TABLE OF CONTENTS

1 STRUCTURE 4

Council members 4

Honorary curators 4

Staff members 5

Organisational diagram 6

2 ACCOUNTING AUTHORITY’S REPORT 8

Submission of the Accounting Authority’s Report to the Executive Authority 8

Mandate

Mission 8

Introduction 8

Performance information – income 10

Performance information – expenditure 11

Corporate governance 13

The War Museum and the Future 13

Events after reporting date 13

3 STATEMENT OF RESPONSIBILITY 14

4 ANNUAL FINANCIAL STATEMENTS (INDEX) 16

Management approval 17

Report of the Audit Committee 18

Report of the Auditor-General 20

Annual financial statements 23

Notes to the financial statements 27

Annexure to the financial statements 46

5 HUMAN RESOURCE MANAGEMENT REPORT 48

SKEIDINGSBLAD
1 STRUCTURE

Council Members

Prof Louis Changuion Chairman

Dr J.D.E. Cronje

Prof A.W.G. Raath Chairman, Audit Committee

Mrs A. S. Rall

Mrs R. Ramagoshi

Maj-Genl J.A. Steenkamp

Adv C. F. Steyn

Mrs S. van der Sandt

Honorary Curators

Dr J.D.E. Cronje (Philately)

Dr R.C. Bester (Fire-arms collection)

1 STRUCTURE (continued)

Staff Members

Director

Col F J Jacobs, MA, HED

Deputy Director

Mr J H du Pisani, MA

Chief Financial Officer

Mrs C A Swanepoel, B Acc Hons

First Museum Human Scientist

Mr J J R van Zyl

Miss E M Wessels, MA, HED

Museum Human Scientists

Mr A Sekete, MA

Mr J Wolfaardt

Conservation

Lt-Col B P van Coller, BA Hons, HED

Mrs E L Knox

Mr P Wentzel

Head Typist/Publications

Mrs A A Fourie, BA

Industrial Technician (Artist/Photographer)

Mr C C Nieuwenhuizen

Technician

Mr N J Rossouw

Store Clerk

Mrs E Labuschagne

Secretary

Mrs E Malherbe

Financial Clerk

Mrs J P Wansbury

Specialised Auxilliary Service Clerk

Mr E Malankabe

Security

Mr J Mosotho

Workshop Foreman

Mr J N Katu

General Assistants

Mr B J Katu, Mrs J Kok, Mr K Louw, Mrs E Minnie, Mr S Nqai, Mr O Ramatsepe

1 STRUCTURE (continued)

TUSSENBLAD
2 ACCOUNTING AUTHORITY’S REPORT

REPORT OF THE ACCOUNTING AUTHORITY OF THE WAR MUSEUM OF THE BOER REPUBLICS

for the year ended 31 MARCH 2007

Report by the Accounting Authority to the Executive Authority and

Parliament of the Republic of South Africa

(Submitted in terms of the Public Finance Management Act, 1 of 1999)

I have the honour of submitting the 2006/2007 Annual Report of the War Museum of the Boer Republics in terms of the Public Finance Management Act, 1999

COL F J JACOBS

ACCOUNTING AUTHORITY

31 May 2007

MANDATE

The War Museum of the Boer Republics is mandated in terms of the Cultural Institutions Act, No 119 of 1998.

MISSION

To collect, curate and display items relating to the Anglo-Boer War of 1899 to 1902 and the Rebellion of 1914; research and publications on these themes and cooperation with other organisations, nationally and internationally, in order to develop these themes.

INTRODUCTION

The Council and Corporate Governance

The Council’s last year of service was unfortunately marked by a series of decision causing uncertainty. The Council’s three years’ of service was extended from 30 April 2006 to 30 September 2006, but a new council was not appointed and in the course of November 2006 the council’s life was again extended to 31 March 2007. Due to administrative delays there was still no council at 31 May 2007 and therefore this report is signed by the Director. Despite the uncertainty caused by these administrative problems, the council functioned effectively and continued its responsibility with regard to corporate management.

Human Resources Policy. The pro forma use with performance based evaluation was approved by the Council and the process will be

2 ACCOUNTING AUTHORITY’S REPORT (continued)

implemented in the new financial year. The Council is sympathetic towards addressing imbalances of the past regarding new appointments, but due to a very low staff turnover very little progress has been made.

Collections management. The computerisation of the documents relating to collections management is in progress and all set target dates have been met.

Aligning with Government’s Strategic Objectives

The Strategic objectives of Government have been incorporated in the entity’s strategic plans where possible. One staff member under the Expanded Public Works Programme has been appointed as a full-time employee. The whole process of internship, proposed by the Department of Arts and Culture is being supported.

When the Minister of Arts and Culture announced certain possibilities to broaden the view regarding existing monuments of the Anglo-Boer War, the Council immediately started negotiating with the National Women’s Memorial Commission for a process of cooperation whereby the whole area around the museum and monument could be developed in to an all-inclusive place of remembrance.

Services rendered by the Public Entity

The museum services the whole community as a place of education, recreation and tranquillity. The exhibitions portray the inclusivity of the Anglo-Boer War and is therefore supported by all the racial groups as proved by the support of the museum’s facilities by church groups, cultural organisations and schools.

The museum supplies services that include conference facilities. There is also a comprehensive library for the support of educational pursuits. The museum’s photographic collection supplies researchers and publishers with most probably the world’s most comprehensive collection of the museum’s theme.

Tariff Policy

The following tariffs are applicable:

Rent of functions’ hall R550-00

Rent of auditorium R350-00

Photographs R10 $5 £2 (each for private use)

R50 $10 £5 (each for publication purposes)

2 ACCOUNTING AUTHORITY’S REPORT (continued)

Capacity Constraints

The Museum is experiencing a serious capacity constraint with regard to access for disabled persons. This matter has been mentioned in the previous annual report; included in the strategic plan; and even mentioned to the Arts and Culture Portfolio Committee. To date no reaction has been received. This matter has become a serious embarrassment for the museum.

Utilization of donor funds

No funds from donors were received.

Transfer payments

No transfer payments have been made .

Public Private Partnerships (PPP)

No Public Private Partnerships were entered in.

PERFORMANCE INFORMATION

Income

Entrance Fees
Key objective	Strategy	Target	Performance results	Reason for variance
To increase number of visitors	To actively promote museum	10% increase per annum	2005/2006= R41 000 2006/2007 = R48 000 Increase = 17%	Target reached and bettered

Business Ventures
Key objective	Strategy	Target	Performance results	Reason for variance
Renting of facilities and marketing of publications	Advertise facilities	15% per annum	Facilities: 2005/06 = R13 000 2006/07 = R15 000 Publications: 05/06 = R52 000 06/07 = R40 000	Increase 15% Target reached Target not reached due to lowering of price of Suffering of War and entity not publishing new books

2 ACCOUNTING AUTHORITY’S REPORT (continued)

Investment Income
Key objective	Strategy	Target	Performance results	Reason for variance
Utilisation of investments to gain maximum results	Stringent application of expenditure policy	10% increase per annum	2005/06 = R125 000 2006/07 = R187 000 Increase = 49%	Investment increased due to requirement of post retirement benefits

Expenditure

Support Functions
Key objective	Strategy	Target	Performance results	Reason for variance
The percentage of state subsidy spent on staff maintenance is very high and needs to be lowered	To improve human resource management To implement performance measurement	Keep percentage below 75% of income per annum	2005/06 = 84% 2006/07 = 81%	7% short of target due to negotiated salary increase 1 July 2006

