contents page · 2018-05-02 · contents page foreword by the minister of trade and industry.....3...

Contents Page

Foreword by the Minister of Trade and Industry..............................................3

Submission of the Annual Report to the Executive

Authority ........................................................................................................................4

Commissioner's Overview .......................................................................................5

1. General Information.........................................................................................9

2. Performance Information ............................................................................13

3. Financial Statements .....................................................................................51

Acronyms & Abbreviations..................................................................................112

• Vision .............................................................................................................................10

• Mission..........................................................................................................................10

• Values.............................................................................................................................10

• Legislative Mandate.................................................................................................11

• Governance Structure.............................................................................................12

Human Resource Oversight Report........................................................................33

2.1 Mandate..............................................................................................................14

2.2 Divisional Performance ................................................................................16

2.3 Performance against the Annual Performance Plan...........................38

TABLE OF CONTENTS

1 ANNUAL REPORT 2012/2013


The National Consumer Commission is the

youngest agency falling under the banner of “the

dti family”. After experiencing challenges faced

by a new organisation, the Commission took a

decision to redefine its strategic focus to be more

in line with the CPA, resulting in increasing

stability.

The Commission was established to be a voice for

the vulnerable consumer in country. It is

important that the Commission works harder

than ever before to ensure that its voice becomes

louder. It is therefore most encouraging to see the

improved relations between the Commission and

its stakeholders.

I note that the Commission obtained a qualified

audit from the Auditor-General SA. This was

mainly due to historical reasons over which the current leadership had no control and

proper financial systems and controls are now in place.

The South African consumer has very high expectations of the Commission. This is so

because the NCC possesses instruments that can deliver change in the economic lives of

South Africans. I therefore look forward to the NCC becoming entrenched in the economic

fabric of our country.

Dr Rob Davies, MP

Minister of Trade and Industry

20/8/2013

Minister's Foreword

Dr Rob Davies, MPMinister of Trade and Industry

08 Bauhinia Road

Berkely Office Park, Bld 10

National Consumer Commission

Highveld Technopark

Eco Park Centurion

Honorable Minister Dr Rob Davies (MP)

Department of Trade and Industry

Pretoria

Dear Honorable Minister

Re: Submission of NCC Annual Report 2012/2013

We refer to the provisions of the Public Finance Management Act and Shareholder

Compact. I confirm that we attach the annual report for the financial year 01 April 2012 to

31 March 2013. This also includes the performance of the National Consumer Commission

against targets.

Yours Faithfully

Mr Ebrahim Mohamed

Acting Commissioner


31/07/2013

ANNUAL REPORT 2012/2013 4

N A T I O N A L C O N S U M E R C O M M I S S I O N

The National Consumer Commission (NCC) has received

a qualified audit for the financial period under review.

The qualification was unavoidable due to historical

reasons. This largely stems from the theft of supply chain

documents relating to transactions entered into by the

NCC prior to my appointment as Acting Commissioner.

Despite genuine attempts, these files could not be

reconstructed. The theft occurred shortly after my

appointment and at a time when an “as is” audit was

being conducted at my request. The Auditor General,

despite its best efforts, was unable to audit these

transactions as it was expected to.

I was appointed as Acting Commissioner of the NCC by

the Honourable Minister (Minister) of the Department of

Trade and Industry (the dti) on 04 September 2012. The

NCC was, by this time, almost approaching the third quarter of the financial year under

review. The mood at the NCC following the exit of the former commissioner was

characterized by high levels of instability. This was exacerbated by a necessary “as is” audit

and a forensic investigation which commenced shortly after my acting appointment. The

vast majority of human resources and procurement files as well as a number of computers

were allegedly stolen from the NCC. However with the assistance, guidance and support of

Minister and the leadership of the Executive Authority, the NCC had begun to stabilize.

A significant portion of my time in the year under review was spent on crisis management.

With regard to the performance of the NCC during the year, some progress was made in

relation to the outputs/measurable objectives necessary to achieve the NCC's broader

strategic objectives, as contained in the NCC's annual performance plan. However, progress

has been limited in all divisions of the NCC and the majority of the deliverables have not

been met. Regrettably, the revision of the annual performance plan took place too late in the

year to implement the changes as envisaged. It is for this reason that the performance

information of the NCC, as contained herein, may not necessarily be fully reflective of all the

work undertaken by the NCC.

The Enforcement and Investigation Division of the NCC is one of the most critical

Overview by Acting Commissioner


Mr Ebrahim MohamedActing Commissioner


components of the NCC. Much of its work entails dealing directly with thousands of

consumer complaints. The focus of the NCC by then was the conciliation of complaints and

issuing of compliance notices. This approach was fraught with difficulty and resulted in

matters remaining unresolved. Business began challenging the compliance notices and

decisions of the NCC and this impacted severely on the financial resources of the NCC.

A number of these objections have been brought before the National Consumer Tribunal

(NCT). None of the decisions of the NCT favoured the NCC. The relationship with the NCT

had broken down. Some of the actions and decisions of the NCC resulted in huge

unbudgeted legal costs for the NCC.

Having regard to consumer policy, the mandate of the NCC and its existing resources, it was

apparent that the focus of the NCC was unsustainable and strategy had to be revised.

Throughout the year, the NCC remained under huge pressure regarding its human

resources. Only 32 approved positions out of 130 approved have been filled. In addition 37

others have been employed by the former commissioner that fall outside the approved

structure and which has resulted in financial and other burdens for the NCC and the

Executive Authority. Critical posts in virtually every division of the NCC could not be filled.

This obviously hampered the NCC's urgent need to recruit personnel with critical skills that

are required to propel the NCC towards delivering adequately on its mandate. Hence the

vacancy rate remains exceedingly high and is likely to remain this way for some time to

come.

A performance management system which was non- existent at the NCC was put in place in

the fourth quarter of the year under review.

Information Technology and network operability remained a challenge for much of the

year. The contact centre, procured by the NCC, was largely dysfunctional. This was

exacerbated by a financial dispute that has arisen between the NCC and the service

provider and the ever erratic service provided by Telkom. The NCC website remained

closed.

With regards to communications, monthly internal newsletters were produced and

circulated to staff. Regular meetings were held to keep staff abreast of developments and in

order to address their concerns.

Towards the latter part of the year, the NCC revised its strategic and annual performance


plans which have been approved by Minister. In revising these plans, conciliation of

disputes between business and consumers had to be removed as the Consumer Protection

Act (Act) specifically stipulates that the NCC “is responsible to…. promote the resolution of

disputes arising in terms of this Act, but is not responsible to intervene in or directly

adjudicate any such dispute”. It was agreed that a key mandate of the NCC, instead was to

investigate prohibited conduct. A further analysis revealed that much of the complaints

received by the NCC emanated from two distinct sectors, namely the general consumer

goods industry (furniture, appliances, etc.) and from the motor industry. These two sectors

accounted for approximately ninety percent of the complaints received by the NCC. It was

also established that consumers are primarily interested in having their disputes resolved

and within a very short space of time.

The revised strategic plan seeks to:

I) Shift conciliations to the respective industry bodies through a process of accreditation

of ombud schemes (where expertise and capacity in such matters reside);

ii) cease with conciliations incrementally until the conciliation mechanisms are

operational;

iii) work closely with provincial consumer protection authorities in dealing with

consumer disputes that arise within their respective provinces.

The intention with this approach was to firstly ensure that the NCC was not acting ultra

vires; secondly, to ensure that it uses its resources appropriately and thirdly to ensure that

the consumers do not approach the NCC as a forum of first resort thereby alleviating the

complaints burden. The motor, consumer goods and advertising industries responded

positively with codes and plans to largely relieve the NCC of the conciliation and mediation

burden relative to complaints, all at their own costs.

In order to deal with the existing volumes of complaints, a special project was declared. All

matters that fell outside the jurisdiction of the NCC were rejected. Arising from its not so

cordial deliberations with the NCT in the past, internal processes were revised by the NCC

so as to ensure that all matters dealt with by the NCC are procedurally correct. Meetings and

workshops were held internally and with the NCT to address this. Arrangements were

made for the “withdrawal” of matters that were before the Tribunal. This approach proved

to be successful.


As a result of this approach, the stakeholders, especially suppliers, are no longer adopting

an adversarial approach to the NCC. To the contrary, offers of assistance have been received.

Even though old compliance notices have fallen by the wayside, suppliers have largely

complied with the spirit thereof. Cellular telephone agreements, for example are now

compliant with the Act, leaving millions of consumers much better off.

The expenses of the NCC had increased exponentially. Much of these had resulted from

commitments that were not budgeted for appropriately or at all. The bulk of the

expenditure arose from legal costs which ran into millions of rands. The Department has

been most helpful in this respect by providing additional funds to settle these debts. The

financial division was targeted during the quarter to ensure that it is compliant with the

PFMA. Many strides have been made in this respect. The NCT has been helpful in providing

the NCC with its supply chain policy and procedures. Critical policies were adopted.

Despite the challenges, I am comforted by the fact that the NCC is now on the path in

fulfilling its given mandate. Genuine strides are being made to ensure that the NCC

functions optimally as soon as possible. I also wish to add that I am indeed committed to

clean governance and that I am certain that an unqualified audit will be achieved in the

following year.

I hereby wish to extend my sincere gratitude to the leadership of the dti for their support,

the Portfolio Committee on Trade and Industry for their patience and understanding,

Senior Management of the dti, more specially Director-General Mr Lionel October, Deputy

Director General, Ms Zodwa Ntuli and her team, Group COO, Ms Jody Scholtz, Group CFO,

Mr Kumaran Naidoo, Chief Director, Mr Marks Thibela and his team, The National Credit

Regulator (NCR) for training provided to NCC investigators, the NCT for the guidance and

support and last but not least, the staff of NCC who continue to strive to serve the

consumers of South Africa as best as they can.

Mr E Mohamed

Acting Commissioner


31/07/2013


1

GENERALINFORMATION

Vision

Mission

Values

In pursuance of it strategic mandate enshrined in the Act, the vision of the Commission is:

“To be the leading institution in consumer protection that is professional, responsive

and effective”

The mission of the National Consumer Commission is “To promote compliance with the

Consumer Protection Act through advocacy and enforcement, in order to ensure fair

business practice and to uphold the social and economic welfare of consumers”

Core values govern the National Consumer Commission's operations and relationships.

These core values remain constant and are not affected by the changes in operational

environment and management.

The National Consumer Commission stands to:

• Promote and maintain a high standard of professional ethics.

• Promote efficient, effective and economic use of resources.

• Provide service impartially, fairly, equitably and without bias.

• Be responsive to consumer needs and the public.

• Foster accountability and transparency.

• Accept responsibility for our own actions.

• Maximise and cultivate human capital development and practices.

• Promote broad public participation.


The Commissioner is responsible for Governance and day to day operation of the

organization with the assistance of a management team. The Audit Committee advises the

Commissioner on Governance matters. The Audit Committee is governed and operates

within the framework of the terms of the Audit Committee Charter. The Commissioner

reports directly to the Minister of Trade and Industry. The Parliamentary Portfolio

Committee on Trade and Industry exercises oversight responsibilities over the NCC.

The NCC was established in terms of section 85 of the Consumer Protection Act No. 68 of

2008, as an organ of state within the Public Administration and as an institution outside

Public Service with jurisdiction throughout the Republic of South Africa.

Legislative Mandate


The NCC's main role is:

• Protect consumers from hazards through advocacy, education and awareness;

• Improve consumer redress as envisaged in the Act;

• Protect consumers from unethical business practices and misconduct through law

enforcement and compliance;

• Conduct research for policy, legislative and regulatory improvement;

• Ensure the establishment of a fully functional and effective public entity.

Mr Narain KuljeethSeconded from the dti

Team: Commissioners Office


GOVERNANCE STRUCTURE

Accounting Authority:Commissioner

Executive Authority:Minister of Trade and Industry

Governance Audit Committee

2

PERFORMANCEINFORMATION

Mandate

The mandate of the National Consumer Commission is executed through strategic projects

which form the basis of the entity's business or operational plan. The projects that the NCC

undertakes relate to:

• Advocacy, Education and Awareness through

- Public awareness

- Sector Education

• Complaints Handling and Information System through

- Consumer Contact Centre

• Research and Development (R&D) through

- Industry and Customer Research

• Enforcement and Compliance through

- Industry Codes

- Codes of Practice

- Accreditation of Consumer Protection Groups

- Accreditation of ADR Agents

• Stakeholder Relationship Management through

- Formalized Memorandum of Understanding (MOU's)/Service Level Agreements

(SLA)

• Organizational Development through

- Development of all relevant organizational policies and standard operating

procedures (HR, IT, Finance, SCM, Internal Audit etc.)

- Organizational Design (Structures)

- Organizational Change Management

2.1


• Human Capital Management through

- Human Capital Development Strategy

- Internal Communication (Corporate Values)

• Performance Management System through

- Performance Management System

• Communication and Marketing through

- Media Engagements

• ICT Infrastructure and Network through

- NCC ICT Master Plan

- Contact Centre: Multi-media System

- Case Management System

• Financial Management through

- Financial Management System


2.2Programme Performance

2.2.1 Programme 1: Advocacy, Education and Awareness

Programme 1: Advocacy, Education and Awareness

Programme 2: Enforcement and Investigations

Programme 3: Research and Development

Programme 4: Legal Services

Programme 5: Corporate Services

Purpose of the Programme

The Advocacy, Education and Awareness Division is tasked

with ensuring that consumers are protected from hazards

through advocacy, education and awareness, stakeholder

relationship management as well as profiling the NCC as a

brand for consumer protection in SA.

This is done through the employ of various education

mechanisms targeted at the vulnerable consumer. Section

3(1)b of the Act stipulates the primary target market for

NCC activities as consumers:

• in remote and isolated areas;

• in low income communities;

• seniors, minors and persons with disabilities; and

• persons with limited literacy.


Ms Phumeza MlunguHead: Advocacy, Education

and Awareness Division

Mechanisms used include consumer targeted workshops as well as business focused

workshops and presentations aimed at facilitating a better understanding of the Act.

Media engagement in the form of responses and interviews is undertaken as well as

general communication both internally in the form of newsletters, and external

communication in the form of articles/media releases for placement with magazines and

newspapers. Brochures, booklets and pamphlets are also developed. NCC participation at

different forums is further facilitated in this unit.


Team: Advocacy, Education and Awareness

Key Achievements

Advocacy, Awareness and Education initiatives are huge cost drivers and the division had to

come up with creative means to deliver on its mandate due to cost considerations.

Partnerships were formed with other like institutions in order to minimize costs associated

with organizing its own workshops. The Division has targeted schools, churches,

government employees and has exhibited at shopping malls.

World Consumer Rights Day is celebrated all over the world in recognition of consumer

rights as first pronounced by the then President of the US JF Kennedy in 1962. The

theme for this year's consumer rights day was “Consumer Justice Now”. The NCC

recognizes that consumers cannot derive any justice without the knowledge and

understanding of their rights as contained in the Act. As a result the NCC focused on

commuters both of public and private transportation. During the day it increased

visibility and awareness of the NCC and consumer rights at major intersections in

Gauteng by handing out educational and awareness material and engaging with certain

consumers. An article was placed in the Commuter SA newspaper which is distributed

to train and taxi commuters in various provinces. Similar articles were also placed in

the Consumer Fair newspaper, the only consumer rights tabloid in the country.

The NCC has decided to build on the relationship already established with Sunnyside

Primary during Nelson Mandela Day 2011. School Consumer Clubs are created to

empower minors in their capacity as consumers to grow up to be wise consumers and

to begin to act as advocates for consumer rights within their communities from an

early age. Sunnyside primary has been engaged to pilot the very first school consumer

club and it was encouraging to experience the enthusiasm shown by learners wanting

�World Consumer Rights Day 2013

�School Consumer Club


to understand consumer rights and to participate as members of the club. Terms of

reference have been developed on the concept and NCC intends launching the school

club shortly.

