Select Committee on Labour

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Select Committee on Labour and Public
Enterprises 8 March 2005 Presentation on
the SAFCOL Annual Report 2003/04
Charles Ntuli Sikkie Kajee
Kobus Breed Joe Coetzer
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Outline

• 1. Introduction to SAFCOL Operations
• Map
• Video

2. Corporate Governance

• 3. Status of Privatisation
• Core Assets
• Non-core Assets
• Interest in privatised entities

4. Overview of performance against objectives
5. Financial Review 2004
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Introduction to SAFCOL OperationsPMG note
map not included
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Corporate Governance
Code of Corporate Practices and Conduct The
Directors endorse the Code of Corporate Practices
and Conduct as set out in the King Report. The
Directors confirm the need to conduct the
business with integrity and in accordance with
generally accepted corporate practice.
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Public Finance Management Act, 1999 (PFMA)
The PFMA became effective on 1 April 2000. As
part of the implementation of the PFMA, there is
an ongoing process of awareness, education,
instruction and advice to the SAFCOL Board and
employees.
The Board of Directors are the accounting
authority of SAFCOL. The Directors comply with
their fiduciary duties as set out in the Act.
Since its inception in 1993, SAFCOL followed a
policy of good corporate governance and sound
accounting principles and internal control and as
a result, comprehensive accounting policies,
accounting procedures, internal control
procedures, conditions of employment and
disciplinary procedures, including a code of
conduct, were prepared and documented and are
well entrenched in the operations of the
company.
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As a substitute for the corporate plan and
shareholders compact, SAFCOL submitted a
privatisation framework, which outlines
Governments privatisation objectives for SAFCOL.
This privatisation framework does not contain
the performance objectives as stated in the Chief
Executive Officers Report, other than the
privatisation objective.
The other responsibilities have been addressed by
SAFCOL, as far as practically possible, within
the constraints resulting from privatisation.
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Except for one item listed below, SAFCOL complies
with the PFMA and Treasury Regulations in all
material respects with regard to the provisions
applicable to public entities.

• Projections of revenue, expenditure and
  borrowings for a financial year are included in
  the annual budget that is approved by the Board.
  This approval does however not take place at
  least one month before the commencement of the
  financial year, but within
• one month of such commencement.

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Status of privatisation
No privations transactions were completed during
the year under review in respect of the core
assets. The status can be summarised as
follows-
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Core Assets In preparation for the eventual
privatisation, SAFCOL acquired certain commercial
forestry assets and business from DWAF at a
nominal value.
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The combined sale assets, comprising the major
portion of businesses and commercial forestry
assets of the company as well as the relevant
portions of the commercial forestry assets and
businesses acquired from DWAF were transferred to
wholly-owned subsidiaries of SAFCOL, as follows
-
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The following table provides an indication of the
impact of the said transactions
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Non-Core Assets The portion of the operations in
KwaZulu-Natal not transferred to Siyaqhubeka
Forests (Pty) Ltd and therefore remaining with
SAFCOL, the St Lucia region, comprises of
approximately 7 200 ha of commercial forestry
plantations. Other assets remaining with SAFCOL
are as follows -
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Interest in privatised entities Up to 19 of
SAFCOLs interest in the privatised entities has
been earmarked for disposal to the following
entities
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Overview of performance against objectives
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Financial Review
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Financial Review (continued)
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Key Ratios
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