Contents

Report of the Chief Executive Officer
- Operations and Logistics
- Marketing and Communications
- Public Affairs
- Technology
- Conclusion
Board of Directors responsibilities for the financial statements
Report of the Audit Committee
Unqualified report of the independent auditors
Report of the Board of Directors
Balance sheet
Income statement
Statement of changes in equity
Cash flow statement
Accounting policies
Notes to the annual financial statements

REPORT OF THE CHIEF EXECUTIVE OFFICER

PREFACE

When South Africa and Johannesburg won the bid in December of 2000 to host the United Nations World Summit on Sustainable Development (WSSD 2002), the announcement was greeted with excitement and some trepidation.

April 2001 saw the formation of the Johannesburg World Summit Company (Jowsco), a Section 21 company established by the South African Government as a special-purpose vehicle with the sole mandate to coordinate and manage the operations and logistics for WSSD 2002, the largest event ever to be staged by the United Nations.

It soon became evident that Jowsco was faced with a major logistical challenge within the limited time available.

The United Nations projected attendance of WSSD 2002 by more than 100 heads of state. It was estimated that up to 65 000 delegates, media and suppliers would have to be accredited for WSSD 2002 and its parallel events.

Few venues were fully geared to host WSSD 2002. In addition, accommodation would have to be sourced throughout the province, adding to the complexity of the transport system.

A team of specialised managers and support staff was assembled to begin preparations of this daunting task. Jowsco was structured into logical components, with a Chief Executive Officer and executive managers heading up each of the main business units: Finance and Administration, Public Affairs, Operations and Logistics, Marketing, Communications and Technology. These units were further broken down into specialised portfolios.

Several forums were established to ensure the co-operation and participation of major stakeholders, including:

• A Management Committee consisting of the Jowsco executives and representatives from the City of Johannesburg and the Gauteng Department of Agriculture, Conservation, Environment and Land Affairs provided strategic direction and assisted with high-level decision-making.
• A National Logistics Committee consisting of Jowsco managers and representatives from relevant departments of all three spheres of Government reviewed all logistical preparations and provided necessary leadership and guidance.

A draft Memorandum of Understanding detailing the roles and responsibilities of national, provincial and local government has been drafted.

Key members of Jowsco travelled to New York to attend relevant preparatory committee meetings and negotiate terms and conditions for the Host Country Agreement.

An additional challenge during the latter part of the year was the decision by the United Nations to move the Summit dates forward a week (from 2 - 11 September 2002 to 26 August - 4 September 2002) to avoid a clash with the first anniversary of the September 11 disaster in New York.

OPERATIONS AND LOGISTICS

Accommodation

A destination management company was awarded the tender to organise all accommodation and related travel arrangements for delegates and support staff.

Hotels considered suitable for accommodating the Heads of State and Government were identified. Availability of accommodation in other hotels, bed-and-breakfst establishments and guest houses was catalogued. The process of procuring available space and agreeing on rates began in earnest.

Airports, Airlines and Borders

It was clear that the majority of delegates would utilise the Johannesburg International Airport while some Heads of State would use the Waterkloof Air Force Base. Negotiations were entered into with these airports.

A task team was established with the relevant stakeholders, and a draft operational plan was compiled.

Discussions were held with various airlines to negotiate block booking of seats to ensure that there would be sufficient capacity to cater for delegates attending the Summit.

Procedures for visa applications and yellow fever certificates at ports of entry were agreed with the relevant national departments.

Accreditation

The National Intelligence Agency assumed the lead role on accreditation. The plan for accrediting categories and sub-categories of delegates, media and suppliers was drawn up and presented to the United Nations for approval.

Venues

Following extensive investigations, the Sandton Convention Centre was booked as the main venue for the United Nations summit. In collaboration with the United Nations, planning started on the layout of the complex.

Other venues that would be utilised during the Summit were also booked. The Wanderers Club would host the Ubuntu Village and Exhibition, while various hotels were secured for conference facilities, official functions and major parallel events such as Business Action for Sustainable Development and the Local Government Forum.

Health, Medical, Fire and Disaster Management

The national Department of Health assumed the lead role for this portfolio. A multi-stakeholder task team consisting of Jowsco, the national Department of Health and the emergency management services of the City of Johannesburg was established to assist the department.