The NCC has for the period under review decided to target government employees to

spread the message of consumer rights protection. We recognize that government

employees constitute a large number of economically active consumers and as such

should be adequately empowered to navigate the market for goods and services. We

have so far established relations with the dti, the department of public works, and

CoGTA through their wellness desks, first as a distribution point for information and

to participate during workshops aimed at ensuring financial fitness for government

employees. We forward articles, fact sheets for placement within their own internet

and intranet. The vulnerable consumer was further engaged through workshops and

distribution of material.

The National Consumer Commission spent its

67 minutes in celebration of Nelson Mandela

Day with the Society for the Blind in Hatfield,

Pretoria. This initiative was undertaken in

recognition of the consumer rights of persons

living with disabilities. Material on consumer

rights were printed in braille and distributed.

The NCC also participated in live radio

broadcasts to spread the message of consumer

rights.

�Consumer Education

�Nelson Mandela Day 2012


�Media Coverage

Media continues to be a key vehicle to reach a wide spectrum of consumers

throughout the country. The Commission has been invited to both radio and TV to

engage on consumer related topics. The NCC has been featured on SABC radio and TV

on numerous topics. These initiatives have proved to be effective in ensuring maximum

reach evidenced by the feedback the NCC receives from general consumers on the

topics covered.

Key Challenges Proposed Solutions

Limited reach of consumer messages Expedited accreditation process of

Consumer Protection Groups.

High costs associated with consumer

education

Partnerships with other similar

regulators for cost sharing.

Human Resource Constraints Filling of key positions within the

division.


2.2.2 Programme 2: Enforcement and Investigations


Key Achievements

The Enforcement and Investigations Division (EID) of the

NCC is mandated to ensure enforcement of the Act. The

Divisional strategy in ensuring compliance is twofold, namely

Complaints Handling and Investigations. The EID, in terms of

the approved structure comprises of three Units, namely,

Complaints Handling, Alternative Dispute Resolution (ADR)

and Investigations.

Complaints Handling in the Commission is meant to give

effect to one of the key purposes of the Consumer Protection

Act 68 of 2008 is to promote and advance the social and

economic welfare of consumers in South Africa by, amongst

others: providing for a consistent, accessible and efficient

system of consensual resolution of disputes arising from

consumer transactions; as well as providing for an accessible, consistent, harmonized,

effective and efficient system of redress for consumers.

The strategy for the financial year 2012/2013, with regards to investigations by the NCC is

to conduct industry/sector wide investigations in terms of the Act.

The sectors identified at the beginning of the year were:

• ICT Sector (Information and Communications Technology)

• Medical and Pharmaceutical

• Retail and Manufacturing

The EID of the NCC has assisted thousands of consumers in the year under review

through its complaints handling processes. The total amount recovered for consumers

�Complaints Handling

Ms Prudence MoilwaHead: Enforcement andInvestigations Division


as a result of the NCC's intervention is R20 288 524.07. These are monies actually

refunded to consumers through the Commission's intervention. Other achievements

that cannot be quantified in monetary terms include restored relationships, product

replacements and improved complaints handling systems by suppliers as a result of the

NCC's intervention.

Contact Centre- This is the first port of call of the NCC where complaints are lodged.

During the year under review the contact centre output is as follows:

�The Complaints Handling Statistics

Team: Enforcement and Investigations


GRAPH A below depicts the comparison of Call Centre enquiries per quarter

in the financial year under review.

Table A: Depicts Call Centre enquiries per quarter

Year 2012/2013 Total per quarter

Quarter One 10 945

Quarter Two 6 991

Quarter Three 4 581

Quarter Four 3 971

Total 26 488

An average of 360 calls is received every working day by the NCC.



Quarter One 572

Quarter Two 574

Quarter Three 536

Quarter Four 605

Total 2 287

�Walk-in Statistics

There has been a steady increase in the number of walk-ins in the past year as depicted

by TABLE B. The growth can be attributed to more and more people becoming aware of

the services of the office.

TABLE B below depicts Walk-in enquiries per quarter.


Some of the complainants come to the NCC offices in person to lodge their complaints. In

the year under review an average of 25 people a day approached the office for assistance

which is a 120% increase from the previous financial year. This figure excludes those who

are invited to have their disputes resolved through Alternative Dispute Resolution.

Complaints received from April 2012 to March 2013 were received by way of email,

walk-ins, post and via the call center; a total number of 9518 matters were received

during this period.

�Complaints Received


GRAPH B below depicts average number of complainants visiting the NCC

(walk-ins) per quarter

�Investigations

There has been an improvement in compliance with the Act in the sectors identified for

investigation. In the ICT sector the NCC continued engaging with Pay TV and mobile

telephony companies to ensure compliance with the provisions of the Act (Subscriber

agreements) following the cancellation of the compliance notices. The subscriber

agreement are now compliant with the Act except for section 63 that provides for the

expiry of prepaid certificates, cards, credit, voucher or similar devices.

Inspection of Retail Outlets have proved effective as compliance with the Act has

improved. The inspections were conducted in order to enforce the refund and layby

requirements. Of the thirty five (35) follow up inspections carried out, most have

amended their refund and layby policies so as to align with the Act except for

fourteen(14) which were not in alignment.

Medical and pharmaceutical investigation focused primarily on clauses of medical

aid membership agreements. The specific waiting period clause remains unresolved

but discussions with the Council of Medical Schemes is continuing with the intention of

resolving this amicably. The referral to the Equality Court has therefore been reviewed.



Quarter One 3 340

Quarter Two 2 453

Quarter Three 2 095

Quarter Four 1 630

Total 9518

TABLE C below depicts quarterly breakdown of new complaints received.

Key Challenges Proposed Solutions

Lack of Contact Centre System Procure contact Centre system

Increase personnel for calls intake

Lack of resources (no computers for

investigators)

Procure computers

Interruption of e-mail and internet

services

Procurement of reliable internet services by

the NCC

No motor vehicles for complaints

handling and investigation meetings

Procure NCC vehicles

Shortage of Skills for complaints

Handling

Provide training for existing staff

Recruit personnel with legal qualification and

experience in Consumer Protection

Shortage of investigations Staff Fill critical positions


Product Safety recalls are also monitored by EID. Notifications are forwarded to the

Division. Ford registered three (3) recalls, relating to Ford Figo, Ford Ikon and Ford

Ranger. Bose Corporation (Speakers) registered one (1) recall. Nissan South Africa

registered one (1) recall (Qashqai). Stryker South Africa recalled the manual surgical

instrument IFU. Virbac RSA recalled a Biotech Micro-chip. Toyota South Africa recalled

Hino trucks, pick up and tipper trucks on two (2) occasions.

2.2.3 Programme 3: Research and Development

It is stated in Section 3(1) of the Act that one of the purposes

of the CPA is to promote and advance the social and economic

welfare of consumers in South Africa by: - conducting

research and proposing policies to the Minister in relation to

any matter affecting the supply of goods and services,

including proposals for legislative, regulatory or policy

initiatives that would improve the realization and full

enjoyment of their consumer rights. Furthermore, Research

Division is also empowered by Section 96 to increase public

knowledge of the nature and dynamics of the consumer

market.

The purpose of the Division is to conduct research and

propose policies to the Minister in relation to any matter affecting the supply of goods and

services, including proposals for legislative, regulatory or policy initiatives that would

improve the realization and full enjoyment of their consumer rights.

The Research Division is a Division within the National Consumer Commission tasked with

offering research services to the NCC and is responsible for the following outputs as per the

annual performance plan:

• Number of consumer studies conducted (three);

• Industry research (three);

Due to budgetary and human resources constraints the consumer studies could not be

conducted. However, the Research Division conducted research on the following

industries:


Key achievements

Mr David RailoHead: Research Division


• Health and Medical industry

• Timeshare; and

• Travel and Tourism.

The key challenge faced during the financial year was due to lack of adequate funds.

Key Challenges

Team: Research


2.2.4 Programme 4: Legal Services

The Legal Division was initially primarily tasked with

defending matters before the NCT and in various courts. Due

to the fact that the NCT has found that due process was not

followed by the NCC in issuing compliance notices, the

approach by the Division was revised. This resulted in the

Division concentrating on applications for accreditation of

the Industry Codes in line with the new strategic direction.

The Legal Division is mandated to ensure enforcement of the

Act. Its tasks are the following:

• to bring applications to the NCT for declaration of various

conduct contrary to the Act as prohibited conduct;

• to provide legal opinions and advice to consumers; businesses; other divisions within

the NCC, especially investigations; and

• to conduct various projects related to the Opt-Out Register; establishment of the Codes

of Good Practice; Accreditation of Industry Codes and to enforce the product labeling

requirements of the Act.

The division is integral in improving the reputation and image of the NCC. It has been at the

forefront of major and strategic meetings held with consumer bodies, industry, and

regulatory authorities in an effort to find ways of improving the service that all

stakeholders render to the actual beneficiary of the Act which is the Consumer. The division

has also played a pivotal role with regard to investigations processes within the

Enforcement and Investigations division in order to ensure proper handling of

investigations which would determine the successes of failures of the legal division at the

NCT in the future. Lessons have been learnt from various matters that the NCC lost at the

NCT. Major service contracts have been amended for the benefit of Consumers by the

division.


Key achievements

Mr Andy ThupayatlaseHead: Legal Division


Challenges

The challenge that the division faced had been related to budgetary constraints due to the

high legal costs incurred. As a result, various projects, for example, the codes of practice in

terms of section 93 as well as the country of origin project did not receive adequate

attention.

Team: Legal Services


2.2.5 Programme 5: Corporate Services

The Corporate Services Division is critical to the operation of

the NCC. In that, it is responsible for Finance, Supply Chain,

Human Resources, Information Technology and Records

Management.

Policies and standard operating procedures within the NCC

have been established and reviewed in the current financial

year. Additional equipment and software are being procured

to enhance the NCC's IT infrastructure. A Disaster Recovery

Plan has been developed but not yet implemented. A Risk

Management Plan and Strategy has been drafted and

financial policies and systems are now in place.

Key Achievements

Mr Kgabo MantshoHead: Corporate Services

Team: Corporate Services


Challenges/Solutions

Challenges Solutions

Employees not reading, understanding or

complying with policies.

Training of employees via workshops.

The NCC has not met its target to employ

60% of the women to be appointed in the

organisation

Female appointments will be prioritized

when appointing new employees

Performance management not fully

implemented.

A performance management system put in

place in the last quarter to be fully

implemented. Training to be conducted by

Human Resources in the new financial

year to assist employees to understand

performance contracts.

Lack of adequate financial systems and

controls.

Full implementation of financial systems

and processes in new financial year with

assistance of Executive Authority.

Human Resource Oversight Report

The strategic focus of Human Resources within the NCC strives to assist the NCC in meeting

its strategic objectives and intends inculcating a high performance culture in the NCC.

A major focus over the past year has been on developing team work to promote a set of

common, integrated, cultural and behavioral values and norms across the organization.

The NCC has been confronted by a number of organizational challenges, including the lack

of a performance management system for much of the year under review, lack of certain

skilled staff, and lack of formal training programmes.


Year as

31 March 2013

Staff on

Approved

Structure

Staff Outside

Approved

Structure

Contract

WorkersSecondment

Total Staff

Complement

31 March 2013 32 33 2 1 68

Staff Complement

The NCC has an approved structure of 132 positions but at the end of March 2013 the staff

complement was 68 including the 33 employees that fell outside the structure:


Staff Breakdown

GRAPH 1 : Employment Equity Profile

GRAPH 2: Employment and Vacancy by Programme


10

1

38

11

0

33

10

0

12

3

0

10

4

00

5

10

15

20

25

30

35

40

0

EMPLOYMENT AND VACANCIES BY

PROGRAMME AS AT 31 MARCH 2013

OFF

ICE

OF

THE

COMMIS

SIO

NER

ADVOCACY, E

DUCATI

ON

AND A

WAREN

ESS

ENFO

RCEM

ENT

AND

INVES

TIGATI

ON

LEGAL

SER

VIC

ES

RES

EARCH A

ND

DEV

ELOPMEN

T

Salary band Number of employees Type of termination

Senior Management (SL 13-16) 1 End of contract

Highly skilled supervision (SL 9-12) 2 Resignation/Transfer

Skilled (SL 3-5) 3 Resignation

GRAPH 3: Employment and Vacancies by Salary Band


NUMBER OF POSTS

LOW

ER (L

1-2

)

SKIL

LED (SL

3-5

)

HIG

HLY

SKIL

LED

PRODUCTI

ON

(SL

6-8

)

HIG

HLY

SKIL

LED

SUPER

VIS

ION

(SL

9-1

2)

SEN

IOR

MANAGEM

ENT

(SL

13-1

6)

NUMBER OF POSTSFILLED

NUMBER OF POSTSFILLED ADDITIONALTO THE ESTABLISHMENT

VACANCY RATE

Terminations for the Period 01 April 2012 to 31 March 2013

Challenges and solutions

• Performance Management Systems: After the approval of a revised new strategic

plan, the organization prioritized the adoption of a revised Annual Performance Plan

which later cascaded down to an operational plan and thereafter the performance

contracts were developed.

• The Training and Development: The organization did not develop and implement an

annual training plan. There was no budget allocated for training and development,

capacity building was achieved through on-the job training and job rotation.

• Insufficient Staff: The organization is operating with less than half of its approved

structure. Certain critical positions were identified and advertised at the end of

financial year namely: Company Secretary, Deputy Manager Finance, HR Practitioner

and Systems Administrator.

COMMISSIONERVacant

DEPUTY COMMISSIONERMr Ebrahim Mohamed

COMPANY SECRETARYVacant

DIVISIONAL HEADRESEARCH ANALYSIS

Mr David Railo

DIVISIONAL HEADEDUCATION

Ms Phumeza Mlungu

CHIEF FINANCIALOFFICER

Mr Kgabo Mantsho

DIVISIONAL HEADLEGAL SERVICES

Mr Andy Thupayatlase

DIVISIONAL HEADENFORCEMENT &INVESTIGATIONS

Ms Prudence Moilwa


NCC Management Organisational Chart


1 B

usi

nes

s d

ay

s in

clu

de

Mo

nd

ay

to F

rid

ay

incl

usi

ve e

xcep

t in

th

e ca

se o

f o

ffic

ial

pu

bli

c h

oli

da

ys i

n S

ou

th A

fric

a

Co

mp

lain

ts r

egis

tere

d

and

an

alys

ed

Per

cen

tage

of

rece

ived

com

pla

ints

reg

iste

red

an

d

anal

ysed

wit

hin

a

pre

def

ined

tim

e p

erio

d

New

KP

I2

5 %

of

rece

ived

com

pla

ints

an

alys

ed

wit

hin

ten

bu

sin

ess

day

s o

f re

ceip

t

19

%T

he

asse

ssm

ent

and

an

alys

is

on

ly b

egan

in Q

3 a

nd

Q4

aft

er

rev

iew

of

the

stra

tegi

c p

lan

.

Co

mp

lain

ts s

ettl

emen

t

con

clu

ded

tim

eou

sly

Ave

rage

nu

mb

er o

f

bu

sin

ess

day

s t

o f

acil

itat

e

sett

lem

ent

of

com

pla

ints

and

to

co

mm

un

icat

e

ou

tco

me

of

sett

lem

ent

1

New

KP

I8

04

7%

Inad

equ

ate

Hu

man

res

ou

rces

and

IT

Su

pp

ort

.

No

tice

of

refe

rral

an

d

no

n-r

efer

ral i

ssu

ed

tim

eou

sly

Per

cen

tage

of

com

pla

ints

refe

rred

wit

hin

def

ined

turn

-aro

un

d t

imes

50

% o

f re

ferr

als

wit

hin

20

bu

sin

ess

day

s

9%

Ref

erra

ls w

ere

inte

nsi

fied

in Q

3

and

Q4

aft

er r

evie

w o

f th

e

stra

tegi

c p

lan

.

Ou

tpu

t P

erf

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ica

tor/

Me

asu

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ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Pe

rfo

rma

nce

ag

ain

st t

he

An

nu

al

Pe

rfo

rma

nce

Pla

n

Str

ate

gic

Ob

ject

ive:

To

pro

mo

te c

om

pli

an

ce w

ith

th

e C

on

sum

er

Pro

tect

ion

Act

Lin

ke

d o

utc

om

e o

f th

e d

ti: E

nfo

rced

fair

bu

sin

ess

pra

ctic

es.

