The President s Fund Annual Report 2014/2015 · Report of the Audit Committee We are pleased to...

1The President’s Fund Annual Report 2014/2015

2 The President’s Fund Annual Report 2014/2015

The President’s Fund Annual Reportfor 2014/2015


1. Accountingofficerreport 5

2. ReportoftheAuditCommittee 8

3. ReportoftheAuditorGeneraltoParliament 10

4. StatementofFinancialPerformance(SPR) 13

5. StatementofFinancialPosition(SPO) 13

6. StatementofchangesinNetAssets(NA) 14

7. Cashflowstatement(CFS) 14

8. Notestothefinancialstatements(Generalinformationandaccountingpolicies) 15

9. Notestothefinancialstatement 18



Report of the Accounting Officer on the annual financial statements of the President’s Fund for the year ended 31 March 2015

1. GENERAL REVIEW

ThePresident’sFundwasestablishedintermsofsection42ofthePromotionofNationalUnityandReconciliationAct,(ActNo34of1995).

Parliament approved the following measures to victimson the recommendation of the State President and thesubsequent consideration and recommendation of thead hoc Joint Committee of both Houses of Parliamenton the tabling of the final two volumes of the Truth andReconciliationCommission(TRC)Reports:

• Aonce-off individual grant of R30000 to thoseindividualsorsurvivorsdesignatedbytheTRC.

• Systematicprogrammestoprojectacademicandformal recordsofhistory, cultural andart forms,as well as erecting symbols and monumentsthat exalt the freedom struggle, including newgeographicandplacenames.

• Medical and other forms of Social Assistanceprogrammes to provide for medical benefits,education assistance and the provision ofhousing,aswellasothersocialbenefitstoaddresstheneedsofvictimsidentifiedbytheTRC.

• Whole communities, other than individualslinked to the process, which suffered and arestill in distress, therefore, the need for suchcommunities to be rehabilitated throughvariousprogrammes initiatedand supportedbyGovernment.

Subsection 42(2) of the aforementioned Act states that“thereshallbepaidfromthefundallamountspayabletovictimsbywayofreparationintermsofregulationsmadebythePresident”.

Once-off Individual Grant of R30 000

Togiveeffecttothepaymentoftheonce-offindividualgrantofR30000,regulationswerepromulgatedandgazettedon12November2003.

Thisaspectofthereparationmeasurehasbeencompletedexceptforthirteenbeneficiarieswhocouldnotbetracedofwhichninearedeclaredtoberesidingabroad. Funds forthe outstanding beneficiaries have been reserved in theFund,shouldthebeneficiariescomeforwardtoclaimtheirreparationgrants.

Symbols and Monuments

ThisaspectofthereparationmeasureisbeingimplementedundertheauspicesoftheDepartmentofArtsandCultureandiscontinuingthroughouttheRepublic,manyofwhichareinlinewithTRCrecommendations.

No fundshavebeenutilized fromthePresident’sFund todateregardingthisaspectofthereparationmeasure.

Medical and other forms of social assistance

Regulations on assistance to families ofmissingpersons,whose remains were exhumed and reburied, werepromulgatedandgazettedon07May2010.Asat31March2015, assistancewasgranted to65 familieswho appliedforcontributionstowardsre-burialexpensesintermsoftheregulationsandwerepaida totalamountofR1079500.Amendments to the regulations are being considered toextendthenatureofservicesbeingprovided.

Regulations for both Basic and Higher Education werepromulgatedon03November2014andtheclosingdateforapplicationswas31March2015.Ofthe750applicationsreceived,596applicantswereeligible.

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The successful applicants, being 331 for basic educationand265forhighereducation,havebeensubmittedtotherespectiveEducationDepartmentsforfurtherprocessingasdirectedbytheRegulations.

In my Report for the Financial Year 2013/2014 it wasstated that the Department of Health is looking atpossibleamendmentstotheNationalHealthAct,2003toprovide for free health services to victims, their relativesand dependants. Changes were effected to the draftRegulationstofocusonspecialhealthservicesinlinewiththeagreement reachedbetweenmyDepartmentand theDepartmentofHealth.The reviseddraftRegulationsweresubmittedtothesaidDepartmentforcomments.ThedraftRegulationscannotbefinalisedbeforetheDepartmentofHealthhasamended theNationalHealthAct,2003.BoththeDirectorGeneralandtheMinisterofHealthhavebeenrequestedtoexpeditethematter.

