk management

The entity has a risk management function that assists in identifying, evaluating and managing the significant risks faced by the business. Significant progress has been made in addressing and managing these significant risks. The risk committee reviews the risk management process and the effectiveness of the system of internal controls by considering the regular reports from management on key risks, mitigating actions and assertions.



PERFORMANCEAGAINST OBJECTIVES

Objectives Indicator Target Performance Result

Reason for non-achievement of targets

Administration and corporate governance

Executive support

Responses and presenta-tion to DoE and the Minister of Energy as and when re-quired

Achieved

Exco minutes completed and distributed on a monthly basis

Achieved

Support Services (services dependent on CEF)

Quarterly evaluation of ser-vices rendered as docu-mented in the SLA

Achieved

Corporate governance

Compliance to relevant legislation

Achieved

Effective and efficient operations/ administration

Achieved

Corporate and programme marketing and communication services

Corporate and programme marketing and communica-tion plan approved and im-plemented

Not achieved

The corporate communication plan is complete; however it has not been approved and implemented. The plan will be approved in the first quarter in 2014.

Monitoring and evaluation of corporate and programme marketing and communica-tion plan

Not achieved

The corporate communication plan is complete; however has not been approved and implemented. The plan will be approved in the first quarter in 2014.

Financial Management and management accounting

SANEDI budget coordinated and aligned to strategic plan and annual performance plan by 30 November 2012

Achieved

Spending monitored and fi-nancial performance report-ed on a monthly basis at the budget sub-committee

Achieved

Debt and revenue due to SANEDI managed and ac-curately and timeously re-corded and the cash book managed on a monthly basis

Achieved

SANEDI assets managed on a monthly basis

Achieved




Administration and corporate governance (continued)

Financial Management and management accounting

SANEDI expenditure and creditors managed on a monthly basis

Achieved

Programme management accounting reported month-ly

Achieved

ICT infrastructure and systems

ICT strategic plan devel-oped, approved and imple-mented

Achieved

Mechanism to enhance en-ergy data collection and storage provided

Achieved

Projects management sys-tem implemented SLA with CEF for ICT services ap-proved

Achieved

ICT Disaster Recovery plan developed , approved and implemented

Not achieved

The SANEDI ICT Disaster Recovery Plan has not been developed due to the delay of implementation of the Enterprises Resources Management system. SANEDI has adopted the CEF ICT Disaster Recovery Plan until the SANEDI ICT plan is developed

Enterprises resources man-agement system imple-mented

Not achieved

The enterprises resources management system has not been implemented due to delays in the procurement process and funding received.

Applied research: Advanced fossil fuels

Clean Coal Technologies (CCT) to facilitate the optimisation and efficient use of coal and decrease greenhouse gas emissions

Complete 4 existing CCT project by 31 March 2013

Achieved






Applied research: Advanced fossil fuels (continued)

Clean Coal Technologies (CCT) to facilitate the optimisation and efficient use of coal and decrease greenhouse gas emissions (continued)

Technical support to Coal Road map

Achieved

Financial Management of South African Coal Road Map (SACRM)

Achieved

Oil and Gas R&D Frameworks to facilitate the optimisation and efficient use of oil and gas and decrease greenhouse gas emissions

Framework for oil and gas R&D frameworks and sub-mission to DoE by 31 March 2013

Partially achieved

The frameworks have been completed by 31 March 2013; however the reports to the DoE were only submitted in the first quarter of 2014.

Carbon Cap-ture and Stor-age (CCS) to determine the potential and a p p ro p r i a t e -ness of tech-nologies for the geological storage of car-bon dioxide in SA

Sourcing of funding Achieved

Completion of current pro-jects

Not achieved

The draft final report was received; however returned to consultant to revise after review by technical committee.

Preparation of further explo-ration of the Zululand Basin

Achieved

International co-operation Achieved








Applied research: Smart grids

SA smart grid vision which will set the direc-tion to enhance supply reliability and the effec-tive operations of the electric-ity distribu-tion industry (EDI).

Minutes of stakeholder workshops

Achieved

Report and presentation to SANEDI Board of Directors

Achieved

Submit a briefing document to the DoE by 31 March 2013

Achieved

Current state assessment to amongst oth-ers define the EDI constraints from a holistic system reliabil-ity and real time data availability perspective

Terms of reference docu-ments

Achieved

Resource requirement iden-tified

Achieved

Smart grid scoping docu-ment

Achieved

Te c h n o l o g y , g o v e r n a n c e and service gap analysis and defined solu-t ions /ac t ions to realise the smart grid vi-sion

Minutes of work group Achieved

Technology, regulatory, in-stitutional, policy, skills, ICT gaps and propose solutions identified

Achieved

Smart grid b u s i n e s s case

Motivation for smart grid with clearly define project proposals including a fund-ing plan

Achieved

Smart grid im-p lementa t i on plan

Pilot project running, applied research and results as de-fined in respect of the pilot project demonstrated

Achieved






Applied research: Smart grids (continued)

Optimised so-lution portfo-lio to underpin the business case

Documented results and defined smart grid benefits

Achieved

Data enhancement, energy management improvement, reliability improvement and contribution to effective en-ergy planning documented

Achieved

Conso l idated smart grid in-dustry guideline

Business case and guide-lines and National strategy for smartgrids developed by 31 March 2013

Achieved

Applied research: Renewable technologies

Co-ordinate RE (renewable en-ergy) research in South Af-rica, facilitate RE research col laborat ion, par t ic ipat ion: in standards deve l opmen t and technology evaluation, con-tribute to RE skills develop-ment, support RE business deve l opmen t and RE aware-ness creation to stakehold-ers and stu-dents

RECORD RE research co-ordination mandate is con-firmed, a co ordinated re-newable energy research effort in SA with stakeholder buy in and support, a num-ber of RE research projects are funded by RECORD, value offering to serve RE research paying clients, a platform for inter institu-tional research is created, a platform for international inter institutional research is expanded and RECORD participates effectively in standard development and technology evaluation

Achieved

Projects, pilots and demonstra-tions Wind at-las South Africa (WASA); Waste to energy plant, Algal biofuels and solar road map

Continue as per work plan and seek funding extension from RDE for WASA

Achieved

Pre/Feasibility investigations Achieved

Setups Achieved

Support to So-lar Park Mete-orological (MET) Station

Set up of solar measuring station

Not achieved

There are land matters that need to be addressed at the solar park; therefore the project has been delayed.






Applied research: Renewable technologies (continued)

Representation of South Africa in an interna-tional forum, whereby tech-nical knowl-edge is gained and skills are t r a n s f e r r e d . Globalisation of expertise and leveraging of research fund-ing

Maintain IEA and EU FP7 agreements, build up more collaborations and attempt to increase funding

Achieved

Applied research: Green Transport programme

A national Green Trans-port strategic vision and tech-nology devel-opment plan, including a Sta-tus Quo and gap analysis for the alternate fu-els and propul-sion systems in RSA developed

Develop a national Green Transport strategic vision and technology develop-ment plan, including a Sta-tus Quo and gap analysis for the alternate fuels and pro-pulsion systems in RSA by 31 March 2013

Not achieved

Delays in funding and scope definition with the Department of Transport. Until funding is secured the sustainability of the project is not guaranteed and it can be a waste of expenditure to commence the programme until a funding stream has been secured.

Develop a tech-nology devel-opment incu-bation centre to offer ‘Soft Start’ facilities to companies and technology partners who are entering the Green Trans-port sector

Develop the Institutional Framework and participa-tion Charter for the Incu-bation centre by 31 March 2013

Not achieved

The terms of reference and the request for proposals are being prepared.Initiate the call for proposals

and expression of interests for prospective partner or-ganisations or benefactors

Not achieved

Operate the centreNot achieved

Delays in funding and scope definition with the Department of Transport. Until funding is secured the sustainability of the project is not guaranteed and it can be waste of expenditure to commence the programme until a funding stream has been secured.






Applied research: Green Transport programme (continued)

Develop vari-ous demonstra-tion projects in the various alternate fuels and propul-sion systems to showcase these technolo-gies and cre-ate an enabling environment to bring these al-ternatives to the market.

Develop various demonstra-tion projects in the various alternate fuels and propul-sion systems to showcase these technologies. Stand-ards and best practices de-veloped

Not achieved

Delays in funding and scope definition with the Department of Transport. Until funding is secured the sustainability of the project is not guaranteed and it can be a waste of expenditure to commence the programme until a funding stream has been secured.

Modelling and regulation frameworks developed

Not achieved

Situational Analysis com-pleted

Not achieved

Demonstration projects commissioned

Not achieved

Lessons learnt and best practices communicated through the Public Advoca-cy Programme

Not achieved

Participate in i n t e r n a t i o n a l k n o w l e d g e sharing fora to bring best of breed to full commercialisa-tion

Participate in international collaboration partnerships

Achieved

Establish knowledge sharing clusters

Achieved

Participated in both local and international events and activities

Achieved

Promote technology and knowledge sharing through the SANEDI web site and communicated through the Public Advocacy Pro-gramme

Achieved

Develop a sub-stantive pub-lic advocacy programme to create market acceptability for alternate fuels and propulsion systems to al-low successful market pen-etration and s u s t a i n a b i l -ity.