Lin

ke

d o

utc

om

e o

f Go

ve

rnm

en

t: C

reat

e a

bet

ter

Sou

th A

fric

a an

d c

on

trib

ute

to a

bet

ter

and

saf

er A

fric

a an

d W

orl

d.

2.3

Inve

stig

atio

ns

com

ple

ted

an

d r

epo

rts

issu

ed

Rea

ctiv

e In

vest

igat

ion

s:

Nu

mb

er o

f m

atte

rs

esca

late

d f

or

inve

stig

atio

n

that

are

fin

alis

ed

New

KP

I9

03

6 I

nve

stig

atio

ns

app

rove

d a

nd

cert

ific

ated

in t

he

latt

er p

art

of

the

year

un

der

rev

iew

.

Inve

stig

atio

ns

Inco

mp

lete

-

Inve

stig

atio

ns

wer

e ap

pro

ved

in

the

fou

rth

qu

arte

r o

f th

e ye

ar

un

der

rev

iew

.


Ou

tpu

t P

erf

orm

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ce

Ind

ica

tor/

Me

asu

reB

ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Po

licy

on

acc

red

itat

ion

of

con

sum

er

pro

tect

ion

gro

up

s

dev

elo

ped

an

d

imp

lem

ente

d

Po

licy

on

acc

red

itat

ion

of

con

sum

er p

rote

ctio

n

gro

up

s d

evel

op

ed a

nd

imp

lem

ente

d

New

KP

ID

evel

op

dra

ft p

oli

cy

on

acc

red

itat

ion

of

con

sum

er p

rote

ctio

n

gro

up

s

No

t ac

hie

ved

.P

roje

ct m

ove

d t

o n

ew f

inan

cial

year

du

e to

late

incl

usi

on

in

rev

ised

AP

P.

Res

earc

h c

on

du

cted

and

rep

ort

s is

sued

Nu

mb

er o

f re

sear

ch

rep

ort

s co

mp

lete

d a

nd

sign

ed o

ff b

y t

he

exec

uti

ve

auth

ori

ty

New

KP

I3

Co

mp

lete

d t

hre

e (3

) se

cto

r re

sear

ch

stu

die

s in

th

e fo

llo

win

g se

cto

r

ind

ust

ries

:

-H

ealt

h a

nd

Med

ical

In

du

stry

-T

imes

har

e; a

nd

-T

rave

l an

d T

ou

rism

.

Ind

ust

ry 1

: He

alt

h a

nd

Me

dic

al

Du

rin

g th

e fi

nan

cial

yea

r u

nd

er

rev

iew

, th

e D

ivis

ion

un

der

too

k

rese

arch

on

ove

rbo

ok

ing

in b

oth

th

e

pu

bli

c an

d t

he

pri

vate

ho

spit

als

and

clin

ics.

Th

e p

urp

ose

of

the

rese

arch

was

to

inve

stig

ate

if t

her

e is

con

trav

enti

on

of

Sect

ion

47

(3)

of

the

CPA

(o

vers

elli

ng

and

ove

rbo

ok

ing)

.

Th

e re

sear

ch s

eem

s to

ind

icat

e th

at

ove

rsel

lin

g in

ho

spit

als

and

cli

nic

s is

a

Tar

get

no

t fu

lly

ach

ieve

d a

s

rese

arch

no

t ap

pro

ved

by

Exe

cuti

ve A

uth

ori

ty.

Nu

mb

er o

f p

roac

tive

inve

stig

atio

ns

con

du

cted

New

KP

I9

3 in

vest

igat

ion

s fi

nal

ized

an

d r

epo

rts

app

rove

d b

y t

he

Co

mm

issi

on

er.

Inve

stig

atio

ns

Inco

mp

lete

Inve

stig

atio

ns

wer

e ap

pro

ved

in

the

fou

rth

qu

arte

r o

f th

e ye

ar

un

der

rev

iew

.

Ind

ust

ry c

od

es

reco

mm

end

ed f

or

accr

edit

atio

n in

a

tim

eou

s m

ann

er

Tu

rnar

ou

nd

tim

e fo

r th

e

reco

mm

end

atio

n o

f co

des

to t

he

Min

iste

r fr

om

dat

e o

f

rece

ipt

of

the

cod

es

New

KP

IR

eco

mm

end

atio

n o

f

all c

od

es t

o M

inis

ter

wit

hin

6 m

on

ths

of

rece

ipt

Th

ree

app

lica

tio

ns

rece

ived

in t

erm

s

of

the

guid

elin

es in

Q3

an

d Q

4.

On

e ap

pli

cati

on

fo

r ex

emp

tio

n

rece

ived

, pro

cess

ed a

nd

ad

vic

e gi

ven

to t

he

Min

iste

r.

Par

tial

ly a

chie

ved

du

e to

lack

of

hu

man

res

ou

rce.

Inve

stig

atio

ns

com

ple

ted

an

d r

epo

rts

issu

ed -

co

nti

nu

ed

Ind

ust

ry 2

: Tim

esh

are

Du

rin

g th

e fi

nan

cial

yea

r u

nd

er

rev

iew

, th

e R

esea

rch

Div

isio

n

con

du

cted

res

earc

h o

n t

he

Tim

esh

are

ind

ust

ry. I

n t

his

res

earc

h t

he

focu

s

was

on

co

mp

lian

ce b

y t

he

Tim

esh

are

ind

ust

ry t

o t

he

CPA

. Th

e m

ain

sec

tio

ns

of

the

CPA

th

at a

ffec

t th

e T

imes

har

e

ind

ust

ry a

re:

-Se

ctio

n 1

4 –

Exp

iry

an

d r

enew

al o

f

fixe

d t

erm

agr

eem

ents

-Se

ctio

n 4

8 –

Un

fair

, un

reas

on

able

,

and

un

just

co

ntr

act

term

s an

d

con

dit

ion

s

-Se

ctio

n 4

9 –

No

tice

s re

qu

ired

fo

r

cert

ain

ter

ms

and

co

nd

itio

ns

Th

e re

sear

ch s

eem

s to

ind

icat

e th

at

ther

e is

no

n-c

om

pli

ance

wit

h t

he

CPA

by

th

e T

imes

har

e in

du

stry

. An

inve

stig

atio

n is

un

der

way

to

pro

be

furt

her

into

th

e in

du

stry

.

Res

earc

h c

on

du

cted

and

rep

ort

s is

sued

- co

nti

nu

ed

Ou

tpu

t P

erf

orm

an

ce

Ind

ica

tor/

Me

asu

reB

ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

com

mo

n p

ract

ice

is S

ou

th A

fric

a. I

t is

reco

mm

end

ed t

hat

th

ere

sho

uld

be

a

con

tin

ual

co

nsu

mer

ed

uca

tio

n a

nd

awar

enes

s to

bo

th c

on

sum

ers

and

sup

pli

ers.

Ind

ust

ry 3

: Tra

ve

l a

nd

To

uri

sm

Ind

ust

ry

Du

rin

g th

e fi

nan

cial

yea

r u

nd

er

rev

iew

, th

e R

esea

rch

Div

isio

n

con

du

cted

a r

esea

rch

stu

dy

on

th

e

Tra

vel a

nd

To

uri

sm (

ho

tels

) In

du

stry

.

Th

is r

esea

rch

fo

cuse

d o

n in

du

stry

com

pli

ance

wit

h t

he

pro

vis

ion

s o

f th

e


Ou

tpu

t P

erf

orm

an

ce

Ind

ica

tor/

Me

asu

reB

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lin

e

Info

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rge

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12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

CPA

, ty

pes

of

com

pla

ints

rec

eive

d b

y

the

NC

C a

nd

ap

pli

cab

le s

ecti

on

s o

f th

e

CPA

th

at a

re r

elev

ant

to t

he

ho

tel

ind

ust

ry w

as a

lso

co

nsi

der

ed. T

he

foll

ow

ing

sect

ion

s o

f th

e C

PA a

re

app

lica

ble

to

th

e h

ote

ls:

-S

ect

ion

17

: Co

nsu

mer

s ri

ghts

to

can

cel a

dva

nce

res

erva

tio

n,

bo

ok

ing,

or

ord

er.

-S

ect

ion

40

: Un

con

scio

nab

le

con

du

ct.

-S

ect

ion

41

: Fal

se, m

isle

adin

g o

r

dec

epti

ve r

epre

sen

tati

on

s.

-S

ect

ion

47

: Ove

r-se

llin

g an

d O

ver-

bo

ok

ing.

-S

ect

ion

54

: Co

nsu

mer

's r

igh

ts t

o

dem

and

qu

alit

y s

erv

ices

.

Th

e re

ach

see

ms

to in

dic

ate

that

th

e

Ho

spit

alit

y I

nd

ust

ry d

oes

no

t co

mp

ly

wit

h c

erta

in p

rov

isio

ns

of

the

CPA

.

It is

rec

om

men

ded

th

at t

her

e sh

ou

ld

be

con

tin

ual

co

nsu

mer

ed

uca

tio

n a

nd

awar

enes

s to

bo

th c

on

sum

ers

and

sup

pli

ers.

Do

cum

ents

pre

par

ed a

nd

pre

sen

ted

to

Co

mm

issi

on

er.

Res

earc

h c

on

du

cted

and

rep

ort

s is

sued

- co

nti

nu

ed

Co

nsu

mer

aw

aren

ess

init

iati

ves

con

du

cted

Nu

mb

er o

f co

nsu

mer

awar

enes

s in

itia

tive

s

con

du

cted

New

KP

I1

2P

ub

lica

tio

ns:

4 F

act

shee

ts/4

Bu

sin

ess

Cir

cula

rs o

n:

righ

t to

pri

vacy

; ri

ght

to c

ho

ose

; rig

ht

to d

iscl

osu

re o

f in

form

atio

n;

righ

t to

fair

an

d r

esp

on

sib

le m

ark

etin

g; r

igh

t

to f

air

and

ho

nes

t d

eali

ngs

; rig

ht

to

fair

just

an

d r

easo

nab

le t

erm

s an

d

Tar

get

ach

ieve

d


Ou

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t P

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Ind

ica

tor/

Me

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Info

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12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Co

nsu

me

r W

ork

sho

ps

12

Co

nsu

mer

ed

uca

tio

n w

ork

sho

ps

wer

e co

nd

uct

ed f

or

the

you

th, w

ard

cou

nci

llo

rs, c

om

mu

nit

y m

emb

ers

via

com

mu

nit

y o

rgan

isat

ion

s

Co

mm

un

itie

s in

So

wet

o w

ere

also

vis

ited

at

the

inv

itat

ion

of

cou

nci

llo

rs

(War

d 6

2 C

om

mu

nit

y).

Go

vern

men

t

dep

artm

ent

emp

loye

es w

ere

also

reac

hed

fo

r co

nsu

mer

wo

rksh

op

s i.e

.

Pu

bli

c W

ork

s, P

ub

lic

Serv

ice

Co

mm

issi

on

. An

aw

aren

ess

wo

rksh

op

was

hel

d f

or

peo

ple

liv

ing

wit

h

dis

abil

itie

s to

(D

EA

FSA

), e

du

cati

ng

them

ab

ou

t th

eir

con

sum

er r

igh

ts.

Tar

get

exce

eded

con

dit

ion

s; r

igh

t to

fai

r va

lue,

go

od

qu

alit

y a

nd

saf

ety

; su

pp

lier

acco

un

tab

ilit

y a

nd

ho

w t

o lo

dge

a

com

pla

int.

A b

oo

kle

t o

n t

he

8 b

asic

co

nsu

mer

righ

ts p

rod

uce

d f

or

LSM

1-4

an

d

pro

vid

ing

a gr

aph

ic p

rese

nta

tio

n o

f

the

mes

sage

s in

a s

tory

fo

rm w

as

pri

nte

d a

nd

dis

trib

ute

d t

o s

cho

ol

chil

dre

n, p

erso

ns

wit

h d

isab

ilit

ies,

gove

rnm

ent

off

icia

l an

d r

ura

l

com

mu

nit

ies.

Co

nsu

mer

aw

aren

ess

init

iati

ves

con

du

cted

- co

nti

nu

ed

Sp

eci

al

Pro

ject

s

Th

e N

CC

als

o c

eleb

rate

d t

he

Nel

son

Man

del

a D

ay 2

01

2 w

ith

th

e SA

Nat

ion

al C

ou

nci

l fo

r th

e B

lin

d w

her

e

bo

ok

lets

on

co

nsu

mer

rig

hts

wri

tten

in b

rail

le w

ere

han

ded

ove

r. P

erso

n t

o

per

son

co

nta

ct w

as m

ade

wit

h 6

00

con

sum

ers

du

rin

g th

e w

ork

sho

ps.


Ou

tpu

t P

erf

orm

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Ind

ica

tor/

Me

asu

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e

Info

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rge

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/1

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ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Bu

sin

ess

Wo

rksh

op

s

3 B

usi

nes

s fo

cuse

d w

ork

sho

ps

con

du

cted

to

pro

mo

te v

olu

nta

ry

com

pli

ance

tar

gete

d a

t th

e T

ou

rism

sect

or.

Wo

rksh

op

s al

so c

on

du

cted

fo

r

the

Pre

tori

a M

etro

Rai

l an

d t

he

Dep

t.

Pu

bli

c W

ork

s. A

pre

sen

tati

on

was

con

du

cted

fo

r th

e SA

Po

ult

ry

Ass

oci

atio

n.

Tar

get

exce

eded

Wo

rld

Co

nsu

mer

Rig

hts

Day

20

13

:

Th

e N

CC

Rai

sed

aw

aren

ess

spec

ific

ally

for

pri

vate

an

d p

ub

lic

tran

spo

rt

com

mu

ters

by

hav

ing

a b

litz

at

maj

or

inte

rsec

tio

ns-

Gau

ten

g w

her

e

bro

chu

res

on

th

e R

igh

ts t

o

Info

rmat

ion

wer

e d

istr

ibu

ted

to

mo

tori

sts

and

tra

in c

om

mu

ters

. 3

Art

icle

s o

n c

on

sum

er r

igh

ts, t

arge

ted

at e

du

cati

ng

con

sum

ers

them

ed in

lin

e w

ith

co

nsu

mer

rig

hts

as

stip

ula

ted

in t

he

CPA

wer

e d

evel

op

ed

and

pu

bli

shed

in t

he

SA C

om

mu

ter

Mag

azin

e (d

istr

ibu

ted

to

tra

in a

nd

tax

i

com

mu

ters

) an

d t

he

Co

nsu

mer

Fai

r

mag

azin

e.

Co

nsu

mer

aw

aren

ess

init

iati

ves

con

du

cted

- co

nti

nu

ed

Ma

ll/

Tra

in/

Ta

xi/

Ex

hib

itio

ns

Th

e C

om

mis

sio

n h

as e

xhib

ited

in 2

sho

pp

ing

mal

ls (

Ree

ds,

Ire

ne:

a f

oo

t

cou

nt

for

mal

l pat

ron

du

rin

g th

e m

all

exh

ibit

ion

s w

as 1

40

00

co

nsu

mer

s) in

and

aro

un

d G

aute

ng

and

has

par

tici

pat

ed d

uri

ng

the

dti

op

en d

ay

exh

ibit

ion

hel

d in

Ham

ansk

raal

an

d

Die

psl

oo

t; a

s w

ell a

s at

th

e C

OG

TA

Tar

get

ach

ieve

d


Ou

tpu

t P

erf

orm

an

ce

Ind

ica

tor/

Me

asu

reB

ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Ca

pa

cita

tio

n o

f C

on

sum

er

Pro

tect

ion

Gro

up

s

A P

rop

osa

l was

sen

t to

Wit

s L

aw

sch

oo

l to

inco

rpo

rate

CPA

into

th

e

lega

l cu

rric

ulu

m f

or

hig

her

lear

nin

g.

Th

e p

rop

osa

l wo

uld

als

o p

rov

ide

for

a

Tra

inin

g M

anu

al t

o b

e d

evel

op

ed f

or

trai

nin

g o

f C

on

sum

er P

rote

ctio

n

Gro

up

s (C

PG

) in

lin

e w

ith

th

e A

ct.