Collection, conservation and curation
Key objective	Strategy	Target	Performance results	Reason for variance
1. The upgrading of the record keeping system of the museum’s collections to a computer based system. 2. The development of a computer generated conservation system iro the collections. 3. Focus collection policy on aspects such as artefacts from the British forces as well as from Black participants of the war.	1. Develop a project focussing on this aspect. 2. Expand the above-mentioned aspect iro this activity. 3. Informal field work	1. 60% of system computerised at end of year. 2. As above 3. Progress reports.	Review quarterly. Review quarterly Review quarterly	Report quarterly Progress according to targets Report quarterly Progress according to targets Report quarterly Progress not satisfactorily. No artefacts from Black participants could be found

2 ACCOUNTING AUTHORITY’S REPORT (continued)

Publications
Key objective	Strategy	Target	Performance results	Reason for variance
To support research for publications by external publishers and by museum.	Encourage researchers in the field of Anglo-Boer War and identify suitable publishers	To be involved with the publication of at least two publications per annum	Edited text for: Bittereinde Vrede And De la Rey ─ ‘n Stryd vir Vryheid	Target achieved

Exhibitions
Key objective	Strategy	Target	Performance results	Reason for variance
1. To upgrade permanent exhibitions to keep developing new audiences. 2. The rotation of temporary exhibitions to support the national strategic imperatives of Government	1. Identify shortcomings and rectify where necessary 2. Identify exhibitions that will support the national strategic initiatives, e.g. Medical conditions in warfare; children in armed conflict; suffering of non-combatants..	1. Quarterly progress reports 2. Implementation of three temporary exhibitions per annum.	All captions now in three languages except for some paintings Children in War NZAV Exhibition Suffering of non-combatants	Target achieved. Shortcomings in new Strategic Plan Target achieved

Education and public programmes
Key objective	Strategy	Target	Performance results	Reason for variance
1. To develop programmes that will supplement the lack of history in school programmes. 2. To cater for specialist groups such as collectors, re-enactors, etc.	1. Develop a realistic outreach programme to learners. 2. To actively promote the museum as a suitable venue for cultural activities.	1. The programme to be operational beginning 2007 2. Actively get at least two such groups involved in museum.	Display posters for outreach programme to school completed Militaria Collectors Club And OFS Philatelic Club now use Museum as venue	Target achieved. Placed on new Strategic Plan Target achieved

2 ACCOUNTING AUTHORITY’S REPORT (continued)

Corporate Governance

Policy documents are in a process of review with the aim to further improve the whole aspect of management as set out in the PFMA.

The first three year rolling plan of the internal audit function was completed. The function is handled in a very responsible way by a contracted firm of auditors and their reports were meticulously implemented and reported on to the Audit Committee.

The Council was very supportive of the process of updating the record keeping process with regard to the collections and the development of a computerised system. This is an on-going process.

Risk evaluation has been updated and implemented. The chairperson of the Audit Committee has given several briefings to the members of the Council regarding their individual and corporate responsibilities to the entity. It can thus be safely stated that the whole approach towards corporate governance is on a very responsible level.

The War Museum and the Future

As stated previously the council of the War Museum has firmly embarked on the road to utilise the knowledge of war in an effort to develop an anti-war mentality. In this respect they want to show that in any war it is always the non-combatants, mainly children and women, that suffer most. These realities were portrayed in various exhibitions

The new year will also be the period of a new council and if there is an insufficient continuity factor many of the issues that have been overcome in the past will indeed be new challenges for the future.

Events after the reporting date

None

…………………………………………

Col F J Jacobs

Accounting Authority

3 STATEMENT OF RESPONSIBILITY

Statement of Responsibility

for the year ended 31 March 2007

In terms of the Public Finance Management Act, 1999 (Act No. 1 of 1999), as amended, the Council keeps full and proper records of the financial affairs of the War Museum, and that the Annual Financial Statements are a fair representation of the War Museum, its business and its financial results, its performance against predetermined objectives and its financial position as at the end of the financial year and that they are presented in terms of Generally Accepted Accounting Practice.

The Annual Financial Statements are the responsibility of the Council and it is the Auditor-General’s responsibility to independently audit and report on the Annual Financial Statements.

It is the assessment of the Council that the War Museum will continue as a going concern during the year ahead.

The Public Finance Management Act also requires that the Council must initiate a three year corporate plan that includes strategic objectives, key performance indicators for assessing the War Museum’s performance, a risk management plan, a fraud prevention plan, a materiality and significance framework and a financial plan. In terms of the Public Finance Management Act the War Museum submits quarterly reports to the National Treasury.

In terms of the Public Finance Management Act the Council ensures that the War Museum has and maintains effective, efficient and transparent systems of financial and risk management and internal control, a system of internal audit and an appropriate procurement and provisioning system. The Council also takes effective and appropriate steps to collect all revenue and to prevent irregular and fruitless and wasteful expenditure and the effective and economical management of working capital.

It is also the responsibility of the Council to manage and safeguard the assets and to manage revenue, expenditure and liabilities of the War Museum.

As required by legislation, the Council complies with taxes, levies, duties, pensions and audit commitments.

As required by the Public Finance Management Act the Council accepts the responsibility to submit all reports, returns, notices and other information to Parliament and to the National Treasury.

…………………………………………

Col FJ Jacobs

Director

TUSSENBLAD
4 ANNUAL FINANCIAL STATEMENTS (INDEX)

Annual Financial Statements for the year ended 31 March 2007

Management approval 17

Report of the Audit Committee 18

Report of the Auditor-General 20

Statement of Financial Position 23

Statement of Financial Performance 24

Statement of Changes in Net Assets 25

Cash Flow Statement 26

Notes to the Financial Statements 27

Statements of Gifts, Donations and Sponsorships received Annexure 1 46

Management Approval for the year ended 31 March 2007

The financial statements set out on pages 23 to 46 have been approved by the Accounting Authority.

Col F J Jacobs

Accounting Authority

31 May 2007

Report of the Audit Committee for the year ended 31 March 2007

Report of the Audit Committee required by Treasury Regulations 27.1.7 and 27.1.10 (b) and (c) issued in terms of the Public Finance Management Act 1 of 1999, as amended by Act 29 of 1999

We are pleased to present our report for the financial year ended 31 March 2007.

Audit Committee Members and Attendance

The audit committee consists of the members listed hereunder and meets regularly as per its approved terms of reference. During the current year 5 meetings were held.

Name of Member Number of Meetings Attended

Prof A W G Raath (Chairperson) 5

Mr A Theron 5

Mr J L Pretorius 5

Mr A P van Zyl 3

Ex officio

Col F J Jacobs (Director) 5

Miss Y Pretorius (CFO) (resigned wef 31 Dec 2006) 4

Mrs C A Swanepoel (CFO) (appointed wef 1 Jan 2007) 1

Audit Committee Responsibility

The Audit Committee has adopted appropriate formal terms of reference as its audit committee charter, has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.

The effectiveness of internal control

The system of controls is designed to provide cost effective assurance that assets are safeguarded and that liabilities and working capital are efficiently managed. In line with the PFMA and the Corporate Governance requirements, Internal Audit provides the Audit Committee and management with assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. It was noted that no significant or material non-compliance with prescribed policies and procedures has been reported. Accordingly, we can report that the systems of internal control for the period under review were improved and are now effective and efficient.

Report of the Audit Committee for the year ended 31 March 2007 (continued)

Evaluation of Annual Financial Statements

The Audit Committee has

• Reviewed and discussed the audited annual financial statements to be included in the annual report with the Auditor-General and the Accounting Officer;

• Reviewed changes in accounting policies and practices to comply with GAAP.

• Approved the annual financial statements.