Viral portal Platforms Devel-oped

Achieved

Print media Platforms Devel-oped

Achieved

Events and exhibitions staged

Achieved

Feedback loops created Achieved






Applied research: Data knowledge management

Development of the integrated data reposi-tory: functional, accurate inte-grated and user friendly data-base

Coordinate and facilitate de-velopment of database by 31 March 2013 and oversee project

Achieved

Review and develop a stra-tegic plan for Centre for En-ergy Systems and Research (CESAR)

Review strategic direction, develop a strategic plan and develop a funding plan by 31 March 2013

Not achieved

A proposal has been sent to the Department of Science and Technology (DST) and the Department of Environmental Affairs (DEA) for funding. Currently in discussions regarding strategic direction.

Applied research: Working for Energy

Renewable En-ergy: Invite ten-ders, process, assess and ap-prove project proposals

Approved Project Propos-als to develop 5 mega watt (MW) by 31 March 2013

Achieved

R e n e w a b l e Energy: Kwa-Mashu Bio-mass to Energy Project

Negotiated Management and Operational Agreement for the Kwa-Mashu Biomass to Energy plant.

Not achieved

The governance process of the project (a public private partnership (PPP)) is currently in the hands of the Ethekwini Metro. Once this process is complete, SANEDI will contribute towards the project.

Bela Bela Bi-ogas (Phase 2)

Procurement and imple-mentation

Not achieved Project is delayed due to non

responsiveness of the service provider.

Reticulation of the biogas to the neighbouring com-munity

Not achieved

Phillipi Biogas Project

Implementation of the re-vised interventions

Not achieved

Delayed due to prioritisation to streamline learning from the Bio energy cluster project.

University of Fort Hare Re-newable Energy Research Facil-ity


Achieved

Rehabilitation of the bio ñ digester for research and development purpose under the faculty of science

Achieved

Melani Village Biogas Project


Not achieved

The contract has been concluded between SANEDI and Fort Cox College. The College is finalising the BEE accreditation.






Applied research: Working for Energy (continued)

Fort Cox Bio energy Project Phase 2

Implementation of the re-vised interventions, addition of 1digester, connection of the gas to the kitchen and other facilities for utilisation

Not achieved

The contract has been concluded between SANEDI and Fort Cox College. The College is finalising the BEE accreditation.

Mpfuneko Bio-mass Project

Implementation and rollout of community bio digesters

Not achieved

A contract has been concluded between SANEDI and the service provider, implementation will commence in 2014.

Lucingweni Bi-omass Project

Implementation and reha-bilitation of control battery room to become a commu-nity early childhood centre retrofitted with energy ef-ficiency and renewable en-ergy technologies

Not achieved

Stakeholder consultation completed and the agreement reached for the establishment of the ECD centre. Community negotiations are on going with the Nyandeni District Municipality for the joint implementation of the Green ECD Centre.

Walter Sisulu University RE-CORD Estab-lishment

Implementation and re-es-tablishment of the renew-able energy facility for rural energy research under the faculty of science

Not achieved

Delayed due to the slow response from the University contact persons. A decision has been taken to establish a parallel facility at the Nelson Mandela Metropolitan University.

Coal Fuel tablet (CFT)

Implementation & feasibil-ity study using coal dust to produce alternative energy

Not achievedProject delayed due to non responsiveness of the service providers.

Tshireleco School Renew-able Energy Demonstration centre project

Implementation and estab-lishment of a demonstration centre for renewable energy and energy efficiency under the department of science within the school

Not achieved

The Memorandum of Agreement (MoA) between SANEDI and Tshireleco high School has been finalised; implementation will commence in the first quarter of 2014

Working for En-ergy Outreach programme

Implementation of the out-reach programme for the Working for Energy Pro-gramme

Not achievedFinalisation of the proposed roll out plan with the Department is still work in progress.

Energy Man-agement: Invite Tenders, pro-cess, assess, approve project proposals

Approved Project Propos-als to deliver 500 kilo watt (kW) Energy Management Projects

Partially achieved

The MoA negotiations with the Gauteng Department of Infrastructure Development (DID) is in process for the greening of at least 4 schools. Technology supply tenders will be issued on the back of the MoA between SANEDI and DID.






Applied research: Energy Efficiency

Integrated pub-lic advocacy plan, draft con-sultation Paper in place, co-ordinate and facilitate imple-mentation and overseeing im-plementation

Integrated plan developed and submitted to DoE

Achieved

Demand side energy diversi-fication: Multi stakeholder Ad-visory Group

Advisory Group in place and fully functional

Achieved

Ad hoc project deve l opmen t and technical support: Num-ber of projects proposed

2 projects developed and proposed to the DoE

Achieved

I n t e r n a t i o n a l col laborat ion: Contr ibut ions to international co l l abora t ion efforts

Membership and participa-tion in CEM GSEP activities and IEA 4E Implementing Agreement on behalf of DoE

Achieved



ACCOUNTING AUTHORITY’S REPORT

The directors present the accounting authority report that forms part of the annual financial statements for the year ended 31 March 2013.

South African National Energy Development Institute is incorporated in terms of section 7 of National Energy Act 2008 (Act No. 34 of 2008), and is listed as a national public entity in schedule 3 of the Public Finance Management Act, 1999, as amended.

The board of directors acts as the accounting authority in terms of the PFMA.

1. Members

The members of the entity during the year and to the date of this report are as follows:

NAME APPOINTED RESIGNED/TERM ENDEDMs N Mlonzi 01 September 2011

Mr J Marriott 01 September 2011

Ms M Modise 01 August 2010

Mr M Vilana 01 September 2011

Dr V Msimang 01 January 2011 7 May 2012

Ms D Ramalope 17 October 2011

Ms T Ramuedzisi (alternate director) 01 September 2011 28 June 2012

Mr M Gordan 17 October 2011

Prof E Meyer 01 September 2011

Dr D Hildebrandt 01 September 2011

Dr R Maserumule (alternate director) 26 June 2012

ATTENDANCE AT MEETINGS: 08/05/2012 30/07/2012 25/09/2012 28/01/2013

Ms N Mlonzi N N Y Y

Mr J Marriott Y Y Y Y

Ms M Modise Y N N Y

Mr M Vilana Y N Y N

Dr V Msimang N/A N/A N/A N/A

Ms D Ramalope Y Y N Y

Mr M Gordan N N Y N

Prof E Meyer N N N N

Dr D Hildebrandt Y Y Y Y

Ms R Maserumule N/A Y N Y

Mr G Fourie * N/A N/A N/A Y

Y = Attended meetingN = Apology receivedN/A = Not a member at the date of meeting* = Not a member at the date of the meeting, but present at the meeting


1. Members (continued)

Board Audit committee and Board Risk committee

The Committee consists of the following members:

NAME APPOINTED RE-APPOINTED RESIGNEDMr VG Magan Independent, non-executive

Chairperson1 January 2008 1 January 2011

Ms A Thomani Independent, non-executive 1 January 2008 1 January 2011 7 March 2013

Ms N Nyathi Independent, non-executive 1 January 2008 1 January 2011

ATTENDANCE AT MEETINGS: 20/04/2012 30/07/2012 21/07/2012 24/01/2013

Mr VG Magan Y Y Y Y

Ms A Thomani Y Y Y N

Ms N Nyathi Y Y Y Y

Y = Attended meetingN = Apology received

2. Secretary

The secretary of the entity is CEF (SOC) Limited incorporated in South Africa and its business and postal addresses are as follows:

Business address Block C, Upper Grayston Office Park 152 Ann Crescent Strathavon Sandton 2199

Postal address PO Box 786141 Sandton 2146

3. Nature of business

Main business and operations Chapter 4 of the Energy Act, (Act 34 of 2008) makes provision for the South African National Energy Development Institute (SANEDI). In terms of the Act, the main business and operations of SANEDI are:• Energy research and development; and• Energy efficiency.

The principal activities of the South African National Energy Development Institute are as outlined below:• Undertake energy efficiency measures as directed by the Minister;increase energy efficiency throughout the

economy;• Increase the gross domestic product per unit of energy consumed; and• Optimise the utilisation of finite energy resources;• Direct, monitor, conduct and implement energy research and technology development in all fields of energy,

other than nuclear energy; and• Promote energy research and technology innovation.






3. Nature of business (continued)

• Provide for:• Training and development in the field of energy research and technology development;• Establishment and expansion of industries in the field of energy;• Commercialisation of energy technologies resulting from energy research and development programmes.

• Register patents and intellectual property in its name resulting from its activities;• Issue licences to other persons for the use of its patents and intellectual property;• Publish information concerning its objects and functions;• Establish facilities for the collection and dissemination of information in connection with research, development

and innovation;• Undertake any other energy technology development related activity as directed by the Minister, with the

concurrence of the Minister of Science and Technology;• Promote relevant energy research through cooperation with any entity, institution or person equipped with the

relevant skills and expertise within and outside the Republic;• Make grants to educational and scientific institutions in aid of research by promoting the training of research

workers by granting bursaries or grants in aid of research;• Undertake the investigations or research that the Minister, after consultation with the Minister of Science and

Technology, may assign to it; and• Advise the Minister and the Minister of Science and Technology on research in the field of energy technology.

4. Review of financial position

The entity’s business and operations and the results thereof are clearly reflected in the attached annual financial statements. No material fact or circumstance has occurred between the accounting date and the date of this report.