Dis

cuss

ion

s w

ere

ente

red

into

wit

h

the

inte

nti

on

of

dev

elo

pin

g co

urs

e

con

ten

t fo

r p

rese

nta

tio

n a

t th

e W

its

Law

Sch

oo

l.

Fu

nd

ing

Pro

po

sal f

or

CP

G C

apac

ity

Bu

ild

ing

was

dev

elo

ped

an

d le

tter

s

forw

ard

ed t

o f

un

der

s fo

r d

on

or

fun

din

g su

pp

ort

.

Tar

get

mo

ved

to

new

fin

anci

al

year

Sch

oo

l C

on

sum

er

Clu

b

Th

e Su

nn

ysid

e P

rim

ary

Sch

oo

l was

form

ally

en

gage

d f

or

pu

rpo

ses

of

esta

bli

shin

g th

e fi

rst

sch

oo

l co

nsu

mer

clu

b. T

erm

s o

f R

efer

ence

wer

e

dev

elo

ped

as

a b

lue

pri

nt

for

the

pro

ject

. An

intr

od

uct

ory

pre

sen

tati

on

was

do

ne

for

Gra

de

6 a

nd

7 a

nd

th

e

lear

ner

s sh

ow

ed k

een

inte

rest

by

regi

ster

ing

thei

r n

ames

fo

r th

e cl

ub

.

Tar

get

ach

ieve

d

Co

nsu

mer

aw

aren

ess

init

iati

ves

con

du

cted

- co

nti

nu

ed

Fin

anci

al W

elln

ess

even

t. T

he

Co

mm

issi

on

was

als

o p

art

of

the

pre

sid

enti

al v

isit

th

at w

as h

ost

ed in

Ngo

bi V

illa

ge, H

aman

skra

al.


Ou

tpu

t P

erf

orm

an

ce

Ind

ica

tor/

Me

asu

reB

ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Sta

ke

ho

lde

r E

ng

ag

em

en

t:

En

gage

men

ts c

on

tin

ued

wit

h

inte

rnat

ion

al a

gen

cies

; th

e Fe

der

al

Tra

de

Co

mm

issi

on

(U

SA),

to

sh

are

info

rmat

ion

on

th

e C

PA.

En

gage

men

t w

ith

So

ciet

y f

or

Co

nsu

mer

Aff

airs

Pro

fess

ion

als

(SO

CA

P)

as

con

tact

po

int

for

bu

sin

ess,

an

d t

o

ensu

re b

usi

nes

s h

as c

om

pla

ints

reso

luti

on

des

ks

at p

oin

t o

f sa

le.

Init

iate

d c

on

tact

wit

h M

erit

ing

Co

nsu

mer

Vo

lun

tary

Gro

up

Dev

elo

p-

men

t fo

rum

fo

r co

op

erat

ion

on

con

sum

er m

atte

rs.

4 I

nte

r-d

epar

tmen

tal m

eeti

ngs

wer

e

hel

d w

ith

th

e d

ti t

o e

nsu

re in

ter-

dep

artm

enta

l co

op

erat

ion

an

d a

s a

lin

k

wit

h t

he

Nig

eria

n C

on

sum

er P

rote

ctio

n

Co

un

cil.

Co

nta

ct in

itia

ted

an

d o

n-g

oin

g w

ith

th

e

Nig

eria

Co

nsu

mer

Pro

tect

ion

Co

un

cil

for

coo

per

atio

n a

nd

po

ssib

le b

ench

-

mar

k o

n b

est

pra

ctic

es o

n c

on

sum

er

pro

tect

ion

mat

ters

acr

oss

Afr

ica.

Spee

ch p

rep

ared

an

d d

eliv

ered

at

Co

nsu

mer

s In

tern

atio

nal

Eve

nt

to

enco

ura

ge c

oo

per

atio

n w

ith

inte

rna-

tio

nal

org

aniz

atio

ns

op

erat

ing

wit

hin

the

con

sum

er p

rote

ctio

n s

ph

ere.

Th

e C

om

mis

sio

n h

ost

ed a

nu

mb

er o

f

mee

tin

gs w

ith

ind

ust

ry s

tak

eho

lder

s to

dis

cuss

mat

ter

of

com

mo

n in

tere

st

(BU

SA, S

AA

, Cel

l C, M

BA

Gra

du

ates

,

BM

F a

nd

BL

A, C

irru

s T

ech

vu

e, N

ew E

ra,

Cal

l Cen

ter

Op

erat

ion

s M

anag

emen

t,

Tar

get

exce

eded

Co

nsu

mer

aw

aren

ess

init

iati

ves

con

du

cted

- co

nti

nu

ed


Ou

tpu

t P

erf

orm

an

ce

Ind

ica

tor/

Me

asu

reB

ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

EC

Pro

vin

cial

Off

ice)

.

A t

elec

on

fere

nce

was

hel

d w

ith

SOC

AP

to

dis

cuss

dis

trib

uti

on

of

info

rmat

ion

cir

cula

rs t

o b

usi

nes

s

thro

ugh

SO

CA

P's

dat

abas

e as

wel

l as

crea

tin

g aw

aren

ess

on

th

e n

eed

fo

r

bu

sin

ess

to s

et u

p A

DR

des

ks

to d

eal

wit

h c

on

sum

er c

om

pla

ints

in li

ne

wit

h

the

AD

R g

uid

elin

es in

ter

ms

of

the

Act

.

Th

e C

om

mis

sio

n h

ost

ed 4

mee

tin

gs

wit

h t

he

dti

, Dep

t. o

f H

ealt

h,

Agr

icu

ltu

re a

nd

Sci

ence

an

d

Tec

hn

olo

gy f

orm

ing

a G

MO

Lab

elli

ng

Tas

k T

eam

to

set

gu

idel

ines

on

GM

O

lab

elli

ng

on

fo

od

s.

Mee

tin

gs w

ere

hel

d w

ith

th

e

Un

iver

sity

of

Joh

ann

esb

urg

an

d W

its

to d

iscu

ss a

pro

po

sal t

ow

ard

s th

e

incl

usi

on

of

the

CPA

as

par

t o

f th

e

Cu

rric

ulu

m f

or

un

der

grad

uat

e st

ud

ies.

6 R

egu

lato

ry c

lust

er m

eeti

ngs

wit

h

the

dti

an

d o

ther

reg

ula

tors

wer

e al

so

hel

d t

o f

ind

way

s o

f st

ream

lin

ing

init

iati

ves

and

join

t ca

mp

aign

s.

Co

nsu

mer

aw

aren

ess

init

iati

ves

con

du

cted

- co

nti

nu

ed

Cre

ate

th

e b

ran

d o

f th

e N

CC

as

SA

con

sum

er

vo

ice

:

Serv

ice

Ch

arte

r re

vis

ed in

lin

e w

ith

pu

bli

c in

pu

t an

d in

tern

al in

pu

t fr

om

wo

rksh

op

s

Pro

ject

pu

t o

n h

old

Inte

rna

l C

om

mu

nic

ati

on

:

4 I

nte

rnal

New

slet

ters

dev

elo

ped

,

app

rove

d a

nd

cir

cula

ted

.

Stra

tegi

c P

lan

nin

g W

ork

sho

p

- A

, E &

A U

nit

Tar

get

ach

ieve

d


Ou

tpu

t P

erf

orm

an

ce

Ind

ica

tor/

Me

asu

reB

ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Me

dia

en

ga

ge

me

nt/

re

spo

nse

s

Cla

rifi

cati

on

s:

-G

iova

ni M

edia

tors

an

d A

rbit

rato

rs

-A

ccre

dit

atio

n

- C

on

sum

er P

rote

ctio

n C

entr

e-

Acc

red

itat

ion

-M

ask

ew M

ille

r: N

CC

Lo

go

Med

ia r

esp

on

ses

-M

on

eyw

eb: E

xten

sio

n o

f

Co

mm

issi

on

er's

ter

m

-B

P S

A: O

pt-

ou

t R

egis

ter

-Su

nd

ay T

rib

un

e: R

etu

rns

& R

efu

nd

s

-Su

nd

ay T

imes

: Ser

vic

e Q

ual

ity

; NC

C

Dra

ft S

erv

ice

Stan

dar

ds;

Inac

cess

ibil

ity

of

the

Co

mm

issi

on

to

Bu

sin

ess

-C

PA o

n V

oet

sto

ots

; SA

BC

Ter

ms

and

Co

nd

itio

ns;

Un

fair

Dis

crim

inat

ion

;

Cit

y o

f Jo

bu

rg; T

rib

un

al R

uli

ngs

:

- V

od

aco

m

- S

tatu

s M

on

ey;

-D

ie S

on

: Ret

urn

s &

Ref

un

ds

-B

eeld

: San

ral T

arif

fs

-Sa

turd

ay S

tar:

Co

oli

ng-

off

per

iod

-So

uth

Ech

o: R

egu

lati

on

s o

n M

edic

al

Aid

-So

wet

an: D

A v

s C

ity

of

Job

urg

-B

usi

nes

s T

imes

: NC

C a

nd

Co

mm

issi

on

er's

ter

m o

f o

ffic

e.

Med

ia r

elea

se:

-M

oto

r In

du

stry

Co

de

Tar

get

exce

eded

Co

nsu

mer

aw

aren

ess

init

iati

ves

con

du

cted

- co

nti

nu

ed


Ou

tpu

t P

erf

orm

an

ce

Ind

ica

tor/

Me

asu

reB

ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Med

ia I

nte

rvie

ws:

Rad

io

-L

esed

i FM

x 2

- D

irec

t M

ark

etin

g &

Cel

l ph

on

e C

on

trac

ts, B

uy

ing

Pro

per

ty

-R

adio

20

00

- Sa

nra

l- e

-to

llin

g

-R

adio

70

2-

(AT

M F

ees

and

1 T

ime

airl

ine

tick

et c

ance

llat

ion

s)

-M

ET

RO

FM

: 1 T

ime

airl

ine

tick

et

can

cell

atio

ns

-R

adio

In

terv

iew

s x

28

reg

ard

ing

the

Mea

t Is

sue

TV

-Y

ilu

nge

lo L

akh

o x

4-

Pro

du

ct

Lab

elli

ng,

Py

ram

id S

chem

es,

Stat

us

of

Co

nsu

mer

Pro

tect

ion

Age

nci

es a

nd

Tim

esh

are

-SA

BC

3 X

2 :

NC

C S

trat

egic

fo

cus

rev

iew

-Y

ilu

nge

lo L

akh

o X

3 +

on

-2

nd

Han

d M

oto

r V

ehic

les

-C

on

sum

er R

igh

ts D

ay

- Y

ilu

nge

lo L

akh

o x

4-

Pro

du

ct

Lab

elli

ng,

Py

ram

id S

chem

es,

Stat

us

of

Co

nsu

mer

Pro

tect

ion

Age

nci

es a

nd

Tim

e sh

are

-SA

BC

3 X

2 :

NC

C S

trat

egic

fo

cus

and

rev

iew

Co

nsu

mer

aw

aren

ess

init

iati

ves

con

du

cted

- co

nti

nu

ed


Ou

tpu

t P

erf

orm

an

ce

Ind

ica

tor/

Me

asu

reB

ase

lin

e

Info

Ta

rge

t

20

12

/1

3A

ctu

al

Ach

iev

em

en

t R

ea

son

fo

r V

ari

an

ce

Str

ate

gic

Ob

ject

ive

: T

o b

e a

we

ll-g

ov

ern

ed

an

d c

ap

aci

tate

d

org

an

isa

tio

n

Lin

ke

d o

utc

om

e o

f th

e d

ti: E

nfo

rced

fair

bu

sin

ess

pra

ctic

es.

Lin

ke

d o

utc

om

e o

f go

ve

rnm

en

t: C

reat

e a

bet

ter

Sou

th A

fric

a an

d c

on

trib

ute

to a

bet

ter

and

saf

er A

fric

a an

d W

orl

d.

Imp

lem

enta

tio

n o

f

app

rove

d o

rgan

isat

ion

stru

ctu

re

Per

cen

tage

of

po

siti

on

s

fill

ed

Les

s th

an 3

0%

10

%T

her

e ar

e 1

32

po

siti

on

s o

n t

he

app

rove

d o

rgan

isat

ion

str

uct

ure

.

32

po

siti

on

s w

ere

fill

ed a

nd

th

at

mak

es it

to

be

24

% o

f p

osi

tio

ns

fill

ed

as o

f 3

1 M

arch

20

13

.

Tar

get

has

bee

n a

chie

ved

Skil

ls d

evel

op

men

t

pla

n

Skil

ls d

evel

op

men

t p

lan

dev

elo

ped

, im

ple

men

ted

and

mo

nit

ore

d

New

KP

IF

inal

ise

term

s o

f

refe

ren

ce a

nd

ap

po

int

serv

ice

pro

vid

er

Ter

ms

of

refe

ren

ce h

as b

een

fin

alis

ed

and

th

e se

rvic

e p

rov

ider

has

no

t ye

t

bee

n a

pp

oin

ted

Tar

get

no

t ac

hie

ved

. Fu

nd

s w

ere

no

t av

aila

ble

in 2

01

2/1

3

fin

anci

al y

ear.

Fu

nd

s w

ill b

e

req

ues

ted

in t

he

MT

EF

du

rin

g

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3

ANNUAL FINANCIAL

STATEMENTSFOR THE YEAR ENDED 31 MARCH 2013

Contents Page

Administrative Information ..................................................................................54

Statement of Responsibility by the Accounting Authority ..........................55

Report of the Audit Committee.............................................................................57

Report of the Auditor-General ..............................................................................60

Statement of Financial Performance ..................................................................69

Statement of Financial Position ...........................................................................70

Statement of Changes in Net Assets ....................................................................71

Cash Flow Statement ................................................................................................72

Summary of Accounting Policies..........................................................................73

Notes to the Annual Financial Statements ........................................................94


ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2013


Domicile Republic of South Africa

Legal Form National entity-Schedule 3A

Nature of Principal Activities The National Consumer Commission was established to

promote and advance the social and economic welfare

of consumers in South Africa by establishing a legal

framework for the achievement and maintenance of a

consumer market that is fair, accessible, efficient,

sustainable and responsible for the benefit of

consumers generally.

Executive Authority Dr. Rob Davies (Minister)

Department of Trade and Industry

Postal Address

the dti Campus

77 Mentjies Street

Sunnyside

0002

Physical Address

8 Bauhinia Street

Berkley Office Park

Highveld Techno Park

Centurion

0157

Accounting Authority Mr. Ebrahim Mohamed (Acting Commissioner

from 03 September 2012, appointed as

Commissioner from 01 June 2013.

Deputy Commissioner Mr. Ebrahim Mohamed

Chief Financial Officer Mr. Kgabo Mantsho

Bankers Nedbank Limited

Auditors Auditor-General of South Africa

Contact Information Telephone No. 012 940 4450

Facsimile No. 086 151 5259

E-mail: [email protected]

Administrative Informationfor the year ended 31 March 2013

Statement of Responsibility by the Accounting Authorityfor the year ended 31 March 2013

The Accounting Authority is responsible for the preparation of the annual financial

statements. The annual financial statements conform with Generally Recognised

Accounting Practices (GRAP) and the reporting requirements of the Public Finance

Management Act and fairly present the state of affairs of the National Consumer

Commission as at the end of the financial year, and the results of its operations and cash

flows for that period.

It is the responsibility of the independent auditors to report on the fair presentation of the

financial statements.

The Accounting Authority is ultimately responsible for the internal controls of the entity.

The system of internal control is designed to provide reasonable assurance of the integrity

and reliability of the financial statements of the Entity and to adequately safeguard, verify

and maintain accountability for funds and assets. Management did not implement the risk

management policy, nor regularly review the system of internal control.

The entity has implemented monitoring controls through comprehensive budgeting and

submission of operating reports as per the deadline agreed upon in the shareholders

agreement signed with the Department of Trade and Industry.