In my previous Annual Report, it was indicated thatTRC identified victims in need of housing assistanceincluding repairs or renovations to existing infrastructureisbeing compiled.This informationwas submitted to theDepartmentsofHumanSettlementsandMilitaryVeteranstocomparewiththeirdatabase.Wehaverecentlyreceivedfeedback from both Departments and are analysing thedatatoassessthehousingneedsofthevictims.Apolicyonhousingassistanceforvictimswillbepreparedandusedtofinalisethedraftregulations.

Rehabilitation of Communities

It was previously reported that needs analysis has beenconducted inAlexandra andMamelodi (Gauteng) aswellasBambayiandMpophomeni(KwazuluNatal).DuringtheYearbeingreportedon,furtherneedsanalysiswerecarriedoutinTumahole,Thabong(FreeState),Paballelo,Seoding,(Northern Cape), Lulekani and Ga-Matlala (Limpopo).On completionof theneeds analysis in the remainderofthe Provinces, the draft regulations will be reviewed inconjunctionwiththerelevantstakeholdersandfinalised.

2. CORPORATE GOVERNANCE ARRANGEMENTS

The administration costs for the Fund is paid by theDepartment of Justice and Constitutional Developmentas a related party and the Fund uses the Department’srisk management approach, fraud prevention policy,effectiveness of internal audit and Audit Committeeservices.Italsoutilizesthegovernancestructures,systemsandmanagementprocessesoftherelatedparty.

3. OTHER

We shall continue to utilize the funds available in thePresident’s Fund, aswell as any further contributions, forthepurposesforwhichtheFundwasestablishedintermsofthefoundinglegislationandbydirectionofregulationsassentedtobytheStatePresident.

4. APPRECIATION

My appreciation and thanks are accorded to the relateddepartments,agenciesandstakeholderswhoareassistinginattainingthereparationgoalsofthePresident’sFund.

_________________________

Ms Nonkululeko SindaneAccountingOfficer:President’sFundDate:31July2015



Report of the Audit Committee

Wearepleasedto presentour reportfor thefinancialyearended31 March2015.

1.1 Audit Committee members and attendance

The Audit Committee consisted of the members listedbelow and is required to meet at least four times perannum as per its approved terms of reference. Duringthe current year 5 meetingswereheldand onememberresignedasindicatedbelow.

Name of members

Numbers of meetingsattended

Status

Mr. Motsamai Karedi(Chairperson)

5 Reappointed 09January2013

Mr. Cedric Boltman

5 Reappointed 09 January2013

Ms. Besky Ngunji ri 5 Appointed 28 February2012

Mr. Wilson Ramabulana

5 Reappointed 09January2013

Ms. Livhuwani Yuma

5Resigned 31March 2015

Mr Andy Sello 5 Appointed 09January2013

1.2 Audit Committee Responsibility

Wereportthatwehaveadoptedappropriate formal termsof reference inour charter in line withthe requirementsofsection38(1(a)of thePublic FinanceManagementAct,1999(Act No. I of1999)andTreasuryRegulation3. I.

1.3 The Effectiveness Of Internal Control

The Audit Committee is satisfied that key controlsremainedinplacethroughouttheyear underreview andwhere shortcomings in the internal controls wereidentified;managementimplemented an audit action

planwhich was validated byInternal Auditand reviewedby theAuditCommitteeonongoingbasi s.

1.4 Internal Audit

TheInternalAuditunithasdischargeditsresponsibilitiesaspertheinternalauditplan.

1.5Reports

1.5.1 The quality of in-year management and monthly/quarterlyreportssubmitted intermsofthePFMA

Wearesatisfiedwith thecontent andquality ofmonthlyand quarterlyreportspreparedby theAccounting Officer of the Department during the yearunderreview.

1.5.2 Evaluation of financial statements

We have reviewed and discussed the audited annualfinancial statements with the management and alsoreviewed the Department’s compliance with legaland regulatory provisions.We havealsoreviewedtheAuditor-GeneralSouthAfrica’s reportandmanagementletterandmanagement’sresponses to it.