Due to the changes in the reporting structure resulting from the promulgation of the Energy Act which makes provision for the establishment of SANEDI, the principal funder of the entity is the Department of Energy. The baseline allocation for the entity was R 56.1m. The entity has also received an amount of R6m from the Department of Science and Technology which is to be used exclusively for the Hub for Energy Efficiency and Demand Side Management, the Centre for Energy Systems and Analysis and the Centre for Carbon Capture and Storage.

There was no change in the nature of the business.

5. Going concern

It is the Government’s vision to have SANEDI as an independent entity outside of the CEF Group of Companies. SANEDI’s assets exceed its liabilities by R7.3 million. SANEDI has applied for approval of accumulated surplus funds from the National Treasury in terms of section 53(3).

The Directors believe that the entity will operate for the next foreseeable 12 months given the revised allocation received from MTEC.

6. Review of operations

The Government Gazette No. 34175, dated 1 April 2011 states that in terms of section 21 of the National Energy Act, 2008 (Act No. 34 of 2008), I hereby fix 01 April 2011 as the date on which Chapter 4 of the said Act shall come into operation.

Chapter 4 of the National Energy Act, 2008 (No. 34 of 2008) provides for the establishment of the South African National Energy Development Institute (SANEDI) as a successor to the previously created South African National Energy Research Institute (Pty) Ltd (SANERI) and the National Energy Efficiency Agency (NEEA) (a division of CEF SOC Ltd). All assets, liabilities, and staff of SANERI and NEEA are legislated to be vested in SANEDI.


6. Review of operations (continued)

The establishment of SANEDI therefore comprises the incorporation of two functioning bodies into one.

The relevant sections of the National Energy Act (sections 7 to 15) are operationalised. All employees (including board members) of SANERI and NEEA are transferred to SANEDI and all assets and liabilities are transferred to SANEDI. Funding which is currently allocated to SANERI through the science vote should be budgeted for within the DoE budget and allocated to SANEDI through transfers and subsidies. Mechanisms to ensure that CEF continues to provide support services and systems for SANEDI are in place.

The 2012/13 financial year has been a very challenging year for SANEDI. SANEDI was now operating as a schedule3A entity. A vast amount of time was spent on having policies/procedures/practice notes approved as relevant to the operations of a schedule 3A entity. In line with this, change management had to take place for to enable the entity to operate effectively and in line with the new schedule 3A status. The 5 year strategic plan for SANEDI and the Annual Performance Plan for 2013/14 was approved by the Minister and thereafter tabled in Parliament.

Summarized below are the highlights of the year:

Centre for Carbon Capture and StorageThe focus of the SACCCS activities is the pilot CO2 storage project (PCSP) with its first injection scheduled for 2017. In this regard, a number of projects are technically complete and are in the process of being administratively concluded namely the scoping study for the test injection, regulatory requirements for test injection, Zululand Basin storage potential , Algoa Basin Storage potential , geological modelling of storage sites, financial opportunities for CCS in SA, public outreach determination and COCATE project. The outputs of these projects are applied to the next phase of the programme which is the exploration to determine an appropriate pilot injection site.

Green Transport ProgrammeThe relocation of the Green Transport Centre to the CSIR campus with intent to develop an innovation facility has not developed to its full potential due to funding constraints. SANEDI continues to make representation to various stakeholders for funding to advance various demonstration projects within the Green Transport Programme. The research initiatives and new fuel technologies have the potential to greatly enhance the public transport sector which is considered a priority focus area for the GHG mitigation. Funding, however, remains a challenge for the programme.

The Hub of Energy Efficiency and Demand Side ManagementThere have been several highlights since the launch of the Hub in 2008. The Hub has been successful in their efforts to ensure that the postgraduate programme is well managed. Their advertisements are well received and generate many enquiries from prospective South African and foreign students. A number of energy efficiency and demand side management projects have been initiated and some partial results have been obtained: e.g. the energy efficiency components classifications and applications.

Working for Energy Programme (WFE)During the 2011/12 financial year, the Working for Energy Programme experienced some strategic alignment challenges which resulted in the delayed transfer of the 2011/12 funds by the DoE. Transfer of funds was subject to corrective measures being taken by SANEDI. These measures related to the alignment of the Draft Memorandum of Agreement and the Annual Work Plan; which was amended during the 2012/13 financial year. The Phillipi Bio Waste to gas Projects has been completed. There were challenges with the Robben Island Project which are being addressed. The Lucingweni Hybrid project and the Fuel Tablet are being resuscitated. Wind Atlas of South Africa (WASA)This involves cooperation between SANEDI, RISO, the Danish Research Institute, the CSIR, the University of Cape Town (UCT) and the South African Weather Service (SAWS). The monthly publishing on wind data information was activated on the wind data website at http://www.wasa.csir.co.za. The data is available to the public as the aim of the project is to have the Atlas publicly available so as to encourage the uptake and use of wind energy.






6. Review of operations (continued)

Using world class technology from RISO a micro scale and a mesoscale numerical atlas has been compiled, which models wind patterns in South Africa. RISO and UCT are responsible for software design and installation, and for feeding models into a central database. An exciting discovery that had initially occurred through the research was that SA has three different wind climates. This is a very unique scenario, as most countries have only a single wind climate. It is very positive news, as it means that SA could be able to have continuous energy production from wind, in different regions of the country. It also means that different wind technologies, appropriate to specific wind speeds, can be applied to maximise the benefit from wind energy.

Centre for Energy Systems and Research (CESAR)The current SANEDI contract with ERC and the University of Pretoria was concluded and all deliverables delivered. The DoE used the results from the Phase 1 transport study towards the development of the integrated energy plan. The DoE requested that a full scale study be undertaken to complete a huge transport data gap. In conjunction with the DoE and SANEDI, ERC was requested to develop a phase 2 proposal for the transport modelling study. After several refinements the proposal was finalised and taken through the procurement process. A contract was finally awarded to ERC to the value of R2.25 million and the duration of the project would be 18 months.

7. Subsequent events

The directors are not aware of any matters or circumstances arising since the end of the financial year, not otherwise dealt with in the annual financial statements which significantly affect the financial position of the company or the results of the operations.

It is possible that whilst in this transition period, proper and due cognition to applicable policies, procedures and processes may have been flaunted because SANEDI is currently situated in CEF and has been using CEF policies, procedures and processes which are applicable to a Schedule 2(A) entity as the SANEDI Board was only appointed in September and the first meeting was held on 19 October 2012 which reviewed and approved policies applicable to SANEDI.

8. Approval

The audited annual financial statements set out on pages 67 to 108 which have been prepared on the going concern basis, were approved by the accounting authority on 31 July 2013 and were signed on its behalf by:

Mr J MarriottDeputy Chairperson – SANEDI Board

Sandton31 July 2013


For purposes of materiality (as per PFMA sections 50(1) and 55 (2)) and significance (as per PFMA sections 54(2)) framework the following acceptable levels were agreed with the Executive Authority in consultation with the Auditor-General of South Africa:

• Section 50(1) Material facts to be disclosed to the Minister of Energy are considered to be facts that may influence the decisions or actions of the Stakeholders of the Public Entity or the Group of companies.

• Section 55(2) Disclosure of material losses in the annual financial statements will be for all losses through criminal conduct and any irregular expenditure and fruitless and wasteful expenditure that occurred during the year.

• Section 54(2) The criteria to determine the level of significance was based upon the guiding principles as set out in the “Practice Note on applications under Section 54 of the PFMA No.1 of 1999 (as amended) by Public Entities” as published by National Treasury during 2006 subject to adjustments for any Section 54(4) exemptions.

The significant Rand level was determined as being 1% of Revenue as follows:

APPROVAL LEVELS IN TERMS OF SECTION 54

Public Entity's board approval levels < R561 500Obtain DoE approval and inform National Treasury > R561 500


MATERIALITY AND SIGNIFICANCE FRAMEWORK



STATEMENT OF FINANCIAL POSITION

2013 2012

Notes R‘000 R‘000

Restated

Assets

Current Assets

Receivables 5 1,799 14,373

Cash and cash equivalents 6 146,079 54,477

147,878 68,850

Non-current Assets

Property, plant and equipment 3 2,943 607

Intangible assets 4 1,877 173

4,820 780

Total Assets 152,698 69,630

Liabilities

Current Liabilities

Payables from exchange transactions 9 13,319 16,096

Unspent conditional grants and receipts 7 124,158 59,455

Provisions 8 7,921 4,350

145,398 79,901

Total Liabilities 145,398 79,901

Net Assets 7,300 (10,271)

Net Assets

Accumulated surplus/(deficit) 7,300 (10,271)



STATEMENTOF FINANCIAL PERFORMANCE

2013 2012


Restated

Revenue

Revenue from non-exchange transactions 10 67,728 44,948

Revenue from exchange transactions 10 13,703 10,347

Total Revenue 81,431 55,295

Expenditure

Personnel 12 (32,077) (22,739)

Project costs (19,892) (23,959)

Depreciation and amortisation (737) (306)

Finance costs 13 (125) 511

Repairs and maintenance (139) (128)

Operating expenses 11 (11,859) (8,286)

(Loss)/Gain on foreign exchange (46) 55

Total Expenditure (64,875) (54,852)

Surplus for the year 16,556 443



STATEMENT OF CHANGES IN NET ASSETS

Accumulated Total net

deficit assets

R‘000 R‘000

Opening balance as previously reported (10,710) (10,710)

Prior year adjustments* 1,454 1,454

Balance at 31 March 2012 as restated * (9,256) (9,256)

Surplus for the year 16,556 16,556

Balance at 31 March 2013 7,300 7,300

* Refer to note 21.