To enhance the internal controls, the entity has appointed a firm of chartered accountants

to conduct a review and assessment of the effectiveness of the internal controls that

management have implemented.

The entity has established an Audit Committee which consists of three non-executive

committee members. The committee meets at least two times per annum. The Audit

Committee are governed and operate within the framework of the terms of the Audit

Committee charter. The committee ensures effective communication between the

Accounting Authority, internal audit and the Auditor-General.

Internal and Accounting Controls

Audit Committee


Annual Financial Statements

The annual financial statements have been prepared on a going concern basis, as

management have a reasonable expectation that the Entity will have adequate resources to

continue in operational existence and as a going concern for the foreseeable future.

The annual financial statements are prepared in accordance with accounting policies as set

out in the Notes to the Annual Financial Statements and are supported by judgements,

estimates and assumptions in compliance with GRAP.

Mr Ebrahim Mohamed

Acting Commissioner



Report of the Audit Committeefor the year ended 31 March 2013

We present our report for the year ended 31 March 2013.

The Audit Committee, consisting of the members listed below, convened three times during

the year under review.

Independent Non-Executive Members Number of meetings attended

Mr D Braithwaite 1

(Chairperson from 19 March 2013)

Mr P Semenya 1

Mrs M Maisela 3

(appointed 29 May 2012)

Mr F Dikgale 1

(appointed 19 March 2013)

Mr Z Ntshinza -

(former Chairman, replaced 19 March 2013)

Mr T Rasilingwani 1

(replaced 19 March 2013)

Executive Member - Ex Officio

Mr K Naidoo 2

(since 10 December 2012)

In addition to the members referred to above, the following are standing invitees at each

meeting of the Audit Committee:

• The Commissioner (and Accounting Authority)

• The Chief Financial Officer

• Internal Audit

• Representatives of the Auditor-General

The Audit Committee has direct access to the standing invitees in fulfillment of its duties.

Audit Committee Members and Attendance


Audit Committee Responsibility

Internal Audit

Effectiveness of Internal Control

Quality of Management Reports

The Audit Committee was only partially functional during the year, with two members

(including the former Chairman) being replaced near the financial year end on 19 March

2013. In these circumstances, the Audit Committee is unable to report that it has complied

in all respects with its responsibilities arising from Section 51(1)(a) of the PFMA and

Treasury Regulations 27.1.7. The Audit Committee also reports that its Terms of Reference

in the form of its Audit Committee Charter may not have been complied with in all respects

and the Charter is currently in the process of being reviewed.

There was no Internal Audit function during the year. The contracted term of the former

outsourced service provider came to an end in December 2012 and a new service provider

was appointed only in May 2013. In the circumstances, the Audit Committee records that no

Internal Audit work was performed during the year.

In view of the changes in the composition of the Audit Committee referred to above and in

particular the fact that new members including the Chairman, were appointed only shortly

before the year end, the Committee as a whole is unable to comment on the effectiveness of

internal control. However, based on discussions at the 19 March 2013 Audit Committee

meeting, on the post-year end presentation of a report arising from a major forensic

investigation, and the Auditor-General’s reports, the Committee is of the view that

significant internal control weaknesses need to be addressed urgently.

The Audit Committee also is of the opinion that significant staff issues (both disciplinary

and skills-related) are required to be addressed urgently. The absence of the necessary

skills in the Finance area was further emphasised by the need at the year end to engage an

outsourced service provider to assist in the preparation of its financial statements.

The Audit Committee reviewed only the Management Report for Quarter 3 of the current

year. The Committee was not satisfied with the content and quality of this report in terms of

the PFMA.


Forensic Investigations

Evaluation of Financial Statements

As reported above, a major forensic investigation was conducted during the year in the

areas of Supply Chain Management and certain aspects of Human Resources. Significant,

very urgent interventions by management are required in response to the forensic report

arising from the investigation.

The Audit Committee has not:

• Reviewed or discussed with management the unaudited annual financial statements as

conveyed to the Auditor-General for annual audit purposes as these were not available

at the time of the 30 May 2013 Audit Committee meeting;

• Adequately reviewed either the final audited annual financial statements or the

Auditor-General’s report thereon or the Auditor-General’s Final Management Report

or management’s responses thereto as these were not available in advance of the

24 July 2013 Audit Committee meeting;

• Reviewed the appropriateness of accounting policies and practices;

• Reviewed significant adjustments resulting from the annual audit as details of these are

still awaited from management and the outsourced service provider.

The Audit Committee is not yet in a position to concur with and accept the conclusions of

the Auditor-General on the annual financial statements, read together with the Report of

the Auditor-General.

DA Braithwaite

Chairman of the NCC Audit Committee

31 July 2013


Report of the Auditor-General to Parliament on the National

Consumer Commission

REPORT ON THE FINANCIAL STATEMENTS

Introduction

Accounting authority's responsibility for the financial statements

Auditor-General's responsibility

1. I have audited the financial statements of the National Consumer Commission set out

on pages 69 to 111 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.

2. The accounting authority is responsible for the preparation and fair presentation of

these financial statements in accordance with South African Standards of Generally

Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the

Public Finance Management Act of South Africa, 1999 (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.

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 qualified audit opinion.

6. I was unable to obtain sufficient appropriate audit evidence for irregular expenditure

as supporting information was stolen from the premises and due to inadequate filing of

information. I was unable to confirm the irregular expenditure by alternative means.

Consequently, I was unable to determine whether any material adjustments should be

affected to the irregular expenditure relating to the current year, stated at R15 590 211

(2012: R8 533 591) in note 27 to the financial statements.

7. The entity incorrectly recorded operating expenditure costs relating to the prior year

to the current year operating expenditure costs, resulting in the current year operating

expenditure being overstated and prior year accruals - included in note 8 to the

financial statements - being understated by an estimated amount of R826 072.

8. In my opinion, except for the possible effects of the matters described in the Basis for

qualified opinion paragraphs, the financial statements present fairly, in all material

respects, the financial position of the National Consumer Commission as at 31 March

2013 and its financial performance and cash flows for the year then ended, in

accordance with the SA Standards of GRAP and the requirements of the PFMA.

I draw attention to the matters below. My opinion is not modified in respect of these

matters.

Basis for qualified opinion

Emphasis of matters

Irregular expenditure

Operating expenditure

Qualified opinion


Significant uncertainties

Restatement of corresponding figures

Material impairments

9. With reference to note 24 to the financial statements, the entity has disclosed

contingent liabilities of R1 305 875 and R375 000. These are due to a lawsuit and a

claim respectively for cancellation of contracts. The ultimate outcome of these matters

cannot presently be determined, and no provision for any liability that may result has

been made in the financial statements.

10. With reference to note 24 to the financial statements, the entity has disclosed

contingent liability of R2 758 187. This related to the surplus amount which was

retained by the entity without obtaining the necessary approval from the National

Treasury. The ultimate outcome of this matter cannot presently be determined, and no

provision for any liability that may result has been made in the financial statements.

11. As disclosed in note 28 to the financial statements, the corresponding figures for

31 March 2012 have been restated as a result of errors discovered during 31 March

2013 in the financial statements of the National Consumer Commission at, and for the

year ended, 31 March 2012.

12. As disclosed in note 5 to the financial statements, material impairment to the amount of

R3 374 992 was incurred as a result of long outstanding receivables.

13. 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.

14. I performed procedures to obtain evidence about the usefulness and reliability of the

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

Predetermined objectives


information in the annual performance report as set out on pages 38 to 50 of the annual

report.

15 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.

The reliability of the information in respect of the selected programmes is assessed to

determine whether it adequately reflects the facts (i.e. whether it is valid, accurate and

complete).

16. There were no material findings on the annual performance report concerning the

usefulness and reliability of the information.

17. Although no material findings concerning the usefulness and reliability of the

performance information were identified in the annual performance report, I draw

attention to the following matters below.

18. Of the total number of 16 targets planned for the year, 13 were not achieved during the

year under review. This represents 81% of total planned targets that were not achieved

during the year under review.

19. Material misstatements in the annual performance report were identified during the

audit, all of which were corrected by management.

Additional matters

Achievement of planned targets

Material adjustments to the annual performance report


Compliance with laws and regulations

Audit committees

Internal audit

20. 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:

21. The audit committee did not review the effectiveness of the internal audit function,

annual work programme of the internal audit function, responses from management to

specific recommendations, risk areas of the entity's operations covered in the scope of

internal and external audits, effectiveness of the internal control systems, accounting

and auditing concerns identified as a result of internal and external audits, as required

by Treasury Regulation 27.1.8(a), (b), (c), (e) and (g).

22. The audit committee did not review the adequacy, reliability and accuracy of the

financial information provided to management and other users, as required by

Treasury Regulation 27.1.8(d).

23. The audit committee did not review the institution's compliance with legal and

regulatory provisions, as required by Treasury Regulation 27.1.8(f).

24. The accounting authority did not ensure that the internal audit function was

established, as required by section 51(1)(a)(ii) of the PFMA and Treasury Regulation

27.2.2.

25. Internal audit did not submit reports, detailing performance against the annual

internal audit plan, to the audit committee, as required by Treasury Regulation

27.2.7(d).

26. Internal audit did not report at all audit committee meetings, as required by Treasury

Regulation 27.2.8.


27. Internal audit did not evaluate the effectiveness and efficiency of controls and/or did

not make recommendations for its enhancement and improvement, as required by

Treasury Regulation 27.2.10.

28. Internal audit did not evaluate the reliability and integrity of financial and operational

information, as required by Treasury Regulation 27.2.10(b).

29. Internal audit did not evaluate compliance with laws and regulations, as required by

Treasury Regulation 27.2.10(e).

30. The accounting authority did not submit quarterly reports on actual and projected

revenue and expenditure to the accounting officer of the Department of Trade and

Industry, as required by Treasury Regulation 26.1.1.

31. The public entity accumulated surpluses without the approval of National Treasury, in

contravention of section 53(3) of the PFMA.

32. The financial statements submitted for auditing were not fully prepared in all material

respects in accordance with the prescribed financial reporting framework and/or

supported by full and proper records as required by section 55(1) (a) and) (b) of the

PFMA.

33. Material misstatements of property, plant and equipment, receivables, provisions,

administration expenditure, operating lease expenditure, related parties and

contingent liabilities and commitments disclosure notes identified by the auditors in

the submitted financial statements were subsequently corrected and/or the

supporting records were provided subsequently, but the supporting records that could

not be provided resulted in the financial statements receiving a qualified audit opinion.

34. The accounting authority did not take effective steps to prevent and detect irregular

and fruitless and wasteful expenditure, as required by section 51(1)(b)(ii) of the PFMA.

Budgets

Annual financial statements, performance and annual reports

Expenditure management


35. Effective and appropriate disciplinary steps were not taken against officials who

incurred and/or permitted irregular and/or fruitless and wasteful expenditure, as

required by section 51(1)(e)(iii) of the PFMA.

36. Payments were made in advance of the receipt of goods or services in contravention of

Treasury Regulation 31.1.2(c).

37. Sufficient appropriate audit evidence could not be obtained that all quotations were

awarded in accordance with the legislative requirements as documentation was stolen

from the entity's premises and due to inadequate filing systems.

38. Goods and services of a transaction value of above R500 000 were procured without

inviting competitive bids, as required by Treasury Regulation 16A6.1

39. Goods and services with a transaction of value below R500 000 were procured without

obtaining the required price quotations, as required by Treasury Regulation 16A6.1.

40. Proper control systems to safeguard and maintain assets were not implemented, as

required by sections 50(1)(a) and 51(1)(c) of the PFMA.

41. I considered internal control relevant to my audit of the financial statements, annual

performance report 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 annual performance report and the

findings on compliance with laws and regulations included in this report.

42. The accounting authority did not exercise adequate oversight responsibility regarding

financial reporting and compliance with laws and regulations and related controls.

Procurement and contract management

Asset management

Internal control

Leadership


43. The accounting authority did not implement effective human resource management to

ensure that adequately and sufficiently skilled resources are in place and that

performance is monitored.

44. The accounting authority did not establish and communicate policies and procedures

to enable and support understanding and execution of internal control objectives,

processes and responsibilities.

45. The accounting authority did not develop and monitor the implementation of action

plans to address internal control deficiencies.

46. Management did not implement proper record keeping in a timely manner to ensure

that complete, relevant and accurate information is accessible and available to support

the procurement of all goods and services.

47. Management did not prepare regular, accurate and complete financial and

performance reports that are supported and evidenced by reliable information.

48. Management did not review and monitor compliance with applicable laws and

regulations.

49. The accounting authority did not ensure that there is an adequately resourced and

functioning internal audit unit for the entire period under review that identifies

internal control deficiencies and recommends corrective action effectively.

50. The audit committee did not promote accountability and service delivery through

evaluating and monitoring responses to risks and providing oversight over the

effectiveness of the internal control environment, including financial and performance

reporting and compliance with laws and regulations.

Financial and performance management

Governance


OTHER REPORTS

Investigations

51. An investigation was conducted by an independent consulting firm to probe certain

procurement irregularities as well as irregularities with regard to the appointment of

certain officials at the NCC. The investigation was concluded during May 2013 and the

report issued made certain recommendations for follow up.

52. An investigation was conducted by the Public Protector South Africa to investigate

allegations of irregular procurement and irregular recruitment. The investigation was

concluded during the financial year and recommendations were made to the

commission to improve on its financial controls and supply chain management

processes.

Pretoria

31 July 2013


A U D I T O R - G E N E R A L

S O U T H A F R I C A

Auditing to build public confidence

NATIONAL CONSUMER COMMISSION

Statement of Financial Performance31 March 2013

NOTES 2013 2012 - Restated

R R

REVENUE

EXPENDITURE

Revenue 10.1 48 296 490 35 354 516

Other income 10.2 101 667 192 344

TOTAL REVENUE 48 398 157 35 546 860

Employee Related Costs 11,16,17 22 991 100 19 571 701

Amortisation and Depreciation 13 1 070 544 1 105 692

Administration expenditure 19 5 056 957 2 972 500

Finance Costs 19 26 872 135

Other Operating Expenditure 19 15 532 875 9 598 989

TOTAL EXPENDITURE 44 678 348 33 249 017

SURPLUS/ (DEFICIT) FOR THE YEAR 3 719 810 2 297 843



Statement of Financial Positionat 31 March 2013

NOTES 2013 2012 - Restated

R R

ASSETS

NON-CURRENT ASSETS

LIABILITIES

CURRENT ASSETS

Cash and Cash Equivalents 4 4 262 552 71 401

Trade and other receivables from exchange transactions 5 1 085 212 1 977 271

Trade and other receivables from non-exchange transactions 6 23 339 37 712

Current Assets 5 371 103 2 086 384

Property Plant and Equipment 2 2 558 938 3 069 716

Intangible Assets 3 541 127 273 741

Rental Deposit 7 - 514 311

NON-CURRENT ASSETS 3 100 064 3 857 767

TOTAL ASSETS 8 471 167 5 944 151

CURRENT LIABILITIES

Trade and other payables from exchange transactions 8 1 504 364 3 407 039

Provision for Leave Pay 23 815 075 239 270

Operating lease liability 9 134 076 -

TOTAL LIABILITIES 2 453 515 3 646 309

Assets 8 471 167 5 944 151

Liabilities -2 453 515 -3 646 309

Net Assets 6 017 652 2 297 842

Net Assets

Accumulated Surplus 6 017 652 2 297 842



Statement of Changes in Net Assetsfor the year ended 31 March 2013

Page 8

Accumulated

Surplus/ Total

NOTES (Deficit) Amount

R R

Balance as at 1 April 2011 - -

Net Surplus for the year 2 133 021 2 133 021

Balance as at 31 March 2012 2 133 021 2 133 021

Balance as at 1 April 2012 2 133 021 2 133 021

Correction to opening retained earnings -38 691 -38 691

Adjustments:

Correction - Interest received 8 982 8 982

Fixed Assets - Reclassification to Debtors 87 261 87 261

Fixed Assets - Reclassification of category -201 837 -201 837

Prior year accumulated depreciation restated -407 399 -407 399

Prior year leave provision overstated 294 805 294 805

Prior year incorrect allocation to income 11 295 11 295

Correction - Straightlining of leases 410 405 410 405

Balance as at 1 April 2012 (restated) 2 297 842 2 297 842

Net Surplus for the year 3 719 810 3 719 810

Balance as at 31 March 2013 6 017 652 6 017 652



Cash Flow Statementfor the year ended 31 March 2013

Notes 2013 2012 - Restated

R R

CASH FLOWS FROM OPERATING ACTIVITIES

CASH FLOW FROM INVESTING ACTIVITIES

Receipts 48 378 741 35 540 528

Transfers 48 296 490 35 354 516

Interest Received 82 251 186 012

Payments 42 870 308 31 008 409

Employee Cost 22 991 100 19 571 701

Interest Paid 26 872 135

Other expenditure 19 852 337 11 436 573

Cash generated by operations 18 5 508 433 4 532 119

NET CASH FLOW FROM OPERATING ACTIVITIES 5 508 433 4 532 119

Purchase of property, plant and equipment (373 479) (3 576 014)

Prepayments (455 853) (555 873)

Purchase of intangible assets (487 950) (328 831)

NET CASHFLOW FROM INVESTING ACTIVITES (1 317 282) (4 460 718)

Total cash and cash equivalents movement for the year 4 191 151 71 401

Cash and cash equivalents at the beginning of the year 71 401 -

TOTAL CASH AND CASH EQUIVALENTS AT END OF YEAR 4 262 552 71 401



Summary of Accounting Policiesfor the year ended 31 March 2013

1. PRESENTATION OF THE ANNUAL FINANCIAL STATEMENTS

1.1 BASIS OF PREPARATION

1.2 GOING CONCERN

1.3 USE OF ESTIMATES AND JUDGEMENTS

The annual financial statements have been prepared in accordance with the

prescribed standards of Generally Recognised Accounting Practice (GRAP),

including any directives, interpretations and guidelines issued by the Accounting

Standards Board (ASB), in accordance with the Public Finance Management Act. The

annual financial statements have been prepared on an accrual basis of accounting

and are in accordance with the historical cost convention.