1.6 Auditor-General South Africa

TheAuditCommitteeconcurs andaccepts theconclusionsoftheAuditorGeneralontheannualfinancial statementsand isof the opinion that the audited annual financialstatementsbeacceptedand readtogether withthereportoftheAuditor-General.

_________________________

Mr M Karedi ChairpersonoftheAuditCommitteeDepartmentofJusticeandConstitutionalDevelopment


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Report of the Auditor-General to Parliament on the President’s Fund Report on the financial statements

Introduction

1. I have audited the financial statements of thePresident’s Fund set out on pages 14 to 28, whichcomprise the statement of financial position asat 31 March 2015, the statement of financialperformance,statementofchangesinnetassets,andcashflowstatement for theyear thenended,aswellas the notes, comprising a summary of significantaccountingpoliciesandotherexplanatoryinformation.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for thepreparation and fair presentation of these financialstatementsinaccordancewithSouthAfricanStandardsof Generally Recognised Accounting Practice (SAStandards of GRAP) and the requirements of theGeneralNotice issued in termsof thePublicAuditActofSouthAfrica,2004(ActNo.25of2004)(PAA),andfor such internal control as the accounting officerdetermines is necessary to enable the preparationfinancial statements that are free from materialmisstatement,whetherduetofraudorerror.

Auditor-General’s responsibility

3. My responsibility is to express an opinion on thesefinancial statementsbasedonmyaudit. I conductedmyaudit in accordancewith International Standardsof Auditing. Those standards require that I complywithethicalrequirements,andplanandperformtheaudit to obtain reasonable assurance aboutwhetherthe financial statements are free from materialmisstatement.

4. An audit involves performing procedures to obtainaudit evidence about the amounts and disclosuresin the financial statements. The procedures selecteddepend on the auditor’s judgement, including theassessment of the risks ofmaterialmisstatement ofthe financial statements, whether due to fraud orerror. Inmaking those risk assessments, the auditorconsiders internal control relevant to the entity’spreparation and fair presentation of the financialstatements in order to design audit procedures thatareappropriate in thecircumstances,butnot for thepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmade by management, as well as evaluating theoverallpresentationofthefinancialstatements.

5. I believe that the audit evidence I have obtained issufficient and appropriate to provide a basis formyauditopinion.

Opinion

6. Inmyopinion,thefinancialstatementspresentfairly,in allmaterial respects, the financial position of thePresident’sFundasat31March2015anditsfinancialperformanceandcashflowsfortheyearthenended,in accordance with SA Standards of GRAP and therequirementsof theGeneralNoticeissuedintermsofthePAA.

Emphasis of matter

7. Idrawattentiontothematterbelow.Myopinionisnotmodifiedinrespectofthismatter.


Restatement of corresponding figures

8. As disclosed in note 12 and 13 to the financialstatements, the corresponding figures for 31March2014 have been restated as a result of an errordiscovered during 2015 in the financial statementsofthePresident’sFundat,andfortheyearended,31March2014

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

9. In accordance with the PAA and the General Noticeissuedintermsthereof,Ihavearesponsibilitytoreportfindings on the reported performance informationagainst predetermined objectives, non-compliancewith legislation and internal control. The objectiveof my tests was to identify reportable findings asdescribedunder each subheadingbut not to gatherevidence to express assurance on these matters.Accordingly,Idonotexpressanopinionorconclusiononthesematters.

Predetermined objectives

10. I did not audit performance against predeterminedobjectives, as the fund is not required to prepare areport on its performance against predeterminedobjectives. The fund does not fall within the ambitof the PFMA and the entity-specific legislationdoes not require reporting on performance againstpredeterminedobjectives.

Compliance with legislation

11. I performed procedures to obtain evidence thatthe fund had complied with applicable legislationregarding financial matters, financial managementand other related matters. I did not identify anyinstances of material non-compliance with specificmatters in key legislation, as set out in the generalnoticeissuedintermsofthePAA.

Internal control

12. Iconsideredinternalcontrolrelevanttomyauditofthefinancialstatementsandcompliancewithlegislation.Ididnotidentifyanysignificantdeficienciesininternalcontrol.

