Assurance statement

Independent Assurance Report on Selected Sustainability Information

To the Directors of Industrial Development Corporation of South Africa Limited

We have undertaken a limited assurance engagement on selected sustainability information, as described below, and presented in the 2013 Sustainability Report included in the Integrated Annual Report of the Industrial Development Corporation of South Africa Limited (IDC) for the year ended 31 March 2013 (the Report).

Subject matter and related assurance

We are required to provide limited assurance on the following key performance indicators, prepared in accordance with the Global Reporting Initiative (GRI) G3.1 Guidelines, marked with an ‘LA’ on the relevant pages in the Report and limited assurance on the IDC’s self declaration of the GRI B+ Application Level.

Category    Key Performance Indicators    Boundary  
Natural Capital   EN6: Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives    IDC Company  
EN16: Total direct and indirect greenhouse gas emissions by weight (total of scope 1 and 2 emissions)    
Social Capital   IDC indicator: Building partnerships – assisting government/public sector   IDC Company  
IDC indicator: Corporate social investment     
IDC indicator: IDC worker and community trusts     
Human Capital   LA10: Average hours of training per year per employee by gender and by employee category   IDC Company  
LA11: Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings     
Financial Capital   EC1: Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments   IDC Group  
EC4: Significant financial assistance received from government  

Directors’ Responsibilities

The Directors are responsible for the selection, preparation and presentation of the sustainability information in accordance with the GRI G3.1 Guidelines. This responsibility includes the identification of stakeholders and stakeholder requirements, material issues, for commitments with respect to sustainability performance and for the design, implementation and maintenance of internal controls relevant to the preparation of the Report that is free from material misstatement, whether due to fraud or error.

Our Independence and Quality Control

We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants and IRBA Code of Professional Conduct for Registered Auditors, which includes independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Our engagement was conducted by a multidisciplinary team of environmental and assurance specialists with extensive experience in sustainability reporting.

In accordance with International Standard on Quality Control 1, KPMG Services Proprietary Limited and SizweNtsalubaGobodo Incorporated maintain comprehensive systems of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Our Responsibility

Our responsibility is to express limited assurance conclusions on the selected sustainability information based on our work performed. We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements other than the Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board. That Standard requires that we plan and perform our engagement to obtain limited assurance about whether the selected sustainability information is free from material misstatement.

A limited assurance engagement undertaken in accordance with ISAE 3000 involves assessing the suitability in the circumstances of IDC’s use of GRI G3.1 Guidelines as the basis of preparation for the selected sustainability information, assessing the risks of material misstatement of the selected sustainability information whether due to fraud or error, responding to the assessed risks as necessary in the circumstances, and evaluating the overall presentation of the selected sustainability information. A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks.

The procedures we performed were based on our professional judgement and included inquiries, observation of processes performed, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying records.

Given the circumstances of the engagement, in performing the procedures listed above we:

  • Interviewed management and senior executives to obtain an understanding of the internal control environment, risk assessment process and information systems relevant to the sustainability management and reporting process;
  • Inspected documentation to corroborate the statements of management and senior executives in our interviews;
  • Reviewed process that IDC has in place for determining material selected sustainability information to be included in the Report;
  • Tested the processes and systems to generate, collate, aggregate, monitor and report the selected sustainability information;
  • Inspected supporting documentation and performing analytical procedures on a sample basis to evaluate the data generation and reporting processes against the reporting criteria;
  • Assessed the reasonableness and appropriateness of significant estimates and judgments made by directors in preparation of the key performance indicators; and
  • Evaluated whether the selected sustainability information presented in the Report is consistent with our overall knowledge and experience of sustainability management and performance at IDC.

The procedures performed in a limited assurance engagement vary in nature from, and are less in extent then for, a reasonable assurance engagement. As a result the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express a reasonable assurance opinion about whether IDC’s selected sustainability information has been prepared, in all material respects, in accordance with GRI G3.1 Guidelines.

Conclusions

1.

On selected key performance indicators on which we are required to express limited assurance

Based on our work performed, nothing has come to our attention that causes us to believe that the selected sustainability information set out above for the year ended 2013 are not prepared, in all material respects, in accordance with GRI G3.1 Guidelines.

2.

On IDC’s self-declaration on the GRI G3.1 B+ Application Level on which we are required to express limited assurance

Based on our work performed, nothing has come to our attention that causes us to believe that the IDC’s self-declaration on the GRI G3.1 B+ Application Level is not prepared, in all material respects, in accordance with GRI G3.1 Guidelines.

Other matters

Our report includes the provision of limited assurance on: Building partnerships: assisting government/public sector; Corporate social investment; IDC worker and community trusts; EC4: significant financial assistance received from government; LA 10: average hours of training per year per employee by gender and by employee category; and LA 11: programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. We were previously not required to provide assurance on these key performance indicators.

Our report does not extend to any disclosures or assertions relating to future performance plans and/or strategies disclosed in the Report.

The maintenance and integrity of the IDC’s Website is the responsibility of IDC management. Our procedures did not involve consideration of these matters and, accordingly we accept no responsibility for any changes to either the information in the Report or our independent assurance report that may have occurred since the initial date of presentation on the IDC Website.

Restriction of liability

Our work has been undertaken to enable us to express a limited assurance conclusion on the selected sustainability information and IDC’s self declaration on the GRI G3.1 B+ Application Level to the Directors of IDC in accordance with the terms of our engagement, and for no other purpose. We do not accept or assume liability to any party other than IDC, for our work, for this report, or for the conclusion we have reached.

KPMG Services (Pty) Limited SizweNtsalubaGobodo Inc
Registered Auditor Registered Auditor
Per N Morri
Chartered Accountant (SA)
Registered Auditor
Director
27 June 2013
KPMG Crescent
85 Empire Road
Parktown
Johannesburg, 2193
Per D Manana
Chartered Accountant (SA)
Registered Auditor
Director
27 June 2013
SizweNtsaluba Building
20 Morris Street East
Woodmead
Johannesburg, 2191

CASE STUDY

Components for renewable energy

South Africa’s Integrated Resource Plan for electricity generation foresees the creation of 9 200MW of wind power generation capacity, as well as 8 400MW of photo-voltaic and 1 000MW of concentrated solar power generation capacity by 2030.

Coega Dairy Holdings

The IDC has identified increased competition in the dairy value chain and import substitution in the cheese industry as key sector development goals. We also singled out the need for increased farmer (and specifically B-BBEE) participation in dairy value-adding initiatives.

Windtown Lagoon Resort 

The newly built Windtown Lagoon Resort and Spa reflects the IDC’s focus to funding community-based projects that have potential to create employment opportunities in far-flung regions.


APPROVALS
R13.1 billion
DISBURSEMENTS
R16.0 billion
JOBS FACILITATED
18 922
JOBS SAVED
3 950
© The IDC 2013. All rights not expressly allowed are reserved. P.O. Box 784055, Sandton, 2146, South Africa