The principal accounting policies adopted in the preparation of these annual

financial statements are set out below. Assets, liabilities, revenues and expenses

have not been offset except where offsetting is required or permitted by a Standard

of GRAP. The accounting policies have been applied consistently in all material

aspects, unless otherwise indicated. The details of any changes are explained in the

relevant policy notes.

Additional information has been disclosed to enhance the usefulness of the annual

financial statements and to comply with the relevant legislative requirements of the

PFMA.

The Cash Flow Statement is prepared on the direct cost method.

The financial statements has been prepared on a going concern basis of accounting

policies applicable to a going concern. This basis presumes that funds will be

available to finance future operations and that the realisation of assets and

settlements of liabilities ,contingent obligations and commitments will occur in the

ordinary course of business.

The preparation of the annual financial statements in conformity with GRAP

requires the use of certain critical accounting estimates. It also requires

management to exercise judgements, estimates and assumptions in the process of


applying the accounting policies and the reported amounts of assets, liabilities,

income and expenses. Actual results may differ from these estimates. Estimates and

underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimates are revised and in any

future financial periods affected.

In particular, information about significant areas of estimation and uncertainty and

critical judgements in applying accounting policies that have material effect on the

amounts recognised in the financial statements is included in the notes to the

financial statements.

The annual financial statements are presented in South African Rand (ZAR), which is

the currency in which the entity's transactions are denominated. All financial

information has been expressed in rands.

Prior year comparatives have been provided in the annual financial statements.

When the presentation or classification of items in the annual financial statements is

amended, prior period comparative amounts are also reclassified and restated,

unless such comparative reclassification and / or restatement is not required by a

Standard of GRAP. The nature and reason for such reclassifications and restatements

are also disclosed.

Where material accounting errors, which relate to prior periods, have been

identified in the current year, the correction is made retrospectively as far as is

practicable and the prior year comparatives are restated accordingly.

1.5.1 Government Grants

Government grants comprise gross inflows of economic benefits, and are recognised

as revenue when it is probable that future economic benefits will flow to the entity

and the fair value of those benefits can be reliably measured. Grants are recognised

1.4 PRESENTATION CURRENCY

1.5 COMPARATIVE FIGURES

1.5 REVENUE (non-exchange transactions)



Summary of Accounting Policies (continued)for the year ended 31 March 2013

when there is reasonable assurance that they will be received or when there is legal

obligation for the grant to be paid, and only to the extent that the entity has complied

with any of the stipulations or conditions (if any) attached to the grant.

1.6.1 Interest, Royalties and Dividends

Revenue arising from the use by others of the entity assets yielding interest,

royalties and dividends is recognised when:

• It is probable that economic benefits or service potential associated with the

transactions will flow to the entity; and

• The amount of the revenue can be measured reliably

Revenue is recognised as interest accrues using the effective interest rate.

Other Income

Other Income is recognised on accrual basis.

All finance costs are recognised in the Statement of Financial Performance using the

effective interest rate method.

For the purposes of the cash flow statement, cash and cash equivalents comprise

cash at the bank including cash on hand. These are initially and subsequently

recorded at fair value.

Other receivables are recognised initially at fair value and subsequently measured at

amortised cost using the effective interest rate method, less any provision for

impairment.

A provision for impairment of other receivables is estimated when there is objective

evidence that the entity will not be able to collect all amounts due according to the

original terms of the receivables.

1.6 REVENUE (Exchange Transactions)

1.7 FINANCE EXPENSES

1.8 CASH AND CASH EQUIVALENTS

1.9 OTHER RECEIVABLES




Significant financial difficulties of any debtor, probability that the debtor will be

bankrupt or under financial reorganisation, and default or delinquency in payments

(more than 30 days overdue), are considered indicators that the receivable is

impaired.

The provision is the difference between the asset's carrying amount and the present

value of the estimated future cash flows, discounted using the effective interest rate

and is recognised in the Statement of Financial Performance. Subsequent recoveries

of amounts previously written off are then recognised in the Statement of Financial

Performance.

1.1 Useful lives of property, plant and equipment and intangible assets

The entity's management determines the estimated useful lives and related

depreciation charges for property, plant and equipment and intangible assets. These

estimates are based on the condition and use of the individual assets, in order to

determine the remaining period over which the assets can and will be used.

INITIAL RECOGNITION:

Property, plant and equipment are resources controlled by the entity as a result of

past events and are recognised in the Statement of Financial Position only when:

• it is probable that future economic benefits or service potential associated with

the asset will flow to the entity; and

• the cost or fair value of the item can be measured reliably.

All items of property, plant and equipment that qualify for recognition as an asset are

measured at cost, or if acquired at no cost, or at a nominal cost are measured at fair

value at the date of acquisition.

Assets transferred to the entity are recognised at the book value on the date the

assets are received and are assessed for any evidence of impairment.

1.10 PROPERTY, PLANT AND EQUIPMENT




Measurement at Recognition:

Costs for acquired assets include:

• the items purchase price, including import duties, non-refundable taxes, after

deducting any trade discounts and rebates;

• any costs directly attributable to bringing the asset to the location and condition

necessary for it to be capable of operating in the manner as intended by

management;

• the initial estimates of the costs of dismantling and removing the item and

restoring the site on which it is located, the obligation which the Entity incurs

either when the item is acquired or as a consequence of having used the item

during a particular period.

The cost of self-constructed assets is determined using the same principles as for an

acquired asset and includes the cost of materials, direct labour and other resources

incurred in constructing the asset, any costs directly attributable to bringing the

asset to the location and condition necessary for it to be capable of operating in the

manner intended by management, and an initial estimate where relevant of the costs

of dismantling and removing the items and restoring the site on which they are

located.

Subsequent costs, such as replacement costs, are included in the asset’s carrying

amount or recognised as a separate asset, only when it is probable that future

economic benefits associated with the item will flow to the entity and the cost of the

item can be reliably measured. The carrying amount of the parts of the items that are

replaced is derecognised in accordance with derecognition provisions.

All other costs such as day-to-day servicing and small parts are treated as 'repairs

and maintenance' and are charged to the Statement of Financial Performance during

the financial period in which they are incurred.

After recognition as an asset, the entity applies the cost model as its accounting

policy. An item of property, plant and equipment is carried at its cost less any

accumulated depreciation and any accumulated impairment losses.




Where parts of an item of property, plant and equipment have different useful lives,

they are accounted for as a separate items of property, plant and equipment.

Depreciation:

Depreciation is recognised in the Statement of Financial Performance and is

calculated on a straight-line basis over the estimated useful lives of each part of an

item of property, plant and equipment. 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. Depreciation is calculated on the cost less the expected

residual value of an item of property, plant and equipment, and begins when an asset

is available for use.

The period over which the various categories are depreciated is detailed below:

Item Average useful life

Computer Equipment 3 years

Furniture and fittings 10 years

Leasehold improvements 5 years

Depreciation methods, useful lives and residual values are re-assessed annually and

adjusted if necessary at the end of each reporting period.

Impairment :

The entity assesses at each reporting date whether there is indication that any item

of property, plant and equipment may be impaired. If such an indication exists the

entity estimates the recoverable service amount of the asset. In assessing whether

there is any indication that an asset may be impaired, the entity considers both

external and internal sources of information.

Recoverable amount is the higher of the asset's fair value less costs to sell, and its

value in use. Value in use is the present value of the asset's remaining service

potential. If either of these amounts exceeds the asset's carrying value, the asset is

not impaired, and it is not necessary to determine the other amount.




If the asset's carrying value exceeds its recoverable service amount, the asset is

impaired. The carrying amount of the asset is then reduced to its recoverable service

amount, and this reduction is the impairment loss which is charged as an expense to

the Statement of Financial Performance.

Reversal of Impairment:

The entity shall assess at each reporting date whether there is any indication that an

impairment loss recognised in prior periods for an asset may no longer exist or may

have decreased. If any such indication exists, the entity shall estimate the

recoverable service amount of that asset.

The increased carrying amount of an asset attributable to a reversal of an

impairment loss shall not exceed the carrying amount that would have been

determined (net of depreciation) had no impairment loss been recognised for the

asset in prior periods.

A reversal of an impairment loss for an asset shall be recognised immediately in the

Statement of Financial Performance.

After a reversal of an impairment loss is recognised, the depreciation charge for the

asset shall be adjusted in future periods to allocate the asset’s revised carrying

amount, less its residual value (if any), on a systematic basis over its remaining

useful life.

DERECOGNITION:

The carrying amount of an item of property, plant and equipment shall be

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 item of property, plant and

equipment is determined by comparing the proceeds from disposal with the

carrying amount of the property, plant and equipment, and is recognised in the

Statement of Financial Performance when the item is derecognised.




1.11 INTANGIBLE ASSETS

Initial Recognition:

Intangible Assets are classified as non-monetary assets without physical substance

and are only recognised when:

• it is probable that future economic benefits or service potential associated with

the asset will flow to the entity;

• the cost or fair value of the asset can be measured reliably.

For those intangible assets with a definite useful life:

• Amortisation is recognised in the Statement of Financial Performance and is

calculated on a straight line basis over the estimated useful life of each part of the

intangible asset;

• Amortisation is determined from the date the intangible asset is available for use

in the location and condition as intended by management.

Measurement at Recognition:

Initial expenditure incurred is recognised and capitalised only when it increases the

future economic benefits embodied in the specific asset to which it relates.

All other expenditure is recognised in the Statement of Financial Performance as an

expense when it is incurred.

All intangible assets of the entity have been capitalised on the basis of the costs

incurred in order to acquire and bring the assets into use.

Subsequent Measurement

Subsequent expenditure on capitalised intangible assets is recognised and

capitalised only when the costs incurred increases the future economic benefits

embodied in the specific asset to which it relates.

All other subsequent expenditure is recognised in the Statement of Financial

Performance as an expense when it is incurred.




Amortisation:

All items of intangible assets are measured at historic cost less accumulated

amortisation and accumulated impairment losses.

The estimated useful lives are as follows:

Item Average useful life

• Computer software 2 years

Amortisation methods and useful lives are reassessed annually and adjusted if

necessary at the end of each reporting period.

Amortisation is recognised in the Statement of Financial Performance on a straight-

line basis over the estimated useful lives of intangible assets unless such lives are

indefinite. Intangible assets with an indefinite useful life are systematically tested

for impairment at each reporting date. Other intangible assets are amortised from

the date they are available for use.

Impairment:

Intangible assets with an indefinite useful life or an intangible asset not yet available

for use are tested annually for impairment by comparing the carrying amount with

the recoverable amount of the intangible asset. Different intangible assets may be

tested for impairment at different times.

If the intangible asset's carrying value exceeds its recoverable service amount, the

intangible asset is impaired. The carrying amount of the asset is then reduced to its

recoverable service amount, and this reduction is the impairment loss which is

charged as an expense to the Statement of Financial Performance.

Reversal of Impairment:

The Entity shall assess at each reporting date whether there is any indication that an

impairment loss recognised in prior periods for an asset may no longer exist or may

have decreased. If any such indication exists, the entity shall estimate the

recoverable service amount of that asset.






determined (net of amortisation) had no impairment loss been recognised for the

asset in prior periods.

A reversal of an impairment loss for an asset shall be recognised immediately in the

Statement of Financial Performance.

After a reversal of an impairment loss is recognised, the amortisation charge for the

asset shall be adjusted in future periods to allocate the asset’s revised carrying

amount, less its residual value (if any), on a systematic basis over its remaining

useful life.

DERECOGNITION:

The carrying amount of an intangible asset shall be derecognised on disposal or

when no future economic benefits are expected from its use or disposal.

The gain or loss arising from the derecognition of an intangible asset is determined

by comparing the proceeds from disposal with the carrying amount of the intangible

asset, and is recognised in the Statement of Financial Performance when the item is

derecognised.

A lease is classified s 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.

Finance leases

Finance leases are recognised as assets and liabilities in the statement of financial

position at amounts equal to the fair value of the leased asset or, if lower, the present

value of the minimum lease payments. The corresponding liability to the lessor is

included in the statement of financial position as the finance lease obligation.

Leases of assets are classified as finance lease whenever the terms of the lease

transfers substantially all the risks and rewards of ownership to the lessee.

1.12 LEASES




Assets held under finance leases are recognised as assets at their fair value at the

inception of the lease or, if lower at the present value of the minimum lease

payments. The corresponding liability to the lessor is included in the statement of

financial position as a finance lease obligation. Lease payments are apportioned

between the finance charges and reduction of the lease obligation so as to achieve a

constant rate of interest on the remaining balance of the liability.

The finance leases are measured at fair value in subsequent period.

Operating Leases

Leases under which the lessors effectively retains the risks and benefits of

ownership are classified as operating leases. Obligations incurred under operating

leases are charged to the statement of financial performance in equal instalments

over the lease period.

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. This

liability is not discounted.

A provision is a liability of uncertain timing or amount.

Provisions are recognised as liabilities when the entity has a present legal or

constructive obligation as a result of a past event, for which it is probable that an

outflow of resources embodying economic benefits or service potential will be

required to settle the obligation, and a reliable estimate can be made of the amount

of the obligation.

The amount recognised as a provision shall be the best estimate of the expenditure

required to settle the present obligation at the reporting date. The best estimate is

determined by management judgement, supplemented by experience of similar

transactions, and in certain cases reports from independent experts.

1.14 PROVISIONS AND OTHER LIABILITIES




1.15 CONTINGENCIES AND COMMITMENTS

1.15 IRREGULAR EXPENDITURE

Contingent Liability

The entity does not recognise a contingent liability but discloses details of any

contingencies in the notes to the financial statements, unless the possibility of an

outflow of resources embodying economic benefits or service potential is remote.

A contingent liability is:

• a possible obligation that arises from past events, and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain

future events not wholly within the control of the entity; or

• a present obligation that arises from past events but is not recognised because it

is not probable that an outflow of resources embodying economic benefits or

service potential will be required to settle the obligation; or the amount of the

obligation cannot be measured with sufficient reliability.

Commitments

Commitments represent goods/services that have been ordered but no delivery has

taken place at the reporting date. Theses amounts are not recognised in the

statement of financial position as a liability or as expenditure in the statement of

financial performance. However, the are amounts is disclosed as part of the

disclosure notes in the financial statements.