…………………………………………

Prof AWG Raath

Chairperson of the Audit Committee

Date ……………………

REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE FINANCIAL STATEMENTS AND PERFORMANCE INFORMATION OF THE WAR MUSUEM OF THE BOER REPUBLICS FOR THE YEAR ENDED 31 MARCH 2007

REPORT ON THE FINANCIAL STATEMENTS

Introduction

1. I have audited the accompanying financial statements of the War Museum of the Boer Republics which comprise the statement of financial position as at 31 March 2007, statement of financial performance, statement of changes in net assets and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 23 to 46.

Responsibility of the accounting authority for the financial statements

2. The accounting authority is responsible for the preparation and fair presentation of these financial statements in accordance with the basis of accounting determined by the National Treasury and in the manner required by the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and the Cultural Institutions Act, 1998 (Act No. 119 of 1998). This responsibility includes:

§ designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error

§ selecting and applying appropriate accounting policies

§ making accounting estimates that are reasonable in the circumstances.

Responsibility of the Auditor-General

3. As required by section 188 of the Constitution of the Republic of South Africa, 1996, read with section 4 of the Public Audit Act, 2004 (Act No. 25 of 2004) and section 11 of the Cultural Institutions Act, 1998 (Act No. 119 of 1998), my responsibility is to express an opinion on these financial statements based on my audit.

4. I conducted my audit in accordance with the International Standards on Auditing and General Notice 645 of 2007, issued in Government Gazette No. 29919 of 25 May 2007. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

5. 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.

6. An audit also includes evaluating the:

· appropriateness of accounting policies used

· reasonableness of accounting estimates made by management

· overall presentation of the financial statements.

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

Basis of accounting

8. The museum’s policy is to prepare financial statements on the basis of accounting determined by the National Treasury, as set out in note 2 to the financial statements.

Opinion

9. In my opinion the financial statements present fairly, in all material respects, the financial position of the War Museum of the Boer Republics as at 31 March 2007 and its financial performance and cash flows for the year then ended, in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by the PFMA.

OTHER MATTERS

10. Matters of governance

In terms of section 5(1) of the Cultural Institutions Act, 1998 (Act No. 119 of 1998), The affairs of a declared institution, other than a flagship institution, are under the control, management and direction of a council consisting of -

(a) at least seven members appointed by the Minister in the prescribed manner; and

(b) the director of the declared institution concerned.

However, no council had been in place at the War Museum of the Boer Republics since 31 March 2007.

OTHER REPORTING RESPONSIBILITIES

Reporting on performance information

11. I have audited the performance information as set out on pages 10 to 12.

Responsibilities of the accounting authority

12. The accounting authority has additional responsibilities as required by section 55(2)(a) of the PFMA to ensure that the annual report and audited financial statements fairly present the performance against predetermined objectives of the public entity.

Responsibility of the Auditor-General

13. I conducted my engagement in accordance with section 13 of the Public Audit Act, 2004 (Act No. 25 of 2004) read with General Notice 645 of 2007, issued in Government Gazette No. 29919 of 25 May 2007.

14. In terms of the foregoing, my engagement included performing procedures of an audit nature to obtain sufficient appropriate evidence about the performance information and related systems, processes and procedures. The procedures selected depend on the auditor’s judgement.

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

16. No audit findings.

APPRECIATION

17. The assistance rendered by the staff of the War Museum of the Boer Republics during the audit is sincerely appreciated.

BJK van Niekerk for Auditor-General

Bloemfontein

31 July 2007

Statement of Financial Position

as at 31 March 2007

		2006/07 R’000	2005/06 R’000 (as restated)
	Notes
ASSETS
Current assets
Cash and cash equivalents	3	233	508
Receivables	4	38	45
Inventories	5	591	584
Total current assets		862	1137
Non-current assets
Investment	6	3013	1876
Long-term debtor	7	49	86
Intangible Assets	8	11	7
Property, Plant and Equipment	9	343	265
Total non-current assets		3416	2234
Total assets		4278	3371
LIABILITIES
Current liabilities
Payables	10	24	31
Total current liabilities		24	31
Non-current liabilities
Provisions	11	244	220
Finance lease liability	12	12	21
Post employment health care benefit liability	13,14	2434	2304
Total non-current liabilities		2690	2545
Total liabilities		2714	2576
Net assets		1564	795
NET ASSETS
Accumulated surpluses		1564	795
Reserves		-	-
Total net assets		1564	795

Statement of Financial Performance

for the year ended 31 March 2007

		2006/07 R’000	2005/06 R’000 (as restated)
	Notes
REVENUE
Gifts, sponsorships and donations received	15	9	3
Other operating revenue	16	106	123
Rental income	17	20	16
Transfers and subsidies received	18	4723	3795
Total revenue		4858	3937
EXPENSES
Administrative expenses	19	77	75
Audit fees	20	57	76
Amortisation charge	21	2	2
Depreciation charge	22	80	69
Finance costs	23	20	24
Other operating expenses	24	389	416
Project expenses	25	-	39
Staff costs	26	3804	3177
Total expenses		4429	3878
Surplus/(deficit) from operations		429	59
Gain from sale of property plant and equipment		13	-
Actuarial gain		128	-
Income from investments	27	199	137
Surplus/(deficit) for the year		769	196

Statement of changes in net assets

for the year ended 31 March 2007

		Accumulated Surpluses	Director’s Vehicle Reserve	Total
	Notes
Balance at 1 April 2005		248	230	478
Surplus for the year		196	-	196
Prior period error	32	121	-	121
Transfers		230	(230)	-
Balance at 1 April 2006		795	-	795
Surplus for the year		769	-	769
Balance at 31 March 2007		1564	-	1564

Cash Flow Statement

for the year ended 31 March 2007

		2006/07 R’000	2005/06 R’000 (as restated)
	Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers		4871	3937
Cash paid to suppliers and employees		(4072)	(3591)
Net cash flows from operating activities	28	799	346
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment		(159)	(47)
Disposal of plant and equipment		1	-
Purchase of intangible assets		(6)	(6)
(Increase)/decrease in investments		(1137)	162
Net cash flows from investing activities		(1301)	109
CASH FLOWS FROM FINANCING ACTIVITIES
(Increase)/decrease in long-term debtor		37	(86)
Increase/(decrease) in finance lease liability		(9)	(4)
Interest received		199	137
Cash flows from financing activities		227	47
Net increase/(decrease) in cash and cash equivalents		(275)	502
Cash and cash equivalents at beginning of year	3	508	6
Cash and cash equivalents at end of the year	3	233	508

Notes to the Financial Statements

for the year ended 31 March 2007

1. Accounting Policies

These financial statements are for The War Museum of the Boer Republics. The financial statements have been prepared in accordance with Statements of Generally Recognised Accounting Practice and the Public Finance Management Act, Act 1 of 1999 as amended (as amended by Act 29 of 1999). Where Statements of Generally Recognised Accounting Practice have not yet been approved, Statements of South African Accounting Standards have been used.

The following are the principal accounting policies of the Museum which are, in all material respects, consistent with those applied in the previous financial year, except as otherwise indicated:

1.1 Basis of preparation

The financial statements have been prepared in accordance with the South African Statements of Generally Accepted Accounting Practices (GAAP), including any interpretations of such Statements issued by the Accounting Practices Board, with the effective standards of Generally Recognised Accounting Practices (GRAP), issued by the Accounting Standards Board replacing the equivalent GAAP Statement as follows:

Standard of GRAP Replaced Statement of GAAP

GRAP1:Presentation of financial statements IAS1(AC101):Presentation of financial statement

GRAP2:Cash flow statements IAS7(AC118):Cash flow statements

GRAP3:Accounting policies, changes IAS8(AC103):Accounting policies, changes

in accounting estimates and errors. in accounting estimates and errors

The recognition and measurement principles in the above GRAP and GAAP statements do not differ or result in material differences in items presented and disclosed in the financial statements. The implementation of GRAP 1, 2 and 3 has resulted in the following significant changes in the presentation of the financial statements:

Terminology differences:

Standard of GRAP Replaced Statement of GAAP

Statement of financial performance Income statement

Statement of financial position Balance sheet

Statement of changes in net assets Statement of changes in equity

Net assets Equity

Surplus/(deficit) for the period Profit/loss for the period

Accumulated surplus/(deficit) Retained earnings

Contributions from owners Share capital

Contributions to owners Dividends

Reporting date Balance sheet date

The cash flow statement was prepared in accordance with the direct method.