CASH FLOW STATEMENT

2013 2012


Restated

Cash flows from operating activities

Receipts

Grants 133,910 30,951

Interest income 3,822 1,725

Membership fees and other donor funds 18,882 9,532

156,614 42,208

Payments

Employee costs (27,545) (17,910)

Suppliers (32,573) 41,893

Finance costs (125) 511

(60,243) 24,494

Net cash flows from operating activities 14 96,371 66,702

Cash flows from investing activities

Purchase of property, plant and equipment 3 (2,837) -

Proceeds from sale of property, plant and equipment 3 15 -

Purchase of other intangible assets 4 (1,947) -

Purchase of financial assets - (510)

Transfer from SANERI - (11,715)

Net cash flows from investing activities (4,769) (12,225)

Net increase/(decrease) in cash and cash equivalents 91,602 54,477

Cash and cash equivalents at the beginning of the year 54,477 -

Cash and cash equivalents at the end of the year 6 146,079 54,477



ACCOUNTING POLICIES

1. Presentation of Annual Financial Statements

1.1 Basis of preparationThe annual financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.

These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention unless specified otherwise. They are presented in South African Rand.

The financial statements have been prepared on a going concern basis and the accounting policies have been applied consistently throughout the period.

1.2 Translation of foreign currenciesForeign currency transactionsA foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.At each reporting date:• Foreign currency monetary items are translated using the closing rate;• Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the

exchange rate at the date of the transaction; and• Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange

rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in surplus or deficit in the period in which they arise.

When a gain or loss on a non-monetary item is recognised directly in net assets, any exchange component of that gain or loss is recognised directly in net assets. When a gain or loss on a non-monetary item is recognised in surplus or deficit, any exchange component of that gain or loss is recognised in surplus or deficit.

Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.

1.3 Events after the reporting dateRecognised amounts in the annual financial statements are adjusted to reflect events arising after the reporting date that provide evidence of conditions that existed at the reporting date. Events after the reporting date that are indicative of conditions that arose after the reporting are dealt with by way of a note.

1.4 Property, plant and equipmentProperty, plant and equipment are tangible non-current assets that are held for use in the supply of goods or services or for administrative purposes, and are expected to be used during more than one period.

Carrying amounts

All property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses and are not depreciated.


1. Presentation of Annual Financial Statements (continued)

1.4 Property, plant and equipment (continued) CostThe cost of an item of property, plant and equipment is recognised as an asset when:• It is probable that future economic benefits or service potential associated with the item will flow to the entity

or; • The cost or fair value of the item can be measured reliably. The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.

Where an item of property, plant and equipment is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition.

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired non-monetary asset’s fair value is not determinable, its deemed cost is the carrying amount of the asset given up.

Cost includes costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, or to replace a part of, or service it. If a replacement cost is recognised in the carrying amount of an a item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Finance costs directly associated with the construction or acquisition of major assets are capitalised at interest rates relating to loans specifically raised for that purpose, or at the average borrowing rate where the general pool of borrowings is utilised.

DerecognitionThe carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use.

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. Such difference is recognised in the surplus or deficit when the item is derecognised.

DepreciationDepreciation is charged so as to write off the depreciable amount of the assets, other than land, over their estimated useful lives to estimated residual values, using the straight line method to write off the cost of each asset that reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the entity.

Where significant parts of an item have different useful lives to the item itself, these parts are depreciated over their estimated useful lives.

The useful life of the assets is reviewed annually.


ACCOUNTING POLICIES



ACCOUNTING POLICIES

1.4 Property, plant and equipment (continued) The following methods and rates are used during the year to depreciate property, plant and equipment to estimated residual values:

Item Average useful lifeFurniture, fittings and communication equipment 2 – 15 yearsOffice equipment 5 yearsComputer equipment 3 years

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The methods of depreciation, useful lives and residual values are reviewed annually.

1.5 Intangible assetsAn asset is identified as an intangible asset when it:• Is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged,

either individually or together with a related contract, assets or liability; or• Arises from contractual rights or other legal rights, regardless whether those rights are transferable or separate

from the entity or from other rights and obligations. An intangible asset is an identifiable non-monetary asset without physical substance.

An intangible asset is recognised when:• It is probable that the expected future economic benefits or service potential that are attributable to the asset

will flow to the entity; and• The cost or fair value of the asset can be measured reliably.

Intangible assets are initially recognised at cost if acquired separately or internally generated or at fair value if acquired as part of a business combination. If assessed as having an indefinite useful life, the intangible asset is not amortised but tested for impairment annually and impaired if necessary. If assessed as having a finite useful life, it is amortised over its useful life using a straight line basis and tested for impairment if there is an indication that it may be impaired.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

Development costs are capitalised only if they result in an asset that can be identified, and it is probable that the asset will generate future economic benefits and the development cost can be reliably measured. Otherwise it is recognised in surplus or deficit.

Intangible assets are derecognised on disposal, or when no future economic benefits or service potential are expected from its use or disposal.

The gain or loss arising from the derecognition of an intangible asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the intangible asset. Such a difference is recognised in surplus or deficit when the intangible asset is derecognised.



Amortisation is recognised in profit and loss, on a straight line basis, to their residual values as follows: Item Useful life Computer software 2 years

1.6 Impairment of non-financial assetsAt each reporting date, the entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount for an individual asset, the recoverable amount is determined for the cash generating unit to which the asset belongs. Value in use is estimated taking into account future cash flows, forecast market conditions and the expected lives of the assets.

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, its carrying amount is reduced to the higher of its recoverable amount and zero. Impairment losses are recognised in profit or loss. Subsequent to the recognition of the impairment loss, the depreciation or amortisation charge for the asset is adjusted to allocate its remaining carrying value, less any residual value, over its remaining useful life.

If an impairment loss is subsequently reversed, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount but limited to the carrying amount that would have been determined had an impairment loss not been recognised in prior years. A reversal of an impairment loss is recognised in surplus or deficit.

1.7 LeasesA lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Operating lease payments are recognised as an expense on a straight line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.

The aggregate benefit of incentives is recognised as a reduction of rental expense over the lease term on a straight line basis over the lease term.

Any contingent rent is recognised separately as an expense when paid or payable and are not straight lined over the lease term.

1.8 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity.A financial asset is:• Cash;• A residual interest of another entity; or• A contractual right to:

– Receive cash or another financial asset from another entity; or– Exchange financial assets or financial liabilities with another entity under conditions that are potentially

favourable to the entity.


ACCOUNTING POLICIES



ACCOUNTING POLICIES


1.8 Financial instruments (continued)A financial liability is any liability that is a contractual obligation to:• Deliver cash or another financial asset to another entity; or• Exchange financial assets or financial liabilities under conditions that are potentially unfavourable to the entity.

Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial liabilities that have fixed or determinable payments, excluding those instruments that:• The entity designates at fair value at initial recognition; or• Are held for trading.

Financial instruments at fair value comprise financial assets or financial liabilities that are:• Derivatives;• Combined instruments that are designated at fair value;• Instruments held for trading. A financial instrument is held for trading if:

– It is acquired or incurred principally for the purpose of selling or repurchasing it in the near-term; or– On initial recognition it is part of a portfolio of identified financial instruments that are managed together and

for which there is evidence of a recent actual pattern of short term profit-taking;– Non-derivative financial assets or financial liabilities with fixed or determinable payments that are designated

at fair value at initial recognition; and– Financial instruments that do not meet the definition of financial instruments at amortised cost or financial

instruments at cost. Financial assets and financial liabilities are recognised on the company's statement of financial position when the company becomes a party to the contractual provisions of the instrument.

Financial assetsThe entity's principal financial assets are accounts receivable as cash and cash equivalents.

The entity has the following types of financial assets (classes and category) as reflected on the face of the statement of financial position or in the notes thereto:

Class CategoryLoans receivable Financial asset measured at amortised costTrade and other receivables Financial asset measured at amortised costCash and cash equivalents Financial asset measured at amortised cost

Investments:

Financial liabilities The entity has the following types of financial liabilities (classes and category) as reflected on the face of the statement of financial position or in the notes thereto:

Class CategoryTrade and other payables Financial liability measured at amortised cost

Initial recognitionThe entity recognises a financial asset or a financial liability in its statement of financial position when the entity becomes a party to the contractual provisions of the instrument.



1.8 Financial instruments (continued)The entity recognises financial assets using trade date accounting.

Initial measurement The entity measures a financial asset and financial liability at amortised cost initially at its fair value, plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

Subsequent measurementThe entity measures all financial assets and financial liabilities after initial recognition using the following category:

• Financial instruments at amortised cost.

All financial assets measured at amortised cost, or cost, are subject to an impairment review.

The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility.

Gains and losses For financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired, or through the amortisation process.

Trade and other receivables Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in the income statement.

Trade and other receivables are classified as loans and receivables.