Irregular expenditure means expenditure incurred in contravention of, or not in

accordance with a requirement of any applicable legislation including the PFMA.

On discovery of alleged irregular expenditure, such expenditure will be left in the

expenses account and Accounting Authority will record the details of the

expenditure in the irregular expenditure register. The Accounting Authority must

investigate the alleged irregular expenditure to determine whether the expenditure

meets the definition of irregular expenditure.




If the investigation reveal that the expenditure does not constitute irregular

expenditure, the amount will be retained in the irregular expenditure register for

completeness. Should the investigation reveal that the amount is in fact an irregular

expenditure, the Accounting Authority will report, in writing, the details of the

expenditure to National treasury.

Fruitless and wasteful expenditure is defined as expenditure that was made in vain

and would have been avoided had reasonable care been exercised. Such expenditure

is treated as a current asset in the Statement of Financial Position until such

expenditure is recovered from the responsible official or written off as

irrecoverable.

Unauthorised expenditure means

• overspending on the budget

• expenditure not in accordance with the purpose of the budget

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 if recovered, it is subsequently accounted for as revenue in the statement of

financial performance.

Short-term employee benefit

The cost of short-term employee benefits (those benefits payable within twelve

months after the service has been rendered) are recognised in the period in which

the service is rendered and not discounted. Short-term benefit obligations are

measured on an undiscounted basis and are expensed as the related service is

provided.

1.16 FRUITLESS AND WASTEFUL EXPENDITURE

1.17 UNAUTHORISED EXPENDITURE

1.18 EMPLOYEE BENEFIT




Provident, Pension and post retirement benefits

Payments to defined contribution plans are charged as an expense as the fall due.

Payments made to industry managed (or state plans) retirement benefit schemes

are recognised as defined contribution plans where the entity's obligation under the

scheme is equivalent to those arising in a defined contribution retirement benefit

plan.

Contributions to the defined contribution fund are charged to the statement of

financial performance in the year to which they relate.

The entity's income received is exempt from taxation in terms of Section 10 (1)(cA)

of the Income Tax Act.

Recognition

Non-derivative financial instruments comprise trade and other receivables, cash

and cash equivalents, other liabilities (accruals) and other payables. All non-

derivative financial instruments, other than financial instruments at fair value

through profit and loss, are initially recognised at fair value plus any directly

attributable transaction costs. All non-derivative financial instruments at fair value

through profit and loss are initially recognised at fair value excluding any directly

attributable transaction costs. Subsequent to initial recognition non-derivative

financial instruments are classified and measured as described in the individual

notes below.

(A) FINANCIAL ASSETS

Classification and Subsequent Measurement

The entity classifies its financial assets in the following categories: at fair value

through profit or loss, loans and receivables, available-for-sale and held to

1.19 TAXATION

1.20 FINANCIAL INSTRUMENTS




maturity. The classification depends on the purpose for which the financial

assets were acquired. Management initially recognises and determines the

classification of its financial assets at acquisition date.

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through the Statement of Financial

Performance (profit or loss) are financial assets held for trading. A financial

asset is classified in this category if acquired principally for the purpose of

selling in the short-term. Derivatives are also categorised as held for

trading unless they are designated as hedges. Assets in this category are

classified as current assets.

Financial assets at fair value through profit or loss are subsequently

measured at fair value with changes in fair value being recognised directly

in Statement of Financial Performance.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market. They are

included in current assets, except if they have maturities greater than

twelve months after the end of the reporting period. These are classified as

non-current assets.

Loans and receivables are subsequently measured at amortised cost using

the effective interest rate method less any impairment loss. Interest income

is recognised in the Statement of Financial Performance by applying the

effective interest rate.

(iii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either

designated in this category or not classified in any of the other categories.

They are included in non-current assets unless the investment matures or

management intends to dispose of it within twelve months of the end of the

reporting period.




Available for sale financial assets are subsequently measured at fair value

with changes in fair value being recognised directly in net assets (equity).

(iv) Held-to-maturity financial assets

Held-to-maturity assets are non-derivative financial assets with fixed or

determinable payments and fixed maturity that an entity has the positive

intention and ability to hold to maturity other than:

(a) Those that the entity upon initial recognition designates as at fair value

through profit or loss;

(b) Those that the entity designates as available for sale; and

(c) Those that meet the definition of loans and receivables.

They are included in non-current assets unless the investment matures or

management intends to dispose of it within twelve months of the end of the

reporting period.

Held-to-maturity assets are subsequently measured at amortised cost

using the effective interest rate method less any impairment loss. Interest

income is recognised in the Statement of Financial Performance by

applying the effective interest rate.

Derecognition

The entity derecognises a financial asset only when:

(a) The contractual rights to the cash flows from the financial asset expire, are

settled or waived;

(b) It transfers to another party substantially all of the risks and rewards of

ownership of the financial asset; or

(c) 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 who has the practical ability to sell the asset in its entirety,

and to exercise that ability unilaterally.




Any difference between the consideration received and the amounts recognised

and derecognised, is recognised in the Statement of Financial Performance in

the period of the transfer.

The entity transfers a financial asset if, and only if, it either:

(a) Transfers the contractual rights to receive the cash flows of the financial

asset; or

(b) Transfers control of the asset to another party.

(B) FINANCIAL LIABILITIES

Classification

The entity classifies its financial liabilities in the following categories: at fair

value through profit or loss and held at amortised cost. The classification

depends on the purpose for which the financial liabilities were acquired.

Management determines the classification of its financial liabilities at initial

recognition (trade date).

(i) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through the Statement of Financial

Performance (profit or loss) are financial liabilities held for trading. A

financial liability is classified in this category if acquired principally for the

purpose of selling in the short-term. Derivatives are also categorised as

held for trading unless they are designated as hedges. Liabilities in this

category are classified as current liabilities.

Financial liabilities at fair value through profit or loss are subsequently

measured at fair value with changes in fair value being recognised directly

in Statement of Financial Performance.

(ii) Financial liabilities held at amortised cost

On initial recognition financial liabilities held at amortised cost are




measured at their fair value plus transaction costs that are directly

attributable to the issue of the financial liability.

The financial liabilities are subsequently measured at amortised cost using

the effective interest rate method. Interest expense is recognised in the

Statement of Financial Performance by applying the effective interest rate.

Derecognition

The entity removes a financial liability, or a part of a financial liability, from its

Statement of Financial Position when, and only when, it is extinguished i.e.

when the obligation specified in the contract is discharged or cancelled or

expires.

The entity recognises the difference between the carrying amount of the

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, in the Statement of Financial Performance.

(A) Non-Financial Assets

The carrying amounts of non-financial assets are reviewed at each reporting

date to determine whether there is any indication of impairment. If any

indication of impairment exists, then the asset's recoverable amount is

estimated. An impairment loss is recognised whenever the carrying amount of

an asset or its cash-generating unit exceeds its recoverable amount.

The recoverable amount of an asset is the greater of its fair value less costs to

sell, and its value in use. In assessing value in use, the estimated future cash

flows are discounted to their present value using a pre-tax discount rate that

reflects current market assessments of the time value of money and the risks

specific to that asset. Impairment losses are recognised in the Statement of

Financial Performance.

1.21 IMPAIRMENT OF ASSETS




An impairment loss recognised in prior periods for an asset is reversed if, and

only if, there has been a change in the estimates used to determine the asset's

recoverable service amount since the last impairment loss was recognised. If

this is the case, the carrying amount of the asset shall be increased to its

recoverable service amount. This increase is a reversal of an impairment loss.



determined (net of depreciation or amortisation) had no impairment loss been

recognised for the asset in prior periods.

(B) Financial Assets

A financial asset is assessed at each reporting date to determine whether there

is any objective evidence that it is impaired. A financial asset is considered to be

impaired if objective evidence indicates that one or more events that have had a

negative effect on the estimated cash flows of that asset can be reliably

estimated. Individually significant financial assets are tested for impairment on

an individual basis. The remaining financial assets are assessed collectively in

groups that share similar credit risk characteristics.

An impairment loss is reversed if the reversal can be related objectively to an

event occurring after the impairment loss was recognised. All impairment

losses are recognised in the Statement of Financial Performance.

Financial assets and liabilities are offset and the net amount reported in the

Statement of Financial Position when there is a legally enforceable right to offset the

recognised amounts and there is an intention to settle on a net basis, or realise the

asset and settle the liability simultaneously.

A Related party transaction is a transfer of resources or obligations between related

parties, regardless of whether a price is charged. Parties are considered to be related

1.22 OFFSETTING FINANCIAL INSTRUMENTS

1.23 RELATED PARTIES




if one party has the ability to control the other party or exercise significant influence

over the other party in making financial and operating decisions or if the related

party entity and another entity are subject to common control.

However related party transactions exclude transactions with any other entity that

is a related party solely because of its economic dependence on the reporting entity

or the sphere of Government of which it forms part of.

Key management is defined as being individuals with the authority and

responsibility for planning, directing and controlling the day-to-day activities of the

entity. All those officials who report directly to the Commissioner are considered to

be a related party of the entity, thus forming part of the entity's key management

personnel.

Events after the reporting date, are those events both favourable and unfavourable

that occur between the reporting date and the date when the Financial Statements

are authorised for issue, and are treated as follows:

(a) The Entity shall adjust the amounts recognised in its annual financial

statements to reflect adjusting events after the reporting date for those events

that provide evidence of conditions that existed at the reporting date , and

(b) The Entity shall not adjust the amounts recognised in its annual financial

statements to reflect non-adjusting events after the reporting date for those

events that are indicative of conditions that arose after the reporting date.

The following approved Standards of GRAP that have been issued, but are not yet

effective, are not likely to affect the annual financial statements when they are

adopted as these Standards have been used to formulate and inform the current

accounting policies and disclosures:

1.24 EVENTS AFTER REPORTING PERIOD

1.25 Effect of the new standard of GRAP issued




GRAP 20 Related party;

GRAP 25 Employee benefits;

The adoption of the Amendments to the Standards of GRAP and various

Interpretations of the Standards of GRAP (effective from 1 April 2012) will not have

a significant effect on the financial statements.




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2013 2012 - Restated

R R

4. Cash and Cash Equivalents

5. Trade and Receivables from Exchange Transactions

6. Trade and Receivables from Non-exchange Transaction

7. Rental Deposit

Bank Balance - Current Account 4 260 403 71 107

Petty Cash 2 148 294

TOTAL 4 262 552 71 401

Cash and cash equivalents consists of the cash balance of the current account held with Nedbank

Limited and the balance of petty cash at year end.

Accrued interest income 19 416 6 332

Capital prepayment - 215 937

Other prepayments 432 514 3 850

Rental Prepaid - 514 311

Other receivables 4 008 274 205 070

Provision for doubtful debts -3 374 992 -

Reclassification of assets paid for but not received - 1 031 770

TOTAL 1 085 212 1 977 271

Staff debtor 23 339 37 712

TOTAL 23 339 37 712

Deposit - 514 311

TOTAL - 514 311

Deposits consists of the rental deposit paid as per the lease agreement. Due to the re-negotiation of the

lease agreement, the rental deposit was transferred to accounts receivable.

NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 2013

(continued)



R R

8. Trade and other Payables from Exchange Transactions

9. Operating Lease Liability

10. Revenue

Accounts Payable 617 568 2 550 344

Accrued expenses 886 797 856 695

TOTAL 1 504 364 3 407 039

Operating lease liability 134 076 -

TOTAL 134 076 -

During the previous financial period, the operating lease expense on the building and the office

equipment had been straight-lined. An amount of R410 405 was raised as a lease liability. Based on the

contracts, straight-lining should never have taken place (no escalation, straight amount). The lease

liability for the previous period was therefore reversed. The reversal was performed through

Accumulated Surplus. During the current year, the operating lease on the building was re-negotiated

with the landlord, and straight-lining is now applicable due to an annual escalation clause.

Revenue from non- exchange transactions 48 296 490 35 354 516

Revenue from exchange transactions 101 667 192 344

TOTAL 48 398 157 35 546 860

Transfers Received-Budget 48 296 490 32 988 000

Transfers Received- other 1 817 427

Transfer of Assets (the dti) 549 089

TOTAL 48 296 490 35 354 516

The other transfer received (2012) is from the SWEEP fund allocated to the NCC to utilise for its

setup costs which includes the purchase of office furniture and IT equipment. The SWEEP fund is

also utilised to pay the rentals cost for the first year of operations.

10.1 Revenue from Non-exchange Transactions


(continued)


R R

10.2 Revenue from Exchange Transactions

Interest Income 101 667 192 344

Other Income - -

TOTAL 101 667 192 344

Salaries, bonuses and allowances 13 800 227 12 508 965

Increase/(Decrease) in Leave Provision 575 805 239 269

Employee Contributions 1 395 488 484 817

Employer Contributions 1 338 612 1 630 372

TOTAL 17 110 132 14 863 424

NCC contributes to the Government Employees Pension Fund (GEPF) for all employees. Contributions

to the pension plan in respect of service in a particular period are included in the employees' total cost

of employment and are charged to statement of financial performance in the year to which they relate

as part of the cost of employment. The NCC has no legal or constructive obligation in respect of normal

retirements to pay further contributions if the GEPF does not hold sufficient assets to pay all

employees the benefits relating to employee service in the current and prior periods.

11. Employee Related Costs

12. Pension: Defined Benefit Plan -


(continued)



R R

2013

R

Office Photocopying

Building Machines Total

13. Depreciation and Amortisation Costs

14. Taxation

15. Commitments

Property, Plant and Equipment 849 981 528 627

Intangible Assets 220 563 55 091

Reclassification between fixed asset categories 201 837

Reclassification to Accounts Receivable -87 261

Prior year Depreciation understated 716 836

Prior year Depreciation overstated -309 437

TOTAL 1 070 544 1 105 692

The NCC is exempt from Income Tax in terms of section 10(1) (cA) of the Income Tax Act.

Operating lease commitments:

At the statement of financial position date the NCC had outstanding commitments which relates to

office building and photocopiers and which falls due as follows:

Due within one year 4 831 762 188 535 5 020 298

Due between one and five years 14 223 788 125 690 14 349 478

Total minimum future operating lease payments 19 055 550 314 226 19 369 776

The NCC re-negotiated the building operating lease during the year. The new lease is effective over the

same period as the old lease, and will expire on 30 September 2016. The new lease allows for an

escalation of 10% per annum. Increases are effective 1 October of each remaining year of the lease.


(continued)


2013

R

Internal Audit Total

2012

R

Office Photocopying

Building Machines Total

Call Centre

Management

System

Other Commitments

Approved and Contracted out 324 216 324 216

324 216 324 216

Operating lease commitments:

Due within one year 7 143 696 194 820 7 338 516

Due between one and five years 30 270 168 366 387 30 636 555

Total minimum future operating lease payments 37 413 864 561 207 37 975 071

The NCC rents building under operating lease for a period of five years with a renewal option. The lease

agreement for building was entered into effective 1 October 2011 and will be operational for period of

five years, expiring on 30 September 2016. The Lessor allows for annual escalation of 10% per annum.

The lease expense for the year ended 31 March 2012 is R3 708 306.00. It was discovered that the lease

had not allowed for an annual escalation.

NCC rents photocopying machines under an operating lease for a period of three years from Minolta

effective from 01 December 2012, expiring on 30 November 2014. Lease expense for the year amounts

to R62 845.16.

Other Commitments

Approved and Contracted out 2 882 344 2 882 344

2 882 344 2 882 344

The other commitments relates to capital expenditure for procuring and installing a call centre

management system.


