Ncera Farms Annual Report 2005/6: briefing

AGRICULTURE AND LAND AFFAIRS PORTFOLIO COMMITTEE
24 October 2006
NCERA FARMS ANNUAL REPORT 2005/6: BRIEFING

Acting Chairperson: Ms D Hlengethwa (ANC)

Documents handed out:
Ncera Farms (Pty) LTD Annual Report: 2005/2006 Powerpoint presentation
Ncera Farms (Pty) LTD Annual Report: 2005/2006

SUMMARY
The committee was briefed on Ncera farm budget allocation and expenditure, and on both the external audit report and the audit committee report. The audit had been unqualified. Certain planned capital projects were rolled over to 2006/7because they could not be finalized by the end of 2005/06. The audit committee had reported that financial systems and internal controls were in place and were adequate and operational.
Members asked questions on the target market, the need for security, and for further clarity on what was included in livestock and dairy expenses, transport costs and travelling expenses, and management and administration costs. Questions were asked on some of the services reflected in the Annual Report. The future involvement of government was questioned. Transfer of skills was raised and clarified.

MINUTES
Mr Tommie Marais, Chairman of the Board, Ncera Farms, briefed the Committee on the Annual Report. Ncera Farms was a Schedule 3B public entity, and had created a service centre. His report highlighted a number of achievements, which included the success of the administration and training centre, livestock handling facilities, borehole, security fence and reservoir erection. He listed the members of the Board.  and progress in building the new offices. He also mentioned some challenges, which included the high rate of crime and heavy rains, which delayed the building project. On financial report, the Ncera Agriculture Development Corporation (NADC) had spent R2.4 million out of its budget of R3.72 million (of which R2.3 million was transferred from the Department. The surplus was R1.3 million. There had been an unqualified report with no emphasis of matter. The surplus funds resulted from certain planned capital projects not finalized, and the funds were rolled over to 2006/7. There had been a positive audit committee report, and adequate internal control systems were in place.
 
Discussion
Ms C Nkuna (ANC) asked whether the target market of Ncera was national or international. She also enquired why it was necessary to employ more security.

Mr Marais replied that the market was local and Ncera sold milk every day. Fourteen security guards had now been employed because there were number of robberies in Ncera, and security was necessary.

Mr D Dlali (ANC) asked the difference between livestock expenses and dairy expenses, and also enquired as to  the difference between transport costs and travelling expenses.

On the question of transport, Mr Marais replied that the Annual Report had reflected the Board’s payment for Ms Ngubelanga’s traveling costs. Mr Marais, being a public servant, had his transport costs paid for by the government.

Mr Dlali asked about the services rendered to the company, what they cost, and if those giving legal advice were qualified lawyers, and, if so, who was paying them.

Mr Marais replied that the services mentioned did not carry cost implications, and the advice was not given by lawyers. The services had related to notarisation of documents.

Mr A Van Niekerk (DA) asked Mr Marais how he saw the future and development of Ncera Farms, specifically whether future plans would involve the government.

Mr Marais replied that government involvement was crucial and would definitely be involved in future endeavours
 
Mr Dlali asked for the difference between the management fees and administration expenses.

Mr G van den Heever, Management Agent, Ncera Farms, explained how the administration costs had been allocated. He added that there were five members paid by the Board.

The Chairperson asked what the lowest payment was to members.

Mr van den Heever replied that it was R4 000. Mr Marais added that four members were not paid by Ncera Agricultural Development Corporation.

Ms Nkuna asked if the soil in Ncera was wet.

Mr Marais replied that this was not a problem at Ncera.

Mr Dlali asked whether NADC had any specific targets for the future, and whether there was any transfer of management skills to future management.

Mr Marais replied that currently this was not happening. However, there were eleven farms in Ncera and these aspects would develop.

The meeting was adjourned.