Health preparations included setting standards for caterers, food security and contingency plans for possible disease outbreaks at the summit venues and headquarter hotels. Preliminary audits of the facilities were conducted.

A database of available medical facilities was compiled and a comprehensive operational plan drawn up. This plan detailed the location of all medical facilities and the procedure for the effective emergency treatment of delegates and support staff.

Fire-prevention facilities at all venues and hotels were inspected. In addition, preliminary assessments of emergency evacuation procedures for venues and hotels were conducted.

Transport

The first draft of the transport plan was compiled.

Taking into account predicted accommodation demands, Gauteng province was divided into a transport grid consisting of 11 zones. "Hub and spoke" routings were identified. An initial estimate was made of the likely demand of coaches. Tender specifications for provision of the mass transport system were developed. Discussions were entered into with Daimler Chrysler for the sponsorship of the vehicles required for the motorcades.

Security

The VIP Protection Services of the South African Police Services assumed the lead role for the security of the Summit. A core command group consisting of the SAPS, Metropolitan Police Department and other security agencies was formed.

The main purpose of the team was to ensure the security of Heads of State and Government. Security concerns escalated in the wake of the events of September 11, 2001. A high-level security strategy and a schedule of security equipment requirements were compiled. This was presented to the United Nations for discussion and agreement.

A start was made with the procurement of certain equipment and the security strategy broken down into an implementation plan for each of the venues, headquarter hotels and other strategic points.

Protocol

Initially, Jowsco assumed the lead role for protocol but this responsibility was later transferred to the Department of Foreign Affairs. Discussions were initiated with foreign embassies via Note Verbale, and guidelines relating to accommodation and transport arrangements were communicated.

A tentative schedule of Heads of State and Government and Heads of Delegations expected to attend the Summit was compiled for planning purposes.

Hospitality

In conjunction with the selected venues, furniture and fittings requirements were identified and presented to the United Nations for comment and approval.

In addition, the initial scoping of requirements for information kiosks was undertaken and tenders for suppliers were compiled and published.

Events

The development of preliminary concepts for the opening ceremony led to a tender being issued and proposals submitted by prospective suppliers.

The possibility of developing a cultural programme was explored with the National Department of Arts, Science, Culture and Technology and other stakeholders.

Exhibition

The initial plan was for the sustainable development best practice exhibition requested by the United Nations to be staged in a structure in the parking lot of the Sandton Library. The concept and business plan for the exhibition was compiled and submitted, and requests for expressions of interest were distributed internationally.

Due to budget constraints, however, it was later decided that the exhibition would be staged in conjunction with the Ubuntu Village on the sports fields of the Wanderers Club. It would be housed in Tensile One (the largest moveable structure in the world according to the Guinness Book of Records).

Ubuntu Village

Ubuntu Village was planned for delegates and South Africans to meet on "common ground". The Village would host the opening ceremony and numerous other events, along with the sustainable development best practice exhibition.

A detailed business plan was compiled. Various cultural and commercial organisations and relevant government departments were invited to participate at the Village.

Tender specifications for an event management company were compiled and published.

Volunteers

The concept of using volunteers to assist with a wide range of duties and functions during the Summit was compiled. By year-end, clarity had been reached in the numbers of volunteers required and an operational plan had been compiled.

Greening of the Summit

In response to the theme of the Summit, a dedicated team was implemented to ensure that all stakeholders would comply with the Summit's sustainable development best practice policy and guidelines. A "green" procurement policy was compiled and extensive dialogue conducted with suppliers to ensure compliance.

MARKETING AND COMMUNICATIONS

The main objective of this portfolio was to demonstrate unequivocally that Johannesburg has the ability to host major international gatherings, and to create positive impressions of the city, the province, the country and continent.

Detailed marketing and communication plans were compiled. The aim of these programmes was to promote mass awareness of the Summit and ensure buy-in from the public and other stakeholders. Negotiations with media suppliers led to generous cooperation in respect of advertising, editorial and promotional activities.

Plans were developed to service the needs of approximately 5 000 local and international media representatives who are likely to attend the Summit.

A major responsibility was the delivery of the rights packages negotiated with corporate and other partners.

