Namib Poultry

The IDC – long considered a partner in local and regional development – funded this project, the first commercial integrated poultry business in Namibia.

Corporate governance


Governance and Ethics Committee (GEC)

The main purpose of the GEC is to advise the Board generally on corporate governance and ethics matters. The GEC aims to promote the ideals of corporate fairness, transparency and accountability as well as to assist the Board in vetting funding applications, projects and any matter in which a director of the IDC has an interest.

GEC members attended the following meetings during the reporting period:
Name of director 30 January 2013 06 February 2013
LL Dhlamini*
LR Pitot
ZJ Vavi
* Chairman Present Apologies n Via telecon

Executive Management Committee (Exco)

Exco is responsible for among other duties, the implementation of strategies and policies of the IDC as developed by the Board; managing the business and affairs of the IDC on a day-to-day basis; and prioritising the allocation of capital, technical and human resources. Exco assists the CEO by guiding the overall direction of the Corporation and exercising executive control in the management of its day-to-day operations. The CEO is an executive director appointed by the shareholder through a recommendation by the Board, and other Exco members are appointed by the Board.

The current composition of Exco is reflected here. It should be noted that three executive committee members resigned as follows: Ms JM Modise resigned with effect from end November 2012, Ms NV Mokhesi’s contract ended at the end of February 2013. Mr U Khumalo resigned with effect from end January 2013, to take up the position of Executive Chairman at IDC subsidiary, Scaw South Africa (Pty) Limited. Ms J Gaveni was appointed as the Divisional Executive of Human Capital, replacing Ms Modise, with effect from 1 December 2012.

Stakeholder engagement

The Corporation’s stakeholder engagement is discussed in more detail here.

Changes to the Board and remuneration

IDC non-executive Board members are remunerated for the meetings they attend at rates approved by the shareholder. No performance-based remuneration or retainer fees are paid to directors. Senior management and other employees are paid market-related salaries, and through the IDC short- and long-term incentive schemes based on performance and achievement of specific set targets. Particulars of the directors’ remuneration are set out in the table below.
Name of director
2013 2012
MW Hlahla 507 292
LR Pitot 315 196
LI Bethlehem* 287 229
SK Mapetla 332 167
LL Dhlamini 157 192
NE Zalk**
JA Copelyn*** 86 21
BA Mabuza 309 52
SM Magwentshu-Rensburg 181 45
PM Mthethwa 155 33
RM Godsell 176 21
BA Dames 98 45
ZJ Vavi 98
*   LI Bethlehem does not derive any financial benefit for services rendered to the IDC. Her fees are paid directly to Standard Bank
**   NE Zalk is employed by the dti and does not earn director’s fees for services rendered to the IDC.
***   JA Copelyn’s fees are paid directly to HCI Limited

There were no changes to the Board during the reporting period.

Compliance with relevant laws and regulations

The Board is responsible for ensuring that the Corporation complies with applicable laws, regulations and government policy. To enable it to perform this function, the Board has unrestricted access to the information of the Corporation.

All IDC business units are responsible for compliance with applicable laws, rules, codes and standards applicable to the Corporation. The compliance function (in the Legal Services & International Finance Department) is responsible for assisting the various business units with identifying regulatory risks, assessing impact, and monitoring and reporting any regulatory compliance breaches within the organisation as per the identified IDC’s regulatory universe. During the year under review there were no contraventions, penalties, sanctions or fines imposed on IDC due to regulatory non-compliance.

Internal audit function

Internal Audit is an independent appraisal function established to examine and evaluate activities, and to assist the Board of Directors and management to effectively discharge their responsibilities. The activities and practices in Internal Audit are conducted in accordance with recognised professional standards.

The primary role of Internal Audit is to provide Management and the Board Audit Committee with assurance on the adequacy and effectiveness of the Corporation’s Systems of Internal Control, as well as to provide consultative and Forensic investigation services.

The Internal Audit Department (IAD) provides an independent and comprehensive auditing service to the IDC and its business partners. This is achieved through the provision of value-added recommendations to management where deficiencies have been identified in the Internal Control Systems.

Internal Audit’s main function is to assist Executive Management in achieving their strategic objectives, by providing, among others, the following services:
  • Assessment of the adequacy of the internal control environment of the Corporation.
  • Provide assurance on the effectiveness of the control environment.
  • Perform follow-ups to monitor and measure the extent of corrective actions taken by the Corporation to address identified weaknesses.