Specific information has been presented separately on the statement of financial position, such as:

¨ Receivables from non-exchange transactions, including taxes and transfers

¨ Taxes and transfers payable; and

¨ Trade and other payables from non-exchange transactions.

The amount and nature of any restrictions on cash balances should be disclosed.

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

1.1 Basis of preparation (continued)

Paragraph 11 to 15 of GRAP1 has not been implemented as the budget reporting standard is in the process of being developed by the international and local standard setters. Although the inclusion of budget information would enhance the usefulness of the financial statements, non-disclosure will not affect fair presentation.

1.2 Currency

These financial statements are presented in South African Rand (R) since that is the currency in which the majority of the Museum’s transactions are denominated. Amounts presented have been rounded to the nearest R1 000.

1.3 Revenue recognition

Revenue is recognized when it is probable that future economic benefits will flow to the Museum and these benefits can be measured reliably.

Revenue from the sale of goods is recognized when significant risks and rewards of ownership of the goods have been transferred to the buyer.

Revenue is measured at the fair value of the consideration received or receivable when considered to be material.

1.4 Retirement benefit costs

The Museum operates a defined contribution plan, the assets of which are generally held in separate trustee-administered funds. The plan is generally funded by payments from the Museum’s employees, taking account of the recommendations of independent qualified actuaries.

Payments to defined contribution retirement benefit plans are charged to the statement of financial performance in the year to which they relate.

The museum also operates a post employment health care benefit plan. The current service cost, interest cost and liability are determined by means of an actuarial valuation. The vested current service cost is immediately acknowledged in the statement of financial performance as an expense, while the non-vested current service cost, if any, is acknowledged as an expense on a straight line basis over the average period until the benefit will be vested.

Actuarial gains and losses are recognised through profit and loss in the period in which they occur.

1.5 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to systematically write off the cost or valuation of assets over their estimated useful lives to its residual value, using the straight line method on the following bases:

Vehicles 5.6% - 10 %

Computer hardware 7.7% - 25%

Electrical equipment 5.3% - 20%

Other assets – Items above R 500 5% - 25%

Computer software 10% - 20%

Other assets - Items below R 500 5% - 50%

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

1.5 Property, plant and equipment (continued)

If the cost of a part of an item is considered to be significant in relation to the total cost of the item, that part is depreciated separately. The useful lives and residual value of assets are reviewed at each financial year-end.

The gain or loss arising from the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

The museum at each reporting date assesses whether there is any indication that assets may be impaired. Where the recoverable amount of an asset is less than its carrying amount the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognised immediately in profit and loss.

1.6 Intangible Assets

Intangible assets are initially recognised at cost. Subsequent to initial recognition, intangible assets shall be carried at its cost less any accumulated amortisation and any accumulated impairment losses.

Amortisation is charged so as to systematically write off the cost or valuation of assets over their estimated useful lives to its residual value, using the straight line method on the following bases:

Computer software 10% - 20 %

The residual value of an intangible asset with a finite useful life shall be assumed to be zero.

The amortisation period and the amortisation method shall be reviewed al least at each financial year-end.

The museum at each reporting date assesses whether there is any indication that assets may be impaired. Where the recoverable amount of an asset is less than its carrying amount the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognised immediately in profit and loss.

1.7 Inventories

Inventories are stated at the lower of cost or net realisable value. Net realisable value represents the estimated selling price in the ordinary course of business less any costs of completion and costs to be incurred in marketing, selling and distribution. Inventories are measured using the First-in-first-out technique.

1.8 Financial instruments

Recognition

Financial assets and financial liabilities are recognised on the Museum’s statement of financial position when the Museum becomes a party to the contractual provisions of the instrument. All “regular way” purchases and sales of financial assets are initially recognised using trade date accounting.

Measurement

Financial instruments are initially measured at fair value, which include transaction costs. Subsequent to initial recognition these instruments are measured as set out below.

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

1.8 Financial instruments (continued)

Financial assets

The Museum’s principle financial assets are investments and loans, accounts receivable and cash and cash equivalents.

¨ Trade receivables

Trade receivables are stated at fair value, reduced by appropriate allowances for estimated irrecoverable amounts.

¨ Investments

All investments are initially recognized at fair value, transaction costs, included.

At subsequent reporting dates the following categories of investments are measured at amortised cost by using the effective interest rate method if they have a fixed maturity, or at cost if there is no fixed maturity:

- Loans and receivables originated by the Museum and not held for trading

- Held to maturity investments

- An investment in a financial asset that does not have a quoted market price in an active market and whose fair value cannot be measured reliably.

Cost and amortised cost are inclusive of any impairment loss recognized to reflect irrecoverable amounts. The financial assets are subject to review for impairment at each statement of financial position date.

The annual amortization of any discount or premium on the acquisition of a held-to-maturity security is aggregated with other investment income receivable over the term of the instrument so that the revenue recognised in each period represents a constant yield on the investment.

Investments other than held-to-maturity debt securities are classified as available-for-sale investments and trading investments and are measured at subsequent reporting dates at fair value without any deduction for transaction costs that may be incurred on sale or other disposal. Where securities are held for trading purposes, unrealized gains and losses are included in net profit or loss for the period. For available-for-sale investments, unrealized gains and losses are dealt with in equity, until the security is disposed of or is determined to be impaired, at which time the net profit or loss is included in the net profit or loss for the year.

Equity instruments

Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

The Museum’s principle financial liabilities are accounts payable and bank overdraft.

All financial liabilities are measured at amortised cost, comprising original debt less principle payments and amortizations, except for financial liabilities held-for-trading and derivative liabilities, which are subsequently measured at fair value.

¨ Trade payables

Trade and other payables are stated at fair value.

1.9 Provisions

Provisions are recognized when the Museum has a present obligation as a result of a past event and it is probable that this will result in an outflow of economic benefits that can be estimated reliably.

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

1.10 Government grants

Government grants are recognized when it is probable that future economic benefits will flow to the Museum and these benefits can be measured reliably. The grant is recognised to the extent that there are no further obligations arising from the receipt of the grant. Grants related to income are disclosed as such in the Statement of Financial Performance.

1.11 Comparative figures

Comparative figures have been adjusted to conform to changes in presentation in the current year, where necessary.

1.12 Cash and cash equivalents

Investment must include a selection of counter-parties through credit risk analyses, an establishment of investment limits per institution and investment instrument and the monitoring of investments against limits. The policy should contain the reassessment of investment policies on a regular basis, counter-party credit risk based on credit ratings and the assessment of investment instruments based on liquidity requirements.

1.13 Post reporting date events

Where an event occurs after the reporting date that has an effect on a situation that occurred before the reporting date, the effect will be acknowledged in the financial statements.

However, where an event occurs after the reporting date that has no effect on a situation that occurred before the reporting date, the effect will be acknowledged in a note to the financial statements, if the fair presentation of the financial statements, are affected.

1.14 Income taxation

In terms of section 10(1) the War Museum of the Boer Republics are exempted from taxation and the approval for exemption were granted in terms of section 18A of the Income tax Act, No. 58 of 1962.