The SABC was appointed host broadcaster based on a comprehensive memorandum of understanding, which was nearing completion at the year-end.

Following a tender process, international and national public-relations companies were appointed and contractual negotiations started.

PUBLIC AFFAIRS

Stakeholder Management

Given that the perceived success of the Summit would be dependent on the participation and satisfaction of numerous stakeholders, consultation was initiated with a wide range of stakeholders such as residents and businesses in Sandton, the taxi industry, civil society and political parties and other major groups.

Formal communication mechanisms were established with various organisations intending to host parallel events during the Summit. These included the Civil Society Global Forum, Business Action for Sustainable Development and the Local Government Forum.

Tourism

A task team including Jowsco, South African Tourism, the City of Johannesburg, the Department of Environmental Affairs and Tourism and other roleplayers developed a comprehensive plan to ensure that all delegates were exposed to the tourism offerings of the country.

A tourism management company was appointed following a tender process.

TECHNOLOGY

The City of Johannesburg provided the initial resources to scope the information technology requirements for WSSD 2002. A detailed and integrated plan was signed off by the various Jowsco departments and a tender document issued.

The tender procedure was unsuccessful largely due to the size and complexity of the project. Further investigation into the information technology package used by the International Olympic Committee led to negotiations starting with the relevant suppliers shortly before the year-end.

CONCLUSION

31 March 2002 saw remarkable progress towards the delivery of a Summit that was likely to deliver meaningful benefits in terms of "People, Planet and Prosperity", while demonstrating the organisational capacity of the city, province and country.

Operational plans were largely in place and the bulk of planning was complete.

The major challenge for 2002-03 financial year is to move from conceptualisation and planning to implementation, a challenge Jowsco is confident of meeting.

* * *

ANNUAL FINANCIAL STATEMENTS

BOARD OF DIRECTORS RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS

The directors of the company are responsible for the maintenance of adequate accounting records and the preparation and integrity of the annual financial statements and related information. The financial statements have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice. The company's independent external auditors, PricewaterhouseCoopers Inc., have audited the financial statements. Click here for their unqualified report.

Internal and accounting controls

The directors are also responsible for the systems of internal control. These are designed to provide reasonable but not absolute, assurance as to the reliability of the financial statements, and to adequately safeguard, verify and maintain accountability of assets, and to prevent and detect material misstatement and loss. Management regularly reviews the system of internal control and these are modified and improved as operating conditions change. Nothing has come to the attention of the directors to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the period under review.

The Board is satisfied that the system of internal control is adequate so that the financial records may be relied upon for preparing the financial statements and maintaining accountability of assets and liabilities.

The annual financial statements set out on pages 12 to 27 were approved by the Board of Directors on 12 August 2002 and are signed on its behalf by:

Dr C. Olver, Chairperson
M.R. Mashishi, Chief Executive Officer

CERTIFICATE BY COMPANY SECRETARY

In my capacity as company secretary, I hereby confirm, in terms of section 268 G(d) of the Companies Act, 1973, that for the period ended 31 March 2002, the company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of this Act and that all such returns are true, correct and up to date.

B.G. Mokgoro, Company Secretary

REPORT OF THE AUDIT COMMITTEE TO THE EXECUTIVE AUTHORITY OF THE DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND TOURISM FOR THE YEAR ENDED 31 MARCH 2002

This report has been prepared in accordance with the Treasury Regulations for public entities issued in terms of the Public Finance Management Act 1999 (PFMA) as amended. The Johannesburg World Summit Company is listed as a Public Entity in Schedule 3A of the Act. The report is for the period ended 31 March 2002. The Johannesburg World Summit Company's (Jowsco) accounting authority approved the sharing of the Department of Environmental Affairs and Tourism's Audit Committee. This approval was granted on 14 May 2002 and as such, the Audit Committee did not meet in the year under review.

The Audit Committee comprises of two non-official independent chairpersons. The composition of the Audit Committee is Messrs S.K. Motuba (Chairman, Professor H. de Jager, and T. Bouwer, ex-officio from Department of Environmental Affairs and Tourism. Messrs M.R. Mashishi and B.G. Mokgoro from Johannesburg World Summit Company attend the meetings as invitees. Representatives of Internal Audit as well as representatives of External Auditors attend the Audit Committee meetings. The Committee is required to meet at least four times annually, with additional meetings convened as required.