Pretoria30July2015

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Statement of financial performancefor the year ended 31 March 2015

Notes 2015 2014

R R

Revenue

Investmentrevenue 3 78,762,413 63,520,110

78,762,413 63,520,110

Less:expenditure 4 1,019,144 1,147,176

Surplus for the year 77,743,270 62,372,935

Statement of financial position as at 31 March 2015

Notes 2015 2014

R R

ASSETS

Non-current assets 1,229,628,198 1,152,419,203

Financialinvestmentsatfairvalue 6 1,229,628,198 1,152,419,203

Current assets 47,091,993 46,694,934

Cashandcashequivalents 8 47,091,993 46,690,934

Tradeandotherreceivables-Nonexchangetransactions 5 0 4,000

Total assets 1,276,720,192 1,199,114,137

LIABILITIES

Total liabilities 2,886,555 3,023,770

Tradeandotherpayables-Nonexchangetransactions 7 1,239 1,197

Provision 14 2,885,316 3,022,573

CAPITAL AND RESERVES

Total net assets 1,273,833,637 1,196,090,367

Accumulatedsurplus 9 1,273,833,637 1,196,090,367

Total net assets and liabilities 1,276,720,192 1,199,114,136


Statement of changes in NET assetsas at 31 March 2015

Notes 2015 2014

R R

AccumulatedSurplus

Openingbalance 1,196,090,367 1,133,524,232

Plus:Surplusfortheyear 77,743,270 62,372,935

Prioryearerror 13 0 193,200

Closingbalance 9 1,273,833,637 1,196,090,367

Totalnetassets 1,273,833,637 1,196,090,367

Cash flow statement as at 31 March 2015

Notes 2015 2014

R R

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts 0 0

Interestreceived 3 78,762,413 63,520,110

Otherreceipts 0 0

Payments 0 0

Suppliers(Managementfees) -704,637 -665,359

Otherpayments 10 -451,722 -2,995,875

Net cash flows from operating activities 77,606,054 59,858,876

CASH FLOWS FROM INVESTING ACTIVITIES

Proceedsfromsaleofinvestments -77,208,995 -62,762,709

Net cash flows from investing activities -77,208,995 -62,762,709

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash flows from financing activities 0 0

Net increase/ (decrease) in cash and cash equivalents 397,059 -2,903,833

Cashandcashequivalentsatbeginningofperiod 46,690,934 49,594,767

Cash and cash equivalents at end of period 8 47,087,993 46,690,934


Notes to the Financial Statements 31 March 2015

1. GENERAL INFORMATION

The President’s Fund was established in terms ofSection 42 of the Promotion of National Unity andReconciliationAct,(ActNo.34of1995)anddomiciledintheRepublicofSouthAfrica.

2. PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies applied in thepreparationofthesefinancialstatementsaresetoutbelow.Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.

2.1 Basis of preparation Thefinancialstatementshavebeenpreparedonthehistoricalcostbasis,except forfinancial investmentsthathavebeenmeasuredat fairvalue.Thefinancialstatements are presented in rands. The financialstatementshavebeenpreparedonagoingconcernandaccrualbasis.

2.1.1 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements,management is required to make estimates andassumptionsthataffecttheamountspresentedintheannualfinancial statements and relateddisclosures.Use of available information and the application ofjudgementisinherentintheformationofestimates.Actual results in the future could differ from theseestimates which may be material to the annualfinancialstatements.Significantjudgementsincludethefollowing:

2.1.2 Contingent liabilities

Thebasisforcalculationofthecontingentliability isR30000beingfixedamountforfinalreparationandanaverageamountofR2932beingprovisionfor

interim reparation as the interim reparation variesfromR2000toR5705duetonumberofpeopleinneedwithinthefamily.

2.1.3 Compliance

The financial statements of the President’s Fundhave been prepared in accordance with SouthAfrican Standards of Generally RecognisedAccountingPracticeasrequiredbythePublicFinanceManagementAct,(ActNo.1of1999)(PFMA).