Trade and other payablesAll financial liabilities are measured at amortised cost, comprising original debt less principal payments and amortisations.

Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.


ACCOUNTING POLICIES



ACCOUNTING POLICIES


1.8 Financial instruments (continued)Derecognition Financial assets The entity derecognises financial assets using trade date accounting. The entity derecognises a financial asset only when:• The contractual rights to the cash flows from the financial asset expire, are settled or waived;• The entity transfers to another party substantially all of the risks and rewards of ownership of the financial

asset; or• The entity, despite having retained some significant risks and rewards of ownership of the financial asset, has transferred

control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party, and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. In this case, the entity:– Derecognises the asset; and– Recognises separately any rights and obligations created or retained in the transfer.

The carrying amounts of the transferred asset are allocated between the rights or obligations retained and those transferred on the basis of their relative fair values at the transfer date. Newly created rights and obligations are measured at their fair values at that date. Any difference between the consideration received and the amounts recognised and derecognised is recognised in surplus or deficit in the period of the transfer.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit.

Financial liabilities The entity removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished, that is when the obligation specified in the contract is discharged, cancelled, expires or is waived.

The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in surplus or deficit. Any liabilities that are waived, forgiven or assumed by another entity by way of a non-exchange transaction are accounted for in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers).

Fair value measurement considerationsThe best evidence of fair value is quoted prices in an active market. If the market for a financial instrument is not active, the entity establishes fair value by using a valuation technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. If there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the entity uses that technique. The chosen valuation technique makes maximum use of market inputs and relies as little as possible on entity-specific inputs. It incorporates all factors that market participants would consider in setting a price and is consistent with accepted economic methodologies for pricing financial instruments. Periodically, an entity calibrates the valuation technique and tests it for validity using prices from any observable current market transactions in the same instrument (i.e. without modification or repackaging) or based on any available observable market data.



1.8 Financial instruments (continued)Offsetting Financial assets and financial liabilities are offset if there is an intention to either net the asset or liability or to realise the asset and settle the liability simultaneously and a legally enforceable right to set off exists. 1.9 ProvisionsProvisions are recognised when:• The entity has a present obligation as a result of a past event;• It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;

and• A reliable estimate can be made of the obligation.

The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.

Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation.

The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation.

Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as an interest expense.

A provision is used only for expenditures for which the provision was originally recognised. Provisions are not recognised for future operating deficits.

If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision.

Contingent assets and contingent liabilities are not recognised.

1.10 Revenue from exchange transactions Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange.


ACCOUNTING POLICIES



ACCOUNTING POLICIES


1.10 Revenue from exchange transactions (continued)

MeasurementRevenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.

Sale of goodsRevenue from the sale of goods is recognised when all the following conditions have been satisfied:• The entity has transferred to the purchaser the significant risks and rewards of ownership of the goods;• The entity retains neither continuing managerial involvement to the degree usually associated with ownership

nor effective control over the goods sold;• The amount of revenue can be measured reliably;• It is probable that the economic benefits or service potential associated with the transaction will flow to the

entity; and• The costs incurred or to be incurred in respect of the transaction can be measured reliably

Rendering of services When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:• The amount of revenue can be measured reliably;• It is probable that the economic benefits or service potential associated with the transaction will flow to the

entity;• The stage of completion of the transaction at the reporting date can be measured reliably; and• The costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When services are performed by an indeterminate number of acts over a specified time frame, revenue is recognised on a straight line basis over the specified time frame unless there is evidence that some other method better represents the stage of completion. When a specific act is much more significant than any other acts, the recognition of revenue is postponed until the significant act is executed.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

Interest, royalties and dividends Revenue arising from the use by others of entity assets yielding interest, royalties and dividends is recognised when:• It is probable that the economic benefits or service potential associated with the transaction will flow to the

entity; and• The amount of the revenue can be measured reliably.

Interest is recognised, in surplus or deficit, using the effective interest rate method.



1.11 Revenue from non-exchange transactionsNon-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an entity either receives value from another entity without directly giving approximately equal value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange.

Stipulations on transferred assets are terms in laws or regulation, or a binding arrangement, imposed upon the use of a transferred asset by entities external to the reporting entity.

Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be returned to the transferor.

Restrictions on transferred assets are stipulations that limit or direct the purposes for which a transferred asset may be used, but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployed as specified.

Recognition An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow.

As the entity satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.

Measurement Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity.

When, as a result of a non-exchange transaction, the entity recognises an asset, it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When a liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the liability is recognised as revenue.

Gifts and donations, including goods and services in-kind Gifts and donations, including goods in-kind, are recognised as assets and revenue when it is probable that the future economic benefits or service potential will flow to the entity and the fair value of the assets can be measured reliably.

Services in-kind are not recognised.

Membership fees Revenue from membership fees are recognised as revenue from non-exchange revenue and are recognised and measured in accordance with GRAP 23.


ACCOUNTING POLICIES



ACCOUNTING POLICIES


1.12 Irregular, fruitless and wasteful expenditure and unauthorised expenditure Irregular expenditure as defined in section 1 of the PFMA is expenditure incurred in contravention of, or that is not in accordance with:• A requirement of the PFMA (Act No. 29 of 1999); or• A requirement of the State Tender Board Act (Act No.86 of 1986), or any regulations made in terms of the Act;

or• A requirement in any provincial legislation providing for procurement procedures in that provincial government.

All expenditure relating to irregular expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

Unauthorised expenditure means:• Overspending of a vote or a main division within a vote; and• Expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance

with the purpose of the main division.

All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

When an accounting authority determines the appropriateness of disciplinary steps against an official, the accounting authority must take into account:• The circumstances of the transgression;• The extent of the expenditure involved; and• The nature and seriousness of the transgression.

All unauthorised, irregular or fruitless and wasteful expenditures are disclosed as a note to the annual financial statements of the company.

1.13 Conditional grants and receiptsRevenue received from conditional grants, donations and funding are recognised as revenue to the extent that the entity has complied with any of the conditions embodied in the agreement. To the extent that the conditions have not been met a liability is recognised.



1.14 Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until the assets are substantially ready for their intended use or sale. Qualifying assets are assets that necessarily take a substantial period to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the cost of those assets.

Other borrowing costs are recognised as an expense in the period in which they are incurred.

1.15 Key accounting judgments and key sources of estimation uncertainty In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgment are inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgment includes:

Going concern Management considers key financial metrics and loan covenant compliance in its approved medium-term budgets, together with its existing term facilities, to conclude that the going concern assumption used in the compiling of its annual financial statements is relevant.

Other Provisions For other provisions, estimates are made of legal or constructive obligations resulting in the raising of provisions, and the expected date of probable outflow of economic benefits to assess whether the provision should be discounted.

Impairment testing The recoverable (service) amounts of individual assets and cash-generating units have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions.

The entity reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets.

Useful lives of property, plant and equipment and intangible assetsThe entity's management determines the estimated useful lives and related depreciation charges for property, plant and equipment and intangible assets. This estimate is based on the condition and use of the individual assets, in order to determine the remaining period over which the asset can and will be used.

Fair value estimation The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the entity is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example, over-the counter derivatives) is determined by using valuation techniques. The entity uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.

The carrying values of trade receivables and payables are assumed to approximate their fair values.


ACCOUNTING POLICIES



ACCOUNTING POLICIES


1.16 Events after the reporting dateRecognised amounts in the annual financial statements are adjusted to reflect events arising after the reporting date that provide evidence of conditions that existed at the reporting date. Events after the reporting date that are indicative of conditions that arose after the reporting are dealt with by way of a note.

1.17 Post-employment benefit costShort-term employee benefitsShort-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service.

Short-term employee benefits include items such as:• Wages, salaries and social security contributions;• Short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation

for the absences is due to be settled within twelve months after the end of the reporting period in which the employees rendered the related employee service;

• Bonus, incentive and performance related payments payable within twelve months after the end of the reporting period in which the employees rendered the related service; and

• Non-monetary benefits (for example, medical care, and free or subsidised goods or services such as housing, cars and cellphones) for current employees.

When an employee has rendered service to the entity during a reporting period, the entity recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service:• As a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds

the undiscounted amount of the benefits, the entity recognises that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and

• As an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The entity measures the expected cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The entity recognises the expected cost of bonus, incentive and performance related payments when the entity has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the entity has no realistic alternative but to make the payments.

Defined contribution plans When an employee has rendered service to the entity during a reporting period, the entity recognises the contribution payable to a defined contribution plan in exchange for that service:• As a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid

exceeds the contribution due for service before the reporting date, an entity recognises that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and

• As an expense, unless another Standard requires or permits the inclusion of the contribution in the cost of an asset.



1.18 Related parties The entity operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the national sphere of government are considered to be related parties.

Key management are those persons responsible for planning, directing and controlling the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions.

Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, that management in their dealings with the entity.

Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.

2. New standards and interpretations

2.1 Standards and interpretations effective and adopted in the current year In the current year, the entity has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations:

1. GRAP 21: Impairment of Non-cash-generating assetsThe standard prescribes the procedures that an entity applies to determine whether a non-cash-generating asset is impaired and to ensure that impairment losses are recognised. The Standard also specifies when an entity would reverse an impairment loss and prescribes disclosures.