The structure of the Audit Committee is set out in the Audit Committee Charter, which is reviewed annually. The charter sets out specific responsibilities delegated by Management of the Audit Committee and its terms of reference which deal adequately with its membership authority and duties. The roles and responsibilities of the Audit Committee are also stipulated under Treasury Regulations issued in terms of the PFMA 1999. The function of the Audit Committee is primarily to assist Management in discharging its responsibilities relative to the Act.

The Committee has to satisfy management that adequate and appropriate financial and operating controls are in place particularly with regard to monitoring the management and assessment of financial risks, financial control, accounting and reporting. As part of its function the Audit Committee co-ordinates and monitors the activities of the Internal Audit. Through this the Audit Committee is able to report on the effectiveness of the internal control system and to assess whether the internal audit section is fulfilling its role efficiently and effectively.

In terms of section 3.1.10 of the Treasury Regulations (April 2001) the Audit Committee should report the following:

(a) The effectiveness of internal control.

(b) The quality of in year management and monthly reports submitted in terms of the PFMA 1999.

(c) Evaluation of the annual financial statements.

EFFECTIVENESS OF INTERNAL CONTROL

As the Audit Committee was only established after year-end, the Committee is not in a position to comment on internal controls for the year ended 31 March 2002. Concerns of internal Audit after year-end on different aspects were forwarded to management and for the attention to Minister of Environmental Affairs and Tourism.

THE QUALITY OF IN YEAR MANAGEMENT AND MONTHLY REPORTS

The Committee did not review the management and monthly reports as it was only established after the year end and therefore cannot comment on the above.

EVALUATION OF THE ANNUAL FINANCIAL STATEMENTS

The Audit Committee has reviewed the audited annual financial statements of the Johannesburg World Summit Company for the year ended 31 March 2002 and is satisfied that these statements are fair and reasonable in all material respects, the relevant requirements of the PFMA, 1999, as amended, and the Companies Act 1973, have been compiled with. The Audit Committee has noted the emphasis of the matter in report of the External Auditors regarding the going concern issue, and the outstanding approval from the South African Revenue Services for tax exemption, and is satisfied that management will take appropriate action to rectify these matters.

S.K. Motuba, Chairman, Audit Committee

Johannesburg

12 August 2002

UNQUALIFIED REPORT OF THE INDEPENDENT AUDITORS TO THE EXECUTIVE AUTHORITY OF THE DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND TOURISM

We have audited the annual financial statements of Johannesburg World Summit (association incorporated under section 21) set out on pages 12 to 27 for the period ended 31 March 2002. These financial statements are the responsibility of Johannesburg World Summit's board of directors.

Our responsibility is to express an opinion on these financial statements.

Scope

We conducted our audit in accordance with statements of South African Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatements. The audit was also planned and performed to obtain reasonable assurance that, in all material respects, the relevant requirements of the Public Finance Management Act, 1999, as amended, have been complied with. An audit includes:

• examining, on a test basis, evidence supporting the amounts and disclosures included in the annual financial statements;
• assessing the accounting principles used and significant estimates made by management; and
• evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Audit opinion

In our opinion:

• The annual financial statements fairly present, in all material respects, the financial position of Johannesburg World Summit at 31 March 2002 and the results of its operations and cash flows for the period then ended in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by Schedule 4 to the Companies Act in South Africa, 1973, and other reporting requirements as set out in the Public Finance Management Act, 1999, as amended.
• The transactions of Johannesburg World Summit, which were examined during the course of our audit, were made, in all material respects, in accordance with the mandatory functions of the entity as determined by law or otherwise.

Emphasis of matter

Without qualifying our opinion:

• We draw attention to the fact that the liabilities of the company exceed the assets by R2 608 550 at 31 March 2002. This condition indicates the existence of a material uncertainty, which casts doubt about the company's ability to continue as a going concern. The company has entered into discussions with the South African government on funding any shortfall arising from the Johannesburg World Summit (refer note 8), but a final decision on this will only be made in October 2002. (Also refer to the report of the board of directors, paragraph: "Post balance sheet events".)
• We draw attention to note 6 in the annual financial statements. The company has applied for exemption from taxation in terms of section 30 of the Income Tax Act, 1962. Approval from the South African Revenue Services is still outstanding.