2.2 Summary of significant accounting policies

2.2.1 Revenue recognition

The President’s Fund recognises revenue when theamount of revenue can be reliably measured. It isprobablethatfutureeconomicbenefitswillflowtotheentityandspecificcriteriahavebeenmetforeachofthePresident’sFundactivityasdescribedbelow.

(i) Interest Income

Interest revenue is accrued on a time basis, byreference to the principal outstanding, and atthe effective interest rate applicable, which is therate that exactly discounts estimated future cashreceipts through the expected life of the financialassettothatasset’snetcarryingamount.

2.2.2 Expenditure

(i) Reparations

Reparations are initially recognised when abeneficiary’sapplicationisapprovedbytheCommitteeon Reparation and Rehabilitation within the Truthand Reconciliation Commission. Reparations areprocessedintermsoftheregulations

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(ii) Administration expenditure

Disbursements in respect of administrative expenses:bank charges, management fees and service providerfeesarerecognisedwhenreceivedandmeasuredatcost

(iii) Exhumation and reburials

Financialassistanceprovidedtoarelativeofamissingperson, reported to the Truth and ReconciliationCommission(TRC) as a deceased victim, whoseremains have been exhumed and handed to thefamilyforreburialorsymbolicburialofpersonswhosephysical remains cannot be found. The Exhumationand reburials are recognised on application andmeasuredatcost.

2.2.3 Financial instruments

Financial instruments at fair value.

Fair value financial assets are measured withconsideration that, unrealised gains and losses arerecognised directly in surplus or deficit. Interestearnedwhilstholdingfairvaluefinancialinvestmentsis reported as interest income using the effectiveinterestrate.Dividendsearnedwhilstholdingfairvaluefinancialinvestmentsarerecognisedinthestatementofcomprehensiveincomeas“otheroperatingincome”whentherightof thepaymenthasbeenestablished.Thelossesarisingfromimpairmentofsuchinvestmentsarerecognisedintheincomestatementin“impairmentlossesonfinancialinvestments”.

Financial assets are assesed for indicators ofimpairment at the end of each reporting period.Financial assets are impaired where there isobjective evidence that, as a result of one or moreevents that occured after the initial recognition ofthe financial asset, the estimated future cash flowsoftheinvestmenthavebeenaffected.

(i) Date of recognition

Purchases or sales of financial assets that requiredelivery of assets within the time frame generallyestablised by regulations or convention in the

marketplace are recognised on the date that thePresident’sFundcommitstopurchaseorselltheasset.

(ii) Initial recognition of financial statements

The classification of financial instruments at initialrecognition depends on the purpose for whichthe financial instruments were acquired and theircharacteristics.Allfinancialinstrumentsaremeasuredinitially at their fair value and transaction costs onfinancial insrumentsat fairvaluethroughsurplusordeficitarerecognisedinsurplusordeficit.

(iii) Subsequent Measurement

FinancialInstrumentsatfairvaluethroughsurplusordeficitaresubsequentlymeasuredatfairvalue,withgains and losses arising from changes in fair valuebeingincludedinsurplusordeficitfortheperiod.

(iv) Derecognition

The financial instrument is derecognised when thecontractual agreement in respect of the financialassetsisterminated.

2.3 Trade and other receivables

Thetradeandotherreceivablesarerecognisedwhenbeneficiaries are overpaid and measured by theamount of the overpayment. The trade and otherreceivablesoriginatedby theFundare statedat fairvalue.

Thederecognitionofthetradeandotherreceivableiswhenrecoveriesaremadeorwriteoffisapproved.

2.3.1 Write-off and Provision of

irrecoverable debts Policy

Provisionforbaddebtsaremadewhenwriteoffhasnotbeenapprovedbutthedebtseemirrecoverable.

ThePresident’sFundutilizesthePolicy:Writing-offofDebtasapplicabletotheDepartmentofJusticeandConstitutional Development and approved by theDirector-Generalon31March2011.


2.4 Trade and other payables

Trade and other payables are recognised whencreditorsareidentifiedandmeasuredbytheamountowing.

Thederecognitionofotherpayablesarewhenmoniesarepaidtothecreditors.

2.5 Provisions

Represents amounts owing to victims who haveapplied for reparation but could not be located attheirgivenaddresses.Thetimingofthesepaymentsareuncertain.