1.15 Change in accounting policy

During 2006/07 the museum changed its accounting policy with respect to the treatment of actuarial gains and losses. In order to ensure that the financial statements provides reliable and more relevant information about the effects of actuarial gains and losses, the policy have been changed in order to recognised such gains and losses through profit or loss in the period in which they occur. The change in accounting policy had no effect on the comparative statements for 2005/06.

1.16 Heritage Assets

Assets are described as Heritage Assets when they are culturally and historically significant. Heritage assets are not valued for purposes of disclosure in the Annual Financial Statements. A list of such assets will however be disclosed.

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

2. Adoption of South African Accounting Standards

During the previous financial year the Museum adopted the following South African Accounting Standards for the first time:

GRAP 1: Presentation of financial statements

GRAP 2: Cash flow statements

GRAP 3: Accounting policies, changes in accounting estimates and errors

AC 116: Employee benefits

AC 107: Post reporting date events

During the current financial year the Museum did not adopt any South African Accounting Standards for the first time

3. Cash and cash equivalents

Cash and cash equivalents comprise cash and short-term, highly liquid investments that are held with registered banking institutions with maturities of 3 months or less and that are subject of insignificant interest rate risk. The carrying amount of these assets approximates to their fair value.
	2006/07 R’000	2005/06 R’000
Cash at bank	231	506
Cash on hand	2	2
Total	233	508
As required in sections 7(2) and 7(3) of the Public Finance Management Act, the National Treasury has approved the bank where the bank account is held.

4. Receivables

Trade receivables	10	13
Less: Provision for doubtful debts	(9)	(2)
	1	11
Current portion of long term debtor	37	34
Total	38	45
The provision for doubtful debts has been determined by reference to past default experience and the current economic environment.

During the 2005/06 financial year an amount of R120 000 was included in “Receivables” for the Directors loan, due to the fact that the Director was to retire during the 2006/07 financial year. The Director was however re-appointed for a further period of 3 years and subsequently the entire outstanding amount was no longer classified as current receivables. The 2005/06 amounts was restated. Refer to note 7 for the non-current portion of the loan.

5. Inventories

Cafeteria	-	133
Consumables	23	7
Publications	568	444
Total	591	584

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

6. Investment

	2006/07 R’000	2005/06 R’000
Corporation for Public Deposits	3013	1876
Total	3013	1876
The financial instrument consists of an investment at the Corporation for Public Deposits and interest is received at an effective rate of 8.33 % (2005/06: 6.61%). The financial instrument is classified as “available for sale”. “Available for sale instruments” is disclosed at fair value. The fair value of the investment is determined by the cost of the investment and the interest received thereon.

7. Long-term debtor

Loan: F.J. Jacobs (Director)
Amount owed to Museum	86	120
Less: Portion receivable within 12 months transferred to current receivables	(37)	(34)
	49	86

Reconciliation of the future receipts
	Minimum Receivables	Future finance income	Present value
2006/2007
Due within one year	37	8	45
Due between one and five years	49	3	52
	86	11	97
2005/2006
Due within one year	34	11	45
Due between one and five years	86	11	97
	120	22	142

8. Intangible Assets

	Computer Software	Total
Year ended 31/3/2006	3	3
Opening net carrying amount	5	5
Accumulated amortisation	(2)	(2)
Additions	6	6
Amortisation charge	(2)	(2)
Net carrying amount 31 March	7	7
Year ended 31/3/2006	7	7
Opening net carrying amount	11	11
Accumulated amortisation	(4)	(4)
Additions	6	6
Amortisation charge	(2)	(2)
Net carrying amount 31 March	11	11

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

9. Property, Plant and Equipment

	Computer equipment	Electrical equipment	Vehicles	Finance lease equipment	Other assets	Total
Year ended 31/3/2006	62	44	77	35	69	287
Opening net carrying amount	150	78	116	57	196	597
Accumulated depreciation	(88)	(34)	(39)	(22)	(127)	(310)
Additions	41	4	-	-	2	47
Depreciation charge	(27)	(11)	(7)	(11)	(13)	(69)
Transfers to other asset groups	-	9	-	(9)	-	-
Net carrying amount 31 March	76	46	70	15	58	265
Year ended 31/3/2006	76	46	70	15	58	265
Opening net carrying amount	191	110	116	29	198	644
Accumulated depreciation	(115)	(64)	(46)	(14)	(140)	(379)
Additions	16	6	130	-	7	159
Depreciation charge	(29)	(17)	(15)	(6)	(13)	(80)
Disposals	-	-	(1)	-	-	(1)
Transfers to other asset groups	-	-	-	-	-	-
Net carrying amount 31 March	63	35	184	9	52	343

10. Payables

	2006/07 R’000	2005/06 R’000
Current portion of finance lease liability	9	4
Trade creditors	15	27
Total	24	31

11. Provisions

Provision for leave:
Opening balance	220	208
Unused amounts reversed during the year	-	-
Provisions made during the year	24	14
Utilisation of provisions during the year	-	(2)
Total	244	220

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

12. Finance Lease liability

The finance lease liability consists of a copier machine:
		2006/07 R’000		2005/06 R’000
Gestetner 1802 copier
Commitment due to finance lease contract		21		25
Less: Portion payable within 12 months transferred to current liabilities		(9)		(4)
Total		12		21
The effective interest rate is 98.11% (2005/06: 95.28%). The finance lease liability is payable in 60 upfront monthly payments of R2 028 each with the last payment on 1 October 2008.
The finance lease liabilities are secured by office equipment with the carrying amount of R8 409(2005/06: R14 158) as presented in note 9.
Reconciliation of the future minimum lease payments and the present value
	Minimum finance lease payments	Future finance costs	Present value
2006/2007
Due within one year	24	15	9
Due between one and five years	14	2	12
	38	17	21
2005/2006
Due within one year	24	20	4
Due between one and five years	38	17	21
	62	37	25

13. Post employment health care information

About 82% of the employees of The War Museum participate in Medicover Medical Aid Society which is self administered, 9% in Munimed Medical Aid Society administered by Multimed and 9% in the Profmed Medical Scheme administered by PMSA. The post-employment subsidy policy valued is summarised as follows: ¨ Members who were employed before 1 April 2006 are entitled to 100% subsidy of medical scheme contributions in retirement; ¨ Members who were employed on or after 1 April 2006 with at least 10 years of service when they retire, are entitled to a 66.67% subsidy of medical scheme contributions, in retirement. ¨ Members who were employed on or after 1 April 2006, with more than 5 years, but les than 10 years of service when they retire, are entitled to a 50% subsidy of medical scheme contributions, in retirement. ¨ Members who were employed on or after 1 April 2006, with less than 5 years of service when they retire are not entitled to a subsidy of medical scheme contributions, in retirement. ¨ Employees must be members of a medical scheme for continuous period prior to retirement in order to be eligible for the subsidy in retirement. ¨ Dependants of eligible continuation members receive a subsidy before and after the death of the principal member ¨ If a member eligible for a retirement subsidy dies while in service, their dependants are not eligible for a subsidy of medical scheme contributions as described above. Notes to the Financial Statements for the year ended 31 March 2007 (continued) 13. Post employment health care information (continued) An actuarial valuation of the medical aid benefit will be done on a yearly basis, starting on 31 March 2006. Valuation Method: The actuarial valuation method used by valuators, Alexander Forbes Financial Services, to value the liabilities is the Projected Unit Credit Method. The main actuarial assumptions used on reporting date:
	2006/07 %	2005/06 %
Discount rate	7.75% p.a.	7.5% p.a.
Health care cost inflation	6.75% p.a.	6.5% p.a.
Membership discontinued at retirement	0%	0%
Average retirement age	65	65
The valuators, Alexander Forbes Financial Services, assumed that current in service members would retire on their current medical scheme option and that there would be no change in options in retirement.