PRICEWATERHOUSECOOPERS INCORPORATED
Chartered Accountants (SA)
Registered accountants and auditors

Johannesburg
12 August 2002

REPORT OF THE BOARD OF DIRECTORS

The directors have pleasure in presenting their report on the activities of the company for the first period of operation, ended 31 March 2002.

GENERAL OVERVIEW OF THE COMPANY'S OPERATIONS

Nature of business

The Johannesburg World Summit 2002 Company (JOWSCO) was set up as a Special Purpose Vehicle to manage and co-ordinate on behalf of the Government of the Republic of South Africa, logistical arrangements for the successful hosting of the United Nations World Summit on Sustainable Development (WSSD) to be held in Johannesburg during August/September 2002.

An Association Incorporated not for Gain under Section 21 of the Companies Act of 1973 incorporated on 1 November 2000, was acquired in February 2001 with a view to use it as a vehicle through which the management and co-ordination of WSSD logistical activities are to be executed. As the South African government would provide a substantial portion of the company's revenue, the company was also listed as a Schedule 3A Public Entity in terms of the Public Finance Management Act of 1999 (PFMA). As such, the company has to comply with the requirements of both the Companies Act and the PFMA.

As a public entity, the company functions under the auspices of the Minister of Environmental Affairs and Tourism, whose department, the Department of Environmental Affairs and Tourism (DEAT) is also the designated department responsible for the company.

Based on the nature of its business and its direct relationship with governmental initiatives on sustainable development, it was regarded appropriate to apply to the South African Revenue Services (SARS) for income tax exemption with in terms of section 30 of the Income Tax Act. Although this matter was regarded as high priority, a final ruling had not been received from SARS at time of this report.

The company commenced operations at the start of the financial period on 1 April 2001 when the Chief Executive Officer was appointed. The balance of the senior executive team was in place by end of June 2001. Following a strategic planning exercise, comprehensive business plans where developed and the organisation was structured to deliver on its mandate. During the second half of 2001, core staff were appointed and located in offices kindly made available by the City of Johannesburg at a strategic location in Sandton.

In the absence of a clear precedent for an event of this magnitude, strategic plans and budgets attached to them were therefore based on functional expertise and best estimates available at that time.

Towards the end of 2001, the National Treasury and the Inter-Ministerial Committee on WSSD approved a provisional budget of R551.4 million.

It was therefore only from January 2002 that the company could move aggressively to deliver the implementation phase.

Given the initial focus on planning, only 11.6% of the budgeted expenditure was spent during the period under review.

FINANCIAL PERFORMANCE

Of the total WSSD project budget of R551.4 million, expenditure of R90.1 million was allocated for the period under review. Of this, R64.0 million was in fact expended. The under-spend was mainly due to a decision to postpone the contractual engagements of service providers for the security equipment required for WSSD as the company enjoyed only a limited cash inflow and did not wish to overdraw on its account.

According to the revenue projections that were proposed and approved, the company would generate its revenue from the following sources:

• Three tiers of South African government (National, Gauteng Province and the City of Johannesburg);
• National and international donor community;
• Local and international corporate partners; and
• Own revenue initiatives.

As at period-end, the following revenue had been received:

The company incurred a net operating loss of R2.6 million for the period.

FIXED ASSETS

Due to the limited span of the company, it was decided to lease or rent assets. Where this was not a viable proposition, assets were procured with guaranteed buy-back options as far as possible. Based on these principles, the company acquired assets at a cost of only R1.7 million during the period, consisting mainly of furniture, office equipment, computers and communications equipment.

POST BALANCE SHEET EVENTS

At the time of the reporting period end, the full funding projected in the revenue budget had not yet been secured. Furthermore, a review of the expenditure budget clearly indicated that the actual costs of WSSD would be significantly higher than the approved budget of R551.4 million. This has led to the company experiencing cash flow pressures during the subsequent period. The assistance of the National Treasury was sought in this regard. The outcome was that National Treasury indicated that they supported the need for an upward adjustment. It was however indicated that the company through its designated department, DEAT would need to approach the Treasury Committee in October 2002 for a final decision in this regard. In the mean time additional cash would be made available to JOWSCO in order to address immediate cash flow problems.