The recognition of the provision is made wheninterimandfinalreparationispaidtobenefiaries.Themeasurement is in terms of regulations governingthepaymentof interimandfinalreparationandtheamountsremainataninitialrecognition.

2.6 Cash and cash equivalents

Cashandcashequivalentdemanddeposits thatarereadily convertible to a known amount of cash andaresubjecttoaninsignificantriskofchangesinvalueare disclosed under another category of financialinstrument, depending on their nature as well asamountsincludedincommercialbankaccounts.

Cashandcashequivalentsandbankborrowingsarerecordedatfacevalueatwhichitremains.

Thederecognitionofthecashandcashequivalentiswhencashhasbeenfinallyused.

2.7 Contingent liabilities

Acontingentliabilityisapresentobligationthatarisesfrompasteventsbut isnot recognisedbecause it isnotprobablethatanoutflowofresourcesembodyingeconomicbenefitsorservicepotentialwillberequiredtosettletheobligation.ThePresident’sFundclassifiesits contingent liability aspeoplewhoweredeclaredvictimsbytheTRCandhavenotappliedforreparation.It is uncertain whether these people will apply forreparation.Contingent liabilitiesare included in thedisclosurenotes.

Thebasisforcalculationofthecontingentliability isR30000beingfixedamountforfinalreparationandan average amount of R2 932 being provision forinterim reparation as the interim reparation variesfromR2000toR5705duetonumberofpeopleinneedwithinthefamily.

The subsequent measurement of the contigentliabilities reduces on application for interim andfinal reparation. It will be derecognised when thePresident’s Fund is dissolved andmoney transferedto theDisasterRelief fundasper thePromotionofNational Unity and Reconciliation Act (Act No.34 of1995).

2.8 Related parties

Related parties are recognised when it is beingcontrolled by another entity and other entitiesare subject to common control. It includes keymanagement personnel which exercise significantinfluence in making decisions on financialinvestment.

Related party transactions are measured at actualcostandderecognisedwhen thePresident’sFund isdissolved.

2.9 Cash Flow statement

The cash flow statement is prepared according tothedirectmethod.

2.10 GRAP1 and GRAP 24 requires the fund topresent budget against actual information in theannualfinancialstatements,duetothenatureofthePresident’sFundandtheFundnothavingabudget,thisdisclosurehasnotbeenmade.

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Notes to the financial statements31 March 2015

2015 2014

R R

3. Investment revenue

Interestreceived(Fairvalueinvestments)-PIC 78,762,413 63,520,110

78,762,413 63,520,110

4. Surplus for the year

Operatingprofithasbeendeterminedaftertakingintoaccountthefollowingrevenueandexpenditureitems:

Revenue 78,762,413 63,520,110

InvestmentRevenue-Seenote3 78,762,413 63,520,110

Less: Expenditure 1,019,144 1,147,176

Interimreparations(Newapplications) 25,335 19,030

ManagementFees-PublicInvestmentCorporation 704,637 665,359

Finalreparations(Newapplications) 240,000 180,000

ExhumationandReburials 34,000 272,768

ServiceProvider-BDBDataBureau 8,224 7,172

BankCharges 2,948 2,846

Provisionforbaddebts-Expense 4,000 0

Surplus for the year 77,743,270 62,372,935

5. Trade and other receivables - Non exchange transactions

Reparationpaymentsrecoverable: 0 4,000

Accountsreceivable 277,264 277,264

Less:Provisionforbaddebts -277,264 -273,264

0 4,000


2015 2014

R R

6. Financial investments at Fair value

6.1 Public Investment Corporation

Openingbalanceasoriginallystated 1,198,303,742 1,138,448,992

Cost 1,198,303,742 1,138,448,992

Investmentincomereceivedduringfinancialyear 78,762,413 63,520,110

Drawingsduringtheyear 0 -3,000,000

Managementexpenses -704,637 -665,359

Tradingcash(classifiedascashandcashequivalent) -46,733,320 -45,884,539

Closing balance 1,229,628,198 1,152,419,203

Fairvalueatacquisitiondate 1,229,628,198 1,152,419,203

Unrealisedprofit/(losses)isthedifferencebetween“All-inmarketvalues”andthe“Cleanbookvalue”plus“Marketvalueinterest”.