  • Performance of fraud and related investigations, the reporting thereof to management and provision of recommendations regarding the outcomes of the investigations by the Forensic Audit team.
  • Facilitation of the development and revision of systems and procedures.
  • Provide consultative business partnering to address complex issues.

Internal Audit (IA) follows a risk-based audit approach and to this end has based its three-year Audit Plan on the IDC Risk Register as compiled by the Risk Management Department (RMD), with the plan focusing mainly on Key Risks. Internal Audit engaged in 76 assignments comprising Internal Audit Reviews as well as Fraud Investigations during the financial year.

Internal Audit performs audits of processes related to the Key Risks of the Corporation as scheduled in the Audit Plan. The sampling guide for the execution of these audits ensures coverage of a broad spectrum of business units and departments through the various reviews performed during the year.

The control environment is generally viewed to be adequate to effectively mitigate the key risks which may hamper business processes and the achievement of the Corporation’s objectives. However, it has been noted that particular attention needs to be given to Operational Risk and the related fraud risks and controls, mainly due to external fraudulent incidents and the misapplication of funds by IDC clients.

Issues noted in clients misappropriating IDC’s funds are regarded as significant and this is exacerbated by deficiencies in the IDC’s processes to proactively identify red flags in this area and have somehow resulted in the Corporation experiencing financial losses on some of the investments. Of significance is that complex strategies are devised, most often through the use of related party transactions, in order for clients to misappropriate IDC funds, ultimately to the Corporation’s detriment.

In acknowledgement of the significance of these trends, Internal Audit has formulated “Interventions” which have been presented to management in an attempt to mitigate or reduce risk and exposure in this regard.

To address this concern, specific Interventions and processes have been tabled for this area, such as the pre-disbursement briefing of clients. This entails the comprehensive briefing of clients regarding the expectations and implications of signing legal agreements for funding with the IDC.

Furthermore, Internal Audit presented an Intervention recommendation on how application of funding should be assessed by Post Investment Associates. In addition, this Intervention provided guidelines to Associates on how to identify potential red flags timeously.

The interventions and process enhancement are fundamentally intended to deter fraud and mismanagement by clients and cultivate a culture of ethical business conduct, thereby ensuring the proper implementation of business plans and appropriate application of funds by IDC clients. Furthermore, they attempt to provide Management with some guidelines to enhance the effectiveness of processes as well as the techniques with which the “application of funding” should be monitored.

Due attention is being afforded by management to ensure appropriate improvements in the control environment in terms of noted deficiencies. Internal Audit will assess the extent to which management actions have been taken to address identified weaknesses in the next financial year.

Both the Board and Audit Committee consider the effectiveness of internal controls.


The IDC has adopted an internal control framework as set out by the Committee of Sponsoring Organisations of the Treadway Commission (COSO). Under the COSO Enterprise Risk Management (ERM) Framework, risks are categorised into strategic, operational, financial reporting, and legal/regulatory.

The value of COSO-based auditing is that it enables effective evaluation of the soft controls espoused by COSO while avoiding the faulty, negative findings that can sometimes result from traditional audit methods. Customer-focused and outcome-oriented, this method addresses systemic root causes, avoids placing blame, and produces a workable solution every time.

Authority and competence

The Internal Audit Charter was recommended to the Board for approval, and it establishes the internal audit activity’s position within the organisation including the nature of the chief audit executive’s functional reporting relationship with the Board; authorises access to records, personnel, and physical properties relevant to the performance of engagements; and defines the scope of internal audit activities.

The internal audit activity collectively possesses the knowledge, skills, experience and other competencies needed to perform its responsibilities. Furthermore, Internal Audit has access to and integration of best practices through affiliation to various professional bodies as well as sharing best practices with various entities.

The quality of work performed by IAD is continuously assessed by Management and at least annually by the Board. External quality assessments must be conducted at least once every five years by a qualified, independent reviewer or review team from outside the IDC. The assessment was conducted in the last two years in line with IIA requirements and the result concluded that Internal Audit conformed with set standards and principles outlined by IIA.

There were no significant matters of concern noted by the independent assessments. In general the findings were that Internal Audit complies with required standards, with improvement areas noted among others that the department should consider to utilise electronic working papers rather than the current physical files which are used as part of its working papers trails. To address this, Internal Audit has procured an audit tool to address the improvement area noted by the quality assessment process.

Furthermore, External Auditors conduct ISA 610 assessments on the Internal Audit function yearly and have found Internal Audit to be in conformity with all relevant requirements, with no negative findings noted.

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.

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