CORPORATE GOVERNANCE

The Johannesburg World Summit 2002 is committed to a sound governance process embracing the principles of integrity, openness and accountability in order that stakeholders may be assured that the company's directors and managers are managing it appropriately. The board supports the principles of The Code of Corporate Practices and Conduct as set out in the King II Report.

COMPLIANCE WITH PUBLIC FINANCE AND MANAGEMENT ACT (PFMA)

The company is fully compliant with all prescribed requirements of the PFMA.

AUDIT COMMITTEE

Jowsco's designated government department, DEAT, kindly agreed to make its Audit Committee available to Jowsco. As the Committee's charters and procedures were already in place, this made it possible for the Committee to take on the Jowsco responsibility with immediate effect. The Audit Committee meets at least monthly during the lead up to WSSD. It reviews special and routine reports received from the internal audit unit. We would like to extend our sincere gratitude towards the members of the Committee for accepting this additional responsibility.

ACCOUNTABILITY AND AUDIT

We acknowledge our special responsibility to institute internal control systems that provide reasonable assurance that the company's assets are being safeguarded and to prevent their unauthorised use or disposition, as well as maintaining proper and reliable accounting records. To this end, policies and procedures have been adopted to ensure that this responsibility is fulfilled.

Internal audit

An internal audit unit was established to cover all major risk areas identified. After having gone through a public tender process, the firm KPMG was appointed to fulfil this function. The internal audit unit has unrestricted access to all the company staff and records. It reports to the Audit Committee and the Board on any matter it deems significant.

External audit

The Office of the Auditor General was approached in terms of Section 58(3) of the PFMA with respect to the appointment of external auditors for the company. The Auditor General's office indicated that it would not assume this role and advised the company to identify a firm of public registered chartered accountants and auditors in private practice to perform the role of the company's external auditors. After a public tender and evaluation process in which representatives of the Auditor-General's office participated, it was decided to appoint PricewaterhouseCoopers Inc as the company's external auditors.

RISK MANAGEMENT

Upon assuming their duties, the internal auditors performed an assessment on the risk profile and exposure of the event (WSSD) and the company. During this exercise, the involvement and opinions of the Gauteng Province and City of Johannesburg (respectively as host province and city) were taken into consideration. Based on the findings, appropriate actions were taken to avoid or mitigate the different risk exposures. It was subsequently decided to take appropriate insurance cover on a variety of risk exposures around the following areas:

• Public liability
• Professional indemnity
• Directors and officers
• Assets all risks
• Medical assistance and emergency evacuation for VIP delegates
• Business interruption
• Theft and malicious damage
• Business all risks
• SASRIA

Based on the nature, probability of occurrence and prohibitive costs of premiums relating to risks of cancellation of the event, sabotage and terrorism, it was decided not to insure against these eventualities.

RELATIONSHIP WITH GOVERNMENT

As a public entity, the company reports to the Department of Environmental Affairs and Tourism. The company utilises this avenue to inform all governmental institutions and political office bearers of developments and matters for notification and concern with regard to WSSD.

PROCUREMENT PRACTICES

The major share of goods and services are secured from external parties. As such, it is important that the procurement system and criteria facilitate a fair, equitable, transparent and economic process that also achieves empowerment of historically disadvantaged individuals and groups. This is in line with the procurement criteria of government also enshrined in our Constitution.

Accordingly, the following criteria are included in the company's procurement process:

• Preferential treatment of suppliers who could demonstrate high levels of participation of historically disadvantaged individuals and groups together with small, micro and medium sized enterprises;
• Taking on board of enterprises from historically disadvantaged individuals and groups in consortia with established national and international enterprises and
• Major service providers who by their engagement would be compelled to also engage subcontractors to support their activities were contractually obligated to also engage similar criteria to ensure that empowerment targets would be achieved and further enhanced.

Due to the nature of the event, sustainable development practices of bidding service providers are also an important criterion in the procurement process.