14. Post employment health care benefit liability

	2006/07 R’000	2005/06 R’000
Present value of liability	2434	2304
Net liability	2434	2304
Reconciliation of movement in net liability during the year:
Opening benefit liability	2304	-
As restated (per valuation)	-	2070
	2304	2070
Service cost	155	144
Interest cost	168	151
Actuarial gain*	(128)	-
Benefits paid	(65)	(61)
Closing benefit liability	2434	2304

*The actuarial gain was completely recognised in profit/loss.

Sensitivity Results

The liability was recalculated to show the effect of:

¨ A one percentage point decrease or increase in the rate of health care cost inflation;

¨ A five or ten percentage point increase in the rate of health care cost inflation for the next five years, thereafter returning to a health care cost inflation of 6.75% p.a.;

¨ A one percentage point decrease or increase in the discount rate;

¨ A one year decrease or increase in the expected retirement age.

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

14. Post employment health care benefit liability (continued)

	Health Care Cost Inflation
	Central Assumption 6.75%	-1%	+1%
Accrued Liability 31 March 2007 % Change	2434 -	2127 -12.6%	2814 +15.6%
Current Service Cost + Interest Cost 2007/08 % Change	279 -	235 -15.8%	336 +20.4%
Sensitivity Results from Previous valuation	Central Assumption 6.5%	-1%	+1%
Current Service Cost + Interest Cost 2006/07 % Change	323 -	273 -15.5%	367 +13.6%
	Central Assumption 6.75%	-5% for 5 years	+10% for 5 years
Accrued Liability 31 March 2007 % Change	2434 0	2991 +22.9%	3654 +50.1%
	Discount Rate
	Central Assumption 7.75%	-1%	+1%
Accrued Liability 31 March 2007 % Change	2434 -	2822 +15.9%	2126 -12.7%
	Expected Retirement Age
	Central Assumption 65 years	1 year younger	1 year older
Accrued Liability 31 March 2007 % Change	2434 -	2547 +4.7%	2254 -7.4%

15. Gifts, sponsorships and donations received

	2006/07 R’000	2005/06 R’000
Annexure 1	9	3
Total	9	3

16. Other operating revenue

Recovery of expenses	2	2
Entrance fees	48	41
Insurance claim	-	5
Photos	1	6
Sales	52	69
Sundry income	3	-
Total	106	123

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

17. Rental income

Employees	2006/07 R’000	2005/06 R’000
Rental received	5	3
National public	15	13
	20	16
Reconciliation to future minimum rental income
Employees
Due within one year	5	5
Due between one and five years	19	19
	24	24
Employees fulfilling a security function and staying on the property of the Museum, have to pay rent of R400.00 per month, according to the regulations of Department of Public Works, Roads and Transport.
Members of the public can rent two types of facilities situated on the property of the Museum: An auditorium at R350.00 per day A general hall at R550 per day

18. Transfers and subsidies received

National Department of Arts and Culture	4723	3795
Total	4723	3795
The Museum has not received any other form of government assistance from which the Museum has directly benefited. There are no unfulfilled conditions and other contingencies attached to the grant that has been recognised.

19. Administrative expenses

Regional service council levy	3	9
Travel and subsistence	74	66
Total	77	75

20. Audit fees

External audit fees	40	47
Internal audit fees	17	29
Total	57	76

21. Amortisation charge

Computer software	2	2
Total	2	2

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

22. Depreciation charge

	2006/07 R’000	2005/06 R’000
Computer equipment	29	27
Electrical equipment	17	11
Vehicles	15	7
Finance lease equipment	6	11
Other items	13	13
Total	80	69

23. Finance costs

Finance lease liability	20	24
Total	20	24

24. Other operating expenses

Advertisements	5	2
Bank charges	14	13
Bad debt	7	-
Books and periodicals	1	1
Cafeteria purchases	7	11
Conference fees	5	1
Conservation	2	1
Consumables	48	46
Entertainment	10	14
Exhibitions	12	73
Gifts and flowers	1	2
Insurance	87	80
Inventory written off	1	7
Legal fees	-	1
License fees	1	4
Maintenance, repairs and running costs
- Machinery and equipment	56	45
- Other maintenance, repairs and running costs	17	15
Membership fees	-	1
Paardeberg costs	2	2
Photos	-	2
Publications	34	39
Security	5	5
Statutory payments	-	-
Stock – opening balance	584	555
Stock – closing balance	(592)	(590)
Telephone and postage	68	81
Workmen’s compensation	5	5
Valuation costs	9	-
Total	389	416

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

25. Project expenses

	2006/07 R’000	2005/06 R’000
Photo project	-	39
Total	-	39

26. Staff costs

Wages and salaries
Basic salaries	2082	1714
Leave payments	29	18
Motor allowances	39	34
Overtime pay	42	41
Periodic payments	176	164
Temporary staff	19	37
Social contributions (Employer’s contributions)
Medical aid fund	118	97
Pension fund	425	324
Pension fund – stabilisation account	35	28
Unemployment Insurance Fund	24	20
Social contributions (State contributions)
Housing subsidy	37	25
Post retirement medical aid benefit
Current service cost	155	144
Interest cost	168	151
Director’s emoluments Note 29	455	380
Total	3804	3177

27. Income from investments

Interest income
Bank deposit	1	1
Loan	11	11
Investment	187	125
Total	199	137

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

28. Reconciliation of profit/(loss) to cash generated/(utilized) in operations

	2006/07 R’000	2005/06 R’000
Profit/(loss)	769	196
Adjusted for:
Depreciation on property, plant and equipment	80	69
Amortisation on intangible assets	2	2
Income on financial assets	(199)	(137)
Increase/(decrease) in provisions	24	12
Inventory written off	-	7
Heath care benefit liability costs	130	234
Operating cash flows before working capital changes	806	383
Working capital changes	(7)	(37)
Decrease/(increase) in inventories	(7)	(29)
Decrease/(increase) in receivables	7	(13)
Increase/(decrease) in payables	(7)	5
Cash generated from operations	799	346

29. Related party transactions

Loan to director is disclosed in Note 7

	Salary	Bonuses	Pension	Medical	Other	Total
Director’s emoluments:
2006/2007
Executive director:
FJ Jacobs	345	1	27	16	66	455
	345	1	27	16	66	455
2005/2006
Executive director:
FJ Jacobs	229	23	46	18	64	380
	229	23	46	18	64	380
Deputy director’s emoluments:
2006/2007
JH du Pisani	214	19	52	13	41	339
	214	19	52	13	41	339
2005/2006
JH du Pisani	196	19	48	17	34	314
	196	19	48	17	34	314

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

29. Related party transactions (continued)

Chief financial officer’s emoluments
2006/2007
Y Pretorius	148	17	32	6	1	204
	148	17	32	6	1	204
(01/04/2006 – 31/12/2006)
CA Swanepoel	44	-	10	4	-	58
	44	-	10	4	-	58
(01/01/2007 – 31/03/2007)
2005/2006
Y Pretorius	138	9	33	13	1	194
	138	9	33	13	1	194
The deputy director’s and chief financial officer’s emoluments are included in the staff costs included in the statement of financial performance as disclosed in note 26.

