annrep 1011 1 to 148.qxp - Department of Defence

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D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201128.2 Analysis of awaiting condonement per economicclassificationCurrentCapitalTotalNote 2010/11 2009/10R’000R’0006 3864 20310 5895 9734 56410 53728.3 Analysis of Current Year's Fruitlessand wasteful expenditureIncidentPayment of allowances to members notentitled to itDeviation from State contract resulting inpaying moreCancellation fees paid on different occationsCash withdrawal charges levied twice onthe same amountPayment of interest claim on air servicesPayment of finance for late payment ofinvoices regarding navigation and over flightTotalDisciplinary steps taken/criminal proceedingsStill under investigationStill under investigationStill under investigationStill under investigationStill under investigationStill under investigation115494837849129. Related party transactionsLoans to/from related partiesNon-interest bearing loans to/(from)Interest bearing loans to/(from)Total12 362-12 36212 362-12 362Identification and nature of related party relationshipAs at 31 March 2011 the DOD had the following related parties, namely the:- President of the RSA;- Deputy President of the RSA;- Cabinet of the Government of the RSA, including the Ministers of all National Departments;- National Departments;- Public Entities resorting under the National Departments;- Public Entities resorting under the portfolio of the Minister of Defence and Military Veterans, these being the:- Armaments Corporation of South Africa Limited (Armscor) including subsidiaries, joint ventures or units underits control;- Castle Control Board (CCB);- South African National Defence Force Fund (SANDF Fund); and- Reserve Force Council- Key management personnel of the DOD (members of the Plenary Defence Staff Council); and- All entities under the control, joint control or significant influence of a key management personnel member of theDOD.As per clarification letter from the National Treasury dated 31 March 2009, Department of Defence funds (messes,clubs, regimental funds, etc.) are not regarded as related parties.242ANNUAL REPORT FY 2010/2011
D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 2011Related party transactionsThe Department is not aware of any related party transactions (i.e. transactions not at arms length) that occurred duringthe period between the Department and the President of the RSA; the Deputy President of the RSA; the Cabinetof the Government of the RSA, including the Ministers of all National Departments; National Departments and publicentities falling under these departments. Armscor and the Department are not aware of any related party transactionsthat occurred during the period between the related parties other than, the use of six South African Military(SAMIL) vehicles. Four SAMIL 50’s and two SAMIL 100 vehicles, owned by the Department were allocated to Gerotek(Pty) Ltd, a subsidiary of Armscor, several years ago. Gerotek (Pty) Ltd uses these vehicles in its operations at no considerationto the Department. These vehicles are primarily for Defence purposes. Gerotek (Pty) Ltd carries theresponsibility of the maintenance and insurance of the above mentioned vehicles. The age of the vehicles is in excessof 20 years. During the period the following related party transactions occurred between the Department and theCastle Control Board (CCB);- The CCB is mandated in terms of the Castle Management Act, 1993 (Act 207 of 1993), to govern and manage theCastle of Good Hope on behalf of the Minister of Defence and Military Veterans. The CCB is housed and locatedin the Castle of Good Hope, Cape Town.- The following entities and activities occupy or utilise parts of the Castle of Good Hope, at no consideration to theDepartment however in some instances consideration is paid to the CCB:- Die Goewerneur restaurant;- Waterblommetjie restaurant;- Castle Forge;- Carriage rides;- Castle Military Museum;- Souvenir shop;- Iziko Museum of Cape Town;- The Western Cape Army Support Base (forming part of the Department) supplied guards to the CCB to guardthe Castle of Good Hope and to perform ceremonial duties at no charge.- Defence Reserves Provincial Office Western Cape;- SA Heritage Resources Agency (SAHRA);- Good Hope Art Studio;- 5X Reserve Force Regiments.- The Department provides management and advisory services to the CCB at no consideration. The cost to theDepartment for the time and subsistence for these services for the period was R2 373 734 (2009/10: R2 270 696).The Deparment provides management and administrative support to the SANDF Fund at no consideration. The costto the Department for the time spent in providing this support for the period was R25 690 (2009/10: R5 772).TheDepartment is not aware of any related party transactions that might have occurred during the period between theDepartment and the Reserve Force Council. The Department did not identify any related party transaction during theperiod between the Department and its key management personnel, and the entities under the control, joint controlor significant influence of key management personnel of the Department, except for the following:- Major-General R.C. Anderson, a member of key management personnel (PDSC) of the Department is the chairpersonof Murray & Roberts, which provides training services to the Works Regiment of the SANDF at no consideration.ANNUAL REPORT FY 2010/2011 243
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annrep 1011 1 to 148.qxp - Department of Defence

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