(continued)


16. Audit Committee Remuneration

17. Executive Management Remuneration

2013

R

Name of Committee Members Committee Travel Total

Fees Expenses Remuneration

2012

R

Name of Committee Members Committee Travel Total

Fees Expenses Remuneration

2013

R

Name of Executive Management Basic Pension Total

Salary Fund Other Remuneration

Denis Braithwaite - Chairperson 3 207 - 3 207

Phuthi Semenya 1 947 - 1 947

Dikgale Franklin 1 947 1 947

Mantuka Maisela 3 894 - 3 894

TOTAL 10 995 - 10 995

Zamani Ntshiza- Chairperson 6 110 - 6 110

Tendani Rasilingwana 1 855 - 1 855

Phuthi Semenya 1 855 - 1 855

TOTAL 9 820 - 9 820

Mamodupi Mohlala - Commissioner 396 189 51 505 212 621 660 315

Ebrahim Mohamed

- Deputy/Acting Commissioner 811 881 105 545 242 404 1 159 830

Kgabo Mantsho - Chief Financial Officer 523 328 68 033 280 853 872 214

David Ngoako Railo - Head Of Research 589 525 76 638 316 379 982 542

Prudence Moilwa - Head of Investigations 523 328 68 033 280 853 872 214

Thupayahlase Oatlhotse - Head of Legal 392 496 51 025 221 542 665 063

Phumeza Mlungu

- Head of Education and Awareness 392 496 51 025 214 274 657 795

TOTAL 3 629 245 471 802 1 768 926 5 869 973


(continued)


2012

R

Name of Executive Management Basic Pension Total

Salary Fund Other Remuneration


R R

Mamodupi Mohlala - Commissioner 905 380 117 699 485 888 1 508 967

Ebrahim Mohamed - Deputy Commissioner 662 619 86 141 355 606 1 104 366

Kgabo Mantsho - Chief Financial Officer 415 251 53 983 222 851 692 085

David Ngoako Railo - Head Of Research 387 169 71 945 168 447 627 562

Prudence Moilwa - Head of Investigations 210 648 94 266 460 564 765 478

TOTAL 2 581 067 424 034 1 693 356 4 698 457

Surplus/Deficit per Statement of financial Performance 3 719 810 2 297 843

Non-cash adjustments for:

Depreciation and amortisation 1 070 544 1 105 692

Assets transferred from the dti - (549 089)

Accrued Interest (19 416) (6 332)

Finance costs 26 872 135

Loss on disposal of assets 52 691 4 648

Operating Lease Liability 134 076 -

Leave Payout provision expense 575 805 239 270

Bad Debts 3 374 992

Changes in working capital:

Increase in Trade and other receivables (1 524 265) (1 967 088)

Decrease in Trade and other payables (1 902 675) 3 407 039

Net cash inflows from operating activities 5 508 433 4 532 118

18. Reconciliation of net Cash Flows from Operating Activities to Surplus


(continued)



R R

19. Other Operating Expenditure 20 616 704 12 571 623

20. Related Party Relationships - Nature

21. Related Party Transactions - Amount

Administration costs 5 056 957 2 972 500

Other expenses 15 148 120 9 587 093

Travel & Subsistence - Domestic cost 331 381 391 497

Trave & Subsistence- Foreign 683 78 685

Interest Expense 26 872 135

Profit/loss on disposal 52 691 4 648

Prior year incorrect smoothing of lease - -410 405

Prior period correction - 38 691

Prior year incorrect classification as income - -91 220

(a) Non-Executive : Audit Committee Members:

The names of the Audit Committee Members have been disclosed in Note No. 16 above.

(b) Executive Management:

The names of each Executive Manager have been disclosed in Note No. 17 above.

(c) Executive Authority: Department of Trade and Industry

The NCC is a National Public Entity reporting to the Minster of the Department of Trade and

Industry. The Department of Trade and Industry, including their trading entities are related

parties of the NCC.

(a) Non-Executive Board Members and the Audit Committee Members:

The total value of all transactions in respect of the Audit Committee Members are disclosed in

Note No. 16 above.

(b) Executive Management:

The total value of all transactions in respect of Executive Management are disclosed in Note

No. 17.


(continued)


2 013 2012

R R

(c) Executive Authority: Minister of the Department of Trade and Industry

The following amounts were received from the Department of Trade and Industry:

48 296 490 35 354 516

Grant Received 41 577 000 24 234 576

Expenditure paid by the dti on behalf of the NCC 8 753 424

Assets transfered from the dti 549 089

Other Transfers Received 6 719 490 1 817 427

The following balance exists at year end due to compensation expenditure paid by DTI on behalf of

the NCC

Compensation Expenditure paid by the dti

on behalf of the NCC - (1 454 490.40)

Amount receivable for performance bonuses

paid in respect of the dti employees - 178 070

The Agency’s financial instruments consist mainly of cash at bank and cash equivalents, other

receivables and other payables. All financial instruments are measured and recognised at fair value.

The bank deposits and bank balances, receivables and payables approximate their fair value due to the

short term nature of these instruments.

No financial instrument is carried at an amount in excess of its fair value.

The fair values together with the carrying amounts have been determined by using available market

information and is shown in the Statement of Financial Position as detailed below.

Financial assets - at carrying value

Cash and cash equivalents 4 262 552 71 401

Accrued income 19 416 6 332

TOTAL 4 281 968 77 733

22. Financial Instruments and Risk Management


(continued)


2 013 2012

R R

Financial liabilities - at carrying value


Other liabilities 617 568 2 550 344

TOTAL 1 504 364 3 407 039

Fair value of financial instruments:

Financial assets by category - at fair value:

Cash and cash equivalents 4 262 552 71 401

Accrued income 19 416 6 332

TOTAL 4 281 968 77 733

Financial liabilities held at amortised cost:

Other Liabilities 617 568 2 550 344


TOTAL 1 504 364 3 407 039

The revenue and expenses that are included the Statement of Financial Performance are detailed

below per category of financial instrument.

Income from Cash and cash equivalents

Finance Income 101 667 192 344

TOTAL 101 667 192 344

Financial Instruments

Potential concentrations of credit risk consist mainly of cash and cash equivalents, trade receivables

and other receivables. Other receivables consist of accrued interest and prepayments, upon which

credit risk is limited as interest is receivable from banks and prepayments are minimal.

At 31 March 2013, NCC did not consider there to be any significant concentration of credit risk which

had not been insured or adequately provided for.


(continued)


Risk Management

Credit Risk

Credit risk consists mainly of cash deposits, cash equivalents and trade receivables. The entity only

deposits cash with major banks with high quality credit standing and limits exposure to any one

counter-party.

Interest rate risk management

As the entity has no significant interest-bearing assets, the entity’s income and operating cash flows

are substantially independent of changes in market interest rates.

Foreign exchange risk management

The Agency is not exposed to any foreign exchange risk.

Liquidity risk management

The entity manages liquidity risk through the compilation and monitoring of cash flow forecasts as

well as ensuring that there are adequate banking facilities.

The maturity profiles of the financial instruments are summarised as follows:

Financial Liabilities

Other Liabilities 617 568

Accrued expenses 886 797

Net effect 1 504 364 - -

Trade and Other Receivable past due but not impaired

2012 -

2013 397 356 397 356

Maturity period 0 - 12 Months 1 - 5 Years > 5 Years

Neither past due

nor impaired < 60 days 60 - 90 days 90 - 120 days 120+ days TOTAL


(continued)


Trade and Other Receivables Impaired

1 to 3 months - -

3 to 6 months - -

6 to 9 months 3 374 992 -

Over 9 months - -

Opening Balance - -

Contributions to provision 3 374 992 -

Doubtful debts written off against provision - -

Reversal of provision - -

Amounts used - -

Increase / Decrease due to change in estimate - -

Change due to correction of errors - -

Closing Balance 3 374 992 -

Opening balance 239 270 -

Leave provision expense for the year 575 805 534 075

Restatement of prior year balance -294 805

Closing Balance 815 075 239 270

The NCC Human Resources Policy stipulates that all officials are entitled to take accumulated annual

leave days within the first six month period of the next annual leave cycle, failing which those leave

days accrued to the official are forfeited.

The ageing of these receivables is as follows 2013 2012

R R

Reconciliation of Doubtful Debt Provision 2013 2012

23. Reconciliation of provision for Leave Pay 2013 2012


(continued)


24. Contingent Liabilities

25. Reconciliation of budget surplus/deficit with statement of financial

performance

Details of Contingent Liabilities follow:

RAM 77 AT-R Construction CC

RAM 77 AT-R Construction CC (RAM) was contracted to provide a Call Centre Management System

(CCMS) to the NCC (refer to 2012 Commitments). The NCC paid an amount of R1 000 000 as a deposit to

RAM. The contract was further awarded to a subcontractor by RAM.

The CCMS was never provided to the NCC. In a letter dated 18 February 2013, received from the

attorneys representing RAM, being Webber Wentzel, the NCC was informed that legal action would be

taken against the NCC for breach in terms of the agreement. The outstanding amount to settle the

breach is R1 305 875.

Izwelethu Protection Services (Izwelethu)

Izwelethu had been awarded a contract to provide security services to the NCC. Due to non-

performance on their part, being that thefts still occurred during their time at the NCC, their services

were terminated. Izwelethu are claiming damages for the remaining period of the contract. The

amount being claimed is R375 000.

National Treasury

Surplus retained by the National Consumer Commission, without the approval from Treasury. The

ultimate outcome of this matter has not yet been determined, but could potentially be demanded by

Treasury. The amount, net of Accounts Payable, is R2 758 187.

2013

Statement of comparison of budget and actual amounts

Receipts

Rendering of services - - - - -

Investment revenue - - - 101 667 101 667

Grant revenue 41 577 000 - 41 577 000 48 296 490 6 719 490

Total Receipts 41 577 000 - 41 577 000 48 398 157 6 821 157

Payments

Employee costs 22 547 000 - 22 547 000 22 991 100 444 100

Operating expenses 17 004 000 - 17 004 000 16 603 419 -400 581

Finance charges - - - 26 872 26 872

Materials and bulk purchases - - - - -

Other expenditure 2 026 000 - 2 026 000 5 056 957 3 030 957

Total Payments 41 577 000 - 41 577 000 44 678 348 3 101 348

Net Receipts/ (payments) - - - 3 719 810 3 719 810

Explanation of material difference between the final budget and actual

Actual amounts DifferenceApproved Final on comparable between final

Budget Adjustments budget basis budget & actual


(continued)


The National Consumer Commission was in need of additional funding to cover unexpected legal costs.

2012 - Restated

Statement of comparison of budget and actual amounts

Receipts

Rendering of services - - - - -

Investment revenue - - - 192 344 192 344

Grant revenue 32 988 000 - 32 988 000 35 354 516 2 366 516

Total Receipts 32 988 000 - 32 988 000 35 546 860 2 558 860

Payments

Employee costs 23 654 000 - 23 654 000 19 571 701 -4 082 299

Operating expenses 8 854 000 - 8 854 000 10 704 681 1 850 681

Finance charges - - - 135 135

Materials and bulk purchases - - - - -

Other expenditure 480 000 - 480 000 2 972 500 2 492 500

Total Payments 32 988 000 - 32 988 000 33 249 017 261 017

Net Receipts/ (payments) - - - 2 297 844 2 297 844

Explanation of material difference between the final budget and actual

The National Comsumer Commission was in its first year of operation and was assisted with start-up

costs by the dti.

Opening Balance 135

Finance expense 26 872 135

Unnecessary printing expense 52 020

Legal fees of a personal nature - Former Commissioner 27 622

Call Centre management system - RAM 77 At-R's Construction CC 717 105

Assets paid for and never received 306 195

VAT incorrectly claimed 764 536

Assets no longer in use 125 867

Identified in current year, relating to prior year

Legal fees of a personal nature - Former Commissioner 45 600

Assets paid for and never received 1 031 770

VAT incorrectly claimed 477 717

Total 3 575 439 135

This finance expense relates to interest charged on late payment to the Government Employees

Pension Fund, legal costs and the Auditor General's fee.

The Legal Division of the National Consumer Commission has been instructed to attempt recovery of

fruitless and wasteful expenditure. Attorneys have been engaged for this purpose.

Actual amounts DifferenceApproved Final on comparable between final

Budget Adjustments budget basis budget & actual


R R

26. Fruitless and Wasteful Expenditure


(continued)


27. Irregular Expenditure 2013 2012

R R

28. Prior period errors

Opening Balance 8 533 591

Add: Irregular Expenditure -Current year 15 590 211 8 533 591

Less: Amounts condoned - -

Less: Amounts recoverable (not condoned) - -

Less:Amounts not recoverable (not condoned) - -

Irregular Expenditure awaiting condonation 24 123 802 8 533 591

Analysis of expenditure awaiting condonation per

age classification

Current year 15 590 211 8 533 591

Prior years 8 533 591 -

Total 24 123 802 8 533 591

Irregular Expenditure 15 590 211 8 533 591

Goods and service with a transaction value between

R10 000 and R500 000 were procured without obtaining

written quotations from three different prospective

suppliers. 235 593 517 434

Suppliers with no valid tax certificate 125 590

Invitations for competitive bids not advertised withing

21 days as per Treasury Regulation 7 479 461

Irregular Expenditure not condoned by relevant

Authority 411 106

Procurement process not followed 8 222 100

Irregular in terms of the PFMA 839 303

Irregular legal fees 2 871 871

Documentation/contracts unavailable 2 421 344

Call Centre Management System 1 000 000

The Legal Division of the National Consumer Commission has been instructed to attempt recovery of

debtors. Attorneys have been engaged for this purpose.

The following prior period errors were identified and adjustments passed:


(continued)


Operating lease expense on the building had been straight-lined. Due to there being no escalation

clause, the rental amount being fixed over the period of the lease, the resulting lease liability was

reversed. This reversal occurred through opening Retained Earnings.

Fixed assets which had never been received, but had been paid for and included in the fixed asset

register. These fixed assets were reclassified to accounts receivable. The mentioned fixed assets had

been depreciated from the prior year. The adjustment occurred through opening Retained Earnings.

Fixed assets, specifically Computer Equipment, being incorrectly classified as Leasehold

Improvements. These assets were reclassified to the correct category. The categories depreciate at

different rates. The resulting difference was adjusted through opening Retained Earnings.

Overstatements and Understatements of prior year depreciation have been corrected, the resulting

difference was adjusted through retained earnings.

Prior year leave provision had been understated, the resulting difference was adjusted through

retained earnings.

Incorrect allocation of income and income not accounted for, the resulting difference was adjusted

through retained earnings.

A difference existed between the prior year retained earnings per the General Ledger and the Annual

Financial Statements. This difference was corrected in the current year.

The Cash Flow Statement has been adjusted with all adjustments detailed above.

The correction of the errors results in adjustments as follows:

Statement of Financial Position

Property, plant and equipment -1 031 770

Accounts receivable 1 031 770

Operating Lease Liability -410 405

Provision for Leave Pay -294 805

Opening retained earnings 38 691

Retained Earnings 501 697

Profit or loss

Depreciation expense - Reclassifications -114 576

Depreciation expense - Understatements -716 836

Depreciation expense - Overstatements 309 437

Other Operating Expenditure (Straight-Lining of Leases) 410 405

Employee Related Costs 294 805

Other Operating Expenditure (Prior year error) -38 691

Other Operating Expenditure (Prior year incorrect allocation

as income - refunds) 11 295

Other Income (prior year correction to interest received) 8 982

2013 2012

R R


(continued)



Act Consumer Protection Act No. 68 of 2008

EID Enforcement and Investigations

Division

ADR Alternative Dispute Resolution

AEA Advocacy Education and Awareness

CHL Consumer Helpline

CHM Complaints Handling Manual

CMS Case Management System

CoGTA Dept. of Cooperative Governance and Traditional Affairs

CPA Consumer Protection Act

the dti Department of Trade and Industry

HCD Human Capital Development

HoTL House of Traditional Leaders

HRM Human Resource Management

ICT Information and Communication Technology

IT Information Technology

KSF Key Success Factors

LSM Living Standard Measure

MCC Medicines Control Council

MOU Memorandum of Understanding

NCC National Consumer Commission

NCR National Credit Regulator

NCT National Consumer Tribunal

NGO Non-Governmental Organization

NPA National Prosecuting Authority

PFMA Public Finance Management Act

SABS South African Bureau of Standards

SAC Standing Advisory Committee

SCM Supply Chain Management

SLA Service Level Agreement

SOP Standard Operating Procedures

TOR Terms of Reference

Acronyms

bbreviations&

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