AllMarketValue -1,229,628,198 -1,152,419,203

CleanBookValue 1,195,626,970 1,129,826,203

Difference -34,001,229 -22,593,000

Plus:MarketValueInterest 34,001,229 22,593,000

UnrealisedProfit/Losses -0 0

PIC Investments

MoneyMarket0-3months 609,359,862 455,163,610




1,229,628,198 1,152,419,203

6.2 Total financial investments at Fair value 1,229,628,198 1,152,419,203

7. Trade and other payables - Non exchange transactions

Accruals 854 812

Unidentified 385 385

1,239 1,197

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2015 2014

R R

8. Cash and cash equivalents

Cashandcashequivalentsconsistofcashonhandandbalanceswithbanksandinvestmentsinmoneymarketinstruments.Cashandcashequivalentsincludedinthecashflowstatementcomprisethefollowingstatementofamountsindicatingfinancialposition:

Cashonhandandbalanceswithbank 358,673 806,395

Short-terminvestments-Tradingcash 46,733,320 45,884,539

47,091,993 46,690,934

ThecarryingamountofCashandcashequivalentsapproximatestheirfairvalueduetotheirshort-termmaturity.

9. Accumulated surplus

Openingbalanceatthebeginingoftheyear 1,196,090,367 1,133,524,232

Surplusfortheyear 77,743,270 62,372,935

Prioryearerror(note13) 0 193,200

Balance at the end of the year 1,273,833,637 1,196,090,367

10. Cash generated from/(utilized in) operations

Cashreceiptsonbehalfofbeneficiaries 0 0

Cashpaidtobeneficiariesandcreditors -447,722 -2,995,874

Net cash flows from operating activities -447,722 -2,995,874

11. Related party transactions

TheDepartmentofJusticeandConstitutionalDevelopmentistheprincipalrelatedpartyandhasunderit’scontrolthePresident’sFund,ThirdPartyFund,Guardian’sFundandtheCriminalAssetRecoveryAccount(CARA),NationalProsecutingAuthority(NPA),SpecialInvestigatingUnitandLegalAidBoardasentities.

11.1 Department of Justice and Constitutional Development

Relationship:

AlladministrationcostsforthePresident’sFundarepaidforbytheDepartmentofJusticeandConstitutionalDevelopment.

Compensationofemployees 1,296,729 979,350

GoodsandServices 32,221 115,693

1,328,951 1,095,043

11.2 Key management personnel

Compensationofemployees 630,822 622,490

Households 0 64,065

630,822 686,555


2015 2014

R R

11.3 Public Investment Corporation

Relationship:

Intermsofsection42ofthepromotionofnationalunityandreconciliationAct34of1995,President’sFundinvesttheirmonieswithPIC.Detailsofthetransactionvaluesasstatedinnote3,4,6and8.

12. Contingent liabilities

VictimsidentifiedbytheTRCneedtoapplyforreparationsbeforetheyarerecognisedascreditors.Anuncertaintyexistastohowmanyvictimsmayapplyinthefuture.At31March2015theestimatedamountwasR140,947,081inrespectof4,280beneficiarieswhereasasat31March2014theestimatedamountwasR141,212,416inrespectof4,288beneficiaries.ThecontigentliabilityhasbeenrestatedwiththedifferenceofR64,316,351(1953beneficiaries).

13. Prior year error

TheTransactionisduetounderprovisionoftheCreditorsforthe2013/14financialyear.

Provisionoverstated 0 253,200

Provisionunderstated 0 -60,000

0 193,200

14. Provisions

Carryingamountatthebeginningoftheyear 3,022,574 5,729,971

Movementfortheyear -137,258 -2,514,197

Prioryearerror(Note13) 0 -193,200

Carrying amount at the end of the year 2,885,316 3,022,574

TheProvisionsaremadeintermsofSection47ofthePromotionofNationalUnityandReconciliationAct(ActNo34of1995)

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Notes to the Financial Statements 31 March 2015

15 Risk assessment 15.1 Introduction

As a client of the PIC, the President’s Fund specifies itsdesirable risk parameters in accordancewith its own riskappetite.This riskappetite informs the formal investmentmandate given to the PIC. The ultimate responsibility forinvestment risk management oversight lies with the PICandnotwiththePresident’sFund. 15.2 Market risk

Marketriskisthepotentiallossduetoadversemovementinthemarketvalueofassets.