This Standard applies to non-cash-generating property, plant and equipment, intangible assets and heritage assets carried at revalued amounts in accordance with the Standards of GRAP on Property, Plant and Equipment, Intangible Assets and Heritage Assets. The fair value for these assets is not determined at each reporting date but depends on the frequency of changes in the fair value from one reporting period to the next.

The entity therefore needs to assess at each reporting date whether there is an indication that the value of the asset may be impaired since the last revaluation.

The effective date of the standard is for the years beginning on or after 1 April 2012. The entity has adopted the interpretation for the first time in the 2013 annual financial statements.

2. GRAP 23: Revenue from Non-exchange transactions This Standard addresses revenue arising from non-exchange transactions. Revenue arising from exchange transactions is addressed in the Standard of GRAP on Revenue from Exchange Transactions. While revenues received by entities arise from exchange and non-exchange transactions, the majority of revenue of entities is typically derived from non-exchange transactions such as:• Taxes; and• Transfers (whether cash or non-cash), including grants, debt forgiveness, fines, bequests, gifts, donations,

and goods and services in-kind

The effective date of the standard is for the years beginning on or after 1 April 2012.

The entity has adopted the interpretation for the first time in the 2013 annual financial statements.


ACCOUNTING POLICIES



ACCOUNTING POLICIES

2. New standards and interpretations (continued)

2.1 Standards and interpretations effective and adopted in the current year (continued)

3.GRAP 24: Presentation of budget information in financial statements The standard requires a comparison of budget amounts and the actual amounts arising from execution of the budget to be included in the financial statements of entities that are required to, or elect to, make publicly available their approved budget(s) and for which they are, therefore, held publicly accountable. The standard also requires disclosure of an explanation of the reasons for material differences between the budget and actual amounts.

3. GRAP 24: Presentation of budget information in financial statements (continued)Compliance with the requirements of this Standard will ensure that entities discharge their accountability obligations and enhance the transparency of their financial statements by demonstrating compliance with the approved budget(s) for which they are held publicly accountable and, where the budget(s) and the financial statements are prepared on the same basis, their financial performance in achieving the budgeted results.


The entity has adopted the interpretation for the first time in the 2013 annual financial statements.

4. GRAP 26: Impairment of cash-generating assets The standard prescribes the procedures that an entity applies to determine whether a cash-generating asset is impaired and to ensure that impairment losses are recognised. The standard also specifies when an entity should reverse an impairment loss and prescribes disclosures. The standard applies to cash-generating property, plant and equipment, intangible assets and heritage assets carried at revalued amounts in accordance with the Standards of GRAP on Property, Plant and Equipment, Intangible Assets and Heritage Assets. The fair value for these assets is not determined at each reporting date but depends on the frequency of changes in the fair value from one reporting period to the next. The entity therefore needs to assess at each reporting date whether there is an indication that the value of the asset may be impaired since the last revaluation.

The effective date of the standard is for years beginning on or after 1 April 2012.

The entity has adopted the interpretation for the first time in 2013 annual financial statements.

5. GRAP 104: Financial instruments The standard prescribes recognition, measurement, presentation and disclosure requirements for financial instruments. Financial instruments are defined as those contracts that results in a financial asset in one entity and a financial liability or residual interest in another entity. A key distinguishing factor between financial assets and financial liabilities and other assets and liabilities, is that they are settled in cash or by exchanging financial instruments rather than through the provision of goods or services.

Financial assets and financial liabilities are initially recognised at fair value. Where an entity subsequently measures financial assets and financial liabilities at amortised cost or cost, transactions costs are included in the cost of the asset or liability.



2.1 Standards and interpretations effective and adopted in the current year (continued) Concessionary loans are loans either received by or granted to another entity on concessionary terms, e.g. at low interest rates and on flexible repayment terms. On initial recognition, the fair value of a concessionary loan is the present value of the agreed contractual cash flows, discounted using a market-related rate of interest for a similar transaction. The difference between the proceeds either received or paid and the present value of the contractual cash flows is accounted for as non-exchange revenue by the recipient of a concessionary loan in accordance with Standard of GRAP on Revenue from non-exchange Revenue Transactions (Taxes and Transfers), and using the Framework for the Preparation and Presentation of Financial Statements (usually as an expense) by the grantor of the loan.

Financial assets and financial liabilities are subsequently measured either at fair value or, amortised cost or cost. An entity measures a financial instrument at fair value if it is:• A derivative;• A combined instrument designated at fair value, i.e. an instrument that includes a derivative and a non-

derivative host contract;• Held-for-trading;• A non-derivative instrument with fixed or determinable payments that is designated at initial recognition to be

measured at fair value;• An investment in a residual interest for which fair value can be measured reliably; and• Other instruments that do not meet the definition of financial instruments at amortised cost or cost.

GRAP 104 requires extensive disclosures on the significance of financial instruments for an entity’s statement of financial position and statement of financial performance, as well as the nature and extent of the risks that an entity is exposed to as a result of its annual financial statements. Some disclosures, for example the disclosure of fair values for instruments measured at amortised cost or cost and the preparation of a sensitivity analysis, are encouraged rather than required.

GRAP 104 does not prescribe principles for hedge accounting. An entity is permitted to apply hedge accounting, as long as the principles in IAS 39 are applied.


2.2 Standards and interpretations not yet effective or relevant The following standards and interpretations have been published and are mandatory for the entity’s accounting periods beginning on or after 01 April 2013 or later periods but are not relevant to its operations:

1. GRAP 18: Segment reporting The objective of this Standard is to establish principles for reporting financial information by segments. The disclosure of this information will:

• Enable users of the financial statements to better understand the entity’s past performance, to evaluate the nature and financial effects of the activities in which it engages and the economic environments in which it operates;

• Identify the resources allocated to support the major activities of the entity and assist in making decisions about the allocation of resources; and

• Enhance the transparency of financial reporting and enable the entity to better discharge its accountability obligations.


ACCOUNTING POLICIES



ACCOUNTING POLICIES


2.2 Standards and interpretations not yet effective or relevant (continued)

The standard has been approved by the Board but its effective date not yet been determined by the Minister of Finance. It is unlikey that the standard will have a material impact on the entity's annual financial statements.

2. GRAP 20: Related party disclosures The objective of this Standard is to ensure that a reporting entity’s financial statements contain the disclosures

necessary to draw attention to the possibility that its financial position and surplus or deficit may have been affected by the existence of related parties and by transactions and outstanding balances with such parties.

The standard has been approved by the Board but its effective date not yet been determined by the Minister of Finance. It is unlikey that the standard will have a material impact on the entity's annual financial statements.


2013 2012 Accumulated depreciation and Cost/ Accumulated Carrying Cost/ accumulated Carrying Valuation depreciation value Valuation impairment value R’000 R’000 R’000 R’000 R’000 R’000

3. Property, plant and equipmentFurniture and fixtures 1,446 (149) 1,297 197 (31) 166 Office equipment 155 (22) 133 21 (4) 17 Computer equipment 660 (209) 451 334 (58) 276 Leasehold improvements 1,066 (176) 890 50 (10) 40 Communication equipment 233 (61) 172 135 (27) 108 Total 3,560 (617) 2,943 737 (130) 607

Reconciliation of property, plant and equipment – 2013

Opening Depre- balance Additions Disposals ciation Total R’000 R’000 R’000 R’000 R’000

Furniture and fixtures 166 1,249 - (118) 1,297 Office equipment 17 133 - (17) 133 Computer equipment 276 341 (15) (151) 451 Leasehold improvements 40 1,016 - (166) 890 Communication equipment 108 98 - (34) 172 607 2,837 (15) (486) 2,943

Reconciliation of property, plant and equipment – 2012

Opening balance Transfers Depreciation Total R’000 R’000 R’000 R’000

Furniture and fixtures – 197 (31) 166Office equipment – 21 (4) 17Computer equipment – 334 (58) 276Leasehold improvements – 50 (10) 40Communication equipment – 135 (27) 108 – 737 (130) 607 A register containing the information required by section 50 of the Public Finance Management Act is available for inspection at the registered office of the entity.


NOTES TO THE ANNUAL FINANCIAL STATEMENTS


2013 2012 Accumulated depreciation and Cost/ Accumulated Carrying Cost/ accumulated Carrying Valuation depreciation value Valuation impairment value R’000 R’000 R’000 R’000 R’000 R’000

4. Intangible assets Computer software 2,251 (374) 1,877 349 (176) 173

Reconciliation of intangible assets – 2013

Opening Scrapped balance Additions Assets Depreciation Total R’000 R’000 R’000 R’000 R’000

Computer software 173 1,947 (44) (199) 1,877

Reconciliation of intangible assets – 2012

Opening balance Transfers Amortisation Total R’000 R’000 R’000 R’000

Computer software – 349 (176) 173

2013 2012 R‘000 R‘000 Restated

5. ReceivablesReceivables from exchange transactions 8,127 9,183Employee costs in advance – 11Prepayments 52 12Provision for bad debts (6 821) (203)Other receivables from non-exchange transactions – 5 370Interest receivable 441 – 1 799 14 373

Trade and other receivables pledged as securityThe entity does not hold any collateral as security.

Trade and other receivables past due but not impairedTrade and other receivables which are less than 3 months past due are not considered to be impaired. At 31 March 2013, R 1,306 (2012: R 14,350) were past due but not impaired.