As required by Treasury Regulation 28.1.3:

	2006/07 R’000	2005/06 R’000
AWG Raath
Audit committee fees	4	6
	4	6

As required by SAICA circular 4 of 2005: State controlled entities

Eskom Holdings Limited
Total amount of transactions	2	2
SA Post Office Limited
Total amount of transactions	3	1
Telkom SA Limited
Total amount of transactions	40	68
Amount outstanding at year end included in creditors	4	5
National Library, Pretoria / Cape Town
Total amount of transactions	-	1
Northen Flagship Institution
Total amount of transactions	2	-
Compensation fund
Total amount of transactions	5	5
Notes to the Financial Statements for the year ended 31 March 2007 (continued) 29. Related party transactions (continued)	2006/07 R’000	2005/06 R’000
SA Revenue Services
Total amount of transactions	461	387
Payments received	-	(15)
Public Investment Corporation Limited
Opening balance	(1876)	(2038)
Investments made	(950)	-
Withdrawals	-	287
Interest received	(186)	(125)
Closing balance	(3013)	(1876)

30. Financial instruments

Credit risk

Financial assets, which potentially subject the Museum to the risk of non-performance by counter-parties and thereby subject the Museum to concentrations of credit risk, consist mainly of cash and cash equivalents, investments, and trade receivables. Credit risk is controlled through the application of credit approvals, limits and monitoring procedures.

The Museum limits its treasury counter-party exposure by only dealing with well-established financial institutions with high credit ratings assigned by international credit-rating agencies. The Museum’s exposure and the credit ratings of its treasury counter-parties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counter-parties. The Museum does not expect any treasury counter-parties to fail to meet their obligations, given their high credit rating.

Credit risk with respect to trade receivables is limited due to the large number of customers comprising the Museum’s customer base and their dispersion across different industries and geographical areas. The Museum does not have any significant exposure to any individual customer or counter-party. Accordingly, the Museum does not consider there to be any significant concentration of credit risk, which had not been adequately provided for. Trade receivables are presented net of the allowance for doubtful debt.

Liquidity risk

The Museum manages liquidity risk through proper management of working capital, capital expenditure and actual vs. forecasted cash flows. Adequate reserves, liquid resources and unutilized borrowing facilities are also maintained.

Fair value

The Museum’s financial instruments consist mainly of cash and cash equivalents, trade receivables, investments and trade payables.

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

Notes to the Financial Statements

for the year ended 31 March 2007 (continued)

30. Financial instruments (continued)

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

Cash and cash equivalents

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

Trade receivables

The fair value of trade receivables is determined by discounting the future cash flows involved at a market related rate.

Investments

The fair value of unlisted equity investments are carried at their original cost and the interest received during the year.

Trade payables

The fair value of trade payables is determined by discounting the future cash flows involved at a market related rate.

31. Change in accounting policy

From the start of 2005/06 the Museum changed its accounting policy for post employment health care benefits, to valuate the liability. The policy stated that actuarial gains and losses should be treated as follows:

If the net cumulative unrecognized actuarial gains and losses at the end of the previous year exceeds the greater of:

¨ 10% of the present value of the defined benefit obligation at that date and

¨ 10% of the fair value of any plan assts at that date.

The portion of actuarial gains and losses to be recognised for each defined benefit plan is the excess of above divided by the expected average remaining working lives of the employees participating in that plan.

The policy was changed in order to recognize actuarial gains and losses in the period in which they occur.

As there was no actuarial gains or losses in the prior period is it possible to apply the policy retrospectively as it will have no effect on prior year amounts.

In the current financial year an actuarial gain of R128 000 was recognised in profit/loss.

32. Prior period error

Asset classification and estimation of useful life and residual values:
During the current year it came to management’s attention that computer software was incorrectly classified as Property, plant and equipment. Further more was the useful life and residual values of assets not assessed thus causing the carrying amount of assets being understated. The prior period error was corrected retrospectively and comparative figures were restated. Notes to the Financial Statements for the year ended 31 March 2007 (continued) 32. Prior period error (continued) The effect of the correction on prior periods was as follows:
	2005/06 R’000
Statement of financial position:
Increase in Non-current assets	131
Intangible assets	7
Property, plant and equipment	124
Decrease in accumulated surpluses/(deficits)	131
Statement of financial performance:
Total expenses	10
Amortisation charge	2
Depreciation charge	8
Increase in surplus/(deficit) for the year	10
Statement of changes in net assets:
Increase in opening balance at 1 April 2005	121
Increase in surplus/(deficit) for the year	10
Increase in closing balance 31 March 2006	131

33. Heritage Assets

The Museums Heritage Assets relates to the Anglo Boer War and include the following:

¨ Paintings and sculptures

¨ A photographic collection in excess of 9000

¨ Textiles and household items from the period

¨ Prisoner-of-war handcraft

¨ A philatelic collection on the theme

¨ A representative collection of fire-arms

¨ A wide collection of databases

¨ Documents and books pertaining to the war.

Annexure to the Financial Statements

for the year ended 31 March 2007

Annexure 1

Statement of gifts, donations and sponsorships received

			2006/07 R’000	2005/06 R’000
Local	Name of donor	Nature of gift, donation or sponsorship
	Anonymous	Cash	9	3
Total gifts, donations and sponsorships received			9	3

TUSSENBLAD
5 HUMAN RESOURCE MANAGEMENT REPORT

1. Personal Costs

Table 1.1 - Personnel costs by salary bands, 2006/07

Salary bands	Personnel Expenditure (R‛000)	% of total personnel cost	Average personnel cost per employee (R‛000)
Lower skilled (Levels 1-2)	375	10.9%	53.6
Skilled (Levels 3-5)	375	10.9%	75
Highly skilled production (Levels 6-8)	1417	41.3%	141.7
Highly skilled supervision (Levels 9-12)	819	23.9%	273
Senior management (Levels 13-16)	446	13%	446
Total	3432	100%	132

TABLE 1.2 - Salaries, Overtime, Home Owners Allowance and Medical Assistance by salary

bands, 2006/07

Salary Bands	Salaries		Overtime		Home Owners Allowance		Medical Assistance
	Amount (R‛000)	Salaries as a % of personnel cost	Amount (R‛000)	Overtime as a % of personnel cost	Amount (R‛000)	HOA as a % of personnel cost	Amount (R‛000)	Medical Assistance as a % of personnel cost
Lower Skilled (Levels 1-2)	270	72%	15	4%	-	-	-	-
Skilled (Levels 3-5)	267	71.2%	-	-	5	1.3%	12	3.2%
Highly skilled production (Levels 6-8)	993	70.1%	27	1.9%	23	1.6%	83	5.9%
Highly skilled supervision (Levels 9-12)	575	70.2%	-	-	9	1.1%	24	2.9%
Senior management (Levels 13-16)	345	77.6%	-	-	-	-	16	3.6%
Total	2450	71.4%	42	1.2%	37	1.1%	135	3.9%

5 HUMAN RESOURCE MANAGEMENT REPORT (continued)

2. Employment and vacancies

TABLE 2.1 - Employment and vacancies by salary bands, 31 March 2007

Salary Band	Number of posts	Number of posts filled	Vacancy Rate	Number of posts filled additional to the establishment
Lower skilled (Levels 1-2)	-	-	-	-
Skilled (Levels 3-5)	-	-	-	-
Highly skilled production (Levels 6-8)	-	-	-	-
Highly skilled supervision (Levels 9-12)	-	-	-	-
Senior management (Levels 13-16)	-	-	-	-

TABLE 2.2 - Employment and vacancies by critical occupation, 31 March 2007

Critical occupations	Number of posts	Number of posts filled	Vacancy Rate	Number of posts filled additional to the establishment
Human Scientists	4	4	0%	-
Admin	6	6	0%	-
Total	10	10

3. Job evaluation

No posts were upgraded or downgraded during the year

5 HUMAN RESOURCE MANAGEMENT REPORT (continued)

4. Employment changes

TABLE 4.1 - Annual turnover rates by salary band for the period 1 April 2006 to 31 March 2007