EMPLOYMENT EQUITY PRACTICES

The company is committed to providing equal opportunities for its employees regardless of their ethnic origin or gender. The principles of economic empowerment of historically disadvantaged individuals and groups have been rigorously applied. Jowsco sought to appoint individuals with proven track records, many of whom interrupted successful careers to accept temporary contracts with the company. Some appointees have needed strong support. It can be confidently stated that WSSD will be delivered by a team of South Africans who reflect the demographic profile of the country as a whole. Given the extraordinary pressure under which Jowsco has worked, staff turnover has been modest.

DIRECTORS OF THE COMPANY

The following persons held office in the period from incorporation to the date of this report:

The company secretary is:

Mr BG Mokgoro.

The registered office and place of business of the company is:

Fedsure on Grayston
cnr Grayston Drive & Linden
Sandton
2146

Telephone (011) 303-8200
Facsimile (011) 303-8370

Website: www.joburgsummit2002.com

BALANCE SHEET - for the period ended 31 March 2002

	Notes	31/3/2002
		R
ASSETS
Current assets
Property, plant and equipment	1	1 208 518
Receivables	2	9 010 083
Cash and cash equivalents	3	31 775 766
TOTAL ASSETS		41 994 367
EQUITY AND LIABILITIES
Capital and reserves
Accumulated loss		(2 608 550)
Current liabilities
Trade and other payables	4	44 602 917
TOTAL EQUITY AND LIABILITIES		41 994 367

INCOME STATEMENT - for the period ended 31 March 2002

	Note	31/3/2002
		R
Revenue		60 899 262
Operating costs		(64 001 283)
Operating loss before finance income		(3 102 021)
Interest received		493 471
Operating loss for the period	5	(2 608 550)

STATEMENT OF CHANGES IN EQUITY - for the period ended 31 March 2002

	Total R
Balance at 22 November 2000	-
Operating loss for the period	(2 608 550)
Balance at 31 March 2002	(2 608 550)

CASH FLOW STATEMENT - for the period ended 31 March 2002

	Notes	31/3/2002
		R
Cash flows from operating activities
Cash receipts from grants, donations and sponsorships		51 889 179
Cash paid to suppliers and employees		18 884 128
Cash generated from operations		33 005 051
Interest received		493 471
Net cash inflow from operating activities	7	33 498 522
Cash flows from investing activities
Purchase of property, plant and equipment		(1 722 756)
Net cash outflow from investing activities		(1 722 756)
Net increase in cash and cash equivalents		31 775 766
Cash and cash equivalents at beginning of the period		0
Cash and cash equivalents at end of the period	3	31 775 766

ACCOUNTING POLICIES - for the period ended 31 March 2002

The annual financial statements are prepared on the historical cost basis and incorporate the following principal accounting policies.

Basis of preparation

The financial statements are prepared in accordance with and comply with South African Statements of Generally Accepted Accounting Practice.

Property, plant and equipment

All items of a capital nature are stated at cost less accumulated depreciation.

Assets are written off over the lifespan of the project, which is two years, or over its useful life if shorter. In terms of the Memorandum and Articles of Association all assets will be donated at the end of the project to another organisation, which has a similar objective to that of the company.

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

When the recoverable amount of an asset has declined below its carrying amount, the carrying amount is reduced to reflect the decline in value. The recoverable amount of assets is the higher of net selling price or value in use.

Revenue

Revenue represents donations, sponsorships and grants received from government, donors and sponsors. Revenue received for specific projects are treated as earmarked funds as described below.

Revenue includes discounts received.

Earmarked funds are only recognised when they are actually receivable and there is reasonable assurance that they will be received.

Sponsorship and grant income are only recognised when received or when they are actually receivable and there is reasonable assurance that they will be received.

Product sponsorships are recognised at a deemed market value and are accounted for as they are utilised.

Interest on these funds will be recognised only when realised.

Government grants

Government grants are recognised as revenue on a rational basis in the year in which the related costs are incurred. During the current period grants were recognised on a receipt basis since no basis existed for allocating the grant to a year other than the one in which it was received. The grants are not repayable and no specific conditions are attached to grants received.

Leases

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Foreign currencies

Transactions in currencies other than South African Rands are initially recorded at the rates of exchange ruling on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates ruling on the balance sheet date.