2013 2012 R‘000 R‘000 Restated

5. Receivables (continued)The ageing of amounts past due but not impaired is as follows:

1 month past due 268 5,5402 months past due – 7,2453 months past due 1,038 1,565

Trade and other receivables impaired The amount of the provision was R (6 821) as of 31 March 2013 (2012: R (203)). The ageing of these loans is as follows: Over 6 months 6,821 203

Reconciliation of provision for impairment of trade and other receivables Opening balance 203 –Provision for doubtful debts 6,618 203 6,821 203 6. Cash and cash equivalents Cash and cash equivalents consist of: Cash on hand 145,321 48,477Bank balances 758 6,000 146,079 54,477

There are no restrictions placed on the realisation or usability of cash balances. The entity does not have access to any additional undrawn facilities.

7. Unspent conditional grants and receiptsUnspent conditional grants and receipts comprises of:Unspent grants 124,158 59,455

Movement during the yearBalance at the beginning of the year 59,457 –Additions during the year 84,233 59,455Income recognition during the year (19,532) – 124,158 59,455

These amounts are invested in money market accounts and interest accrues toto the invested money.




2013 2012 R‘000 R‘000 Restated

7. Unspent conditional grants and receipts (continued)Danish Commercial building project 703 –European Union Project (COCATE) 489 512FP7 107 107SA Carbon Capture and Storage Centre 16,336 14,763Centre for Energy Systems and Research 1,700 976SA Road Map 1,096 2,205SDC EE Monitoring and Implementation Project 2,747 4,274Working for Energy Programme 27,784 36,994EU AID Demo Project 71,800 –Wind Resource Mapping 1,396 (376) 124,158 59,455

8. ProvisionsReconciliation of provisions – 2013 Opening Utilised during balance Additions the year Total R‘000 R‘000 R‘000 R‘000 Bonus provision 4,350 6,628 (3,057) 7,921

Reconciliation of provisions – 2012 Opening Additions Total R‘000 R‘000 R‘000 Bonus provision – 4,350 4,350

The bonus provision is calculated based on a percentage of the entity's performance and the individual performance ratings of staff members.

9. Payables from exchange transactionsTrade payables 8,129 4,989Other payables 5,190 11,107 13,319 16,096






2013 2012 R‘000 R‘000 Restated

10. Revenue

Grants received 67,728 44,948 The amount included in revenue arising from exchanges of goods or services are as follows: Interest received 3,822 1,725 Membership fees and other donor funds 9,881 8,622 13,703 10,347 The amount included in revenue arising from non-exchange transactions is as follows: Grants received 67,728 44,948

11. Operating expenses Advertising 426 207 Bank charges 17 7 Audit fees 465 422 Legal fees 5 55 Donations - 26 Entertainment 254 57 Gifts 82 38 Insurance 113 29 Conferences and seminars 360 283 Lease rentals on operating lease 2,348 997 Marketing 1,612 516 Postage and courier 7 4 Printing and stationery 444 334 Subscriptions and membership fees 92 25 Telephone and fax 139 159 Transport and freight - 3 Travel – local 1,053 963 Travel – overseas 1,141 2,068 Administration 3,290 2,078 Other expenses 11 15 11,859 8,286




2013 2012 R‘000 R‘000 Restated

12. Employee related costs Basic 22,416 16,425 Bonus 6,646 4,554 Medical aid – company contributions 312 228 UIF 44 35 WCA 34 28 SDL 240 194 Other payroll levies 3 3 Leave pay provision charge 588 451 Other short term costs 722 88 Pension and provident fund company contributions 993 733 Travel, motor car, accommodation, subsistence and other allowances 79 - 32,077 22,739

13. Finance costs Other interest paid 125 (511) Interest capitalised on conditional grants.

14. Cash generated from operations Surplus 16,556 443 Adjustments for: Depreciation and amortisation 737 306 Accrued expenses 964 478 Movements in bonus provision 3,571 4,351 Changes in working capital: Receivables 12,574 (14,372) Payables from exchange transactions (2,780) 16,096 Unspent conditional grants and receipts 64,703 59,455 Foreign exchange transactions 46 (55) 96,371 66,702




2013 2012 R‘000 R‘000 Restated

15. Commitments

Operating lease commitments: CEF (SOC) Limited Minimum lease payments due – Within one year 651 640 Block C, Upper Grayston Office Park, 152 Ann Crescent, Strathavon, Sandton

The entity has leased Portion 13, remaining Extent of Erf 14, Portion 1 of Erf 14 Simba Township, together with the building erected thereon from CEF (SOC) Limited. The agreement commenced on 1 April 2012 and the rent payable shall annually, on the anniversary date, escalate by 10% or alternatively, shall escalate in accordance with the CPI, whichever is greater. Either party shall be entitled to terminate this lease on six months written notice to the other party.

Operating lease commitments: City Square Trading 522 (Pty) Ltd

Minimum lease payments due – Within one year 1,959 - – In second to fifth year inclusive 8,727 - 10,686 - Block E, Upper Grayston Office Park, Erf 20 Simba Township, Sandton

SANEDI leased units 9 – 12 on the second floor of Block E, Upper Grayston Office Park, located at Erf 20 Simba Township, Sandton, from City Square Trading 522 (Pty) Ltd. The lease commenced on 1 May 2012 and the rent payable shall annually, on the anniversary date, escalate by 8.25%. The lease terminates on 30 April 2017. SANEDI has the option to extend the lease for another 5 years.

SANEDI also leased unit 1 on the ground floor of Block E, Upper Grayston Office Park, located at Erf 20 Simba Township, Sandton, from City Square Trading 522 (Pty) Ltd. The lease commenced on 1 January 2013 and the rent payable shall annually, on the anniversary date, escalate by 8.25%. The lease terminates on 31 December 2017. SANEDI has the option to extend the lease for another 5 years.

Contractual commitments

Minimum contract commitments – Within one year 28,745 -

SANEDI has entered into various contracts with service providers for the achievement of its key deliverables for the Working for Energy programme; the Centre for Energy Systems Research, the Hub for Energy Efficiency and Demand Side Management and various projects under the Clean Energy Programme.




2013 2012 R‘000 R‘000 Restated

16. Contingencies

Surplus funds

SANEDI has a surplus for the year ended 31 March 2013 amounting to R16,556 million. A request has been submitted to National Treasury to retain the surplus, in terms of Section 53 of the Public Finance Management Act.

17. Related parties

National Department providing grants Department of Energy National Department providing grants Department of Science and Technology Affiliate CEF (SOC) Limited

Related party balances Amounts included in Trade Receivable (Trade Payable) regarding related parties Department of Science and Technology - 5,000 Department of Energy 4,470 5,370 CEF (SOC) Limited (696) (811) Amounts owed by related parties CEF (SOC) Limited - 48,477 Department of Energy 4,470 -

Related party transactions Interest paid to (received from) related parties CEF (SOC) Limited (1,939) (1,725) Rent paid to (received from) related parties CEF (SOC) Limited 590 582 Management fees paid to (received from) related parties CEF (SOC) Limited 4,290 1,887 Grants received Department of Energy 127,910 45,100 Department of Science and Technology 6,000 11,000




2013 2012 R‘000 R‘000 Restated

18. Members’ emoluments

Non-Executive

2013 Committees fees TotalMr J Marriott 93 93 Ms N Mlonzi 90 90 Dr E Steyn* - - Ms M Modise* - - Ms T Ramuedzisi* - - Mr M Vilana* - - Dr D Hilderbrant* 74 74Mr M Gordan* - - Prof E Meyer* 46 46 Ms D Ramalope* - - Dr V Msimang* - - Dr R Maserumule * (alternate director) - - - - 303 303

2012 Committees fees TotalMs N Mlonzi 25 25 Dr E Steyn * - - Mr J Marriott 44 44 Dr V Msimang* - - Ms M Modise* - - Mr M Vilana* - - Dr D Hilderbrant - - Mr M Gordan - - Prof E Meyer - - Ms D Ramalope* - - Ms T Ramuedzisi * (alternate director) - - Dr R Maserumule * (alternate director) - - 69 69

* These members are not remunerated in their personal capacity.




2013 2012 R‘000 R‘000 Restated

18. Members’ emoluments (continued)

Board Audit committee & Board Risk committee

2013 Committees fees TotalMr V Magan 50 50 Ms M Thomani 26 26 Ms M Nyathi 33 33 109 109 2012 Committees fees TotalMr V Magan 40 40 Ms M Thomani 26 26 Ms M Nyathi 32 32 98 98

19. Prior period errors

An accrual for penalties and interest amounting to R2,144,143.97 for the SANERI VAT liability was incorrectly accrued for in SANEDI.

The salary control account was not cleared to the relevant expense account in the statement of financial performance. This resulted in an error of R448,688.01.

A financial asset amounting to R1,754,900 was incorrectly recognised in the statement of financial position.

Invoices for maintenance and the SANEDI launch amounting to R152,192.12 were not accrued for. These invoices were only received for processing in 2013.