The Entity’s activities expose it primarily to the risks offluctuationsininterestratesrisk.

Interestrateriskreferstotheriskthatthefairvalueoffuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarketinterestrates.

Market risk exposures are measured using sensitivityanalysis.Asensitivityanalysisshowshownetsurplus,and/ornetassetswouldhavebeenaffectedbychangesintherelevant riskvariable thatwerereasonablypossibleat thereportingdate. 15.3 Interest rate risk management

ThePresident’sFundinterestrateprofileconsistsofMoneyMarketaccountsandbankbalanceswhichexposetheEntitytofairvalueinterestrateriskandcashflowinterestraterisk,andcanbesummarisedasfollows: 15.4 Financial Assets

BankbalanceslinkedtoSouthAfricanprimerate MoneyMarketlinkedtoSouthAfricanprimerate ThemanagementofthemoneymarketinterestrateriskisdonebythePIC.

15.5 Interest rate risk

Thisriskisthepotentialfinanciallossasaresultofadversemovementsininterestratesthataffectthevalueofmoneymarket instruments. As a PIC client President Fund hasexposuretointerestrateriskthroughinvestmentsinmoneymarkets.

Sensitivity to interest ratemovements ismeasuredbytheduration of the fixed interest exposure. Such duration isdictatedinthePresident’sFundclientinvestmentmandatetoPIC,relativetotheappropriatebenchmark.

Furthermore,theseinvestmentmandatesprescribehowtheassetsshouldbemanagedbyPIC,inlinewithPresident’sFundliquidityneedsanditsliabilityprofile. 15.6 Credit risk

President’sFundinvestmentportfoliosareexposedtothepotentialforcredit-relatedlossesthatcanresultduetoanindividual,counterpartyorissuerbeingunableorunwillingtohonorcontractualobligations.

Tomitigatethisriskandminimizeexcessivecreditexposuretoonesingle counterparty, thePresident’sFundmandatetoPICstatesthatPICwillonlyinvestwithlocalcommercialbanksorinstitutionsthathaveacreditratingofatleast“A”fromoneof therecogniseddomesticand/or internationalcreditratingagencies.

15.7 Liquidity risk

Liquidity risk arises when there are insufficient liquidassetsavailabletoenablethePresident’sFundtomeetitsobligationswhendue.

ThePresident’s Fund current liquid assetholdingsof lessthan 3 months maturity amount to R609 million of thetotalportfoliowhichensuressufficientliquiditytopayoutmoniesduetobeneficiaries.


15.8 Operational risk

Operational risk is the risk of loss resulting frominadequate or failed internal processes, people, systemsandexternalevents.TheFund recognises thesignificanceof the operational inherent in all the Fund’s activities.This operational risk ismanagedwithin acceptable levelsthrough an appropriate level of management focus andresourceallocation. 15.9 Concentration risk

Concentrationrisk is theriskof lossesarisingduetopoordiversificationwithinfunds,whichcanresultinundesirableriskexposures.

The President’s Fund manages this risk through thePIC investment mandate, which dictates the level ofconcentration.Moneymarketinvestmentsarespreadacrossbankstoreduceanddiversifytheclient’sconcentrationrisk.

Acknowledgement

Our appreciation towards the loyal support and valuablecontributions of the various stakeholders is herebyappreciated.

Thefinancialstatementssetoutonpages1to14havebeenapprovedbytheAccountingOfficer.

_________________________ Ms. N. Sindane AccountingOfficer,President’sFund 31July2015

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RP343/2015ISBN: 978-0-621-44080-5

Tel:0123151111PrivateBagX81,Pretoria,0001

MomentumCentre,329PretoriusStreet,Pretoriawww.justice.gov.za @DOJCD_ZA

TheDepartmentofJusticeandConstitutionalDevelopment(DOJ&CD)

The President’s Fund

2014/2015

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