Profit and losses arising on exchange are dealt with in the income statement.

Financial instruments

Financial instruments carried on the balance sheet include cash and bank balances, receivables, and payables. Financial assets and liabilities are accounted for at cost but adjustments are made when the recoverable or payable amount decline below the carrying values. Income or expenditure relating to financial assets and liabilities are accounted for on an accrual basis.

The carrying amounts of financial instruments approximate to their fair value

Comparative figures

There are no comparative figures in this set of financial statements since it is the first period of operation.

NOTES TO THE FINANCIAL STATEMENTS - for the period ended 31 March 2002

				31/3/2002 R
1. PROPERTY, PLANT AND EQUIPMENT
Cost	Opening balance R	Additions R	Disposals R	Closing balance R
Furniture and fittings	-	731 347	-	731 347
Computer equipment	-	201 707	-	201 707
Communication equipment	-	261 446	-	261 446
Office equipment	-	350 244	-	350 244
Audio visual equipment	-	110 743	-	110 743
Security equipment	-	7 204	-	7 204
Motor vehicle	-	60 065	-	60 065
Totals	-	1 722 756	-	1 722 756
Accumulated depreciation	Opening balance R	Current period R	Disposals R	Closing balance R
Furniture and fittings	-	252 917	-	252 917
Computer equipment	-	78 679	-	78 679
Communication equipment	-	90 500	-	90 500
Office equipment	-	50 895	-	50 895
Audio visual equipment	-	21 220	-	21 220
Security equipment	-	2 361	-	2 361
Motor vehicle	-	17 666	-	17 666
Totals	-	514 238	-	514 238

	31/3/2002 R
Net book value
Furniture and fittings	478 430
Computer equipment	123 028
Communication equipment	170 946
Office equipment	299 349
Audio visual equipment	89 523
Security equipment	4 843
Motor vehicle	42 399
Totals	1 208 518
2. RECEIVABLES
Sponsorships due	3 770 000
Other receivables	5 240 083
	9 010 083
3. CASH AND CASH EQUIVALENTS
Cash at bank and in hand	18 899 680
Earmarked bank accounts	12 876 086
	31 775 766
4. TRADE AND OTHER PAYABLES
Trade payables	31 721 035
Dedicated donor funds	12 881 882
	44 602 917
5. OPERATING LOSS FOR THE PERIOD
Operating loss for the period is arrived at after taking the following items into account:
5.1 Revenue
Government grants
-- National	34 517 000
-- Local	12 741 203
	47 258 203
Donations received
-- International donors	8 052 731
Sponsorships
-- Local sponsors	5 586 278
5.2 Expenditure
Consulting fees	3 352 414
Depreciation:
-- Furniture and fittings	252 917
-- Computer equipment	78 679
-- Communication equipment	90 500
-- Office equipment	50 895
-- Audio visual equipment	21 220
-- Security equipment	2 361
-- Motor vehicle	17 666
	514 238

	31/3/2002 R
Director emoluments
-- Executive Director - for services as director	958 408
Foreign exchange loss	12 725
IT services	15 074 180
Operating leases	9 095 048
Other professional services	8 506 700
Staff costs	9 355 080
Number of employees employed	59
6. TAXATION
No provision for South African normal income taxation will be made since the company has applied for an exemption from normal taxation based on the company status as a non-profit organisation. The formal decision regarding the exempt status of the company has not as yet been taken by the South African Revenue Services.
7. RECONCILIATION OF NET LOSS TO CASH GENERATED FROM OPERATIONS
Net loss	(2 608 550)
Adjustment for:
Depreciation	514 238
Operating loss before working capital changes	(2 094 312)
Working capital changes
-- Increase in receivables	(9 010 083)
-- Increase in trade and other payables	44 602 917
	33 498 522
8. POST BALANCE SHEET EVENTS
A revised budget to the amount of approximately R600m for hosting the summit was compiled subsequent to year-end. This budget was significantly higher than the original budget as approved by National Treasury of R551,4 million. The directors of the company approached National Treasury in this regard and it was agreed in principle that there was a need for an upward revision of the budget, however DEAT would have to approach the Treasury Committee in October 2002 for a final decision. In the intervening period additional cash was made available to Jowsco in order to meet its operational needs.