Late entries were processed in the 2011/12 financial year, amounting to R438,591.43 which was not accounted for. The correction of the error(s) results in adjustments as follows: Statement of financial position Payables from exchange transactions - 2,441 Other financial assets - (1,755) Grants/Third party funds - 439 Statement of Financial Performance Interest paid - 2,144 Salaries - 449 General expenses - 1,164




20. Financial instruments

Introduction

The entity has a risk management and central treasury function that manages the financial risks relating to the entity’s operations. The entity’s liquidity, credit, foreign exchange and interest rate risks are monitored continually. Approved policies exist for managing these risks.

Risk profile

The entity utilises the services of risk management and the treasury department in CEF (SOC) Limited to manage the financial risks relating to the entity’s operations.

Risk management objectives and policies

The entity’s objective in using financial instruments is to reduce the uncertainty over future cash flows arising from movements in foreign exchange and interest rates. Throughout the year under review it has been, and remains, the entity’s policy that no speculative trading in derivative instruments be undertaken. Credit risk

Financial assets, which potentially subject the entity to concentrations of credit risk, pertain principally to trade receivables and investments in the South African money market. Trade receivables are presented net of the allowance for doubtful debts.

The exposure to credit risk with respect to trade receivables is not concentrated due to a large customer base.

The entity manages counter party exposures arising from money market and derivative financial instruments by only dealing with well established financial institutions of a high credit rating. Losses are not expected as a result of non performance by these counter parties.

Credit limits with financial institutions are revised and approved by the board quarterly.

Fair value

The entity’s financial instruments consist mainly of cash and cash equivalents, trade receivables, trade payables and long term debt.

As at 31 March 2013 no financial asset was carried at an amount in excess of its fair value and fair values could be reliably measured for all financial assets that are available for sale or held for trading.

The following methods and assumptions are used to determine the fair value of each class of financial instrument:

Cash and cash equivalents

The carrying amounts of cash and cash equivalents approximates fair value due to the relatively short term maturity of these financial assets.




20. Financial instruments (continued)

Trade receivables

The carrying amounts of trade receivables net of provision for bad debt, approximates fair value due to the relatively short term maturity of this financial asset.

Trade payables

The carrying amounts of trade payables approximates fair value due to the relatively short-term maturity of these liabilities.

The carrying value of short-term borrowings approximates fair value due to the relatively short-term maturity of these liabilities. The fair values of other long term borrowings are not materially different from the carrying amounts.

Maturity profile

The maturity profiles of financial assets and liabilities at the statement of financial position date are as follows:

At 31 March 2013

Assets Less than Between 1 Over 5 years Non-interest 1 year and 5 years bearing Total

Cash and cash equivalents 146,079 - - - 146,079 Trade and other receivables 1,747 - - - 1,747 Loans receivable - - - - -

Total financial assets 147,826 - - - 147,826

Liabilities

Trade and other payables 13,319 - - - 13,319

At 31 March 2012

Assets Less than Between 1 Over 5 years Non-interest 1 year and 5 years bearing Total

Cash 54,477 - - - 54,477

Trade and other receivables 14,361 - - - 14,361


Liabilities





20. Financial instruments (continued)

Financial instruments by category

Assets

2013 Fair value Fair value through profit through profit Held to

Loans and or loss - held or loss - maturity

receivables for trading designated investments Total

Cash 146,079 - - - 146,079

Other financial assets - - - - -

Trade and other receivables 1,747 - - - 1,747


Liabilities


Financial instruments by category

Assets

2012 Fair value through profit Held to

Loans and or loss - maturity

receivables designated investments Total

Cash 54,477 - - 54,477

Other financial assets - - - -

Trade and other receivables 14,361 - - 14,361

Total financial assets 68,838 - - 68,838

Liabilities

Trade and other payables 16,096 - - 16,096

Liquidity risk

The entity manages liquidity risk through proper management of working capital, capital expenditure and actual vs.

forecasted cash flows. Adequate reserves and liquid resources are also maintained.




2013 R‘000

21. Fruitless and wasteful expenditure

Reconciliation of fruitless and wasteful expenditure - Opening balance - Fruitless and wasteful expenditure – relating to current year 2 Less: Amounts condoned by the Board of Directors - - Fruitless and wasteful expenditure awaiting condonation 2 A penalty of 5%, amounting to R2,090.18 was raised for late payment of a previous supplier invoices

No fruitless and wasteful expenditure was incurred in the previous financial year.

22. Irregular expenditure Irregular Expenditure – current year 12,644 Analysis of expenditure awaiting condonation per age classification Current year 12,644 Details of irregular expenditure – current yearComprised inter alia of the following payments made: Disciplinary steps taken/criminal proceedings Contravention of legislation (PPPFA) Awaiting approval from the Board 11,266 Contravention of legislation (Treasury Regulations) Awaiting approval from the Board 1,378 12,644 Contravention of legislation (Preferential Procurement Policy Framework Act)

• Correct procurement processes not followed: No notification for deviations from procurement process above R1m. The procurement decision enacted while SANEDI was still a Schedule 2 public entity within the CEF group. This resulted in irregular expenditure of R3,265,539.56.

• Urgent procurement: Three responsive quotes were not obtained in all instances. This resulted in irregular expenditure of R328,958.00. This requires condonation from the Board.

• Procurement of goods and services above R30,000.00 from 8 December 2012 should have been evaluated as per PPPFA legislation. This resulted in irregular expenditure of R7,671,544.29. This requires condonation from the Board.

Contravention of legislation (Treasury Regulations)

• Correct procurement processes not followed: Approval of application in terms of Treasury Regulation 16A 6.4 to deviate from the standard procurement process. This resulted in irregular expenditure of R1,377,483.93. This requires condonation from the Board.

There was no irregular expenditure incurred in the prior financial year.




23. Statement of comparative and actual information

2013 Actual out- Actual out- Original Budget Final Final come as % of come as % of budget adjustments budget outcome Variance final budget original budget

Financial Performance

Grants and other receipts 88,795 63,785 63,785 81,431 (17,646) 128% 92% Employee costs (25,500) (31,134) (31,134) (32,077) 943 103% 126% Depreciation and asset impairment - - - (737) 737 100% 100% Finance charges - - - (125) 125 100% 100% Project costs (53,385) (13,765) (13,765) (19,892) 6,127 145% 37% Operating expenditure (9,910) (18,886) (18,886) (12,044) (6,842) 64% 122%

Total expenditure (88,795) (63,785) (63,785) (64,875) 1,090 102% 73%

Surplus/(Deficit) for the year - - - 16,556 (16,556) 97% 70%

The budget has been prepared on a combination of the cash basis and the accrual basis, whereas the annual financial statements are prepared only on the accrual basis.

The differences are as a result of the following:• Grants and other receipts: Additional allocation was received from the Department of Energy. External donor funding

was sourced for other projects.• Employee costs: Increase in bonus provision due to vacancies being filled which was not budgeted for.• Project costs: Additional costs incurred on projects as external funding was sourced.• Operating costs: Less travel was undertaken than initially budgeted for. Savings on catering, printing and marketing

costs also resulted in expenditure being lower than budgeted for.


AC

KN

OW

LED

GE

ME

NTS

There are others who need to be named and these are as follows:

Minister Dipuo Peters for her ongoing support, guidance and faith in our abilities.

Deputy Minister Barbara Thompson, for her enthusiasm to embrace the work done by SANEDI and assist in being a champion for these initiatives.

Director General of Energy, Ms Nelisiwe Magubane, for her and the department’s ongoing support and strategic direction.

The Chairperson of the Parliamentary Portfolio for Energy, the Honourable Siza Njikelana, for his keen interest in the areas where SANEDI is making a difference and for being an ardent supporter of our efforts to develop a low carbon future.

The Chairperson of the SANEDI Board of Directors, Advocate Nothemba Mlonzi, her deputy, Mr John Marriott, the members of the Board, for their vision, direction and support in guiding the entity through its rebirth.

The Chairperson of the Board Audit and Risk Committee, Mr Viren Magan and the members of the committee who continue to be vigilant in their oversight role and last, but not least.

The industrial partners and donor community who continue to provide the necessary financial and human resources required to drive SANEDI’s programmes into the future. Your contribution is truly appreciated.

Thank you to all the above for your continued belief in what SANEDI can and will achieve. Your faith in the institute is gratefully appreciated and acknowledged.

Mr K NassiepCEO SANEDI

The year in focus would not have been as successful had it

not been for the efforts of so many. In particular, the staff of

SANEDI, who through their loyalty, dedication and specialist

skills continue to produce results of the highest order.

If we were to make a Peacock feather, we would use chemicals and pigments. But actually, the only pigment is brown. It’s

done with structural colour and transparent layers. When light reflects back to us through the layers, it creates the colour blue

or green or gold to your eye. There’s now an e-reader display screen that uses the same principle. It’s made by Qualcomm. It needs no backlighting, because it uses layers and the ambient light to create the different colour pixels to your eye. So it’s an

incredible low-energy way to do it.


T. 010 201 4800 | Block E, Upper Grayston Office Park, 152 Ann Crescent, Strathavon, Sandton, 2199 | PO Box 9935, Sandton, 2146. www.sanedi.org.za

RP128/2013

ISBN: 978-0-621-41824-8

2285

| iw

w |

cp

Date post:	22-May-2020
Category:	Documents
Upload:	others
View:	3 times
Download:	0 times

ANNUAL REPORT 2012/2013 - SANEDI · the year’s objectives. This Annual Report will highlight the...

Documents