Salary Band	Number of employees per occupation as on 1 April 2006	Appointments and transfers into the entity	Terminations and transfers out of the entity	Turnover rate
Lower skilled (Levels 1-2)	6	1	-	16.7%
Skilled (Levels 3-5)	3	2	-	40%
Highly skilled production (Levels 6-8)	9	1	-	11.1%
Highly skilled supervision (Levels 9-12)	3	1	1	33.3%
Senior Management Service Band A	1	-	-	-
Senior Management Service Band B	-	-	-	-
Senior Management Service Band C	-	-	-	-
Senior Management Service Band D	-	-	-	-
Total	22	5	1	22.7%

TABLE 4.2 - Annual turnover rates by critical occupation for the 1 April 2006 to 31 March 2007

Occupation:	Number of employees per occupation as on 1 April 2006	Appointments and transfers into the entity	Terminations and transfers out of the entity	Turnover rate
Human Scientists	3	1	-	33.3%
Administration	4	2	-	50%
Financial	1	1	1	100%
Museum assistants	6	1	-	16.7%
Total	14	4	1

5 HUMAN RESOURCE MANAGEMENT REPORT (continued)

TABLE 4.3 - Reasons why staff are leaving the entity

Termination Type	Number	% of total
Death	-	-
Resignation	1	100%
Expiry of contract	-	-
Dismissal - operational changes	-	-
Dismissal – misconduct	-	-
Dismissal – inefficiency	-	-
Discharged due to ill-health	-	-
Retirement	-	-
Transfers to other Public Service Departments	-	-
Other	-	-
Total	1	100%
Total number of employees who left as a % of the employment	26	3.8%

5. Employment equity

5.1 - Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2007

Occupational categories (SASCO)	Male				Female
	African	Coloured	Indian	White	African	Coloured	Indian	White	Total
Legislators, senior officials and managers	-	-	-	2	-	-	-	1	3
Professionals	1	-	-	2	-	-	-	1	4
Technicians and associate professionals	-	-	-	1	-	-	-	-	1
Clerks	-	-	-	2	1	1	-	5	9
Service and sales workers	-	-	-	-	-	-	-	-	-
Skilled agriculture and fishery workers	-	-	-	-	-	-	-	-	-
Craft and related trades workers	1	-	-	1	-	-	-	-	2
Plant and machine operators and assemblers	-	-	-	-	-	-	-	-	-
Elementary occupations	5	1			1	-	-	-	7
Total	7	1	-	8	2	1	-	7	26
Employees with disablities	-	-	-	-	-	-	-	-	-

5 HUMAN RESOURCE MANAGEMENT REPORT (continued)

5.2 - Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2007

Occupational Bands	Male				Female
	African	Coloured	Indian	White	African	Coloured	Indian	White	Total
Top Management	-	-	-	1	-	-	-	-	1
Senior Management	-	-	-	1	-	-	-	1	2
Professionally qualified and experienced specialists and mid-management	1	-	-	2	-	-	-	1	4
Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents	-	-	-	3	-	-	-	4	7
Semi-skilled and discretionary decision making	2	-	-	1	1	-	-	1	5
Unskilled and defined decision making	5	1	-	-	1	-	-	-	7
Total	8	1	-	8	2	-	-	7	26

5.3 - Recruitment for the period 1 April 2006 to 31 March 2007

Occupational Bands	Male				Female
	African	Coloured	Indian	White	African	Coloured	Indian	White	Total
Top Management	-	-	-	-	-	-	-	-	-
Senior Management	-	-	-	-	-	-	-	1	1
Professionally qualified and experienced specialists and mid-management	-	-	-	1	-	-	-	-	1
Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents	-	-	-	-	-	-	-	-	-
Semi-skilled and discretionary decision making	-	-	-	-	1	-	-	1	2
Unskilled and defined decision making	1	-	-	-	-	-	-	-	1
Total	1	-	-	1	1	-	-	2	5

5 HUMAN RESOURCE MANAGEMENT REPORT (continued)

5.4 - Terminations for the period 1 April 2006 to 31 March 2007

Occupational Bands	Male				Female
	African	Coloured	Indian	White	African	Coloured	Indian	White	Total
Top Management	-	-	-	-	-	-	-	-	-
Senior Management	-	-	-	1	-	-	-	-	1
Professionally qualified and experienced specialists and mid-management	-	-	-	-	-	-	-	-	-
Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents	-	-	-	-	-	-	-	-	-
Semi-skilled and discretionary decision making	-	-	-	-	-	-	-	-	-
Unskilled and defined decision making	-	-	-	-	-	-	-	-	-
Total	-	-	-	1	-	-	-	-	1

Employees with disabilities

-

-

-

-

-

-

-

-

-

6. Performance rewards

No performance rewards were given during the year.

7. Foreign workers

None

5 HUMAN RESOURCE MANAGEMENT REPORT (continued)

8. Leave utilisation for the period 1 April 2006 to 31 March 2007

Table 8.1 - Sick leave, 1 April 2006 to 31 March 2007

Salary Bands	Total days taken	% days with medical certification	Number of Employees using sick leave	% of total total employees using sick leave	Average days per employee	Estimated Cost (R'000)
Lower skilled (Levels 1-2)	33	42.4%	5	71.4%	4.7	7
Skilled (Levels 3-5)	35	82.6%	4	80%	7	13
Highly skilled production (Levels 6- 8)	57	73.7%	7	70%	5.7	44
Highly skilled supervision (Levels 9-12)	13	100%	2	66.7%	4.3	12
Senior management (Levels 13-16)	4	100%	1	100	4	8
Total	142	71.8%	19	73.1%	5,5	84

TABLE 8.2 - Disability leave (temporary and permanent), 1 April 2006 tp 31 March 2007

Salary Bands	Total days taken	% days with medical certification	Number of Employees using disability leave	% of total total employees using disability leave	Average days per employee	Estimated Cost (R'000)
Lower skilled (Levels 1-2)	90	90	1	100	90	1
Skilled (Levels 3-5)	-	-	-	-	-	-
Highly skilled production (Levels 6- 8)	-	-	-	-	-	-
Highly skilled supervision (Levels 9-12)	-	-	-	-	-	-
Senior management (Levels 13-16)	-	-	-	-	-	-
Total	32	90	1	3.8	3.5	1

Table 8.3 - Annual Leave, 1 April 2006 to 31 March 2007

Salary Bands	Total days taken	Average per employee
Lower skilled (Levels 1-2)	163	23.3
Skilled (Levels 3-5)	80	16
Highly skilled production (Levels 6- 8)	214	21.4
Highly skilled supervision (Levels 9-12)	65	21.7
Senior management (Levels 13-16)	35	35
Total	457	17.6

5 HUMAN RESOURCE MANAGEMENT REPORT (continued)

Table 8.4 - Leave payouts for the period 1 April 2006 to 31 March 2007

REASON	Total Amount (R'000)	Number of Employees	Average payment per employee
Leave payout for 2005/06 due to non-utilisation of leave for the previous cycle	-	-	-
Capped leave payouts on termination of service for 2006/07	-	-	-
Current leave payout on termination of service for 2006/07	8	1	8
Total	8	1	0,3

9. HIV and aids & health promotion programmes

1. HIV awareness training was given to personnel by St John Ambulance.

2. Posters on the subject of HIV were displayed in certain areas of the entity.

10. Labour relations

Table 10.1 - Misconduct and disciplinary hearings finalised, 1 April 2006 to 31 March 2007

Outcomes of disciplinary hearings	Number	% of total
Correctional counselling	-	-
Verbal warning	1	100%
Written warning	-	-
Final written warning	-	-
suspended without pay	-	-
Fine	-	-
Demotion	-	-
Dismissal	-	-
Not guilty	-	-
Case withdrawn	-	-
Total	-	-

11. Skills development

None

5 HUMAN RESOURCE MANAGEMENT REPORT (continued)

12. Injury on duty

One incident - finalised

13. Utilisation of consultants

None